Document:

INDEPENDENT
        DIRECTOR’S CONTRACT

      

      

      THIS
        AGREEMENT (the “Agreement”)
        is
        made as of October 9, 2007 and is by and between Puda Coal, Inc. a Florida
        corporation (hereinafter referred to as the “Company”),
        and
        Dr. C. Mark Tang (the “Director”).

      

      BACKGROUND

      

      The
        Company desires to retain the Director for the duties of independent director
        and the Director desires to be retained for such position and to perform
        the
        duties required of such position in accordance with the terms and conditions
        of
        this Agreement.

      

      AGREEMENT

      

      In
        consideration for the above recited promises and the mutual promises contained
        herein, the adequacy and sufficiency of which are hereby acknowledged, the
        Company and the Director hereby agree as follows:

      

      1. DUTIES.
        The
        Company hereby requires that the Director be available to perform such duties
        (i) as may be determined and assigned by the Board of Directors of the
        Company, and (ii) that are specified in the Company’s Articles of
        Incorporations and Bylaws to be performed by directors. The Director agrees
        to
        devote as much time as is necessary to perform completely the duties as the
        Director of the Company as described in the preceding sentence.

      

      2. TERM.
        Except
        in the case of early termination, as hereinafter specifically provided, the
        term
        of this Agreement shall commence as of October 9, 2007 and shall continue
        for as
        long as the Director serves as a director of the Company. 

      

      3. COMPENSATION.
        For all
        services to be rendered by the Director in any capacity hereunder, the Company
        agrees to pay the Director an annual fee of (i) $40,000 in cash and (ii)
        13,021 shares
        of
        common stock of the Company. The initial fee should be 50% of the annual
        fee,
        which is considered earned when paid and is nonrefundable. The initial payment
        for the services of the Director for services rendered is due upon execution
        of
        this Agreement; thereafter, payment of 50% of the annual fee shall be due
        on or
        before the first date of
        each
        six succeeding months. Such fee may be adjusted from time to time as agreed
        by
        the parties. 

      

      4. EXPENSES.
        In
        addition to the compensation provided in paragraph 3 hereof, the Company
        will
        reimburse the Director for business related travel, including economy class
        flight tickets for trips between U.S. and China, meal and other miscellaneous
        expenses incurred in the performance of the Director’s duties for the Company;
        provided, however, that such expenses shall be approved by the Company in
        writing prior to the Director incurring such expenses. Such payments shall
        be
        made by the Company upon submission by the Director of a signed statement
        itemizing the expenses incurred. Such statement shall be accompanied by
        sufficient documentary matter to support the expenditures.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      5. CONFIDENTIALITY
        AND INSIDER TRADING.
        The
        Company and the Director each acknowledge that, in order for the intents
        and
        purposes of this Agreement to be accomplished, the Director shall necessarily
        be
        obtaining access to certain confidential or non-public information concerning
        the Company and its affairs, including, but not limited to business methods,
        information systems, financial data and strategic plans which are unique
        assets
        of the Company (“Confidential
        Information”).
        The
        Director covenants not to, either directly or indirectly, in any manner,
        utilize
        or disclose to any person, firm, corporation, association or other entity
        any
        Confidential Information or engage in any illegal inside trading
        activities.

      

      6. NOTICE
        OF MATERIAL CHANGE IN FINANCIAL CONDITION OF THE COMPANY.
        The
        Company shall endeavor to notify the Director in writing, at the earliest
        practicable time, of any material adverse change in the financial condition
        of
        the Company.

      

      7. TERMINATION.
        With or
        without cause, the Company and the Director may each terminate this Agreement
        at
        any time upon ten (10) days written notice, and the Company shall be obligated
        to pay to the Director the compensation and expenses due up to the date of
        the
        termination and incurred in accordance with this Agreement. If termination
        occurs prior to the last date of any succeeding six months after the first
        six
        months of this agreement, the Company shall be entitled to receive, within
        thirty (30) days after written request by the Company, a prorated refund
        of the
        portion of the fee that relates to the period after the termination date.
        Such
        written request must be submitted within ninety (90) days of the termination
        date. Nothing contained herein or omitted herefrom shall prevent the Director(s)
        of the Company from removing the Director with immediate effect at any time
        for
        any reason.

      

      8. INDEMNIFICATION.
        The Company shall indemnify, defend and hold harmless the Director, to the
        full
        extent allowed by the law of the State of Florida, and as provided by, or
        granted pursuant to, any charter provision, both as to action in the Director’s
        official capacity and as to action in another capacity while holding such
        office, except for matters arising out of the Director’s gross negligence or
        willful misconduct. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      9. EFFECT
        OF WAIVER.
        The
        waiver by either party of the breach of any provision of this Agreement shall
        not operate as or be construed as a waiver of any subsequent breach
        thereof.

      

      10. NOTICE.
        Any and
        all notices referred to herein shall be sufficient if furnished in writing
        and
        delivered in person or mailed at the following addresses or facsimiled to
        the
        following number:

      

        
          	
                  To
                    the Company:

                	 	 
	
                   

                	
                  Attention:
                    

                	
                  Wenwei
                    Tian 

                
	
                   

                	
                  Address:
                    

                	
                  426
                    Xuefu Street, Taiyuan, Shanxi Province, The People’s Republic of
                    China

                
	
                   

                	
                  Facsimile:
                    

                	
                  01186-351-703-4404

                
	 	 	 
	
                  To
                    the Director:

                	
                  Dr.
                    C. Mark Tang

                
	 	
                  Address:
                    

                	
                  c/o
                    World Technology Venture LLC

                  14
                    Wall Street, 20 Floor

                  New
                    York, New York

                
	 	
                  Facsimile: 
                    

                	
                  1-212-658-9952

                

        

      

       

      12. GOVERNING
        LAW AND DISPUTE RESOLUTION.
        This
        Agreement shall be interpreted in accordance with, and the rights of the
        parties
        hereto shall be determined by, the laws of China without reference to its
        conflicts of laws principles. Any dispute arising from or in connection with
        this contract shall be submitted to China International Economic and Trade
        Arbitration Commission (“CIETAC”)
        in
        Beijing for arbitration, which shall be conducted in accordance with CIETAC’s
        arbitration rules in effect at the time of applying for arbitration. The
        arbitral award is final and biding upon both parties. The parties agree that:
        (a) The venue of arbitration is Beijing. The hearing of arbitration may be
        conducted in Beijing or, to the extent permitted by CIETAC’s arbitration rules,
        any other place as agreed on by the parties as the most convenient place;
        (b)
        The language to be used during the arbitration proceedings should be English;
        (c) A one-arbitrator tribunal will be appointed jointly by both parties and
        the
        arbitration should follow the ordinary proceeding. In case the parties fail
        to
        jointly appoint the arbitrator, the arbitrator should be appointed by the
        chairman of CIETAC upon the joint authorization of the parties. The parties
        may
        select arbitrators from the panel of arbitrators provided by CIETAC, and
        to the
        extent permitted by CIETAC’s arbitration rules, from outside of the panel.

      

      13. ASSIGNMENT.
        The
        rights and benefits of the Company under this Agreement shall be transferable,
        and all the covenants and agreements hereunder shall inure to the benefit
        of,
        and be enforceable by or against, its successors and assigns. The duties
        and
        obligations of the Director under this Agreement are personal and therefore
        the
        Director may not assign any right or duty under this Agreement without the
        prior
        written consent of the Company.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      14. MISCELLANEOUS.
        (a) If
        any provision of this Agreement shall be declared invalid or illegal, for
        any
        reason whatsoever, then, notwithstanding such invalidity or illegality, the
        remaining terms and provisions of the within Agreement shall remain in full
        force and effect in the same manner as if the invalid or illegal provision
        had
        not been contained herein; (b) This Agreement shall be binding upon and shall
        inure to the benefit of the parties hereto, and their respective heirs,
        executors, administrators, successors and assigns.

      

      15. ARTICLE
        HEADINGS.
        The
        article headings contained in this Agreement are for reference purposes only
        and
        shall not affect in any way the meaning or interpretation of this
        Agreement.

      

      16. COUNTERPARTS.
        This
        Agreement may be executed in any number of counterparts, all of which taken
        together shall constitute one instrument.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this independent director’s
        contract to be duly executed and signed as of the day and year first above
        written.

       

      
        	
                 

              	
                PUDA
                  COAL, INC.

