Document:

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
      HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION

                             CONFIDENTIAL TREATMENT
<PAGE>

                              DEVELOPMENT AGREEMENT
                              ---------------------

      THIS DEVELOPMENT  AGREEMENT (the  "Agreement") is made and entered into as
of the  fourth _ day of  March,  2003 (the  "Effective  Date"),  by and  between
STIEFEL LABORATORIES, INC. ("Stiefel") and INyX PHARMA LIMITED ("INyX"). INyX is
a company organized under the laws of England and Wales with its principal place
of business at 6 Seymour Court, Manor Park,  Runcorn,  Cheshire WA7 1SY. Stiefel
is a New York  corporation  with its principal place of business at 255 Alhambra
Circle, Coral Gables, Florida 33134.

                                   BACKGROUND:

      Subject to the terms and conditions  contained in this Agreement,  Stiefel
desires to engage INyX to assist in Stiefel's  development of the "Products" (as
hereinafter defined), and INyX desires to accept such appointment.

      NOW,  THEREFORE,  FOR AND IN  CONSIDERATION  of the  premise,  the  mutual
promises, covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS
                                   -----------

      The following words, terms and phrases,  when used herein,  shall have the
following respective meanings:

      1.1 "Batch" shall mean the quantity of cans as agreed between both parties
of the Products,  produced  pursuant to a single  purchase order during the same
cycle of manufacture.

      1.2  "BioBatch"  shall mean a  quantity  of cans of the  Products  that is
smaller than a Batch but not less than cans, whichever is greater.

      1.3 "cGMPs" shall mean current Good Manufacturing  Practices, as published
at 21 CFR parts 210 and 211 and amended during the term of this Agreement.

      1.4 "FDA" shall mean the United States Food and Drug Administration or any
successor agency thereof.

      1.5 "Health Registrations" shall mean the Abbreviated New Drug Application
approval  issued  by  the  FDA  with  respect  to the  Products  and  any  other
governmental  or  regulatory  consents,  registrations,   approvals  or  permits
necessary to sell or manufacture the Products or applications for the same.

      1.6 "Product" and "Products" shall mean * * *

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      1.7 "Specifications"  shall mean the specifications for the manufacturing,
packaging,  storage and labeling of the Products described on Exhibit A attached
hereto  and  incorporated  herein  by  reference.  The  Specifications  shall be
automatically  amended upon each review and issuance of the Health Registrations
to include the information set forth in the Health Registrations.

      1.8 "Total Development Cost" shall mean, with respect to each Product, the
amount designated as such on Exhibit B attached hereto.

                                    ARTICLE 2
                               RIGHTS TO PRODUCTS
                               ------------------

      2.1 For greater clarity,  INyX acknowledges that all intellectual property
created   specifically  in  connection  with  the  Products  (the  "Intellectual
Property"),  including  formulations,  inventions or discoveries  (first made or
reduced to practice in the performance of INyX's obligations hereunder) shall be
the property of Stiefel. INyX shall, when requested by Stiefel, execute all such
assignments,  consents  and other  documents  reasonably  necessary to assign to
Stiefel all right,  title and interest in and to all the Intellectual  Property,
and shall use best efforts to cause its employees,  agents and subcontractors to
execute the necessary documents to give effect to this provision.

      2.2  The  Customer  hereby  grants  INyX  a  royalty-free,  non-exclusive,
worldwide  right  and  license  to  make,  use and sell  products  incorporating
Intellectual Property, subject always to INyX's obligations hereunder.

                                    ARTICLE 3
                                   DEVELOPMENT
                                   -----------

      3.1 INyX agrees to assist Stiefel in the  development of the Products,  as
set forth in Exhibit B attached hereto.

      3.2 Stiefel  agrees to reimburse  INyX' efforts in the  development of the
Products,  within  thirty (30) days of its receipt of invoices  from INyX.  With
respect to each Product, INyX agrees to timely complete all activities set forth
in Exhibit B attached  hereto in exchange for the respective  Total  Development
Cost set forth therein.

      3.3 INyX agrees to provide in a timely fashion all documents  requested by
Stiefel for submission in a Health  Registration  (including  without limitation
those  documents  listed in Exhibit C attached  hereto) and to actually  support
Stiefel in responding to communications from the FDA.

      3.4 Stiefel and INyX acknowledge that INyX must validate three (3) batches
of the Products  prior to selling any Products to Stiefel.  INyX shall  complete
such validation within

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sixteen (16) weeks of Stiefel's request.  Stiefel shall be obligated to purchase
such  Batches  in  accordance  with the terms of the  Manufacturing  and  Supply
Agreement.

                                    ARTICLE 4
                                   COMPLIANCE
                                   ----------

      4.1 Each party shall  promptly  deliver to the other a copy of all written
communications  received  by it from the FDA during  the term of this  Agreement
relating to the design, manufacture, packaging, shipping, storage or sale of the
Products and allow the other party an  opportunity  to comment upon its proposed
response.

      4.2 Stiefel may perform audits of INyX to establish INyX'  compliance with
cGMPs and the Health Registrations or regarding other manufacturing,  quality or
regulatory matters affecting the Products, with reasonable prior notice.

      4.3 INyX shall immediately notify Stiefel of any FDA inspections which may
affect any or all of the  Products,  allow Stiefel to be available to answer FDA
questions, and keep Stiefel informed to the maximum practicable extent as to the
inspection's progress.

      4.4 INyX agrees to provide to Stiefel,  promptly upon  Stiefel's  request,
duly  authenticated  copies of all documents required to obtain and maintain the
Health  Registrations  and all documents  related to manufacturing the Products,
including without limitation those documents listed in Exhibit C.

