Document:

SEPARATION
      AND RELEASE AGREEMENT

    

    

    THIS
      SEPARATION AND RELEASE AGREEMENT (the “Agreement”) is entered into as of the
      7th
      day of
      January, 2008, by and between, Mark W. Eichhorn (“Employee”) and SURFECT
      TECHNOLOGIES, INC. (the “Company”).

    

    WHEREAS,
      Employee
      resigned from his employment with the Company on January 7, 2008 and the
      Employee’s employment with the Company ceased on such date.

    

    WHEREAS,
      this
      Agreement governs the terms of Employee’s separation from the
      Company.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and agreements contained herein and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, and intending to be legally bound, the parties hereby
      agree
      as follows:

    

    1. Resignation
      Date.
      Employee acknowledges that his last day of employment with the Company was
      January 7, 2008 (the “Resignation Date”). The Employee understands and agrees
      that, as of the Resignation Date, he was no longer authorized to incur any
      expenses, obligations, or liabilities on behalf of the Company and he has
      previously submitted for reimbursement any outstanding expenses incurred for
      which he seeks reimbursement. Within 10 business days of the execution of this
      Agreement by the Employee and the Company (but in no event later than January
      31, 2008), the Company will pay Employee for any earned but unused vacation
      days
      (which amounts to $5,769.23). Employee understands and acknowledges that he
      shall be fully responsible for payment of any and all applicable taxes as may
      be
      associated with payment for his earned but unused vacation days, including,
      without limitation, Federal, state and local taxes, and that the Company shall
      bear no responsibility for any withholdings or payment of taxes related to
      such
      payment. The Employee further understands and agrees that, as of the Resignation
      Date, he was and is no longer authorized to conduct any business on behalf
      of
      the Company or to hold himself out as an officer, employee, agent or
      representative of the Company. 

    

    2. Severance.
      As
      severance, Employee shall be receiving the following payments and/or
      benefits:

    

    (i) Payment
      of Employee’s base salary (at the 2007 rate) for the period January 1, 2008
      through January 31, 2008 (amounting to a total payment of $12,500), which
      payment shall be made no later than January 31, 2008. Any and all payments
      shall
      be made in gross amounts, by check to the Employee’s current address. Employee
      understands and acknowledges that he shall be fully responsible for payment
      of
      any and all applicable taxes as may be associated with such payments, including,
      without limitation, Federal, state and local taxes, and that the Company shall
      bear no responsibility for any withholdings or payment of taxes related to
      such
      payments; 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (ii) the
      Company will pay Employee’s insurance premiums through the earlier of January
      31, 2008 or
      the
      Employee securing other employment. Employee will be required to notify the
      Company, in writing, of any form of employment he obtains within five (5)
      business days of securing such employment; 

    

    (iii) subject
      to approval by the Company’s Board of Directors, the Company will grant Employee
      shares of common stock of Surfect Holdings Inc. which has a value equivalent
      to
      $13,500 at the time of grant; and 

    

    (iv) within
      10
      business days of receipt of the entirety of amounts due to the Company in
      connection with orders currently placed with IMI and CV Inc., Employee will
      receive commission payments of $15,900 (related to the IMI order) and $9,000
      (related to the CV Inc. order). 

    

    Employee
      acknowledges and agrees that the payments and benefits provided to him, as
      set
      forth within this paragraph, exceed any and all payments and/or benefits that
      would otherwise be due to the Employee as severance and unpaid salary and
      benefits, and that Employee is not entitled to any other payments, salary,
      commissions, compensation or benefits from the Company aside from what is set
      forth within this paragraph, with the exception of payment for any accrued
      but
      unused vacation days for which the Company will provide payment to the Employee
      as set forth in Section 1 above.

    

    3. Release.
      In
      exchange for the consideration provided for in this Agreement, Employee
      irrevocably and unconditionally releases the Company, its predecessors, parents,
      subsidiaries, affiliates, and past, present and future officers, directors,
      agents, consultants, employees, representatives, and insurers, as applicable,
      together with all successors and assigns of any of the foregoing (collectively,
      the “Releasees”), of and from all claims, demands, actions, causes of action,
      rights of action, contracts, controversies, covenants, obligations, agreements,
      damages, penalties, interest, fees, expenses, costs, remedies, reckonings,
      extents, responsibilities, liabilities, suits, and proceedings of whatsoever
      kind, nature, or description, direct or indirect, vested or contingent, known
      or
      unknown, suspected or unsuspected, in contract, tort, law, equity, or otherwise,
      under the laws of any jurisdiction, that the Employee or his predecessors,
      legal
      representatives, successors or assigns, ever had, now has, or hereafter can,
      shall, or may have, against the Releasees, as set forth above, jointly or
      severally, for, upon, or by reason of any matter, cause, or thing whatsoever
      from the beginning of the world through, and including, the date of this
      Agreement (“Claims”).

    

    Such
      release includes, but is not limited to, the violation of any express or implied
      contract; any federal, state or local laws, restricting an employer’s right to
      terminate employees, or otherwise regulating employment; workers compensation,
      wage and hour, or other employee relations statutes, executive orders,
      ordinance, or regulations, including any rights or claims under Title VII of
      the
      Civil Rights Act of 1964, as amended the Civil Rights Act of 1991, the Americans
      with Disabilities Act of 1990, the Rehabilitation Act of 1973, the Family and
      Medical Leave Act of 1993, the Civil Rights Act of 1866, the Employee Retirement
      Income Security Act of 1974, the Age Discrimination in Employment Act of 1967,
      the Fair Labor Standards Act, the WARN Act, or any state or local laws covering
      the same subject matter; tort (including, without limitation, negligent conduct,
      invasion of privacy and defamation); any federal, state, or local laws providing
      recourse for retaliation, wrongful discharge, dismissal or other obligations
      arising out of public policy, physical or personal injury, fraud, negligent
      misrepresentations, and similar or related claims. The laws referred to in
      this
      section include statutes, regulations, other administrative guidance, and common
      law doctrines. Any and all claims and/or disputes arising out of or relating
      to
      any of the foregoing shall be, and are, finally compromised, released and
      settled.

    

    
      
        
        

      

      
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    Notwithstanding
      the foregoing, this release does not include Employee’s right to enforce the
      terms of this Agreement. Employee understands that this Agreement releases
      claims that he may not know about. This is Employee’s knowing and voluntary
      intent, even though Employee recognizes that someday he might learn that some
      or
      all of the facts that he currently believes to be true are untrue and even
      though he might then regret having signed this Agreement.

    

    Except
      to
      enforce this Agreement, Employee agrees that he will not pursue, file or assert
      or permit to be pursued, filed or asserted any civil action, suit or legal
      proceeding seeking equitable or monetary relief (nor will he seek or in any
      way
      obtain or accept any such relief in any civil action, suit or legal proceeding)
      in connection with any matter concerning his employment relationship with the
      Company and/or the termination thereof with respect to all of the claims
      released herein arising from the beginning of the world up to and including
      the
      date of execution of this Agreement (whether known or unknown to him and
      including any continuing effects of any acts or practices prior to the date
      of
      execution of this Agreement). Except for the payments and benefits set forth
      herein, Employee acknowledges that he has been paid all wages and other amounts
      due to him and that he is not entitled to any other payments or benefits of
      any
      kind.

    

    If
      Employee should bring any action arising out of the subject matter covered
      by
      this Agreement, except to enforce this Agreement, he understands and recognizes
      that he will, at the option of the Company, be considered in breach of this
      Agreement and shall be required to immediately return any and all funds received
      pursuant to this Agreement. Furthermore, if the Company should prevail
      concerning any or all of the issues so presented, Employee shall pay to the
      Company all of the costs and expenses of defense, including attorney’s
      fees.

