Document:

Non-Qualified Stock Option Agreement

 EXHIBIT 4.3 
  
 “VP Finance & Administration and CFO Option Program” 
  

Non-Qualified Stock Option Agreement by and between the Registrant and 
 R. Gregory Miller dated as of May 12, 2003 

 EXHIBIT 4.3 
  
 CALIFORNIA MICRO DEVICES CORPORATION 
  
 NON-QUALIFIED STOCK OPTION AGREEMENT 
  
 THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) is effective as of May 12,.2003, by and between CALIFORNIA MICRO DEVICES
CORPORATION, a California corporation (the “Corporation”), and R. GREGORY MILLER (“Optionee”), on the terms and conditions set forth below to which Optionee accepts and agrees: 
  

	 	1.	 	The Corporation hereby grants to Optionee the “Stock Option” described below: 

  

	 Number of Shares Subject to Stock Option:
	 	 125,000

	 	 	 
	 Date of Grant:
	 	 May 12, 2003

	 	 	 
	 Exercise Price Per Share:
	 	 $2.90

  
 The Stock Option is
not granted under the Corporation’s 1995 Employee Stock Option Plan, as amended (the “Plan”); however, unless otherwise defined in this Agreement, the definitions contained in Section 2 of the Plan are hereby incorporated by
reference. Since the Stock Option is not covered by the S-8 Registration Statement governing the Plan, the Corporation agrees to prepare and file with the Securities and Exchange Commission at its expense an S-8 Registration Statement covering the
Stock Option and the shares of Common Stock (as defined in the Plan) issuable upon its exercise. 
  
 2. The Stock Option is granted to purchase the number of shares of authorized but unissued no par value Common Stock of the Corporation specified in
Section 1 hereof (the “Shares”). The Stock Option shall expire, and all rights to exercise it shall terminate on the tenth anniversary of the Date of Grant, unless sooner terminated under the terms of this Agreement. This Stock Option is
intended by the Corporation and Optionee to be a non-qualified stock option for income tax purposes. 
  
 3. Optionee shall have the right to exercise the Stock Option in accordance with the following schedule: 
  
 (a) The Stock Option may not be exercised in whole or in
part at any time prior to the one-year anniversary of the Date of Grant. 
  
 (b) Optionee may exercise the Stock Option as to one-fourth of the shares on or after the one-year anniversary of the Date of Grant. 
  
 (c) Optionee may exercise the Stock Option as to an additional 1/16th of the Shares on or after the end of
each complete three (3)-month period following the one-year anniversary of the Date of Grant, meaning that Optionee may exercise the Stock Option in full on or after the four-year anniversary of the Date of Grant. 
  

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 (d) The right to exercise the Stock Option shall be cumulative. Optionee may buy all, or
from time to time any part, of the maximum number of shares which are exercisable under the Stock Option, but in no case may Optionee exercise the Stock Option with regard to a fraction of a share, or for any share for which the Stock Option is not
exercisable. 
  
 4. Optionee agrees to comply with all laws,
rules, and regulations applicable to the grant and exercise of the Stock Option and the sale or other disposition of the Common Stock of the Corporation received pursuant to the exercise of such Stock Option, including compliance with the
Corporation’s insider trading policies. 
  
 5. The Stock
Option shall not become exercisable unless and until the Corporation has determined that: (a) it and Optionee have taken all actions required to register such shares under the Securities Act of 1933, as amended, or to perfect an exemption from the
registration requirements thereof; (b) any applicable listing requirement of any stock exchange or securities market on which such shares are listed has been satisfied; and (c) all other applicable provisions of state and federal law have been
satisfied. 
  
 6. The vesting schedule shall not impose upon the
Corporation any obligation to retain Optionee in its employ or under contract for any period, or otherwise change the employment-at-will status of Optionee. 
  
 7. This option grant shall lapse on the earliest of the following events: 
  
 (a) The tenth anniversary of the Date of Grant; 
  
 (b) The first anniversary of Optionee’s death;

  
 (c) The first anniversary of the date
Optionee ceases to be an Employee (as defined in the Plan) due to total and permanent disability, within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (“IRS Code”); 
  
 (d) On the date provided in Sections 10, 11 and 12 of this
Agreement; or 
  
 (e) The date Optionee files or
has filed against him a petition in bankruptcy. 
  
 8. The
Purchase Price (the Exercise Price times the number of Shares for which the Stock Option is being exercised) shall be payable in full in cash upon each exercise of the Stock Option except that Optionee may also pay the Purchase Price by surrendering
shares of the Corporation’s registered common stock in good form for transfer, owned by Optionee and having a Fair Market Value (as defined in the Plan) on the date of exercise equal to the Purchase Price. However, Optionee shall not surrender
shares in payment of the Exercise Price if such action would cause the Corporation to recognize additional compensation expense with respect to the Stock Option for financial reporting purposes as compared to if Optionee had paid cash to exercise
the Option. Optionee may pay in any combination of cash and such shares as long as 
  

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 the sum of the cash so paid and the Fair Market Value of the shares so surrendered equals the Purchase Price. 

