RETIREMENT AND RELEASE AGREEMENT
This Retirement and Release Agreement (this “Agreement”) is entered into by and
between Lisa Mumford (“Employee”) and Ellington Management Group, L.L.C., a
Delaware limited liability company (the “Company”). Ellington Financial LLC, a
Delaware limited liability company (“EFC”) and Ellington Residential Mortgage
REIT, a Maryland real estate investment trust (“EARN”), enter into this
Agreement for the limited purposes of acknowledging and agreeing to Sections 2
and 9 below.
WHEREAS, Employee and the Company are parties to that certain Employment
Agreement, dated as of September 25, 2009 (the “Employment Agreement”), the
Trade Secret and Proprietary Information Agreement, dated September 30, 2009
(the “Trade Secret and Proprietary Information Agreement”), the Mandatory
Arbitration Program, dated September 30, 2009 (the “Mandatory Arbitration
Program”, and, together with the Employment Agreement and the Trade Secret and
Proprietary Information Agreement, the “Existing Agreements”); and
WHEREAS, Employee has been awarded a discretionary cash bonus by the Company
that is reimbursable by EFC and EARN, a portion of which is deferred until
December 31, 2018, subject to certain vesting conditions as described in Section
2 below (the “Deferred Cash Bonus”); and
WHEREAS, Employee has received grants of LTIP Units from EFC (the “LTIP Units”)
and of common shares from EARN (the “Common Shares”) pursuant to the terms of
LTIP Unit Award Agreements and Restricted Share Award Agreements (collectively,
the “Award Agreements”), and a portion of such LTIP Units and Common Shares are
subject to forfeiture restrictions that will lapse on December 12, 2018,
December 13, 2018 and December 12, 2019, subject to Employee’s continued
employment through such dates, as described in Section 2 below (the “Unvested
Equity Awards”); and
WHEREAS, Employee’s employment with the Company shall end as of March 30, 2018
(the “Retirement Date”); and
WHEREAS, the parties wish to enter into this Agreement to set forth certain
obligations that will survive the Retirement Date and to resolve any and all
claims that Employee has or may have against the Company or any of the other
Company Parties (as defined below), including any claims that Employee may have
arising out of Employee’s employment or the end of such employment.
NOW, THEREFORE, in consideration of the promises set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the parties agree as follows:
1.Employee’s Retirement. Employee’s employment with the Company shall end on the
Retirement Date as a result of Employee’s voluntary retirement and, as of the
Retirement Date, Employee shall no longer have an employment relationship with
the Company or any other Company Party (as defined in Section 4 below).

2.Payment of Deferred Cash Bonus; Vesting of Unvested Equity Awards.

(a)As of the date of this Agreement, Employee is entitled to receive an
aggregate Deferred Cash Bonus of $135,000 (of which $106,920 is reimbursable by
EFC and $28,080 is reimbursable by EARN) on or about December 31, 2018, as long
as a “Forfeiture Event” (as defined in the Employment Agreement) has not
occurred before such date. Nevertheless, notwithstanding Employee’s voluntary
retirement on the Retirement Date (i.e., prior to December 31, 2018), Employee
shall be entitled to

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receive the Deferred Cash Bonus on or about December 31, 2018 so long as (i)
Employee does not revoke this Agreement during the Release Revocation Period
(ii) Employee makes herself available to provide reasonable assistance to the
Company, EFC and EARN during the period from the Retirement Date through
December 31, 2018, and (iii) Employee does not breach or fail to comply with any
surviving provisions of the Existing Agreements.

(b)As of the date of this Agreement, Employee holds the following Unvested
Equity Awards:

•
5,887 EFC LTIP Units that are subject to forfeiture restrictions that will lapse
on December 12, 2018,

•
5,583 EFC LTIP Units that are subject to forfeiture restrictions that will lapse
on December 13, 2018,

•
5,886 EFC LTIP Units that are subject to forfeiture restrictions that will lapse
on December 12, 2019,

•
1,784 EARN Common Shares that are subject to forfeiture restrictions that will
lapse on December 12, 2018,

•
1,556 EARN Common Shares that are subject to forfeiture restrictions that will
lapse on December 13, 2018, and

•
1,783 EARN Common Shares that are subject to forfeiture restrictions that will
lapse on December 12, 2019.

