Document:

Physicians Insurance Services, Ltd.
              INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA
                AUTHORIZED: 5,000,000 COMMON SHARES, NO PAR VALUE

      NUMBER                                                        SHARES

This Certifies That                                            SEE REVERSE FOR
                                    SPECIMEN                 CERTAIN DEFINITIONS
                                                             ___________________

  Is The Owner Of                                              CUSIP 719411100
                                                             ___________________

          FULLY-PAID AND NON-ASSESSABLE COMMON SHARES, NO PAR VALUE OF

                       Physicians Insurance Services, Ltd.

transferable on the books of this Corporation in person or by attorney upon
surrender of this Certificate duly endorsed or assigned. This Certificate and
the shares represented hereby are subject to the laws of the Stated of
Minnesota, and to the Articles of Incorporation and Bylaws of the Corporation,
as now or hereafter amended. This Certificate is not valid until countersigned
by the Transfer Agent.

     In Witness Whereof, the Corporation has caused this Certificate to be
signed by the facsimile signatures of its duly authorized officers and to be
sealed with the facsimile seal of the Corporation.

Dated:

                       Physicians Insurance Services, Ltd.
                            [CORPORATE SEAL OMITTED]
                                    MINNESOTA
______________________                                    ______________________
      PRESIDENT                                                 SECRETARY

                      COUNTERSIGNED:
                      CORPORATE STOCK TRANSFER, INC.
                      3200 Cherry Creek Drive South, Suite 430, Denver, CO 80209

                      By _______________________________________________________
                             Transfer Agent and Registrar Authorized Officer

<PAGE>
<TABLE>
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                       Physicians Insurance Services, Ltd.

                         Corporate Stock Transfer, Inc.
                           Transfer Fee: As Required

                                    SPECIMEN
________________________________________________________________________________
  The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<S>                                         <C>
TEN COM  -- as tenants in common            UNIF GIFT MIN ACT- .............. Custodian for ..............
                                                                   (Cust.)                     (Minor)
TEN ENT  -- as tenants by the entireties                under Uniform Gifts to Minors

JT TEN   -- as joint tenants with right of              Act of ...........................................
            survivorship and not as                                             (State)
            tenants in common
</TABLE>
    Additional abbreviations may also be used though not in the above list.

For value received .......................hereby sell, assign and transfer unto

                     PLEASE INSERT SOCIAL SECURITY OR OTHER
                         IDENTIFYING NUMBER OF ASSIGNEE
              _____________________________________________________
             |                                                     |
             |                                                     |
             |_____________________________________________________|
                Please print or type name and address of assignee

.................................................................................

.................................................................................

.................................................................................

...........................................................................Shares
of the Common Stock represented by the within Certificate and do hereby
irrevocably constitute and appoint

.................................................................................

.................................................................................
Attorney to transfer the said stock on the books of the within-named
Corporation, with full power of substitution in the premises.

Dated ................20........

SIGNATURE GUARANTEED:                           X_______________________________

                                                X_______________________________

THE SIGNATURE TO THIS  ASSIGNMENT  MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE  FACE OF  THIS  CERTIFICATE  IN  EVERY  PARTICULAR,  WITHOUT  ALTERATION  OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.  THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE  GUARANTOR   INSTITUTION   (Banks,   Stockbrokers,   Savings  and  Loan
Associations  and  Credit  Unions)  WITH  MEMBERSHIP  IN AN  APPROVED  SIGNATURE
GUARANTEE MEDALLION PROGRAM.EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of May 27, 2008 between Luminent Mortgage
Capital, Inc., a Maryland corporation having its principal place of business at One Commerce
Square, 21st Floor, 2005 Market Street, Philadelphia, Pennsylvania 19103 (the
“Employer”) and Zachary H. Pashel, an individual residing at 700 S. Fillmore Street, Denver,
Colorado 80209 (the “Executive”).

