Document:

EMPLOYMENT AGREEMENT

            This Employment Agreement, dated as of January 17, 2000 (this
"Agreement"), is by and between American Home Mortgage Holdings, Inc., a
Delaware corporation (the "Company"), and Jeffrey L. Lake (the "Executive").

            Whereas the Company wishes to assure itself of the services of the
Executive, and the Executive desires to be employed by the Company, upon the
terms and conditions hereinafter set forth.

            Now, Therefore, the Company and the Executive hereby agree as
follows:

            1. Definitions. Unless defined elsewhere in this Agreement,
capitalized terms contained herein shall have the meanings set forth or
incorporated by reference in Section 17.

            2. Employment. The Company agrees to employ the Executive, and the
Executive hereby accepts such employment by the Company and/or any subsidiary of
the Company, during the term set forth in Section 3 and on the other terms and
conditions of this Agreement.

            3. Term.

            (a) The term of this Agreement shall commence as of the closing of
the transactions contemplated by that certain Agreement and Plan of Merger,
dated as of the date hereof, by and among the Company, American Home Mortgage
Sub II, Inc. (the "Subsidiary"), First Home Mortgage Corp. ("First Home") and
the stockholders of First Home listed on the signature pages thereto (the
"Merger Agreement"), and, subject to Section 3(b), shall terminate at the close
of business on the fifth anniversary of that date (the "Fifth Anniversary").

            (b) The term of this Agreement set forth in Section 3(a) shall be
extended or further extended, as the case may be, without any action by the
Company or the Executive, on the Fifth Anniversary and on each subsequent
anniversary of the date hereof, for an additional period of one year, until
either party gives written notice to the other party in advance of any
anniversary of the date hereof, in the manner set forth in Section 14, that the
term in effect when such notice is given is not to be extended or further
extended, as the case may be, beyond the year following the next anniversary. If
the Executive shall continue in the full-time employment of the Company after
the Fifth Anniversary, such continued employment shall be subject to the terms
and conditions of this Agreement; provided, however, that the Executive's
compensation shall be determined by mutual agreement between the Company and the
Executive, to be negotiated within the six months prior to the Fifth
Anniversary.

            4. Position, Duties and Responsibilities, Rights.

            (a) During the term of this Agreement, the Executive shall serve as,
and be elected to and hold the office and title of, Senior Executive Vice
President of the Company. As such, the Executive shall report only to the Chief
Executive Officer of the Company and the Board of Directors of the Company, and
shall have all of the powers and duties usually incident to the office of Senior
Executive Vice President of the Company, and shall have powers to perform such
other reasonable additional duties as may from time to time be lawfully assigned
to the Executive by the Chief Executive Officer of the Company or the Board of
Directors.

            (b) During the term of this Agreement, the Executive agrees to
devote substantially all the Executive's time, efforts and skills to the affairs
of the Company during the Company's normal business hours, except for vacations,
illness and incapacity, but nothing in this Agreement shall preclude the
Executive from devoting reasonable periods to (i) manage the Executive's
personal investments, (ii) participate in professional, educational, public
interest, charitable, civic or community activities, including activities
sponsored by trade organizations, and (iii) serve as a director or member of an
advisory committee of any corporation not in competition with the Company or any
of its subsidiaries, or as an officer, trustee or director of any charitable,
educational, philanthropic, civic, social or industry organizations, or as a
speaker or arbitrator; provided, however, that the performance of the
Executive's duties or responsibilities in any of such capacities does not
materially interfere with the regular performance of the Executive's duties and
responsibilities hereunder.

            5. Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall be based in the Chicago
Metropolitan Area, and shall not be required to be absent therefrom on travel
status or otherwise for more than a reasonable time each year as necessary or
appropriate for the performance of the Executive's duties hereunder.

            6. Compensation.

            (a) During the term of this Agreement, the Company shall pay the
Executive, and the Executive agrees to accept, an amount to be determined as set
forth below as compensation for his services rendered hereunder, which amount
shall be paid in installments no less frequently than monthly in accordance with
the Company's customary practice.

            (b) During the period beginning on the closing date of the Merger
Agreement and ending on March 31, 2000, the Company shall pay the Executive, and
the Executive agrees to accept, a salary at the bi-weekly rate of $20,192.31 (to
be prorated for any portion of such period that does not constitute at least two
weeks) to be paid no less frequently than bi-weekly. Beginning on April 1, 2000
and during the remaining term of this Agreement, the Executive shall be entitled
to a bi-weekly commission, as determined by the Company, that will be an amount
equal to the excess of (i) 50% of the surcharge for each loan funded during such
period added to the cost established by the Company in its sole and absolute
discretion and set forth on its posted interest rates, over (ii) $13,846.15 per
bi-weekly pay period during the first two years of this Agreement and $13,134.61
per bi-weekly pay period during the next three years of this Agreement (the
"Commission"). In determining the cost, the Company shall give effect to many
factors, including, but not limited to: general volatility of the capital
markets; changes in the real estate market; corporate overhead; interest rates;
and the general economy of the markets in which the Company and the Subsidiary
operate. Such surcharge shall apply only to the loans for which the Executive
accepted the application and which were funded by the Company in accordance with
the Company's customary standards, policies and procedures.

