Document:

Unassociated Document

    EXHIBIT
      4.05

     

    FORM
      OF WARRANT

     

    GENELABS
      TECHNOLOGIES, INC.

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    
      	
              No.
                __-_______

            	
              _______,
                200__

            
	
              VOID
                AFTER  ______,
                200__

            

     

    THIS
      CERTIFIES THAT,
      for
      value received, [PURCHASER],
      with
      its principal office at [ADDRESS],
      or
      assigns (the "Holder"), is entitled to subscribe for and purchase at the
      Exercise Price (defined below) from GENELABS
      TECHNOLOGIES, INC.,
      a
California
      corporation,
      with its principal office at 505
      Penobscot Drive, Redwood City, CA 94063
      (the
      "Company") _____ shares of the Common Stock of the Company as provided herein
      (the "Common Stock"). 

     

    1.  DEFINITIONS.
      As
      used
      herein, the following terms shall have the following respective
      meanings:

     

    (a)  "Exercise
      Period" shall mean the period commencing with the date hereof and
      ending ____
      years from the date hereof, unless sooner terminated as provided
      below.

     

    (b)  "Exercise
      Price" shall mean $____ per share, subject to adjustment pursuant to
      Section 5 below.

     

    (c)  "Exercise
      Shares" shall mean the shares of the Company’s Common Stock issuable upon
      exercise of this Warrant.

     

    2.  EXERCISE
      OF WARRANT. The
      rights represented by this Warrant may be exercised in whole or in part at
      any
      time during the Exercise Period, by delivery of the following to the Company
      at
      its address set forth above (or at such other address as it may designate by
      notice in writing to the Holder):

     

    (a)  An
      executed Notice of Exercise in the form attached hereto;

     

    (b)  Payment
      of the Exercise Price either (i) in cash or by check, or (ii) by cancellation
      of
      indebtedness; and

     

    (c)  This
      Warrant.

     

    Upon
      the
      exercise of the rights represented by this Warrant, a certificate or
      certificates for the Exercise Shares so purchased, registered in the name of
      the
      Holder or persons affiliated with the Holder, if the Holder so designates,
      shall
      be issued and delivered to the Holder within a reasonable time after the rights
      represented by this Warrant shall have been so exercised.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    The
      person in whose name any certificate or certificates for Exercise Shares are
      to
      be issued upon exercise of this Warrant shall be deemed to have become the
      holder of record of such shares on the date on which this Warrant was
      surrendered and payment of the Exercise Price was made, irrespective of the
      date
      of delivery of such certificate or certificates, except that, if the date of
      such surrender and payment is a date when the stock transfer books of the
      Company are closed, such person shall be deemed to have become the holder of
      such shares at the close of business on the next succeeding date on which the
      stock transfer books are open.

     

    2.1  Net
      Exercise.
      Notwithstanding any provisions herein to the contrary, if the fair market value
      of one share of the Company’s Common Stock is greater than the Exercise Price
      (at the date of calculation as set forth below), in lieu of exercising this
      Warrant by payment of cash, the Holder may elect to receive shares equal to
      the
      value (as determined below) of this Warrant (or the portion thereof being
      canceled) by surrender of this Warrant at the principal office of the Company
      together with the properly endorsed Notice of Exercise in which event the
      Company shall issue to the Holder a number of shares of Common Stock computed
      using the following formula:

     

    X
      =
Y
      (A-B)

    A

     

    
      	             
              Where	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder

            

    

     

    
      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable under the Warrant or,
                if only
                a portion of the Warrant is being exercised, the portion of the Warrant
                being canceled (at the date of such
                calculation)

            

    

     

    
      	 	
              A
                =

            	
              the
                fair market value of one share of the Company’s Common Stock (at the date
                of such calculation)

            

    

     

    
      	 	
              B
                =

            	
              Exercise
                Price (as adjusted to the date of such
                calculation)

            

    

     

    For
      purposes of the above calculation, the fair market value of one share of Common
      Stock shall be determined by the Company’s Board of Directors in good
      faith.

