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EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (this “Agreement”) dated as of October 17, 2007 between Luminent Mortgage
Capital, Inc., a Maryland corporation having its principal place of business at One Commerce
Square, 21st Floor, 2005 Market Street, Philadelphia, PA 19103 (the “Employer”) and Karen Chang, an
individual currently residing at 1487 26th Avenue, San Francisco, California 94122 (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 to set forth and
confirm their respective rights and obligations with respect to the continuation of the Executive’s
employment by the Employer on the terms and subject to the conditions provided in this Agreement;

     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, in accordance with the terms and subject to the
conditions set forth in this Agreement, for a term (the “Term”) that shall commence on October 17,
2007 (the “Effective Date”) and, subject to paragraphs 1(b), 1(c), 1(d) and 1(e), shall expire on
December 31, 2009. The Executive shall be based at the Employer’s office in San Francisco,
California and shall serve as the Controller of the Employer (the “Initial Position”) commencing
with the Effective Date and continuing until December 31, 2007. Commencing January 1, 2008, the
Executive shall be based at the Employer’s Philadelphia, Pennsylvania office and shall serve as the
Senior Vice President and Chief Financial Officer (the “Position”) of the Employer.

          (b) Unless written notice in accordance with this paragraph 1 terminating the Executive’s
employment under this Agreement is given by either the Employer or the Executive, on each day that
this Agreement is in effect, the Term shall be automatically extended for one additional day so
that at all times this Agreement shall have a then current Term of not less than two years. Unless
otherwise provided in this Agreement or agreed by the Employer and the Executive, all of the terms
and conditions of this Agreement shall

 

 

continue in full force and effect throughout the Term and, with respect to those terms and
conditions that apply after the Term, after the Term.

          (c) Notwithstanding paragraph 1(b), 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), subject to the provisions of this paragraph 1.

               (i) “Cause” shall mean (A) the Executive’s willful and continued failure substantially to
perform her 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
written notice thereof from the Employer to the Executive and a reasonable opportunity for the
Executive to cease such failure, breach or violation in all material respects, (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 repeated
absences from work such that she is unable to perform her duties hereunder in all material respects
other than for physical or mental impairment or illness which the Executive fails to cure after
written notice, but excluding therefrom such absences as are reasonably required to permit the
Executive to continue her participation in the Berkeley-Columbia Executive MBA Program (the
“Program”) pursuant to the Reimbursement Agreement (the “Reimbursement Agreement”) dated April 19,
2007 between the Employer and the Executive, (D) 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 her
obligations under this Agreement or (E) the Executive’s non-compliance with the provisions of
paragraph 2(c) after notice thereof from the Employer to the Executive and a reasonable opportunity
for the Executive 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) 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 the Executive
is substantially unable to perform in all material respects those duties that she 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

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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.

          (d) The Executive shall have the right to terminate her 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 (A) the Executive’s Initial Position or the Position or the scope of the
Executive’s authority, duties or responsibilities as described in this Agreement are materially
diminished without the Executive’s written consent, 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; (B) a material breach by Employer of its
obligations to the Executive under this Agreement, which breach is not cured in all material
respects to the reasonable satisfaction of the Executive within 30 days, in each case following
written notice thereof from the Executive to the Employer, which notice shall be provided within 90
days of the initial existence of the breach or (C) the relocation of the office location where the
Executive serves in the Position to an office location that is not within 30 air miles of One
Commerce Square, 2005 Market Street, Philadelphia, Pennsylvania 19103.

          (e) (i) If (A) the Employer terminates the Executive’s employment under this Agreement for any
reason other than for Cause or (B) the Executive terminates her employment under this Agreement for
Good Reason, the Employer shall pay to the Executive promptly after the event giving rise to such
payment occurs an amount less applicable withholdings equal to the sum of (x) (1) the Executive’s
Base Salary (as defined in this Agreement) accrued through the date the termination of the
Executive’s employment under this Agreement is effective, (2) any Bonus (as defined in this
Agreement) required to be paid to the Executive pursuant to paragraph 3(b) and (3) any amount in
respect of excise taxes required to be paid to the Executive pursuant to paragraph 1(f), with such
payments, rights and benefits described in clauses (x)(1), (x)(2) and (x)(3) being collectively
referred to in this Agreement as the “Accrued Obligations,” (y) an amount equal to the aggregate
premiums that would be payable by the Executive to maintain in effect throughout the period from
the date of the Executive’s termination through the remainder of the Term (the “Subsequent Period”)
had the Executive remained employed (assuming no increase in insurance premium rates) the same
medical, health, disability and life insurance coverage provided to the Executive by the Employer
immediately prior to the date of such termination (the “Benefit Obligations”) and (z) the Employer
shall, as a severance payment, pay to the Executive for the

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Subsequent Period, an amount equal to the sum of (i) the Executive’s annual salary or, Base
Salary, as the case may be, as of the effective date of termination of the Executive’s employment
under this Agreement that the Executive would have received during the Subsequent Period and (ii)
the Minimum Bonus (as defined in paragraph 3(b) of this Agreement) that the Executive would have
received during the Subsequent Period. For the avoidance of doubt, such severance payment shall
equal the Executive’s Base Salary for two years and the Executive’s Minimum Bonus for two years.
Such severance payment shall be paid in equal bi-weekly installments throughout the remainder of
the Term.

