Document:

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                                                                  EXHIBIT 10.9.1

                     HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
           1997 EXECUTIVE AND NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

                                 Irma N. Tavares
                                (Name of Grantee)

         Hanover Capital Mortgage Holdings, Inc., a Maryland corporation (the
"Company"), hereby grants to Irma N. Tavares (the "Grantee"), effective as of
July 1, 2002 (the "Grant Date"), an option (the "Option") to purchase 18,630
shares of the Company's Common Stock pursuant to the Company's 1997 Executive
and Non-Employee Director Stock Option Plan (the "Plan"), a copy of which is
attached hereto and is incorporated herein in its entirety by this reference.
Except as otherwise provided herein, all capitalized terms used but not defined
herein have the meanings they have in the Plan.

         The Grantee hereby accepts the Option granted subject to the terms and
provisions set forth in the Plan and the following additional terms and
provisions:

         1. The Option is NOT intended to qualify as an incentive stock option
within the meaning of Code section 422.

         2. The price at which shares of Common Stock may be purchased pursuant
to the Option is $15.75 per share, both the price and the number of shares being
subject to adjustment only as provided in the Plan.

         3. (a) Subject to Sections 3(b) through 3(e) below, this Option may be
exercised to the extent vested in accordance with the following vesting
schedule: for each of the five Earn-Out Measuring Dates (as defined in Section 9
below) through which the Total Return Per Unit (as defined in Section 9 below)
equals at least a 15% annualized return on the Base Stock Price (as defined in
Section 9 below), one-third (1/3) of the rights evidenced by this Option shall
vest on such Earn-Out Measuring Date until the Option is fully vested; PROVIDED,
HOWEVER, that if the Total Return per Unit is at least equal to $17.9705 as of
any Earn-Out Measuring Date, then, to the extent not already vested, all of the
rights evidenced by this Option shall vest on such Earn-Out Measuring Date. Any
portion of the Option that shall not have vested on or before the last Earn-Out
Measuring Date, shall expire on such Earn-Out Measuring Date. THE VESTING
SCHEDULE SET FORTH IN THIS SECTION 3(A) IS IN LIEU OF THE VESTING SCHEDULE SET
FORTH IN SECTION 6.3.2 OF THE PLAN, AND THE GRANTEE ACKNOWLEDGES AND AGREES THAT
VESTING OF THE OPTION SHALL NOT BE SUBJECT TO THE PROVISIONS OF SECTION 6.3.2 OF
THE PLAN.

                  (b) Subject to Sections 3(c) through 3(e) below, if the
employment of the Grantee

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by the Company or any Parent or Subsidiary of the Company terminates for any
reason (and the Grantee does not continue to be employed by any member of the
group consisting of the Company, the Company's Parent, if any, and the Company's
Subsidiaries), this Option shall be exercisable by the Grantee only during the
three months following such termination and only as to the number of shares, if
any, as to which it was exercisable immediately prior to such termination.

                  (c) Notwithstanding Section 3(b) but subject to Section 3(e),
if the employment of the Grantee by the Company or any Parent or Subsidiary of
the Company terminates as a result of the Grantee's death or permanent and total
disability (as defined in Section 22(e)(3) of the Code), this Option shall be
exercisable (in the case of the Grantee's death, either by the Grantee's
executor or administrator or, if not so exercised, for the legatees or
distributees of the Grantee's estate) only during the one year following such
termination. During such one-year period, this Option shall be exercisable only
as to the number of shares, if any, as to which it was exercisable immediately
prior to such termination.

                  (d) Notwithstanding Section 3(b), if the employment of the
Grantee by the Company or any Parent or Subsidiary of the Company is terminated
by the Company or any Parent or Subsidiary of the Company for "good cause" (and
the Grantee does not continue to be employed by any member of the group
consisting of the Company, the Company's Parent, if any, and the Company's
Subsidiaries), the Option shall terminate immediately. For purposes of this
Agreement, "good cause" shall mean (i) the willful or reckless failure by the
Grantee to perform his or her duties under, or the willful or reckless violation
by the Grantee of, any written employment agreement, which failure or violation
shall not have been cured within the cure period, if any, provided in such
agreement, (ii) the commission by the Grantee of an act of fraud or theft
against the Company, the Company's Parent, if any, or any Subsidiary of the
Company or (iii) the conviction of the Grantee of, or the plea by the Grantee of
NOLO CONTENDERE to, any felony.

                  (e) Notwithstanding any other provision of this Agreement
other than Section 3(a), the Option shall expire at the close of the day
immediately preceding the tenth anniversary of the Grant Date.

WARNING:  THE OPTION EXERCISE PERIOD MAY BE CUT SHORT IN THE EVENT OF A CHANGE
          IN CONTROL OF THE COMPANY. SEE SECTION 12.4 OF THE PLAN.