                                   ARTICLE 5
                            PRICES, TERMS OF PAYMENT
                            ------------------------

      5.1 Payment.  With respect to each Product:  (a) Stiefel shall pay INyX an
amount equal to fifty percent (50%) of the Total Development Cost, within thirty
(30) days after INyX' duly authorized  representative signs this Agreement;  (b)
Stiefel shall pay INyX an amount equal to twenty-five percent (25%) of the Total
Development  Cost,  within thirty (30) days after INyX completes the development
work set forth in Exhibit B attached  hereto with respect to such  Product;  and
(c)  Stiefel  shall pay INyX the  balance of its Total  Development  Cost within
thirty (30) days of Stiefel's  filing an Abbreviated New Drug Application in its
own name with respect thereto.

                                    ARTICLE 6
                              TERM AND TERMINATION
                              --------------------

      6.1 Term.  Unless  earlier  terminated in accordance  with the  provisions
hereof,  the term of this  Agreement  shall  commence on the Effective  Date and
shall  thereafter  continue in effect until the third (3rd)  anniversary  of the
Effective Date.

      6.2  Termination  for Cause.  Either party may terminate this Agreement on
written notice to the other party, effective immediately if:

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            (a)  the  other  party  commits  a  material  breach  of  any of its
      obligations  hereunder  which is not  cured  within  ninety  (90)  days of
      written notice from the other party specifying the breach; or

            (b) the other party is dissolved or  liquidated,  files or has filed
      against it a petition  under any  bankruptcy or insolvency  law,  makes an
      assignment to the benefit of its creditors,  has a receiver  appointed for
      all or  substantially  all of its  property,  or has a petition  under any
      bankruptcy  or  insolvency  law filed  against  it which is not  dismissed
      within sixty (60) days.

Such  right  of  termination  shall  be  in  addition  to  any  other  remedy  a
non-defaulting  party  may have at law or in  equity  due to the  other  party's
breach of is obligations hereunder.

      6.3 Termination for Market Conditions.  At any time and from time to time,
Stiefel may terminate  this Agreement with respect to any or all of the Products
on ninety (90) days prior  written  notice to INyX,  provided that Stiefel shall
accept and pay for all  development  work  performed by INyX in accordance  with
Exhibit B attached  hereto prior to INyX' receipt of such notice and  reasonable
shut-down  costs,  provided that in no event shall  Stiefel's  liability for any
such costs,  plus amounts paid by Stiefel  prior to such notice  exceed (a) with
respect to any Product,  such Product's  Total  Development  Cost; or (b) in the
aggregate for all Products Six Hundred Thousand Pounds Sterling (GBP 600,000).

      6.4 Changed  Circumstances.  In the event that the market for the Products
materially  changes or either  party,  in good faith,  believes  that a material
change in such party's  circumstances  beyond their  control has occurred  which
materially  affects  its  ability to perform  its  obligations  pursuant to this
Agreement,  the parties hereto shall, in good faith,  negotiate towards mutually
acceptable  revisions to this  Agreement to address the impact of such  material
changes;  provided,  however, the terms of this Agreement shall continue in full
force and effect unless and until the parties hereto agree otherwise.

      6.5 Force Majeure.  The failure of either of the parties hereto to perform
any  obligation  under this  Agreement  solely by reason of any cause beyond its
control (and due to no fault of its own), including, without limitation, acts of
God, acts of government,  riots,  wars, strikes and accidents in transportation,
shall not be deemed to be a breach of this Agreement;  provided,  however,  that
the party so  prevented  from  complying  herewith  shall  continue  to take all
actions within its power,  including payment of outstanding  invoices, to comply
as fully as possible herewith.

                                   ARTICLE 7
                          INDEMNIFICATION AND INSURANCE
                          -----------------------------

      7.1 Indemnification. INyX hereby indemnifies and agrees to defend and hold
Stiefel harmless from and against losses, claims,  damages,  liabilities,  costs
and expenses  (including,  without limitation,  attorneys' fees and court costs)
incurred by Stiefel as a result of any breach of

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<PAGE>

this Agreement by INyX. Stiefel hereby indemnifies and agrees to defend and hold
INyX harmless from and against losses, claims, damages,  liabilities,  costs and
expenses  (including,  without  limitation,  attorneys'  fees and  court  costs)
incurred  by INyX as a  result  of any  breach  of this  Agreement  by  Stiefel,
Stiefel's  storage,  sale  or  distribution  of the  Products,  or any  Products
labeling, Specifications, instructions, directions, warnings, pamphlets or other
information provided by Stiefel that differs from those provided by INyX.

      7.2 Insurance.  Each party hereto shall maintain with a financially  sound
and reputable  insurer,  from the date of the first purchase of Products through
the remainder of the term of this  Agreement,  comprehensive  general  liability
insurance,  including,  without  limitation,  Products liability  insurance with
liability limits of at least Five Million Pounds Sterling ((pound)5,000,000) per
occurrence  and in the  aggregate.  Each party  hereto shall also name the other
party as an  additional  insured party on its policy and provide the other party
with such evidence  thereof as is  reasonably  requested by the other party from
time to time.

                                   ARTICLE 8
                  WARRANTIES AND REPRESENTATIONS OF THE PARTIES
                  ---------------------------------------------

      8.1  Additional  Representations  and  Warranties  of  INyX.  INyX  hereby
additionally represents and warrants to Stiefel the following:

            (a)  INyX is a  corporation  duly  organized  and  existing  in good
      standing under the laws of England;

            (b) There are no material  adverse claims pending or, to the best of
      INyX' knowledge, threatened against INyX by any entity with respect to the
      Products;

            (c) INyX is neither a party to nor otherwise  bound by any agreement
      or  instrument   which  prohibits  or  prevents  it  from  performing  its
      obligations under this Agreement; and

            (d) INyX' manufacturing,  packaging and storage facilities comply in
      all material respects with all applicable  federal,  state and local laws,
      rules and regulations in the Territory.