               (ii) If (A) the Employer terminates the Executive’s employment under this Agreement for Cause,
(B) the Executive terminates her employment under this Agreement for any reason other than Good
Reason, her 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 her estate.

               (iii) 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 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 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. In furtherance thereof, if payment or provision of any
amount or benefit hereunder that is subject to Section 409A at the time specified herein would
subject such amount or benefit to any additional tax under Section 409A, the payment or provision
of such amount or benefit shall be postponed to the earliest commencement date on which the payment
or provision of such amount or benefit could be made without incurring such additional tax. In
addition, to the extent that any Internal Revenue Service 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, to amend this Agreement in
order to avoid the imposition of any such interest or additional tax under Section 409A, which
amendment shall have the minimum economic effect necessary and be reasonably determined in good
faith by the Employer and the Executive.

               (iv) 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

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months following the date of the Executive’s termination of employment or before the date of
the Executive’s death, if earlier.

               (v) To the extent such severance amount exceeds the applicable safe harbor amount under
Section 409A, the excess amount shall be treated as deferred compensation under Section 409A and as
such shall be payable pursuant to the following schedule: (1) one-half of such excess amount shall
be paid on the six month anniversary of the date of termination, and (2) the remaining half shall
be paid on the one year anniversary of the date of termination.

          (f) In the event that the independent public accountants of the Employer or the Internal
Revenue Service 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(f), 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(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.

          (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) If, during the Term of this Agreement, the Employer enters into an employment agreement
that provides for a lump-sum payment of any severance payment that consists of a multiple of Base
Salary and Minimum Bonus, the Employer shall amend this Agreement to provide for the like treatment
for the severance payment of the Executive under this Agreement.

          (i) The Employer agree to reimburse the Executive for the reasonable fees and expenses of the
Executive’s attorneys and for court and related costs in any proceeding to enforce the provisions
of this Agreement in which the Executive is successful on the merits.

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     2. Duties of the Executive.

          (a) Subject to the ultimate control and discretion of the Board of the Employer, the Executive
shall serve in the Initial Position from the Effective Date through December 31, 2007 and shall
continue to perform the duties and provide the services she is currently performing on the date of
this Agreement through December 31, 2007. Commencing on January 1, 2008 and continuing thereafter
throughout the Term of this Agreement, the Executive shall serve in the Position and perform all
duties and services commensurate with the Position as provided in this Agreement and as
contemplated by the Reimbursement Agreement. Throughout the Term, the Executive shall perform all
duties reasonably assigned or delegated to her under the by-laws of the Employer or from time to
time by the Board consistent with the Position.

          (b) Except for travel normally incidental and reasonably necessary to the business of the
Employer, the duties of the Executive while she serves in the Initial Position shall be performed
in the San Francisco metropolitan area and the duties of the Executive during the period she serves
in the Position shall be performed at the Employer’s current office location at 2005 Market Street,
Philadelphia, Pennsylvania 19103 or at such other office location as is within 30 air miles of One
Commerce Square, 2005 Market Street, Philadelphia, Pennsylvania 19103.

          (c) With the exception of the time reasonably necessary for the Executive’s participation in
the Program, 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
her 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 her duties under this Agreement
and that such conduct complies in all material respects with applicable policies of the Employer.

          (d) The Executive shall be entitled to 30 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. During the period starting on the Effective Date and ending on
December 31, 2007, the Executive shall be paid a salary at the same annual rate as she was
receiving immediately prior to the Effective Date and the Executive shall also be paid the

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Retention Bonus on the terms and conditions described in the Retention Agreement dated
September 6, 2007 between the Executive and the Employer (the “Retention Agreement”) for all
services to be rendered by the Executive through December 31, 2007. Commencing with January 1,
2008, and thereafter during the Term of this Agreement, the Executive shall be paid the following
compensation:

          (a) Base Salary. The Employer shall pay the Executive a base salary (the “Base
Salary”) at an annual rate of $300,000, plus such other compensation as may, from time to time, be
determined by the Employer. At the end of each fiscal year of the Employer, the Employer shall
review the amount of the Executive’s Base Salary, and shall increase such Base Salary for the
following year to such amount as the Board may determine in its discretion. Such Base Salary and
other compensation 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 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 in cash, at the same
time as bonuses are paid to other executive officers of the Employer, in such amount as may be
fixed by the Board in its discretion based upon the performance of the Employer and the
contributions of the Executive to such performance, provided, however, that the Executive shall
receive a Bonus (the “Minimum Bonus”) in respect of the services to be rendered by the Executive
that is not less than $300,000 for 2008 and that is not less than $125,000 for each year of the
Term subsequent to 2008. Notwithstanding the foregoing, all bonuses applicable to a particular
fiscal year of the Employer shall be paid by December 31 of that fiscal year.

          (c) Restricted Stock Award. The Employer agrees that the Executive shall 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”) as may be fixed in the Board’s discretion based upon the
performance of the Employer and the contributions of the Executive to such performance. Any such
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 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;

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                    (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) a
termination of the employment of the Executive under this Agreement by the Employer for Cause or
(B) a termination of the employment of the Executive under this Agreement by the Executive without
Good Reason; 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 New York Stock
Exchange 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, subject to the prior approval by the Compensation Committee
of the Employer’s Board of Directors of the price per share at the time of each such purchase.

          (d) Benefits. The Executive shall be entitled to participate in the same medical,
health, disability, 401(K) and life insurance benefits as are provided to the other executive
officers of the Employer, subject to the terms and conditions of any plan pursuant to which such
benefits are provided.

          (e) Change of Control Definition. 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) 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 the Employer’s Common Stock after the date of this
Agreement, (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

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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 of
Control shall only be deemed to have occurred upon the closing of the Transaction.

          (f) The Employer shall pay as incurred during the Term of this Agreement the reasonable moving
expenses of the Executive in relocating from San Francisco, California to Philadelphia,
Pennsylvania at the request of the Employer, but not in excess of $100,000 without the prior
written consent of the Employer. The Employer shall also reimburse the Executive, upon the
presentation of vouchers or other appropriate documentation for two trips to Philadelphia,
Pennsylvania from San Francisco, California to identify suitable residential accommodations and for
one such trip to Philadelphia, Pennsylvania from San Francisco, California to effect such
relocation. The Employer shall also reimburse the Executive for closing fees associated with the
purchase of a residence as provided in Appendix A, provided the Executive purchases a residence in
the Greater Philadelphia, Pennsylvania metropolitan area prior to December 31, 2008. In the event
that the independent registered public accounting firm retained by the Employer or the Internal
Revenue Service determines that any moving expenses of the Executive paid or reimbursed by the
Employee are subject to any taxes imposed by the Code, the Employer, within 30 days thereafter,
shall pay to the Executive 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 such payments or
reimbursements pursuant to this paragraph 3(f), will be no less advantageous to the Executive than
the after-tax position of the Executive would have been had there been no such interest, penalties
or taxes.

     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 her
employment by the Employer, and thereafter, be indemnified by the Employer to the fullest

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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, if and 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 her 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 her
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 she
will not at any time during or after the period of her employment by the Employer reveal to anyone
outside the Employer, except as required by law, or use for her 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 her 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 her 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 she is not under any obligation, contractual or otherwise, to any other firm or
corporation, that would prevent her entry into the employ of the Employer or her performance of the
terms of this Agreement.

     8. Entire Agreement; Amendment. This Agreement, the Restricted Stock Award Agreement,
the Reimbursement Agreement and the Retention 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 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.

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     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, one day 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 or assignment had taken place.

     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 her eligible dependents with medical insurance coverage as long as the
Executive and her 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,

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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 her 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 her 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.

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

	 	 	 	 	 
	 	 	LUMINENT MORTGAGE CAPITAL, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ S. Trezevant Moore, Jr.
	 

	 	 	 	 
	 

	 	 	 	S. Trezevant Moore, Jr., Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Karen Chang
	 

	 	 	 	 
	 

	 	 	 	Karen Chang

-12-

 

APPENDIX A

     The Employer will reimburse the Executive for the fees incurred in connection with the
purchase of a residence in the Greater Philadelphia, Pennsylvania metropolitan area up to the
following limits:

	 	 	 
	Loan Origination

	 	1% of mortgage amount but not to exceed $10,000
	Appraisal Fee

	 	not to exceed $450
	Credit Report

	 	not to exceed $50
	Tax Registration

	 	not to exceed $80
	Flood Certificate

	 	not to exceed $25
	Closing Fee

	 	not to exceed $600
	Document Preparation

	 	not to exceed $75
	Attorney Fee

	 	not to exceed $1,500
	Title Insurance

	 	standard filed rates in PA, NJ or DE as the case may be
	Messenger Fee

	 	not to exceed $30
	 
	 	 
	Recording Fees:
	 	 
