Exhibit 10.1(a)

STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
November 30, 2007 by and between NEW YORK MORTGAGE TRUST, INC., a Maryland
corporation (the “Company”) and EACH OF THE INVESTORS LISTED ON SCHEDULE I
HERETO (each an “Investor” and collectively, the “Investors”).
 
RECITALS
 
WHEREAS, the Company desires to issue and sell to the Investors, and the
Investors desire to purchase from the Company, in a private transaction that is
exempt from registration under Section 4(2) of the Securities Act of 1933, as
amended (the “Securities Act”) and Regulation D thereunder, up to 2,000,000
shares of Series A Cumulative Redeemable Convertible Preferred Stock of the
Company, including up to 1,000,000 shares that may be purchased upon exercise by
the Investor’s of an additional allotment option, on the terms and conditions
set forth in this Agreement (the “Private Transaction”);
 
WHEREAS, the parties desire to make certain representations, warranties,
covenants and agreements in connection with the Private Transaction, and also to
prescribe various conditions to such transaction all as set forth herein.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
 
ARTICLE 1
DEFINITIONS
 
The following defined terms used herein and not otherwise defined shall have the
meaning set forth below:
 
2007 Proxy Statement shall mean the definitive proxy statement of the Company on
Schedule 14A, as filed with the Commission on April 27, 2007.
 
2006 Form 10-K shall mean the Company’s Annual Report on Form 10-K for the year
ended December 31, 2006, as filed with the Commission on April 2, 2007
 
Advisory Agreement shall mean that certain advisory agreement by and between the
Company and JMP Asset Management, LLC, dated as of the date hereof,
substantially in the form attached hereto as Exhibit B.
 
Articles Supplementary shall have the meaning set forth in Section 7.1(e).
 
CERCLA shall have the meaning set forth in Section 4.25.
 
Charter shall mean the Articles of Amendment and Restatement of the Company, as
amended.
 

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Closing shall have the meaning set forth in Article 3 hereof.
 
Closing Date shall have the meaning set forth in Article 3 hereof.
 
Code shall mean the Internal Revenue Code of 1986, as amended.
 
Commission shall mean the Securities and Exchange Commission.
 
Common Stock shall mean the common stock of the Company, $0.01 par value per
share.
 
Company Indemnitees shall have the meaning set forth in Section 9.14.
 
DTC shall mean The Depository Trust Company.
 
Environmental Laws shall have the meaning set forth in Section 4.25.
 
ERISA shall have the meaning set forth in Section 4.26.
 
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission, thereunder, or any similar successor
statute.
 
Exchange Act Documents shall mean all forms, reports and documents required to
be filed by the Company with the Commission pursuant to the Exchange Act.
 
Exchange Act Regulations shall have the meaning set forth in Section 4.17.
 
FCPA shall have the meaning set forth in Section 4.31.
 
FINRA shall have the meaning set forth in Section 4.19.
 
First Quarter Form 10-Q shall mean the Company’s Quarterly Report on Form 10-Q
for the period ended March 31, 2007, as filed with the Commission on May 15,
2007.
 
GAAP shall mean generally accepted accounting principles.
 
Incorporated Form 8-K shall mean each of the Company’s Current Reports on Form
8-K filed with the Commission on February 14, 2007, March 14, 2007, July 3,
2007, September 6, 2007 (excluding the information set forth under Items 7.01
and 9.01), September 12, 2007, October 1, 2007, October 4, 2007, October 9,
2007.
 
Initial Shares shall have the meaning set forth in Section 2.1.
 
Intangibles shall have the meaning set forth in Section 4.21.
 
Investment Company Act shall have the meaning set forth in Section 4.37.
 
Investor Indemnities shall have the meaning set forth in Section 9.14.
 
Investors’ Representative shall have the meaning set forth in Section 2.2.
 
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Material Adverse Change or Material Adverse Effect shall mean any event,
circumstance, change or effect that would reasonably be likely, individually or
in the aggregate, to have a material adverse effect on the assets, business,
operations, earnings, properties or condition (financial or otherwise), of the
Company and its subsidiaries taken as a whole; provided, however, that none of
the following shall be deemed to constitute or shall be taken into account in
determining whether there has been a Material Adverse Effect: any event,
circumstance, change or effect arising out of or attributable to (a) changes in
the economy or financial markets, including, prevailing interest rates and
market conditions, generally in the United States or that are the result of acts
of war or terrorism, or (b) changes that are caused by factors generally
affecting the industry in which the Company and its subsidiaries operate.
 
Money Laundering Laws shall have the meaning set forth in Section 4.32.
 
Notice of Exercise shall have the meaning set forth in Section 2.2.
 
OFAC shall have the meaning set forth in Section 4.33.
 
Option shall have the meaning set forth in Section 2.2.
 
Option Closing shall have the meaning set forth in Section 3.2.
 
Option Shares shall have the meaning set forth in Section 2.2.
 
Preferred Stock shall have the meaning set forth in Article 2.
 
Private Transaction shall have the meaning set forth in the recitals.
 
Registration Rights Agreement shall mean the agreement between the Company and
each of the Investors, dated as of the date hereof, substantially in the form
attached hereto as Exhibit D.
 
REIT shall have the meaning set forth in Section 4.39.
 
Rule 144 shall have the meaning set forth in Section 5.6.
 
Sarbanes-Oxley Act shall have the meaning set forth in Section 4.12.
 
Secondary Closing Date shall have the meaning set forth in Section 3.2.
 
Secondary Closing Time shall have the meaning set forth in Section 3.2.
 
Second Quarter Form 10-Q shall mean the Company’s Quarterly Report on Form 10-Q
for the period ended June 30, 2007, as filed with the Commission on August 10,
2007.
 
Securities Act shall have the meaning set forth in the recitals.
 
Shares shall have the meaning set forth in Article 2.
 
Special Meeting shall have the meaning set forth in Section 6.1.
 
State Acts shall have the meaning set forth in Section 8.2.
 
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Subsidiary shall have the meaning set forth in Section 4.1.
 
Third Quarter Form 10-Q shall mean the Company’s Quarterly Report on Form 10-Q
for the period ended September 30, 2007, as filed with the Commission on
November 14, 2007.
 
Transaction Documents shall mean collectively, this Agreement, the Advisory
Agreement, the Registration Rights Agreement and the Articles Supplementary.
 
ARTICLE 2
AGREEMENT TO PURCHASE AND SELL STOCK
 
2.1. Initial Shares. Upon the basis of the warranties and representations and
subject to the other terms and conditions set forth herein, the Company agrees
to issue and sell to each Investor at the Closing, and each Investor agrees to
purchase from the Company, severally and not jointly, at the Closing, the number
of shares of the Company’s Series A Cumulative Redeemable Convertible preferred
stock, $0.01 par value per share (the “Preferred Stock”), set forth opposite
such Investor’s name on Schedule I at the purchase price per share of $20.00
(the “Initial Shares”).
 