              	 
	
                 

              	
                a
                  Florida corporation 

              	 
	 	 	 	 
	
                 

              	
                BY: 
                  

              	/s/
                Ming Zhao   	 
	
                 

              	 	
                Ming
                  Zhao, Chief Executive Officer 

              	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                INDEPENDENT
                  DIRECTOR

              	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                BY:

              	
                /s/
                  C. Mark Tang    

              	 
	
                 

              	
                 

              	
                C.
                  Mark Tang

              	 

      

    

    
      

      
        
          
          

        

        
          5Unassociated Document

     

    
      
        	
                  

              	
                Master
                  Repurchase

                Agreement

              

      

    

    
    

    
      
        

      

    

    September
      1996 Version

    

    

    Dated
      as
      of    August
      10, 2007 

    
      

    

     

    Between:        RCG
      PB,
      Ltd, as Buyer (the “Buyer”)

    
      
 

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

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

            

    

    

    
      	 	
              (c)

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

            

    

    

    
      	 	
              (d)

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

            

    

    

    
      	 	
              (e)

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

            

    

    

    
      	 	
              (f)

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

            

    

    

    
      	 	
              (g)

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

            

    

    

    
      	 	
              (h)

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

            

    

    

    
      	 	
              (i)

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

            

    

    

    
      	 	
              (j)

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

            

    

    

    
      	 	
              (k)

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

            

    

    

    
      	 	
              (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);

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    
      	
              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.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              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.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    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.

              

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    
      	
              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.

            

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    
      	
              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).

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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 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.

            

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
              RCG
                PB, LTD,
                as Buyer

            
	 
	 
	
              By: 
                /s/ Jeffrey M.
                Solomon                                             
                

            
	
              Name:
                Jeffrey M. Solomon    

            
	
              Title:
                Authorized Signatory

            

    

     

    

    
      	
              HANOVER
                CAPITAL MORTGAGE HOLDINGS, INC., as
                Seller

            
	 
	 
	 
	
              By:
                /s/ John A.
                Burchett                                                   
                

            
	
              Name:
                John A. Burchett

            
	
              Title:
                Chairman, President and Chief Executive
                Officer

            

    

    

    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

      

    

    
      

        AMENDED
          AND RESTATED ANNEX I

         

        SUPPLEMENTAL
          TERMS AND CONDITIONS

        

         

        This
          Amended and Restated Annex I (this “Annex
          I”),
          dated
          as of October 2, 2007, forms a part of the TBMA Master Repurchase Agreement
          (September 1996 Version) dated as of August 10, 2007 (the “Master
          Agreement”
and,
          together with this Amended and Restated Annex I, Annex II and any schedules
          and
          exhibits hereto or thereto, this “Agreement”),
          between Hanover Capital Mortgage Holdings, Inc., as the Seller (the
“Seller”)
          and
          RCG PB, Ltd, as buyer (the “Buyer”).
          Capitalized terms used but not defined in this Annex I shall have the meanings
          ascribed to them in the Master Agreement. To the extent that this Annex
          I
          conflicts with the terms of the Master Agreement, this Annex I shall
          control.

         

        All
          references to Buyer in the Agreement shall be deemed to be references to
          RCG PB,
          Ltd, and except as is otherwise expressly provided in this Annex I to the
          contrary, any reference to “Seller” in the Master Agreement shall be construed
          to mean a reference to Hanover Capital Mortgage Holdings, Inc.

         

        1. DEFINITIONS.

         

        (a) For
          purposes of the Agreement and this Annex I, the following terms shall have
          the
          following meanings:

         

        “Act
          of
          Insolvency”
means
          the occurrence of either of the following with respect to any
          Person:

         

        (a) (i)
          any
          case, proceeding, petition or action shall be commenced or filed, without
          such
          Person’s application or consent, in any court, seeking the liquidation,
          reorganization, debt arrangement, dissolution, winding up, or composition
          or
          readjustment or relief of debts of such Person, the appointment of a trustee,
          receiver, custodian, liquidator, assignee, sequestrator or the like for
          such
          Person or all or substantially all of such Person’s assets, or any assignment
          for the benefit of the creditors of such Person, or (ii) any similar case,
          proceeding, petition or action with respect to such Person under any law
          relating to bankruptcy, insolvency, reorganization, winding up or composition
          or
          adjustment of debts shall be commenced or filed against such Person, and
          such
          case, proceeding, petition or action shall continue undismissed, or unstayed
          and
          in effect, for a period of 15 consecutive days; or an order for relief
          in
          respect of such Person shall be entered in an involuntary case under the
          Bankruptcy Code or other similar laws now or hereafter in effect;
          or

         

        (b) such
          Person shall commence or file a voluntary case or other proceeding under
          any
          applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution
          or other similar law now or hereafter in effect (including, without limitation,
          under Section 301 of the Bankruptcy Code), or shall consent to the appointment
          of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
          sequestrator (or other similar official) for, such Person or for substantially
          all of its property, or shall make any general assignment for the benefit
          of
          creditors, or shall fail to, or admit in writing its inability to, pay
          its debts
          generally as they become due, or its board of directors or managers shall
          vote
          to implement any of the foregoing.

         

        
          
            
            

          

          
            Annex
              I-1

            
              

            

          

          
            
            

          

        

        “Affiliate”
when
          used with respect to a Person means any other Person controlling, controlled
          by,
          or under common control with, such Person. For the purposes of this definition,
          “control” when used with respect to any specified Person means the power to
          direct the management and policies of such Person, directly or indirectly,
          whether through the ownership of voting securities (including, without
          limitation, partnership interests), by contract or otherwise and the terms
          “controlling” and “controlled” have meanings correlative to the
          foregoing.

         

        “Bankruptcy
          Code”
means
          the United States Bankruptcy Reform Act of 1978, as amended.

         

        “Business
          Day”
means
          any day other than a Saturday or Sunday or a day when banks are authorized
          or
          required by law to close in New York, New York.

         

        “Code”
means
          the Internal Revenue Code of 1986, as amended, reformed or otherwise modified
          from time to time, and any successor statute of similar import, in each
          case as
          in effect from time to time. References to sections of the Code also refer
          to
          any successor sections.

         

        “Default”
means
          any event, that, with the giving of notice or the passage of time or both,
          would
          constitute an Event of Default under this Agreement.

         

        “ERISA”
means
          the Employee Retirement Income Security Act of 1974, as amended, and any
          successor statute of similar import, in each case as in effect from time
          to
          time. References to sections of ERISA also refer to any successor
          sections.

         

        “Event
          of Default”
shall
          have the meaning assigned to such term in Section
          11
          of this
          Annex I.

         

        “Investment
          Company Act”
means
          the United States Investment Company Act of 1940, as amended.

         

        “Lien”
means
          any lien (statutory or other), security interest, assignment, mortgage,
          charge,
          pledge, hypothecation, deposit arrangement, encumbrance or preference,
          priority
          or other security agreement or preferential arrangement of any kind or
          nature
          whatsoever (including any conditional sale or other title retention agreement,
          any financing lease involving substantially the same economic effect as
          any of
          the foregoing and the filing of any financing statement under the UCC or
          any
          comparable law of any jurisdiction).

         

        “Monthly
          Additional Purchase Price Payment Date”
means
          the second Business Day following the 25th
          calendar
          day of each month prior to the Repurchase Date.

         

        “Monthly
          Additional Purchase Price Payment”
means,
          for each Monthly Additional Purchase Price Payment Date, an amount equal
          to the
          excess of (A) all interest actually paid on the Purchased Securities (whether
          or
          not held by the Buyer), since the preceding Monthly Additional Purchase
          Price
          Payment Date (or, in the case of the first Monthly Additional Purchase
          Price
          Payment Date, the Purchase Date) over (B) $810,000.

         

        
          
            
            

          

          
            Annex
              I-2

            
              

            

          

          
            
            

          

        

        “Person”
means
          an individual, partnership, limited liability company, corporation (including
          a
          business trust), joint stock company, trust, incorporated or unincorporated
          association, joint venture, government or any agency or political subdivision
          thereof or any other entity.

         

        “Proposal”
means
          a
          written notice setting forth the following information with respect to
          the
          portfolio of securities that the Seller desires to transfer to the Buyer:
          (i)
          the CUSIP for each such Security; and (ii) the unpaid principal balance
          for each
          such Security. A Proposal shall not include any Additional Purchased Securities.
          

         

        “SEC”
means
          the Securities and Exchange Commission or any successor thereto.

