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    AMENDED
      AND RESTATED

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
      entered into as of the 1st day of January, 2008, by and between MFA MORTGAGE
      INVESTMENTS, INC., a Maryland corporation ("MFA"), and TERESA
      D.
      COVELLO, residing at the address set forth on the signature page hereof (the
      "Executive").

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      MFA and the Executive entered into an employment agreement effective as of
      January 1, 2006 (the "Employment Agreement");

     

    WHEREAS,
      prior to such time as the Employment Agreement is required to be in documentary
      compliance with the requirements of Section 409A of the Code, MFA and the
      Executive desire to amend the terms of the Executive's employment and extend
      the
      period of employment set forth in the Employment Agreement to December 31,
      2009 on the terms and conditions set forth in this Agreement; and

     

    WHEREAS,
      the Executive wishes to continue serving MFA and MFA wishes to secure the
      continued exclusive services of the Executive under the terms and conditions
      described below.

     

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual agreements
      herein contained, the parties hereto agree to amend and restate the Employment
      Agreement in its entirety to read as follows:

     

    1. Term
      of
      Employment.

     

    (a) MFA
      hereby employs the Executive, and the Executive hereby accepts employment with
      MFA, in the positions and with the duties and responsibilities as set forth
      in
      Paragraph 2 below for the Term of Employment, subject to the terms and
      conditions of this Agreement.

     

    (b) The
      term
      of employment (the "Term of Employment")
      under this Agreement shall include the Initial Term and each Renewal
      Term.  The Initial Term shall commence as of January 1, 2008 and
      shall continue until December 31, 2009.  The Term of Employment
      shall automatically renew for a one-year period (each such renewal, a "Renewal
      Term") at the end of the Initial Term and each Renewal Term, unless either
      party
      shall give notice to the other not less than six months prior to the end of
      the
      Initial Term or any Renewal Term, as the case may be, of her or its intent
      not
      to renew such Initial Term or Renewal Term, as the case may
      be.  Notwithstanding the foregoing sentences of this
      Paragraph 1(b), the Term of Employment may be terminated before the
      expiration of the Initial Term or any Renewal Term in accordance with
      Paragraph 5 hereof.

     

    2. Position;
      Duties and
      Responsibilities.

     

    (a) During
      the Term of Employment, the Executive shall be employed as Senior Vice
      President, Chief Accounting Officer and Treasurer of MFA, reporting to the
      Chief
      Financial Officer of MFA (the "CFO"), with
      such
      duties and day-to-day management responsibilities as are customarily performed
      by persons holding such offices at similarly situated mortgage REITs and such
      other duties as may be mutually agreed upon between the Executive and the Chief
      Executive Officer of MFA (the "CEO") and/or
      the
      CFO.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (b) During
      the Term of Employment, the Executive shall, without additional compensation,
      also serve on the board of directors of, serve as an officer of, and/or perform
      such executive and consulting services for, or on behalf of, such subsidiaries
      or affiliates of MFA as the CEO, the CFO and/or the Board of Directors of MFA
      (the "Board of
      Directors") may, from time to time, request.  MFA and such
      subsidiaries and affiliates are hereinafter referred to, collectively, as the
      "Company."  For
      purposes of this Agreement, the term "affiliate" shall have the meaning ascribed
      thereto in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
      (the "Act").

     

    (c) During
      the Term of Employment, the Executive shall serve MFA faithfully, diligently
      and
      to the best of her ability and shall devote substantially all of her time and
      efforts to her employment and the performance of her duties under this
      Agreement.  Nothing herein shall preclude the Executive from engaging
      in charitable and community affairs and managing her personal financial and
      legal affairs, so long as such activities do not materially interfere with
      her
      carrying out her duties and responsibilities under this Agreement.

     

    3. Compensation.

     

    (a) Base
      Salary.  During the Term of Employment, MFA shall pay to the
      Executive a base salary (the "Base Salary") equal
      to $250,000 per annum.  The Base Salary shall be paid in accordance
      with MFA's normal payroll practices.

     

    (b) Performance
      Bonus.  The Executive shall be eligible to receive an annual
      performance bonus in such amount, in such manner and at such time as shall
      be
      recommended by the CEO and/or the CFO and approved by the Compensation Committee
      of the Board of Directors (the "Compensation
      Committee") or the Board of Directors, as the case may be.

     

    (c) Equity
      Compensation.  The Executive shall be eligible to receive such
      stock option, restricted stock, phantom share or dividend equivalent rights
      ("DERs") grants
      or other equity awards as the Compensation Committee or the Board of Directors,
      as the case may be, shall deem appropriate.

     

    (d) Discretion
      to Increase
      Compensation.  Nothing in this Agreement shall preclude the
      Board of Directors or the Compensation Committee from increasing or considering
      increasing the Executive's compensation during the Term of
      Employment.  The Base Salary as adjusted to reflect any increase shall
      be the Base Salary for all purposes of this Agreement.

     

    4. Employee
      Benefit Programs
      and Fringe Benefits.

     

    During
      the Term of Employment, the Executive shall be entitled to four weeks of
      vacation each calendar year and to participate in all executive incentive and
      employee benefit programs of MFA now or hereafter made available to MFA's senior
      executives or salaried employees generally, as such programs may be in effect
      from time to time.  MFA shall reimburse the Executive for any and all
      necessary, customary and usual business expenses, properly receipted in
      accordance with MFA's policies, incurred by the Executive in connection with
      her
      employment.

