SEVENTH AMENDED AND RESTATED MANAGEMENT AGREEMENT

This SEVENTH AMENDED AND RESTATED MANAGEMENT AGREEMENT (this “Agreement”) is
entered into and effective as of July 21, 2020 by and between (i) ARMOUR
RESIDENTIAL REIT, INC., a Maryland corporation (the “REIT”), and (ii) ARMOUR
CAPITAL MANAGEMENT LP, a Delaware limited partnership (the “Manager”).

RECITALS
WHEREAS, the REIT and the Manager are parties to that certain Sixth Amended and
Restated Management Agreement dated and effective as of November 20, 2017 (the
“Sixth Amended and Restated Management Agreement”); and
WHEREAS, the parties desire to amend and restate the Sixth Amended and Restated
Management Agreement, upon the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1.    Definitions. Capitalized terms used but not otherwise defined in this
Agreement shall have the respective meanings assigned to them below:
1.1    “Affiliate” means, with respect to any specified Person, any other Person
that directly or indirectly controls, is controlled by, or is under common
control with, that specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling”, “controlled by”
and “under common control with”), with respect to any specified Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that specified Person, whether by
contract, through the ownership of voting securities or other equity interests
(including partnership or membership interests), or otherwise.
1.2    “Agreement” means this Seventh Amended and Restated Management Agreement,
as the same may be amended from time to time.
1.3    [Reserved]
1.4    “Base Management Fee” shall have the meaning set forth in Section 6.1 of
this Agreement.
1.5    “Board of Directors” means the member(s) of the Board of Directors of the
REIT.
1.6    “Business Day” means a day on which the banks are opened for business
(Saturdays, Sundays, statutory and civic holidays excluded) in New York, New
York, United States.
1.7    “Cause” means, for purposes of a termination of this Agreement by the
REIT without penalty or payment of a Termination Fee, a final determination by a
court of competent jurisdiction (a) that the Manager has materially breached
this Agreement that has a material adverse effect on the REIT and such material
breach has continued for a period of 30 days after receipt by the Manager of
written notice thereof specifying such breach and requesting that the same be
remedied in such 30-day period, (b) that an action taken or omitted to be taken
by the Manager in connection with this Agreement constitutes willful misconduct
or gross negligence that results in material harm to the REIT and such willful
misconduct or gross negligence has not been cured within a period of 30 days
after receipt by the Manager of written notice thereof specifying such willful
misconduct or gross negligence and requesting that the same be remedied in such
30-day period, or (c) that an action taken or omitted to be taken by the Manager
in connection with this Agreement constitutes fraud that results in material
harm to the REIT.
1.8     “Code” means the Internal Revenue Code of 1986, as amended.
1.9     “Current Term” shall mean the period from July 21, 2020 through June 18,
2027.

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1.10    “Effective Date” means the date of this Agreement.
1.11    “Equity Securities” shall have the meaning set forth in Rule 3a11-1
under the Securities Exchange Act of 1934, as amended.
1.12    “FHLMC” means the Federal Home Loan Mortgage Corporation (a/k/a Freddie
Mac).
1.13    “FNMA” means the Federal National Mortgage Association (a/k/a Fannie
Mae).
1.14    “GNMA” means the Governmental National Mortgage Administration (a/k/a
Ginnie Mae).
1.15    “Governing Instruments” means the articles of incorporation or charter,
as the case may be, and the bylaws of the REIT and its subsidiaries, as those
documents may be amended from time to time.
1.16    “Gross Equity Raised” means an amount in dollars calculated as of the
date of determination that is equal to (a) the initial equity capital of the
REIT following the consummation of the Merger, plus (b) equity capital raised in
public or private issuances of the REIT’s Equity Securities (calculated before
underwriting fees and distribution expenses, if any), less (c) capital returned
to the stockholders of the REIT, as adjusted to exclude (d) one-time charges
pursuant to changes in GAAP and certain non-cash charges after discussion
between the Manager and the Board of Directors and approved by a majority of the
Board of Directors. For purposes of the preceding sentence, capital returned to
stockholders shall include (i) the purchase price of Equity Securities
repurchased by the REIT and (ii) liquidation distributions as approved and so
designated by a majority of the Board of Directors.
1.17    “Independent Directors” means the members of the Board of Directors who
are not officers or employees of the Manager or any Person directly or
indirectly controlling or controlled by the Manager, and who are otherwise
“independent” in accordance with the REIT’s Governing Instruments and policies
and, if applicable, the rules of any national securities exchange on which the
REIT’s common stock is listed.
1.18    [Reserved]
1.19    “Investment Company Act” shall mean the Investment Company Act of 1940,
as amended.
1.20    “Manager” shall have the meaning set forth in the Preamble of this
Agreement and shall include any successor thereto (subject to the provisions of
Section 13).
1.21    “Manager Obligations” shall have the meaning set forth in Section 2.4.2
of this Agreement and may be limited from time to time in the REIT’s discretion.
1.22     “Merger” means the merger contemplated pursuant to the Merger
Agreement.
1.23    “Merger Agreement” means that Agreement and Plan of Merger, dated as of
July 29, 2009, among the REIT, ARMOUR Merger Sub Corp., a Delaware corporation,
and Enterprise Acquisition Corp., a Delaware corporation.