2.2. Option Shares. Upon the basis of the warranties and representations and
subject to the other terms and conditions set forth herein, the Company hereby
grants to the Investors an option (the “Option”) to purchase from the Company up
to an aggregate of 1,000,000 additional shares of the Preferred Stock at a
purchase price per share of $20.00 (the “Option Shares” and, together with the
Initial Shares, the “Shares”). The Option will expire at 5:00 p.m., New York
City time on January 31, 2008. JMP Group, Inc. shall serve as the Investors’
representative (the “Investors’ Representative”) with respect to the Option. The
Option may be exercised upon delivery by the Investors’ Representative to the
Company of a written notice of exercise (a “Notice of Exercise”) setting forth
(i) the number of Option Shares as to which the Investors or their assignees are
then exercising the Option, (ii) the names and denominations to which
certificates representing the Option Shares are to be delivered, and (iii) the
time and date of payment for and delivery of such Option Shares. The time and
date of delivery shall not be later than five (5) full business days nor earlier
than two (2) full business day after the date of the Notice of Exercise, nor in
any event prior to the Closing Time, unless otherwise agreed in writing by the
Investors’ Representative and the Company. The Investors shall have the right to
assign their rights under the Option to one or more of their Affiliates.
 
ARTICLE 3
PAYMENT AND DELIVERY; ClOSING
 
3.1. The purchase and sale of the Initial Shares (the “Closing”) shall take
place at the offices of Hunton & Williams LLP (“Hunton & Williams”), 951 East
Byrd Street, Richmond, Virginia 23219, at 9:30 a.m., Eastern Time on the earlier
of (i) the date on which the Company consummates an unregistered private
offering of not less than 16,500,000 shares of Common Stock, or (ii) the third
business day after December 31, 2007, or at such other place, at such other
time, or on such other date as the parties may mutually agree upon (such date,
the “Closing Date”). At the Closing, (i) the Company shall deliver to (x) each
of the Investors a certificate representing the number of Shares set forth
opposite the Investors name on Schedule I hereto, and (ii) each of the Investors
shall deliver to the Company the purchase price set forth opposite the
Investor’s name on Schedule I hereto.
 
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3.2. The purchase and sale of any Option Shares (the “Option Closing”) shall
take place at the offices of Hunton & Williams LLP, 951 East Byrd Street,
Richmond, Virginia 23219. At the Secondary Closing Time (as defined herein),
subject to the satisfaction or waiver of the closing conditions set forth
herein, the Investors or their assignees shall pay to the Company the aggregate
applicable purchase price for the Option Shares then purchased by the Investors
or their assignees by wire transfer of immediately available funds against the
Company’s delivery of the Option Shares. Such payment and delivery shall be made
at 9:30 a.m., New York City time, on the date scheduled for the Option Closing
(the “Secondary Closing Date”). The Option Shares shall be delivered in such
names and in such denominations as the Investors’ Representative shall specify
in the Notice of Exercise. The time at which payment by the Investors or their
assignees for, and delivery by the Company of, any Option Shares are actually
made is referred to herein as a “Secondary Closing Time”.
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
Subject to the exceptions and qualifications set forth herein, the Company
hereby represents and warrants to the Investors as follows:
 
4.1. The Company has an authorized capitalization as set forth in the Exchange
Act Documents; the outstanding shares of capital stock of the Company and of
each subsidiary of the Company, each of which is identified in Exhibit A hereto
(each, a “Subsidiary”) have been duly and validly authorized and issued and are
fully paid and non-assessable and were issued in compliance with all applicable
state and federal laws concerning the issuance of securities; except as
otherwise disclosed in the Exchange Act Documents and except for options issued
pursuant to the Company’s 2005 Stock Incentive Plan and 2004 Stock Incentive
Plan, there are no outstanding (i) securities or obligations of the Company or
any of the Subsidiaries convertible into or exchangeable for any capital stock
of the Company or any such Subsidiary, (ii) warrants, rights or options to
subscribe for or purchase from the Company or any such Subsidiary any such
capital stock or any such convertible or exchangeable securities or obligations,
or (iii) obligations of the Company or any such Subsidiary to issue any shares
of capital stock, any such convertible or exchangeable securities or obligation,
or any such warrants, rights or options. The Preferred Stock has been duly and
validly authorized and when issued in accordance with the terms of this
Agreement and upon payment therefor in the manner contemplated by this
Agreement, will be fully paid and non-assessable and issued in compliance with
all applicable state and federal laws concerning the issuance of securities. The
Company shall, prior to issuance of any Preferred Stock hereunder, and from time
to time as may be necessary, reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock, for the purpose of
effecting the conversion of the Preferred Stock, such number of its duly
authorized Common Stock as shall from time to time be sufficient to effect the
conversion of all Preferred Stock then outstanding into such Common Stock at any
time (assuming that, at the time of the computation of such number of Common
Stock, all such Preferred Stock would be held by a single holder). The Common
Stock issuable upon conversion of the Preferred Stock, when issued in accordance
with the terms of the Articles Supplementary, will be duly and validly issued,
fully paid and non-assessable and free of restrictions on transfer, other than
restrictions under applicable federal and state securities laws and the Charter.
Based in part on the representations of the Investors in Article 5 of this
Agreement, the Common Stock issuable upon conversion of the Preferred Stock
pursuant to the Articles Supplementary will be issued in compliance with the
Securities Act and all applicable federal and state securities laws.
 
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4.2. Each of the Company and the Subsidiaries has been duly incorporated or
formed and is validly existing as a corporation or limited liability company, as
applicable, in good standing under the laws of its respective jurisdiction of
incorporation or formation with full corporate power and authority to own its
respective properties and to conduct its respective businesses as described in
the Exchange Act Documents; the Company has full corporate power and authority
to execute and deliver this Agreement and, upon receipt of Stockholder Approval,
full corporate power and authority to consummate the transactions contemplated
herein.
 
4.3. Each of the Company and the Subsidiaries is duly qualified and is in good
standing as a foreign corporation or limited liability company, as the case may
be, in each jurisdiction in which it is required to be so qualified, except
where the failure to be so qualified would not reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
 
4.4. The Company and its Subsidiaries are in compliance in all material respects
with all laws, rules, regulations, orders, decrees and judgments applicable to
it, including those relating to transactions with affiliates, and have not
received any notice of any material actual or proposed changes in existing
federal, state, local or foreign laws, rules or regulations or any orders,
decrees or judgments applicable to it.
 