            (c) On April 30, or on such later date as set forth in Section 2.4
of the Merger Agreement, of each calendar years of 2001, 2002, 2003, 2004 and
2005, the Executive shall receive stock options for 25% of the number of shares
of Common Stock to be determined by dividing (A) a fraction, the numerator of
which shall be the product of 3% of the Net Income (as defined in the Merger
Agreement) for the prior calendar year times the Company's P/E (the ratio of the
Company's price of Common Stock divided by earnings per share of Common Stock
reported for the applicable calendar year, where the price of the Common Stock
is based on the average closing price for the last twenty-trading-day period for
such prior year) and the denominator of which shall be five; by (B) the Fair
Market Value (as defined in the Merger Agreement) as of the grant date;
provided, that unless otherwise provided herein, such options will be subject to
the terms and conditions of the 1999 Omnibus Stock Incentive Plan of the Company
(the "Plan"). In the event that the number of shares of Common Stock available
under the Plan is not sufficient to issue all of the options required to be
issued to the Executive on any date pursuant to this Section, the Purchaser
shall use its best efforts to amend the Plan to increase the number of shares of
Common Stock available under the Plan so that the Plan would include a number of
shares of Common Stock sufficient to allow the issuance of all of the options
required to be issued to the Executive on any date pursuant to this Section. In
such event, if the Plan is amended to allow the issuance of the options required
to be issued to the Executive pursuant to this Section, the Purchaser shall
promptly thereafter issue such options to the Executive. The options granted
pursuant to this Section shall (i) vest after two years from the date of grant,
(ii) expire after 10 years from the date of grant and (iii) have an exercise
price equal to the Fair Market Value as of the grant date.

            For purposes of this Section, the Net Income shall be determined as
provided in the Merger Agreement; provided, however, that such Net Income shall
be determinable only with respect to First Home Group (as defined in the Merger
Agreement).

            (d) During the term of this Agreement, the Executive shall be
entitled to (i) perquisites, including, without limitation, an office and
secretarial and clerical staff, and (ii) fringe benefits, including, without
limitation, health insurance, in each case at least equal to, and on the same
terms and conditions as, those attached to the Executive's office on the date
hereof, as the same may be improved from time to time during the term of this
Agreement, as well as to reimbursement, upon proper accounting, of all
reasonable expenses and disbursements incurred by the Executive in the course of
the Executive's duties.

            (e) The Executive, the Executive's dependents and beneficiaries
shall be entitled to all benefits and service credit for benefits during the
term of this Agreement to which senior officers of the Company and their
dependents and beneficiaries are entitled as the result of the employment of
such officers during the term of this Agreement under the terms of employee
plans and practices of the Company and its subsidiaries, including, without
limitation, any pension plans, profit sharing plans, any non-qualified deferred
compensation plans and related "rabbi" trusts, the Company's life insurance
plans, its disability benefit plans, its vacation and holiday pay plans, its
medical, dental and welfare plans, and other present or successor plans and
practices of the Company and its subsidiaries for which senior officers, their
dependents and beneficiaries are eligible, and to all payments and other
benefits under any such plan or practice subsequent to the term of this
Agreement as a result of participation in such plan or practice during the term
of this Agreement.

            7. Termination of Employment.

            (a) The term of this Agreement shall terminate upon the death of the
Executive.

            (b) The Company may terminate the Executive's employment during the
term of this Agreement for Cause as provided in Section 7(b)(i) or in the event
of Disability as provided in Section 7(b)(ii).

                     (i) This Agreement shall be considered terminated for
      "Cause" only:

                        (A) if the Executive willfully and repeatedly fails to
            substantially perform the Executive's duties hereunder, other than
            by reason of a Disability;

                        (B) if the Executive is grossly negligent or engages in
            gross misconduct in the performance of the Executive's duties
            hereunder;

                        (C) if the Executive knowingly engages in an act of
            dishonesty, an act of fraud or embezzlement, or any conduct
            resulting in a felony conviction; or

                        (D) if the Executive violates the provisions of the
            Non-Competition Agreement of even date hereof between the Executive
            and the Company in substantially the form of Exhibit A hereof (the
            "Non-Competition Agreement")

      and, in the case of each of clauses (A), (B) (C) and (D) above, the
      applicable conditions set forth in Section 7(e) are satisfied.

            Anything in this Section 7(b) to the contrary notwithstanding, the
      Executive's employment shall in no event be considered terminated by the
      Company for Cause if termination takes place (I) as the result of bad
      judgment or negligence on the part of the Executive other than gross
      negligence or willful or reckless misconduct, (II) for any act or omission
      in respect of which a determination could properly be made that the
      Executive met the applicable standard of conduct prescribed for
      indemnification or reimbursement or payment of expenses of an officer or
      director under the Bylaws or Certificate of Incorporation of the Company
      or the Subsidiary or the laws of the State of Delaware or the directors'
      or officers' liability insurance of the Company or the Subsidiary in each
      case as in effect at the time of such act or omission, (III) as the result
      of an act or omission which occurred more than three calendar months prior
      to the Executive's having been given Notice of Termination for such act or
      omission unless the commission of such act or such omission was not or
      could not reasonably have been, at the time of such commission or
      omission, known to a member of the Boards of Directors (other than the
      Executive) , in which case more than three calendar months from the date
      the commission of such act or such omission was or could reasonably have
      been so known, (IV) as the result of a continuing course of action which
      commenced and was or could reasonably have been known to a member of the
      Boards of Directors (other than the Executive) more than three calendar
      months prior to Notice of Termination having been given to the Executive
      for such course of action, or (V) because of an act or omission believed
      by the Executive in good faith to have been in, or not opposed to, the
      interests of the Company.