     

    3.  COVENANTS
      OF THE COMPANY.

     

    3.1  Covenants
      as to Exercise Shares.
      The
      Company covenants and agrees that all Exercise Shares that may be issued upon
      the exercise of the rights represented by this Warrant will, upon issuance,
      be
      validly issued and outstanding, fully paid and nonassessable, and free from
      all
      taxes, liens and charges with respect to the issuance thereof. The Company
      further covenants and agrees that the Company will at all times during the
      Exercise Period, have authorized and reserved, free from preemptive rights,
      a
      sufficient number of shares of its Common Stock to provide for the exercise
      of
      the rights represented by this Warrant. If at any time during the Exercise
      Period the number of authorized but unissued shares of Common Stock shall not
      be
      sufficient to permit exercise of this Warrant, the Company will take such
      corporate action as may, in the opinion of its counsel, be necessary to increase
      its authorized but unissued shares of Common Stock to such number of shares
      as
      shall be sufficient for such purposes.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.2  No
      Impairment.
      Except
      and to the extent as waived or consented to by the Holder, the Company will
      not,
      by amendment of its Articles of Incorporation or through any reorganization,
      transfer of assets, consolidation, merger, dissolution, issue or sale of
      securities or any other voluntary action, avoid or seek to avoid the observance
      or performance of any of the terms to be observed or performed hereunder by
      the
      Company, but will at all times in good faith assist in the carrying out of
      all
      the provisions of this Warrant and in the taking of all such action as may
      be
      necessary or appropriate in order to protect the exercise rights of the Holder
      against impairment.

     

    3.3  Notices
      of Record Date.
      In the
      event of any taking by the Company of a record of the holders of any class
      of
      securities for the purpose of determining the holders thereof who are entitled
      to receive any dividend (other than a cash dividend which is the same as cash
      dividends paid in previous quarters) or other distribution, the Company shall
      mail to the Holder, at least ten (10) days prior to the date specified herein,
      a
      notice specifying the date on which any such record is to be taken for the
      purpose of such dividend or distribution.

     

    4.  REPRESENTATIONS
      OF HOLDER.

     

    4.1  Acquisition
      of Warrant for Personal Account.
      The
      Holder represents and warrants that it is acquiring the Warrant solely for
      its
      account for investment and not with a view to or for sale or distribution of
      said Warrant or any part thereof. The Holder also represents that the entire
      legal and beneficial interests of the Warrant and Exercise Shares the Holder
      is
      acquiring is being acquired for, and will be held for, its account
      only.

     

    5.  ADJUSTMENT
      OF EXERCISE PRICE. In
      the
      event of changes in the outstanding Common Stock of the Company by reason of
      stock dividends, split-ups, recapitalizations, reclassifications, combinations
      or exchanges of shares, separations, reorganizations, liquidations, or the
      like,
      the number and class of shares available under the Warrant in the aggregate
      and
      the Exercise Price shall be correspondingly adjusted to give the Holder of
      the
      Warrant, on exercise for the same aggregate Exercise Price, the total number,
      class, and kind of shares as the Holder would have owned had the Warrant been
      exercised prior to the event and had the Holder continued to hold such shares
      until after the event requiring adjustment; provided, however, that such
      adjustment shall not be made with respect to, and this Warrant shall terminate
      if not exercised prior to, the events set forth in Section 7 below. The
      form of this Warrant need not be changed because of any adjustment in the number
      of Exercise Shares subject to this Warrant.

     

    6.  FRACTIONAL
      SHARES. No
      fractional shares shall be issued upon the exercise of this Warrant as a
      consequence of any adjustment pursuant hereto. All Exercise Shares (including
      fractions) issuable upon exercise of this Warrant may be aggregated for purposes
      of determining whether the exercise would result in the issuance of any
      fractional share. If, after aggregation, the exercise would result in the
      issuance of a fractional share, the Company shall, in lieu of issuance of any
      fractional share, pay the Holder otherwise entitled to such fraction a sum
      in
      cash equal to the product resulting from multiplying the then current fair
      market value of an Exercise Share by such fraction.

     

    7.  EARLY
      TERMINATION. In
      the
      event of, at any time during the Exercise Period, any capital reorganization,
      or
      any reclassification of the capital stock of the Company (other than a change
      in
      par value or from par value to no par value or no par value to par value or
      as a
      result of a stock dividend or subdivision, split-up or combination of shares),
      or the consolidation or merger of the Company with or into another corporation
      (other than a merger solely to effect a reincorporation of the Company into
      another state), or the sale or other disposition of all or substantially all
      the
      properties and assets of the Company in its entirety to any other person, this
      Warrant shall terminate unless exercised immediately upon the occurrence of
      such
      reorganization, reclassification, consolidation, merger or sale or other
      disposition of the Company’s assets.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    8.  NO
      SHAREHOLDER RIGHTS. This
      Warrant in and of itself shall not entitle the Holder to any voting rights
      or
      other rights as a stockholder of the Company.