            (e) INyX will make no use of  Confidential  Information of Connetics
      Corporation under the provisions of the Amended and Restated Manufacturing
      and Supply  Agreement  between Miza  Pharmaceuticals,  Inc. and  Connetics
      Corporation, in performing its obligations hereunder.

      8.2 Additional  Representations and Warranties of Stiefel.  Stiefel hereby
additionally represents and warrants to INyX the following:

            (a) Stiefel is a corporation  duly  organized and existing under the
      laws of the State of New York.

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            (b) There are no material  adverse claims pending or, to the best of
      Stiefel's knowledge, threatened against Stiefel by any entity with respect
      to any of its Products or business; and

            (c)  Stiefel  is  neither  a party  to nor  otherwise  bound  by any
      agreement or instrument which prohibits or prevents it from performing its
      obligations under this Agreement.

                                   ARTICLE 9
                CONFIDENTIALITY AND NONSOLICITATION OF PERSONNEL
                ------------------------------------------------

      9.1  Confidentiality.  Each party hereto acknowledges that it has been and
will be exposed to certain "Confidential  Information" and "Trade Secrets" (both
as hereinafter  defined) of the other party in connection with the  transactions
contemplated  by this Agreement and that its  unauthorized  use or disclosure of
such  information  or data could cause  immediate and  irreparable  harm to such
other party. Accordingly,  except to the extent that it is necessary to use such
information or data to perform its  obligations  under this  Agreement,  neither
party  shall,  without the express  prior  written  consent of the other  party,
redistribute,  market, publish,  disclose or divulge to any person or entity, or
use or modify  for use,  directly  or  indirectly,  in any way for any person or
entity: (a) any of the other party's Confidential Information during the term of
this  Agreement  and for a period  of three (3) years  after any  expiration  or
termination of this Agreement; and (b) any of the other party's Trade Secrets at
any  time  during  which  such  information  constitutes  a trade  secret  under
applicable law. For purposes hereof,  "Confidential  Information" shall mean all
competitively sensitive,  non-public information (other than "Trade Secrets") of
or about a party which is not  generally  known by or  available to such party's
competitors,  and "Trade  Secrets"  shall mean "Trade  Secrets" as defined under
applicable law.

      9.2 Nonsolicitation of Personnel.  Neither party hereto shall, without the
prior written consent to the other party,  either directly or indirectly,  alone
or in conjunction with any other person or entity, solicit or attempt to solicit
any "key or  material"  employee,  consultant,  contractor  or personnel of such
other party to terminate, alter or lessen his or her affiliation with such other
party at any time during the term of this  Agreement and for a period of one (1)
year thereafter.

                                   ARTICLE 10
                             ARBITRATION OF DISPUTES
                             -----------------------

      10.1  All  disputes  arising  out of or in  connection  with  the  present
contract  shall  be  finally  settled  under  the  Rules of  Arbitration  of the
International  Chamber  of  Commerce  by one or more  arbitrators  appointed  in
accordance  with the said  Rules,  in  effect  at the  time the  arbitration  is
commenced. Such arbitration shall be conducted in a mutually convenient location
within an approximately  equal geographic  distance between the addresses of the
parties in effect. The decision of the arbitrators,  which may include interest,
shall be final and binding on the

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<PAGE>

parties  hereto  and may be  entered  and  enforced  in any  court of  competent
jurisdiction  by any party.  The  arbitration  shall be pursued  and  brought to
conclusion as rapidly as possible.

                                   ARTICLE 11
                                     NOTICES
                                     -------

      11.1 Delivery.  All notices,  consents,  requests and other communications
hereunder  shall be in writing and shall be sent by hand delivery,  by certified
or  registered  mail  (return-receipt  requested),  or by a recognized  national
overnight courier service as set forth below:

            If to INyX:       INyX, Inc.
                              Seymour Court
                              Manor Park
                              Runcorn, Cheshire WA7 1SY
                              Attention:

            If to Stiefel:    Stiefel Laboratories, Inc.
                              6290 Route 145
                              Oak Hill, New York 12460
                              Attention:  Purchasing Department

            With a copy to:   Stiefel Laboratories, Inc.
                              255 Alhambra Circle
                              Coral Gables, Florida 33143
                              Attention:  General Counsel

      11.2 Effective  Time.  Notices  delivered  pursuant hereto shall be deemed
given:  (a) at the time  delivered,  if  personally  delivered;  (b) at the time
received,  if mailed;  and (c) one (1) business day after timely delivery to the
courier, if by overnight courier service.

      11.3  Changes.  Either party hereto may change the address to which notice
is to be sent by  written  notice  to the  other  party in  accordance  with the
provisions of this Article 11.

                                   ARTICLE 12
                                  MISCELLANEOUS
                                  -------------

      12.1  Severability.  If any  provision  of  this  Agreement  is held to be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining  provisions shall not in any way be affected or impaired,  and the
parties  shall  use  their  best  efforts  to  substitute  a  valid,  legal  and
enforceable  provision,  which, insofar as practical,  implements the purpose of
this Agreement.

      12.2  Counterparts.  This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall be deemed one and the same instrument.

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<PAGE>

      12.3 Governing Law. This Agreement shall be governed by, and any matter or
dispute  arising  out of this  Agreement  shall be  determined  by,  the laws of
England.

      12.4 Headings;  Gender.  "Article," "Section" and other headings contained
in this  Agreement are for  reference  purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.  All personal pronouns used
in  this  Agreement  shall  include  the  other  genders,  whether  used  in the
masculine,  feminine or neuter gender, and the singular shall include the plural
and vice versa, whenever and as often as may be appropriate.