     

    5. Termination
      of
      Employment.

     

    (a) Termination
      Due to Death or
      Disability.  If the Executive's employment is terminated during
      the Term of Employment by reason of the Executive's death or Disability, the
      Executive's Term of Employment shall terminate automatically without further
      obligations to the Executive, her legal representative or her estate, as the
      case may be, under this Agreement except for (i) any compensation earned
      but not yet paid, including and without limitation, any amount of Base Salary
      accrued or earned but unpaid and any other payments 

     

     

    
      
        
        

      

      
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    payable
      to the Executive pursuant to Paragraph 5(e) below, which amounts shall be
      promptly paid in a lump sum to the Executive, her legal representative or her
      estate, as the case may be, and (ii) continued payment on a monthly basis
      of the Executive's then current Base Salary for a period of one year following
      the date of such termination, which shall be paid to the Executive, her legal
      representative or her estate, as the case may be.  In the event of
      such termination due to her Disability, the Executive's health insurance
      coverage shall be continued at MFA's expense for the duration of such
      Disability; provided, that, if such coverage cannot be provided under MFA's
      health insurance policy for the duration of such Disability, such coverage
      or
      the cost of comparable coverage shall be provided by MFA until the Executive's
      attainment of age 65 or such later date through which coverage is permissible
      under MFA's health insurance policy.

     

    (b) Termination
      Without Cause or
      for Good Reason.  In the event the Executive's employment is
      terminated by MFA without Cause (which shall not include any non-renewal of
      this
      Agreement by MFA pursuant to Paragraph 1(b)) or by the Executive for Good
      Reason, unless any such termination is preceded by the Executive's giving notice
      of her determination not to renew the Initial Term or any Renewal Term pursuant
      to Paragraph 1(b), the Executive shall be entitled to both continued
      payments of her then current Base Salary and continued health insurance coverage
      at MFA's expense, until the later to occur of (i) the expiration of the
      Term of Employment or (ii) the first anniversary of such termination of
      employment, such Base Salary being payable at the same time such amounts would
      have been payable to the Executive had her employment not
      terminated.

     

    (c) Termination
      by MFA for Cause
      or Voluntary Termination by the Executive.  In the event the
      Executive's employment is terminated by MFA for Cause or is terminated by the
      Executive on her own initiative for other than a Good Reason (including pursuant
      to Paragraph 1(b)), the Executive shall be entitled to any compensation
      earned but not yet paid, including and without limitation, any amount of Base
      Salary accrued or earned but unpaid and any other payments payable to the
      Executive pursuant to Paragraph 5(e) below, as of the date of
      termination.

     

    (d) Termination
      Related to
      Change in Control.  In the event of (1) the termination of
      the Executive's employment by MFA without Cause (which shall include any
      non-renewal of this Agreement by MFA pursuant to Paragraph 1(b)) that occurs
      both within two months before a Change in Control and following the occurrence
      of a Pre-Change-in-Control Event, (2) the resignation of her employment by
      the Executive for any reason within three months following a Change in Control
      or (3) the termination of the Executive's employment by MFA other than for
      Cause (which shall include any non-renewal of this Agreement by MFA pursuant
      to
      Paragraph 1(b)) or the Executive's resignation of her employment for Good Reason
      within twelve months following a Change in Control:

     

    (i) MFA
      shall
      pay to Executive in a lump sum, within 30 days following the termination of
      employment, an amount equal to 250% of the sum of (a) the Executive's then
      current Base Salary and (b) the Executive's highest bonus for the two
      preceding years;

     

    (ii) all
      of
      the Executive's outstanding restricted stock, phantom shares and stock options
      shall immediately vest in full and such options shall remain exercisable, and
      any dividend equivalents associated therewith shall continue to be payable,
      until the earlier of (a) 90 days following the date of such termination and
      (b)
      the date on which each such option would have expired had the Executive’s
      employment not terminated; and

     

    (iii) the
      Executive and her immediate family shall continue to participate in all health,
      life insurance, retirement and other benefit programs at MFA's expense for
      the
      balance of the Term of Employment, to the same extent as though the Executive's
      employment had not terminated.

     

     

    
      
        
        

      

      
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    The
      Executive, in her sole and absolute discretion, may elect to reduce any such
      payment in order to avoid imposition of the excise tax under Section 4999
      of the Code.

     

    (e) Other
      Payments.  Upon the termination of the Executive's employment,
      in addition to the amounts payable under any Paragraph above, the Executive
      shall be entitled to receive the following:

     

    (i) any
      annual bonus earned during one or more preceding years but not
      paid;

     

    (ii) any
      vested deferred compensation (including any interest accrued on or appreciation
      in value of such deferred amounts);

     

    (iii) reimbursement
      for reasonable business expenses incurred but not yet reimbursed by MFA;
      and

     

    (iv) any
      other
      benefits to which the Executive or her legal representative may be entitled
      under the 2004 Equity Compensation Plan and under all other applicable plans
      and
      programs of MFA, as provided in Paragraph 4 above.

     

    (v) upon
      the
      termination of the Executive's employment pursuant to Paragraphs 5(a) or 5(b)
      above, all of the Executive's outstanding restricted stock, phantom shares
      and
      stock options shall immediately vest in full and such options shall remain
      exercisable, and any dividend equivalents associated therewith shall continue
      to
      be payable until the earlier of (a) 90 days following the date of such
      termination and (b) the date on which each such option would have expired had
      the Executive's employment not terminated.

     

    (f) No
      Mitigation; No
      Offset.  In the event of any termination of the Executive's
      employment under this Agreement, she shall be under no obligation to seek other
      employment or otherwise in any way to mitigate the amount of any payment
      provided for in this Paragraph 5, and there shall be no offset against
      amounts due her under this Agreement on account of any remuneration attributable
      to any subsequent employment that she may obtain.