                     (ii) The term "Disability" as used in this Agreement means
      an accident or physical or mental illness which prevents the Executive
      from substantially performing the Executive's duties hereunder for six
      consecutive months. The term of this Agreement shall end as of the close
      of business on the last day of such six month period but without prejudice
      to any payments due to the Executive in respect of disability under this
      Agreement or any plan or practice of the Company. The amount of any
      payments payable under Section 6(a) during such six month period shall be
      reduced by any payments to which the Executive may be entitled for the
      same period because of disability under any disability or pension plan or
      arrangement of the Company or any subsidiary or affiliate thereof.

            (c) The Executive may terminate the Executive's employment during
the term of this Agreement for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean: (i) a reduction of the Executive's Base Salary or any
other failure by the Company to comply with Section 6; (ii) failure by the
Company to comply with Section 5; (iii) failure by the Company to obtain the
assumption of, and the agreement to perform, this Agreement by any successor as
contemplated in Section 10(a); (iv) such reduction described in the foregoing
clause (i) or failure described in the foregoing clauses (ii) or (iii), as the
case may be, is not cured within 30 days after receipt by the Company of written
notice from the Executive describing such event; or (v) the occurrence of a
Change of Control and any action by the Company that results in a diminution or
other adverse change in the Executive's job description, responsibilities,
working condition or authority.

            (d) Notwithstanding anything to the contrary set forth herein, the
Company shall have the right to terminate the Executive's employment for any
reason other than Cause at any time, subject to the consequences of such
termination as set forth in Section 8.

            (e) In no event shall the Company be entitled to terminate the
Executive's employment during the term of this Agreement for Cause pursuant to
Section 7(b), unless and until all of the following take place, provided that
Sections 7(e)(i) through (iii) shall not apply to any termination for Cause
pursuant to Section 7(b)(i)(C):

                     (i) the Secretary of the Company gives written notice to
      the Executive (the "Warning Notice") setting forth (A) the specific
      provision of this Agreement that the Executive is alleged to have failed
      to satisfy, (B) the acts or omissions alleged to constitute such failure,
      (C) the date on which the Executive shall be given a reasonable
      opportunity to appear before and be heard by the Board of Directors of the
      Company concerning the allegations, which date shall be not less than 30
      nor more than 90 days after the Executive's receipt of the Warning Notice,
      and (D) the loss of rights under this Agreement that shall occur unless
      the Executive diligently and in good faith takes reasonable steps to
      remedy such failure within 30 days after the Executive's receipt of the
      Warning Notice;

                     (ii) the Executive does not diligently and in good faith
      take all reasonable steps to remedy such failure within 30 days after the
      Executive's receipt of the Warning Notice; and

                     (iii) the Executive is given a reasonable opportunity to
      appear before and be heard by the Board of Directors concerning the
      allegations, in accordance with the Warning Notice.

            (f) Any termination by the Company pursuant to Section 7(b) or by
the Executive pursuant to Section 7(c) shall be communicated by a written Notice
of Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which indicates the specific
termination provision in this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provisions so indicated.

            (g) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by the Executive's death, the date of the Executive's
death, (ii) if the Executive's employment is terminated pursuant to Section
7(b)(ii), 30 days after Notice of Termination is given (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such 30 day period), and (iii) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given.

            8. Compensation on Termination. The parties recognize and agree
that, if the Company terminates the Executive's employment during the term of
this Agreement other than pursuant to Section 7(b), or if the Executive
terminates the Executive's employment during the term of this Agreement for Good
Reason pursuant to Section 7(c), the actual damages to the Executive would be
difficult if not impossible to ascertain and agree that the Executive's sole
remedy shall be a right to receive amounts determined and paid in accordance
with the provisions of this Section 8. The Executive shall not be required to
mitigate the amount of any payment provided for in this Section 8 by seeking
other employment or otherwise, nor shall any compensation earned by the
Executive in other employment or otherwise reduce the amount of any payment
provided for in this Section 8.

            (a) If the Company shall terminate the Executive's employment during
the term of this Agreement other than pursuant to Section 7(b), or if the
Executive shall terminate the Executive's employment during the term of this
Agreement for Good Reason pursuant to Section 7(c), then, as severance pay or
liquidated damages or both:

                     (i) the Company shall pay the Executive the Executive's
      full Base Salary through the Date of Termination at the rate in effect at
      the time Notice of Termination is given, together with any other amounts
      payable to the Executive under Section 6 for periods prior to the Date of
      Termination; and

                     (ii) the Company shall pay the Executive the greater of (a)
      $100,000 or (b) three times the average monthly commission for the six
      months immediately preceding the Date of Termination, in each case payable
      in three equal monthly installments, beginning one month after the Date of
      Termination.

            (b) If the Executive's employment terminates under any circumstance
that does not entitle the Executive to payments under Section 8(a) (including a
termination by reason of the death or Disability of the Executive, or by reason
of the Company or the Executive electing not to extend or further extend the
term of this Agreement pursuant to Section 3(b)), the Executive shall not be
entitled to receive any compensation under Section 6 accruing after the date of
such termination, or any payment under Section 8(a)(ii).

            9. Indemnification. The Company shall indemnify the Executive to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time.

            10. Successors; Binding Agreement.

            (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the extent
that the Company would be required to perform it if no such succession had taken
place; provided, however, that no such agreement with a successor shall release
the Company without the Executive's express written consent. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to hereunder if the Executive's employment were
terminated by the Company other than pursuant to Section 7(b), except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.