      12.5 Entire Agreement.  This Agreement  represents the entire agreement of
the parties with respect to its subject matter. Any and all prior discussions or
agreements  with respect  hereto are merged into and  superseded by the terms of
this Agreement. This Agreement may be modified or amended only in writing signed
by both parties which expressly refers to this Agreement and states an intention
to modify or amend it. No such  amendment or  modification  shall be effected by
use of any purchase order, acknowledgment, invoice or other form of either party
and in the event of conflict  between the terms of this  Agreement  and any such
form, the terms of this Agreement shall control.

      12.6 Notices.  Any notice or payment required or permitted hereunder shall
be in writing and sent by  certified  mail,  overnight  express,  or  personally
delivered, addressed to the party to receive the notice as set out above.

      12.7 No  Assignment.  Neither party hereto may assign this  Agreement,  in
whole or in part,  without the prior  written  consent of the other party (which
consent  shall not be  unreasonably  withheld  or  delayed),  and any  attempted
assignment not in accordance  herewith shall be null and void and of no force or
effect;  provided  that Stiefel may assign its rights (but not its  obligations)
hereunder to any of its subsidiaries.

      12.8 Binding Effect.  This Agreement shall be binding upon and shall inure
to the benefit of the parties  hereto and their  respective  successors,  heirs,
representatives and permitted assigns.

      12.9  Interpretation.  This Agreement was fully negotiated by both parties
hereto and shall not be  construed  more  strongly  against  either party hereto
regardless of which party is responsible for its preparation.  In the event of a
conflict or inconsistency between the Manufacturing and Supply Agreement between
the parties and this Agreement,  the relevant provision of the Manufacturing and
Supply  Agreement  shall be given  effect over the  relevant  provision  of this
Agreement.

      12.10 No Consequential Damages. Neither party to this Agreement shall have
any  liability  to the other party for any  consequential  or  indirect  damages
arising out of any breach of this Agreement, including, without limitation, loss
of profit, loss of use or business stoppage.

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      12.11 Further Assurances.  Upon the reasonable request of the other party,
each party hereto agrees to take any and all actions necessary or appropriate to
give effect to the terms set forth in this Agreement.

                            [Signature Page Follows]

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<PAGE>

      IN WITNESS  WHEREOF,  the parties hereto have caused their duly authorized
representatives  to execute  this  Agreement  as of the day and year first above
written.

                             "INyX"

                             INyX PHARMA LIMITED.

                             By: /S/ Colin Hunter
                                 ----------------
                                 Director

                             "Stiefel"

                             STIEFEL LABORATORIES, INC.

                             By: /S/ Tessie L. Brunker
                                 -----------------------------------------
                                 Title:  Vice President, CEO and Treasurer

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<PAGE>

                                    EXHIBIT A

                                 SPECIFICATIONS

                         TO BE PROVIDED BY STIEFEL LABS

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                                    EXHIBIT B

                       SCHEDULE OF DEVELOPMENT ACTIVITIES

I. Task Name:* * * Start Date Finish Date * * *

1.    Project definition and scope.

2.    Acquisition,  Testing, and Evaluation of drugs, excipients, and components
      as agreed by both parties.

3.    Formulation and manufacturing process assessments to facilitate production
      of the product by INyX.

4.    Assessment and  assistance,  as necessary,  in the development of mutually
      acceptable test methods required to secure health registrations.

5.    Development and Exhibit batch preparation.

6.    Development and preparation of necessary clinical supplies.

7.    Assistance,  as necessary  with  mutually  agreed  testing  activities  to
      support health registrations.

8.    Support in preparation and review of CMC documentation necessary to secure
      health registrations.

TOTAL DEVELOPMENT COST: * * *

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II. Task Name: * * * Start Date Finish Date * * *

1.    Project definition and scope.

2.    Acquisition,  Testing, and Evaluation of drugs, excipients, and components
      as agreed by both parties.

3.    Formulation and manufacturing process assessments to facilitate production
      of the product by INyX.

4.    Assessment and  assistance,  as necessary,  in the development of mutually
      acceptable test methods required to secure health registrations.

5.    Development and Exhibit batch preparation.

6.    Development and preparation of necessary clinical supplies.

7.    Assistance,  as necessary  with  mutually  agreed  testing  activities  to
      support health registrations.

8.    Support in preparation and review of CMC documentation necessary to secure
      health registrations.

TOTAL DEVELOPMENT COST: * * *

III.  Task Name: * * * Start Date * * * Finish Date * * *

1.    Project definition and scope.

2.    Acquisition, Testing, and Evaluation of drugs, excipients, and components
      as agreed by both parties.

3.    Formulation and manufacturing process assessments to facilitate production
      of the product by INyX.

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4.    Assessment and  assistance,  as necessary,  in the development of mutually
      acceptable test methods required to secure health registrations.

5.    Development and Exhibit batch preparation.

6.    Development and preparation of necessary clinical supplies.

7.    Assistance,  as necessary  with  mutually  agreed  testing  activities  to
      support health registrations.

8.    Support in preparation and review of CMC documentation necessary to secure
      health registrations.

TOTAL DEVELOPMENT COST: * * *

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                                    EXHIBIT C

                      DOCUMENTATION TO BE PROVIDED BY INyX

Documentation Required for the ANDA Submission:
-----------------------------------------------

o     cGMP Certification

o     o  Debarment Statement

o     Methods - Raw material and Products

o     Specifications  (Raw  material and  Products) - these may be updated based
      upon stability data, FDAs comment, etc.

o     Packaging component tests, specifications, and methods.

o     Batch records (manufacturing and packaging) for the exhibit batch with lab
      pages of testing performed and Certificates of Analysis ("COAs")

o     Proposed Commercial Manufacturing and Packaging Batch Records

o     COA,  lab pages,  and  manufacturer's  COA for the  active  ingredient/raw
      materials

o     Stability  data/reports - accelerated and long term (updated in accordance
      with the stability schedule)

o     Proposed Post Marketing Stability Protocol

o     Standard Operating Procedures (various)

o     Description of INyX facilities

o     Method Validation Package

Documentation Required for Production Batches

o     Releases of Raw Materials

o     Manufacturing and Packaging Batch Records

o     In-Process and Finished  Products  Testing Results  (including  COAs, Test
      Records, etc.)