4.5. Neither the Company nor any of its Subsidiaries is in breach of or in
default under (nor has any event occurred which with notice, lapse of time, or
both, would constitute a breach of, or default under), its respective
organizational documents, or in the performance or observance of any material
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument to which the Company or the Subsidiaries are a party or by which
any of them or their respective properties or assets may be bound or affected,
except (i) as set forth in the Exchange Act Documents or (ii) where such breach
or default would not reasonably be likely, individually or in the aggregate, to
have a Material Adverse Effect.
 
4.6. The execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated herein, do not and
will not (A) conflict with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or both, would
constitute a breach of, or default under), (i) any provision of the
organizational documents of the Company or its Subsidiaries, or (ii) any
provision of any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or its
Subsidiaries is a party or by which any of them or their respective properties
or assets may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or its Subsidiaries; or (B) result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or asset of the Company
or its Subsidiaries.
 
4.7. This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles, and except to
the extent that the indemnification provisions of Section 9.14 hereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof.
 
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4.8. No approval, authorization, consent or order of or registration or filing
with any federal, state or local court, governmental or regulatory commission,
board, body, authority or agency is required in connection with the Company’s
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated herein, or the sale and delivery of the Shares, other
than (A) such as have been obtained, or will have been obtained under the
Exchange Act, (B) any necessary qualification under the securities or blue sky
laws of any jurisdictions in which the Shares are being offered, (C) the rights
provided in the Registration Rights Agreement or (D) such approvals,
authorizations, consents, orders, registrations or filings, the absence of which
would not reasonably be expected to have a Material Adverse Effect.
 
4.9. The Company and its Subsidiaries have obtained all licenses,
authorizations, consents, accreditations, certifications and approvals and has
made all material filings required under any federal, state or local law,
regulation or rule, which authorizations, consents, accreditations,
certifications, approvals and filings are required in order to conduct its
business as currently conducted, except where the failure to have any such
licenses, authorizations, consents, accreditations, certifications or approvals,
to make any such filings or to obtain any such authorizations, consents,
accreditations, certifications or approvals would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; neither the
Company nor its Subsidiaries are in violation of, in default under, or has
received any notice regarding a possible violation, default or revocation of, or
proceeding relating to, any such license, authorization, consent, accreditation,
certification or approval applicable to the Company or its Subsidiaries, the
effect of which could reasonably be expected to result in a Material Adverse
Change.
 
4.10. Except as set forth in the Exchange Act Documents or previously provided
in writing by the Company to the Investors, there are no actions, suits,
proceedings, inquiries or investigations pending or, to the knowledge of the
Company, threatened against or affecting the Company or the Subsidiaries or any
of their respective officers and directors or to which the properties, assets or
rights of any such entity are subject, at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority, arbitral panel or agency, that (i) could reasonably be expected
to have a Material Adverse Effect on the performance of this Agreement or the
transactions contemplated hereby, or (ii) could reasonably be expected to have a
Material Adverse Effect.
 
4.11. As of their respective dates, the Exchange Act Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder applicable to the Exchange
Act Documents and none of the Exchange Act Documents, at the time they were
filed or are to be filed with the Commission, contained or will contain an
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
 
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4.12. The financial statements, including the notes thereto, included in the
Exchange Act Documents present fairly and accurately in all material respects
the consolidated financial position of the Company as of the dates indicated and
the consolidated results of operations and changes in financial position and
cash flows of the Company for the periods specified; such financial statements
have been prepared in conformity with generally accepted accounting principles
as applied in the United States and on a consistent basis throughout the periods
involved and in accordance with Regulation S-X promulgated by the Commission;
the financial statement schedules included in the Exchange Act Documents and the
amounts under Item 6 of the 2006 Form 10-K present the information purported to
be shown therein fairly and accurately in all material respects and have been
compiled on a basis consistent with the financial statements included in the
Exchange Act Documents; the amounts in each of the 2006 Form 10-K and First
Quarter Form 10-Q under the caption “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” are accurately computed, fairly
present the information purported to be shown therein and have been determined
on a basis consistent with the financial statements included in the Exchange Act
Documents.
 
4.13. The Common Stock is registered pursuant to Section 12(b) or Section 12(g)
of the Exchange Act and the Company has taken no action designed to, or likely
to have the effect of, terminating the registration of the Common Stock under
the Exchange Act nor, except as disclosed in the Exchange Act Documents, has the
Company received any notification that the Commission is contemplating
terminating such registration.
 
4.14. Deloitte & Touche LLP, whose reports on the consolidated financial
statements of the Company are filed with the Commission as part of the 2006 Form
10-K are, and were during the periods covered by their reports, an independent
registered public accounting firm with respect to the Company as required by the
Sarbanes-Oxley Act of 2002, as amended and the rules and regulations of the
Commission thereunder (together, the “Sarbanes-Oxley Act”).
 
4.15. Subsequent to the respective dates as of which information is given in the
Exchange Act Documents, there has not been (A) any Material Adverse Change or
any event or development including, but not limited to any loss or damage
(whether or not insured) to the property of the Company or its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect, whether or not
arising in the ordinary course of business, (B) any transaction that is material
to the Company and the Subsidiaries taken as a whole, entered into by the
Company, or the Subsidiaries, (C) any liability or obligation, contingent or
otherwise, directly or indirectly incurred by the Company or its Subsidiaries
that is material to the Company and its Subsidiaries taken as a whole, or (D)
any dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock or any repurchase or redemption by the Company
of any class of capital stock.
 
4.16. There are no persons with registration or other similar rights to have any
equity or debt securities, including securities which are convertible into or
exchangeable for equity securities, registered by the Company under the
Securities Act.
 
4.17. The Shares have been duly authorized and, when issued and duly delivered
against payment therefor as contemplated by this Agreement, will be validly
issued, fully paid and non-assessable, free and clear of any security interest,
mortgage, pledge, lien, claim, restriction or encumbrance, and the issuance and
sale of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company or the Subsidiaries is a
party or otherwise.
 
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4.18. The Company has not taken, and will not take, directly or indirectly, any
action which is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares.
 
4.19. Neither the Company nor any of its affiliates (i) is required to register
as a “broker” or “dealer” in accordance with the provisions of the Exchange Act,
or the rules and regulations thereunder (the “Exchange Act Regulations”), or
(ii) directly, or indirectly through one or more intermediaries, controls or has
any other association with (within the meaning of Article I of the By-laws of
the Financial Industry Regulatory Authority, or FINRA) any member firm of FINRA.
 
4.20. The form of certificate used to evidence the Preferred Stock complies in
all material respects with all applicable statutory requirements and any
applicable requirements of the organizational documents of the Company.
 