            (b) If the Executive should die while any amounts are due and
payable to the Executive hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of the Agreement to the
Executive's devisees, legatee, or other designee or, if there be no such
designee, to the Executive's estate.

            (c) Except as to withholding of any tax under the laws of the United
States or any state or locality, neither this Agreement nor any right or
interest hereunder nor any amount payable at any time hereunder shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, attachment, or
other legal process, or encumbrance of any kind by the Executive or the
beneficiaries of the Executive or by legal representatives without the Company's
prior written consent, nor shall there be any right of set-off or counterclaim
in respect of any debts or liabilities of the Executive, the Executive's
beneficiaries or legal representatives against any right or interest hereunder
or any amount payable at any time hereunder to the Executive, the Executives
beneficiaries or legal representatives; provided, however, that nothing in this
Section 10 shall preclude the Executive from designating a beneficiary to
receive any benefit payable on the Executive's death, or the legal
representatives of the Executive from assigning any rights hereunder to the
Person or Persons entitled thereto under the Executive's will or, in case of
intestacy, to the Person or Persons entitled thereto under the laws of intestacy
applicable to the Executive's estate.

            11. Parties. This Agreement shall be binding upon and shall inure to
the benefit of the Company and the Executive, the Executive's heirs,
beneficiaries and legal representatives.

            12. Entire Agreement; Amendment.

            (a) This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all other
agreements between the parties with respect to the subject matter hereof.

            (b) Any amendment of this Agreement shall not be binding unless in
writing and signed by both (i) an officer or director of the Company duly
authorized to do so and (ii) the Executive.

            13. Enforceability. In the event that any provision of this
Agreement is determined to be invalid or unenforceable, the remaining terms and
conditions of this Agreement shall be unaffected and shall remain in full force
and effect, and any such determination of invalidity or enforceability shall not
affect the validity or enforceability of any other provision of this Agreement.

            14. Notices. All notices which may be necessary or proper for either
the Company or the Executive to give to the other shall be in writing and shall
be sent by hand delivery, registered or certified mail, return receipt
requested, overnight courier or facsimile, if to the Executive, to him at 950
North Elmhurst Road, Mt. Prospect, IL 60056, Attention: Jeffrey L. Lake,
Facsimile: (847) 259-9307 with a copy to Lorenzini & Dressler, Ltd., 1900 Spring
Road, Ste. 501, Oak Brook, IL 60523, Attention: Ronald N. Lorenzini, Jr.,
Facsimile: (630) 684-0410, and, if to the Company, to it at its principal
executive offices at 12 East 49th Street, New York, NY 10017, Attention: Human
Resources Officer, Facsimile: 212-546-6834, with a copy to Cadwalader,
Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, Attention: Louis
Bevilacqua, Esq., Facsimile: 212-504-6666, and shall be deemed given when sent,
provided that any Notice of Termination or other notice given pursuant to
Section 7 shall be deemed given only when received. Either party may by like
notice to the other party change the address at which the Executive or it is to
receive notices hereunder.

            15. Governing Law. THIS AGREEMENT IS EXECUTED IN THE STATE OF NEW
YORK AND SHALL BE GOVERNED BY, AND BE ENFORCEABLE IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.

            16. Effective Date. This Agreement shall become effective upon
consummation of the transactions contemplated by the Merger Agreement.

            17. Definitions. The following terms, when capitalized in this
Agreement, shall have the meanings set forth or incorporated by reference in
this Section 17.

            (a) "Base Salary" shall have the meaning set forth in Section 6(a).

            (b) "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.

            (c) "Cause" shall have the meaning set forth in Section 7(b)(i).

            (d) "Change of Control" shall be deemed to have occurred if (A)
Michael Strauss, directly or indirectly, is no longer the largest stockholder of
the Company or any successor as contemplated in Section 10(a), or (B) Michael
Strauss is neither the Chief Executive Officer nor the Chief Operating Officer
of the Company or any successor as contemplated in Section 10(a).

            (e) "Common Stock" means shares of common stock, par value $0.01 per
share, of the Company.

            (f) "Company" means American Home Mortgage Holdings, Inc., a
Delaware corporation, and any successors to its business and/or assets, which
executes and delivers an agreement provided for in Section 10(a) or which
otherwise becomes bound by all the terms and conditions of this Agreement by
operation of law.

            (g) "Date of Termination" shall have the meaning set forth in
Section 7(g).

            (h) "Disability" shall have the meaning set forth in Section
7(b)(ii). "Good Reason" shall have the meaning set forth in Section 7(c).

            (i) "Good Reason" shall have the meaning set forth in Section 7(c).

            (j) "Notice of Termination" shall have the meaning set forth in
Section 7(f).

            (k) "Person" means any individual, corporation, partnership, limited
liability company, limited duration company, trust or other entity of any nature
whatsoever.

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<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.

                                       American Home Mortgage Holdings, Inc.

                                       By: /s/ Michael Strauss
                                           -------------------------------------
                                           Name:  Michael Strauss
                                           Title: President and CEO

                                       /s/ Jeffrey L. Lake
                                       -----------------------------------------
                                       Jeffrey L. LakeEMPLOYMENT AGREEMENT

            This Employment Agreement, dated as of January 17, 2000 (this
"Agreement"), is by and between American Home Mortgage Holdings, Inc., a
Delaware corporation (the "Company"), and Thomas J. Fiddler (the "Executive").