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                                                                         Page 15Exhibit 10.01

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT ("Agreement"), dated February 14, 2005 (the
"Effective Date"), is entered into by and between R. Nicholas Singh (the
"Executive") and Annaly Mortgage Management, Inc., a Maryland corporation (the
"Company").

     WHEREAS, the Company desires to establish its right to the services of the
Executive upon the Effective Date, 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.

     NOW, THEREFORE, in consideration of the mutual promises and agreements
herein made and intending to be legally bound hereby, the parties agree to the
Employment Agreement in its entirety to read as follows:

     In consideration of the mutual agreements hereinafter set forth, the
Executive and the Company have agreed and do hereby agree as follows:

     1. Definitions. Capitalized terms used in this Agreement shall have the
respective meanings assigned to them below:

     1.1 "Book Value" of the Company shall be equal to the aggregate amounts
reported as Stockholders Equity on the Company's balance sheet as of the end of
each fiscal year determined in accordance with generally accepted accounting
principles (GAAP) but without taking into account any valuation reserves (i.e.,
changes in the value of the Company's portfolio of investments as a result of
mark-to-market valuation changes, referred to in the financial statements as
"Accumulated Other Comprehensive Gain or Loss").

     1.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.

     1.3 "Compensation Committee" shall mean the Compensation Committee of the
Board of Directors of the Company.

     1.4 "Good Reason" shall mean the occurrence of one or more of the following
without the Executive's written consent: (i) a material breach of this Agreement
by the Company, or (ii) a materially significant change in the Executive's
duties, authorities or responsibilities, or (iii) the relocation of the
Executive's principal place of employment more than 60 miles from New York, New
York, or (iv) the failure of the Company to obtain the assumption in writing of
its obligations to perform this Agreement by any successor to all or
substantially all of the assets or business of the Company within fifteen (15)
days upon a merger, consolidation, sale or similar transaction, provided however
that none of the events specified in (i), (ii) or (iii) shall constitute Good
Reason unless the Executive shall have notified the Company in writing
describing the events which constitute Good Reason and the Company shall have
failed to cure such event within a reasonable period, not to exceed thirty (30)
days, after the Company's actual receipt of such written notice.
<PAGE>

     2. Employment as Executive Vice President, General Counsel, Secretary and
Chief Compliance Officer of the Company. The Company hereby employs and engages
the Executive as Executive Vice President, General Counsel, Secretary and Chief
Compliance Officer of the Company, and the Executive does hereby accept and
agree to such employment and engagement. The Executive's duties as Executive
Vice President, General Counsel, Secretary and Chief Compliance Officer shall be
such duties typically required of executive vice presidents, general counsels,
secretaries and chief compliance officers, and as shall from time to time be
agreed upon by the Executive and the Board of Directors of the Company. The
Executive shall report solely and directly to the Chief Executive Officer. The
Executive's services shall be performed in the Company's offices in New York,
New York or such other location as the Company and Executive shall agree. Except
for periods of Disability (as defined below), during the Term, the Executive
shall devote substantially all of his business time, attention and energies to
the performance of his duties under this Agreement; provided, however, that the
Executive shall be allowed, to the extent such activities do not substantially
interfere with the performance by the Executive of his duties and
responsibilities hereunder, (a) to manage the Executive's personal, financial
and legal affairs, and (b) serve on civic or charitable boards or committees.
Furthermore, the Executive shall exercise due diligence and care in the
performance of his duties to the Company under this Agreement.

     3. Term of Agreement.

     (a) Effective Date. The term ("Term") of this Agreement shall commence as
of the Effective Date and shall continue through the second anniversary of the
Effective Date. From and after such second anniversary and upon each anniversary
thereafter, the Term of the Agreement shall automatically be extended for
successive one-year periods unless, not later than three months prior to such
second anniversary or any subsequent anniversary, as applicable, either party
shall have given written notice to the other that it does not wish to extend the
Term of the Agreement.

     4. Compensation.

     (a) Base Salary. The Company shall pay the Executive, and the Executive
agrees to accept from the Company, in payment for his services to the Company, a
base salary equal to a per annum amount of $300,000 ("Base Salary"), payable in
equal biweekly installments or at such other time or times as the Executive and
the Company shall agree. The Base Salary can be increased (but not decreased) at
any time by the Compensation Committee or the Board of Directors of the Company,
as the case may be. The Executive's salary as increased shall be deemed to be
the Base Salary for all purposes under this Agreement.

     (b) Performance Bonus. With respect to each fiscal year, the Executive
shall be eligible to receive an amount equal to the sum of: (A) the excess, if
any, of (i) 0.030% of the Book Value of the Company for such fiscal year over
(ii) the Executive's Base Salary as of the last day of such fiscal year;
provided, however, that the Compensation Committee must approve such amount,
plus (B) additional amounts as may be recommended by management and approved by
the Compensation Committee (such sum being the "Performance Bonus").

                                       2
<PAGE>

     (c) Annual Review. The Board of Directors shall, at least annually, review
the Executive's entire compensation package to determine if it should be
increased (but not decreased) in order for it to continue to meet the Company's
compensation objectives.