WITNESSETH:

WHEREAS, the Employer desires to provide for the employment of the Executive, and the
Executive desires to be employed by the Employer, all in accordance with the terms and subject to
the conditions set forth in this Agreement; and

WHEREAS, the Employer and the Executive are entering into this Agreement effective as of May
15, 2008 (the “Effective Date”) to set forth their respective rights and obligations with respect
to the Executive’s employment by the Employer;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this
Agreement, the Employer and the Executive, intending to be legally bound hereby, mutually agree as
follows:

1. Employment and Term.

(a) The Employer shall employ the Executive, and the Executive shall be employed by the
Employer, as the President and Chief Executive Officer of the Employer (the “Position”) in
accordance with the terms and subject to the conditions set forth in this Agreement for a term (the
“Term”) that shall commence on the Effective Date and shall expire on December 31, 2009.

(b) Notwithstanding paragraph 1(a), the Employer, by action of its board of directors (the
“Board”) and effective as specified in a written notice thereof to the Executive in accordance with
the terms of this Agreement, shall have the right to terminate the Executive’s employment under
this Agreement at any time during the Term, for Cause (as defined in this Agreement) or other than
for Cause or on account of the Executive’s death or Permanent Disability (as defined in this
Agreement). Upon any termination of the Executive’s employment pursuant to this paragraph 1(b),
the Executive will be entitled to such pay and compensation as is set forth in this Agreement and
in such other plans and agreements then in effect with respect to the Executive’s service with the
Employer.

(i) “Cause” shall mean (A) the Executive’s willful and continued failure substantially to
perform his material duties with the Employer as set forth in this Agreement, or the commission by
the Executive of any activities constituting a violation or breach under any material federal,
state or local law or regulation applicable to the activities of the Employer, in each case, after
the Employer has provided written notice thereof to the Executive specifying in reasonable detail
the facts supporting the alleged failure, breach or violation and has provided the Executive a
reasonable opportunity to cease such failure, breach or violation in all material respects, unless
such failure, breach or violation is not susceptible of being cured, (B) fraud, breach of fiduciary
duty, dishonesty, misappropriation or other actions that cause intentional material damage to the
property or business of the Employer by the Executive, (C) the Executive’s admission or conviction
of, or plea of nolo contendere to, any felony or any other crime that, in the reasonable judgment
of the Board, adversely affects the Executive’s reputation or the Executive’s ability to carry out
his obligations under this Agreement or (D) the Executive’s non-compliance with the provisions of
paragraph 2(b) after the Employer has provided written notice thereof to the Executive specifying
in reasonable detail the facts supporting the alleged non-compliance and has provided the Executive
a reasonable opportunity to cure such non-compliance. Notwithstanding the foregoing, the Employer
may not terminate the Executive’s employment under this Agreement for Cause unless the Executive is
given (A) at least ten days’ written notice, in accordance with the by-laws of the Employer, of a
special meeting of the Board to consider the termination of the Executive’s employment under this
Agreement for Cause and (B) the opportunity for the Executive to address such special meeting.

(ii) “Permanent Disability” shall mean a physical or mental disability such that (A) the
Executive has been determined by the insurer to meet the criteria set forth in the Employer’s
long-term disability plan or similar successor plan to render the Executive eligible for long-term
disability benefits under said Plan and (B) the Executive is substantially unable to perform those
duties that he would otherwise be expected to continue to perform and the nonperformance of such
duties has continued for a period of 240 consecutive days provided, however, that in order to
terminate the Executive’s employment under this Agreement on account of the Executive’s Permanent
Disability, the Employer must provide the Executive with written notice of the Board’s good faith
determination to terminate the Executive’s employment under this Agreement for reason of the
Executive’s Permanent Disability not less than 30 days prior to such termination, which notice
shall specify the date of termination. Until the specified effective date of termination by reason
of the Executive’s Permanent Disability, the Executive shall continue to receive compensation at
the rates set forth in paragraph 3. No termination of the Executive’s employment under this
Agreement because of the Executive’s Permanent Disability shall impair any rights of the Executive
under any disability insurance policy maintained by the Employer at the commencement of the
aforesaid 240-day period.