         

        “Securities
          Act”
means
          the Securities Act of 1933, as amended.

         

        “Securities
          Exchange Act”
means
          the Securities Exchange Act of 1934, as amended.

         

        “UCC”
means
          the Uniform Commercial Code as from time to time in effect in the applicable
          jurisdiction or jurisdictions.

         

        (b) The
          following capitalized terms shall have the respective meanings set forth
          below,
          in lieu of the meanings for such terms set forth in the Master
          Agreement:

         

        “Confirmation”
means
          a
          confirmation substantially in the form of Exhibit
          A
          delivered pursuant to Paragraph
          3
          of the
          Master Agreement.

         

        “Purchase
          Date”
means
          August 10, 2007.

         

        “Purchase
          Price”
          means
          $80,932,928.35

         

        “Repurchase
          Date”
means
          August 9, 2008; provided,
          further,
          that,
          upon the declaration or deemed declaration of an Event of Default pursuant
          to
Section
          11
          hereof,
          the Repurchase Date shall be accelerated pursuant to Section
          11(b).
          

         

        “Repurchase
          Price”
means
          an amount equal to the excess of (A) the sum of
          (i) the
          Purchase Price, (ii) $9,720,000, and
          (iii)
          $4,000,000, over (B) the excess of (i) all interest actually paid on the
          Purchased Securities (whether or not held by the Buyer), since the Purchase
          Date, over (ii) the sum of the Monthly Additional Purchase Price Payments
          paid
          by the Buyer to the Seller since the Purchase Date. 

         

        (c) This
          Annex I is intended to supplement the Master Agreement and shall, wherever
          possible, be interpreted so as to be consistent with the Master Agreement;
          however, in the event of any conflict or inconsistency between the provisions
          of
          this Annex I and the provisions of the Master Agreement, the provisions
          of this
          Annex I shall govern and control. For purposes of this Annex I and each
          Confirmation, unless the context otherwise requires: (a) references to any
          amount as on deposit or outstanding on any particular date means such amount
          at
          the close of business on such day; (b) the term “including” means
“including without limitation”; (c) references to any law or regulation
          refer to that law or regulation as amended from time to time and include
          any
          successor law or regulation; (d) references to any agreement refer to that
          agreement as from time to time amended, restated or supplemented or as
          the terms
          of such agreement are waived or modified in accordance with its terms;
          (e)
          references to any Person include that Person’s successors and assigns; and (f)
          headings are for purposes of reference only and shall not otherwise affect
          the
          meaning or interpretation of any provision hereof.

        
          
            
            

          

          
            Annex
              I-3

            
              

            

          

          
            
            

          

        

        2. DELIVERY.
          All
          Purchased Securities shall be transferred to the Buyer by the Seller delivering
          (or causing to be delivered) to the Buyer, on or prior to the Purchase
          Date, the
          security certificate for each Purchased Security, indorsed to the Buyer
          by an
          effective indorsement whereupon ownership of the Purchased Securities shall
          pass
          to the Buyer.

         

        3. FUNDING
          REQUESTS; CONFIRMATIONS.

         

        Paragraph
          3
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

        

        (a) The
          Seller agrees to do such further acts and things and to execute and deliver
          to
          Buyer such additional assignments, acknowledgments, agreements, powers
          and
          instruments as are reasonably required by Buyer to carry into effect the
          purposes of this Agreement, to perfect the interests of Buyer in the Purchased
          Securities, or to better assure and confirm unto Buyer its rights, powers
          and
          remedies hereunder.

         

        (b) On
          or
          prior to 7:00 a.m. New York City time on the date hereof, the Seller shall
          deliver to the Buyer the Proposal.

         

        (c) On
          the
          Purchase Date specified in the Proposal, the Seller and Buyer shall agree,
          in
          writing through the execution of the Confirmation, on the Securities to
          be
          purchased by the Buyer, which shall be identified by CUSIP in the Confirmation.
          Seller shall, as soon as practicable (but no later than 11:00 a.m. New
          York City
          time on the Purchase Date), deliver to the Buyer the Confirmation, substantially
          in the form of Exhibit
          A,
          and if
          such Confirmation has been delivered in form acceptable to the Buyer and
          all
          other conditions precedent set forth in Section
          12
          have
          been satisfied to the Buyer’s satisfaction, the Buyer shall execute and return
          such Confirmation to the Seller. 

         

        (d) In
          the
          event of any conflict between the terms of such Confirmation and this Agreement,
          this Agreement shall prevail.
          For the
          avoidance of doubt, the parties hereby agree that there shall be only one
          Confirmation and only one Transaction under this Agreement.

         

        4. MARGIN
          MAINTENANCE.

         

        Paragraph
          4
          of the
          Agreement is hereby deleted in its entirety.

         

        5. INCOME
          PAYMENTS; ADDITIONAL PURCHASE PRICE.

         

        Paragraph
          5
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

        

        The
          Buyer
          shall be entitled to all Income and other proceeds received on the Purchased
          Securities. On each Monthly Additional Purchase Price Payment Date, the
          Buyer
          shall pay to the Seller the Monthly Additional Purchase Price Payment for
          such
          Monthly Additional Purchase Price Payment Date by 11:30 a.m. New York City
          time,
          unless an Event of Default or Default shall have occurred or be
          continuing.

         

        
          
            
            

          

          
            Annex
              I-4

            
              

            

          

          
            
            

          

        

        6. SECURITY
          INTEREST.

         

        Paragraph
          6
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

        

        Although
          the parties intend that the Transaction hereunder be a sale and purchase
          and not
          a loan, in the event the Transaction is deemed to be a loan, the Seller
          shall be
          deemed to have pledged to the Buyer as security for the performance by
          the
          Seller of its obligations under the Transaction, and shall be deemed to
          have
          granted to the Buyer a security interest in, all of the Purchased Securities
          and
          all Income thereon and other proceeds thereof. The Seller hereby authorizes
          the
          Buyer to file such financing statements relating to the Purchased Securities
          as
          it may deem appropriate in its sole discretion. The Seller shall pay the
          filing
          costs for any financing statements prepared pursuant hereto.

         

        7. PURCHASE
          PRICE; REPURCHASE PRICE.

         

        Paragraph
          7
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

        

        (a) On
          the
          Purchase Date for the Transaction, the Buyer shall pay the Seller the Purchase
          Price to or at the direction of the Seller.

        

        (b) The
          Seller shall pay the Repurchase Price on the Repurchase Date in immediately
          available funds by 11:30
          a.m.
          New York
          City time on the Repurchase Date to the Buyer.

        

        (c) The
          Seller may elect to repay all or any portion of the Repurchase Price on
          the
          Repurchase Date to the Buyer in kind and not in immediately available funds
          by
          delivering to the Buyer written notice of such election at least two Business
          days preceding the Repurchase Date. If the Seller makes such an election,
          the
          Buyer shall provide to Seller a schedule of each of the Purchased Securities
          or
          substantially similar securities and the market value (determined by Buyer
          in
          its sole discretion) with respect thereto; and Seller shall be entitled
          to
          select, by written notice to Buyer, the amount of Repurchase Price it wishes
          to
          settle in kind and which Purchased Securities or substantially similar
          securities to use for that purpose.

        

        8. ADDITIONAL
          REPRESENTATIONS AND WARRANTIES OF THE SELLER.

         

        In
          addition to the representations and warranties appearing in Paragraph
          10
          of the
          Master Agreement, the Seller represents and warrants to the Buyer that
          as of the
          date of this Agreement and as of the Purchase Date for the purchase of
          the
          Purchased Securities by Buyer from the Seller hereunder: 

         

        
          
            
            

          

          
            Annex
              I-5

            
              

            

          

          
            
            

          

        

        (a) It
          (i) is
          duly organized, validly existing and in good standing under the laws of
          the
          state of its formation, and (ii) has all requisite power and authority
          to carry
          on its business as now conducted in all material respects and to perform
          its
          obligations under this Agreement.

         

        (b) Its
          execution, delivery and performance of this Agreement (i) are within its
          organic
          powers, (ii) have been duly authorized by all necessary corporate action,
          and
          (iii) do not contravene (A) its organizational documents or (B) any law
          or any
          contractual restriction binding on the Seller, except with respect to the
          contravention of law or contractual restrictions which would not result
          in any
          material adverse change in the business, operations, financial condition,
          properties, or assets of the Seller, or which may have an adverse effect
          on the
          validity of this Agreement or the Purchased Securities or the Seller’s ability
          to timely perform its obligations under this Agreement.