1.24    “Mortgage Assets” means the following assets types of the REIT which the
REIT may determine from time to time shall be solely managed by the Manager:
(i)    mortgage securities (or interests therein), including (a)
adjustable-rate, hybrid adjustable-rate and pass-through certificates (including
GNMA certificates, FNMA certificates and FHLMC certificates), (b) collateralized
mortgage obligations, (c) securities representing interests in, or secured by,
agency wrapped mortgages on real property other than pass-through certificates
and CMOs, (d) agency mortgage derivative securities and other agency
mortgage-backed and mortgage collateralized obligations, and (e) mortgage
derivative securities;
(ii)    U.S. government issued bills, notes and bonds including general
obligations of the agencies of the U.S. government (including, but not limited
to GNMA, FNMA and FHLMC); and
(iii)    short-term investments, including short-term bank certificates of
deposit, short-term U.S. Treasury securities, short-term U.S. government agency
securities, commercial paper, repurchase agreements,

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short-term CMOs, short-term asset backed securities and other similar types of
short-term investment instruments, all of which will have maturities or average
lives of less than one (1) year.
1.25    [Reserved]
1.26    “Non-Renewal Notice” shall have the meaning set forth in Section 10.1 of
this Agreement.
1.27    “Notice of Proposal to Negotiate” shall have the meaning set Forth in
Section 10.5 of this Agreement.
1.28    “Person” means any individual, corporation, partnership, joint venture,
limited liability company, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
1.29    “Real Estate Investment Trust” means a “real estate investment trust” as
defined under the Code.
1.30    “REIT” shall have the meaning set forth in the Preamble of this
Agreement and shall include any subsidiary and any successor thereto.
1.31    “REIT Provisions of the Code” means Sections 856 through 860 of the
Code.
1.32    “Renewal Term” shall have the meaning set forth in Section 10.1 of this
Agreement.
1.33    “Staton Bell” shall have the meaning set forth in Section 2.5 of this
Agreement.
1.34    “Sub-Management Agreement” shall have the meaning set forth in Section
2.5 of this Agreement.
1.35    “Termination Fee” means an amount equal to four (4) times the Base
Management Fee paid to the Manager in the preceding full twelve (12) months,
calculated as of the effective date of the termination of this Agreement
pursuant to Section 10.2.
2.    General Duties of the Manager.
2.1    Services. All services performed by the Manager under this Agreement
shall be subject to the direction and oversight of the Board of Directors. As
may be limited from time to time by the REIT in its discretion, the Manager
shall (i) manage the day-to-day operations of the REIT and perform the services
and other activities described below, and (ii) to the extent directed by the
Board of Directors, perform similar management and services for any subsidiary
of the REIT; provided, however, that nothing herein shall give the Manager the
right (or obligate the Manager) to supervise any other manager engaged by the
REIT (each such other manager, an “Other Manager”), or to manage or otherwise
participate in any way in any securitization transaction undertaken by the REIT
or any joint venture formed by the REIT. Subject to the REIT’s right to retain
Other Managers and the REIT’s right to limit the following duties in its
discretion from time to time to the Mortgage Assets which the REIT determines
from time to time shall be solely managed by the Manager, the Manager shall
perform the following services from time to time as may be required for the
management of the REIT and its assets (other than any such assets solely being
managed by an Other Manager):
2.1.1    serving as a consultant to the REIT with respect to the formulation of
investment criteria for assets managed by the Manager and the preparation of
policy guidelines by the Board of Directors for such assets;
2.1.2    assisting the REIT in developing criteria for Mortgage Asset purchase
commitments that are consistent with the REIT’s long-term investment objectives
and making available to the REIT its knowledge and experience with respect to
Mortgage Assets managed by the Manager;
2.1.3    representing the REIT in connection with certain of the REIT’s
purchases, sales and commitments to purchase or sell Mortgage Assets managed by
the Manager that meet in all material respects the REIT’s investment criteria,
including without limitation by providing repurchase agreement and similar
portfolio management expertise as appropriate in connection therewith;
2.1.4    managing the REIT’s Mortgage Assets (other than any Mortgage Assets
managed solely by Other Managers);
2.1.5    advising the REIT and negotiating the REIT’s agreements with
third-party lenders for borrowings by the REIT;

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2.1.6    making available to the REIT statistical and economic research and
analysis regarding the REIT’s activities managed by the Manager and the services
performed for the REIT by the Manager;
2.1.7    monitoring and providing to the Board of Directors from time to time
price information and other data obtained from certain nationally-recognized
dealers that maintain markets in mortgage assets identified by the Board of
Directors from time to time, and providing data and advice to the Board of
Directors in connection with the identification of such dealers, in each case
with respect to assets managed by the Manager;
2.1.8    investing or reinvesting money of the REIT, which the REIT determines
from time to time shall be solely managed by the Manager, in accordance with the
REIT’s policies and procedures;
2.1.9    providing executive and administrative personnel, office space and
other appropriate services required in rendering services to the REIT, in
accordance with and subject to the terms of this Agreement;
2.1.10    administering the day-to-day operations of the REIT and performing and
supervising the performance of such other administrative functions necessary to
the management of the REIT as may be agreed upon by the Manager and the Board of
Directors, including, without limitation, the collection of revenues and the
payment of the REIT’s debts and obligations from the REIT’s accounts (in each
case in respect of assets managed by the Manager), and the maintenance of
appropriate computer systems and related information technology to perform such
administrative and management functions;
2.1.11    advising the Board of Directors in connection with certain policy
decisions (other than any such decisions solely relating to Other Managers);
2.1.12    evaluating and recommending hedging strategies to the Board of
