THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of the 1st day of November 1997, is
entered into by and between Kathryn F. Fagan (the "Executive") and Annaly Mortgage Management, Inc., a
Maryland corporation (the "Company").
The Company desires to establish its right to the continued services of the Execu tive, in the capacity described
below, on the terms and conditions and subject to the rights of termination hereinafter set forth, and the Executive
is willing to accept such employment on such terms and conditions.
In consideration of the mutual agreements hereinafter set forth, the Executive and the Company have agreed and
do hereby agree as follows:
1. Employment as Treasurer and Chief Financial Officer of the Company.
The Company does hereby employ, engage and hire the Executive as Treasurer and Chief Financial Officer of the
Company, and the Executive does hereby accept and agree to such hiring, engage ment, and employment. The
Executive's duties as Treasurer and Chief Financial Officer shall be such executive and managerial duties as the
Board of Directors of the Company shall from time to time prescribe and as provided in the Bylaws of the
Company. The Executive shall devote such time, energy and skill to the performance of her duties for the
Company and for the benefit of the Company as may be necessary or required for the effective conduct and
operation of the Company's business. Furthermore, the Executive shall exercise due diligence and care in the
performance of her duties to the Company under this Agreement.
2. Term of Agreement. The term ("Term") of this Agreement shall commence as of the date of the closing under
the Offering (the "Effective Date") and shall continue through December 31, 1999. From and after December 31,
1999, and each anniversary thereafter, the Term of the Agreement shall automatically be extended for additional
successive one-year periods unless, not later than three months prior to December 31, 1999 or any su