4.21. Each of the Company and the Subsidiaries have good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except where
the failure to have good title would not reasonably be likely, individually or
in the aggregate, to have a Material Adverse Effect.
 
4.22. All agreements between the Company or any of its Subsidiaries and third
parties expressly referenced in the Exchange Act Documents are legal, valid and
binding obligations of the Company or the Subsidiaries, as the case may be,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles; to the knowledge of the Company, no other party to any
such agreement is in material breach or default thereof or thereunder.
 
4.23. Each of the Company and its Subsidiaries owns or possesses adequate
licenses or other rights to use all material patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets, other
intangible property rights and know-how (collectively “Intangibles”) necessary
to entitle it to conduct its business as described in the Exchange Act
Documents, except where the failure to own or possess adequate licenses or other
rights would not reasonably be expected to have a Material Adverse Effect, and
neither the Company nor the Subsidiaries have received notice of infringement of
or conflict with asserted rights of others with respect to any such Intangibles;
 
4.24. The Company has implemented controls and other procedures that are
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms and is accumulated and communicated to the
Company’s management, including its co-chief executive officers and chief
financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure; the Company makes and
keeps books, records and accounts, which, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company
and its Subsidiaries; and the Company maintains a system of internal control
over financial reporting sufficient to provide reasonable assurance that (i)
transactions involving the Company or any of its Subsidiaries are executed in
accordance with management’s general or specific authorizations; (ii)
transactions involving the Company or any of its Subsidiaries are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
 
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4.25. Each of the Company and the Subsidiaries has filed on a timely basis all
material federal, state, local and foreign income and franchise tax returns
required to be filed by it through the date hereof and has paid all material
taxes shown as due thereon and any related material assessments, fines or
penalties; no material tax deficiency has been asserted against any such entity
nor does any such entity know of any such material tax deficiency which is
likely to be asserted against any such entity; all material tax liabilities are
provided for in the financial statements contained in the Exchange Act
Documents.
 
4.26. Each of the Company and the Subsidiaries maintains insurance (issued by
insurers of recognized financial responsibility) of the types and in the amounts
generally deemed adequate for their respective businesses and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
 
4.27. Neither the Company nor any of its Subsidiaries is in violation in any
material respect, or has received notice of any material violation with respect
to, any applicable environmental, safety or similar law applicable to the
business of the Company or any of its Subsidiaries; neither the Company nor any
of its Subsidiaries has received any notice of, or has any knowledge of any
occurrence or circumstance which, with notice or passage of time, or both, would
give rise to a material claim against the Company or any of its Subsidiaries
under or pursuant to any Environmental Law with respect to any properties
currently or previously owned, leased or operated by the Company or any of its
Subsidiaries or the assets of the Company or any of its Subsidiaries or arising
out of the conduct of the business of the Company or any of its Subsidiaries;
the Company and its Subsidiaries have received all material permits, licenses or
other approvals required of them under applicable federal and state occupational
safety and health and environmental laws and regulations to conduct their
respective businesses, and each of the Company and its Subsidiaries is in
compliance in all material respects with all terms and conditions of any such
permit, license or approval applicable to it; for purposes of this Agreement,
the term “Environmental Law” shall mean any federal, state or local
environmental law, statute, ordinance, rule or regulation, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Sections 5101-5127, the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Sections 6901-6992k, the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances Control Act,
15 U.S.C. Sections 2601-2692, the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C.
Sections 7401-7642, the Clean Water Act (Federal Water Pollution Control Act),
33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C.
Sections 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
Sections 651-678, and any analogous state laws, as any of the above may be
amended from time to time and the regulations promulgated pursuant to each of
the foregoing.
 
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4.28. The Company, the Subsidiaries and each “employee benefit plan” as defined
under the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder (“ERISA”) established
or maintained by the Company, the Subsidiaries or their ERISA Affiliates (as
defined below) are in compliance in all material respects with all presently
applicable provisions of ERISA; no “reportable event” (as defined in ERISA) has
occurred or is reasonably expected to occur with respect to any such employee
benefit plan; neither the Company nor its Subsidiaries has incurred or expects
to incur liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Section 412, 4971, 4975
or 4980(B) of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (“Code”); each “employee
benefit plan” established or maintained by the Company, its Subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would reasonably be expected to cause the loss of such
qualification; and no “employee benefit plan” established or maintained by the
Company, its Subsidiaries or any of their ERISA Affiliates, if such “employee
benefit plan” were terminated, would have any material “amount of unfunded
benefit liabilities” (as defined under ERISA); for purposes of this Agreement,
the term “ERISA Affiliate” means, with respect to the Company and any of its
Subsidiaries, any member of any group of organizations described in
Sections 414(b), (c), (m) or (o) of the Code of which the Company or any of its
Subsidiaries is a member.
 
4.29. Neither the Company nor any of the Subsidiaries nor, to the knowledge of
the Company any officer, director, manager or director purporting to act on
behalf of the Company or any of the Subsidiaries has at any time (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law, (ii) made any payment to any U.S.
federal, state, local or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law and the Company’s Code of Business Conduct
and Ethics, or (iii) engaged in any transactions, maintained any bank account or
used any corporate funds except for transactions, bank accounts and funds which
have been and are reflected in the normally maintained books and records of the
Company and the Subsidiaries.
 
4.30. There is no transaction, arrangement or other relationship between the
Company and an unconsolidated or other off-balance sheet entity that is required
to be disclosed by the Company pursuant to the Exchange Act that is not so
disclosed or that otherwise would be reasonably expected to have a Material
Adverse Effect.
 
4.31. Except as disclosed in the Exchange Act Documents, there are no
outstanding loans or advances or guarantees of indebtedness by the Company or
any of the Subsidiaries to or for the benefit of any of the officers, directors
or managers of the Company or any of the Subsidiaries or any of the members of
the families of any of them.
 
4.32. There is and has been no failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act, including Section 402 related to loans and
Sections 302 and 906 related to certifications.
 
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4.33. All securities issued by the Company or any of the Subsidiaries have been
issued and sold in compliance with all applicable federal and state securities
laws.
 
4.34. Neither the Company nor any of the Subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its Subsidiaries is aware of or has taken any action, directly or
indirectly, that would result in a violation by such Persons of the FCPA,
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company, its
Subsidiaries, and to the knowledge of the Company, its affiliates have conducted
their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith. “FCPA” means Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder.
 
4.35. The operations of the Company and its Subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.
 
4.36. Neither the Company nor any of its Subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
 
4.37. Neither the Company nor any of its Subsidiaries has incurred any liability
for any finder’s fees or similar payments in connection with the transactions
herein contemplated.
 