December 12, 2018, December 13, 2018, and December 12, 2019 are referred to
herein as the “vesting dates.” Under the terms of the Award Agreements relating
to the Unvested Equity Awards, as long as a “LTIP Forfeiture Event” or a “Share
Forfeiture Event” (as defined in the applicable Award Agreement) has not
occurred before such date the forfeiture restrictions will lapse on the
specified vesting dates. Nevertheless, notwithstanding Employee’s voluntary
retirement Employee will not forfeit the Unvested Equity Awards, and the
forfeiture restrictions will lapse on the vesting dates listed above, so long as
(i) Employee does not revoke this Agreement during the Release Revocation Period
(as defined below), (ii) Employee makes herself available to provide reasonable
assistance to the Company, EFC and EARN during the period from the Retirement
Date through such vesting dates and (iii) Employee does not breach or fail to
comply with any surviving provisions of the Existing Agreements.

(c)It shall be an additional condition of receiving the Deferred Cash Bonus and
the Unvested Equity Awards that Employee first certify in writing, no earlier
than 30 business days before and no later than 30 business days after December
31, 2018 or the applicable vesting date, as follows: "I have not breached or
failed to comply with any term, condition or provision of my Retirement and
Release Agreement, my Trade Secret and Proprietary Information Agreement with
EMG, or the surviving provisions of my Employment Agreement with EMG." The
Company shall endeavor to remind Employee of this certification requirement
shortly before any applicable vesting date and December 31, 2018. Employee
acknowledges that her certification shall be a material inducement to the
payment and vesting of the Deferred Cash Bonus and the vesting of the Unvested
Equity Awards, and the Company's rights with respect to any certification that
proves to be untrue are without prejudice to the Company's rights to any
remedies to which the Company may otherwise be entitled under this Agreement,
the Employment Agreement, or the Trade Secret and Proprietary Information
Agreement.

3.Satisfaction of All Leaves and Payment Amounts; Prior Rights and Obligations.
In entering into this Agreement, Employee expressly acknowledges and agrees that
Employee has received all leaves (paid and unpaid) to which Employee has been
entitled during Employee’s employment with the Company or any other Company
Party, and (if still unpaid, with the exception of any unpaid base salary

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earned in the pay period in which the Retirement Date occurred) Employee has
received all wages, bonuses and other compensation, been provided all benefits
and been afforded all rights and been paid all sums that Employee is owed or has
been owed by the Company or any other Company Party, including all payments
arising out of all incentive plans and any other bonus arrangements.

4.General Release of Claims.

(a)Employee hereby forever releases, discharges and acquits the Company, EFC,
EARN, each of their respective affiliates, and each of the foregoing entities’
respective past, present and future affiliates, shareholders, members, managers,
partners, directors, officers, trustees, employees, fiduciaries, agents,
attorneys, heirs, predecessors, successors and representatives, in their
personal and representative capacities, as well as all employee benefit plans
maintained by the Company or any of its affiliates and all fiduciaries and
administrators of any such plans, in their personal and representative
capacities (collectively, the “Company Parties”), from liability for, and
Employee hereby waives, any and all claims, damages, or causes of action of any
kind related to Employee’s employment or affiliation with any Company Party, the
termination of such employment or affiliation, and any other acts or omissions
related to any matter occurring or existing on or prior to the time that
Employee executes this Agreement, whether arising under federal or state laws or
the laws of any other jurisdiction, including (i) any alleged violation through
such time of: (A) any federal, state or local anti-discrimination or
anti-retaliation law, including the Age Discrimination in Employment Act of
1967, as amended (including as amended by the Older Workers Benefit Protection
Act), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, as amended, and Sections 1981 through 1988 of Title 42 of the
United States Code, as amended, the Americans with Disabilities Act of 1990, as
amended; (B) the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”); (C) the National Labor Relations Act, as amended; (D) the
Occupational Safety and Health Act, as amended; (E) the Family and Medical Leave
Act of 1993; (F) the Connecticut Human Rights and Opportunities Act; (G) any
other local, state or federal law, regulation, ordinance or orders which may
have afforded any legal or equitable causes of action of any nature; or (H) any
public policy, contract, tort, or common law claim, including any claim for
defamation, emotional distress, wrongful termination, fraud or misrepresentation
of any kind; (ii) any allegation for costs, fees, or other expenses including
attorneys’ fees incurred in, or with respect to, a Released Claim; (iii) any and
all claims Employee may have under any employment contract or any other
agreement (including the Employment Agreement and any Equity Award Agreement (as
defined above), incentive or compensation plan or under any other benefit plan,
program or practice; and (iv) any claim for compensation, damages or benefits of
any kind not expressly set forth in this Agreement (collectively, the “Released
Claims”). THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL
NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY,
OF ANY OF THE COMPANY PARTIES.