         4. The Option shall not be exercisable unless either (a) a registration
statement under the Securities Act of 1933, as amended, with respect to the
Option and the shares to be issued on the exercise thereof shall have become,
and continues to be, effective, or (b) the Grantee (i) shall have represented,
warranted and agreed, in form and substance satisfactory to the Company, at the
time of exercising the Option, that he or she is acquiring the shares for his or
her own account, for investment and not with a view to or in connection with any
distribution, (ii) shall have agreed to restrictions on transfer in form and
substance satisfactory to the Company and (iii) shall have agreed to an
endorsement which makes appropriate reference to such representations,
warranties,

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agreements and restrictions on the certificate(s) representing the shares.

         SHARES ISSUED UPON EXERCISE OF THE OPTION WILL BE SUBJECT TO ALL
RESTRICTIONS ON TRANSFER IMPOSED BY THE COMPANY'S ARTICLES OF INCORPORATION OR
BY-LAWS AND BY APPLICABLE STATE OR FEDERAL SECURITIES LAWS.

         5. The Option may be exercised, subject to such conditions as the
Committee may require in accordance with the Plan, by the delivery, by certified
or registered mail, to the Company's Treasurer at its principal executive office
in Edison, New Jersey, of a Notice of Exercise in the form attached hereto as
EXHIBIT A, which notice shall specify, among other things, the number of Shares
to be so purchased, and shall be accompanied by full payment for the Shares
purchased, together with any tax or excise due in respect of issue of such
Shares, in cash or by certified or bank cashier's check, or in the Committee's
discretion, through (i) the tender of "mature" Shares, as determined under
generally accepted accounting principles, having a Fair Market Value on the date
of tender equal to the purchase price of the Shares to be acquired pursuant to
the exercise of the Option or (ii) delivery of irrevocable instructions to
exercise a broker-assisted cashless exercise in accordance with Regulation T of
the Board of Governors of the Federal Reserve System through a brokerage firm
approved by the Committee and pursuant to such rules and procedures as the
Committee may specify, or a combination of the foregoing.

         6. Notwithstanding anything to the contrary contained herein, no shares
shall be issued to the Grantee pursuant to the Option until the Company and the
Grantee have made appropriate arrangements for the withholding of applicable
income taxes, if any, attributable to the exercise of the Option with respect to
such shares or, in the sole discretion of the Company, the disposition by the
Grantee of such shares, and the Company may require the Grantee to make a cash
payment to the Company or to provide the Company with other security in respect
of such taxes. In addition, the Grantee shall inform the Company promptly of any
disposition of shares acquired by the Grantee pursuant to the Option.

         7. The Option is not transferable by the Grantee otherwise than by will
or the laws of descent and distribution and, during the lifetime of the Grantee,
may be exercised only by the Grantee.

         8. THE GRANT AND EFFECTIVENESS OF THIS OPTION IS CONDITIONED UPON THE
GRANTEE'S CONSENT TO THE CANCELLATION AND SURRENDER OF THE STOCK OPTION GRANTED
TO THE GRANTEE ON SEPTEMBER 28, 1997 FOR THE PURCHASE OF 18,630 SHARES OF THE
COMPANY'S COMMON STOCK AT A PURCHASE PRICE OF $15.75 PER SHARE (THE "PRIOR
OPTION"), AND THE GRANTEE, BY EXECUTION OF THIS STOCK OPTION AGREEMENT, DOES
HEREBY EXPRESSLY CONSENT TO SUCH CANCELLATION AND SURRENDER OF THE PRIOR OPTION
AS OF THE DATE HEREOF.

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         9. Solely for purposes of this Stock Option Agreement, the following
terms shall have the meanings set forth below in lieu of any definition which
may be set forth in the Plan for such terms.

                  (a) "Average Spread" means, on any Earn-Out Measuring Date,
(i) the average of the Daily Market Price per Share, as reported in the Wall
Street Journal, for the twenty (20) consecutive trading days immediately
preceding the date with respect to which "Average Spread" must be determined
hereunder (or, if such date is not a business day, the immediately preceding
business day), on the principal exchange for the Shares or the Nasdaq National
Market (or, if Shares are not publicly traded, the fair market value of such
Share as determined by the Committee in accordance with a valuation methodology
approved by the Committee in good faith) minus (ii) the Base Stock Price.

                  (b) "Base Stock Price" means $8.9345.

                  (c) "Daily Market Price" for any trading day shall mean (i) if
the Shares are listed or admitted to trading on any securities exchange or the
Nasdaq National Market, the closing price, regular way, on such day, or if no
such sale takes place on such day, the average of the closing bid and asked
prices on such day, and (ii) if the Shares are not listed or admitted to trading
on any securities exchange or the Nasdaq National Market, the fair market value
per Share as determined by the Committee in accordance with a valuation
methodology approved by the Committee in good faith.

                  (d) "Earn-Out Measuring Date" means each July 1, beginning
with July 1, 2003 and ending with July 1, 2007.

                  (e) "Total Return per Unit" means, as of any Earn-Out
Measuring Date, (i) the Average Spread, plus (ii) the sum of all distributions
that have been made by the Company with respect to a Share during the period
measured from the Grant Date through and including such Earn-Out Measuring Date.

                           [Signature Page to Follow]}

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      WITNESS the execution hereof under seal as of the 26 day of June,
2002.