4.38. No relationship, direct or indirect, exists between or among the Company
or any of its Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its Subsidiaries
on the other hand, which is required by the Exchange Act Regulations to be
described in the 2006 Form 10-K and which is not so described.
 
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4.39. Each director of the Company which is designated as an “Independent
Director” in the Exchange Act Documents satisfies the requirements for
independence under the Sarbanes-Oxley Act and the rules of the New York Stock
Exchange.
 
4.40. Neither the Company nor any of its Subsidiaries is, or after giving effect
to the offering and sale of the Shares and the receipt of proceeds therefrom
will be, an “investment company” or an entity “controlled” by an “investment
company”, as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”); the Company will continue to conduct its
business in a manner such that it will not be subject to registration as an
“investment company” under the Investment Company Act.
 
4.41. Except as disclosed in the Exchange Act Documents, there are no existing
or, to the knowledge of the Company, threatened labor disputes with the
employees of the Company or any of its Subsidiaries.
 
4.42. To the Company’s knowledge, as of the date of this Agreement, there are no
other known material expenses, liabilities or obligations (absolute, accrued,
contingent or otherwise) to be incurred by the Company during the three month
period ending December 31, 2007, except as incurred in the ordinary course of
business consistent with past practice or as set forth on Schedule II hereto. 
 
4.43. The Company elected to be taxed as a real estate investment trust (a
“REIT”) under the Code commencing with its taxable year ended December 31, 2004;
commencing with the Company’s taxable year ended December 31, 2004, the Company
has been organized and operated in conformity with the requirements for
qualification and taxation as a REIT under the Code, and its current and
proposed ownership and operations will allow the Company to continue to satisfy
the requirements for qualification and taxation as a REIT under the Code for its
taxable year ending December 31, 2007 and in the future.
 
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF INVESTOR
 
Each of the Investors hereby represents and warrants as of the date hereof and
as of the Closing to the Company that:
 
5.1. The Investor has full power and authority to enter into this Agreement and
such agreement constitutes a valid and legally binding obligation, enforceable
in accordance with its respective terms except (i) as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors’ rights generally, and
(ii) as may be limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
 
5.2. This Agreement is made with such Investor in reliance upon such Investor’s
representation to the Company, which by such Investor’s execution of this
Agreement such Investor hereby confirms, that the Shares to be received by such
Investor will be acquired for investment for such Investor’s own account, not as
a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, such Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to any of the Shares.
 
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5.3. The Investor has received all the information it considers necessary or
appropriate for deciding whether to purchase the Shares. Such Investor further
represents that it has had an opportunity to ask questions of and receive
answers from the Company regarding the terms and conditions of the offering of
Shares and the business, properties, prospects and financial condition of the
Company.
 
5.4. The Investor understands that the purchase of the Shares involves
substantial risk. The Investor: (i) has experience as an investor in securities
and acknowledges that the Investor is able to fend for itself, can bear the
economic risk of the Investor’s investment in the Shares and has such knowledge
and experience in financial or business matters that the Investor is capable of
evaluating the merits and risks of this investment in the Shares and protecting
its own interests in connection with this investment and/or (ii) has a
preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables the Investor to be aware of the character, business acumen and financial
circumstances of such persons.
 
5.5. The Investor is an “accredited investor” as defined in Rule 501(a) of
Regulation D under the Securities Act. The Investor has received a copy of the
Articles Supplementary and this Agreement and has read and understands the
respective contents thereof. The Investor has had the opportunity to ask
questions of the Company and has received answers to such questions from the
Company. The Investor has carefully reviewed and evaluated these documents and
understands the risks and other considerations relating to the investment.
 
5.6. The Investor understands that the Shares are characterized as “restricted
securities” under the Securities Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under the
Securities Act and applicable rules and regulations thereunder such securities
may be resold without registration under the Securities Act only in certain
limited circumstances, unless and until the Shares are registered in accordance
with the provisions of the Registration Rights Agreement. The Investor
represents that it is familiar with Rule 144 promulgated under the Securities
Act (“Rule 144”), as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act. 
 
5.7. The Investor has not incurred any liability for any finder’s fees or
similar payments in connection with the transactions herein contemplated.
 
5.8. The Investor is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
 
5.9. The Investor relied only on its own due diligence investigation of the
Company in making its investment decision with respect to the Private
Transaction. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Article 4 of this Agreement or
the right of the Investors to rely on such representations and warranties.
 
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5.10. The Investor acknowledges that it is not relying upon any person, firm or
corporation, other than the Company and its officers and directors, in making
its investment or decision to invest in the Company. Such Investor agrees that
no other Investor nor the respective controlling persons, officers, directors,
partners, agents, or employees of any Investor shall be liable to any other
Investor for any action heretofore or hereafter taken or omitted to be taken by
any of them in connection with the issuance and purchase of the Shares.
 
ARTICLE 6
OTHER AGREEMENTS OF THE PARTIES
 
6.1. Board of Director Resignations; Appointments. 
 
The Company agrees that its Board of Directors and any appropriate committees
thereof shall take all necessary action to (i) accept the resignations of Mary
Dwyer Pembroke, Thomas W. White, and Jerome F. Sherman from the Board of
Directors, (ii) accept the resignation of Steven B. Schnall as non-executive
Chairman of the Board of Directors; provided, however, that Mr. Schnall shall
remain a director of the Company after Closing, and (iii) appoint James J.
Fowler and Steven Abreu as new members of the Company’s Board of Directors, with
Mr. Fowler being appointed as the non-executive Chairman of the Board of
Directors; provided, that Mr. Fowler shall resign as the non-executive Chairman
of the Board of Directors (but shall not be required to resign as a director of
the Company) in the event the Investors exercise the special redemption option
set forth in Section 6(b) of the Articles Supplementary. The Company further
agrees and acknowledges that the Investors shall have the right to appoint one
additional “independent” director, as such term is defined in the Listed Company
Manual of the Nasdaq Stock Market, to stand for election at the Company’s next
annual meeting of stockholders and, that in connection therewith, one of the
Company’s current independent directors who shall remain a director after the
Closing will agree to not accept nomination for election as a director at the
Company’s next annual meeting of stockholders.
 
6.2. Restrictions on Company Indebtedness.
 
For so long as more than fifty percent (50%) or the shares of the Preferred
Stock issued at the Closing remain outstanding, the Company covenants and agrees
that the Company and any of its Subsidiaries shall not incur any future
indebtedness, other than indebtedness incurred pursuant to the issuance of
senior notes in connection with Section 6(b) of the Articles Supplementary,
unless the Board of Directors of the Company unanimously approves the incurrence
of such indebtedness; provided, however, that future indebtedness incurred by
the Company or its Subsidiaries in the ordinary course of its business in
connection with the financing of its investment portfolio shall not require the
approval of the Company’s Board of Directors.
 