 
 Payment may be made all or in part by delivery (on a form prescribed by
the Committee (as defined in the Plan)) of an irrevocable direction to a securities broker to sell the shares resulting from the exercise and to deliver all or part of the sale proceeds to the Corporation in payment of part or all of the aggregate
exercise price along with any taxes due pursuant to Section 17. 
  
 9. During the lifetime of Optionee, the rights granted by this Agreement shall be exercisable only by Optionee or Optionee’s conservator or legal representative and shall not be assignable or transferable except pursuant to a qualified
domestic relations order as defined by the IRS Code. In the event of Optionee’s death, the Stock Option shall not be transferable by Optionee other than by will or the laws of descent and distribution. 
  
 10. If Optionee ceases to be an Employee for any reason other than his death
or disability, Optionee shall have the right, subject to the provisions of this section, to exercise the Stock Option held by Optionee at any time within ninety (90) days after his or her termination of employment, but not beyond the otherwise
applicable term of the Option and only to the extent that on such date of termination of employment Optionee’s right to exercise such Option had vested. For purposes of this section, the employment relationship shall be treated as continuing
intact while Optionee is an active employee of the Corporation, or is on military leave, sick leave, or other bona fide leave of absence to be determined in the sole discretion of the Committee. 
  
 11. If Optionee dies while an Employee, or after ceasing to be an Employee
but during the period while he could have exercised an Option under Section 22(e)(3) of the IRS Code, the Stock Option granted to Optionee may be exercised, to the extent it had vested at the time of death, at any time within twelve (12)
months after Optionee’s death, by the executors or administrators of his estate or by any person or persons who acquire the Stock Option by will or the laws of descent and distribution, but not beyond the otherwise applicable term of the Stock
Option. 
  
 12. If Optionee ceases to be an Employee due to
becoming totally and permanently disabled within the meaning of Section 22(e)(3) of the IRS Code, the Stock Option granted to Optionee may be exercised to the extent it had vested at the time of cessation and at any time within twelve (12) months
after Optionee’s termination of employment, but not beyond the otherwise applicable term of the Stock Option. 
  
 13. Optionee, or a transferee of Optionee, shall have no rights as a shareholder of the Corporation with respect to any Shares for which the Stock Option
is exercisable until the date of the issuance of a stock certificate for such Shares. No adjustment shall be made for dividends, ordinary or extraordinary or whether in currency, securities, or other property, distributions, or other rights for
which the record date is prior to the date such stock certificate is issued. 
  
 14. Except as expressly provided in this section, Optionee shall have no rights by reason of any payment of any stock dividend, stock split or reverse stock split or any other increase or decrease in the number of
shares of stock of any class, or by reason of any 
  

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 reorganization, consolidation, dissolution, liquidation, merger, exchange, split-up or reverse split-up, or spin-off of
assets or stock of another corporation. Any issuance by the Corporation of shares, options or securities convertible into shares or options shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise
Price of the Shares for which this Stock Option is exercisable. In the event of a stock split, reverse stock split, stock dividend, or other like event, or in the event of a merger involving the Corporation in which the Corporation is not the
surviving entity or other reclassification or reorganization, the number of shares, class of stock, and Exercise Price of the Stock Option shall be adjusted so that Optionee would receive upon exercise of the Stock Option the same number of shares
of the same class of stock for the same aggregate Exercise Price as though Optionee had exercised the Stock Option immediately prior to such event and held the shares so acquired when the event occurred. If any of the other events described in the
first sentence of this Section 14 should occur, the Committee shall have the right, but not the obligation, to revise the terms of this Stock Option in a manner the Committee, in its sole discretion, deems fair and reasonable given the transaction
involved; provided, that, if necessary or appropriate in connection with such event, the Committee may declare that the Stock Option shall terminate as of a date fixed by the Committee and give Optionee the right to exercise the Stock Option in
whole or in part, including, if the Committee desires, to exercise the Option for Shares as to which the Option would not otherwise be exercisable. 
  
 15. The grant of this Stock Option shall not affect or restrict in any way the right or power of the Corporation to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or consolidate, or to dissolve, liquidate, sell, or transfer all or any part of its business or assets. 
  
 16. The Committee may grant Optionee the right to exercise the Stock Option prior to the complete vesting of such Stock
Option. Without limiting the generality of the foregoing, the Committee may provide that if the Stock Option is exercised prior to having completely vested, the Shares issued upon such exercise shall remain subject to vesting at the same rate as
under the Stock Option so exercised and shall be subject to a right, but not an obligation, of repurchase by the Corporation with respect to all unvested Shares if Optionee ceases to be an Employee for any reason. For the purposes of facilitating
the enforcement of any such right of repurchase, at the request of the Committee, Optionee shall enter into joint escrow instructions with the Corporation and deliver every certificate for his unvested Shares with a stock power executed in blank by
Optionee and by Optionee’s spouse, if required for transfer. 
  