            Whereas the Company wishes to assure itself of the services of the
Executive, and the Executive desires to be employed by the Company, upon the
terms and conditions hereinafter set forth.

            Now, Therefore, the Company and the Executive hereby agree as
follows:

            1. Definitions. Unless defined elsewhere in this Agreement,
capitalized terms contained herein shall have the meanings set forth or
incorporated by reference in Section 18.

            2. Employment. The Company agrees to employ the Executive, and the
Executive hereby accepts such employment by the Company and/or any subsidiary of
the Company, during the term set forth in Section 3 and on the other terms and
conditions of this Agreement.

            3. Term.

            (a) The term of this Agreement shall commence as of the closing of
the transactions contemplated by that certain Agreement and Plan of Merger,
dated as of the date hereof, by and among the Company, American Home Mortgage
Sub II, Inc. (the "Subsidiary"), First Home Mortgage Corp. ("First Home") and
the stockholders of First Home listed on the signature pages thereto (the
"Merger Agreement"), and, subject to Section 3(b), shall terminate at the close
of business on the fifth anniversary of that date (the "Fifth Anniversary").

            (b) The term of this Agreement set forth in Section 3(a) shall be
extended or further extended, as the case may be, without any action by the
Company or the Executive, on the Fifth Anniversary and on each subsequent
anniversary of the date hereof, for an additional period of one year, until
either party gives written notice to the other party in advance of any
anniversary of the date hereof, in the manner set forth in Section 15, that the
term in effect when such notice is given is not to be extended or further
extended, as the case may be, beyond the year following the next anniversary. If
the Executive shall continue in the full-time employment of the Company after
the Fifth Anniversary, such continued employment shall be subject to the terms
and conditions of this Agreement; provided, however, that the Executive's
compensation shall be determined by mutual agreement between the Company and the
Executive, to be negotiated within the six months prior to the Fifth
Anniversary.

            4. Position, Duties and Responsibilities, Rights.

            (a) During the term of this Agreement, the Executive shall serve as,
and be elected to and hold the office and title of, Executive Vice President of
the Company. As such, the Executive shall report only to the Senior Officers of
the Subsidiary, Chief Executive Officer of the Company and the Board of
Directors of the Company, and shall have all of the powers and duties usually
incident to the office of Executive Vice President of the Company, and shall
have powers to perform such other reasonable additional duties as may from time
to time be lawfully assigned to the Executive by the Chief Executive Officer of
the Company or the Board of Directors.

            (b) During the term of this Agreement, the Executive agrees to
devote substantially all the Executive's time, efforts and skills to the affairs
of the Company during the Company's normal business hours, except for vacations,
illness and incapacity, but nothing in this Agreement shall preclude the
Executive from devoting reasonable periods to (i) manage the Executive's
personal investments, (ii) participate in professional, educational, public
interest, charitable, civic or community activities, including activities
sponsored by trade organizations, and (iii) serve as a director or member of an
advisory committee of any corporation not in competition with the Company or any
of its subsidiaries, or as an officer, trustee or director of any charitable,
educational, philanthropic, civic, social or industry organizations, or as a
speaker or arbitrator; provided, however, that the performance of the
Executive's duties or responsibilities in any of such capacities does not
materially interfere with the regular performance of the Executive's duties and
responsibilities hereunder.

            5. Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall be based in the Chicago
Metropolitan Area, and shall not be required to be absent therefrom on travel
status or otherwise for more than a reasonable time each year as necessary or
appropriate for the performance of the Executive's duties hereunder.

            6. Compensation.

            (a) During the term of this Agreement, the Company shall pay the
Executive, and the Executive agrees to accept a base salary at the rate of not
less than $218,000.00 per year in the first two years of this Agreement and not
less than $224,167.00 per year in the next three years of this Agreement (the
annual base salary as increased from time to time during the term of this
Agreement being hereinafter referred to as the "Base Salary"). The Base Salary
shall be paid in installments no less frequently than monthly. Any increase in
Base Salary or other compensation shall not limit or reduce any other obligation
of the Company hereunder, and once established at an increased specified rate,
the Executive's Base Salary hereunder shall not thereafter be reduced.

            (b) In addition, during the term of this Agreement, for each Quarter
Period of the First Home Group, if the Cash Income of the First Home Group for
the applicable Quarter Period is positive, on May 15, August 15, November 15 and
February 15, as applicable, the Company shall pay the Executive a bonus of
$46,750.00. For the purpose of this paragraph (b), the first Quarter Period of
the First Home Group after the Closing shall be deemed to commence on the first
day of the first full calendar month to commence after the Closing and shall be
deemed to end on the last day of the third calendar month to commence after the
Closing and, thereafter, each three calendar month period shall be deemed a
Quarter Period.