Directors and, upon approval by the Board of Directors, engaging in hedging
activities on behalf of the REIT consistent with the REIT’s status as a Real
Estate Investment Trust, in each case in respect of assets managed by the
Manager;
2.1.13    supervising compliance by the REIT with the REIT Provisions of the
Code and maintenance of its status as a Real Estate Investment Trust (other than
in respect of any assets not managed by the Manager);
2.1.14    qualifying and causing the REIT to qualify to do business in all
applicable jurisdictions and obtaining and maintaining all appropriate licenses
(other than in respect of any activities not managed by the Manager);
2.1.15    assisting the REIT to retain qualified accountants and tax experts to
assist in developing and monitoring appropriate accounting procedures and
testing systems and to conduct quarterly compliance reviews as the Board of
Directors may deem necessary or advisable (other than any such procedures or
reviews relating solely to Other Managers);
2.1.16    assisting the REIT in its compliance with all federal (including,
without limitation, the Sarbanes-Oxley Act of 2002), state and local regulatory
requirements applicable to the REIT in respect of its business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports,
documents and filings, if any, required under the Securities Exchange Act of
1934, as amended, or other federal or state laws;
2.1.17    assisting the REIT in its compliance with federal, state and local tax
filings and reports, and generally enable the REIT to maintain its status as a
Real Estate Investment Trust, including soliciting stockholders, as defined
below, for required information to the extent provided in the REIT Provisions of
the Code;
2.1.18    assisting the REIT in its maintenance of an exemption from the
Investment Company Act and monitoring compliance with the requirements for
maintaining an exemption from the Investment Company Act;
2.1.19    advising the REIT as to its capital structure and capital raising
activities (other than in respect of capital not to be managed by the Manager);
2.1.20    handling and resolving all claims, disputes or controversies
(including all litigation, arbitration, settlement or other proceedings or
negotiations) in which the REIT may be involved or to which the REIT may be
subject arising out of the

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REIT’s day-to-day operations, subject to the approval of the Board of Directors
and excluding any such proceedings or negotiations solely involving Other
Managers;
2.1.21    engaging and supervising, on behalf of the REIT at the REIT’s request
and at the REIT’s expense, the following, without limitation: independent
contractors to provide investment banking services, leasing services, mortgage
brokerage services, securities brokerage services, other financial services and
such other services as may be deemed by the Board of Directors to be necessary
or advisable from time to time (other than Other Managers, or any of the
foregoing to be utilized in connection with activities being solely conducted by
Other Managers);
2.1.22    so long as the Manager does not incur additional costs or expenses,
and the REIT does not incur additional costs or expenses which are not
specifically approved in writing by the REIT, performing such other services as
may be necessary or advisable from time to time for management and other
activities relating to the assets of the REIT as the Board of Directors shall
reasonably request or the Manager shall deem appropriate under the particular
circumstances; and
2.1.23    assisting the REIT, upon the REIT’s request therefor, in evaluating
the advantages and disadvantages of the REIT internalizing the functions of the
Manager or of any merger and acquisition transaction that the REIT may elect to
pursue, which also may be subject to approval by the shareholders of the REIT.
2.2    Obligations of the Manager.
2.2.1    Verify Conformity with Acquisition Criteria. At all times subject to
the direction of the Board of Directors, the Manager shall use commercially
reasonable efforts to provide that each Mortgage Asset acquired by the Manager
for the REIT conforms in all material respects to the acquisition criteria of
the REIT and shall seek to cause each seller or transferor of such Mortgage
Assets to the REIT to make such representations and warranties regarding such
Mortgage Assets as may, in the reasonable judgment of the Manager, be necessary
and appropriate, subject to market custom. In addition, the Manager shall take
such other action as it deems reasonably necessary or appropriate in seeking to
protect the REIT’s investments to the extent consistent with its duties under
this Agreement.
2.2.2    Conduct Activities in Conformity with REIT Status and All Applicable
Restrictions. At all times subject to the direction of the Board of Directors
and with reasonable advance notice from the REIT of any pertinent information
relating to any activities of the REIT as may then be conducted by Other
Managers, the Manager shall refrain from any action which would adversely affect
the status of the REIT or, if applicable, any subsidiary of the REIT as a Real
Estate Investment Trust or (i) which would violate any material law, rule or
regulation of any governmental body or agency having jurisdiction over the REIT
or any such subsidiary or (ii) which would otherwise not be permitted by the
REIT’s or such subsidiary’s Governing Instruments, any material operating
policies adopted by the REIT, or any agreements actually known by the Manager,
except in each of clauses (i) and (ii) as could not reasonably be expected to
have a material adverse effect on the REIT. If the Manager is directed to take
any such action by the Board of Directors, the Manager shall promptly notify the
Board of Directors of the Manager’s judgment that such action would adversely
affect such status or cause such violation or not be permitted as aforesaid.
2.2.3    Reports. Upon the request of the Board of Directors and at the sole
cost and expense of the REIT, the Manager shall cause an annual compliance
report of the REIT to be prepared by a firm independent of the Manager and its
Affiliates and having the proper expertise to determine compliance with the REIT
Provisions of the Code and related matters. In addition, the Manager shall
prepare regular reports for the Board of Directors, that will review the REIT’s
acquisitions of Mortgage Assets, portfolio composition and characteristics,
credit quality (if applicable), performance and compliance with the REIT’s
investment policies and policies that enable the REIT to maintain its
qualification as a Real Estate Investment Trust and to maintain its exemption
from being deemed an “investment company” under the Investment Company Act;
provided that such reports shall only relate to assets the REIT has determined
shall be managed by the Manager.