                                    "GRANTEE"

                                       /s/ Irma N. Tavares
                                    --------------------------------------------
                                           Irma N. Tavares

                                    "COMPANY"

                                    Hanover Capital Mortgage Holdings, Inc.

                                    By:   /s/ John A. Burchett
                                       -----------------------------------------
                                    Name: John A. Burchett
                                    Title: Chief Executive Officer and President

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                                    EXHIBIT A

                     HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
           1997 EXECUTIVE AND NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                               NOTICE OF EXERCISE

TO:      Treasurer, Hanover Capital Mortgage Holdings, Inc.

FROM:    ________________________________________

         Optionholder's Name

     I elect to exercise my option to purchase shares of Hanover Capital
Mortgage Holdings, Inc. common stock as follows:

     Date of Option Grant:  ______________

     Exercise Price: $_______/share

     Number of Shares to Be Purchased: ___________

     Total Exercise Price Enclosed: $__________

Full payment, in cash or certified or bank cashier's check, for the shares I am
electing to purchase is enclosed with this notice. I understand that issuance of
the purchased shares may be conditioned on my payment of any tax or excise due
thereon and on fulfillment of requirements specified in the Stock Option
Agreement, dated as of _____________, 2002, between Hanover Capital Mortgage
Holdings, Inc. and me.

                                              __________________________________

                                              Optionholder's Signature

                                              ______________________

                                              Date

Received by:

______________________________________

Date:_____________<PAGE>
                                                                   EXHIBIT 10.10

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

                               (Joyce S. Mizerak)

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"),
effective as of the 1st day of July, 2002 (the "Effective Date"), is by and
between Hanover Capital Mortgage Holdings, Inc., a Maryland corporation, with
its offices located at 379 Thornall Street, Edison, New Jersey 08837 (the
"Company"), and Joyce S. Mizerak (the "Employee"), an individual whose residence
is 11 Foxhill Run, Monmouth Junction, New Jersey 08852. This Agreement is an
amendment and restatement of that certain employment agreement entered into
between the Company and the Employee as of September 19, 1997 (the "Prior
Agreement"), and supersedes that Prior Agreement in all respects.

         WHEREAS, the Employee is a Member of the Board of Directors and a
Senior Managing Director of the Company; and

         WHEREAS, the Company desires to insure the continued availability to
the Company of the Employee's services, and the Employee is willing to render
such services, all upon and subject to the terms and conditions contained in
this Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the Company and the Employee agree as follows:

         1. EMPLOYMENT AND ACCEPTANCE OF EMPLOYMENT: TERM. Upon and subject to
the terms and conditions set forth in this Agreement, the Company hereby employs
the Employee as its Senior Managing Director or in such other management
position(s) as the Board of Directors of the Company (the "Board") may determine
from time to time, and the Employee hereby agrees to accept such employment, for
a period of five years (unless sooner terminated as hereinafter set forth) (the
"Initial Term") commencing on the Effective Date and ending five years
thereafter (the "Expiration Date"). Subject to Sections 9(a) and 9(g) of this
Agreement, this Agreement shall be automatically extended upon the Expiration
Date for successive one year terms commencing on the fifth anniversary date of
the Effective Date unless the Employee or the Company gives the other party not
less than three (3) months written notice prior to the Expiration Date, or any
anniversary of the Effective Date thereafter.

         2. DUTIES. It is the intention of the Company and the Employee that,
subject to the direction and supervision of the Board, the Employee shall have
full discretionary authority to direct operational activities as described in
the Registration Statement on Form S-11 filed on June 13, 1997, and as amended
from time to time thereafter (the "Registration Statement") and to incur such
obligations on behalf of the Company as may be necessary or appropriate in the

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ordinary course of business as described in the Registration Statement. The
Employee agrees, during the Initial Term and any extension of the Initial Term,
to devote her entire business and professional time, attention, and energies
exclusively to the business of the Company and its subsidiaries (including,
without limitation, Hanover Capital Partners Ltd., HanoverTrade, Inc., Hanover
Capital Mortgage Corporation and Hanover Capital Securities, Inc.) as shall be
necessary, advisable or required to perform the duties of the Employee's
positions specified in Section 1, and to conform to the rules, regulations,
instructions, personnel practices and policies of the Company, as existing and
amended from time to time by the Company or its Board. Notwithstanding the
foregoing, during the Initial Term and any extension of the Initial Term, the
Employee may (i) serve as an officer, director, trustee or committee member of
any religious, professional, civic, charitable or educational organization, or
as a director of any corporation whose business is not competitive with the
Company or any of its subsidiaries, and (ii) engage in, and devote time and
effort to, any and all personal investments or personal business ventures (which
shall in no event include being an officer or principal shareholder of any
public or private company) unrelated to the business or affairs of the Company
and its subsidiaries, in each case so long as such activities do not materially
interfere with the Employee's obligations to the Company and its subsidiaries or
conflict in any way with the business of the Company.