     

    (g) Payments
      Subject to
      Section 409A.  Notwithstanding anything herein to the
      contrary, the Executive shall not be entitled to any payment pursuant to this
      Paragraph 5 prior to the earliest date permitted under Section 409A of
      the Code, and applicable Treasury regulations thereunder.  To the
      extent any payment pursuant to this Paragraph 5 is required to be delayed
      six months pursuant to the special rules of Section 409A related to
      "specified employees," each affected payment shall be delayed until six months
      after the Executive's termination of employment.  Each party to this
      Agreement intends and agrees that this Agreement shall be modified in a timely
      manner, as mutually agreed by both parties, to comply with Section 409A of
      the Code and the regulations thereunder.

     

    (h) Mutual
      Release.  MFA’s obligation to make any payment or provide any
      benefit pursuant to this Paragraph 5 shall be contingent upon, and is the
      consideration for, the Executive executing and delivering to MFA a general
      release (the “Release”), substantially in the form annexed hereto as Exhibit A,
      releasing MFA, and all current and former members, officers and employees of
      MFA, from any claims relating to the Executive’s employment hereunder, other
      than claims relating to continuing obligations under, or preserved by, (x)
      this

     

     

    
      
        
        

      

      
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    Agreement
      or (y) any compensation or benefit plan, program or arrangement in which the
      Executive was participating as of the date of termination of her employment,
      and
      no such amounts shall be provided until the Executive executes and delivers
      to
      MFA a letter which provides that the Executive had not revoked such Release
      after seven days following the date of the Release.  The Release shall
      also be executed by MFA and delivered to the Executive as part of the
      consideration for the Executive’s execution and delivery of the Release, and,
      except as otherwise provided under the terms of the Release, shall release
      the
      Executive from any and all claims MFA may have against the
      Executive.

     

    6. Definitions.

     

    For
      purposes of this Agreement, the following terms shall be defined as set forth
      below:

     

    (a) Cause.  "Cause"
      shall mean the Executive's (i) conviction, or entry of a guilty plea or a
      plea of nolo contendre with respect to, a felony, a crime of moral turpitude
      or
      any crime committed against MFA, other than traffic violations;
      (ii) engagement in willful misconduct, willful or gross negligence, or
      fraud, embezzlement or misappropriation relating to significant amounts, in
      each
      case in connection with the performance of her duties under this Agreement;
      (iii) failure to adhere to the lawful directions of the CEO, the CFO and/or
      the Board of Directors that are reasonably consistent with her duties and
      position provided for herein; (iv) breach in any material respect of any of
      the provisions of Paragraph 7 of this Agreement resulting in material and
      demonstrable economic injury to MFA; (v) chronic or persistent substance
      abuse that materially and adversely affects her performance of her duties under
      this Agreement or (vi) breach in any material respect of the terms and
      provisions of this Agreement resulting in material and demonstrable economic
      injury to MFA.  Notwithstanding the foregoing, (i) the Executive
      shall be given written notice of any action or failure to act that is alleged
      to
      constitute Cause (a "Default"), and an
      opportunity for 20 business days from the date of such notice in which to
      cure such Default, such period to be subject to extension in the discretion
      of
      the CEO or, in her absence, the Board of Directors and (ii) regardless of
      whether the Executive is able to cure any Default, the Executive shall not
      be
      deemed to have been terminated for Cause without (x) reasonable prior
      written notice to the Executive setting forth the reasons for the decision
      to
      terminate the Executive for Cause, (y) an opportunity for the Executive,
      together with her counsel, to be heard by the CEO or, in her absence, the Board
      of Directors and (z) delivery to the Executive of a notice of termination
      approved by said CEO or, in her absence, the Board of Directors, stating her
      or
      its good faith opinion that the Executive has engaged in actions or conduct
      described in the preceding sentence, which notice specifies the particulars
      of
      such action or conduct in reasonable detail; provided, however, MFA may suspend
      the Executive with pay until such time as her right to appear before the CEO
      or
      the Board of Directors, as the case may be, has been exercised, so long as
      such
      appearance is within two weeks of the date of suspension.

     

    (b) Change
      in
      Control.  A "Change in Control" shall mean the occurrence of
      any one of the following events:

     

    (i) any
      "person", as such term is used in Sections 13(d) and 14(d) of the Act
      (other than MFA, any of its affiliates or any trustee, fiduciary or other person
      or entity holding securities under any employee benefit plan or trust of MFA
      or
      any of its affiliates) together with all affiliates and "associates" (as such
      term is defined in Rule 12b-2 under the Act) of such person, shall become
      the "beneficial owner" (as such term is defined in Rule 13d-3 under the
      Act), directly or indirectly, of securities of MFA representing 30% or more
      of
      either (A) the combined voting power of MFA's then outstanding securities
      having the right to vote in an election of the Board of Directors ("voting securities")
      or (B) the then outstanding shares of common stock of MFA ("Shares") (in
      either such case other than as a result of an acquisition of securities directly
      from MFA); or

     

     

    
      
        
        

      

      
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    (ii) persons
      who, as of the effective date of this Agreement, constitute MFA's Board of
      Directors (the "Incumbent Directors")
      cease for any reason, including, without limitation, as a result of a tender
      offer, proxy contest, merger or similar transaction, to constitute at least
      a
      majority of the Board of Directors, provided that any person becoming a Director
      of MFA subsequent to the effective date whose election or nomination for
      election was approved by a vote of at least a majority of the Incumbent
      Directors shall, for purposes of this Agreement, be considered an Incumbent
      Director; or

     

    (iii) there
      shall occur (A) any consolidation or merger of MFA or any subsidiary where
      the stockholders of MFA, immediately prior to the consolidation or merger,
      would
      not, immediately after the consolidation or merger, beneficially own (as such
      term is defined in Rule 13d-3 under the Act), directly or indirectly,
      shares representing in the aggregate 60% or more of the voting securities of
      the
      corporation issuing cash or securities in the consolidation or merger (or of
      its
      ultimate parent corporation, if any), (B) any sale, lease, exchange or
      other transfer (in one transaction or a series of transactions contemplated
      or
      arranged by any party as a single plan) of all or substantially all of the
      assets of MFA or (C) any plan or proposal for the liquidation or
      dissolution of MFA.