    

    4. Restrictions
      on Competition and Solicitation.
      For a
      period of six (6) months from the date of this Agreement, Employee agrees to
      not
      directly or indirectly: (a) solicit or encourage any employee, agent,
      independent contractor, supplier, customer, consultant or any other person
      or
      entity to terminate or otherwise alter or modify, in any respect, its
      relationship with the Company; and (b) own, manage, operate, invest in, control,
      be employed by, participate in, be a financial sponsor of, or be connected
      in
      any manner with the ownership, management, operation or control of any business
      that competes with the Company or which is engaged in activities substantially
      similar to those in which the Company engages or plans to engage. Employee
      understands that the market for the Company’s business is worldwide, so the
      restrictions in this paragraph are not limited in area.

    

    
      
        
        

      

      
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    5. Company
      Information and Property.
      Employee agrees to immediately return to the Company all Company property and
      information in his possession including, but not limited to, Company reports,
      customer lists, supplier lists, consultant lists, formulas, files, manuals,
      memoranda, computer equipment, access codes, discs, software, and any other
      Company business information or records, in any form in which they are
      maintained, including records or information regarding Company customers,
      suppliers and vendors, and Company products and product development, and agrees
      that he will not retain any copies, duplicates, reproductions, or excerpts
      thereof in any form. Employee further agrees that he will not, in any manner,
      make use of any Company property and information in any future dealings,
      business or otherwise, and acknowledges that any use of Company property and
      information in any future dealings, business or otherwise, would constitute
      a
      breach of this Agreement. Employee acknowledges that any breach of this section
      would cause irreparable injury to the Company for which there is no adequate
      remedy at law and in addition to any remedies that may be available to the
      Company in the event of a breach or threatened breach of this section by
      Employee, including monetary damages, the Company shall be entitled to obtain
      a
      temporary restraining order and/or a preliminary or permanent injunction which
      would prevent Employee from violating or attempting to violate the provisions
      of
      this section of the Agreement. In seeking such an order, any requirement to
      post
      a bond or other undertaking shall be waived. In any such action, the Company
      shall be entitled to an award of all reasonable costs and fees incurred in
      bringing such an action, including reasonable attorney’s fees.

    

    Employee
      further acknowledges that, except as may be expressly modified by the terms
      of
      this Agreement, the terms and conditions of the Employee Confidential
      Information and Inventions Agreement, by and between the Company and Employee,
      remain in full force and effect and remain binding on the Employee. (A copy
      of
      this agreement is annexed hereto.)

    

    6. Confidentiality.
      Employee agrees that he will not disclose, directly or indirectly, the
      underlying facts that led up to this Agreement or the terms or existence of
      this
      Agreement. Employee represents that he has not and will not, in any way,
      publicize the terms of this Agreement and agrees that its terms are confidential
      and will not be disclosed by him except that he may discuss the terms of this
      Agreement with his attorneys, financial advisors, accountants, and members
      of
      his immediate family, or as required by law. Employee understands and agrees
      that should he violate this provision of the Agreement, he will be responsible
      to the Company for liquidated damages in the amount of any and all funds payable
      pursuant to this Agreement and understands that such monetary relief shall
      not
      be a bar to the Company’s pursuit of injunctive relief.

    

    7. Non-disparagement.
      Employee represents and agrees that he shall refrain from making any written
      or
      oral statements to any person or entity with whom the Company or Employee has
      had or may have a business or social relationship which may reasonably be
      expected to impugn or degrade the character, integrity, or ethics of the
      Company, its affiliates, employees, officers, agents, representatives or
      clients, or which may reasonably be expected to damage the business, image
      or
      reputation of the Company, its affiliates, employees, officers, agents,
      representatives, or clients. 

    

    The
      Company represents and agrees that it shall refrain from making any written
      or
      oral statements to any person or entity with whom the Company or the Employee
      has had or may have a business or social relationship which may reasonably
      be
      expected to impugn or degrade the character, integrity, or ethics of the
      Employee. Should there by any inquiry as to the Employee’s employment with the
      Company, the Company agrees to provide the following information: dates of
      Employee’s employment with the Company, position held by Employee, and the
      reason for Employee’s departure (i.e.,
      voluntary
      resignation), and will not otherwise comment about the Employee or about the
      Employee’s performance of his duties and responsibilities while employed by the
      Company.

    

    
      
        
        

      

      
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    8. Applicable
      Law and Jurisdiction.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Arizona, without regard to its conflicts of law principles. Any dispute
      regarding this Agreement or the Employee’s employment shall be resolved in the
      Courts located in Maricopa County, Arizona, without a jury (which is hereby
      expressly waived).

    

    9. Entire
      Agreement.
      This
      Agreement may not be changed or altered, except by a writing signed by both
      parties. Until such time as this Agreement has been executed and subscribed
      by
      both parties hereto: (i) its terms and conditions and any discussions relating
      thereto, without any exception whatsoever, shall not be binding nor enforceable
      for any purpose upon any party; and (ii) no provision contained herein shall
      be
      construed as an inducement to act or to withhold an action, or be relied upon
      as
      such. This Agreement constitutes an integrated, written contract, expressing
      the
      entire agreement and understanding between the parties with respect to the
      subject matter hereof and supersedes any and all prior agreements and
      understandings, oral or written, between the parties.

    

    10. Assignment.
      Employee has not assigned or transferred any claim he is releasing, nor has
      he
      purported to do so. If any provision in this Agreement is found to be
      unenforceable, all other provisions will remain fully enforceable. This
      Agreement binds Employee’s heirs, administrators, representatives, executors,
      successors, and assigns, and will insure to the benefit of all Released Parties
      and their respective heirs, administrators, representatives, executors,
      successors, and assigns.

    

    11. Binding
      Effect.
      This
      Agreement will be deemed binding and effective immediately upon its execution
      by
      the Employee; provided, however, that in accordance with the Age Discrimination
      in Employment Act of 1967 (“ADEA”) (29 U.S.C. § 626, as amended), Employee’s
      waiver of ADEA claims under this Agreement is subject to the following: Employee
      may consider the terms of his waiver of claims under the ADEA for twenty-one
      (21) days before signing it and may consult legal counsel if Employee so
      desires. Employee may revoke his waiver of claims under the ADEA within seven
      (7) days of the day he executes this Agreement. Employee’s waiver of claims
      under the ADEA will not become effective until the eighth (8th) day following
      Employee’s signing of this Agreement. Employee may revoke his waiver of ADEA
      claims under this Agreement by delivering written notice of his revocation,
      via
      facsimile and overnight mail, before the end of the seventh (7th) day following
      Employee’s signing of this Agreement to: Mr. Anthony Maffia, Surfect
      Technologies, Inc., 1800 West Broadway Road, Tempe, Arizona 85282 (fax:
      480-968-6083). In the event that Employee revokes his waiver of ADEA claims
      under this Agreement prior to the eighth (8th) day after signing it, the
      remaining portions of this Agreement shall remain in full force in effect,
      except that the obligation of the Company to provide the payments and benefits
      set forth in Section 2 of this Agreement shall be null and void. Employee
      further understands that if Employee does not revoke the ADEA waiver in this
      Agreement within seven (7) days after signing this Agreement, his waiver of
      ADEA
      claims will be final, binding, enforceable, and irrevocable.

    

    
      
        
        

      

      
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    EMPLOYEE
      UNDERSTANDS THAT FOR ALL PURPOSES OTHER THAN HIS WAIVER OF CLAIMS UNDER THE
      ADEA, THIS AGREEMENT WILL BE FINAL, EFFECTIVE, BINDING, AND IRREVOCABLE
      IMMEDIATELY UPON ITS EXECUTION.

    

    12. Acknowledgement.
      Employee acknowledges that he: (a) has carefully read this Agreement in its
      entirety; (b) has been presented with the opportunity to consider it for at
      least twenty-one (21) days; (c) has been advised to consult and has been
      provided with an opportunity to consult with legal counsel of his choosing
      in
      connection with this Agreement; (d) fully understands the significance of all
      of
      the terms and conditions of this Agreement and has discussed them with his
      independent legal counsel or has been provided with a reasonable opportunity
      to
      do so; (e) has had answered to his satisfaction any questions asked with regard
      to the meaning and significance of any of the provisions of this Agreement;
      and
      (f) is signing this Agreement voluntarily and of his own free will and agrees
      to
      abide by all the terms and conditions contained herein.