     5. Fringe Benefits. The Executive shall be entitled to participate in any
benefit programs adopted from time to time by the Company for the benefit of its
senior executive employees, and the Executive shall be entitled to receive such
other fringe benefits as may be granted to his from time to time by the
Compensation Committee or the Board of Directors of the Company, as the case may
be.

     (a) Benefit Plans. The Executive shall be entitled to participate in any
benefit plans relating to stock options, stock purchases, awards, pension,
thrift, profit sharing, life insurance, medical coverage, education, or other
retirement or employee benefits available to other senior executive employees of
the Company, subject to any restrictions (including waiting periods) specified
in such plans.

     (b) Vacation. The Executive shall be entitled to such number of weeks of
paid vacation per calendar year as determined by the Board of Directors of the
Company after review of industry standards, but shall in no event be entitled to
fewer than five weeks of paid vacation per calendar year.

     6. Business Expenses. The Company shall reimburse the Executive for any and
all necessary, customary and usual expenses, properly receipted in accordance
with Company policies, incurred by Executive on behalf of the Company.

     7. Termination of Executive's Employment.

     (a) Death. If the Executive dies while employed by the Company, his
employment shall immediately terminate. The Company's obligation to pay the
Executive's Base Salary shall cease as of the date of Executive's death, except
that any earned, but unpaid Base Salary and Performance Bonus shall be paid to
the Executive's beneficiaries as soon as practicable after his death. In
addition, the Executive's beneficiaries shall receive the pro rata portion of
the Performance Bonus for the year of the Executive's death, which shall be
equal to the Performance Bonus (as determined at the end of the year of the
Executive's death) multiplied by a ratio equal to (A) the number of days the
Executive was employed in the year of his death, divided by (B) 365. The
Performance Bonus shall be paid to the Executive's beneficiaries at the same
time and in the same manner as such Performance Bonus would have been paid to
the Executive had the Executive not died or been terminated. Thereafter,
Executive's beneficiaries or his estate shall receive benefits in accordance
with the Company's retirement, insurance and other applicable programs and plans
then in effect.

     (b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness ("Disability"), Executive shall have been absent from
the full-time performance of his duties with the Company for six (6) consecutive
months, and, within thirty (30) days after written notice is provided to him by
the Company, the Executive shall not have returned to the full-time performance
of his duties, the Executive's employment under this Agreement may be terminated
by the Company for Disability. With respect to the period during which begins
when the Executive is first absent from the full-time performance of his duties
with the Company due to Disability and ends upon the later of (i) the date he is
terminated from employment in accordance with the foregoing sentence, or, (ii)
the date he begins receiving long-term disability payments under the Company's
long term disability plan for senior executives ("Salary Continuation Period"),
the Company shall continue to pay the Executive his Base Salary at the rate in
effect at the commencement of such period of Disability. In addition, the
Executive shall receive the pro rata portion of the Performance Bonus for the
year of the Executive's termination due to Disability, which shall be equal to
the Performance Bonus (as determined at the end of the year in which the
Executive is terminated by reason of Disability) multiplied by a ratio equal to
(A) the number of days the Executive was employed in the year of his termination
for Disability, divided by (B) 365. The Performance Bonus shall be paid to the
Executive at the same time and in the same manner as such Performance Bonus
would have been paid had the Executive not been terminated by reason of
Disability. Upon the end of the Salary Continuation Period, the Executive's
benefits shall be determined under the Company's retirement, insurance and other
compensation programs then in effect in accordance with the terms of such
programs

                                       3
<PAGE>

     (c) Termination by the Company for Cause. The Company may terminate the
Executive's employment under this Agreement for "Cause," at any time prior to
expiration of the Term of the Agreement, only in the event of (i) the
Executive's failure to substantially perform the duties described in this
Agreement, (ii) acts or omissions constituting recklessness or willful
misconduct on the part of the Executive in respect of his fiduciary obligations
to the Company which is materially and demonstrably injurious to the Company, or
(iii) the Executive's conviction for fraud, misappropriation or embezzlement in
connection with the assets of the Company. In the case of clause (i) only, it
shall also be a condition precedent to the Company's right to terminate the
Executive's employment for Cause that (1) the Company shall first have given the
Executive written notice stating with specificity the reason for the termination
("breach") at least 60 days before the meeting of the Board of Directors called
to make such determination and the Executive and his counsel are given the
opportunity to answer such grounds for termination in person, at a hearing or in
writing delivered to the Chairman of the Board, in the Executive's discretion,
before a vote by the Board of Directors on the existence of Cause; and (2) if
such breach is susceptible to cure or remedy, a period of 60 days from and after
the giving of the notice described in (1) shall have elapsed without the
Executive having effectively cured or remedied such breach during such 30-day
period, unless such breach cannot be cured or remedied within 60 days, in which
case the period for remedy or cure shall be extended for a reasonable time (not
to exceed an additional 30 days), provided the Executive has made and continues
to make a diligent effort to effect such remedy or cure. In the case of clause
(iii) above, the Executive's employment under this Agreement may be terminated
immediately without any advance written notice. Upon a determination that
grounds exist for a termination for Cause by the Board of Directors and that the
breach cannot be cured, or immediately in the case of clause (iii) above, the
Company's obligation to pay the Executive's Base Salary, any Performance Bonus
and benefits shall immediately cease, except to the extent any Base Salary or
Performance Bonus has been earned but has not yet been paid.