         3. COMPENSATION AND BENEFITS.

         (a) BASE SALARY. In consideration of the Employee's performance of
services under this Agreement, the Company will pay to the Employee, during the
first year of the Initial Term of the Employee's employment under this
Agreement, and the Employee agrees to accept from the Company for the Employee's
services under this Agreement, an annual salary (the "Base Salary") of
$248,827.44, payable on a pro rata basis in accordance with the Company's normal
payroll practices applicable to its executive officers, but not less often than
monthly. The Employee's Base Salary shall be subject to annual review by the
Company's Compensation Committee (the "Committee") and may be adjusted (upwards
but not downwards) in such amounts as the Committee may determine in its sole
discretion. Notwithstanding the foregoing, the Base Salary shall be increased
annually by any cost of living increases, as determined by the Committee in its
sole discretion. To that end, the Employee shall receive a performance review at
least once a year from the Committee in connection with which the Employee shall
be eligible for such merit increases and other salary adjustments as the
Committee may approve or not in its sole discretion.

         (b) BONUS. In addition to the Base Salary, the Employee shall be
entitled during the Initial Term and any extension thereof to participate in the
Company's Bonus Incentive Compensation Plan and any and all other bonus plans
adopted by the Board or Committee for the executive officers of the Company and
its subsidiaries. The Employee shall be eligible to receive a bonus each year in
such amount as determined or not by the Committee pursuant to the terms of the
Bonus Incentive Compensation Plan.

         (c) STOCK OPTIONS. The Employee shall be entitled to participate in the
Company's 1997 Executive and Non-Employee Director Stock Option Plan, 1999
Equity Incentive Plan, and

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any and all other equity compensation plans adopted by the Board for the
employees of the Company and its subsidiaries. Upon the Effective Date, the
Company shall grant to the Employee an option to purchase 18,630 shares of
Common Stock, par value $.01 per share, of the Company, at an exercise price of
$15.75 per share, such option to become effective and to vest pursuant to the
terms of the Stock Option Agreement attached hereto as EXHIBIT A. Such option
shall be a nonstatutory stock option not intended to constitute an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code of
1986.

         (d) BENEFITS; AUTOMOBILE ALLOWANCE. During, the Initial Term of this
Agreement and any extension thereof, the Employee shall be entitled to receive
medical, dental and other health benefits no less favorable to the Employee than
those provided to him by the Company during the one-year period preceding the
Effective Date (and as described on the attached EXHIBIT B) and to participate
in any other medical, pension, bonus, profit-sharing or similar plan or program
that may be established by the Company and made available to its executive
officers generally. In addition, the Employee shall be entitled to a car
allowance to be applied to the leasing and maintenance of an automobile of an
appropriate age and condition in an amount not to exceed $7,200 per annum,
payable monthly.

         (e) LIFE AND DISABILITY INSURANCE. During the Initial Term and any
extension thereof, the Company shall provide to the Employee at the expense of
the Company (i) a term life insurance policy with a death benefit equal to
$1,500,000 and the proceeds of which shall be payable to such beneficiary or
beneficiaries as the Employee shall designate in writing; and (ii) disability
insurance coverage which shall provide the Employee with a benefit upon total
disability equal to seventy-five percent (75%) of the Base Salary then in effect
payable until the Employee is seventy (70) years old. The Employee shall have
the option to pay the premiums for the disability insurance coverage directly
and, in such event, the Base Salary under this Agreement shall be increased by
an amount equal to the amount of such premiums, plus an additional amount equal
to the Employee's additional income tax resulting from such increase.

         (f) PAID VACATIONS. The Employee shall be entitled to annual paid
vacations of six (6) weeks in each year of the Initial Term and any extension of
the Initial Term at such times and for such periods as may be mutually
acceptable to the Company and the Employee, in accordance with the Company's
policies governing vacations for executive officers of the Company. Unused
vacation in any given year shall not accumulate from year to year and Employee
shall not be entitled to any cash payment for or payment in lieu of unused
vacation time.

         (g) PAID HOLIDAYS AND PERSONAL DAYS. The Employee shall be entitled to
all paid holidays and personal days, in accordance with the Company's policies
governing holidays and personal days for executive officers of the Company.

         (h) CLUB DUES. The Company shall pay all membership dues owed to clubs
(as selected by the Employee), not to exceed $2,000 per year.

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         (i) DEDUCTIONS. The Company shall have the right to deduct from the
Base Salary and all other cash amounts payable by the Company under the
provisions of this Agreement to the Employee or, if applicable, to her estate,
legal representatives or other beneficiary designated in writing by the Employee
(a "Designee"), all social security taxes, all federal, state and municipal
taxes and all other charges and deductions which now or hereafter are imposed by
law as charges on the compensation of the Employee or charges on cash benefits
payable by the Company under this Agreement to her estate, legal representatives
or Designee.

         4. REIMBURSEMENT OF CERTAIN EXPENSES. The Company shall reimburse the
Employee, upon production of accounts and vouchers or other reasonable evidence
of payment by the Employee, all in accordance with the Company's regular
procedures in effect from time to time and in form suitable to establish the
validity and deductibility of such expenses for tax purposes, all reasonable,
ordinary and necessary travel, automobile and other expenses as shall have been
incurred by the Employee in the performance of the Employee's duties under this
Agreement.