            (c) On April 30, or on such later date as set forth in Section 2.4
of the Merger Agreement, of each calendar years of 2001, 2002, 2003, 2004 and
2005, the Executive shall receive stock options for 25% of the number of shares
of Common Stock to be determined by dividing (A) a fraction, the numerator of
which shall be the product of 3% of the Net Income (as defined in the Merger
Agreement) for the prior calendar year times the Company's P/E (the ratio of the
Company's price of Common Stock divided by earnings per share of Common Stock
reported for the applicable calendar year, where the price of the Common Stock
is based on the average closing price for the last twenty-trading-day period for
such prior year) and the denominator of which shall be five; by (B) the Fair
Market Value (as defined in the Merger Agreement) as of the grant date;
provided, that unless otherwise provided herein, such options will be subject to
the terms and conditions of the 1999 Omnibus Stock Incentive Plan of the Company
(the "Plan"). In the event that the number of shares of Common Stock available
under the Plan is not sufficient to issue all of the options required to be
issued to the Executive on any date pursuant to this Section, the Purchaser
shall use its best efforts to amend the Plan to increase the number of shares of
Common Stock available under the Plan so that the Plan would include a number of
shares of Common Stock sufficient to allow the issuance of all of the options
required to be issued to the Executive on any date pursuant to this Section. In
such event, if the Plan is amended to allow the issuance of the options required
to be issued to the Executive pursuant to this Section, the Purchaser shall
promptly thereafter issue such options to the Executive. The options granted
pursuant to this Section shall (i) vest after two years from the date of grant,
(ii) expire after 10 years from the date of grant and (iii) have an exercise
price equal to the Fair Market Value as of the grant date.

            For purposes of this Section, the Net Income shall be determined as
provided in the Merger Agreement; provided, however, that such Net Income shall
be determinable only with respect to First Home Group.

            (d) During the term of this Agreement, the Executive shall be
entitled to (i) perquisites, including, without limitation, an office and
secretarial and clerical staff, and (ii) fringe benefits, including, without
limitation, health insurance, in each case at least equal to, and on the same
terms and conditions as, those attached to the Executive's office on the date
hereof, as the same may be improved from time to time during the term of this
Agreement, as well as to reimbursement, upon proper accounting, of all
reasonable expenses and disbursements incurred by the Executive in the course of
the Executive's duties.

            (e) The Executive, the Executive's dependents and beneficiaries
shall be entitled to all benefits and service credit for benefits during the
term of this Agreement to which senior officers of the Company and their
dependents and beneficiaries are entitled as the result of the employment of
such officers during the term of this Agreement under the terms of employee
plans and practices of the Company and its subsidiaries, including, without
limitation, any pension plans, profit sharing plans, any non-qualified deferred
compensation plans and related "rabbi" trusts, the Company's life insurance
plans, its disability benefit plans, its vacation and holiday pay plans, its
medical, dental and welfare plans, and other present or successor plans and
practices of the Company and its subsidiaries for which senior officers, their
dependents and beneficiaries are eligible, and to all payments and other
benefits under any such plan or practice subsequent to the term of this
Agreement as a result of participation in such plan or practice during the term
of this Agreement.

            7. Termination of Employment.

            (a)   The term of this  Agreement  shall  terminate upon the death
of the Executive.

            (b) The Company may terminate the Executive's employment during the
term of this Agreement for Cause as provided in Section 7(b)(i) or in the event
of Disability as provided in Section 7(b)(ii).

                     (i) This Agreement shall be considered terminated for
      "Cause" only:

                        (A) if the Executive willfully and repeatedly fails to
            substantially perform the Executive's duties hereunder, other than
            by reason of a Disability;

                        (B) if the Executive is grossly negligent or engages in
            gross misconduct in the performance of the Executive's duties
            hereunder;

                        (C) if the Executive knowingly engages in an act of
            dishonesty, an act of fraud or embezzlement, or any conduct
            resulting in a felony conviction; or

                        (D) if the Executive violates the provisions of the
            Non-Competition Agreement of even date hereof between the Executive
            and the Company in substantially the form of Exhibit A hereof (the
            "Non-Competition Agreement")

      and, in the case of each of clauses (A), (B) (C) and (D) above, the
      applicable conditions set forth in Section 7(e) are satisfied.

            Anything in this Section 7(b) to the contrary notwithstanding, the
      Executive's employment shall in no event be considered terminated by the
      Company for Cause if termination takes place (I) as the result of bad
      judgment or negligence on the part of the Executive other than gross
      negligence or willful or reckless misconduct, (II) for any act or omission
      in respect of which a determination could properly be made that the
      Executive met the applicable standard of conduct prescribed for
      indemnification or reimbursement or payment of expenses of an officer or
      director under the Bylaws or Certificate of Incorporation of the Company
      or the Subsidiary or the laws of the State of Delaware or the directors'
      or officers' liability insurance of the Company or the Subsidiary in each
      case as in effect at the time of such act or omission, (III) as the result
      of an act or omission which occurred more than three calendar months prior
      to the Executive's having been given Notice of Termination for such act or
      omission unless the commission of such act or such omission was not or
      could not reasonably have been, at the time of such commission or
      omission, known to a member of the Boards of Directors (other than the
      Executive) , in which case more than three calendar months from the date
      the commission of such act or such omission was or could reasonably have
      been so known, (IV) as the result of a continuing course of action which
      commenced and was or could reasonably have been known to a member of the
      Boards of Directors (other than the Executive) more than three calendar
      months prior to Notice of Termination having been given to the Executive
      for such course of action, or (V) because of an act or omission believed
      by the Executive in good faith to have been in, or not opposed to, the
      interests of the Company.

                     (ii) The term "Disability" as used in this Agreement means
      an accident or physical or mental illness which prevents the Executive
      from substantially performing the Executive's duties hereunder for six
      consecutive months. The term of this Agreement shall end as of the close
      of business on the last day of such six month period but without prejudice
      to any payments due to the Executive in respect of disability under this
      Agreement or any plan or practice of the Company. The amount of any
      payments payable under Section 6(a) during such six month period shall be
      reduced by any payments to which the Executive may be entitled for the
      same period because of disability under any disability or pension plan or
      arrangement of the Company or any subsidiary or affiliate thereof.