6.3. Fiscal Year 2008 Director Compensation.
 
The Company agrees that its Board of Directors and any appropriate committees
thereof shall take all necessary action to approve and adopt the compensation
policy set forth on Schedule III hereto as the compensation to be paid to
directors of the Company for their service on the Board of Directors and any
committees thereof during the 2008 fiscal year. The Company further agrees that
such compensation shall not be modified until January 1, 2009 without the
unanimous consent of the Board of Directors.
 
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6.4. Non-Ordinary Course Expense Statement.
 
The Company shall prepare, and its Board of Directors shall approve, an
operating plan including staffing, compensation and corporate overhead
reasonably satisfactory to the Investors. Such operating plan shall include
reductions in operating costs, including employee compensation and board of
director expenses.
 
6.5. Ownership Waivers.
 
To the extent the issuance and sale of Shares to each of the Investors would
result in any Investor exceeding the Aggregate Stock Ownership Limit (as defined
in Article VII of the Charter), upon receipt of a letter of representation from
such Investor reasonably satisfactory to the Board of Directors, the Board of
Directors will take all necessary action to waive the application of such
Aggregate Stock Ownership Limit as it relates to such Investor’s ownership of
the Shares; provided, however, that the Board of Directors shall not be required
to comply with this Section 6.4 if such compliance would reasonably be expected
to cause the Company to fail to qualify as a REIT.
 
6.6. Use of Proceeds.
 
The Company hereby covenants and agrees to use the proceeds from the Private
Transaction to make investments primarily in mortgage securities guaranteed by
U.S. Government sponsored entities, such as Fannie Mae, and other AAA-rated
residential mortgages. In addition, proceeds from the Private Transaction
allocated to certain subsidiaries of the Company shall be invested by JMP Asset
Management in accordance with the Advisory Agreement.
 
ARTICLE 7
CONDITIONS TO CLOSING
 
7.1. The obligation of the Investors to close the transaction contemplated by
this Agreement is subject to the satisfaction on or prior to the Closing and any
Secondary Closing Time of the following conditions:
 
(a) The Company shall have executed this Agreement and delivered the same to the
Investor.
 
(b) The Investors shall have received copies of all documents and information
which it may have reasonably requested in connection with the purchase and sale
of the Shares.
 
(c) The representations and warranties made by the Company in Article 4 hereof
shall be true and correct as of the Closing Date and any Secondary Closing Date
, and the Company shall have performed all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing and any
applicable Option Closing.
 
(d) The Company shall have delivered to the Investors a certificate of its
(1) Vice-Chairman of the Board and Co-Chief Executive Officer and (2) President,
Co-Chief Executive Officer and Chief Financial Officer, dated as of the Closing
Date or any Secondary Closing Date , to the effect that:
 

 
(i)
the representations and warranties of the Company in this Agreement are true and
correct, as if made on and as of the Closing Date or any Secondary Closing Date
, and the Company has, in all material respects, complied with all the
agreements and satisfied the all the conditions on its part to be performed or
satisfied at or prior to the Closing Date any applicable Option Closing; and

 
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(ii)
subsequent to the respective dates as of which information is given in the
Exchange Act Documents, there has not been (1) any Material Adverse Change,
(2) any transaction that is material to the Company and the Subsidiaries
considered as one enterprise, except transactions entered into in the ordinary
course of business, (3) any obligation, direct or contingent, that is material
to the Company and the Subsidiaries considered as one enterprise, incurred by
the Company or the Subsidiaries, except obligations incurred in the ordinary
course of business, (4) any change in the capital stock or outstanding
indebtedness of the Company or any Subsidiary that is material to the Company
and the Subsidiaries considered as one enterprise, (5) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any Subsidiary, or (6) any loss or damage (whether or not insured) to
the property of the Company or any Subsidiary which has been sustained or will
have been sustained which has a Material Adverse Effect.

 
(e) The Company shall have executed and filed the Articles Supplementary
Establishing and Fixing the Rights and Preferences of the Series A Cumulative
Redeemable Convertible Preferred Stock substantially in the form attached hereto
as Exhibit C (the “Articles Supplementary”) with the Department of Assessment
and Taxation of the State of Maryland and delivered evidence of such filing to
the Investors.
 
(f) The Company shall have executed each of the Advisory Agreement and
Registration Rights Agreement and delivered each of the same to the Investors.
 
(g) The Company shall have caused its legal counsel to deliver to the Investors
legal opinions reasonably satisfactory to the Investors substantially in the
form attached hereto as Exhibits E and F, dated as of the Closing Date and any
Secondary Closing Date.
 
(h) The Company shall have received the written resignations of (i) Mary Dwyer
Pembroke, Thomas W. White, and Jerome F. Sherman from the Board of Directors,
and (ii) the resignation of Steven B. Schnall as non-executive Chairman of the
Board of Directors, and delivered evidence of the same to the Investors.
 
(i) The Amended and Restated Employment Agreements between the Company and each
of David A. Akre and Steven R. Mumma, in the forms attached hereto as Exhibits H
and I, respectively, shall have been executed by each of the parties and
evidence of the same shall have been delivered to the Investors.
 
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7.2. The obligation of the Company to close the transaction contemplated by this
Agreement is subject to the satisfaction on or prior to the Closing and any
Secondary Closing Time of the following conditions:
 
(a) Each of the Investors shall have executed this Agreement and the Investors
shall have delivered the same to the Company;
 
(b) The representations and warranties made by the Investors shall be true and
correct as of the Closing Date and any Secondary Closing Date , and the
Investors shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to the Closing and any applicable
Option Closing;
 
(c) The Investors shall have delivered to the Company a certificate signed by
each of the Investors, dated as of the Closing Date or any Secondary Closing
Date , to the effect that the representations and warranties of the Investors in
this Agreement are true and correct, as if made on and as of the Closing Date or
any Secondary Closing Date , and the Investors have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date or any Secondary Closing Date ;
 
(d) Each of the Investors shall have executed an investor questionnaire in the
form attached hereto as Exhibit G and delivered the same to the Company.
 
(e) Each of the Investors shall have delivered the purchase price as specified
in Article 3.
 
(f) Each of the Investors shall have executed each of the Advisory Agreement and
Registration Rights Agreement and delivered each of the same to the Company.
 