     

    Notwithstanding
      the foregoing, a "Change in Control" shall not be deemed to have occurred for
      purposes of the foregoing clause (i) solely as the result of an acquisition
      of securities by MFA which, by reducing the number of Shares or other voting
      securities outstanding, increases (x) the proportionate number of Shares
      beneficially owned by any person to 30% or more of the Shares then outstanding
      or (y) the proportionate voting power represented by the voting securities
      beneficially owned by any person to 30% or more of the combined voting power
      of
      all then outstanding voting securities; provided, however, that, if any person
      referred to in clause (x) or (y) of this sentence shall thereafter become
      the beneficial owner of any additional Shares or other voting securities (other
      than pursuant to a stock split, stock dividend, or similar transaction), then
      a
      "Change in Control" shall be deemed to have occurred for purposes of this
      Paragraph 6(b).

     

    (c) Code.  “Code”
      shall mean the Internal Revenue Code of 1986, as amended.

     

    (d) Disability.  "Disability"
      shall mean the Executive's inability for a period of six consecutive months,
      to
      render substantially the services provided for in this Agreement by reason
      of
      mental or physical disability, whether resulting from illness, accident or
      otherwise, other than by reason of chronic or persistent abuse of any substance
      (such as narcotics or alcohol).

     

    (e) Good
      Reason.  "Good Reason" shall mean:

     

    (i) a
      material diminution in the Executive's title, duties or
      responsibilities;

     

    (ii) relocation
      of the Executive's place of employment without her consent outside the New
      York
      City metropolitan area;

     

    (iii) the
      failure of MFA to pay within 30 business days any payment due from
      MFA;

     

    (iv) the
      failure of MFA to pay within a reasonable period after the date when amounts
      are
      required to be paid to the Executive under any benefit programs or plans;
      or

     

    (v) the
      failure by MFA to honor any of its material obligations herein.

     

     

    
      
        
        

      

      
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    (f) Pre-Change-in–Control
      Event.  A "Pre-Change-in-Control Event" shall mean the
      occurrence of any one of the following events:

     

    (i) the
      Board
      shall adopt a resolution to the effect that any person has taken actions which,
      if consummated, would result in such person acquiring effective control of
      the
      business and affairs of MFA;

     

    (ii) there
      shall commence a tender offer or proxy contest resulting in any of the
      transactions specified in subparagraphs (i)-(iii) of
      Paragraph 6(b);

     

    (iii) MFA
      shall
      make any agreement resulting in any of the transactions specified in
      subparagraphs (i)-(iii) of Paragraph 6(b);

     

    (iv) there
      shall be a public announcement of a transaction of the kind specified in
      subparagraphs (i)-(iii) of Paragraph 6(b); or

     

    (v) any
      other
      meeting, writing or written communication with, by or to the Board of Directors
      or any officer or executive of MFA, that is held, made or undertaken in good
      faith in anticipation of a Change in Control.

     

    7. Covenant
      Not To
      Compete.

     

    In
      the
      event of the termination of the Executive's employment with MFA other than
      upon
      nonrenewal of the Term of Employment, the Executive will not, without the prior
      written consent of MFA, manage, operate, control 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, provided that the Executive
      shall
      not own more than five percent of the outstanding shares of any publicly traded
      company) or partner with, or as an officer, director, employee or consultant
      of,
      any mortgage REIT for a period of one year following termination of her
      employment with MFA.  For a period of one year following the
      termination of the Executive's employment with MFA for any reason, the Executive
      shall not solicit any employees of MFA to work for any mortgage
      REIT.  Except as otherwise required by law, the Executive shall keep
      confidential all materials, files, reports, correspondence, records and other
      documents (collectively, the "Company Materials")
      used, prepared or made available to her in connection with her employment by
      MFA
      and which have not otherwise been made available to the public, and upon
      termination of her employment shall return such Company Materials to
      MFA.  The Executive acknowledges that MFA may seek injunctive relief
      or other specific enforcement of its rights under this Paragraph.

     

    8. Indemnification.

     

    MFA
      shall
      indemnify the Executive to the fullest extent permitted by Maryland law as
      amended from time to time in connection with the Executive's duties with MFA,
      against all costs, expenses, liabilities and losses (including, without
      limitation, attorneys' fees, judgments, fines, penalties, ERISA excise taxes
      and
      amounts paid in settlement) actually and reasonably incurred by the Executive
      in
      connection with an action, suit or proceeding.  During the Term of
      Employment and for six years following the date of the Executive's termination
      as an officer of MFA, MFA (or any successor thereto) shall provide comprehensive
      coverage under its officers and directors insurance policy (or policies) on
      substantially the same terms and levels that it provides to its senior executive
      officers, at MFA's sole cost.

     

     

    
      
        
        

      

      
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    9. Assignability;
      Binding
      Nature.