	Deed

	 	as appropriate in each county
	Mortgage

	 	as appropriate in each county
	Transfer Tax (PA only)

	 	not to exceed 1% of the Sales Priceexv10w2

 

EXHIBIT 10.2

AMENDMENT NO. 1

to

EMPLOYMENT AGREEMENT

     THIS AMENDMENT NO. 1 (this “Amendment”) dated as of October 22, 2007 to EMPLOYMENT AGREEMENT
(the “Agreement”) dated as of December 20, 2005 between Luminent Mortgage Capital, Inc., a Maryland
corporation having its principal place of business at 101 California Street, Suite 1350, San
Francisco, California 94111 (the “Employer”) and S. Trezevant Moore, Jr., an individual residing at
113 Woods Lane, Radnor, Pennsylvania, 19087 (the “Executive”).

WITNESSETH:

     WHEREAS, the Employer and the Executive desire to amend the Agreement to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and to
ratify and confirm the Agreement except as modified by the Retention Agreement dated August 31,
2007 between the Employer and the Executive; and

     WHEREAS, the Employer and the Executive are entering into this Amendment to set forth and
confirm their respective rights and obligations with respect to such Section 409A compliance;

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

     1. Paragraph 1(d) of the Agreement is hereby amended so that, as amended, Paragraph 1(d) shall
read in its entirety as follows:

     “(d) 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 (A) the Executive’s Position
or the scope of the Executive’s authority, duties or responsibilities as described in
this Agreement are materially diminished without the Executive’s written consent,
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 or (B) a material breach by Employer of its obligations
to the Executive under this Agreement, which breach is not cured in all material
respects to the reasonable satisfaction of the Executive within 30 days, in each

 

 

case
following written notice thereof from the Executive to the Employer, which notice
shall be provided within 90 days of the initial existence of the breach.”

     2. Paragraph 1(e) of the Agreement is hereby amended to insert new subparagraphs 1(e)(iii),
(iv) and (v) that shall read in their entirety as follows:

          “(iii) It is intended that this Agreement be administered in compliance with
section 409A of the Code, including, but not limited to, any future amendments to Code
section 409A, and any other Internal Revenue Service 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 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. In furtherance
thereof, if payment or provision of any amount or benefit hereunder that is subject to
Section 409A at the time specified herein would subject such amount or benefit to any
additional tax under Section 409A, the payment or provision of such amount or benefit
shall be postponed to the earliest commencement date on which the payment or provision
of such amount or benefit could be made without incurring such additional tax. In
addition, to the extent that any Internal Revenue Service 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, to amend this Agreement in order to avoid the imposition of any such
interest or additional tax under Section 409A, which amendment shall have the minimum
economic effect necessary and be reasonably determined in good faith by the Employer
and the Executive.

          (iv) 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 termination of employment
or the date of the Executive’s death, if earlier.

          (v) To the extent such severance amount exceeds the applicable safe harbor amount
under Section 409A, the excess amount shall be treated as deferred compensation under
Section 409A and as such shall be payable pursuant to the following schedule: (1)
one-third of such excess amount shall be
paid on the first anniversary of the date of termination or earlier death, (2)
one-

-2-

 

third of such excess amount shall be paid on the second year anniversary of the
date of termination or earlier death and (3) the remaining one-third of such excess
amount shall be paid on the third anniversary of the date of termination or earlier
death.”

     3. Paragraph 1(f) of the Agreement is hereby amended to delete the reference to “the Internal
Revenue Code of 1986, as amended (“the Code”)” and replace it with a reference to “the Code”.

     4. Paragraph 3(c) of the Agreement is hereby amended to insert a new sentence at the end
thereof to read as follows:

“Notwithstanding the foregoing, all bonuses shall be paid within two and one-half
months of the close of each fiscal year.”

     5. Construction. This Amendment 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.

     6. The Agreement. With the exception of the provisions of this Amendment, the
remainder of the Agreement is hereby ratified and confirmed and shall remain in full force and
effect, except as expressly modified by the Retention Agreement dated August 31, 2007 between the
Employer and the Executive.

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

	 	 	 	 	 
	 	 	LUMINENT MORTGAGE CAPITAL, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Zyda
	 

	 	 	 	 
	 

	 	 	 	Christopher J. Zyda, Senior Vice President
	 

	 	 	 	     and Chief Financial Officer
	 
	 	 	 	 
	 	 	/s/ S. Trezevant Moore, Jr.
	 	 	 
	 	 	S. Trezevant Moore, Jr.

-3-

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