(c) The Executive shall have the right to terminate his employment under this Agreement at any
time during the Term for Good Reason or without Good Reason as specified in a written notice
thereof to the Employer in accordance with the terms of this Agreement. As used herein, “Good
Reason” shall mean any of the following actions taken without the Executive’s prior written
consent: (A) the Executive’s Position or the scope of the Executive’s authority, duties or
responsibilities as described in this Agreement are materially diminished, excluding for this
purpose any action that was not taken by the Employer in bad faith and that is remedied by the
Employer promptly following written notice thereof from the Executive to the Employer and (B) any
material breach by the Employer of any of the provisions of this Agreement, including without
limitation by reason of specification, paragraph 2 of this Agreement. Before any resignation by
the Executive shall constitute Good Reason, the Executive shall first give notice to the Employer
of the occurrence of a condition giving rise to Good Reason within 90 days after the initial
existence of the condition and the condition shall not have been cured in all material respects to
the reasonable satisfaction of the Executive within 30 days after such notice.

(d) (i) It is intended that this Agreement be administered in compliance with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), including, but not limited to, any
future amendments to Code Section 409A, and any other Internal Revenue Service (“IRS”) or other
governmental rulings or interpretations issued pursuant to Section 409A (together, “Section 409A”)
so as not to subject the Executive to payment of interest or any additional tax under Section 409A.
The parties intend for any payments under this paragraph 1(d) either to satisfy the requirements
of Section 409A or to be exempt from the application of Section 409A, and this Agreement shall be
construed and interpreted accordingly. To the extent that any IRS guidance issued under Section
409A would result in the Executive being subject to the payment of interest or any additional tax
under Section 409A, the parties agree, to the extent reasonably possible while retaining the
equivalent value and benefits to the Executive, to amend this Agreement in order to avoid the
imposition of any such interest or additional tax under Section 409A, which amendment reasonably
determined in good faith by the Employer and the Executive.

(ii) Notwithstanding any provision in this Agreement to the contrary, in the event that the
Executive is a “specified employee” as defined in Section 409A, any severance payment, severance
benefits or other amounts payable under this Agreement that would be subject to the special rule
regarding payments to “specified employees” under Section 409A(a)(2)(B) of the Code shall not be
paid before the expiration of a period of six months following the date of the Executive’s
“separation from service” (as defined in Section 409A) or the date of the Executive’s death, if
earlier.

(iii) If (A) the Employer terminates the Executive’s employment under this Agreement for any
reason other than for Cause, (B) the Executive terminates his employment under this Agreement for
Good Reason or (C) the Executive’s employment terminates upon the expiration of the Term following
notice by the Employer pursuant to paragraph 1(d)(iv) that it elects not to renew the Term, the
Employer shall provide the following to the Executive: (x) (1) the Executive’s Base Salary (as
defined in this Agreement) and any incentive bonus and benefits accrued through the date the
termination of the Executive’s employment under this Agreement is effective, consistent with the
Employer’s regular payroll and benefits practices, policies and plans and (2) any amount in respect
of excise taxes required to be paid to the Executive pursuant to paragraph 1(e), with such
payments, rights and benefits described in clauses (x)(1) and (x)(2) being collectively referred to
in this Agreement as the “Accrued Obligations,” (y) (1) an amount equal to the aggregate premiums
that would be payable by the Executive to maintain in effect for the Severance Period (as defined
below), assuming no increase in insurance premium rates, the same disability and life insurance
coverage provided to the Executive by the Employer immediately prior to the date of such
termination and (2) continued participation of the Executive and his dependents in the Employer’s
health insurance plans in which the Executive and/or his dependents were participating immediately
prior to the date of the Executive’s termination of employment for the Severance Period on the same
terms and conditions as existed immediately prior to the termination of the Executive’s employment
and (z) the Employer shall, as a severance payment, pay to the Executive an amount equal to the
Executive’s annual Base Salary as of the effective date of termination of the Executive’s
employment under this Agreement that would have been paid to the Executive during the Severance
Period had the Executive remained employed during the Severance Period. As used herein, “Severance
Period” means the period from the effective date of the termination of the Executive’s employment
through the later of the following dates (A) the last day of the Term and (B) the date that is nine
months after the effective date of the termination of the Executive’s employment.

(iv) Any payments to which the Executive is entitled under paragraph 1(d)(iii), clauses (y)(1)
and/or (z), shall be paid to the Executive in a lump sum within 15 days after the Executive’s
separation from service. Such payments are intended to be short-term deferrals not subject to the
requirements of Section 409A of the Code.