 17. In the event the Corporation or an Affiliate (as defined in the Plan) determines that it is required to withhold or otherwise pay on Optionee’s behalf federal, state, or local taxes in connection with the exercise of an Option or
the disposition of Shares issued pursuant to the exercise of an Option, Optionee or any person succeeding to the rights of Optionee, as a condition to such exercise or disposition, may be required to make arrangements satisfactory to the Corporation
or the Affiliate to enable it to satisfy such withholding requirements or to make such payments on Optionee’s behalf. Optionee understands that under tax law in effect as of the Date of Grant, the spread between the Fair Market Value on the
date of exercise and the Exercise Price would be ordinary income to Optionee and the Corporation would be required to withhold (if Optionee was then an Employee) or pay on Optionee’s behalf (if Optionee was no longer an Employee) tax on such
spread at rates provided by Federal and state tax laws. 
  

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 18. In granting options hereunder, neither the Corporation nor any Affiliate makes any representations or
undertakings with respect to the initial qualification or treatment of Options under federal or state tax or securities laws. The Corporation and each Affiliate expressly disavows the creation of any rights in Optionee, or beneficiaries of any
obligations on the part of the Corporation, any Affiliate or the Committee, except as expressly provided herein. 
  
 19. This Agreement is governed by California law. It constitutes the entire agreement and understanding of the Corporation and Optionee concerning its
subject matter, superseding all prior agreements and understandings concerning its subject matter, whether oral or written, including, without limitation, any offer letter between the Corporation and Optionee. This Agreement may only be amended by a
writing executed by the CEO of the Corporation and by Optionee. 
  
 IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, in the case of the Corporation by its duly authorized officer, effective as of the date first written above. 
  

	CALIFORNIA MICRO DEVICES CORPORATION
		
	 By
	 	 /s/            

	 	 	Robert V. Dickinson, President and CEO

  

	 OPTIONEE

	
	 /s/            

	R. Gregory Miller
	 
	 Address:

  

 -5-EXHIBIT 10.1
Master Repurchase
Agreement

September 1996 Version

Dated as of:   August 25, 2003

Between:       Georgetown Funding Company, LLC, as Buyer (the "Buyer")and
               Friedman, Billings, Ramsey Group, Inc., as Seller (the "Seller")

1.   Applicability

     From  time  to  time  the  parties  hereto  may  enter  into
     transactions in which one party ("Seller")  agrees to transfer to the other
     (`Buyer") securities or other assets ("Securities") against the transfer of
     funds by Buyer,  with a  simultaneous  agreement  by Buyer to  transfer  to
     Seller such Securities at a date certain or on demand, against the transfer
     of funds by Seller.  Each such transaction shall be referred to herein as a
     "Transaction" and, unless otherwise agreed in writing, shall be governed by
     this Agreement, including any supplemental terms or conditions contained in
     Annex I hereto  and in any other  annexes  identified  herein or therein as
     applicable hereunder.

2.   Definitions

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

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

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

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

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

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

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

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

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

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

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

(l)  "Pricing  Rate",  the per annum  percentage rate for  determination  of the
     Price Differential;

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

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

(o)  "Purchase  Price",  (i) on the Purchase Date, the price at which  Purchased
     Securities are transferred by Seller to Buyer, and (ii) thereafter,  except
     where Buyer and Seller agree otherwise,  such price increased by the amount
     of any cash  transferred  by Buyer to Seller  pursuant  to  Paragraph  4(b)
     hereof and  decreased  by the amount of any cash  transferred  by Seller to
     Buyer  pursuant  to  Paragraph  4 (a) hereof or applied to reduce  Seller's
     obligations under clause (ii) of Paragraph 5 hereof;

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

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

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

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

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

3.   Initiation; Confirmation; Termination

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

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

(c)  In the case of Transactions  terminable  upon demand,  such demand shall be
     made by Buyer or  Seller,  no  later  than  such  time as is  customary  in
     accordance with market  practice,  by telephone or otherwise on or prior to
     the business day on which such termination  will be effective.  On the date
     specified in such demand,  or on the date fixed for termination in the case
     of Transactions having a fixed term, termination of the Transaction will be
     effected by transfer to Seller or its agent of the Purchased Securities and
     any  Income  in  respect  thereof  received  by Buyer  (and not  previously
     credited  or  transferred  to, or applied  to the  obligations  of,  Seller
     pursuant to  Paragraph 5 hereof)  against  the  transfer of the  Repurchase
     Price to an account of Buyer.