         

        (c) No
          authorization, consent, approval or other action by, and no notice to or
          filing
          with, any governmental authority or regulatory body, domestic or foreign
          (which
          has not been obtained or made) is or will be necessary for the Seller’s valid
          execution, delivery and performance of this Agreement. 

         

        (d) This
          Agreement when executed, will constitute legal, valid and binding obligations
          of
          the Seller enforceable against the Seller in accordance with their respective
          terms; except that the enforcement of each such agreement may be subject
          to (i)
          bankruptcy, insolvency, reorganization, moratorium or other similar laws
          now or
          hereafter in effect relating to creditors’ rights generally and (ii) general
          principles of equity and the discretion of the court before which any proceeding
          therefor may be brought. 

         

        (e) There
          is
          no action, suit, proceeding, investigation, or arbitration pending or threatened
          against the Seller or any of its assets, which may result in any material
          adverse change in the business, operations, financial condition, properties,
          or
          which may have an adverse effect on the validity of this Agreement or the
          Purchased Securities or the Seller’s ability to timely perform its obligations
          under this Agreement or requires filing with the SEC in accordance with
          its
          rules and regulations. This Seller is in compliance in all material respects
          with all requirements of applicable law. The Seller is not in default in
          any
          material respect with respect to any judgment, order, writ, injunction,
          decree,
          rule or regulation of any arbitrator or governmental authority. 

         

        (f) The
          Seller has not dealt with any broker, investment banker, agent, or other
          Person
          who may be entitled to any commission or compensation in connection with
          the
          sale of Purchased Securities pursuant to this Agreement. 

         

        (g) No
          Event
          of Default or Default exists hereunder.

         

        (h) The
          Seller is generally able to pay, and as of the date hereof is paying, its
          debts
          as they come due. The Seller has not become, or is presently, financially
          insolvent nor will the Seller be made insolvent by virtue of its execution
          of or
          performance under this Agreement within the meaning of the bankruptcy laws
          or
          the insolvency laws of any jurisdiction. The Seller has not entered into
          this
          Agreement or the Transaction pursuant thereto in contemplation of insolvency
          or
          with intent to hinder, delay or defraud any creditor. 

        
          
            
            

          

          
            Annex
              I-6

            
              

            

          

          
            
            

          

        

        (i) The
          Seller is not (A) an “investment company,” or a company “controlled by an
          investment company,” within the meaning of the Investment Company Act of 1940,
          as amended, or (B) a “holding company,” or a “subsidiary company of a holding
          company,” or an “affiliate” of either a “holding company” or a “subsidiary
          company of a holding company,” as such terms are defined in the Public Utility
          Holding Company Act of 1935, as amended. 

         

        (j) The
          Seller has filed or caused to be filed all tax returns which to its knowledge
          would be delinquent if they had not been filed on or before the date hereof
          and
          has paid all taxes shown to be due and payable on or before the date hereof
          on
          such returns or on any assessments made against it or any of its property
          and
          all other taxes, fees or other charges imposed on it and any of its assets
          by
          any governmental authority, except for such taxes as are being appropriately
          contested in good faith by appropriate proceedings diligently conducted
          and with
          respect to which adequate reserves have been provided in accordance with
          generally accepted accounting principles; no tax liens have been filed
          against
          any of the Seller’s assets and, to its knowledge, no claims are being asserted
          with respect to any such taxes, fees or other charges. 

         

        (k) The
          Seller does not sponsor, contribute to, or maintain a “single employer plan”
within the meaning of Section 4001(a)(15) of ERISA, and is not a member
          of an
          ERISA Group, any member of which sponsors, contributes to, or maintains
          a
“single employer plan.”

         

        (l) The
          Seller represents and warrants (i) that the Transaction contemplated hereunder
          is a “repurchase agreement” as that term is defined in Section 101(47) of the
          Bankruptcy Code, eligible for relief under Section 559 of the Bankruptcy
          Code
          (except insofar as the Purchased Securities subject to the Transaction,
          or the
          term of the Transaction, would render such definition inapplicable), a
“forward
          contract” as that term is
          defined in Section 101(25) of the Bankruptcy Code (except insofar as the
          Purchased Securities subject to the Transaction would render such definition
          inapplicable), a “securities contract” as that term is defined in Section 741(7)
          of the Bankruptcy Code, and/or a “master netting agreement” as that term is
          defined in Section 101(38A) of the Bankruptcy Code; and (ii) that each
          assignment, transfer or payment of Purchased Securities or Repurchase Price
          is a
“margin payment” as that term is defined in Sections 101(38), 741(5) and 761(15)
          of the Bankruptcy Code, or a “settlement payment” as that term is defined in
          Sections 101(51A) and 741(8) of the Bankruptcy Code.

         

        (m) The
          provisions of this Agreement are effective to either constitute a sale
          of the
          Purchased Securities transferred by the Seller to the Buyer or to create
          in
          favor of the Buyer a valid security interest in all right, title and interest
          of
          the Seller in, to and under such Purchased Securities.

         

        (n) The
          Seller’s jurisdiction of organization is Maryland and its chief executive office
          is, and has been, located at 200 Metroplex, Suite 100, Edison, New Jersey
          08817.

         

        (o) As
          of the
          date hereof, the Seller has not changed its jurisdiction of formation since
          such
          entity was formed.

         

        (p) The
          Seller keeps its books and records, including all computer tapes and records
          related to the Purchased Securities transferred by it hereunder at its
          chief
          executive office and its offices at 1 Exchange Plaza, 55 Broadway, Ste
          3002, New
          York, New York 10006.

        
          
            
            

          

          
            Annex
              I-7

            
              

            

          

          
            
            

          

        

        (q) The
          Seller does not believe, nor does it have any reason or cause to believe,
          that
          it cannot perform each and every covenant contained in this Agreement in
          all
          material respects.

         

        (r) The
          Seller has not selected and will not select the Purchased Securities transferred
          by it hereunder in a manner so as to adversely affect the Buyer’s
          interests.

         

        (s) There
          is
          no UCC filing jurisdiction for filing of a financing statement in order
          to
          establish perfection with respect the Seller’s interest in the Purchased
          Securities other than Maryland.

         

        (t) The
          information, reports, financial statements, exhibits and schedules furnished
          in
          writing by or on behalf of the Seller to the Buyer in connection with the
          negotiation, preparation or delivery of this Agreement or included herein
          or
          delivered pursuant hereto, when taken as a whole, do not contain any untrue
          statement of material fact or omit to state any material fact necessary
          to make
          the statements herein or therein, in light of the circumstances under which
          they
          were made, not misleading. All written information furnished after the
          date
          hereof by or on behalf of the Seller to the Buyer in connection with this
          Agreement and the transactions contemplated hereby will be true, complete
          and
          accurate in every material respect, or (in the case of projections) based
          on
          reasonable estimates, on the date as of which such information is stated
          or
          certified.

         

        (u) The
          use
          of all funds acquired by the Seller under this Agreement will not conflict
          with
          or contravene any of Regulations T, U or X promulgated by the Board of
          Governors
          of the Federal Reserve System.

         

        (v) As
          of the
          date hereof, the exact legal name of the Seller is, and since the Seller
          was
          formed has been, the name set forth for it on the signature page hereto
          and the
          Seller has not had (i) any prior name or (ii) any trade names.

         

        (w) The
          consideration received by the Seller in connection with the transfer of
          the
          Purchased Securities by the Seller under this Agreement constitutes fair
          consideration and reasonably equivalent value for such Purchased
          Securities.

         

        (x) The
          consummation of the transactions contemplated by this Agreement are in
          the
          ordinary course of business of the Seller.