    

    

    SURFECT
      TECHNOLOGIES, INC.

    

    By:
      /s/ Steve
      Anderson                                         

    Steve
      Anderson

    Chief
      Executive Officer

    

    

    Executed
      on the 14th day of January, 2008

    

    

    By:
      /s/ Mark W.
      Eichhorn                                      

    Mark
      W.
      Eichhorn

    

    

    Executed
      on the 10th day of January, 2008

     

    
      
        
        

      

      
        6Exhibit
      4.1

    

    NEW
      YORK MORTGAGE TRUST, INC.

     

    ARTICLES
      SUPPLEMENTARY

    
      ESTABLISHING
        AND FIXING THE RIGHTS AND PREFERENCES

      OF

    

     

    SERIES
      A CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK

    (liquidation
      preference $20.00 per share)

     

    New
      York
      Mortgage Trust, Inc., a Maryland corporation (the “Company”), hereby certifies
      to the State Department of Assessments and Taxation of Maryland (“SDAT”)
      that:

     

    FIRST: Pursuant
      to the authority expressly vested in the Board of Directors of the Company
      or a
      duly authorized committee thereof (the “Board of Directors”) by Article VI of
      the Articles of Amendment and Restatement of the Company (the “Charter”), the
      Board of Directors by duly adopted resolutions reclassified and designated
      2,000,000 shares of Series A Cumulative Redeemable Convertible Preferred Stock,
      $0.01 par value per share, of the Company having
      the
      preferences, conversion and other rights, voting powers, restrictions,
      limitations as to dividends and other distributions, qualifications and terms
      set forth in the Articles Supplementary filed with and accepted for record
      by
      the SDAT on January 3, 2008 as 2,000,000
      shares of Series A Cumulative Redeemable Convertible Preferred Stock, $0.01
      par
      value per share, with the following preferences, conversion and other rights,
      voting powers, restrictions, limitations as to dividends and other
      distributions, qualifications and terms and conditions of redemption, which,
      upon any restatement of the Charter, shall be deemed to be part of Article
      VI of
      the Charter with any necessary or appropriate renumbering or relettering of
      the
      sections or subsections thereof:

     

    SERIES
      A CUMULATIVE REDEEMABLE

    CONVERTIBLE
      PREFERRED STOCK

     

    A. TERMS
      OF THE SERIES A CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED
      STOCK.

     

    1. Designation
      and Number.
      A
      series of Preferred Stock, designated the “Series A Cumulative Redeemable
      Convertible Preferred Stock” (the “Series A Preferred Stock”), is hereby
      established. The maximum number of authorized shares of Series A Preferred
      Stock
      shall be 2,000,000. 

     

    2. Rank.
      The
      Series A Preferred Stock shall, with respect to dividend rights and rights
      upon
      liquidation, dissolution or winding up of the Company, rank (a) prior or
      senior to any class or series of Common Stock of the Company and any other
      class
      or series of equity securities of
      the
      Company, if the holders of Series A Preferred Stock shall be entitled to the
      receipt of dividends or of amounts distributable upon liquidation, dissolution
      or winding up in preference or priority to the holders of shares of such class
      or series (“Junior Stock”); (b) on a parity with any class or series of equity
      securities of the Company if, pursuant to the specific terms of such class
      or
      series of equity securities, the holders of such class or series of equity
      securities and
      the
      Series A Preferred Stock shall be entitled to the receipt of dividends and
      of
      amounts distributable upon liquidation, dissolution or winding up in proportion
      to their respective amounts of accrued and unpaid dividends per share or
      liquidation preferences, without preference or priority one over the other
      (“Parity Stock”); (c) junior to any class or series of equity
      securities of
      the
      Company if, pursuant to the specific terms of such class or series, the holders
      of such class or series shall be entitled to the receipt of dividends or amounts
      distributable upon liquidation, dissolution or winding up in preference or
      priority to the holders of the Series A Preferred Stock (“Senior Stock”); and
      (d) junior to all existing and future indebtedness of the Company. The term
      “equity securities” does not include convertible debt securities, which will
      rank senior to the Series A Preferred Stock prior to conversion.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Dividends.

     

    (a) Holders
      of Series A Preferred Stock shall be entitled to receive, when and as authorized
      by the Board of Directors and declared by the Company, out of funds legally
      available for the payment of distributions, cumulative preferential quarterly
      cash dividends at the rate of the greater of (i) two and one half percent (2.5%)
      per quarter of the $20.00 per share liquidation preference of the Series A
      Preferred Stock (equivalent to a fixed annual amount of $2.00 per share) or
      (ii)
      the quotient of the quarterly dividend declared on shares of the common stock,
      par value $0.01 per share, of the Company (“Common Stock”) divided by the
      conversion price set forth in Section 7(a). In the event the Company shall
      have
      failed to file a resale registration statement (“Resale Registration Statement”)
      under the Securities Act of 1933, as amended, with the Securities and Exchange
      Commission (“SEC”) on or before June 30, 2008 (“Registration Deadline”) pursuant
      to that certain registration rights agreement among the Company and each of
      the
      investors listed on Schedule I thereto dated as of November 30, 2007, holders
      of
      Series A Preferred Stock shall be entitled to receive, when and as authorized
      by
      the Board of Directors and declared by the Company, out of funds legally
      available for the payment of distributions, an additional cumulative
      preferential cash dividend at the rate of one-half percent (0.5%) per quarter
      of
      the $20.00 liquidation preference per share (equivalent to $0.10 per quarter
      per
      share) for each calendar quarter after the Registration Deadline until such
      Resale Registration Statement shall have been so filed (the “Registration
      Penalty Dividend”). Such dividends shall accumulate on a daily basis and be
      cumulative from (but excluding) the original date of issuance and be payable
      quarterly in arrears on or before the last day of each January, April, July
      and
      October of each year, beginning on April 30, 2008 (each such day being
      hereinafter called a "Dividend Payment Date"); provided that if any Dividend
      Payment Date is not a Business Day (as hereinafter defined), then the dividend
      which would otherwise have been payable on such Dividend Payment Date may be
      paid on the next succeeding Business Day with the same force and effect as
      if
      paid on such Dividend Payment Date, and no interest or additional dividends
      or
      other sums shall accrue on the amount so payable from such Dividend Payment
      Date
      to such next succeeding Business Day. The first dividend will be payable based
      on a full quarter. Any dividend payable on the Series A Preferred Stock for
      any
      partial dividend period will be computed on the basis of twelve 30-day months
      and a 360 day year. Dividends will be payable in arrears to holders of record
      as
      they appear on the stock records of the Company at the close of business on
      the
      last business day of March, June, September and December immediately preceding
      such Dividend Payment Date. Holders of Series A Preferred Stock shall not be
      entitled to receive any dividends in excess of cumulative dividends on the
      Series A Preferred Stock. No interest shall be paid in respect of any dividend
      payment or payments on the Series A Preferred Stock that may be in
      arrears.

     

    
      
        
        

      

      
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    (b) When
      dividends are not paid in full upon the Series A Preferred Stock or any other
      class or series of Parity Stock, or a sum sufficient for such payment is not
      set
      apart, all dividends declared upon the Series A Preferred Stock and any other
      class or series of Parity Stock shall be declared ratably in proportion to
      the
      respective amounts of dividends accumulated, accrued and unpaid on the Series
      A
      Preferred Stock and accumulated, accrued and unpaid on such Parity Stock. Except
      as set forth in the preceding sentence, unless dividends on the Series A
      Preferred Stock equal to the full amount of accumulated, accrued and unpaid
      dividends have been or contemporaneously are declared and paid, or declared
      and
      a sum sufficient for the payment thereof set apart for such payment for all
      past
      dividend periods, no dividends shall be declared or paid or set aside for
      payment by the Company with respect to any class or series of Parity Stock.
      Unless full cumulative dividends on the Series A Preferred Stock have been
      paid
      or declared and set apart for payment for all past dividend periods, no
      dividends (other than dividends paid in shares of Junior Stock or options,
      warrants or rights to subscribe for or purchase shares of Junior Stock) shall
      be
      declared or paid or set apart for payment by the Company with respect to any
      shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
      purchased or otherwise acquired (except for purposes of an employee benefit
      plan) for any consideration (except by conversion or exchange for shares of
      Junior Stock, or options, warrants or rights to subscribe for or purchase shares
      of Junior Stock), nor shall any other cash or other property be paid or
      distributed to or for the benefit of holders of shares of Junior Stock.
      Notwithstanding the above, the Company shall not be prohibited from
      (i) declaring or paying or setting apart for payment any dividend or
      distribution on any shares of Parity Stock or (ii) redeeming, purchasing or
      otherwise acquiring any Parity Stock, in each case, if such declaration,
      payment, redemption, purchase or other acquisition is necessary to maintain
      the
      Company’s qualification as a real estate investment trust (“REIT”) under the
      Internal Revenue Code of 1986, as amended. 