         5.     NON-COMPETITION.

         (a) NON-COMPETITION. Through the date on which the Employee's
employment with the Company is terminated (the "Termination Date") and, in the
event that the Employee's employment with the Company is terminated other than
(i) by the Company pursuant to Sections 9(b) (termination by the Company without
Good Cause) or 9(g) (termination by the Company following a Change of Control)
or (ii) by the Employee pursuant to Sections 9(d) (termination by the Employee
following loss of Board seat) or 9(g) (termination by the Employee following a
Change of Control), until the Expiration Date, the Employee will not directly or
indirectly, engage in the business of, or own or control an interest in (except
as a passive investor owning less than one percent (1%) of the equity securities
of a publicly-owned company), or act as director, officer or employee of, or
consultant to, any individual, partnership, joint venture, corporation or other
business entity directly or indirectly engaged anywhere in the United States in
any Business (as hereinafter defined) competing with the business then being
carried on by the Company or its subsidiaries or contemplated by the Company or
its subsidiaries to the extent included within the definition of "Business." In
the event any of the provisions of this Section 5(a) are unenforceable by law,
then the restrictions shall be for such period and such geographic area as a
court shall find is necessary to protect the Company. The provisions of this
Section 5(a) shall no longer be enforceable in the event the Company either
files for bankruptcy or other protection from creditors (which filing is not
dismissed within 180 days) or advises its shareholders in a press release and in
a filing with the Securities and Exchange Commission that it is ceasing to
operate as an ongoing business.

         (b) BUSINESS. The term "Business" as used in this Section 5 shall mean
(i) acquiring and holding single family mortgage loans, (ii) originating,
selling and servicing multifamily and commercial real estate loans, (iii)
offering due diligence services to buyers, sellers and holders of mortgages,
(iv) securitizing the mortgage loans and retaining interests therein, (v)
purchasing mortgage asset investments in the secondary mortgage market, (vi)
managing such portfolios, (vii) any other business in which the Company or any
subsidiary is engaged on the Termination

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Date, (viii) such other business contemplated by the Registration Statement or
any subsequent filings by the Company or any subsidiary with the Securities and
Exchange Commission prior to the Termination Date and (ix) any other business in
which the Company or any subsidiary is actively planning to become engaged on
the Termination Date, and in connection with the planning of which the Employee
has had significant involvement.

         (c) EMPLOYEE REPRESENTATION. The Employee represents to the Company (i)
that the Employee is not subject to any employment agreement as of the Effective
Date, nor has the Employee previously, at any time, entered into any written
agreement with any person, firm or corporation, which would or could preclude or
prevent him from entering into this Agreement or which requires the consent of
any other party, and (ii) that as of the Effective Date, neither the Company nor
any of its subsidiaries has any financial or other obligation to the Employee
except as set forth on EXHIBIT C. The Employee agrees to indemnify the Company
and each of its officers, directors and controlling persons against any claim,
loss, liability or expense (including reasonable counsel's fees and costs)
incurred by the Company or its officers, directors and controlling persons
arising out of or in connection with any misrepresentation made by the Employee
under this Agreement.

         6. CONFIDENTIALITY.

         (a) OBLIGATION TO KEEP CONFIDENTIAL. The Employee acknowledges that her
employment by the Company brings him into close contact with many confidential
affairs of the Company, its subsidiaries and its customers, including, without
limitation, information about costs, profits, markets, sales, key personnel,
pricing policies, operational methods, concepts, and other business affairs and
methods of the Company, its subsidiaries and its customers and other information
not readily available to the public, as well as plans for future developments
(collectively referred to hereinafter as "Proprietary Information"). The
Employee further acknowledges that the relationships between the Company, its
subsidiaries and its officers, employees, agents, and customers constitute a
valuable asset of the Company (the "Other Proprietary Assets"). In recognition
of the foregoing, the Employee covenants and agrees:

                 (i) That all Proprietary Information and Other Proprietary
Assets shall be the exclusive property of the Company and that the Employee will
keep secret all Proprietary Information and Other Proprietary Assets and will
not use the same for the Employee's own benefit or disclose the same to, or use
the same for the benefit of, anyone outside of the Company, either during or
after the Employee's employment by the Company; and

                 (ii) That Employee will deliver promptly to the Company on
termination of Employee's employment by the Company, or at any time the Board
may so request all Proprietary Information and Other Proprietary Assets,
including, without limitation, all memoranda, notes, documentation, data,
records, reports and other tangible manifestations of the Proprietary
Information and Other Proprietary Assets (and all copies thereof), that Employee
may then (or thereafter) possess or have under the Employee's control.

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<PAGE>

         (b) EXCEPTIONS. The Employee's undertakings and obligations under this
Section 6 will not apply to any Proprietary Information or Other Proprietary
Asset which (i) is or becomes generally known to the public through no action on
the part of the Employee, (ii) is generally disclosed to third parties by the
Company without restriction on such third parties, (iii) is approved for release
by written authorization of the Board, or (iv) is the subject matter of a lawful
request or subpoena by and within the authority of a court or governmental
agency or other body, provided, however, no such information shall be released
by Employee without Employee providing to the Company thirty (30) days prior
written notice to the Company and providing the Company the right to seek a
protective order or injunctive relief preventing the release of such
information.