     

    This
      Agreement shall inure to the benefit of MFA and the Executive and their
      respective successors, heirs (in the case of the Executive) and
      assigns.  No rights or obligations of MFA under this Agreement may be
      assigned or transferred by MFA except that any such rights or obligations may
      be
      assigned or transferred pursuant to a merger or consolidation in which MFA
      is
      not the continuing entity, or the sale or liquidation of all or substantially
      all of the assets of MFA, provided that the assignee or transferee is the
      successor to all or substantially all of the assets of MFA and such assignee
      or
      transferee assumes the liabilities, obligations and duties of MFA, as contained
      in this Agreement, either contractually or as a matter of law.  This
      Agreement shall not be assignable by the Executive.

     

    10. Representation.

     

    MFA
      represents and warrants that it is fully authorized and empowered to enter
      into
      this Agreement and that its entering into this Agreement and the performance
      of
      its obligations under this Agreement will not violate any agreement between
      MFA
      and any other person, firm or organization or any law or governmental
      regulation.

     

    11. Entire
      Agreement.

     

    This
      Agreement contains the entire agreement between MFA and the Executive concerning
      the subject matter hereof and supersedes all prior agreements, understandings,
      discussions, negotiations and undertakings, whether written or oral, between
      them with respect thereto.

     

    12. Amendment
      or
      Waiver.

     

    This
      Agreement cannot be changed, modified or amended without the consent in writing
      of both the Executive and MFA.  No waiver by either MFA or the
      Executive at any time of any breach by the other party of any condition or
      provision of this Agreement shall be deemed a waiver of a similar or dissimilar
      condition or provision at the same or at any prior or subsequent
      time.  Any waiver must be in writing and signed by the Executive or an
      authorized officer of MFA, as the case may be.

     

    13. Severability.

     

    In
      the
      event that any provision or portion of this Agreement shall be determined to
      be
      invalid or unenforceable for any reason, in whole or in part, the remaining
      provisions of this Agreement shall be unaffected thereby and shall remain in
      full force and effect to the fullest extent permitted by law.

     

    14. Reasonableness.

     

    To
      the
      extent that any provision or portion of this Agreement is determined to be
      unenforceable by a court of law or equity, that provision or portion of this
      Agreement shall nevertheless be enforceable to the extent that such court
      determines is reasonable.

     

    15. Survivorship.

     

    The
      respective rights and obligations of the parties hereunder shall survive any
      termination of this Agreement to the extent necessary to the intended
      preservation of such rights and obligations.

     

     

    
      
        
        

      

      
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    16. Governing
      Law.

     

    This
      Agreement and all rights thereunder, and any controversies or disputes arising
      with respect thereto, shall be governed by and construed and interpreted in
      accordance with the laws of the State of New York, applicable to agreements
      made
      and to be performed entirely within such State, without regard to conflict
      of
      laws provisions thereof that would apply the law of any other
      jurisdiction.

     

    17. Dispute
      Resolution.

     

    In
      the
      event of any dispute, controversy or claim arising out of or relating to this
      Agreement or Executive's employment or termination thereof (other than a
      controversy or claim arising under Paragraph 7, to the extent necessary for
      MFA
      (or its affiliates, where applicable) to enforce the provisions thereof), the
      parties hereby agree to settle such dispute, controversy or claim in a binding
      arbitration by a single arbitrator in accordance with the Commercial Arbitration
      Rules of the American Arbitration Association, which arbitration shall be
      conducted in New York, New York.  The parties agree that the arbitral
      award shall be final and non-appealable and shall be the sole and exclusive
      remedy between the parties hereunder.  The parties agree that judgment
      on the arbitral award may be entered in any court having competent jurisdiction
      over the parties or their assets.  All reasonable fees and expenses
      related to any such arbitration (including reasonable attorneys' fees and
      related disbursements) shall be paid by MFA.

     

    18. Legal
      Fees.

     

    MFA
      shall
      pay directly all reasonable legal fees incurred by the Executive in connection
      with the negotiation, preparation and execution of this Agreement.

     

    19. Notices.

     

    Any
      notice given to either party shall be in writing and shall be deemed to have
      been given when delivered personally or sent by certified or registered mail,
      postage prepaid, return receipt requested, duly addressed to the party
      concerned, if to MFA, at its principal office, and if to the Executive, at
      the
      address of the Executive shown on MFA's records or at such other address as
      such
      party may give notice of.

     

    20. Headings.

     

    The
      headings of the paragraphs contained in this Agreement are for convenience
      only
      and shall not be deemed to control or affect the meaning or construction of
      any
      provision of this Agreement.

     

    21. Counterparts.

     

    This
      Agreement may be executed in two or more counterparts.

     

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
      first written above.

    
       

      
        
          	 	MFA
                  Mortgage Investments, Inc.	 
	 	 	 	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ William S. Gorin 	 
	 	Name: 	William S. Gorin	 
	 	Title: 	
                  Chief Financial Officer and Executive Vice President

                	 
	 	 	 	 

        

      

      
        
          	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ Teresa
                  D.
                  Covello	 
	 	Name:  	Teresa
                  D. Covello 	 
	 	Title:  	
                  
                    Senior
                      Vice President, Chief Accounting Officer and
                      Treasurer

                  

                	 
	 	 	 	 

        

      

      
      

      
      

       

    

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    

    EXHIBIT
      A

     

    MUTUAL
      RELEASE

     

    This
      Mutual Release of Claims (this “Release”) is made
      as
      of _____________, by and between MFA MORTGAGE INVESTMENTS, INC. (the “Company”) and
      _________________ (the “Executive”).

     

    
      	
               

            	
              1.

            	
              Release
                by the
                Company. 