(b)The Released Claims do not include any rights or claims that may first arise
after the time that Employee executes this Agreement.

(c)In no event shall the Released Claims include any claim to vested benefits
under an employee benefit plan of the Company that is subject to ERISA
(including any rights to vested benefits under health and retirement plans).

(d)Employee hereby represents and warrants that, as of the time Employee
executes this Agreement, Employee has not brought or joined any lawsuit or filed
any charge or claim against any of the Company Parties in any court or before
any government agency or arbitrator for or with respect to a matter, claim or
incident that occurred or arose out of one or more occurrences that took place
on or prior

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to the time at which Employee signs this Agreement. Employee hereby further
represents and warrants that Employee has not assigned, sold, delivered,
transferred or conveyed any rights Employee has asserted or may have against any
of the Company Parties to any person or entity, in each case, with respect to
any Released Claims.

5.Employee’s Acknowledgements. By executing and delivering this Agreement,
Employee expressly acknowledges that:

(a)Employee has carefully read this Agreement;

(b)Employee has had sufficient time (and at least 21 days) to consider this
Agreement before the execution and delivery to Company;

(c)Employee has been advised, and hereby is advised in writing, to discuss this
Agreement with an attorney of Employee’s choice at Employee’s own expense, and
Employee has had adequate opportunity to do so prior to executing this
Agreement;

(d)Employee fully understands the final and binding effect of this Agreement;
the only promises made to Employee to sign this Agreement are those stated
within the four corners of this document; and Employee is signing this Agreement
knowingly, voluntarily and of Employee’s own free will, and that Employee
understands and agrees to each of the terms of this Agreement; and

6.Affirmation of Surviving Provisions in Existing Agreements and Award
Agreements. Employee expressly acknowledges and agrees that, except to the
extent expressly modified by this Agreement, all of the provisions in the
Existing Agreements and the Award Agreements that are intended to survive the
termination of Employee’s employment shall survive and remain enforceable in all
respects in accordance with the terms thereof, and Employee promises to abide by
the terms of such agreements.

7.Non-disparagement. As a material inducement for the Company to enter into this
Agreement, Employee agrees to refrain from making any statements (or permitting
any statements to be reported as being attributed to her) that are critical,
disparaging or derogatory about, or which injure the reputation of, the Company,
EFC, EARN or any other Company Party. Notwithstanding the foregoing, Employee
may respond to subpoenas, provide testimony or otherwise provide evidence to the
extent required by law.

8.Entire Agreement. This Agreement, the Existing Agreements, and the applicable
Award Agreements constitute the entire agreement between Employee on the one
hand and the Company, EFC and EARN, as applicable, on the other hand with
respect to the matters herein provided. No modifications or waiver of any
provision hereof shall be effective unless in writing and signed by each party.

9.Governing Law. The validity, interpretation, construction, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Connecticut, without giving effect to the principles of conflicts of law. For
the avoidance of doubt, the Mandatory Arbitration Program remains in full force
and effect.

10.Assignment. The Company, EFC and EARN have the right to assign this
Agreement, but Employee does not. This Agreement inures to the benefit of the
successors and assigns of the Company, EFC and EARN, who are intended third
party beneficiaries of this Agreement.

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11.Headings; Interpretation. Titles and headings to Sections hereof are for the
purpose of reference only and shall in no way limit, define or otherwise affect
the provisions hereof. Unless the context requires otherwise, all references
herein to an agreement, instrument or other document shall be deemed to refer to
such agreement, instrument or other document as amended, supplemented, modified
and restated from time to time to the extent permitted by the provisions
thereof. The word “or” as used herein is not exclusive and is deemed to have the
meaning “and/or.” The words “herein”, “hereof”, “hereunder” and other compounds
of the word “here” shall refer to the entire Agreement, including exhibits, and
not to any particular provision hereof. The use herein of the word “including”
following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation”, “but not limited to”, or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter. Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against any party hereto, whether under any rule of construction or
otherwise. On the contrary, this Agreement has been reviewed by each of the
parties hereto and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of the parties.