         7. NON-SOLICITATION. The Employee hereby covenants and agrees that, if
the Employee's employment with the Company is terminated other than (i) by the
Company pursuant to Sections 9(b) or 9(g) or (ii) by the Employee pursuant to
Sections 9(d) or 9(g), the Employee will not, during the period from the
Termination Date through the Expiration Date, induce or attempt to induce any
officer, employee, agent, consultant or customers of the Company or its
subsidiaries to discontinue such affiliation with the Company or its
subsidiaries or to refrain from entering into new business relationships with
the Company or its subsidiaries.

         8. SPECIFIC PERFORMANCE. Without intending to limit the remedies
available to the Company, the Employee agrees that damages at law will be an
insufficient remedy to the Company in the event that the Employee violates the
terms of Section 5, 6 or 7 of this Agreement and that the Company may apply for
and obtain immediate injunctive relief in any court of competent jurisdiction or
restrain the breach or threatened breach of, or otherwise to specifically
enforce, any of the agreements and covenants contained in such Sections. The
parties hereto understand that each of the agreements and covenants of the
Employee contained in Sections 5, 6 and 7 of this Agreement is an essential
element of this Agreement and agree that the obligations of the Employee
thereunder will survive the termination of this Agreement.

         9.  TERMINATION.

         (a) TERMINATION BY THE COMPANY FOR GOOD CAUSE. The Company may
terminate this Agreement and its obligations to the Employee under this
Agreement at any time for "Good Cause", which shall mean only (i) the conviction
of the Employee of (or the plea by the Employee of NOLO CONTENDERE to) a felony,
(ii) the good faith determination by the Board that the Employee has willfully
and deliberately failed to perform a material amount of Employee's duties under
this Agreement (other than a failure to perform duties resulting from the
Employee's incapacity due to physical or mental illness), which failure to
perform duties shall not have been cured within thirty (30) days after the
receipt by the Employee of written notice thereof from the Board specifying with
reasonable particularity such alleged failure; (iii) any absence from the
Company's regular full-time employment in excess of three consecutive days that
is not due to a vacation, participation in a permitted activity, bona fide
illness, disability, death or other reason expressly authorized by the Board in
advance; or (iv) any act or acts of personal dishonesty (including, without
limitation, any insider trading or unauthorized trading in

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the Company's securities) by the Employee which have a material adverse effect
on the Company or any of its subsidiaries. In the event of such termination, the
Employee shall only be entitled to receive any accrued but unpaid sick pay and
any properly incurred unreimbursed expenses. In addition, if the Company
terminates this Agreement due to the conviction of the Employee of (or the plea
by the Employee of NOLO CONTENDERE to) a felony as a result of (iv) above, then
Employee will pay all costs and expenses (including reasonable attorney's fees)
incurred by the Company in connection therewith.

         (b) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE. In the event the
Company terminates this Agreement without Good Cause, the Employee shall be
entitled to the following benefits:

                 (i) The Company shall continue to pay the Employee the
Employee's Base Salary at the rate then in effect (plus any cost of living
adjustments as described above) until the later of (x) one year after the
Termination Date, or (y) the Expiration Date; and

                 (ii) The Company shall pay the Employee for any accrued but
unpaid sick pay and any properly incurred unreimbursed expenses.

         In the event that the Employee shall obtain other full-time or
part-time employment or consulting work during such period, the amount of
payments Employee receives from such employment or work shall be credited
against the amount that the Company is obligated to pay Employee during such
period pursuant to this subparagraph (b). The Employee shall be under no
obligation to obtain such other employment or work, but if the Employee shall,
the Employee shall promptly give written notice to the Company of the salary and
fringe benefits provided to the Employee in connection with such other
employment or work, in order that the amount of such credit may be determined.

         (c) TERMINATION BY THE EMPLOYEE WITHOUT CAUSE. Notwithstanding the
provisions of Section 1, the Employee may resign from the Company at any time
upon ninety (90) days prior written notice to the Company. In the event of
resignation by the Employee under this Section 9(c), the Board in its sole
discretion may elect to waive the period of notice, or any portion thereof, and,
in such event, the Company will pay the Employee's salary for the notice period
(or for any remaining portion of the period) provided the Employee continues to
be employed during that period. From and after the effective date of such
termination by the Employee of Employee's employment under this Agreement, the
Company shall have no further liability to the Employee for salary or other
compensation (or benefits, except for any accrued but unpaid sick pay, any
properly incurred unreimbursed expenses and as provided pursuant to the terms of
any compensation or benefit plan of the Company in which the Employee is a
participant) or other matters whatsoever.