4.   Margin Maintenance

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

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

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

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

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

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

5.  Income Payments

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

6.  Security Interest

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

7.  Payment and Transfer

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

8.  Segregation of Purchased Securities

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

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

    Seller is not permitted to substitute other securities for those subject to
    this Agreement and therefore must keep Buyer's securities segregated at all
    times, unless in this Agreement Buyer grants Seller the right to substitute
    other securities. If Buyer grants the right to substitute, this means that
    Buyer's securities will likely be commingled with Seller's own securities
    during the trading day. Buyer is advised that, during any trading day that
    Buyer's securities are commingled with Seller's securities, they [will] *
    [may] ** be subject to liens granted by Seller to [its clearing bank] *
    [third parties] ** and may be used by Seller for deliveries on other
    securities transactions. Whenever the securities are commingled, Seller's
    ability to resegregate substitute securities for Buyer will be subject to
    Seller's ability to satisfy [the clearing] * [any] ** lien or to obtain
    substitute securities.

    * Language to be used under 17 C.F.R. 13403.4(e) if Seller is a government
    securities broker or dealer other than a financial institution.
    ** Language to be used under 17 C.F.R. 13403.5(d) if Seller is a financial
    institution.
--------------------------------------------------------------------------------
9.       Substitution

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

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

10.      Representations

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

11.      Events of Default

    In the event that (i) Seller fails to transfer or Buyer fails to purchase
    Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to
    repurchase or Buyer fails to transfer Purchased Securities upon the
    applicable Repurchase Date, (iii) Seller or Buyer fails to comply with
    Paragraph 4 hereof, (iv) Buyer fails, after one business day's notice, to
    comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect
    to Seller or Buyer, (vi) any representation made by Seller or Buyer shall
    have been incorrect or untrue in any material respect when made or repeated
    or deemed to have been made or repeated, or (vii) Seller or Buyer shall
    admit to the other its inability to, or its intention not to, perform any of
    its obligations hereunder (each an "Event of Default"):

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

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

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

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

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

     (ii) as to Transactions  in which the defaulting  party is acting as Buyer,
          (A) immediately  purchase,  in a recognized  market (or otherwise in a
          commercially  reasonable  manner)  at  such  price  or  prices  as the
          nondefaulting  party  may  reasonably  deem  satisfactory,  securities
          ("Replacement  Securities")  of  the  same  class  and  amount  as any
          Purchased Securities that are not delivered by the defaulting party to
          the  nondefaulting  party  as  required  hereunder  or (B) in its sole
          discretion elect, in lieu of purchasing Replacement Securities,  to be
          deemed to have purchased Replacement  Securities at the price therefor
          on such date, obtained from a generally  recognized source or the most
          recent closing offer quotation from such a source.

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

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

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

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

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

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

12.      Single Agreement

    Buyer and Seller acknowledge that, and have entered hereinto and will enter
    into each Transaction hereunder in consideration of and in reliance upon the
    fact that, all Transactions hereunder constitute a single business and
    contractual relationship and have been made in consideration of each other.
    Accordingly, each of Buyer and Seller agrees (i) to perform all of its
    obligations in respect of each Transaction hereunder, and that a default in
    the performance of any such obligations shall constitute a default by it in
    respect of all Transactions hereunder, (ii) that each of them shall be
    entitled to set off claims and apply property held by them in respect of any
    Transaction against obligations owing to them in respect of any other
    Transactions hereunder and (iii) that payments, deliveries and other
    transfers made by either of them in respect of any Transaction shall be
    deemed to have been made in consideration of payments, deliveries and other
    transfers in respect of any other Transactions hereunder, and the
    obligations to make any such payments, deliveries and other transfers may be
    applied against each other and netted.

13.      Notices and Other Communications

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

14.      Entire Agreement; Severability

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

15.      Non-assignability; Termination

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

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

16.      Governing Law

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

17. No Waivers, Etc.

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

18.      Use of Employee Plan Assets

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

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

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

19.      Intent

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

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

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

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

20.      Disclosure Relating to Certain Federal Protections

    The parties acknowledge that they have been advised that:

(a)      in the case of Transactions in which one of the parties is a broker or
         dealer registered with the Securities and Exchange Commission ("SEC")
         under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"),
         the Securities Investor Protection Corporation has Georgetown Funding
         Company, LLC, as Buyer

    taken the position that the provisions of the Securities Investor Protection
    Act of 1970 ("SIPA") do not protect the other party with respect to any
    Transaction hereunder;

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

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

Georgetown Funding Company, LLC,         Friedman, Billings, Ramsey Group, Inc.,
as Buyer                                 as Seller

By: /s/ Orlando Figueroa                 By: /s/ Richard J. Hendrix

Title: Authorized Signatory              Title: Chief Investment Officer

Date: August 25, 2003                    Date: August 25, 2003

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