         

        9. NEGATIVE
          COVENANTS OF THE SELLER.

         

        The
          Seller shall not without the prior written consent of Buyer: 

         

        (a) take
          any
          action which would directly or indirectly impair or adversely affect Buyer’s
          title to the Purchased Securities; 

         

        (b) move
          its
          chief executive office from the address or change its jurisdiction of
          organization from the jurisdiction referred to in Section
          8(p)
          of this
          Annex I unless it shall have provided the Buyer 30 days’ prior written notice of
          such change;

        
          
            
            

          

          
            Annex
              I-8

            
              

            

          

          
            
            

          

        

        (c) engage
          in
          any conduct or activity that could subject its assets to forfeiture or
          seizure;

         

        (d) make
          any
          material change in the nature of its business as carried on at the date
          hereof;

         

        (e) create,
          incur, assume or suffer to exist Liens of any nature whatsoever on any
          of the
          Purchased Securities, whether real, personal or mixed, now or hereafter
          owned,
          other than the Liens created in connection with the transactions contemplated
          by
          this Agreement; nor shall such Seller cause any of the Purchased Securities
          to
          be sold, pledged, assigned or transferred; or

         

        (f) transfer,
          assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose
          of,
          or pledge or hypothecate, directly or indirectly, any interest in the Purchased
          Securities (or any of them) to any Person other than Buyer, or engage in
          repurchase transactions or similar transactions with respect to the Purchased
          Securities (or any of them) with any Person other than Buyer so long as
          such
          Purchased Securities are subject to the Agreement.

         

        10. AFFIRMATIVE
          COVENANTS OF THE SELLER.

         

        (a) The
          Seller shall promptly notify Buyer of any material adverse change in its
          business operations and/or financial condition; provided,
          however,
          that
          nothing in this Section
          10
          shall
          relieve the Seller of its obligations under the Agreement.

         

        (b) The
          Seller (1) shall defend the right, title and interest of Buyer in and to
          the
          Purchased Securities against, and take such other action as is necessary
          to
          remove, the Liens, security interests, claims and demands of all Persons
          (other
          than security interests by or through Buyer) and (2) shall take all action
          reasonably requested by the Buyer to ensure that Buyer will have a first
          priority security interest in the Purchased Securities subject to the
          Transaction in the event the Transaction is recharacterized as a secured
          financing.

         

        (c) The
          Seller will permit Buyer, or any designated representative thereof, to
          inspect
          such Seller’s records with respect to the Purchased Securities and the conduct
          and operation of its business related thereto upon reasonable prior written
          notice from Buyer, or any designated representative thereof, at such reasonable
          times and with reasonable frequency, and to make copies of extracts of
          any and
          all thereof.

         

        (d) If
          the
          Seller shall at any time become entitled to receive or shall receive any
          rights,
          whether in addition to, in substitution of, as a conversion of, or in exchange
          for the Purchased Securities, or otherwise in respect thereof, the Seller
          shall
          accept the same as Buyer’s agent, hold the same in trust for Buyer and deliver
          the same forthwith to Buyer in the exact form received, duly endorsed by
          the
          Seller to Buyer, if required, together with an undated bond or other securities
          power covering such certificate duly executed in blank to be held by Buyer
          hereunder as additional collateral security for the Transaction. If any
          sums of
          money or property so paid or distributed in respect of the Purchased Securities
          shall be received by the Seller, the Seller shall promptly deliver such
          amounts
          to the Buyer.

         

        (e) At
          any
          time from time to time upon prior written request of Buyer, at the sole
          expense
          of the Seller, the Seller will promptly and duly execute and deliver such
          further instruments and documents and take such further actions as Buyer
          may
          reasonably request for the purposes of obtaining or preserving the full
          benefits
          of this Agreement including the first priority security interest granted
          hereunder and of the rights and powers herein granted (including, among
          other
          things, filing such UCC financing statements as Buyer may reasonably request).
          If any amount payable under or in connection with any of the Purchased
          Securities shall be or become evidenced by any promissory note, other instrument
          or chattel paper, such note, instrument or chattel paper shall be promptly
          delivered to Buyer, duly endorsed in a manner satisfactory to Buyer, to
          be held
          as a Purchased Security under the Transaction pursuant to this Agreement,
          and
          the documents delivered in connection herewith.

        
          
            
            

          

          
            Annex
              I-9

            
              

            

          

          
            
            

          

        

        (f) If
          any
          amounts are required to be withheld for U.S. federal income tax purposes
          with
          respect to any payments to Buyer in connection with the Transaction effected
          by
          this Agreement, Seller
          shall so withhold (if so required) and
          shall
          make payments to Buyer so that the net amount received by Buyer after such
          withholding equals the amount Buyer would have received if such withholding
          were
          not required. The Buyer will deliver such form or forms as the Seller reasonably
          requests to minimize or avoid any such withholding.

         

        (g) The
          Seller shall provide Buyer with the following financial and reporting
          information:

         

        (i) Within
          45
          days after the last day of the first three fiscal quarters in any fiscal
          year,
          an unaudited statement of the Seller’s income and expenses for such quarter and
          assets and liabilities as of the end of such quarter; and

         

        (ii) Within
          90
          days after the last day of its fiscal year, an audited statement of the
          Seller’s
          income and expenses for such year and assets and liabilities as of the
          end of
          such year.

         

        (h) The
          Seller shall timely file all tax returns that are required to be filed
          by them
          and shall timely pay all taxes due, except for any such taxes as are being
          appropriately contested in good faith by appropriate proceedings diligently
          conducted and with respect to which adequate reserves have been
          provided.

         

        (i) The
          Seller shall give notice to the Buyer immediately after a responsible officer
          of
          the Seller has any knowledge of the occurrence of any Event of Default
          or
          Default.

         

        (j) All
          information, reports, exhibits, schedules, financial statements or certificates
          of the Seller or any of its officers furnished to the Buyer hereunder and
          during
          the Buyer’s diligence of the Seller is and will be true and complete and not
          fail to disclose any material facts or omit to state any material fact
          necessary
          to make the statements therein or therein, in light of the circumstances
          in
          which they are made, not misleading. All required financial statements
          delivered
          by the Seller to the Buyer pursuant to this Agreement shall be prepared
          in
          accordance with GAAP, or as applicable, in the case of SEC filings, the
          appropriate SEC accounting requirements.

         

        (k) If
          an
          Event of Default has been declared or deemed declared, the Seller shall
          cooperate reasonably with the Buyer.

        
          
            
            

          

          
            Annex
              I-10

            
              

            

          

          
            
            

          

        

        11. EVENTS
          OF DEFAULT; INDEMNITY.

         

        Paragraph
          11
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

         

        (a) After
          the
          occurrence and during the continuance of an Event of Default hereunder,
          the
          Seller hereby appoints the Buyer as its attorney-in-fact for the purpose
          of
          carrying out the provisions of this Agreement and taking any action and
          executing or endorsing any instruments that Buyer may deem necessary or
          advisable to accomplish the purposes hereof, which appointment as
          attorney-in-fact is irrevocable and coupled with an interest. Each of the
          following shall constitute an “Event
          of Default”
          hereunder:

         

        (i) the
          Seller fails to transfer the Purchased Securities to Buyer upon payment
          of the
          Purchase Price on the Purchase Date;

         

        (ii) the
          Seller fails to repurchase the Purchased Securities or substantially similar
          securities held by the Buyer on the Repurchase Date by paying the Repurchase
          Price and such failure continues unremedied for two consecutive Business
          Days;

         

        (iii) an
          Act of
          Insolvency occurs with respect to the Seller or any Affiliate
          thereof;

         

        (iv) the
          Seller shall have defaulted in any of its obligations under the Stock Purchase
          Agreement;

         

        (v) any
          representation made by the Seller (other than any representations regarding
          the
          eligibility of the Purchased Securities set forth in Section
          19
          of this
          Annex I), shall have been incorrect or untrue in any material respect when
          made or repeated or deemed to have been made or repeated and shall not
          have been
          cured within 5 days of the date the Seller has actual knowledge or has
          received
          written notice of such breach;

         

        (vi) the
          Seller shall admit its inability to, or its intention not to, perform any
          of its
          obligations hereunder;

         

        (vii) the
          Seller shall have assigned or purported to assign this Agreement, or any
          of its
          rights hereunder, except to an Affiliate, without obtaining the prior written
          consent of Buyer;
          or

         

        (viii) the
          Seller fails to comply with any of its other agreements or covenants in,
          or
          provisions of, this Agreement and such failure continues for a period of
          5 days
          after the earlier of (i) the date on which the Seller obtains knowledge
          thereof or (ii) the date on which written notice of such failure, requiring
          the same to be remedied, shall have been given to the Seller by
          Buyer.

         

        (b) Provided
          an Event of Default has occurred and is continuing, the Buyer may, at its
          option
          (which option shall be deemed to have been exercised immediately upon the
          occurrence of an event described in clause
          (iii)
          of
Section 11(a)),
          declare
          an Event of Default to have occurred hereunder and, upon the exercise or
          deemed
          exercise of such option, the Transaction shall terminate, meaning that
          the
          Repurchase Date hereunder shall, if it has not already occurred, be deemed
          immediately to occur. The Buyer shall (except upon the occurrence of any
          event
          deemed to have been declared an Event of Default pursuant to the preceding
          sentence) give notice to the Seller of the exercise of such option as promptly
          as practicable.