     7.2. Termination by the Executive. The Executive may at any time during the
Term of this Agreement terminate his employment hereunder for any reason or no
reason by giving the Company notice in writing not less 90 days in advance of
such termination. The Executive shall have no further obligations to the Company
after the effective date of his termination, as set forth in the notice. In the
event of a termination by the Executive under this Section, the Company will pay
only the portion of Base Salary or previously awarded Performance Bonus unpaid
as of the termination date. Benefits which have accrued and/or vested on the
termination date will continue in effect according to their terms, but no
additional accrual or vesting will take place. Notwithstanding the foregoing, if
the Executive terminates his employment for Good Reason, the notice period
provided in Section 7.2 above shall not apply and the Executive will be entitled
to the severance detailed in Section 8.

                                       4
<PAGE>

     8. Compensation Upon Termination by the Company Other Than for Cause or
Upon Termination by the Executive for Good Reason. If the Executive's employment
shall be terminated by the Company other than for Cause or by the Executive for
Good Reason, the Executive shall be entitled to the following benefits:

     (a) Payment of Unpaid Base Salary. The Company shall immediately pay the
Executive any portion of the Executive's Base Salary or previously awarded
Performance Bonus not paid prior to the termination date.

     (b) Severance Payment. The Company shall pay the Executive an amount (the
"Severance Amount") equal to three (3) times the greater of (i) the Executive's
combined Base Salary and actual Performance Bonus for the preceding fiscal year
or (ii) the average for the three preceding years of the Executive's combined
actual Base Salary and Performance Bonus. Fifty percent of the Severance Amount
shall be paid within five (5) days after the date the Executive terminates for
Good Reason or is terminated by the Company for any reason other than Cause, and
the remaining 50% of the Severance Amount shall be paid in three equal monthly
installments beginning on the first business day of the month following the
month of such termination.

     (c) Immediate Vesting of Stock Options. The Company shall take all
appropriate action to ensure that all stock options on the Company's stock owned
by the Executive as of his termination date, and which have not been exercised
prior to the termination date become immediately exercisable by the Executive,
whether or not the right to exercise such stock options would otherwise then be
vested in the Executive, provided, however, an option that is an incentive stock
option within the meaning of Code Section 422(b) ("ISO") shall not be
exercisable for the first time in a calendar year to the extent that the
aggregate fair market value of stock (as determined under Code Section
422(b)(3)) with respect to which ISO's are exercisable by the Executive during
such calendar year exceeds $100,000. The provisions of this Section 7(c) shall
constitute an amendment to any existing stock option agreements (including award
certificates) of the Company as of the termination date.

     (d) Maximization of Payment in the Event of a Change in Control. The
Company shall make the payments and provide the benefits to be paid and provided
under this Agreement; provided, however, that if all or any portion of the
payments and benefits provided under this Agreement, either alone or together
with other payments and benefits which the Executive receives or is then
entitled to receive from the Company or otherwise, would constitute a "parachute
payment" within the meaning of Section 280G of the Code (or a similar or
successor provision), the Company shall reduce such payments hereunder and such
other payments to the extent necessary so that no portion thereof shall be
subject to the excise tax imposed by Section 4999 of the Code (or a similar or
successor provision); but only if, by reason of such reduction, the net
after-tax benefit to the Executive shall exceed the net after-tax benefit if
such reduction were not made. The payments or benefits shall be reduced in the
manner and order determined by the Executive, subject to the consent of the
Company, which consent shall not be unreasonably withheld. The determination of
whether the payments shall be reduced as provided in this Section 8(d) and the
amount of such reduction shall be made at the Company's expense by a public
accounting firm retained by the Company at the time the calculation is to be
performed, or one selected by the Company from among the four (4) largest public
accounting firms in the United States (the "Accounting Firm"). The Accounting
Firm shall provide its determination, together with detailed supporting
calculations and documentation to the Company and the Executive within twenty
(20) business days of the payment of the initial installment of the Severance
Amount. The Executive may review these calculations for a period of twenty days
and may retain another accounting firm (at his own expense) for such review and
submit objections during such twenty-day review period.

                                       5
<PAGE>

     (e) No Other Entitlement to Benefits Under Agreement. Except as set forth
in Section 7 or Section 8 of this Agreement, following a termination governed by
Section 7 or Section 8, the Executive shall not be entitled to any other
compensation or benefits, except as may be separately negotiated by the parties
and approved by the Board of Directors of the Company in writing in conjunction
with the termination of Executive's employment.

     9. Noncompetition Provisions.

     (a) Noncompetition. The Executive agrees that during the Term of employment
under this Agreement prior to any termination of his employment hereunder and,
in the event of termination of the Executive's employment by the Company for
Cause or voluntary termination of employment by the Executive (other than for
Good Reason), for a period of one year following such termination, the Executive
will not, directly or indirectly, without the prior written consent of the
Company, manage, operate, join, control, participate in, or be connected as a
stockholder (other than as a holder of shares publicly traded on a stock
exchange or the NASDAQ National Market System), partner, or other equity holder
with, or as an officer, director or employee of, any private or public
investment firm, broker dealer or real estate investment trust whose business
strategy is based on or who engages in the trading, sales or management of
mortgage-backed securities (the "Business") in any geographical region in which
the Company engages in the Business (a "Competitor"). It is further expressly
agreed that the Company will or would suffer irreparable injury of the Company
in violation of the preceding sentence of this Agreement and that the Company
would by reason of such competition be entitled to injunctive relief in a court
of appropriate jurisdiction, and the Executive further consents and stipulates
to the entry of such injunctive relief in such a court prohibiting the Executive
from competing with the Company or any subsidiary or affiliate of the Company,
in the areas of business set forth above, in violation of this Agreement.