     

    9.  TRANSFER
      OF WARRANT. This
      Warrant and all rights hereunder are transferable, by the Holder in person
      or by
      duly authorized attorney, upon delivery of this Warrant and the form of
      assignment attached hereto to any transferee designated by Holder only with
      the
      prior written consent of the Company. If requested, the transferee shall sign
      an
      investment letter in form and substance satisfactory to the
      Company.

     

    10.  LOST,
      STOLEN, MUTILATED OR DESTROYED WARRANT. If
      this
      Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
      as to indemnity or otherwise as it may reasonably impose (which shall, in the
      case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
      of like denomination and tenor as the Warrant so lost, stolen, mutilated or
      destroyed. Any such new Warrant shall constitute an original contractual
      obligation of the Company, whether or not the allegedly lost, stolen, mutilated
      or destroyed Warrant shall be at any time enforceable by anyone.

     

    11.  NOTICES,
      ETC. All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be sent by facsimile telex, telegram, express mail or other
      form of rapid communications, if possible, and if not then such notice or
      communication shall be mailed by first-class mail, postage prepaid, addressed
      in
      each case to the party entitled thereto at the following addresses: (a) if
      to
      the Company, to Genelabs Technologies, Inc., Attention: [NAME
      OF CONTACT PERSON],
      505
      Penobscot Drive, Redwood City, CA 94063
      and (b)
      if to the Holder, [ADDRESS],
      or at
      such other address as one party may furnish to the other in writing. Notice
      shall be deemed effective on the date dispatched if by personal delivery,
      facsimile, telex or telegram, two days after mailing if by express mail, or
      three days after mailing if by first-class mail.

     

    12.  ACCEPTANCE.
      Receipt
      of this Warrant by the Holder shall constitute acceptance of and agreement
      to
      all of the terms and conditions contained herein.

     

    13.  GOVERNING
      LAW. This
      Warrant and all rights, obligations and liabilities hereunder shall be governed
      by the laws of the State of California.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be executed by its duly authorized officer
      as
      of __________, 200__.

     

    [COMPANY]

     

    By:____________________________________

     

    Title:___________________________________

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    NOTICE
      OF EXERCISE

     

    TO: GENELABS
      TECHNOLOGIES, INC.

     

    
      	
               (1)

            	
              o

            	    The
              undersigned hereby elects to purchase ________ shares of Common Stock
              of
              Genelabs Technologies, Inc. (the "Company") pursuant to the terms of
              the
              attached Warrant, and tenders herewith payment of the exercise price
              in
              full, together with all applicable transfer taxes, if
              any.

    

     

    
      
        	 	
                o

              	    The
                undersigned
                hereby elects to purchase ________ shares of Common Stock of Genelabs
                Technologies, Inc. (the "Company") pursuant to the terms of the attached
                Warrant, and tenders herewith payment of the exercise price in full,
                together with all applicable transfer taxes, if
                any.

      

    

     

    
      	
               (2)

            	
               Please
                issue a certificate or certificates representing said shares of Common
                Stock in the name of the undersigned or in such other name as is
                specified
                below:

            

    

     

    ________________________

    (Name)

     

    ________________________

    ________________________

    (Address)

     

    
      	
              (3) 

            	
              o

            	
              [If
                a registration statement covering the exercise of the shares of Common
                Stock is not then effective and the exercise is being effected other
                than
                pursuant to Section 2.1 of the Warrant, the undersigned represents
                that
                (i) the aforesaid shares of Common Stock are being acquired for the
                account of the undersigned for investment and not with a view to,
                or for
                resale in connection with, the distribution thereof and that the
                undersigned has no present intention of distributing or reselling
                such
                shares; (ii) the undersigned is aware of the Company’s business affairs
                and financial condition and has acquired sufficient information about
                the
                Company to reach an informed and knowledgeable decision regarding
                its
                investment in the Company; (iii) the undersigned is experienced in
                making
                investments of this type and has such knowledge and background in
                financial and business matters that the undersigned is capable of
                evaluating the merits and risks of this investment and protecting
                the
                undersigned’s own interests; (iv) the undersigned understands that the
                shares of Common Stock issuable upon exercise of this Warrant have
                not
                been registered under the Securities Act of 1933, as amended (the
                "Securities Act"), by reason of a specific exemption from the registration
                provisions of the Securities Act, which exemption depends upon, among
                other things, the bona fide nature of the investment intent as expressed
                herein, and, because such securities have not been registered under
                the
                Securities Act, they must be held indefinitely unless subsequently
                registered under the Securities Act or an exemption from such registration
                is available; (v) the undersigned is aware that the aforesaid shares
                of
                Common Stock may not be sold pursuant to Rule 144 adopted under the
                Securities Act unless certain conditions are met and until the undersigned
                has held the shares for the number of years prescribed by Rule 144,
                that
                among the conditions for use of the Rule is the availability of current
                information to the public about the Company and the Company has not
                made
                such information available and has no present plans to do so; and
                (vi) the
                undersigned agrees not to make any disposition of all or any part
                of the
                aforesaid shares of Common Stock unless and until there is then in
                effect
                a registration statement under the Securities Act covering such proposed
                disposition and such disposition is made in accordance with said
                registration statement, or the undersigned has provided the Company
                with
                an opinion of counsel satisfactory to the Company, stating that such
                registration is not required.]