     

    (c) Any
      dividend payment made on shares of the Series A Preferred Stock shall first
      be
      credited against the earliest accrued but unpaid dividend due with respect
      to
      such shares which remains payable. Holders of Series A Preferred Stock shall
      not
      be entitled to any dividend, whether payable in cash, property or stock in
      excess of full cumulative dividends on the Series A Preferred Stock as described
      above.

     

    (d) No
      dividends on shares of Series A Preferred Stock shall be declared by the Board
      of Directors or paid or set apart for payment by the Company at such time as
      the
      terms and provisions of any agreement of the Company, including any agreement
      relating to its indebtedness, prohibits such declaration, payment or setting
      apart for payment or provides that such declaration, payment or setting apart
      for payment would constitute a breach thereof or a default thereunder, or if
      such declaration or payment shall be restricted or prohibited by
      law.

     

    
      
        
        

      

      
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    (e) The
      Registration Penalty Dividend shall not be due and payable as set forth in
      Section 3(a) if a majority of the “independent” (as such term is defined in
      Section 303.A of the Listed Company Manual of the New York Stock Exchange
      (“NYSE”)) directors determine in good faith that the failure to file the Resale
      Registration Statement by the Registration Deadline is due to circumstances
      beyond the ultimate control of the Company or the result of any action or
      inaction of any of the holders of the Series A Preferred Stock.

     

    (f) If,
      for
      any taxable year, the Company elects to designate as “capital gain dividends”
(as defined in Section 857 of the Internal Revenue Code of 1986, as amended
      (the
“Code”)) any portion (the “Capital Gains Amount”) of the dividends (as
      determined for federal income tax purposes) paid or made available for the
      year
      to holders of all classes of stock (the “Total Dividends”), then the portion of
      the Capital Gains Amount that shall be allocable to the holders of Series A
      Preferred Stock shall be the amount that the total dividends (as determined
      for
      federal income tax purposes) paid or made available to the holders of the Series
      A Preferred Stock for the year bears to the Total Dividends. The Company may
      elect to retain and pay income tax on its net long-term capital gains. In such
      a
      case, the holders of Series A Preferred Stock would include in income their
      proportionate share of the Company’s undistributed long-term capital gains, as
      designated by the Company.

     

    (g) "Business
      Day" shall mean any day, other than a Saturday or Sunday, that is neither a
      legal holiday nor a day on which banking institutions in New York, New York
      are
      authorized or required by law, regulation or executive order to
      close.

     

    4. Liquidation
      Preference. 

     

    (a) Upon
      any
      voluntary or involuntary liquidation, dissolution or winding up of the Company,
      before any payment or distribution by the Company shall be made to or set apart
      for the holders of any shares of Junior Stock, the holders of shares of Series
      A
      Preferred Stock shall be entitled to receive a liquidation preference of $20.00
      per share (the “Liquidation Preference”), plus an amount equal to all
      accumulated, accrued and unpaid dividends (whether or not earned or declared)
      to
      the date of final distribution to such holders, but such holders shall not
      be
      entitled to any further payment. Until the holders of the Series A Preferred
      Stock have been paid the Liquidation Preference in full, plus an amount equal
      to
      all accumulated, accrued and unpaid dividends (whether or not earned
      or declared)
      to the date of final distribution to such holders, no payment shall be made
      to
      any holder of Junior Stock upon the liquidation, dissolution or winding up
      of
      the Company. 

     

    (b) If
      upon
      any liquidation, dissolution or winding up of the Company, the assets of the
      Company, or proceeds thereof, distributable among the holders of Series A
      Preferred Stock shall be insufficient to pay in full the above described
      preferential amount and liquidating payments on any other shares of any class
      or
      series of Parity Stock, then such assets,
      or
      the
      proceeds thereof, shall be distributed among the holders of Series A Preferred
      Stock and any such other Parity Stock ratably in the same proportion as the
      respective amounts that would be payable on such Series A Preferred Stock and
      any such other Parity Stock if all amounts payable thereon were paid in
      full.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c) Written
      notice of any such liquidation, dissolution or winding up of the Company,
      stating the payment date or dates when, and the place or places where, the
      amounts distributable in such circumstances shall be payable, shall be given
      by
      first class mail, postage pre-paid, not less than 30 nor more than 60 days
      prior
      to the payment date stated therein, to each record holder of the Series A
      Preferred Stock at the respective addresses of such holders as the same shall
      appear on the stock transfer records of the Company. 

     

    (d) A
      voluntary or involuntary liquidation, dissolution or winding up of the Company
      shall not include a consolidation or merger of the Company with one or more
      corporations, a sale, lease, conveyance or transfer of all or substantially
      all
      of the Company’s assets or business, or a statutory share exchange.

     

    (e) Upon
      any
      liquidation, dissolution or winding up of the Company, after payment shall
      have
      been made in full to the holders of Series A Preferred Stock and any Parity
      Stock, any other series or class or classes of Junior Stock shall be entitled
      to
      receive any and all assets remaining to be paid or distributed, and the holders
      of the Series A Preferred Stock and any Parity Stock shall not be entitled
      to
      share therein.

     

    5. Redemption.

     

    (a) Except
      as
      set forth in Section 6, the Series A Preferred Stock shall not be redeemable
      prior to December 31, 2010. However,
      in order to ensure that the Company will continue to meet the requirement for
      qualification as a REIT, unless the provisions of Article VII of the Company’s
      Charter have been waived or modified with respect to a holder of the Series
      A
      Preferred Stock, as applicable, the Series A Preferred Stock will be subject
      to
      the provisions of Article VII of the Company’s Charter pursuant to which any
      series of Preferred Stock owned by a stockholder in excess of the Aggregate
      Stock Ownership Limit (as defined in such Article VII) will automatically be
      deemed “Shares-in-Trust” (as defined in such Article VII) and the Company will
      have the right to purchase such shares, as provided in Article VII of the
      Charter. To
      the
      extent any shares of the Series A Preferred Stock are not converted into shares
      of Common Stock pursuant to Section 7 hereof, the Company shall redeem Series
      A
      Preferred Stock, in whole but not in part, on or about December 31, 2010 at
      a cash redemption price equal to 100% of the Liquidation Preference plus all
      accrued and unpaid dividends to the date fixed for redemption (such date fixed
      for redemption, the “Redemption Date”). If full cumulative dividends on all
      outstanding Series A Preferred Stock have not been paid or declared and set
      apart for payment, no Series A Preferred Stock may be redeemed unless all
      outstanding Series A Preferred Stock are simultaneously redeemed.

     

    (b) Notice
      of
      redemption of the Series A Preferred Stock shall be mailed by the Company to
      each holder of record of the shares to be redeemed by first class mail, postage
      prepaid at such holder’s address as the same appears on the share records of the
      Company. Any notice which was mailed as described above shall be conclusively
      presumed to have been duly given on the date mailed whether or not the holder
      receives the notice. Each notice shall state: (i) the Redemption Date; (ii)
      the
      number of Series A Preferred Stock to be redeemed; and (iii) the place or places
      where certificates for such Series A Preferred Stock are to be surrendered
      for
      cash. From and after the Redemption Date, dividends on the shares of Series
      A
      Preferred Stock to be redeemed will cease to accrue, such shares shall no longer
      be deemed to be outstanding and all rights of the holders thereof shall cease
      (except the right to receive the cash payable upon such
      redemption).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c) The
      Series A Preferred Stock shall be mandatorily redeemed by the Company on
      December 31, 2010 and will not be subject to any sinking fund.