         (d) TERMINATION BY THE EMPLOYEE FOLLOWING LOSS OF BOARD SEAT.
Notwithstanding Section 9(c) above, if the Employee resigns from the Company
within ninety (90) days after being removed from, or not re-elected to, the
Board despite the Employee's efforts to remain on the Board (unless the Employee
is removed from, or not re-elected to, the Board for Good

                                       7
<PAGE>

Cause as defined in Section 9(a)), such resignation shall be treated as a
termination by the Employee pursuant to this Section 9(d) rather than Section
9(c), and the Employee shall be entitled to the following benefits:

                  (i) The Company shall continue to pay the Employee the
Employee's Base Salary at the rate then in effect (plus cost of living
adjustments) until the later of (x) one year after the Termination Date or (y)
the Expiration Date; and

                  (ii) The Company shall pay the Employee for any accrued but
unpaid sick pay and any properly incurred unreimbursed expenses.

         In the event that the Employee shall obtain other full-time or
part-time employment or consulting work during such period, the amount of
payments Employee receives from such employment or work shall be credited
against the amount that the Company is obligated to pay Employee during such
period pursuant to this subparagraph (d). The Employee shall be under no
obligation to obtain such other employment or work, but if the Employee shall,
the Employee shall promptly give written notice to the Company of the salary and
fringe benefits provided to the Employee in connection with such other
employment or work, in order that the amount of such credit may be determined.

         (e) TERMINATION UPON DISABILITY OF EMPLOYEE. This Agreement shall
terminate upon the Disability (resulting from the Employee's inability, due to
an injury, physical or mental illness, disease or infirmity due to age, to
perform her duties under this Agreement on a full-time basis for two consecutive
months or an aggregate of 60 days within a one-year period, as certified by at
least two (2) duly licensed and qualified physicians, one of whom will be
approved by the independent members of the Board) of the Employee, which is
likely to continue for at least one year from the time of inception, in which
event the Employee shall be entitled to receive, in full satisfaction of all
obligations due to the Employee by the Company under this Agreement, (i) her
Base Salary then in effect (plus any cost of living adjustments as described
above) while such disability continues until the date upon which the disability
benefits pursuant to the disability insurance policy provided for in Section
3(e) COMMENCE (but in no event more than two (2) months); (ii) the proceeds of
such disability policy; and (iii) any accrued but unpaid sick pay and any
properly incurred unreimbursed expenses.

         (f) TERMINATION UPON DEATH OF EMPLOYEE. This Agreement shall terminate
upon the death of the Employee, in which event the Employee's estate, legal
representatives or designee shall be entitled to receive, in full satisfaction
of all obligations due to the Employee by the Company hereunder, (i) the
Employee's Base Salary through the last day of the month of death; (ii) the
proceeds of the insurance policy or policies maintained on the Employee's life,
pursuant to Section 3(e) hereof; and (iii) any accrued but unpaid sick pay and
any properly incurred unreimbursed expenses.

         (g) TERMINATION BY THE COMPANY FOLLOWING CHANGE OF CONTROL.
Notwithstanding Sections 9(b), 9(c) and 9(d) above, in the event that, at any
time within 90 days following a Change of Control (as hereinafter defined),
either (i) the Company shall terminate the

                                       8
<PAGE>

Employee's employment without Good Cause as defined in Section 9(a) or (ii) the
Employee shall terminate the Employee's employment without there being a Good
Cause termination by the Company pending, then and in either such event, such
termination shall be treated as a termination pursuant to this Section 9(g)
rather than Section 9(b), 9(c) or 9(d), as the case may be, and the Employee
shall be entitled to receive until the later of (A) two (2) years after the
Termination Date or (B) the Expiration Date, her Base Salary at the rate then in
effect (plus cost of living adjustments as provided above). The Employee shall
also be paid any accrued vacation pay to the date of such termination for the
applicable year only, and any sick leave for appropriate sick day absences then
accrued but unpaid or unpaid expense reimbursements that may then be properly
due. The amounts payable to the Employee shall not be subject to any credit or
set-off resulting from the obtaining of any part-time or full-time employment or
consulting assignments by the Employee during such period.

         For purposes of this Agreement, a "Change of Control" shall mean and
include any of the following (for which the Employee did not promote the
transaction or vote as a director or as a shareholder):

                 (i) a merger or consolidation of the Company with or into
any other corporation or other business entity (except one in which the holders
of capital stock of the Company immediately prior to such merger or
consolidation continue to hold at least a majority of the outstanding securities
having the right to vote in an election of the Board of Directors ("Voting
Stock") of the surviving corporation);

                 (ii) a sale, lease, exchange or other transfer (in one
transaction or a related series of transactions) of all or substantially all of
the Company's assets except in a transaction where the Employee or an Affiliate
of the Employee is the transferee;

                 (iii) the acquisition by any person or any group of persons
(other than the Company, any of its direct or indirect subsidiaries, or any
director, trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its direct or
indirect subsidiaries) acting together in any transaction or related series of
transactions, of such number of shares of the Company's Voting Stock as causes
such person, or group of persons, to own beneficially, directly or indirectly,
as of the time immediately after such transaction or series of transactions, 50%
or more of the combined voting power of the Voting Stock of the Company other
than as a result of an acquisition of securities directly from the Company, or
solely as a result of an acquisition of securities by the Company which by
reducing the number of shares of the Voting Stock outstanding increases the
proportionate voting power represented by the Voting Stock owned by any such
person to 50% or more of the combined voting power of such Voting Stock; and

                 (iv) a change in the composition of the Company's Board of
Directors following a tender offer or proxy contest as a result of which persons
who immediately prior to such tender offer or proxy contest, constituted the
Company's Board of Directors shall cease to constitute at least a majority of
the members of the Board of Directors (other than by their

                                       9
<PAGE>

voluntary resignations), but only in the event that the persons elected to the
Board were not supported by the Employee as a director or shareholder.