        
          
            
            

          

          
            Annex
              I-11

            
              

            

          

          
            
            

          

        

        (c) If
          the
          Buyer exercises or is deemed to have exercised the option referred to in
          clause
          (b)
          of this
          Section, (i) the Seller’s obligation to repurchase all Purchased Securities or
          substantially similar securities held by Buyer, at the Repurchase Price,
          shall
          thereupon become immediately due and payable, and (ii) all Income paid
          after
          such exercise or deemed exercise shall be retained by Buyer applied to
          the
          unpaid Repurchase Price and any other amounts owing by the Seller hereunder.
          

         

        (d) If
          the
          Buyer exercises or is deemed to have exercised the option referred to in
          clause
          (b)
          of this
          Section, the Seller hereby acknowledges and agrees that the Purchased Securities
          or substantially similar securities (A) may be sold by the Buyer, or (B)
          in
          Buyer’s sole discretion, in lieu of selling all or a portion of the Purchased
          Securities or substantially similar securities, may give the Seller credit
          for
          such Purchased Securities or substantially similar securities in an amount
          equal
          to the price therefor obtained from a generally recognized source or the
          most
          recent closing bid quotation from such a source.

         

        (e) The
          parties acknowledge and agree that (1) the Purchased Securities 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, Buyer may
          establish the source therefor in its sole discretion, (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), and
          (4)
          any sale of the Securities by the Buyer shall be deemed to have been conducted
          in a commercially reasonable manner for all purposes under applicable
          law.

         

        (f) Buyer
          shall pay to the Seller an amount equal to the excess of the aggregate
          purchase
          price paid by the purchasers in any sale of the Purchased Securities or
          substantially similar securities (or an amount equal to the excess of such
          credit as determined in Section
          11(d)(B)
          above)
          following the declaration or deemed declaration of an Event of Default,
          as
          reduced by any expenses incurred by Buyer in connection with such sale
          or
          liquidation, over
          the
          aggregate Repurchase Price hereunder and any other amounts payable by the
          Seller
          hereunder.

         

        (g) To
          the
          extent permitted by applicable law, the Seller shall be liable to Buyer
          for
          interest on any amounts owing by the Seller hereunder, from the date the
          Seller
          becomes liable for such amounts hereunder until such amounts are (i) paid
          in
          full by the Seller or (ii) satisfied in full by the exercise of the rights
          hereunder. Interest on any sum payable by the Seller to Buyer under this
          Section
          11
          shall be
          at a rate equal to 14% per annum.

         

        (h) Subject
          to the notice and grace periods set forth herein, each party to this Agreement
          may exercise any or all of the remedies available to such party immediately
          upon
          the declaration or deemed declaration of an Event of Default and at any
          time
          during the continuance thereof. Neither any failure nor any delay on the
          part of
          any party to this Agreement in insisting upon strict performance of any
          term,
          condition, covenant or agreement, or exercising any right, power, remedy
          or
          privilege hereunder shall operate as or constitute a waiver thereof, nor
          shall a
          single or partial exercise thereof preclude any other future exercise,
          or the
          exercise of any other right, power, remedy or privilege.

        
          
            
            

          

          
            Annex
              I-12

            
              

            

          

          
            
            

          

        

        (i) Buyer
          may
          enforce its rights and remedies hereunder without prior judicial process
          or
          hearing, and the Seller hereby expressly waives any defenses the Seller
          might
          otherwise have to require Buyer to enforce its rights by judicial process.
          Seller also waives any defense the Seller might otherwise have arising
          from the
          use of nonjudicial process, disposition of any or all of the Purchased
          Securities or substantially similar securities, or from any other election
          of
          remedies. The Seller recognizes that nonjudicial remedies are consistent
          with
          the usages of the trade, are responsive to commercial necessity and are
          the
          result of a bargain at arm’s length.

         

        (j) The
          Seller hereby agree to indemnify Buyer and its Affiliates and each of their
          officers, directors, employees and agents (each, an “Indemnified
          Party”)
          from
          and against any and all liabilities, obligations, losses, damages, penalties,
          actions, judgments, suits, taxes (including stamp, excise, sales or other
          taxes
          which may be payable or determined to be payable with respect to any of
          the
          Purchased Securities or in connection with this Agreement or any of the
          transactions contemplated by this Agreement and the documents delivered
          in
          connection herewith), fees, costs, expenses (including reasonable attorneys
          fees
          and disbursements actually incurred to external counsel) or disbursements
          (all
          of the foregoing, collectively “Indemnified
          Amounts”)
          which
          may at any time (including, without limitation, such time as this Agreement
          shall no longer be in effect and the Transaction shall have been repaid
          in full)
          be imposed on or asserted against any Indemnified Party in any way whatsoever
          arising out of or in connection with, or relating to, this Agreement or
          the
          Transaction hereunder or any action taken or omitted to be taken by any
          Indemnified Party under or in connection with any of the foregoing, including
          without limitation in connection with the enforcement of this Agreement
          or any
          other agreement evidencing the Transaction, whether in action, suit or
          litigation or bankruptcy, insolvency or other similar proceeding affecting
          creditors’ rights generally; provided,
          that
          the Seller shall not be liable for Indemnified Amounts resulting from the
          gross
          negligence or willful misconduct of any Indemnified Party. 

         

        (k) Notwithstanding
          anything herein to the contrary, any payment made by the Seller, within
          the
          applicable grace period described above, to cure any failure by the Seller
          to
          repurchase the Purchased Securities or substantially similar securities
          held by
          Buyer on the Repurchase Date, shall be made by it on or before 2:00 p.m.
          (New
          York time) on the date such failure is so cured. Any such payment received
          by or
          on behalf of the Buyer after 2:00 p.m. (New York time) shall be deemed
          to be
          received on (the next succeeding Business Day.

         

        12. CONDITIONS
          PRECEDENT.

         

        The
          Buyer’s agreement to enter into the initial Transaction under the Agreement is
          subject to the prior or contemporaneous satisfaction of all of the following
          conditions precedent (the first date on which all such conditions precedent
          shall have been satisfied, the “Effective
          Date”):

         

        
          
            
            

          

          
            Annex
              I-13

            
              

            

          

          
            
            

          

        

        (a) Agreements.
          The
          Buyer shall have received the Agreement, duly executed and delivered by
          each of
          the parties hereto. In addition, the Seller and the Buyer shall have received
          the Stock Purchase Agreement, dated as of the date hereof (the “Stock
          Purchase Agreement”),
          duly
          executed and delivered by the Seller and the Buyer. The Buyer shall have
          received one or more cross receipts, satisfactory to the Buyer in its sole
          discretion and duly executed and delivered by the applicable repo lender(s)
          for
          the Seller, to the effect that upon its receipt of the payment of certain
          amounts by the Buyer, such repo lender(s) shall deliver the Purchased Securities
          in its possession to the Buyer or the Buyer shall have previously received
          the
          Purchased Securities held by any repo lender which has not provided such
          a cross
          receipt.

         

        (b) Seller’s
          Certificate.
          The
          Buyer shall have received a certificate from the secretary of the Seller,
          in
          form and substance satisfactory to the Buyer, attaching a good standing
          certificate and certified copies of the Seller’s charter and by-laws (or
          equivalent documents) and of all corporate or other authority of the Seller
          with
          respect to the execution, delivery and performance of the Agreement and
          each
          other document to be delivered by it from time to time in connection herewith
          and certifying as to the incumbency of each person authorized to execute
          on
          behalf of the Seller the Agreement or any related document on behalf (and
          the
          Buyer may conclusively rely on such certificate until it receives notice
          in
          writing from the Seller to the contrary).

         

        (c) Opinions
          of Counsel.
          The
          Buyer shall have received opinions of legal counsel to the Seller with
          respect
          to the Agreement and the matters contemplated hereunder, including, without
          limitation, a customary due authority opinion, which opinions shall be
          satisfactory to the Buyer in form and substance.

         

        (d) Other
          Documents.
          The
          Buyer shall have received such other documents as the Buyer, or its counsel,
          may
          reasonably request.