     

    (d) Subject
      to applicable law and the limitation on purchases when dividends on the Series
      A
      Preferred Stock are in arrears, the Company may, at any time and from time
      to
      time, purchase any shares of Series A Preferred Stock.

     

    (e) Any
      Series A Preferred Stock redeemed, purchased, converted or otherwise acquired
      by
      the Company in any manner whatsoever shall become authorized but unissued
      Preferred Stock of the Company and may be reissued or reclassified by the
      Company in accordance with the applicable provisions of the Charter.

     

    6. Special
      Optional Redemptions.

     

    (a) Special
      Optional Redemption by the Company after Change of Control.

     

    (i) At
      any
      time following a Change of Control Optional
      Conversion
      Termination Date (as defined below), the Company will have the option upon
      written notice to the holders of record of the then outstanding shares of Series
      A Preferred Stock in accordance with Section 5(b) to redeem the then outstanding
      shares of Series A Preferred Stock, in whole but not in part, within 90 days
      after the Change of Control Optional Conversion Termination Date, for a cash
      redemption price equal to 100% of the Liquidation Preference, plus all accrued
      and unpaid dividends to the Redemption Date. 

     

    (ii) Within
      five (5) calendar days after the occurrence of a Change of Control, the Company
      shall give Notice (as defined in Section 7(b)) to the holders of Series A
      Preferred Stock of the occurrence of the Change of Control and of the Optional
      Conversion Right provided in Section 7(a). Such Notice shall state:

     

    (A) the
      events constituting the Change of Control;

     

    (B) the
      date
      of the Change of Control;

     

    (C) Change
      of
      Control Optional Conversion Termination Date;

     

    (D) the
      name
      and address of the transfer agent;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (E) the
      Conversion Rate and any adjustment to the Conversion Rate; and

     

    (F) the
      procedures that a holder must follow to exercise the Optional Conversion
      Right.

     

    Prior
      to
      the opening of business on the first Trading Day (as defined in Section 7(b))
      after giving such Notice, the Company shall issue for publication on the Dow
      Jones & Company, Inc., Business Wire or Bloomberg Business News (or, if
      such organizations are not in existence at the time of issuance of such press
      release, such other news or press organization as is reasonably calculated
      to
      broadly disseminate the relevant information to the public) a press release
      containing the information required in such Notice.

     

    (iii) To
      exercise the Optional Conversion Right after the date on which the Company
      gives
      the Notice specified in Section 6(a)(ii), a holder of the Series A Preferred
      Stock shall surrender to the Company at its principal office or at the office
      of
      the transfer agent of the Company, as may be designated by the Board of
      Directors, the certificate or certificates for the shares of Series A Preferred
      Stock to be converted accompanied by the Series A Preferred Stock to be
      converted, duly endorsed for transfer, together with the Conversion Notice
      specified in Section 7(c)(i), on or before the twentieth (20th)
      Trading
      Day (the “Change of Control Optional Conversion Termination Date”) after the
      date the Company gives such Notice (subject to extension to comply with
      applicable law).

     

    (iv) A
      holder
      of Series A Preferred Stock may withdraw its Conversion Notice (in whole or
      in
      part) by a written notice of withdrawal delivered to the Company prior to the
      close of business on the Trading Day prior to the Change of Control Conversion
      Termination Date. The notice of withdrawal shall state:

     

    (A) the
      number of shares of Series A Preferred Stock not to be converted into Common
      Stock;

     

    (B) if
      certificated Series A Preferred Stock have been issued, the certificate numbers
      of the withdrawn Series A Preferred Stock; and

     

    (C) the
      number of shares of Series A Preferred Stock, if any, which remain subject
      to
      the conversion notice.

     

    (v) Upon
      any
      redemption of the Series A Preferred Stock pursuant to this Section 6, the
      Company will pay, in cash, any accrued and unpaid dividends to the Redemption
      Date, whether or not authorized, unless the Redemption Date falls after a
      dividend payment record date and prior to the corresponding Dividend Payment
      Date, in which case each holder of the Series A Preferred Stock at the close
      of
      business on such dividend payment record date will be entitled to the
      distribution payable on such shares on the corresponding Dividend Payment Date
      notwithstanding the redemption of such shares before the Dividend Payment Date.
      Except as provided in the previous sentence, the Company will make no payment
      or
      allowance for unpaid dividends, whether or not in arrears, on the Series A
      Preferred Stock.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (vi) At
      its
      election, the Company, prior to the Redemption Date, may irrevocably deposit
      the
      redemption price (including accumulated and unpaid dividends) for the shares
      of
      the Series A Preferred Stock so called for redemption in trust for the holders
      thereof with a bank or trust company. 

     

    (vii) A
      "Change
      of Control" shall be deemed to have occurred at such time as (i) the date a
      "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the
      ultimate "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
      Exchange Act, except that a person or group shall be deemed to have beneficial
      ownership of all shares of Voting Stock that such person or group has the right
      to acquire regardless of when such right is first exercisable), directly or
      indirectly, of Voting Stock representing more than 50% of the total voting
      power
      of the total Voting Stock of the Company; (ii) the date the Company sells,
      transfers or otherwise disposes of all or substantially all of its assets;
      or
      (iii) the date of the consummation of a merger or share exchange of the Company
      with another entity where the Company's stockholders immediately prior to the
      merger or share exchange would not beneficially own immediately after the merger
      or share exchange, shares representing 50% or more of all votes (without
      consideration of the rights of any class of stock to elect directors by a
      separate group vote) to which all stockholders of the corporation issuing cash
      or securities in the merger or share exchange would be entitled in the election
      of directors, or where members of the Company's Board of Directors immediately
      prior to the merger or share exchange would not immediately after the merger
      or
      share exchange constitute a majority of the Board of Directors of the
      corporation issuing cash or securities in the merger or share
      exchange.

     

    (viii) "Voting
      Stock" shall mean capital stock of any class or kind having the power to vote
      generally for the election of directors.

     

    (b) Special
      Optional Redemption by the Holders of Series A Preferred Stock.

     

    (i) In
      the
      event the Company fails to issue and sell Common Stock that generates aggregate
      gross proceeds to the Company, before underwriting discounts and commissions,
      placement fees and offering expenses, of $50 million by September 30, 2008,
      then
      the holders of Series A Preferred Stock shall have the right to redeem the
      Series A Preferred Stock in exchange for, at the option of the Company, (x)
      cash
      equal to the Liquidation Preference, plus an
      amount
      equal to all accumulated, accrued and unpaid dividends (whether or not earned
      or
      declared) to the Redemption Date,
      or (y)
      senior notes equal in value to the Liquidation Preference per share, maturing
      on
      December 31, 2010, bearing an annual interest rate of ten percent (10%) and
      on
      other terms reasonably satisfactory to the holders of the Series A Preferred
      Stock (the “Senior Notes”), plus an amount equal to all accumulated, accrued and
      unpaid dividends (whether or not earned or declared) to the Redemption Date
      (the
“Holder Redemption Option”).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (ii) To
      exercise the Holder Redemption Option as set forth in Section 6(b), a
      holder of the Series A Preferred Stock must surrender to the Company at its
      principal office or at the office of the transfer agent of the Company, as
      may
      be designated by the Board of Directors, the certificate or certificates for
      the
      shares of Series A Preferred Stock to be exchanged accompanied by a written
      notice stating that the holder of Series A Preferred Stock elects to exchange
      all or a specified whole number of those shares in accordance with this
      Section 6(b), and specifying the name or names in which the holder wishes
      the Senior Notes or cash be issued (“Special Redemption Notice”). Other than any
      transfer taxes payable upon such exchange, the Company shall also pay any
      documentary, stamp or similar issue or transfer taxes that may be payable in
      respect of any issuance or delivery of Senior Notes or cash upon exchange of
      the
      shares of Series A Preferred Stock. 