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2.2.4    Portfolio Transactions. In placing portfolio transactions and selecting
brokers or dealers, the Manager shall seek to obtain on behalf of the REIT
commercially reasonable terms. In assessing commercially reasonable terms for
any transaction, the Manager shall consider all factors it deems relevant,
including, without limitation, the breadth of the market for the security, the
price of the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis.
2.3    Cooperation of the REIT. The REIT and the Board of Directors shall take
such actions as may reasonably be required to permit and enable the Manager to
carry out its duties and obligations under this Agreement, including, without
limitation, the steps reasonably necessary to allow the Manager to file any
registration statement on behalf of the REIT in a timely manner if the REIT
requests that the Manager do so. The REIT further agrees to use commercially
reasonable efforts to make available to the Manager reasonably available
resources, information and materials reasonably requested by the Manager to
enable the Manager to satisfy its obligations hereunder, including its
obligations to deliver financial statements and any other information or reports
with respect to the REIT. If the Manager is not able to provide a service, or in
the reasonable judgment of the Manager it is not prudent to provide a service,
without the approval of the Board of Directors, then the Manager shall be
excused from providing such service (and shall not be in breach of this
Agreement) until the applicable approval has been obtained; provided, however,
that the Manager shall have promptly advised the Board of Directors in writing
that the Manager is awaiting such approval.
2.4    Engagement of Third Parties.
2.4.1    Securities Dealers. Subject to the REIT’s right to retain Other
Managers and the REIT’s right to limit the Manager’s authorizations in the
REIT’s discretion from time to time, the Manager is authorized, for and on
behalf, and at the sole cost and expense of the REIT, to employ such securities
dealers (including Affiliates of the Manager) for the purchase and sale of the
REIT’s Mortgage Assets managed by the Manager as may, in the reasonable judgment
of the Manager, be necessary to obtain the best commercially available net
results taking into account such factors as the policies of the REIT, price,
dealer spread, the size, type and difficulty of the transaction involved, the
firm’s general execution and operational facilities and the firm’s risk in
positioning the securities involved. Consistent with this policy, and subject to
the foregoing caveats with respect to the REIT’s rights, the Manager is
authorized to direct the execution of the REIT’s portfolio transactions to
dealers and brokers furnishing statistical information or research deemed by the
Manager to be reasonably necessary to the performance of its investment advisory
functions for the REIT.
2.4.2    Other Third Parties. The Manager is authorized to retain, for and on
behalf of the REIT, the services of third parties (including Affiliates of the
Manager), including, without limitation, accountants, legal counsel, appraisers,
insurers, brokers, dealers, transfer agents, registrars, developers, investment
banks, financial advisors, banks and other lenders and others as the Manager
deems reasonably necessary or advisable in connection with the management and
operations of the REIT. The costs and expenses related to the retention of third
parties shall be the sole cost and expense of the REIT except to the extent (i)
the third party is retained to make decisions to invest in and dispose of
Mortgage Assets, provide administrative, data processing or clerical services,
prepare the financial records of the REIT or prepare a report summarizing the
REIT’s acquisitions of Mortgage Assets, portfolio compensation and
characteristics, credit quality (if applicable) or performance of the portfolio,
in each case with respect to assets the REIT has determined shall be managed by
the Manager, in which case it shall be at the sole cost and expense of the
Manager unless otherwise approved by the Board of Directors or (ii) the costs
and expenses are not reimbursable pursuant to Section 7.1 of this Agreement
(collectively, the “Manager Obligations”). Notwithstanding anything in this
Agreement to the contrary, in no event shall the Manager be responsible for any
costs or expenses related to or incurred by any Other Manager.

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2.4.3    Affiliates. Notwithstanding anything contained in this Agreement to the
contrary, the Manager shall have the right to cause any of its services under
this Agreement to be rendered by the Manager’s employees or Affiliates of the
Manager. The REIT shall pay or reimburse the Manager or its Affiliates (subject
to the foregoing approval) for the reasonable and actually incurred cost and
expense of performing such services by the Affiliate, including, without
limitation, back office support services specifically requested by the REIT if
the costs and expenses of such Affiliate would have been reimbursable under this
Agreement if such Affiliate were an unaffiliated third party, or if such service
had been performed by the Manager itself.
2.5    Sub-Management Agreement. The REIT and the Manager expressly acknowledge
and agree that, concurrent with the execution of that certain Fourth Amended and
Restated Management Agreement dated as of February 23, 2015, the Manager entered
into the First Amended and Restated Sub-Management Agreement, by and among the
Manager, Staton Bell Blank Check LLC (“Staton Bell”) and the REIT (such
agreement, the “Sub-Management Agreement”), and nothing to the contrary
contained in this Agreement shall limit the ability of the Manager or Staton
Bell to enter into and perform their respective obligations under such
Sub-Management Agreement or otherwise limit the effectiveness of such
Sub-Management Agreement. The REIT represents and warrants that the
Sub-Management Agreement has been duly authorized and approved by all necessary
action of the REIT.