            (c) The Executive may terminate the Executive's employment during
the term of this Agreement for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean (i) a reduction of the Executive's Base Salary or any
other failure by the Company to comply with Section 6, (ii) failure by the
Company to comply with Section 5, (iii) failure by the Company to obtain the
assumption of, and the agreement to perform, this Agreement by any successor as
contemplated in Section 11(a); (iv) such reduction described in the foregoing
clause (i) or failure described in the foregoing clauses (ii) or (iii), as the
case may be, is not cured within 30 days after receipt by the Company of written
notice from the Executive describing such event; or (v) the occurrence of a
Change of Control and any action by the Company that results in a diminution or
other adverse change in the Executive's job description, responsibilities,
working condition or authority.

            (d) Notwithstanding anything to the contrary set forth herein, the
Company shall have the right to terminate the Executive's employment for any
reason other than Cause at any time, subject to the consequences of such
termination as set forth in Section 8.

            (e) In no event shall the Company be entitled to terminate the
Executive's employment during the term of this Agreement for Cause pursuant to
Section 7(b), unless and until all of the following take place, provided that
Sections 7(e)(i) through (iii) shall not apply to any termination for Cause
pursuant to Section 7(b)(i)(C):

                     (i) the Secretary of the Company gives written notice to
      the Executive (the "Warning Notice") setting forth (A) the specific
      provision of this Agreement that the Executive is alleged to have failed
      to satisfy, (B) the acts or omissions alleged to constitute such failure,
      (C) the date on which the Executive shall be given a reasonable
      opportunity to appear before and be heard by the Board of Directors of the
      Company concerning the allegations, which date shall be not less than 30
      nor more than 90 days after the Executive's receipt of the Warning Notice,
      and (D) the loss of rights under this Agreement that shall occur unless
      the Executive diligently and in good faith takes reasonable steps to
      remedy such failure within 30 days after the Executive's receipt of the
      Warning Notice;

                     (ii) the Executive does not diligently and in good faith
      take all reasonable steps to remedy such failure within 30 days after the
      Executive's receipt of the Warning Notice; and

                     (iii) the Executive is given a reasonable opportunity to
      appear before and be heard by the Board of Directors concerning the
      allegations, in accordance with the Warning Notice.

            (f) Any termination by the Company pursuant to Section 7(b) or by
the Executive pursuant to Section 7(c) shall be communicated by a written Notice
of Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which indicates the specific
termination provision in this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provisions so indicated.

            (g) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by the Executive's death, the date of the Executive's
death, (ii) if the Executive's employment is terminated pursuant to Section
7(b)(ii), 30 days after Notice of Termination is given (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such 30 day period), and (iii) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given.

            8. Compensation on Termination. The parties recognize and agree
that, if the Company terminates the Executive's employment during the term of
this Agreement other than pursuant to Section 7(b), or if the Executive
terminates the Executive's employment during the term of this Agreement for Good
Reason pursuant to Section 7(c), the actual damages to the Executive would be
difficult if not impossible to ascertain and agree that the Executive's sole
remedy shall be a right to receive amounts determined and paid in accordance
with the provisions of this Section 8. The Executive shall not be required to
mitigate the amount of any payment provided for in this Section 8 by seeking
other employment or otherwise, nor shall any compensation earned by the
Executive in other employment or otherwise reduce the amount of any payment
provided for in this Section 8.

            (a) If the Company shall terminate the Executive's employment during
the term of this Agreement other than pursuant to Section 7(b), or if the
Executive shall terminate the Executive's employment during the term of this
Agreement for Good Reason pursuant to Section 7(c), then, as severance pay or
liquidated damages or both:

                     (i) the Company shall pay the Executive the Executive's
      full Base Salary through the Date of Termination at the rate in effect at
      the time Notice of Termination is given, together with any other amounts
      payable to the Executive under Section 6 for periods prior to the Date of
      Termination; and

                     (ii) the Company shall pay the Executive the lesser of (a)
      one year's Base Salary or (b) the Base Salary to be paid to the Executive
      for the period after the Termination Date until the Fifth Anniversary;
      provided, however, that the Company, within 30 days after the Date of
      Termination, may elect, at its sole discretion, to terminate the
      Non-Competition Agreement and make no payment under this Section 8(a)(ii).

            (b) If the Executive's employment terminates under any circumstance
that does not entitle the Executive to payments under Section 8(a) (including a
termination by reason of the death or Disability of the Executive, or by reason
of the Company or the Executive electing not to extend or further extend the
term of this Agreement pursuant to Section 3(b)), the Executive shall not be
entitled to receive any compensation under Section 6 accruing after the date of
such termination, or any payment under Section 8(a)(ii).

            9. Indemnification. The Company shall indemnify the Executive to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time.

            10. Optional Sixth Year. At the end of the term of this Agreement
set forth in Section 3(a) (i) if a Change of Control has occurred, the term
shall automatically be extended for one (1) year, or (ii) if a Change of Control
has not occurred, the Company and the Executive shall each use reasonable best
efforts to agree to the terms of a one (1) year extension of the term.

            11. Successors; Binding Agreement.

            (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the extent
that the Company would be required to perform it if no such succession had taken
place; provided, however, that no such agreement with a successor shall release
the Company without the Executive's express written consent. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to hereunder if the Executive's employment were
terminated by the Company other than pursuant to Section 7(b), except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.