            

    

     

    (a)           
      The Company on behalf of itself, its agents, successors, affiliated entities
      and
      assigns, in consideration for the Executive’s execution and delivery of this
      Release, hereby forever releases and discharges the Executive, and her agents,
      heirs, successors, assigns, executors and administrators, from any and all
      known
      and unknown causes of action, actions, judgments, liens, indebtedness, damages,
      losses, claims, liabilities, and demands of whatsoever kind and character in
      any
      manner whatsoever arising on or prior to the date of this Release, including
      but
      not limited to (i) any claim for breach of contract, breach of implied
      covenant, breach of oral or written promise, defamation, interference with
      contract relations or prospective economic advantage, negligence,
      misrepresentation; (ii) any and all liability that was or may have been
      alleged against or imputed to the Executive by the Company or by anyone acting
      on its behalf; (iii) any punitive, compensatory or liquidated damages; and
      (iv) all rights to and claims for attorneys’ fees and costs except as
      otherwise provided in her employment agreement with the Company dated January
      1,
      2008 (the “Employment
      Agreement”).

     

    (b)           
      The Company shall not file or cause to be filed any action, suit, claim, charge
      or proceeding with any federal, state or local court or agency relating to
      any
      claim within the scope of this Release. In the event there is presently pending
      any action, suit, claim, charge or proceeding within the scope of this Release,
      or if such a proceeding is commenced in the future, the Company shall promptly
      withdraw it, with prejudice, to the extent it has the power to do so. The
      Company represents and warrants that its has not assigned any claim released
      herein, or authorized any other person to assert any claim on its
      behalf.

     

    (c)           
      Anything to the contrary notwithstanding in this Release or the Employment
      Agreement, this Release shall not apply to claims or damages based on (i) any
      right or claim that arises after the date on which the Company executes this
      Release, including any right to enforce the Employment Agreement with respect
      to
      provisions pertaining to matters that arise after the date of the Release and
      that survive termination of employment or (ii) any act of willful misconduct,
      gross negligence, fraud or misappropriation of funds.

     

    
      	
               

            	
              2.

            	
              Release
                by the
                Executive. 

            

    

     

    (a)           
      The Executive, on behalf of himself, her agents, heirs, successors, assigns,
      executors and administrators, in consideration for the termination payments
      and
      other consideration provided for under the Employment Agreement, hereby forever
      releases and discharges the Company, and its successors, its affiliated
      entities, and, in such capacities, its past and present directors, employees,
      agents, attorneys, accountants, representatives, plan fiduciaries, successors
      and assigns from any and all known and unknown causes of action, actions,
      judgments, liens, indebtedness, damages, losses, claims, liabilities, and
      demands of whatsoever kind and character in any manner whatsoever arising on
      or
      prior to the date of this Release, including but not limited to (i) any
      claim for breach of contract, breach of implied covenant, breach of oral or
      written promise, wrongful termination, intentional infliction of emotional
      distress, defamation, interference with contract relations or prospective
      economic advantage, negligence, misrepresentation or employment discrimination,
      and including without limitation alleged 

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    violations
      of Title VII of the Civil Rights Act of 1964, as amended, prohibiting
      discrimination based on race, color, religion, sex or national origin; the
      Family and Medical Leave Act; the Americans With Disabilities Act; the Age
      Discrimination in Employment Act; other federal, state and local laws,
      ordinances and regulations; and any unemployment or workers’ compensation law,
      excepting only those obligations of the Company pursuant to Paragraph 5 of
      the Employment Agreement or otherwise continuing under the Employment Agreement
      and any claims to benefits under any compensation or benefit plan, program
      or
      arrangement in which the Executive was participating as of the date of
      termination of her employment; (ii) any and all liability that was or may
      have been alleged against or imputed to the Company by the Executive or by
      anyone acting on her behalf; (iii) all claims for wages, monetary or
      equitable relief, employment or reemployment with the Company in any position,
      and any punitive, compensatory or liquidated damages; and (iv) all rights
      to and claims for attorneys’ fees and costs except as otherwise provided in the
      Employment Agreement.

     

    (b)           
      The Executive shall not file or cause to be filed any action, suit, claim,
      charge or proceeding with any federal, state or local court or agency relating
      to any claim within the scope of this Release. In the event there is presently
      pending any action, suit, claim, charge or proceeding within the scope of this
      Release, or if such a proceeding is commenced in the future, the Executive
      shall
      promptly withdraw it, with prejudice, to the extent she has the power to do
      so.
      The Executive represents and warrants that she has not assigned any claim
      released herein, or authorized any other person to assert any claim on her
      behalf.

     

    (c)           
      In the event any action, suit, claim, charge or proceeding within the scope
      of
      this Release is brought by any government agency, putative class representative
      or other third party to vindicate any alleged rights of the Executive,
      (i) the Executive shall, except to the extent required or compelled by law,
      legal process or subpoena, refrain from participating, testifying or producing
      documents therein, and (ii) all damages, inclusive of attorneys’ fees, if
      any, required to be paid to the Executive by the Company as a consequence of
      such action, suit, claim, charge or proceeding shall be repaid to the Company
      by
      the Executive within ten (10) days of her receipt thereof.