(v) If (A) the Employer terminates the Executive’s employment under this Agreement for Cause,
(B) the Executive terminates his employment under this Agreement for any reason other than Good
Reason, his death or the Executive’s Permanent Disability or (C) this Agreement is terminated by
the Employer as a result of the death or Permanent Disability of the Executive, the sole obligation
of the Employer shall be to pay the Accrued Obligations to the Executive or his estate and to
provide such other rights and benefits under any employee benefit plan, program or arrangement or
agreement as may be applicable to the Executive.

(vi) If the Employer does not renew the Executive’s employment upon the expiration of the Term
upon terms and conditions at least as favorable to the Executive as the terms and conditions under
this Agreement, and such non-renewal for any reason other than Cause, the Employer will provide to
the Executive severance benefits in the amount and kind set forth in paragraph 1(d). The Employer
shall provide the Executive with written notice of such non-renewal not less than 90 days before
the expiration of the Term.

(e) In the event that the independent public accountants of the Employer or the IRS determines
that any payment, coverage or benefit provided to the Executive pursuant to this Agreement is
subject to the excise tax imposed by Sections 280G and 4999 of the Code or any successor provision
thereof or any interest or penalties incurred by the Executive with respect to such excise tax, the
Employer, within 30 days thereafter, shall pay to the Executive, in addition to any other payment,
coverage or benefit due and owing under this Agreement, an additional amount that will result in
the Executive’s net after tax position, after taking into account any interest, penalties or taxes
imposed on the amount payable under this paragraph 1(e), upon the receipt of the payments provided
for by this Agreement be no less advantageous to the Executive than the net after tax position to
the Executive that would have been obtained had Sections 280G and 4999 of the Code not been
applicable to such payment, coverage or benefits. Except as otherwise provided in this Agreement,
all determinations to be made under this paragraph 1(e) shall be made by tax counsel whose
selection shall be reasonably acceptable to the Executive and the Employer and whose fees and costs
shall be paid for by the Employer. Notwithstanding any provision above to the contrary, any
payment payable under this paragraph shall be made not earlier than the date that is six months
after the Executive’s separation from service and not later than the end of the calendar year
following the calendar year in which the Executive remits the taxes.

(f) In the event that the independent public accountants of the Employer or the IRS determines
that any payment, coverage or benefit due or owing to the Executive pursuant to this Agreement is
subject to the excise tax imposed by Section 409A of the Code or any successor provision thereof or
any interest or penalties, including interest imposed under Section 409A(1)(B)(i)(I) of the Code,
incurred by the Executive as a result of the application of such provision, the Employer, within 30
days thereafter, shall pay to the Executive, in addition to any other payment, coverage or benefit
due and owing under this Agreement, an amount that will result in the Executive’s net after tax
position, after taking into account any interest, penalties or taxes imposed on the amounts paid
under this paragraph 1(f), being no less advantageous to the Executive than the net after tax
position to the Executive that would have been obtained had Section 409A of the Code not been
applicable to such payment, coverage or benefits. Except as otherwise provided in this Agreement,
all determinations to be made under this paragraph 1(f) shall be made by tax counsel whose
selection shall be reasonably acceptable to the Executive and the Employer and whose fees and costs
shall be paid for by the Employer. Notwithstanding any provision above to the contrary, any
payment payable under this paragraph shall be made not earlier than the date that is six months
after the Executive’s separation from service and not later than the end of the calendar year
following the calendar year in which the Executive remits the taxes.

(g) Any notice of termination of the employment of the Executive under this Agreement by the
Employer to the Executive or by the Executive to the Employer shall be given in accordance with the
provisions of paragraph 10.

(h) The Employer agrees to reimburse the Executive for the reasonable fees and expenses of the
Executive’s attorneys and for court and related costs in connection with the Executive’s seeking
any legal advice or any effort by any proceeding to enforce the provisions of this Agreement or to
obtain any right or benefit hereunder, unless such efforts by the Executive are determined to be in
bad faith or frivolous. Notwithstanding any provision above to the contrary, any payment payable
under this paragraph shall be made not earlier than the date that is six months after the
Executive’s separation from service and not later than the end of the calendar year following the
calendar year in which the fees or costs are incurred by the Executive.