12.Third Party Beneficiaries. Each Company Party that is not a signatory hereto
shall be a third-party beneficiary of Employee’s covenants, warranties,
representations, and release of claims set forth in this Agreement and entitled
to enforce such provisions as if it was a party hereto.

13.Return of Property. Employee represents and warrants that she has returned to
the Company all property belonging to the Company, EFC, EARN and any other
Company Party, including all computer files and other electronically stored
information, client materials, electronically stored information and other
materials provided to Employee by the Company, EFC, EARN or any other Company
Party in the course of her employment and Employee further represents and
warrants that she has not maintained a copy of any such materials in any form.

14.No Waiver. No failure by any party at any time to give notice of any breach
by the other party of, or to require compliance with, any condition or provision
of this Agreement shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.

15.Severability and Modification. To the extent permitted by applicable law, the
parties agree that any term or provision of this Agreement (or part thereof)
that renders such term or provision (or part thereof) or any other term or
provision (or part thereof) of this Agreement invalid or unenforceable in any
respect shall be severable and shall be modified or severed to the extent
necessary to avoid rendering such term or provision (or part thereof) invalid or
unenforceable, and such severance or modification shall be accomplished in the
manner that most nearly preserves the benefit of the parties’ bargain hereunder.

16.Withholding of Taxes and Other Employee Deductions. The Company, EFC and EARN
may withhold from any payments made pursuant to this Agreement all federal,
state, local, and other taxes and withholdings as may be required pursuant to
any law or governmental regulation or ruling.

17.Deemed Resignations. Employee acknowledges and agrees that, as of the
Retirement Date, Employee is deemed to have automatically resigned as: (a) an
officer of EFC, EARN and each other Company Party for which she served as an
officer; and (b) a member of the board of directors, board of managers, board of
trustees (or similar governing body) of any Company Party for which she served
in

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such capacity, and from the board of directors or board of managers (or similar
governing body) of any corporation, limited liability entity, unlimited
liability entity or other entity in which any Company Party holds an equity
interest and with respect to which board of directors or board of managers (or
similar governing body) Employee served as such Company Party’s member’s
designee or other representative.

18.Revocation Right. Notwithstanding the initial effectiveness of this
Agreement, Employee may revoke the delivery (and therefore the effectiveness) of
this Agreement within the seven-day period beginning on the date Employee
executes this Agreement (such seven-day period being referred to herein as the
“Release Revocation Period”).  To be effective, such revocation must be in
writing signed by Employee and must be received by Daniel Margolis at 53 Old
Forest Avenue, Old Greenwich, CT 06870 or via email at dmargolis@ellington.com
before 11:59 p.m., Connecticut time, on the last day of the Release Revocation
Period.  If an effective revocation is delivered in the foregoing manner and
timeframe, Employee will forfeit the right to receive the Deferred Cash Bonus
and will immediately forfeit the Unvested Equity Awards described in Section 2,
the release of claims set forth in Section 4 shall be of no force or effect, and
the remainder of this Agreement shall be in full force and effect.

19.Counterparts. This Agreement may be executed in one or more counterparts
(including portable document format (.pdf) and facsimile counterparts), each of
which shall be deemed to be an original, but all of which together will
constitute one and the same agreement.

[Signatures begin on the following page]

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LISA MUMFORD

/s/ Lisa Mumford

Date: March 30, 2018

ELLINGTON MANAGEMENT GROUP, L.L.C.

By:/s/ Laurence Penn
Name: Laurence Penn
Title: Authorized Signatory

Date: March 30, 2018

With respect to Sections 2 and 9:

ELLINGTON FINANCIAL LLC

By:/s/ Laurence Penn
Name: Laurence Penn
Title: Chief Executive Officer

Date: March 30, 2018

ELLINGTON RESIDENTIAL MORTGAGE REIT

By:/s/ Laurence Penn
Name: Laurence Penn
Title: Chief Executive Officer

Date: March 30, 2018