     

    (iii) As
      promptly as practicable after the surrender of the certificate or certificates
      for the shares of Series A Preferred Stock in accordance with
      Section 6(b)(ii), the receipt of the Special Redemption Notice and payment
      of all required transfer taxes, if any, or the demonstration to the Company’s
      satisfaction that those taxes have been paid, the Company shall issue and shall
      deliver or cause to be issued and delivered to such holder, or to such other
      person on such holder’s written order, (a) cash or a Senior Note in an
      amount equal to the aggregate value of the Liquidation Preference for such
      shares of Series A Preferred Stock being exchanged by the holder of the Series
      A
      Preferred Stock, or the holder’s transferee, as the case may be, and (b) if
      less than the full number of Series A Preferred Stock evidenced by the
      surrendered certificate or certificates is being exchanged, a new certificate
      or
      certificates, of like tenor, for the number of shares evidenced by the
      surrendered certificate or certificates, less the number of shares being
      exchanged. 

     

    (iv) Each
      exchange shall be deemed to have been made at the close of business on the
      date
      of giving the notice and of surrendering the certificate or certificates
      representing the shares of the Series A Preferred Stock to be exchanged (the
      “Exchange Date”) so that the rights of the holder thereof as to the Series A
      Preferred Stock being exchanged shall cease except for the right to receive
      the
      consideration set forth in Section 6(b)(i).

     

    7. Conversion.

     

    (a) Optional
      Conversion. 

     

    (i) Subject
      to and upon compliance with the provisions of this Section 7 and prior to
      December 31, 2010, a holder of any share or shares of Series A Preferred
      Stock shall have the right, at its option, to convert all or any portion of
      such
      holder’s outstanding Series A Preferred Stock (the “Optional Conversion Right”),
      subject to the conditions described below, into the number of fully paid and
      non-assessable shares of Common Stock at a conversion rate of one share of
      Common Stock per $4.00 liquidation preference (the “Conversion Rate”), which is
      equivalent to a conversion price of approximately $4.00 per share of Common
      Stock (the “Conversion Price”) (subject to adjustment in accordance with the
      provisions of Section 8). Such holder shall surrender to the Company such
      shares of Series A Preferred Stock to be converted in accordance with the
      provisions in paragraph (b) and (c) of this Section 7, as
      applicable. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (ii) Except
      for the voting rights set forth in Section 9 hereof, a holder of Series A
      Preferred Stock is not entitled to any rights of a holder of shares of Common
      Stock until that holder has converted its Series A Preferred Stock, and only
      to
      the extent the shares of Series A Preferred Stock are deemed to have been
      converted to shares of Common Stock in accordance with the provisions of this
      Section 7. 

     

    (iii) The
      Company shall, prior to issuance of any shares of Series A Preferred Stock
      hereunder, and from time to time as may be necessary, reserve and keep
      available, free from preemptive rights, out of its authorized but unissued
      Common Stock, for the purpose of effecting the conversion of the shares of
      Series A Preferred Stock, such number of its duly authorized Common Stock as
      shall from time to time be sufficient to effect the conversion of all shares
      of
      Series A Preferred Stock then outstanding into such Common Stock at any time.
      The Company covenants that all shares of Common Stock which may be issued upon
      conversion of Series A Preferred Stock shall upon issuance be fully paid and
      nonassessable and free from all liens and charges and, except as provided in
      Section 7(c), taxes with respect to the issue thereof. Before the delivery
      of any securities that the Company shall be obligated to deliver upon conversion
      of the shares of Series A Preferred Stock, the Company shall comply with all
      applicable federal and state laws and regulations. 

     

    (b) Mandatory
      Conversion. 

     

    (i) Each
      outstanding share of Series A Preferred Stock shall be converted into the number
      of fully paid and non-assessable shares of Common Stock at the Conversion Rate
      (subject to adjustment in accordance with the provisions of Section 8) upon
      satisfaction of the following conditions (the “Mandatory
      Conversion”):

     

    (A) the
      Company has obtained the requisite approval(s), if any, of its common
      stockholders in connection with the issuance of the Series A Preferred Stock
      or
      any Common Stock issuable upon conversion of such shares of Series A Preferred
      Stock;

     

    (B) the
      Resale Registration Statement has been declared effective by the SEC;
      and

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (C) the
      number of shares of Common Stock issuable upon conversion of the outstanding
      shares of Series A Preferred Stock shall equal a number that is less than ten
      percent (10%) of the Company’s then outstanding Common Stock;

     

    provided,
      however,
      that no
      such Mandatory Conversion shall occur if such conversion would result in the
      Company being consolidated for accounting purposes as a subsidiary of JMP Group,
      Inc.

     

    (ii) To
      exercise the Mandatory Conversion right set forth in this Section 7(b), the
      Company must issue a press release for publication on the Dow Jones &
Company, Inc., Business Wire or Bloomberg Business News (or, if such
      organizations are not in existence at the time of issuance of such press
      release, such other news or press organization as is reasonably calculated
      to
      broadly disseminate the relevant information to the public) prior to the opening
      of business on any Trading Day (as defined below) not more than five Trading
      Days following any date on which the Company becomes aware that the conditions
      set forth in Section 7(b)(i) shall have been satisfied, announcing the
      satisfaction of the Mandatory Conversion conditions. The Company shall also
      give
      notice by mail or by publication (with subsequent prompt notice by mail) to
      the
      holders of the Series A Preferred Stock (“Notice”) (not more than four Trading
      Days after the date of the press release) of the Mandatory Conversion. The
      conversion date (the “Mandatory Conversion Date”) shall be on the date that is
      five Trading Days after the date on which the Company issues such press release.
      In
      addition to any information required by applicable law or regulation, the press
      release and Notice of a Mandatory Conversion shall state, as appropriate, (A)
      the Mandatory Conversion Date; (B) the number of shares of Series A Preferred
      Stock to be converted and the number of shares of Common Stock to be issued
      upon
      conversion of such shares; and (C) that dividends on the Series A Preferred
      Stock to be converted shall cease to accrue on the Mandatory Conversion Date.
      

     

    (iii) Upon
      exercise of the Mandatory Conversion right and the surrender of shares of the
      Series A Preferred Stock by a holder thereof, the Company shall issue and shall
      deliver or cause to be issued and delivered to such holder, or to such other
      person on such holder’s written order certificates representing the number of
      validly issued, fully paid and non-assessable full shares of Common Stock to
      which a holder of shares of Series A Preferred Stock being converted, or a
      holder’s transferee, shall be entitled. 

     

    (iv) Each
      conversion shall be deemed to have been made at the close of business on the
      Mandatory Conversion Date so that the rights of the holder thereof as to the
      Series A Preferred Stock being converted shall cease except for the right to
      receive the number of fully paid and non-assessable shares of Common Stock
      at
      the Conversion Rate (subject to adjustment in accordance with the provisions
      of
      Section 8), and the person entitled to receive shares of Common Stock shall
      be treated for all purposes as having become the record holder of those shares
      of Common Stock at that time. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (v) In
      lieu
      of the foregoing procedures, if the shares of Series A Preferred Stock are
      held
      in global form, each holder of beneficial interest in Series A Preferred Stock
      must comply with the procedures of The Depository Trust Company (“DTC”) to
      convert such holder’s beneficial interest in respect of the Series A Preferred
      Stock evidenced by a global share of the Series A Preferred Stock. 

     

    (vi) In
      case
      any shares of Series A Preferred Stock are to be converted pursuant to this
      Section 7(b), such holder’s right to voluntarily convert its Series A
      Preferred Stock shall terminate at 5:00 p.m., New York City time, on the Trading
      Day immediately preceding the Mandatory Conversion Date. 