2. Duties of the Executive.

(a) Subject to the ultimate control and discretion of the Board, the Executive shall serve in
the Position and perform all duties and services commensurate with the Position. Throughout the
Term, the Executive shall perform all duties reasonably assigned or delegated to him under the
by-laws of the Employer or from time to time by the Board consistent with the Position. The
Executive shall at all times report directly to the Board. Except for travel normally incidental
and reasonably necessary to the business of the Employer and the duties of the Executive under this
Agreement, the duties of the Executive shall predominantly be performed at the Employer’s offices
in the greater Philadelphia, Pennsylvania metropolitan area, it being understood, however, that the
Executive will commute to Philadelphia, Pennsylvania from Denver, Colorado and the Employer shall
not require the Executive to relocate his residence from Denver, Colorado.

(b) The Executive shall devote substantially all of the Executive’s business time and
attention to the performance of the Executive’s duties under this Agreement and, during the Term of
his employment under this Agreement, the Executive shall not engage in any other business
enterprise that requires any significant amount of the Executive’s personal time or attention,
unless granted the prior permission of the Board. The foregoing provision shall not prevent the
Executive’s purchase, ownership or sale of any interest in, or the Executive’s engaging, but not to
exceed an average of five hours per week, in, any business that does not compete with the business
of the Employer or the Executive’s involvement in charitable or community activities, provided,
that the time and attention that the Executive devotes to such business and charitable or community
activities does not materially interfere with the performance of his duties under this Agreement
and that such conduct complies in all material respects with applicable policies of the Employer.

(c) The Executive shall be entitled to 30 business days of vacation leave during each calendar
year with full compensation, and to be taken at such time or times, as the Executive and the
Employer shall mutually determine. Earned but unused vacation shall be accrued in accordance with
the Employer’s vacation policy.

3. Compensation. For all services to be rendered by the Executive during the Term of
the Executive’s employment with the Employer under this Agreement:

(a) Base Salary. The Employer shall pay the Executive a base salary (the “Base
Salary”) at an annual rate of $350,000, plus such other compensation as may, from time to time, be
determined in the sole discretion of the Board. Such Base Salary and any other compensation
determined in the sole discretion of the Board shall be payable in accordance with the Employer’s
normal payroll practices as in effect from time to time.

(b) Annual Bonus. The Employer agrees that the Executive shall be eligible to
receive, in accordance in all material respects with applicable policies of the Employer relating
to incentive compensation for executive officers, an annual bonus (the “Bonus”) payable either in
cash or, if requested by the Executive, in the form of equity based on fair market value, at the
same time as bonuses are paid to other executive officers of the Employer, in such amount as may be
determined in the sole discretion of the Board based upon the Senior Management Bonus Plan attached
to this Agreement as Appendix A. Notwithstanding the foregoing, all Bonuses earned by the
Executive with respect to a particular fiscal year of the Employer shall be paid by March 15 of the
succeeding fiscal year.

(c) Restricted Stock Awards. The Employer agrees that the Executive shall be eligible
to receive, in accordance in all material respects with applicable policies of the Employer
relating to incentive compensation for the executive officers, an annual restricted stock award
(each, an “Award”) as to such number of shares (the “Shares”), if any, as may be determined in the
sole discretion of the Board. Any such discretionary Award shall be evidenced by a Restricted
Stock Award Agreement between the Employer and the Executive in substantially the form thereof
currently in use by the Employer. Each Award and the Restricted Stock Award Agreement shall have
the following other principal terms:

(i) the Shares subject to each Award shall become vested, and remain vested from and after the
Effective Date, in three cumulative installments as follows:

(A) the first installment, consisting of one-third of the Shares subject to each Award, shall
become vested from and after the first anniversary of the date of the Award;

(B) the second installment, consisting of an additional one-third of the Shares subject to
each Award, shall become vested from and after the second anniversary of the date of the Award; and

(C) the third installment, consisting of the remaining one-third of the Shares subject to each
Award, shall become vested from and after the third anniversary of the date of the Award;