            (b) If the Executive should die while any amounts are due and
payable to the Executive hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of the Agreement to the
Executive's devisees, legatee, or other designee or, if there be no such
designee, to the Executive's estate.

            (c) Except as to withholding of any tax under the laws of the United
States or any state or locality, neither this Agreement nor any right or
interest hereunder nor any amount payable at any time hereunder shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, attachment, or
other legal process, or encumbrance of any kind by the Executive or the
beneficiaries of the Executive or by legal representatives without the Company's
prior written consent, nor shall there be any right of set-off or counterclaim
in respect of any debts or liabilities of the Executive, the Executive's
beneficiaries or legal representatives against any right or interest hereunder
or any amount payable at any time hereunder to the Executive, the Executives
beneficiaries or legal representatives; provided, however, that nothing in this
Section 11 shall preclude the Executive from designating a beneficiary to
receive any benefit payable on the Executive's death, or the legal
representatives of the Executive from assigning any rights hereunder to the
Person or Persons entitled thereto under the Executive's will or, in case of
intestacy, to the Person or Persons entitled thereto under the laws of intestacy
applicable to the Executive's estate.

            12. Parties. This Agreement shall be binding upon and shall inure to
the benefit of the Company and the Executive, the Executive's heirs,
beneficiaries and legal representatives.

            13. Entire Agreement; Amendment.

            (a) This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all other
agreements between the parties with respect to the subject matter hereof.

            (b) Any amendment of this Agreement shall not be binding unless in
writing and signed by both (i) an officer or director of the Company duly
authorized to do so and (ii) the Executive.

            14. Enforceability. In the event that any provision of this
Agreement is determined to be invalid or unenforceable, the remaining terms and
conditions of this Agreement shall be unaffected and shall remain in full force
and effect, and any such determination of invalidity or enforceability shall not
affect the validity or enforceability of any other provision of this Agreement.

            15. Notices. All notices which may be necessary or proper for either
the Company or the Executive to give to the other shall be in writing and shall
be sent by hand delivery, registered or certified mail, return receipt
requested, overnight courier or facsimile, if to the Executive, to him at 950
North Elmhurst Road, Mt. Prospect, IL 60056, Attention: Thomas J. Fiddler,
Facsimile: (847) 259-9307, with a copy to Lorenzini and Dressler, Ltd., 1900
Spring Road, Ste. 501, Oak Brook, IL 60523, Attention: Ronald N. Lorenzini, Jr.,
Facsimile: (630) 684-0410, and, if to the Company, to it at its principal
executive offices at 12 East 49th Street, New York, NY 10017, Attention: Human
Resources Officer, Facsimile: 212-546-6834, with a copy to Cadwalader,
Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, Attention: Louis
Bevilacqua, Esq., Facsimile: 212-504-6666, and shall be deemed given when sent,
provided that any Notice of Termination or other notice given pursuant to
Section 7 shall be deemed given only when received. Either party may by like
notice to the other party change the address at which the Executive or it is to
receive notices hereunder.

            16. Governing Law. THIS AGREEMENT IS EXECUTED IN THE STATE OF NEW
YORK AND SHALL BE GOVERNED BY, AND BE ENFORCEABLE IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.

            17. Effective Date. This Agreement shall become effective upon
consummation of the transactions contemplated by the Merger Agreement.

            18. Definitions. The following terms, when capitalized in this
Agreement, shall have the meanings set forth or incorporated by reference in
this Section 18.

            (a) "Base Salary" shall have the meaning set forth in Section 6(a).

            (b) "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.

            (c) "Cash Income" means the net income of First Home Group for the
applicable period as determined in accordance with generally accepted accounting
principles consistently applied, using the principles specified in Exhibit A
plus amortization and depreciation expenses of First Home Mortgage Corp. for the
period set forth in Exhibit A.

            (d) "Change of Control" shall be deemed to have occurred if (A)
Michael Strauss, directly or indirectly, is no longer the largest stockholder of
the Company or any successor as contemplated in Section 11(a), or (B) Michael
Strauss is neither the Chief Executive Officer nor the Chief Operating Officer
of the Company or any successor as contemplated in Section 11(a).

            (e) "Cause" shall have the meaning set forth in Section 7(b)(i).

            (f) "Closing" means the closing date of the Merger Agreement.

            (g) "Company" means American Home Mortgage Holdings, Inc., a
Delaware corporation, and any successors to its business and/or assets, which
executes and delivers an agreement provided for in Section 11(a) or which
otherwise becomes bound by all the terms and conditions of this Agreement by
operation of law.

            (h) "Date of Termination" shall have the meaning set forth in
Section 7(g).

            (i) "Disability" shall have the meaning set forth in Section
7(b)(ii).

            (j) "First Home Group" is defined in Exhibit 2.4(d) to the Merger
Agreement.

            (k) "Good Reason" shall have the meaning set forth in Section 7(c).

            (l) "Notice of Termination" shall have the meaning set forth in
Section 7(f).

            (m) "Person" means any individual, corporation, partnership, limited
liability company, limited duration company, trust or other entity of any nature
whatsoever.

                    (REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.

                                       American Home Mortgage Holdings, Inc.

                                       By: /s/ Michael Strauss
                                           -------------------------------------
                                           Name:   Michael Strauss
                                           Title:  President and CEO

                                       /s/ Thomas J. Fiddler
                                       -----------------------------------------
                                       Thomas J. Fiddler

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