ARTICLE 8
COVENANTS OF THE PARTIES
 
8.1. Legends.
 
It is understood that the certificates evidencing the shares of the Preferred
Stock will bear the legends set forth below:
 
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
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(b) The shares represented by this certificate are subject to restrictions on
Beneficial and Constructive Ownership and Transfer. Subject to certain further
restrictions and except as expressly provided in the Corporation’s Charter, (i)
no Person may Beneficially or Constructively Own shares of the Corporation’s
Common Stock in excess of nine and four-tenths percent (9.4%) in value or in
number of shares, whichever is more restrictive, of the aggregate of the
outstanding shares of Common Stock of the Corporation unless such Person is an
Excepted Holder (in which case the Excepted Holder Limit shall be applicable);
(ii) no Person may Beneficially or Constructively Own shares of Capital Stock of
the Corporation in excess of nine and four-tenths percent (9.4%) in value of the
aggregate of the outstanding shares of Capital Stock of the Corporation unless
such Person is an Excepted Holder (in which case the Excepted Holder Limit shall
be applicable); (iii) no Person may Beneficially or Constructively Own shares of
Capital Stock that would result in the Corporation being “closely held” under
Section 856(h) of the Internal Revenue Code of 1986, as amended (the “Code”);
(iv) no Person may Transfer shares of Capital Stock that would result in the
Capital Stock of the Corporation being beneficially owned by less than one
hundred (100) Persons (determined without reference to any rules of attribution)
and (v) no Disqualified Organization shall Beneficially Own any shares of
Capital Stock, and no Person shall Transfer shares of Capital Stock to the
extent that such Transfer would result in shares of Capital Stock being
Beneficially Owned by a Disqualified Organization. Any Person who Beneficially
or Constructively Owns or attempts to Beneficially or Constructively Own shares
of Capital Stock which causes or will cause a Person to Beneficially or
Constructively Own shares of Capital Stock in excess or in violation of the
above limitations must immediately notify the Corporation. If any of the
restrictions on transfer or ownership are violated, the shares of Capital Stock
represented hereby will be automatically transferred to a Trustee of a
Charitable Trust for the benefit of one or more Charitable Beneficiaries. In
addition, the Corporation may redeem shares upon the terms and conditions
specified by the Board of Directors in its sole discretion if the Board of
Directors determines that ownership or a Transfer or other event may violate the
restrictions described above. Furthermore, upon the occurrence of certain
events, attempted Transfers in violation of the restrictions described above may
be void ab initio. All capitalized terms in this legend have the meanings
defined in the Charter of the Corporation, as the same may be amended from time
to time, a copy of which, including the restrictions on transfer and ownership,
will be furnished to each holder of Capital Stock of the Corporation on request
and without charge. Requests for such a copy may be directed to the Secretary of
the Corporation at its principal office.
 
(c) Any legend required by the laws of the State of Maryland or any other state
securities laws.
 
The legend set forth in (a) above shall be removed by the Company from any
certificate evidencing the Shares upon delivery to the Company of an opinion by
counsel, reasonably satisfactory to the Company, that a registration statement
under the Securities Act is at that time in effect with respect to the legended
security or that such security can be freely transferred in a public sale
without such a registration statement being in effect and that such transfer
will not jeopardize the exemption or exemptions from registration pursuant to
which the Company issued the Shares.
 
8.2. Restrictions on Transfer; Registration Rights.
 
(a) Investor acknowledges that it is acquiring the Shares for its own account
and for the purpose of investment and not with a view to any distribution or
resale thereof within the meaning of the Securities Act, and any applicable
state or other securities laws ("State Acts"). Investor further agrees that it
will not sell, assign, transfer or otherwise dispose of any of the Shares in
violation of the Securities Act or State Acts and acknowledges that, in taking
unregistered shares of preferred stock, it must continue to bear economic risk
in regard to its investment for an indefinite period of time because of the fact
that the Shares have not been registered under the Securities Act or State Acts
and further realizes that the Shares cannot be sold unless subsequently
registered under the Securities Act and State Acts or an exemption from such
registration is available. Investor further recognizes that the Company is not
assuming any obligation to register such Shares except as expressly set forth
herein. Investor also acknowledges that appropriate legends reflecting the
status of the Shares under the Securities Act and State Acts may be placed on
the face of the certificates for the Shares at the time of their transfer and
delivery to the holder thereof. This Agreement is made with each of the
Investors, subject to, and in reliance upon the Investors’ above
representations.
 
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(b) The Shares issued pursuant to this Agreement may not be transferred except
in a transaction, which is in compliance with the Securities Act and State Acts.
Except as provided hereafter, it shall be a condition to any such transfer that
the Company shall be furnished with an opinion of counsel, which counsel and
opinion shall be reasonably satisfactory to the Company, to the effect that the
proposed transfer would be in compliance with the Securities Act and State Acts.
Notwithstanding the foregoing, furnishing such opinion of counsel shall not be a
condition to any transfer of the Shares to an affiliate of Investor, including
for this purpose if such Investor is an investment company, any fund or account
advised by such Investor’s investment adviser or any affiliate thereof.
 
ARTICLE 9
MISCELLANEOUS
 
9.1. Payment of Expenses.
 
The Company shall pay its own expenses in connection with the Private
Transaction and the other transactions contemplated herein, including any
advisory fees or commissions due to third parties, and upon completion of the
Private Transaction, shall reimburse JMP Group Inc., or one of its designated
affiliates, up to a maximum of $250,000 for its Private Transaction-related
expenses, including reasonable travel expenses of its personnel, out-of-pocket
expenses incurred by JMP Group Inc., or one of its designated affiliates, in
connection with document production, third party data sources, and other direct
expenses attributable to the Investors’ evaluation of the Private Transaction,
and reasonable fees of one (1) external legal counsel.

9.2. Survival of Warranties.
 
The representation, warranties and covenants of the Company and the Investors
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing for a period of one year after the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Investors, their counsel or
the Company or its counsel, as the case may be.
 
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9.3. Successors and Assigns.
 
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. This
Agreement may not be assigned by either party without the prior written consent
of the other party; provided, however, that any of the Investors may assign its
rights, but may not delegate its obligations, hereunder to a wholly-owned
subsidiary. In no event will a sale by any of the Investors of all or
substantially all of its capital stock or assets, or a merger, consolidation,
share exchange or other business combination transaction involving any such
Investor constitute an assignment for purposes of this Section 9.3.
 
9.4. Governing Law.
 
This Agreement shall be governed by and construed under the internal laws of the
State of New York as applied to agreements among residents of such state entered
into and to be performed entirely within such state, without reference to
principles of conflict of laws or choice of laws.
 
9.5. Counterparts; Facsimile Signatures.
 
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Signatures delivered by facsimile shall be deemed to be
original signatures.
 