(ii) the Shares, and any other shares of the Employer’s common stock held under prior or
subsequent restricted stock Awards made to the Executive by the Employer, shall become immediately
vested in full and shall remain vested in the event of (A) a Change of Control (as defined herein),
(B) a termination of the employment of the Executive by the Employer under this Agreement without
Cause or (C) a termination of the employment of the Executive under this Agreement by the Executive
for Good Reason;

(iii) any unvested Shares shall revert to the Employer immediately in the event of a
termination of the employment of the Executive under this Agreement by the Employer for Cause; and

(iv) the Executive shall have the right by notice to the Employer to require that the Employer
purchase from the Executive that number of vested shares of the Employer’s common stock at a price
per share equal to the average closing price of the Employer’s common stock on the market on which
the Employer’s common stock is principally traded for the 20 days preceding the Executive’s notice
of purchase, as is necessary to provide the Executive with sufficient funds to pay applicable
federal and state income taxes resulting from the vesting of Shares under the Award.

As used in this paragraph 3, “Change of Control” shall mean (A) the acquisition of shares of the
Employer by any “person” or “group” (as such terms are used in Rule 13d-3 under the Securities
Exchange Act of 1934 as now or hereafter amended), with the exception of a Transaction (as defined
herein) by Arco Capital Corporation Ltd. and its affiliates in a transaction or series of
transactions that result in such person or group directly or indirectly becoming the beneficial
owner of 25% or more of either (1) the Employer’s common stock after the date of this Agreement or
(2) the combined voting power of the then outstanding voting securities of the Employer entitled to
vote generally in the election of directors, (B) the consummation of a merger or other business
combination after which the holders of voting capital stock of the Employer do not collectively own
60% or more of the voting capital stock of the entity surviving such merger or other business
combination, (C) the sale, lease, exchange or other transfer in a transaction or series of
transactions of all or substantially all of the assets of the Employer, but excluding therefrom the
sale and reinvestment of the Employer’s investment portfolio or (D) as the result of or in
connection with any cash tender offer or exchange offer, merger or other business combination, sale
of assets or contested election of directors or any combination of the foregoing transactions (a
“Transaction”), the persons who constituted a majority of the members of the Board on the date of
this Agreement and persons whose election as members of the Board was approved by such members then
still in office or whose election was previously so approved after the date of this Agreement, but
before the event that constitutes a Change of Control, no longer constitute such a majority of the
members of the Board then in office. A Transaction constituting a Change in Control shall only be
deemed to have occurred upon the closing of the Transaction. The Executive and the Employer agree
that the conversion of the Employer from a Maryland corporation qualified as a real estate
investment trust to a Delaware limited liability company treated as a publicly traded partnership
and the transactions comprising such conversion shall not constitute a Change of Control for the
purposes of this Agreement.

(d) Initial Restricted Stock Award. The Board shall grant to the Executive an initial
restricted stock award consistent with the terms and conditions set forth in paragraph 3(c) for
1,590,000 shares of Common Stock of the Employer.

(e) Employee Benefits. The Executive will be entitled to participate in all employee
benefit plans and programs generally available to executive employees of the Employer and on the
same terms and conditions as other executive employees of the Employer.

(f) Housing/Travel. The Employer shall (A) provide suitable temporary furnished
housing for the Executive in the Philadelphia, Pennsylvania metropolitan area, including lease,
utility and other regular monthly housing-related costs, and (B) pay or reimburse the Executive for
the cost of airfare for roundtrip travel by the Executive between Philadelphia and his residence in
Denver, Colorado as reasonably necessary for the Executive to perform his duties hereunder. The
Executive shall endeavor to schedule such home travel in a manner that does not unduly disrupt the
operations of the Employer and to coordinate with other business travel as reasonable. To the
extent that any benefits provided under this paragraph 3(f) are taxable to the Executive, the
Employer shall provide the Executive with a an additional amount that will result in the
Executive’s net after tax position, after taking into account any interest, penalties or taxes
imposed on the amount payable under this paragraph 3(f), being no less advantageous to the
Executive such that the net after tax position fully covers the cost of such housing, travel and
tax payments and benefits.

(g) The Employer will reimburse the Executive for the reasonable attorneys’ fees incurred by
him in connection with the review and negotiation of this Agreement and related documents.