     

    (vii) “Trading
      Day” shall mean a day during which trading in securities generally occurs on the
      NYSE or, if the Common Stock is not listed on the NYSE, on the principal other
      United States national or regional securities exchange on which the Common
      Stock
      is then listed (including the Nasdaq Global Market and the Nasdaq Capital
      Market) or, if the Common Stock is not listed on a United States national or
      regional securities exchange, on the principal other market on which the Common
      Stock is then traded immediately prior to the Mandatory Conversion
      Date.

     

    (c) Optional
      Conversion Right Procedures. 

     

    (i) To
      exercise the Optional Conversion Right as set forth in Section 7(a), a
      holder of the Series A Preferred Stock must surrender to the Company at its
      principal office or at the office of the transfer agent of the Company, as
      may
      be designated by the Board of Directors, the certificate or certificates for
      the
      shares of Series A Preferred Stock to be converted accompanied by a written
      notice stating that the holder of Series A Preferred Stock elects to convert
      all
      or a specified whole number of those shares in accordance with this
      Section 7(c) and specifying the name or names in which the holder wishes
      the certificate or certificates for the shares of Common Stock to be issued
      (“Conversion Notice”). In case the notice specifies that the shares of Common
      Stock are to be issued in a name or names other than that of the holder of
      Series A Preferred Stock, the notice shall be accompanied by payment of all
      transfer taxes payable upon the issuance of shares of Common Stock in that
      name
      or names. Other than those transfer taxes payable pursuant to the preceding
      sentence, the Company shall pay any documentary, stamp or similar issue or
      transfer taxes that may be payable in respect of any issuance or delivery of
      shares of Common Stock upon conversion of the shares of Series A Preferred
      Stock. 

     

    (ii) As
      promptly as practicable after the surrender of the certificate or certificates
      for the shares of Series A Preferred Stock in accordance with
      Section 7(c)(i), the receipt of the Conversion Notice and payment of all
      required transfer taxes, if any, or the demonstration to the Company’s
      satisfaction that those taxes have been paid, the Company shall issue and shall
      deliver or cause to be issued and delivered to such holder, or to such other
      person on such holder’s written order, (a) certificates representing the
      number of validly issued, fully paid and non-assessable full shares of Common
      Stock to which the holder of the Series A Preferred Stock being converted,
      or
      the holder’s transferee, shall be entitled and (b) if less than the full
      number of Series A Preferred Stock evidenced by the surrendered certificate
      or
      certificates is being converted, a new certificate or certificates, of like
      tenor, for the number of shares evidenced by the surrendered certificate or
      certificates, less the number of shares being converted. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (iii) Each
      conversion shall be deemed to have been made at the close of business on the
      date of giving the notice and of surrendering the certificate or certificates
      representing the shares of the Series A Preferred Stock to be converted (the
      “Conversion Date”) so that the rights of the holder thereof as to the Series A
      Preferred Stock being converted shall cease except for the right to receive
      the
      number of fully paid and non-assessable shares of Common Stock at the Conversion
      Rate (subject to adjustment in accordance with the provisions of
      Section 8), and, if applicable, the person entitled to receive shares of
      Common Stock shall be treated for all purposes as having become the record
      holder of those shares of Common Stock at that time. 

     

    (iv) In
      lieu
      of the foregoing procedures, if the shares of Series A Preferred Stock are
      held
      in global form, each holder of beneficial interest in Series A Preferred Stock
      must comply with the procedures of DTC to convert such holder’s beneficial
      interest in respect of the Series A Preferred Stock evidenced by a global share
      of the Series A Preferred Stock. 

     

    (d) Payment
      of Dividends. 

     

    (i) Optional
      Conversion. 

     

    (A) If
      a
      holder of shares of Series A Preferred Stock exercises its Optional Conversion
      Right, upon delivery of the Series A Preferred Stock for conversion, those
      shares of Series A Preferred Stock shall cease to cumulate dividends as of
      the
      end of the day immediately preceding the Conversion Date and the holder shall
      not receive any cash payment representing accrued and unpaid dividends of the
      Series A Preferred Stock, except in those limited circumstances discussed in
      this Section 7(d). Except as provided herein, the Company shall make no
      payment for accrued and unpaid dividends, whether or not in arrears, on Series
      A
      Preferred Stock converted at a holder’s election pursuant to a Conversion Right,
      or for dividends on shares of Common Stock issued upon such conversion.

     

    (B) If
      the
      Company receives a Conversion Notice before the close of business on a Dividend
      Record Date, the holder shall not be entitled to receive any portion of the
      dividend payable on such converted Series A Preferred Stock on the corresponding
      Dividend Payment Date.
      

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (C) If
      the
      Company receives a Conversion Notice after the Dividend Record Date but prior
      to
      the corresponding Dividend Payment Date, the holder on the Dividend Record
      Date
      shall receive on that Dividend Payment Date accrued dividends on those Series
      A
      Preferred Stock, notwithstanding the conversion of those Series A Preferred
      Stock prior to that Dividend Payment Date, because that holder shall have been
      the holder of record on the corresponding Dividend Record Date. However, at
      the
      time that such holder surrenders the Series A Preferred Stock for conversion,
      the holder shall pay to the Company an amount equal to the dividend that has
      accrued and that shall be paid on the related Dividend Payment Date.

     

    (D) A
      holder
      of shares of Series A Preferred Stock on a Dividend Record Date who exercises
      its Optional Conversion Right and converts such Series A Preferred Stock into
      Common Stock on or after the corresponding Dividend Payment Date shall be
      entitled to receive the dividend payable on such Series A Preferred Stock on
      such Dividend Payment Date, and the converting holder need not include payment
      of the amount of such dividend upon surrender for conversion of Series A
      Preferred Stock. 

     

    (ii) Mandatory
      Conversion. 

     

    (A) If
      the
      Company exercises the Mandatory Conversion right, whether the Mandatory
      Conversion Date is prior to, on or after the Dividend Record Date for the
      current period, all unpaid dividends which are in arrears as of the Mandatory
      Conversion Date shall be payable to the holder of the Series A Preferred Stock.
      

     

    (B) If
      the
      Company exercises the Mandatory Conversion right and the Mandatory Conversion
      Date is a date that is prior to the close of business on any Dividend Record
      Date, the holder shall not be entitled to receive any portion of the dividend
      payable for such period on such converted shares on the corresponding Dividend
      Payment Date. 

     

    (C) If
      the
      Company exercises the Mandatory Conversion right and the Mandatory Conversion
      Date is a date that is on, or after the close of business on, any Dividend
      Record Date and prior to the close of business on the corresponding Dividend
      Payment Date, all dividends, including accrued and unpaid dividends, whether
      or
      not in arrears, with respect to the Series A Preferred Stock called for
      conversion on such date, shall be payable on such Dividend Payment Date to
      the
      record holder of such shares on such record date.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    8. Adjustment
      of Conversion Rate.
      

     

    (a) If
      the
      Company shall, at any time or from time to time after the original issue date
      of
      the Series A Preferred Stock while any shares of Series A Preferred Stock are
      outstanding, effect one or more stock
      dividends, stock split-ups (including reverse splits), subdivisions or
      consolidations of shares of Common Stock,
      the
      Conversion Rate shall be appropriately adjusted to reflect such stock dividends,
      stock split-ups, subdivisions or consolidations of shares of Common Stock.
      

     

    (b) If,
      during the period in which shares of the Series A Preferred Stock remain
      outstanding, the Company issues or sells any shares of Common Stock (excluding
      any equity awards granted under the Company’s 2005 Stock Incentive Plan) for a
      price per share that is less than the Conversion Price at the time of such
      issuance or sale, the Conversion Rate immediately shall be adjusted by
      multiplying the Conversion Rate by the quotient of (x) the Conversion Price
      at
      the time of such issuance or sale divided by (y) the product of the Conversion
      Price at the time of such issuance or sale multiplied by (a) an amount equal
      to
      the sum of (i) the number of shares of Common Stock outstanding and deemed
      to be
      outstanding immediately prior to such sale plus the number of shares of Common
      Stock to be issued upon such issuance or sale multiplied by the Conversion
      Price
      at the time of such issuance or sale and (ii) the total consideration received
      and deemed (in accordance with the provisions of Section 8(c)) to be received
      by
      the Company upon such issuance and sale and (b) dividing the result by an amount
      equal to (i) the sum of (A) the amount determined in (a) and (B) the product
      of
      the number of shares issued or sold multiplied by the Conversion Price at the
      time of such issuance or sale, minus (ii) the consideration
      received.