     

    (d)           
      BY HER SIGNATURE BELOW, THE EXECUTIVE ACKNOWLEDGES THAT:

     

    (1)           
      SHE HAS RECEIVED A COPY OF THIS RELEASE AND WAS OFFERED A PERIOD OF TWENTY-ONE
      (21) DAYS TO REVIEW AND CONSIDER IT;

     

    (2)           
      IF SHE SIGNS THIS RELEASE PRIOR TO THE EXPIRATION OF TWENTY-ONE DAYS, SHE
      KNOWINGLY AND VOLUNTARILY WAIVES AND GIVES UP THIS RIGHT OF REVIEW;

     

    (3)           
      SHE HAS THE RIGHT TO REVOKE THIS RELEASE FOR A PERIOD OF SEVEN (7) DAYS
      AFTER SHE SIGNS IT BY MAILING OR DELIVERING A WRITTEN NOTICE OF REVOCATION
      TO
      THE COMPANY’S GENERAL COUNSEL, NO LATER THAN THE CLOSE OF BUSINESS ON THE
      SEVENTH DAY AFTER THE DAY ON WHICH SHE SIGNED THIS RELEASE;

     

    (4)           
      THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE SEVEN DAY
      REVOCATION PERIOD HAS EXPIRED WITHOUT THE RELEASE HAVING BEEN REVOKED (THE
      “EFFECTIVE
      DATE”);

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    (5)           
      THIS RELEASE WILL BE FINAL AND BINDING AFTER THE EXPIRATION OF THE REVOCATION
      PERIOD REFERRED TO IN SECTION 2(d)(3).  SHE AGREES NOT TO
      CHALLENGE ITS ENFORCEABILITY;

     

    (6)           
      SHE IS AWARE OF HER RIGHT TO CONSULT AN ATTORNEY, HAS BEEN ADVISED IN WRITING
      TO
      CONSULT WITH AN ATTORNEY, AND HAS HAD THE OPPORTUNITY TO CONSULT WITH AN
      ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS RELEASE;

     

    (7)           
      NO PROMISE OR INDUCEMENT FOR THIS RELEASE HAS BEEN MADE EXCEPT AS SET FORTH
      IN
      THIS RELEASE;

     

    (8)           
      SHE IS LEGALLY COMPETENT TO EXECUTE THIS RELEASE AND ACCEPT FULL RESPONSIBILITY
      FOR IT; AND

     

    (9)           
      SHE HAS CAREFULLY READ THIS RELEASE, ACKNOWLEDGES THAT SHE HAS NOT RELIED ON
      ANY
      REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS DOCUMENT,
      AND WARRANTS AND REPRESENTS THAT SHE IS SIGNING THIS RELEASE KNOWINGLY AND
      VOLUNTARILY.

     

    

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, the parties have hereunto set their hands this _____ day of
      ___________________.

     

    
      
        
          	 	 	 	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	 	 
	 	 	Name: 	 
	 	 	
                  Title: 

                	 
	 	 	 	 
	 	 	 	 

        

      

      
        
          	 	MFA
                  Mortgage Investments, Inc.	 
	 	 	 
	 	 	 
	
                   

                	
                  By:
                    

                	 	 
	 	 	Name: 	 
	 	 	
                  Title: 

                	 
	 	 	 	 

        

      

      
      

      
      

       

       

       

      
        14EX-10.1

THE STILLWATER NATIONAL BANK AND TRUST COMPANY

DIRECTORS’ DEFERRED COMPENSATION PLAN

(2007 PLAN AGREEMENT)

Amendment of Directors’ Deferred Compensation Agreement to Comply with Section 409A

AGREEMENT, made this 26th day of December 2007, effective as of January 1, 2007, by and between
James M. Johnson (the “Participant”), and Stillwater National Bank and Trust Company (the “Bank”).

WHEREAS, on December 28, 2006 the Bank and the Participant entered into the Stillwater National
Bank and Trust Company Directors’ Deferred Compensation Plan to provide for deferral of
compensation earned during calendar year 2007 (the “Plan”); and

WHEREAS, in order to obtain deferral of federal income taxation on deferred compensation hereunder,
the Plan must comply with Section 409A of the Internal Revenue Code (“Code”) and regulations and
other guidance thereunder (collectively “§ 409A”); and

WHEREAS, the Internal Revenue Service (“IRS”) has issued final regulations and transition rules
clarifying what is required for compliance with § 409A; and

WHEREAS, the Plan is hereby amended as set forth below in order to comply with § 409A and to
clarify the effect of the December 28, 2006 Plan document; and

WHEREAS, the amendments set forth below do not alter in any respect the elections previously made
in the December 28, 2006 Plan document.

NOW THEREFORE, it is mutually agreed that Sections 1, 2, 4 and 7 are amended, and Section 8 is
added, as set forth below:

	1.	 	Section 1(c) is amended by striking the existing language and substituting in lieu thereof
the following: “The election of the amount of deferred compensation in Section 1(a) is
irrevocable as of January 1, 2007.”

Section 1(e) is amended by adding as flush language after clause (iii) the following:

“With respect to Options I and III, a former director who continues
to serve as an independent contractor after ceasing to serve as a
director may not receive a distribution; in contrast, a former
director who continues as an employee may receive a distribution.”

	2.	 	Section 2 is amended by striking the first paragraph (prior to subparagraph (a)) and
inserting in lieu thereof the following:

“Notwithstanding Section 1(e), the amounts deferred and any
accumulated income on such deferrals shall be distributed on the
earliest of the following events, if any such event occurs before
the event elected in Section 1(e)(i)-(iii): (1) the date, if any,
specified in Section 1(e)(iii), above; (2) the Participant’s
disability, (3) the occurrence of an unforeseeable emergency of the
Participant, and (4) a Change in Control of the Bank or Southwest
Bancorp, Inc, provided that, in the event that on December 31, 2006
the Participant was not only a director but also a Specified
Employee as defined in Section 7 as of the date of separation from
service as a director , then no distribution may be made before (A)
the expiration of six months after the date of separation from
service, or (B) the Participant’s earlier death.”