4. Expenses. The Employer shall promptly reimburse the Executive for (a) all
reasonable expenses paid or incurred by the Executive in connection with the performance of the
Executive’s duties and responsibilities under this Agreement, upon presentation of expense vouchers
or other appropriate documentation therefor and (b) all reasonable professional expenses, such as
licenses and dues and professional educational expenses, paid or incurred by the Executive during
the Term.

5. Indemnification. Notwithstanding anything in the Employer’s certificate of
incorporation or its by-laws to the contrary, the Executive shall at all times during his
employment by the Employer, and thereafter, be indemnified by the Employer to the fullest extent
permitted by applicable law for any matter in any way relating to the Executive’s affiliation with
the Employer and its subsidiaries; provided, however, that if the Executive’s employment shall have
been terminated by the Employer for Cause, then, to the extent required by applicable law, the
Employer shall have no obligation whatsoever to indemnify the Executive for any claim arising out
of the matter for which his employment shall have been terminated for Cause or for any conduct of
the Executive not within the scope of the Executive’s duties under this Agreement.

6. Confidential Information. The Executive understands that, in the course of his
employment by the Employer, the Executive will receive confidential information concerning the
business of the Employer and that the Employer desires to protect. The Executive agrees that he
will not at any time during or after the period of his employment by the Employer reveal to anyone
outside the Employer, except as required by law or as appropriate in the course of the Executive’s
performance of the duties of the Position, or use for his own benefit, any such information that
has been designated as confidential by the Employer or understood by the Executive to be
confidential without specific written authorization by the Employer. Upon termination of this
Agreement, and upon the request of the Employer, the Executive shall promptly deliver to the
Employer any and all written materials, records and documents, including all copies thereof, made
by the Executive or coming into his possession during the Term and retained by the Executive
containing or concerning confidential information of the Employer and all other written materials
furnished to and retained by the Executive by the Employer for his use during the Term, including
all copies thereof, whether of a confidential nature or otherwise.

7. Representation and Warranty of the Executive. The Executive represents and
warrants that he is not under any obligation, contractual or otherwise, to any other firm or
corporation, that would prevent his entry into the employ of the Employer or his performance of the
terms of this Agreement.

8. Entire Agreement; Amendment. This Agreement and any Restricted Stock Award
Agreement contain the entire agreement between the Employer and the Executive with respect to the
subject matter hereof, and may not be amended, waived, changed, modified or discharged except by an
instrument in writing executed by the Employer and the Executive.

9. Assignability. The services of the Executive under this Agreement are personal in
nature, and, except as provided in paragraph 13, neither this Agreement nor the rights or
obligations of the Employer under this Agreement may be assigned by the Employer, whether by
operation of law or otherwise, without the Executive’s prior written consent. This Agreement shall
be binding upon, and inure to the benefit of, the Employer and its permitted successors and assigns
under this Agreement. This Agreement shall not be assignable by the Executive, but shall inure to
the benefit of the Executive’s heirs, executors, administrators and legal representatives.

10. Notice. Any notice that may be given under this Agreement shall be in writing and
be deemed given when hand delivered and acknowledged or, if mailed, three days after mailing by
registered or certified mail, return receipt requested, or if delivered by an overnight delivery
service, one day after the notice is delivered to such service, to either the Employer or the
Executive at their respective addresses stated above, or at such other address as the Executive or
the Employer may by similar notice designate.

11. Specific Performance. The Employer and the Executive agree that irreparable
damage would occur in the event that any of the provisions of paragraph 6 were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of paragraph 6 and to
enforce specifically the terms and provisions of paragraph 6, this being in addition to any other
remedy to which any party is entitled at law or in equity.

12. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties (and the Executive’s heirs,
executors, administrators and legal representatives and the permitted transferees of the Shares)
any rights or remedies of any nature under or by reason of this Agreement.

13. Successor Liability. The Employer shall require any successor, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or substantially all of the
business or assets of the Employer to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Employer would be required to perform it if no such
succession had taken place, including, without limitation by reason of specification, the
contemplated conversion of the Employer to a Delaware limited liability company.