     

    (c) If
      any
      shares of Common Stock shall be issued or sold for cash, the consideration
      received by the Company shall be deemed to be the amount paid by the purchaser
      therefor without deduction of any expense incurred or any underwriting
      commission, concession or discount paid or allowed by the Company in connection
      therewith. If any shares of Common Stock shall be issued or sold for a
      consideration other than cash, the consideration received by the Company shall
      be deemed to be the fair value of such consideration as determined by the Board
      of Directors of the Company without deduction of any expense incurred or any
      underwriting commission, concession or discount paid or allowed by the Company
      in connection therewith. If any shares of Common Stock shall be issued in
      connection with a merger of another corporation into the Company, the
      consideration received by the Company shall be deemed to be the fair value
      as
      determined by the Board of Directors of the Company of such portion of the
      assets of such merged corporation as the Board of Directors shall reasonably
      determine to be attributable to such shares of Common Stock.

     

    9. Voting
      Rights.

     

    (a) Holders
      of the Series A Preferred Stock will have the same voting rights as holders
      of
      Common Stock and will vote together with holders of Common Stock as a single
      class, except as set forth below. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (b) If
      and
      whenever distributions on any shares of Series A Preferred Stock or any
      series or
      class
      of Parity Stock shall be in arrears for six or more quarterly periods (whether
      or not consecutive), the number of directors then constituting the Board of
      Directors shall be increased by two and the holders of such shares of Series
      A
      Preferred Stock (voting together as a single class with all other shares of
      Parity Stock of any other class or series which is entitled to similar voting
      rights (excluding Common Stock (the “Voting Preferred Stock’’)), will be
      entitled to vote for the election of the two additional directors of the Company
      at any annual meeting of stockholders or at a special meeting of the holders
      of
      the Series A Preferred Stock and of the Voting Preferred Stock called for that
      purpose. The Company must call such special meeting upon the request of any
      holder of record of shares of Series A Preferred Stock. Whenever dividends
      in
      arrears on outstanding shares of the Series A Preferred Stock and the Voting
      Preferred Stock shall have been paid and dividends thereon for the current
      quarterly dividend period shall have been paid or declared and set apart for
      payment, then the right of the holders of the Series A Preferred Stock to elect
      such additional two directors shall cease and the terms of office of such
      directors shall terminate and the number of directors constituting the Board
      of
      Directors shall be reduced accordingly. 

     

    (c) The
      affirmative vote or consent of at least 66 2/3%
      of the
      votes entitled to be cast by the holders of the outstanding Series A Preferred
      Stock and the holders of all other classes or series of Preferred Stock entitled
      to vote on such matters, voting as a single class, will be required to
      (i) authorize the creation of, the increase in the authorized amount of, or
      issuance of any shares of any class of Senior Stock or any security convertible
      into shares of any class of Senior Stock or (ii) amend, alter or repeal any
      provision of, or add any provision to, the Charter, including the Articles
      Supplementary for the Series A Preferred Stock, if such action would materially
      adversely affect the voting powers, rights or preferences of the holders of
      the
      Series A Preferred Stock. The amendment of the Charter to authorize, create,
      or
      increase the authorized amount of Junior Stock or any class of Parity Stock,
      shall not be deemed to materially adversely affect the voting powers, rights
      or
      preferences of the holders of Series A Preferred Stock. No such vote of the
      holders of Series A Preferred Stock as described above shall be required if
      provision is made to redeem all Series A Preferred Stock at or prior to the
      time
      such amendment, alteration or repeal is to take effect, or when the issuance
      of
      any such shares or convertible security is to be made, as the case may
      be.

     

    (d) With
      respect to the exercise of the above described voting rights, each share of
      Series A Preferred Stock shall be entitled to a number of votes equal to the
      Conversion Rate then in effect.

     

    (e) The
      foregoing voting provisions will not apply if, at or prior to the time when
      the
      act with respect to which such vote would otherwise be required shall be
      effected, all outstanding Series A Preferred Stock shall have been redeemed
      or
      called for redemption upon proper notice and sufficient funds shall have been
      deposited in trust to effect such redemption.

     

    B. EXCLUSION
      OF OTHER RIGHTS.

     

    Except
      as
      may otherwise be required by law or as set forth in Section 9, the Series A
      Preferred Stock shall not have any voting powers, preferences or relative,
      participating, optional or other special rights, other than those specifically
      set forth in these Articles Supplementary (as such Articles Supplementary may
      be
      amended from time to time) and in the Charter. The Series A Preferred Stock
      shall have no preemptive or subscription rights, or rights of an objecting
      stockholder under Title 3, Subtitle 2 of the Maryland General Corporation
      Law.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    C. HEADINGS
      OF SUBDIVISIONS.

     

    The
      headings of the various subdivisions hereof are for convenience of reference
      only and shall not affect the interpretation of any of the provisions hereof.
      

     

    D. SEVERABILITY
      OF PROVISIONS.

     

    If
      any
      voting powers, preferences or relative, participating, optional, conversion
      and
      other special rights of the Series A Preferred Stock or qualifications,
      limitations or restrictions thereof set forth in these Articles Supplementary
      (as such Articles Supplementary may be amended from time to time) is invalid,
      unlawful or incapable of being enforced by reason of any rule of law or public
      policy, all other voting powers, preferences and relative, participating,
      optional, conversion and other special rights of Series A Preferred Stock and
      qualifications, limitations and restrictions thereof set forth in these Articles
      Supplementary (as so amended) which can be given effect without the invalid,
      unlawful or unenforceable voting powers, preferences or relative, participating,
      optional, conversion or other special rights of Series A Preferred Stock or
      qualifications, limitations and restrictions thereof shall be given such effect.
      None of the voting powers, preferences or relative participating, optional,
      conversion or other special rights of the Series A Preferred Stock or
      qualifications, limitations or restrictions thereof herein set forth shall
      be
      deemed dependent upon any other such voting powers, preferences or relative,
      participating, optional, conversion or other special right of Series A Preferred
      Stock or qualifications, limitations or restrictions thereof unless so expressed
      herein.

     

    SECOND: These
      Articles Supplementary were duly adopted by the Board of Directors of the
      Company in the manner and by the vote required by law.

     

    THIRD: The
      Series A Preferred Stock have been classified and designated by the Board of
      Directors under the authority contained in the Charter.

     

    FOURTH: These
      Articles Supplementary shall be effective at the time the State Department
      of
      Assessments and Taxation of Maryland accepts these Articles Supplementary for
      record.

     

    FIFTH: The
      undersigned Co-Chief Executive Officer of the Company acknowledges these
      Articles Supplementary to be the act of the Company and, as to all matters
      or
      facts required to be verified under oath, the undersigned Co-Chief Executive
      Officer acknowledges that to the best of his knowledge, information and belief,
      these matters and facts are true in all material respects and that this
      statement is made under the penalties for perjury.

     

    *
      * * * *
      * * * *

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused these Articles Supplementary to be
      signed in its name and on its behalf by its Co-Chief Executive Officer and
      witnessed by its Secretary on January 18, 2008.

     

    
      	ATTEST	 	 	NEW
              YORK
              MORTGAGE TRUST, INC.
	 	 	 	 	 
	 	 	 	 	 
	/s/
              Nathan R.
              Reese	 	 	By:	/s/
              Steven R.
              Mumma
	
              
Nathan
              R. Reese	 	 	 	
              
Steven
              R. Mumma
	Secretary	 	 	 	
              Co-Chief
                Executive
                Officer, President and

              Chief Financial
                Officer

            

    

     

    
      
        
        

      

      
        18

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