3.    Additional Activities.
3.1    Other Activities of the Manager. Nothing in this Agreement shall (i)
prevent the Manager or its Affiliates, officers, directors or employees, from
engaging in other businesses or from rendering services of any kind to any other
person or entity, including, without limitation, investing in, or rendering
advisory service to others investing in, any type of mortgage assets or other
real estate investments (including, without limitation, investments that meet
the principal investment objectives of the REIT), whether or not the investment
objectives or policies of any such other person or entity are similar to those
of the REIT, or (ii) in any way bind or restrict the Manager or its Affiliates,
officers, directors or employees from buying, selling or trading any securities
or commodities for their own accounts or for the account of others for whom the
Manager or its Affiliates, officers, directors or employees may be acting. The
REIT acknowledges that the Manager will base allocation decisions on the
procedures the Manager and the REIT reasonably and in good faith consider fair
and equitable, including, without limitation, such considerations as investment
objectives, restrictions and time horizon, availability of cash and the amount
of existing holdings. While information and recommendations supplied to the REIT
shall, in the Manager’s reasonable and good faith judgment, be appropriate under
the circumstances and in light of the investment objectives and policies of the
REIT, they may be different from the information and recommendations supplied by
the Manager or any Affiliate of the Manager to other investment companies, funds
and advisory accounts. The REIT shall be entitled to equitable treatment under
the circumstances in receiving information, recommendations and any other
services. However, the REIT recognizes that it is not entitled to receive
preferential treatment as compared with the treatment given by the Manager or
any Affiliate of the Manager to any investment company, fund or advisory account
other than any fund or advisory account which contains only funds invested by
the Manager (and not of any of its clients or customers) or its officers and
directors.
3.2    Other Activities of the REIT. Except to the extent expressly set forth in
this Agreement or any other written agreement between the REIT and the Manager,
neither this Agreement nor the relationship between the REIT and the Manager
shall be deemed (i) to limit or restrict the activities of the REIT, its
officers, its employees, or members of its Board of Directors or (ii) impose a
fee or other penalty on the REIT, its officers, its employees, or members of its
Board of Directors for pursuing any such other activities.
3.3    Service to the REIT; Execution of Documents. Directors, officers,
employees and agents of the Manager and its Affiliates may serve as trustees,
directors, officers, employees, agents, nominees or signatories for the REIT or
any

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subsidiary of the REIT, to the extent permitted by the Governing Instruments, as
from time to time amended, or by any resolutions duly adopted by the Board of
Directors pursuant to the Governing Instruments. When executing documents or
otherwise acting in such capacities for the REIT, such persons shall use their
respective titles in the REIT.
4.    Bank Accounts. The Manager may establish and maintain one or more bank
accounts in the name of the REIT or any subsidiary of the REIT, and may collect
and deposit into any such account or accounts, and disburse funds from any such
account or accounts in a manner consistent with this Agreement, including,
without limitation, the following: (a) the payment of the Base Management Fee,
(b) the payment (or advance) of reimbursable costs and expenses, and (c) any
other appropriate amounts. The Manager shall from time to time render
appropriate accountings of such collections and payments to the Board of
Directors and, upon request, to the auditors of the REIT or any subsidiary of
the REIT. One or more of the obligations of the Manager hereunder may be revoked
in whole or in part by the REIT from time to time in its sole discretion.
5.    Records; Confidentiality. The Manager shall maintain appropriate and
accurate books of account and records relating to services performed under this
Agreement, and such books of account and records shall be accessible for
inspection by representatives (including the auditors) of the REIT or any
subsidiary of the REIT at any time during normal business hours. Except in the
ordinary course of business of the REIT, the Manager shall, and shall use
commercially reasonable efforts to cause each of its Affiliates to, keep
confidential any and all information they (or such Affiliates) may obtain from
time to time in connection with the services they (or such Affiliates) render
under this Agreement.
6.    Compensation of the Manager.
6.1    Base Management Fee. For services rendered under this Agreement,
commencing after the end of the first month of business, the REIT shall pay to
the Manager each month in arrears (by wire transfer of immediately available
funds) compensation equal to 1/12th of the sum of (a) 1.5% of the Gross Equity
Raised up to $1 billion plus (b) 0.75% of the Gross Equity Raised in excess of
$1 billion (the “Base Management Fee”) within one (1) Business Day after the end
of such month; provided, however, that the Base Management Fee shall not ever be
less than 1/12th of the Annual Minimum Fee. In the event of a termination of
this Agreement during a calendar month, the Base Management Fee shall be
pro-rated based upon the number of days elapsed in such calendar month prior to
the effective date of such termination.
6.2    Equity Compensation. The REIT may make equity incentive-based
compensation grants to the Manager, from time to time, solely for the purpose of
providing equity incentive based grants for the benefit of the Manager’s
officers and employees who provide substantial services that benefit the REIT.
6.3    No Incentive Management Compensation. The Manager shall not receive any
incentive-based compensation other than as set forth in Section 6.2.
7.    Expenses of the Manager and the REIT.
7.1    Expenses of the Manager. The Manager shall be responsible for the
following expenses:
7.1.1    employment expenses of the personnel employed by the Manager,
including, without limitation, salaries (base and bonuses alike), wages, payroll
taxes and the cost of employee benefit plans of such personnel (but excluding
any stock of the REIT that the Board of Directors may determine to grant to such
personnel, which stock shall not reduce employment expenses otherwise payable by
the Manager pursuant to this Section 7.1.1 or cause the Manager or the REIT to
pay any payroll taxes in respect thereof); and
7.1.2    rent, telephone, utilities, office furniture, equipment, machinery and
other office, internal and overhead expenses of the Manager required for the
REIT’s day-to-day operations, including, bookkeeping, clerical and back-office
services provided by the Manager, provided, however, that the REIT shall pay for
supplies applicable to operations (paper, software, presentation materials,
etc.).