14. Mitigation. The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment or benefit provided for in this Agreement be reduced by any compensation
earned by the Executive as the result of employment by another employer or by retirement benefits
payable after the termination of this Agreement, except that the Employer shall not be required to
provide the Executive and his eligible dependents with medical insurance coverage as long as the
Executive and his eligible dependents are receiving comparable medical insurance coverage from
another employer.

15. Waiver of Breach. The failure at any time to enforce or exercise any right under
any of the provisions of this Agreement or to require at any time performance by the other party of
any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to
affect either the validity of this Agreement or any part hereof, or the right of any party
hereafter to enforce or exercise its rights under each and every provision in accordance with the
terms of this Agreement.

16. No Attachment. Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be
null, void and of no effect; provided, however, that nothing in this paragraph 16 shall preclude
the assumption of such rights by executors, administrators or other legal representatives of the
Executive or his estate and their assigning any rights under this Agreement to the person or
persons entitled hereto.

17. Severability. The invalidity or unenforceability of any term, phrase, clause,
paragraph, restriction, covenant, agreement or other provision hereof shall in no way affect the
validity or enforceability of any other provision, or any part thereof, but this Agreement shall be
construed as if such invalid or unenforceable term, phrase, clause, paragraph, restriction,
covenant, agreement or other provision had never been contained in this Agreement unless the
deletion of such term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision would result in such a material change as to cause the covenants and agreements contained
in this Agreement to be unreasonable or would materially and adversely frustrate the objectives of
the Employer and the Executive as expressed in this Agreement.

18. Survival of Benefits. Any provision of this Agreement that provides a benefit to
the Executive and that by the express terms hereof does not terminate upon the expiration of the
Term shall survive the expiration of the Term and shall remain binding upon the Employer until such
time as such benefits are paid in full to the Executive or his estate.

19. Construction. This Agreement shall be governed by and construed in accordance
with the internal laws of the Commonwealth of Pennsylvania, without giving effect to principles of
conflict of laws. All headings in this Agreement have been inserted solely for convenience of
reference only, are not to be considered a part of this Agreement and shall not affect the
interpretation of any of the provisions of this Agreement.

1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 
	LUMINENT MORTGAGE CAPITAL, INC.

By:_/s/ Craig A. Cohen     

	 

	Craig A. Cohen, Chairman of the Board

/s/ Zachary H. Pashel      

	 

	Zachary H. Pashel, Executive

2

APPENDIX A

LUMINENT MORTGAGE CAPITAL, INC.

SENIOR MANAGEMENT BONUS PLAN

The following bonus plan shall become in effect for the senior management of Luminent Mortgage
Capital, Inc. (“Luminent”) effective for Luminent’s fiscal year ending December 31, 2008 and for
subsequent fiscal years. To the extent Luminent becomes engaged as a service provider to a
mortgage insurance company, those results will be included in the CRM segment. Bonus calculations
would be made by the Luminent Finance Department who would not participate in the CRM and asset
management bonus pools.

The bonus amount for CRM would be 10% of Luminent’s net income derived from the CRM business
with net income being calculated as:

	 	•	 	CRM gross revenues

	 	•	 	less CRM direct expenses

	 	•	 	less an allocable portion of Luminent’s other expenses that is currently estimated
at 5%

	 	•	 	the resulting bonus pool would be allocated among CRM staff at the discretion of
senior management after receiving recommendations from the Luminent Board.

The bonus amount for the asset management, or AM, business would be 20% of Luminent’s net
income derived from the AM business with net income being calculated as:

	 	•	 	AM gross revenues

	 	•	 	less AM direct expenses

	 	•	 	less an allocable portion of Luminent’s other expenses that is currently estimated
at 5%

	 	•	 	the resulting bonus pool would be allocated among AM staff at the discretion of
senior management after receiving recommendations from the Luminent Board.

The bonus pool for senior management (Messrs. Pashel and Papatheoharis) will be 20% of
Luminent’s net profits, including the deduction of the bonus amounts for CRM and AM referenced
above. The Compensation Committee will allocate the bonus amounts, if any, to senior management.

Finance Department personnel would be eligible for discretionary bonuses based on the
achievement of tangible goals to be annually specified by the Compensation Committee that would not
be profit-based.

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