         10. INDEMNIFICATION. To the fullest extent permitted by law and in
addition to any other rights permitted or granted under the Company's articles
of incorporation, by-laws, or any policy of insurance, or by law, the Company
shall indemnify the Employee if the Employee is made a party, or threatened to
be made a party, to any threatened, pending or contemplated action, suit or
proceeding, whether civil, administrative or investigative, by reason of the
fact that the Employee is or was an employee, officer or director of the Company
or any subsidiary of the Company, in which capacity the Employee is or was
serving at the Company's request in accordance with the terms of this Agreement,
against any and all costs, losses, damages, judgments, liabilities and expenses
(including reasonable attorneys' fees) which may be suffered or incurred by him
in connection with any such action, suit or proceeding; PROVIDED, HOWEVER, that,
there shall be no indemnification in relation to matters as to which the
Employee is adjudged to have been guilty of fraud, bad faith, gross negligence,
breach of fiduciary duty or as a result of the Employee's material breach of
this Agreement; PROVIDED, HOWEVER, that all of such costs shall be paid by
insurance, to the extent such coverage exists.

         11. ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement is the
entire agreement between the parties with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous oral and prior written
agreements and understandings. There are no oral promises, conditions,
representations, understandings interpretations or terms of any kind as
conditions or inducements to the execution of this Agreement or in effect among
the parties. No custom or trade usage, nor course of conduct among the parties,
shall be relied upon to vary the terms of this Agreement. This Agreement may not
be amended, and no provision of this Agreement shall be waived, except by
writing signed by all the parties to this Agreement, which states that it is
intended to amend or waive a specifically identified provision of this
Agreement. Any waiver of any rights or failure to act in a specific instance
shall relate only to such instance and shall not be construed as an agreement to
waive any rights or failure to act in any other instance, whether or not
similar. All amendments or waivers on behalf of the Company shall have first
been approved by the non-employee members of the Board.

         12. SEVERABILITY. Should any provision of this Agreement be
unenforceable or prohibited by any applicable law, this Agreement shall be
considered divisible as to such provision which shall be inoperative, and the
remainder of this Agreement shall be valid and binding as though such provision
were not included in this Agreement.

         13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original. It shall not be
necessary when making proof of this Agreement to account for more than one
counterpart.

         14. HEADINGS. All headings in this Agreement are for convenience only
and shall not affect the meaning of any provision in this Agreement.

                                       10
<PAGE>

         15. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of, and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon the Employee and her executors, administrators, heirs and
legal representatives. This Agreement may not be assigned by the Employee.

         16. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey, without reference to the
conflict of laws principles thereof.

         17. NOTICES. All notices under this Agreement shall be in writing and
shall be sent to the parties at the following addresses:

If to the Employee, to:             Joyce S. Mizerak
                                    11 Foxhill Run
                                    Monmouth Junction, New Jersey 08852

If to the Company, to:              Hanover Capital Mortgage Holdings, Inc.
                                    379 Thornall Street
                                    Edison, New Jersey 08837

                                    Attn:   Chairman of Compensation Committee
                                            of the Board of Directors

All notices shall be delivered in person or given by registered or certified
mail postage prepaid, and shall be deemed to have been given when delivered in
person or deposited in the United States mail. Either party may designate any
other address to which notice shall be given, by giving written notice to the
other of such change of address in the manner herein provided.

                        {Signatures appear on next page}

                                       11
<PAGE>

         IN WITNESS WHEREOF, the Employee has executed this Agreement and the
Company has caused this Agreement to be executed by a duly authorized officer as
of the day and year first above written.

                                      COMPANY:

                                      HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

                                      By:  /s/ John A. Burchett
                                          --------------------------------------
                                           Name: John A. Burchett
                                           Title: Chief Executive Officer
                                                      and President

                                      EMPLOYEE:

                                       /s/ Joyce S. Mizerak
                                      ------------------------------------------
                                           Joyce S. Mizerak

                                       12
<PAGE>

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

<PAGE>

                                    EXHIBIT B

Major medical expense insurance plan and dental expense insurance plan at
following costs to Employee:

                 Combined:

                          Family/month                $251.32
                          Single/month                 115.72

                 Dental only:

                          Family/month                  15.90
                          Single/month                   9.06

<PAGE>

                                    EXHIBIT C

                 Financial and Other Obligations to the Employee
       by the Company or any of its Subsidiaries as of the Effective Date

                                      None

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