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7.2    Expenses of the REIT. The REIT shall pay all of the costs and expenses of
the REIT and the Manager incurred solely on behalf of the REIT or any subsidiary
or in connection with this Agreement, other than (i) those expenses that are
specifically the responsibility of the Manager pursuant to Section 7.1 of this
Agreement, and (ii) any costs or expenses incurred by the Manager which the REIT
is not required to reimburse pursuant to the provisions of Section 7.3 below.
Without limiting the generality of the foregoing, it is specifically agreed that
the following costs and expenses of the REIT or any subsidiary of the REIT shall
be paid by the REIT and shall not be paid by the Manager and/or the Affiliates
of the Manager (except to the extent of any costs or expenses which the REIT is
not required to reimburse pursuant to the provisions of Section 7.3 below):
7.2.1    all costs and expenses associated with the formation and capital
raising activities of the REIT and its subsidiaries, including, without
limitation, the costs and expenses of the preparation of the REIT’s registration
statements, and any and all costs and expenses of any public offering of the
REIT, any subsequent offerings and any filing fees and costs of being a public
company, including, without limitation, filings with the Securities and Exchange
Commission, the Financial Industry Regulatory Authority, the New York Stock
Exchange (and any other exchange or over-the-counter market), among other such
entities;
7.2.2    all costs and expenses of the REIT in connection with the acquisition,
disposition, financing, hedging, administration and ownership of the REIT’s or
any subsidiary’s investment assets (including, without limitation, the Mortgage
Assets) and, including, without limitation, costs and expenses incurred in
contracting with third parties, including Affiliates of the Manager (as may be
approved by the REIT pursuant to the terms of this Agreement), to provide such
services, such as legal fees, accounting fees, consulting fees, trustee fees,
appraisal fees, insurance premiums, commitment fees, brokerage fees, guaranty
fees, ad valorem taxes, costs of foreclosure, maintenance, repair and
improvement of property and premiums for insurance on property owned by the REIT
or any subsidiary of the REIT;
7.2.3    all costs and expenses relating to the acquisition of, and maintenance
and upgrades to, the REIT’s portfolio analytics and accounting systems
(including, but not limited to Bloomberg);
7.2.4    all costs and expenses of money borrowed by the REIT or its
subsidiaries, including, without limitation, principal, interest and the costs
associated with the establishment and maintenance of any credit facilities,
warehouse loans and other indebtedness of the REIT and its subsidiaries
(including commitment fees, legal fees, closing and other costs);
7.2.5    all taxes and license fees applicable to the REIT or any subsidiary of
the REIT, including interest and penalties thereon;
7.2.6    all legal, audit, accounting, underwriting, brokerage, listing, filing,
rating agency, registration and other fees, printing, engraving, clerical,
personnel and other expenses and taxes of the REIT incurred in connection with
the issuance, distribution, transfer, registration and stock exchange listing of
the REIT’s or any subsidiary’s Equity Securities or debt securities;
7.2.7    other than for the Manager Obligations, all fees paid to and expenses
of third-party advisors and independent contractors, consultants, managers and
other agents (other than the Manager) engaged by the REIT or any subsidiary of
the REIT or by the Manager for the account of the REIT or any subsidiary of the
REIT (other than the Manager) and all employment expenses of the personnel
employed by the REIT or any subsidiary of the REIT, including, without
limitation, the salaries (base and bonuses alike), wages, equity based
compensation of such personnel, and payroll taxes;
7.2.8    all insurance costs incurred by the REIT or any subsidiary of the REIT
and including, but not limited to, insurance paid for by the REIT to insure the
Manager for liabilities as a result of being the manager for the REIT;
7.2.9    all custodian, transfer agent and registrar fees and charges incurred
by the REIT;

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7.2.10    all compensation and fees paid to directors of the REIT or any
subsidiary of the REIT, all expenses of directors of the REIT or any subsidiary
of the REIT (including those directors who are also employees of the Manager),
the cost of directors and officers liability insurance and premiums for errors
and omissions insurance, and any other insurance deemed necessary or advisable
by the Board of Directors for the benefit of the REIT and its directors and
officers (including those directors who are also employees of the Manager), the
cost of all meetings of the REIT’s Board of Directors, and the cost of travel,
hotel accommodations, food and entertainment for all participants in the
meetings of the REIT’s Board of Directors;
7.2.11    all third-party legal, accounting and auditing fees and expenses and
other similar services relating to the REIT’s or any subsidiary’s operations
(including, without limitation, all quarterly and annual audit or tax fees and
expenses);
7.2.12    all legal, expert and other fees and expenses relating to any actions,
proceedings, lawsuits, demands, causes of action and claims, whether actual or
threatened, made by or against the REIT, or which the REIT is authorized or
obligated to pay under applicable law or its Governing Instruments or by the
Board of Directors;
7.2.13    any judgment or settlement of pending or threatened proceedings
(whether civil, criminal or otherwise) against the REIT or any subsidiary of the
REIT, or against any trustee, director or officer of the REIT or any subsidiary
of the REIT in his capacity as such for which the REIT or any subsidiary of the
REIT is required to indemnify such trustee, director or officer by any court or
governmental agency, or settlement of pending or threatened proceedings;
7.2.14    at all times all travel and related expenses of directors, officers
and employees of the REIT and the Manager incurred in connection with meetings
related to the business of the REIT, attending meetings of the Board of
Directors or holders of securities of the REIT or any subsidiary of the REIT or
performing other business activities that relate to the REIT or any subsidiary
of the REIT, including, without limitation, travel and expenses incurred in
connection with the purchase, financing, refinancing, sale or other disposition