     (b) Right to Company Materials. The Executive agrees that all styles,
designs, lists, materials, books, files, reports, correspondence, records, and
other documents ("Company Materials") used, prepared, or made available to the
Executive in connection with his employment by the Company shall be and shall
remain the property of the Company. Upon the termination of employment or the
expiration of the Term of employment under this Agreement, all Company Materials
shall be returned immediately to the Company, and the Executive shall not make
or retain any copies thereof.

                                       6
<PAGE>

     (c) Soliciting Executives. The Executive promises and agrees that he will
not directly or indirectly solicit any of the Company Executives to work for any
Competitor during the one-year period following his termination of employment
unless such termination is by the Company for reasons other than Cause or by the
Executive for Good Reason.

     (d) Corporate Opportunities. The Executive agrees, in accordance with
Maryland law, to first offer to the Company corporate opportunities learned of
solely as a result of his service as an officer and director of the Company.

     10. Notices. All notices and other communications under this Agreement
shall be in writing and shall be given by fax or first class mail, certified or
registered with return receipt requested, and shall be deemed to have been duly
given three (3) days after mailing or twenty-four (24) hours after transmission
of a fax to the respective persons named below:

                  If to the Company:    Michael A. J. Farrell
                                        Chairman and Chief Executive Officer
                                        Annaly Mortgage Management, Inc.
                                        1211 Avenue of the Americas
                                        Suite 2902
                                        New York, NY 10036
                                        Phone: (212) 696-0100
                                        Fax:  (212) 696-9809
                  If to the Executive:  R. Nicholas Singh
                                        11520 Front Field Lane
                                        Potomac, MD 20854
                                        Phone: (301) 983-4829

Either party may change such party's address for notices by notice duly
given pursuant hereto.

     11. Attorneys' Fees. In the event judicial determination or arbitration (as
provided in Section 22) is necessary for any dispute arising as to the parties'
rights and obligations hereunder, the Company shall pay to the Executive his
costs incurred (including attorney's fees) in deciding such dispute provided
that he has substantially prevailed.

     12. No Mitigation or Offset. The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise. The Company shall not be entitled to set off
against the amounts payable to the Executive under this Agreement any amounts
earned by the Executive in other employment after termination of employment with
the Company, or any amounts which might have been earned by the Executive in
other employment had such other employment been sought.

                                       7
<PAGE>

     13. Termination of Prior Agreements. This Agreement terminates and
supersedes any and all prior agreements and understandings between the parties
with respect to employment or with respect to the compensation of the Executive
by the Company.

     14. Assignment; Successors. This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder; provided that,
in the event of the merger, consolidation, transfer, or sale of all or
substantially all of the assets of the Company with or to any other individual
or entity, this Agreement shall, subject to the provisions hereof, be binding
upon and inure to the benefit of such successor and such successor shall
discharge and perform all the promises, covenants, duties, and obligations of
the Company hereunder.

     15. Governing Law. This Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under and in
accordance with the laws of the State of New York.

     16. Entire Agreement; Headings. This Agreement embodies the entire
agreement of the parties respecting the matters within its scope and may be
modified only in writing. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

     17. Waiver; Modification. Failure to insist upon strict compliance with any
of the terms, covenants, or conditions hereof shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.

     18. Severability. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any statute or
public policy, only the portions of this Agreement that violate such statute or
public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and effect.
Further, any court order striking any portion of this Agreement shall modify the
stricken terms as narrowly as possible to give as much effect as possible to the
intentions of the parties under this Agreement.

     19. Indemnification; Directors and Officers Insurance. The Company shall
indemnify and hold Executive harmless to the maximum extent permitted by Section
2-418 of the Maryland General Corporations Law or its successor statute. During
the Term and for six years following the date of the Executive's termination as
an officer of the Company, the Company (or any successor thereto) shall provide
comprehensive coverage under the Company's officers and directors insurance
policy (or policies) on substantially the same terms and levels that it provides
to its senior executive officers, at the Company's sole cost.

     20. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

                                       8
<PAGE>
     21. Successor Sections. References herein to sections, rules or regulations
of the Code or other applicable law shall be deemed to include any successor
sections, rules or regulations.

     22. Arbitration. Any dispute, claim or controversy arising out of or in
relation to this Agreement, which the Executive and the Company are unable to
resolve shall be determined by the decision of a board of arbitration consisting
of three (3) members (the "Board of Arbitration") selected by the American
Arbitration Association upon application made to it for such purpose by either
the Company or the Executive. The arbitration proceedings shall take place in
New York, New York or such other place as shall be agreed to by the parties. The
Board of Arbitration shall reach and render a decision in writing. In connection
with rendering its decision, the Board of Arbitration shall adopt and follow
such rules and procedures as a majority of the members of the Board of
Arbitration deems necessary or appropriate. Any award shall be rendered on the
basis of the substantive law governing this Agreement and shall be concurred in
by a majority of the arbitrators. To the extent practical, decisions of the
arbitrators shall be rendered no more than thirty (30) calendar days following
commencement of the arbitration proceedings with respect thereto.

     Any decision made by the Board of Arbitration (either prior to or after the
expiration of such thirty (30) calendar day period) shall be final, binding and
conclusive on the Executive and the Company and entitled to be enforced to the
fullest extent permitted by law and entered in any court of competent
jurisdiction. The Company shall bear all of the costs of arbitration, except for
the attorneys' fees incurred by the Executive, which fees shall be subject to
Section 11 hereof.

                [REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK]

                                       9
<PAGE>
     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and the Executive has hereunto signed this
Agreement, as of the date first above written.

                                ANNALY MORTGAGE MANAGEMENT, INC.

                                By: /s/ Michael A.J. Farrell
                                    --------------------------------------------
                                     Michael A.J. Farrell

                                By:  /s/ R. Nicholas Singh
                                    --------------------------------------------
                                     R. Nicholas Singh

                                       10

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