         

        (e) Representations
          and Warranties.
          Both
          immediately before and after giving effect to such Transaction, all of
          the
          representations and warranties made by the Seller pursuant to the Agreement
          shall be true, correct and complete in all material respects on and as
          of the
          Purchase Date for such Transaction with the same force and effect as if
          made on
          and as of such date (or, if any representation or warranty is expressly
          stated
          to have been made as of a specific date, or with respect to a specific
          period,
          as of such specific date or period).

         

        (f) Fees
          and Expenses.
          The
          Buyer shall have received payment from Seller of an amount equal to the
          actual
          costs and expenses incurred by the Buyer in connection with the development,
          preparation and execution of the Agreement, and any other documents prepared
          in
          connection herewith, including, without limitation, the fees and expenses
          of
          Mayer, Brown, Rowe & Maw LLP, counsel to the Buyer, provided that a
          statement of such fees shall have been delivered prior to 11:00 A.M. New
          York
          City time on the date hereof.

         

        13. USE
          OF
          EMPLOYEE PLAN ASSETS.

         

        Paragraph
          18
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

         

        
          
            
            

          

          
            Annex
              I-14

            
              

            

          

          
            
            

          

        

        Both
          the
          Buyer and the Seller represent, warrant and covenant to the other with
          respect
          to the Transaction that it is not, and is not acting on behalf of, (i)
          an
“employee benefit plan” as defined in Section 3(3) of ERISA, whether or not
          subject to Title I of ERISA, (ii) a “plan” as defined in Section 4975 of the
          Code, or (iii) an entity deemed to hold plan assets of any of the
          foregoing.

         

        14. BUYER
          AS ATTORNEYS-IN-FACT.
          The
          Buyer is hereby appointed to act after the declaration or deemed declaration
          of
          a Default or Event of Default as the attorney-in-fact of the Seller for
          the
          purpose of carrying out the provisions of this Agreement and taking any
          action
          and executing any instruments that Buyer may deem necessary or advisable
          to
          accomplish the purposes hereof, which appointment as attorney-in-fact is
          irrevocable and coupled with an interest. Without limiting the generality
          of the
          foregoing, Buyer shall have the right and power after the declaration or
          deemed
          declaration of any Default or Event of Default to receive, endorse and
          collect
          all checks made payable to the order of the Seller representing any payment
          on
          account of the principal of or interest on any of the Purchased Securities
          and
          to give full discharge for the same.

         

        15. REPURCHASE
          TRANSACTIONS.
          Buyer
          may engage in repurchase transactions with the Purchased Securities or
          otherwise
          pledge, transfer, hypothecate or rehypothecate the Purchased Securities,
          but no
          such transaction shall relieve the Buyer of its obligations to resell and
          transfer securities that, in the reasonable discretion of the Buyer, are
          substantially similar to the Purchased Securities (based on weighted average
          coupon, weighted average life, weighted average FICO of the underlying
          mortgagors, weighted average loan to value of the underlying mortgage loans,
          occupancy status and documentation type) to the Seller pursuant to the
          terms
          hereof.

         

        16. NOTICES
          AND OTHER COMMUNICATIONS.
          

         

        Paragraph
          13
          of the
          Master Agreement is hereby deleted and replaced in its entirety with the
          following:

        

        Except
          as
          otherwise expressly provided herein, all notices or communications shall
          be in
          writing (including, without limitation, by e-mail, facsimile or telex
          communication) or confirmed in writing and such notices and other communications
          shall, when mailed, e-mailed, communicated by facsimile transmission or
          telexed,
          be effective when received at the address for notices for the party to
          whom such
          notice or communications is to be given as set forth in Annex II
          hereto.

         

        Notwithstanding
          the foregoing, a facsimile transmission shall be deemed to be received
          when
          transmitted so long as the transmitting machine has provided an electronic
          confirmation of such transmission. Any notices or communications sent via
          e-mail
          shall be followed with a telephone call on the same day to confirm receipt
          of
          such e-mail. Either party may revise any information relating to it by
          notice in
          writing to the other party, which notice shall be effective on the third
          Business Day following receipt thereof.

         

        17. EXPENSES.
          The
          Seller shall pay its own expenses and all reasonable out-of-pocket costs
          and
          expenses (including reasonable fees and disbursements of counsel) of Buyer
          incident to the enforcement of payment of amounts due under the Agreement,
          whether by judicial proceedings or otherwise, including, without limitation,
          in
          connection with bankruptcy, insolvency, liquidation, reorganization, moratorium
          or other similar proceedings involving the Seller. Notwithstanding any
          provision
          hereof to the contrary, the obligations of the Seller under this Section
          17
          shall be
          effective and enforceable whether or not the Transaction remains outstanding
          and
          shall survive payment of all other obligations owed by the Seller to
          Buyer.

        
          
            
            

          

          
            Annex
              I-15

            
              

            

          

          
            
            

          

        

        18. COUNTERPARTS.
          The
          Agreement may be executed in any number of counterparts, each of which
          counterparts shall be deemed to be an original, and such counterparts shall
          constitute but one and the same instrument.

         

        19. REPRESENTATIONS
          RELATING TO THE PURCHASED SECURITIES.
          The
          Seller hereby represents and warrants, with respect to each Purchased Security,
          as follows:

         

        (a) Upon
          payment of the Purchase Price as directed by Seller pursuant hereto, such
          Purchased Securities are free and clear of any lien, encumbrance or impediment
          to transfer (including any “adverse claim” as defined in Section 8-102(a)(1) of
          the UCC), and Seller is the recordholder and beneficial owner of and has
          good
          and marketable title to and the right to sell and transfer such Purchased
          Securities to Buyer and, upon transfer of such Purchased Securities to
          Buyer,
          Buyer shall be the owner of such Purchased Securities free of any adverse
          claim.
          In the event the Transaction is recharacterized as a secured financing
          of the
          Purchased Securities, the provisions of the Agreement are effective to
          create in
          favor of Buyer a valid security interest in all rights, title and interest
          of
          Seller in, to and under the Purchased Securities and Buyer shall have a
          valid,
          perfected first priority security interest in the Purchased
          Securities;

         

        (b) information
          set forth in the Confirmation is true and correct in all material
          respects;

         

        (c) no
          payment under such Security is currently past its contractual due date
          or has
          been past its contractual due date since its issuance date;

         

        (d) the
          Seller has received all consents and approvals required by the terms of
          such
          Security to the transfer to Buyer of its interest and rights in such
          Security;
          and

         

        (e) Buyer’s
          purchase of such Security shall not constitute a violation of any restriction
          on
          transfer applicable to such Security pursuant to its terms, or a breach
          of
          Section 5 of the Securities Act.

         

        20. AMENDMENT/WAIVERS.
          

         

        (a) Amendments.
          Any
          amendment, modification or supplement to this Annex I or the Agreement
          shall be
          in writing signed by the parties hereto. 

         

        (b) Waiver.
          Any
          waiver of any provision of this Agreement, and any consent to any departure
          by
          the Buyer from the terms of any provision of this Agreement, shall be effective
          only in the specific instance and for the specific purpose for which given.
          No
          notice to or demand upon the Buyer in any instance hereunder shall entitle
          the
          Buyer to any other or further notice or demand in similar or other
          circumstance.

        
          
            
            

          

          
            Annex
              I-16

            
              

            

          

          
            
            

          

        

        (c) Costs
          and Expenses.
          The
          costs and expenses associated with any amendment, modification or supplement
          pursuant to this Section
          20
          shall be
          borne by the party requesting such amendment, modification or
          supplement.

         

        21. TAX
          TREATMENT.
          Each
          Party intends that the Transaction effected by this Agreement be treated
          as a
          sale of the Purchased Securities for U.S. federal income tax purposes,
          and the
          Parties hereby agree to file all tax returns and otherwise treat the transaction
          for U.S. federal income tax purposes consistently therewith. All provisions
          of
          the Agreement shall be construed to achieve the aforementioned treatment
          for
          U.S. federal, state, and local income and franchise tax purposes. None
          of the
          parties to this Agreement shall take any contrary position unless required
          by
          applicable law.

         

        22. SUBMISSION
          TO JURISDICTION AND WAIVER OF IMMUNITY.

         

        (a) Each
          Party irrevocably and unconditionally (i) submits to the non-exclusive
          jurisdiction of any United States federal or New York state court sitting
          in
          Manhattan, and any appellate court from any such court, solely for the
          purpose
          of any suit, action or proceeding brought to enforce its obligations under
          this
          Agreement or relating in any way to this Agreement or the Transaction under
          this
          Agreement and (ii) waives, to the fullest extent it may effectively do
          so, any
          defense of an inconvenient forum to the maintenance of such action or proceeding
          in any such court and any right of jurisdiction on account of its place
          of
          residence or domicile.