            

    

    
       

    

              

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	 	
              (Signature)

            
	
              
                (Date)

              

            	 	
               

            
	 	
              (Print
                name)

            
	 	 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT
      FORM

     

    (To
      assign the foregoing Warrant, execute this form and supply required information.
      Do not use this form to purchase shares.)

     

    FOR
      VALUE RECEIVED,
      the
      foregoing Warrant and all rights evidenced thereby are hereby assigned
      to

     

    
      	
              Name:

            	 
	 	
              (Please
                Print)

            
	
              Address:
                

            	 
	 	
              (Please
                Print)

            
	
              Dated:

            	 	
              ,
                20___

            
	 	 
	 	 
	
              Holder’s
                Signature:

            	 
	 	 
	
              Holder’s
                Address:

            	 

    

    

    

    NOTE:
      The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatever. Officers of corporations and those acting in a fiduciary or other
      representative capacity should file proper evidence of authority to assign
      the
      foregoing Warrant.Unassociated 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

        
          

        

      

      
        
        

      

    

    

      ANNEX
        I

      

      SUPPLEMENTAL
        TERMS AND CONDITIONS

      

      

      This
        Annex I (this “Annex
        I”),
        dated
        as of August 10, 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 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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “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 collections actually received by the Buyer on
        the
        Purchased Securities, net of any applicable U.S. federal income tax withholding
        tax imposed on such interest collections, 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 collections actually
        received by the Buyer on the Purchased Securities, net of any applicable
        U.S.
        federal income tax withholding tax imposed on such interest collections,
        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. 

       

      
        
          
          

        

        
          Annex
            I-3

          
            

          

        

        
          
          

        

      

       

      (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.

       

      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.

       

      
        
          
          

        

        
          Annex
            I-4

          
            

          

        

        
          
          

        

      

       

      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.

      

      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.

       

      
        
          
          

        

        
          Annex
            I-5

          
            

          

        

        
          
          

        

      

       

      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: 

       

      (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.

       

      
        
          
          

        

        
          Annex
            I-7

          
            

          

        

        
          
          

        

      

       

      (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.

       

      (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.

       

      
        
          
          

        

        
          Annex
            I-8

          
            

          

        

        
          
          

        

      

       

      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;

       

      (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.

       

      
        
          
          

        

        
          Annex
            I-9

          
            

          

        

        
          
          

        

      

       

      (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.

       

      (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.

       

      
        
          
          

        

        
          Annex
            I-10

          
            

          

        

        
          
          

        

      

       

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

       

      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.

       

      
        
          
          

        

        
          Annex
            I-11

          
            

          

        

        
          
          

        

      

       

      (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.

       

      (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
        (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, may give the Seller
        credit
        for such Purchased 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
        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
        become 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.

       

      
        
          
          

        

        
          Annex
            I-12

          
            

          

        

        
          
          

        

      

       

      (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.

       

      (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 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.

       

      
        
          
          

        

        
          Annex
            I-14

          
            

          

        

        
          
          

        

      

       

      13. USE
        OF
        EMPLOYEE PLAN ASSETS.

       

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

      

      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.

       

      
        
          
          

        

        
          Annex
            I-15

          
            

          

        

        
          
          

        

      

       

      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.

       

      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:
                  Managing Member, Ramius Capital Group

              
	 
	 
	
                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

          
            

          

        

        
          
          

        

      

      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 Annex I thereto dated as of August 10, 2007),
        dated as of August 10, 2007 (the “Agreement”).

      

      DESCRIPTION
        OF PURCHASED SECURITIES:

       

      
        	
                CUSIP

              	
                Unpaid
                  Principal Balance

              
	 	 
	 	 
	 	 
	 	 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      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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