9.6. Headings.
 
The headings and captions used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement. All
references in this Agreement to sections, paragraphs, exhibits and schedules
shall, unless otherwise provided, refer to sections and paragraphs hereof and
exhibits and schedules attached hereto, all of which exhibits and schedules are
incorporated herein by this reference.
 
9.7. Notices.
 
Unless otherwise provided, any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified or upon deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed, by a
nationally recognized overnight courier service or by facsimile, as follows:
 
if to the Company, to:
New York Mortgage Trust, Inc.
1301 Avenue of the Americas, 7th Floor
New York, New York 10019
Attention: President
Fax: 212-655-6269

 
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With a copy to:
Hunton & Williams LLP
951 East Byrd Street
Richmond, Virginia 23219
Attention: Daniel M. LeBey, Esq.
Fax: 804-788-8218
   
if to the Investors, to:
JMP Group, Inc.
600 Montgomery Street, 11th Floor
San Francisco, CA 94108
Attention: Janet Tarkoff
Fax: (415) 263-1336
   
With a copy to:
Kirkpatrick & Lockhart, Preston Gates Ellis LLP
1601 K Street, NW
Washington, DC 20006
Attention: Phillip Kardis, Esq.
Fax: 202-778-9100
   

or at such other address as the Investors or the Company may designate by giving
ten (10) days advance written notice to the other parties.
 
9.8. Attorneys’ Fees.
 
If any action at law or in equity, proceeding or counterclaim is necessary to
enforce or interpret the terms of this Agreement or to recover damages, costs
and expenses in connection with any breach of the Agreement, the prevailing
party shall be entitled to be reimbursed by the opposing party for all of the
prevailing party’s reasonable attorneys’ fees, costs and other reasonable
out-of-pocket expenses incurred in connection with such action, proceeding or
counterclaim in addition to any other relief to which such party may be
entitled.
 
9.9. Amendments and Waivers.
 
Any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Investors. Any amendment or waiver effected in accordance with this
Section shall be binding upon each holder of any Common Stock at the time
outstanding, each future holder of such securities, and the Company.
 
9.10. Termination.
 
In the event any of the conditions to a party’s obligations to close the
transactions contemplated under this Agreement is not satisfied or waived, that
party shall have the right to terminate this Agreement.
 
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9.11. Severability.
 
If one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its terms.
 
9.12. Entire Agreement.
 
This Agreement, together with all exhibits and schedules hereto, constitutes the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties with
respect to the subject matter hereof. The Exhibits hereto shall be deemed a part
of this Agreement for all purposes.
 
9.13. Further Assurances.
 
From and after the date of this Agreement, upon the request of the Investors or
the Company, the Company and the Investors shall execute and deliver such
instruments, documents or other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
 
9.14. Indemnity.
 
The Company shall indemnify, defend and hold harmless each of the Investors and
its agents, shareholders, partners, members, officers, directors,
representatives and affiliates (each an “Investor Indemnitee” and collectively,
the “Investor Indemnitees”) from and against any and all losses, damages,
liabilities, claims and expenses, including reasonable attorneys’ fees,
sustained by any Investor Indemnitee resulting from, arising out of, or
connected with any material inaccuracy in, breach of, or non-fulfillment of any
representation, warranty, covenant or agreement made by or other obligation of
the Company contained in this Agreement (including the exhibits and schedules
hereto) or in any document delivered in connection herewith.
 
Each Investor agrees, severally and not jointly, to indemnify, defend and hold
harmless the Company and each of its agents, partners, members, officers,
directors, representatives and affiliates (each a “Company Indemnitee” and
collectively, the “Company Indemnitees”) from and against any and all actual
damages sustained or incurred by any Company Indemnitee upon a finding by a
court of competent jurisdiction in a final non-appealable judgment that the
Investors have in fact breached its representations and warranties under
Article 5 of this Agreement and that the Company Indemnitee has in fact been
damaged as a direct result of such breach.
 
9.15. Press Release.
 
The parties hereto shall consult in good faith with each other as to the form
and substance of any press releases or other public announcements (including
investor presentations and related presentations or outlines prepared or used by
the Company), including any related question and answer guidelines prepared or
used by the Company, related to the transactions contemplated hereby and any
filings with any governmental body or with any national securities exchange or
interdealer quotation service with respect thereto prior to issuing any press
release or other public announcement or making any filing. Nothing in this
Agreement shall be deemed to prohibit any party from making any disclosure or
filing that it determines, upon the advice of counsel, is required by applicable
law or by obligations pursuant to any listing agreement with or rules of any
national securities exchange or interdealer quotation service or to prohibit the
Company from making disclosures in connection with other discussions, questions
or comments in connection with investor relations matters the principal focus of
which is not specifically related to the transactions contemplated hereby
provided that such disclosures or comments are not designed to adversely affect
the reputation or business of the Investors or any of their Affiliates.
 
[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 
COMPANY:
   
NEW YORK MORTGAGE TRUST, INC.
                    /s/ David A. Akre    

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Name: David A. Akre
Title: Co-Chief Executive Officer
       
INVESTORS:
   
JMP GROUP INC.
                      /s/ Joseph A. Jolson      

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Name: Joseph A. Jolson
Title: Chief Executive Officer
             
JMP REALTY TRUST, INC.
                      /s/ Jim J. Fowler      

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Name: Jim J. Fowler
Title: President
             
HARVEST OPPORTUNITY PARTNERS II, L.P.
                      /s/ Joseph A. Jolson      

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Name: Joseph A. Jolson
Title: Portfolio Manager
             
HARVEST OPPORTUNITY PARTNERS OFFSHORE FUND, LTD.
                      /s/ Joseph A. Jolson      

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Name: Joseph A. Jolson
Title: Portfolio Manager

 

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HARVEST SMALL CAP PARTNERS, L.P.
                      /s/ Jeffrey B. Osher      

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Name: Jeffrey B. Osher
Title: Portfolio Manager
             
HARVEST SMALL CAP PARTNERS OFFSHORE, LTD.
                      /s/ Jeffrey B. Osher      

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Name: Jeffrey B. Osher
Title: Portfolio Manager

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Schedule I
 
Investor
 
No. of Shares
 
Purchase Price
 
JMP Group, Inc.
   
250,000
 
$
5,000,000
 
JMP Realty Trust, Inc.
   
500,000
 
$
10,000,000
 
Harvest Opportunity Partners II, L.P.
   
194,693
 
$
3,893,860
 
Harvest Opportunity Partners Offshore Fund, Ltd.
   
17,807
 
$
356,140
 
Harvest Small Cap Partners, L.P.
   
33,850
 
$
677,000
 
Harvest Small Cap Offshore, Ltd.
   
3,650
 
$
73,000
 
Total
   
1,000,000
 
$
20,000,000
 

 

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