of Mortgage Assets or other investments of the REIT; provided, however, that the
REIT shall only be responsible for a proportionate share of such expenses, as
reasonably determined by the Manager in good faith after full disclosure to the
REIT, in instances in which such expenses were not incurred solely for the
benefit of the REIT;
7.2.15    all expenses of organizing, modifying or dissolving the REIT or any
subsidiary of the REIT, costs preparatory to entering into a business or
activity, and costs of winding up or disposing of a business or activity of the
REIT or its subsidiaries;
7.2.16    all expenses relating to payments of dividends or interest or
distributions in cash or any other form made or caused to be made by the Board
of Directors to or on account of holders of the securities of the REIT or any
subsidiary of the REIT, including, without limitation, in connection with any
dividend reinvestment plan;
7.2.17    all expenses of third parties relating to communications to holders of
Equity Securities or debt securities issued by the REIT or any subsidiary of the
REIT and the other bookkeeping and clerical work necessary in maintaining
relations with holders of such securities and in complying with the continuous
reporting and other requirements of governmental bodies or agencies, including
any costs of computer services in connection with this function, the cost of
printing and mailing certificates for such securities and proxy solicitation
materials and reports to holders of the REIT’s or any subsidiary’s securities
and reports to third parties required under any indenture to which the REIT or
any subsidiary of the REIT is a party;
7.2.18    subject to Section 7.1, all expenses relating to any office or office
facilities maintained by the REIT or any subsidiary of the REIT (exclusive of
the office of the Manager and/or Affiliates of the Manager), including, without
limitation, rent, telephone, utilities, office furniture, equipment, machinery
and other office expenses for the REIT’s chief financial officer and any other
persons the Board of Directors authorizes the REIT to hire;

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7.2.19    all costs and expenses related to the design and maintenance of the
REIT’s web site or sites and associated with any computer software or hardware
that is used solely for the REIT;
7.2.20    other than for the Manager Obligations, all other costs and expenses
relating to the REIT’s business and investment operations, including, without
limitation, the costs and expenses of acquiring, owning, protecting,
maintaining, developing and disposing of Mortgage Assets, including, without
limitation, appraisal, reporting, audit and legal fees;
7.2.21    other than for the Manager Obligations, and subject to a line item
budget approved in advance by the Board of Directors all other expenses actually
incurred by the Manager, its Affiliates (as may be approved by the REIT pursuant
to the terms of this Agreement) or their respective officers, employees,
representatives or agents, or any Affiliates thereof (as may be approved by the
REIT pursuant to the terms of this Agreement) which are reasonably necessary for
the performance by the Manager of its duties and functions under this Agreement
(including, without limitation, any fees or expenses relating to the REIT’s
compliance with all governmental and regulatory matters); and
7.2.22    all other expenses of the REIT or any subsidiary of the REIT that are
not the responsibility of the Manager under Section 7.1 of this Agreement.
7.3    Expense Reimbursement to the Manager. Costs and expenses incurred by the
Manager on behalf of the REIT or its subsidiaries shall be reimbursed in cash
monthly to the Manager within five (5) Business Days of receipt by the REIT from
the Manager of a statement of such costs and expenses. Cost and expense
reimbursement to the Manager shall be subject to adjustment at the end of each
calendar year in connection with the annual audit of the REIT.
8.    Limits of Manager Responsibility: Indemnity.
8.1    Limits of Manager Responsibility. The Manager shall have the
responsibility under this Agreement to render the services specifically called
for under this Agreement and shall not be responsible for any action of the
Board of Directors in following or declining to follow any advice or
recommendations of the Manager, including, without limitation, as set forth in
Section 2.2.2 of this Agreement. The Manager and its Affiliates, directors,
officers, stockholders, equity holders, employees, representatives and agents,
and any Affiliates thereof, shall not be liable to the REIT (including, without
limitation, any stockholder thereof), any issuer of mortgage securities, any
subsidiary of the REIT, its subsidiary’s stockholders, the Board of Directors,
any credit-party, any counter-party under any agreement or any other person
whatsoever for any acts or omissions, errors of judgment or mistakes of law by
the Manager or its Affiliates, directors, officers, employees, representatives
or agents, or any Affiliates thereof, under or in connection with this
Agreement, except in the event that the Manager was grossly negligent, acted
with reckless disregard or engaged in willful misconduct or fraud while
discharging its duties under this Agreement.
8.2    Indemnification. The REIT and its subsidiaries shall reimburse, indemnify
and hold harmless the Manager and its Affiliates, directors, officers,
stockholders, equity holders, employees, representatives and agents, and any
Affiliates thereof from and against any and all expenses, losses, costs,
damages, liabilities, demands, charges and claims of any nature whatsoever,
actual or threatened (including, without limitation, reasonable attorneys’
fees), arising from or in respect of any acts or omissions, errors of judgment
or mistakes of law (or any alleged acts or omissions, errors of judgment or
mistakes of law) performed or made while acting in any capacity contemplated
under this Agreement or pursuant to any underwriting agreement or similar
agreement to which Manager is a party that is related to the REIT’s activities.
The REIT shall make payments required by this Section 8.2 in advance upon a
receipt from the Manager of an undertaking to repay such amounts if the Manager
is ultimately found not to be entitled to indemnification pursuant to this
Agreement. Notwithstanding the foregoing, the REIT shall have no indemnification
obligation under this Section 8.2 in the event that the Manager is ultimately
found to have been grossly negligent, acted with reckless disregard or engaged
in willful misconduct or fraud while discharging its duties under this
Agreement.