	3.	 	Section 4 is amended by striking the text in its entirety and substituting in lieu thereof
the following:

	 	 	 	“4. Except for the beneficiary designation made in Section 3 hereof (which may be
revised at any time and from time to time), the elections made herein may be changed
only with respect to the time and form of payment of the amounts deferred during the
term of the Agreement, and only if each of the following requirements is satisfied:

	 	 	 	“(a) the change does not take effect until at least 12 months after
the date the Participant elects the change,

	 	 	 	“(b) the changed payment date must be at least five years after the
date payment would otherwise have been paid (or, in the case of installment
payments treated as a single payment, five years from the date the first amount
was scheduled to be paid), provided, however, that this requirement does not
apply to payment on account of death, disability or unforeseeable emergency;
and

	 	 	 	“(c) with respect to payments under Section 1(e) or 2(a), the change
is made not less than 12 months before the payment is scheduled to be paid (or,
in the case of installment payments treated as a single payment, 12 months
before the date the first amount was scheduled to be paid).”

	4.	 	Section 7 is deleted in its entirety.

	5.	 	The following new Sections 8 and 9 are added:

	 	 	 	“8. Definitions.	 

“Change in control means:

	 	 	 	“(a) the date any entity or person, including a
group as defined in Section 13(d)(iii) of the Securities
Exchange Act of 1934, shall become the beneficial owner of 50
percent or more of the outstanding common shares of the Bank;	 

	 	 	 	“(b) the closing of a transaction (i) to merge or
consolidate either the Bank or Southwest Bancorp, Inc. with or
into another corporation in which the Bank or Southwest
Bancorp, Inc. is not the continuing or surviving corporation or
pursuant to which any common shares of the Bank or Southwest
Bancorp, Inc. would be converted into cash, securities, or
other property of another, other than a merger of the Bank or
Southwest Bancorp, Inc. in which holders of common shares
immediately prior to the merger have the same proportionate
interest of common stock of the surviving corporation
immediately after the merger as immediately before, or (ii) to
sell or otherwise dispose of substantially all of the assets of
the Bank or Southwest Bancorp, Inc.; or	 

	 	 	 	“(c) the date there shall have been change in a
majority of the Board of the Bank within a 12 month period
unless the nomination of each new director was approved by the
vote of two-thirds (2/3) of directors then still in office who
were in office at the beginning of the 12 month period.	 

“The decision of the Committee (defined in Section 9) as to whether
a change in control has occurred shall be conclusive and binding and
shall be a ministerial rather than a discretionary decision.

“Disability: The Participant will be deemed disabled for purposes
of Section 2 if he is determined to be totally disabled by the
Social Security Administration.

“Specified Employee shall mean those employees designated by the
Committee annually as of December 31 as a Specified Employee. The
Committee shall designate as Specified Employees participants in The
Stillwater National Bank and Trust Company Employees Profit Sharing
Plan who are designated as key employees under section 416 of the
Code as of that December 31, plus any other employees not
participating in the Profit Sharing Plan who would be designated as
key employees were they participants in the Profit Sharing Plan.
Any individual so designated who is still employed as of the
following April 1 shall become a Specified Employee from April 1
through the next March 31. If a Change in Control occurs, the
Committee has authority to determine alternative methods for
designating Specified Employees and satisfying the six-month delay
rule, to the extent permitted by Treas. Reg. § 1.409A-1(i).”

“Unforeseeable emergency: An unforeseeable emergency is a severe
hardship to the Participant resulting from an illness or accident of
the Participant, his spouse, beneficiary or dependent (as defined in
Code Section 152 without regard to subsections (b)(1), (b)(2), and
(d)(1)(B) thereof); loss of the Participant’s property due to
casualty (including the need to rebuild a home following damage to a
home not otherwise covered by insurance, for example, not as a
result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the Participant. Whether the Participant is faced with
an unforeseeable emergency permitting a distribution under Section 2
is to be determined by the Committee (as defined in Section 9) based
on the relevant facts and circumstances of each case, but, in any
case, a distribution on account of unforeseeable emergency may not
be made to the extent that such emergency is or may be relieved
through reimbursement or compensation from insurance or otherwise,
by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not cause severe hardship, or by
cessation of deferrals under the Plan. Distributions because of an
unforeseeable emergency must be limited to the amount reasonably
necessary to satisfy the emergency need (which may include amounts
necessary to pay any Federal, state, local, or foreign income taxes
or penalties reasonably anticipated to result from the
distribution).

	 	 	 	“9. The Compensation Committee (“Committee”) of the Board of
Directors of the Southwest Bancorp, Inc. (“Board”) shall have
authority to administer the Plan. In the absence at any time of a
duly appointed Committee, the Plan shall be administered by the
Board. Except as limited by the express provisions of the Plan or
by resolutions adopted by the Board, the Committee’s authority
includes the following:	 

	 	(a)	 	authority to delegate Plan administration
functions to employees or other agents of Southwest Bancorp,
Inc. or the Bank or their affiliates or other agents;	 

	 	(b)	 	authority to prescribe, amend and rescind rules
and regulations relating to the Plan;	 

	 	(c)	 	authority to determine eligibility for
benefits, the amount and payment of benefit claims and
resolution of claim disputes	 

In administering the Plan, the Committee has full discretionary
authority to make factual determinations, to construe the terms of
the Plan, to determine compliance with § 409A, and to otherwise
interpret the Plan (including ambiguous provisions), provided that
no Committee member may participate in a decision on his or her
individual claim for benefits under the Plan. The Committee’s
decisions shall be binding, final and conclusive upon all parties.”

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year first
above-written.

PARTICIPANT

/s/ James M. Johnson

James M. Johnson

STILLWATER NATIONAL BANK

AND TRUST COMPANY

By /s/Kerby E. Crowell

Kerby E. Crowell, EVP/CFO/Sec.

Printed name and title

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