         

        (b) To
          the
          extent that either party has or hereafter may acquire any immunity (sovereign
          or
          otherwise) from any legal action, suit or proceeding, from jurisdiction
          of any
          court or from set off or any legal process (whether service or notice,
          attachment prior to judgment, attachment in aid of execution or judgment,
          execution of judgment or otherwise) with respect to itself or any of its
          property, such party hereby irrevocably waives and agrees not to plead
          or claim
          such immunity in respect of any action brought to enforce its obligations
          under
          the Agreement or relating in any way to this Agreement or the Transaction
          under
          this Agreement.

         

        23. CHARACTERIZATION
          OF THIS AGREEMENT.
          Each of
          the Seller and the Buyer hereby acknowledges and agrees: 

         

        (a) that
          the
          Transaction is a “repurchase agreement” as that term is defined in Section
          101(47) of Title 11 of the Bankruptcy Code (except insofar as the Purchased
          Securities subject to such Transaction, or the term of such Transaction,
          would
          render such definition inapplicable), a “forward contract” as that term is
          defined in Section 101(25) of the Bankruptcy Code (except insofar as the
          Purchased Securities subject to such Transaction would render such definition
          inapplicable), a “securities contract” as that term is defined in Section 741(7)
          of the Bankruptcy Code, and/or a “master netting agreement” as that term is
          defined in Section 101(38A) of the Bankruptcy Code; and

         

        (b) that
          each
          assignment, transfer or payment of Purchased Securities or Repurchase Price
          is a
“margin payment” as that term is defined in Sections 101(38), 741(5) and 761(15)
          of the Bankruptcy Code, or a “settlement payment” as that term is defined in
          Sections 101(51A) and 741(8) of the Bankruptcy Code.

         

        
          
            
            

          

          
            Annex
              I-17

            
              

            

          

          
            
            

          

        

        Seller
          and Buyer further intend that Buyer’s right to liquidate, terminate or
          accelerate the Purchased Securities delivered to Buyer in connection with
          the
          Transaction hereunder, and to exercise any other remedies pursuant to
Section
          11
          hereof,
          are contractual rights to liquidate, terminate or accelerate such Transaction
          as
          described in Sections 555, 556, 559 and 561 of the Bankruptcy Code.

        

        Each
          of
          the Buyer and the Seller hereby covenants and agrees that it shall not
          challenge
          such characterizations of this Agreement, the Transaction hereunder or
          of any of
          the payments or actions referred to above.

        

        24. NO
          RECOURSE.
          Except
          with respect to any indemnification rights the Buyer may have against the
          Seller, no recourse shall be had against the Seller with respect to any
          of the
          payment obligations, covenants, agreements, representations or warranties
          of the
          Seller contained in this Agreement, and the Buyer’s recourse shall be limited to
          its rights in the Purchased Securities.

         

        25. BINDING
          TERMS.
          All of
          the covenants, stipulations, promises and agreements in the Agreement shall
          bind
          the successors and assigns of the parties hereto, whether expressed or
          not.

         

        26. TERMINATION.

         

        Paragraph
          15(a)
          of the
          Master Agreement is hereby deleted in its entirety and replaced with the
          following:

         

        The
          rights and obligations of the parties under this Agreement and under the
          Transaction shall not be assigned by either party other than to one of
          its
          Affiliates 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. The Seller shall maintain a register of the ownership of the
          Buyer’s
          rights hereunder, and in the event of any assignment of this agreement
          by the
          Buyer, the Buyer shall present a copy of such assignment to the Seller,
          and the
          Seller shall record the name(s) and address(es) of the assignee(s) in the
          register. The parties shall be entitled to rely upon the register as proof
          of
          the ownership of the Buyer’s rights hereunder. Subject to the foregoing, this
          Agreement and the Transaction shall be binding upon and shall inure to
          the
          benefit of the parties and their respective successors and assigns.

         

        [REMAINDER
          OF PAGE INTENTIONALLY LEFT BLANK]

        
          
            
            

          

          
            Annex
              I-18

            
              

            

          

          
            
            

          

        

        IN
          WITNESS WHEREOF, Buyer and the Seller have caused their names to be signed
          hereto by their respective officers thereunto duly authorized as of the
          day and
          year first above written.

         

        
          	
                  RCG
                    PB, LTD, as
                    Buyer

                	 
	 	 
	 	 
	 
	 	 
	
                  By:     
                    /s/ Jeffrey M.
                    Solomon                                            
                    

                	 
	
                  Name:
                    Jeffrey M. Solomon

                	 
	
                  Title:  
                    Authorized Signatory

                	 
	
                  HANOVER
                    CAPITAL MORTGAGE HOLDINGS, INC., as
                    Seller

                	 
	 	 
	 	 
	 	 
	
                  
                    By:     
                      /s/ John A.
                      Burchett                                                  
                      

                  

                	 
	
                  Name:
                    John A. Burchett

                	 
	
                  Title:  
                    President and CEO

                	 
	 	 

        

         

        

          
            	
                     

                  	
                    S-1

                  	
                    Amended
                      and Restated Annex I to Master 

                    Repurchase
                      Agreement

                  

          

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        EXHIBIT
          A

         

        FORM
          OF CONFIRMATION

         

        
          	
                  TO:        
                    Hanover
                    Capital Mortgage Holdings, Inc.

                  200
                    Metroplex Drive

                  Edison,
                    NJ  08817

                  Attention:
                    Harold McElraft

                  Tel: 
                    732-593-1044

                  Fax:
                    732-548-0286

                  and

                  Hanover
                    Capital Mortgage Holdings, Inc.

                  1
                    Exchange Plaza/55 Broadway

                  Suite
                    3002

                  New
                    York, NY  1006

                  Attention:
                    James Strickler

                  Tel: 
                    212-227-0075 ext 5003

                  Fax: 
                    212-227-5434

                
	
                  FROM:  
                    RCG PB, Ltd

                  c/o
                    Ramius Advisors, LLC

                  666
                    Third Avenue, 26th Floor

                  New
                    York, New York 10017

                  Attention:
                    Julian Vulliez / John Holmes / Owen Littman

                  Tel.:
                    212-845-7941 / 212-201-4851 / 212-201-4841

                  Fax:
                    212-845-7960 / 212-845-7999 /
                    212-845-7995

                

        

        

         

        RE:

         

        RCG
          PB,
          Ltd (the “Buyer”)
          is
          pleased to confirm your sale and our purchase of the Purchased Securities
          described below pursuant to the Master Repurchase Agreement (including
          the
          supplemental terms set forth in the Amended and Restated Annex I thereto
          dated
          as of October 2, 2007), dated as of August 10, 2007 (the
“Agreement”).

         

        DESCRIPTION
          OF PURCHASED SECURITIES:

         

        
          	
                  CUSIP

                	
                  Unpaid
                    Principal Balance

                
	 	 
	 	 
	 	 
	 	 

        

        
          
            
            

          

          
            
              Exh.
                A-1

            

            
              

            

          

          
            
            

          

        

        The
          Agreement is incorporated by reference into this Confirmation and made
          a part
          hereof as if it were fully set forth herein. All capitalized terms used
          herein
          but not otherwise defined shall have the meanings specified in the
          Agreement.

         

        
          	 	
                  BY:
                    RCG PB, LTD

                
	 	 
	 	
                  By:________________________________

                
	 	
                  Name:______________________________

                
	 	
                  Title:_______________________________

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        ANNEX
          II

        Names
          and Addresses for Communications Between Parties

         

        HANOVER
          CAPITAL MORTGAGE HOLDINGS, INC.

        200
          Metroplex Drive

        Edison,
          NJ  08817

        Attention:
          Suzette Berrios

        Tel: 
          732-593-1038

        Fax: 
          732-548-0286

        

        RCG
          PG, LTD

        c/o
          Ramius Advisors, LLC

        666
          Third
          Avenue, 26th Floor

        New
          York,
          New York 10017

        Attention:
          Julian Vulliez / John Holmes / Owen Littman

        Tel.:
          212-845-7941 / 212-201-4851 / 212-201-4841

        Fax:
          212-845-7960 / 212-845-7999 / 212-845-7995

         

        
          
            
            

          

          
            
              Annex
                II-1

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