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9.    No Joint Venture. The REIT and the Manager are not partners or joint
venturers with each other, and nothing in this Agreement shall be construed to
make them such partners or joint venturers or impose any liability as such on
any of them. The Manager is an independent contractor and, except as expressly
provided or authorized in this Agreement, shall have no authority to act for or
represent the REIT.
10.    Effectiveness; Termination.
10.1    Effectiveness. This Agreement shall be effective during the Current
Term. Following the Current Term, this Agreement shall automatically extend for
successive five (5)-year terms (each, a “Renewal Term”), unless either party
gives 180 days’ written notice prior to the expiration of the Current Term or
any Renewal Term to the respective other party of such first party’s intent not
to renew the then-current term (any such notice, a “Non-Renewal Notice”);
provided, however, that the REIT may give a Non-Renewal Notice to the Manager,
if any of the stock of the REIT is publicly traded, only if at least two-thirds
of all of the Independent Directors or the holders of a majority of the
outstanding shares of common stock of the REIT (other than those shares held by
the Manager or its Affiliates) agree that (i) there has been unsatisfactory
performance by the Manager that is materially detrimental to the REIT and its
subsidiaries or (ii) the compensation payable to the Manager hereunder is
unfair; provided further, however, that in the event that the REIT gives a
Non-Renewal Notice to the Manager under clause (ii) above, such Non-Renewal
Notice, and its effectiveness, shall be subject to Section 10.5. This Agreement
may be terminated during the Current Term or any Renewal Term only in accordance
with the provisions of Sections 10.2, 10.3 and 10.4 or 13.1 (as applicable).
10.2    Early Termination without Cause.
10.2.1    The REIT may not terminate the Agreement during the Current Term,
except for Cause or in connection with (i) a merger, consolidation or
reorganization, pursuant to which the REIT is not the surviving entity, (ii) a
sale of all or substantially all the assets of the REIT (iii) an acquisition,
directly or indirectly, of 50% or more of the then issued and outstanding common
stock of the REIT or the power, by agreement or otherwise, to elect or appoint a
majority of the Board of Directors, or (iv) a liquidation of the REIT ((i),
(ii), (iii) and (iv) each, a “Corporate Event”). After the Current Term, the
REIT may terminate the agreement without Cause upon 180 days’ prior written
notice to the Manager and subject to payment of the Termination Fee pursuant to
Section 10.4 (except as otherwise provided in Section 13.1). A Corporate Event
during the Current Term or thereafter, which gives rise to or results in a
termination of this Agreement or a material diminution of the Manager's duties
or aggregate compensation (other than as voluntarily agreed by the Manager),
shall be deemed a termination without Cause and subject to the payment of the
Termination Fee pursuant to Section 10.4.
10.2.2    The Manager may terminate the agreement at any time and for any reason
upon 180 days’ prior written notice to the REIT.
10.3    Early Termination for Cause. Notwithstanding the provisions of Section
10.2.1, or any other provision of this Agreement to the contrary, the REIT may
terminate the agreement for Cause at any time and without paying any Termination
Fee, effective immediately upon written notice.
10.4    Payments In Connection With Termination.
10.4.1    Payments By the REIT. Following any termination of this Agreement by
the REIT or the Manager, the REIT shall pay the following amounts to the Manager
(by wire transfer of immediately available funds to such bank account as is
designated by the Manager to the REIT in writing) not later than five (5)
Business Days after the effective date of such termination:
i.    all reimbursable costs and expenses permitted under the Agreement (to the
extent not previously reimbursed to the Manager), if any, as of the date of the
effectiveness of such termination of this Agreement; and

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ii.    either (a) if this Agreement was terminated by the REIT for Cause
pursuant to Section 10.3, any Base Management Fee due and not yet paid to the
Manager, (as pro-rated pursuant to Section 6.1 through the date of the
effectiveness of such termination of this Agreement) or (b) if this Agreement
was terminated by the REIT without Cause pursuant to Section 10.2.1, and subject
to the provisions of Section 13.1, the Termination Fee (as calculated through
the effective date of such termination of the Agreement).
10.4.2    Payments By the Manager. For the avoidance of doubt, following any
termination of this Agreement by the Manager, no fees or other payment shall be
due from the Manager to the REIT except as otherwise expressly provided in this
Agreement.
10.5    Renegotiation of Compensation. In the event that a Non-Renewal Notice is
given by the REIT to the Manager in connection with a determination pursuant to
clause (b)(ii) of Section 10.1 that the compensation payable to the Manager is
unfair, the Manager shall have the right to renegotiate such compensation by
delivering to the REIT, no fewer than 45 days prior to the prospective
expiration of the Current Term or Renewal Term then in effect, as applicable,
written notice (any such notice, a “Notice of Proposal to Negotiate”) of its
intent to renegotiate its compensation under this Agreement. Thereupon, the REIT
(represented by the Independent Directors if any of the stock of the REIT is
publicly traded) and the Manager shall endeavor to negotiate the revised
compensation payable to the Manager under this Agreement. In the event that the
Manager and the REIT, including, if any of the stock of the REIT is publicly
traded, at least two-thirds of all of the Independent Directors, agree to the
terms of the revised compensation to be payable to the Manager within 45 days
following the receipt of the Notice of Proposal to Negotiate, the Non-Renewal
Notice shall be deemed of no force and effect and this Agreement shall continue
in full force and effect on the terms stated in this Agreement, except that the
compensation payable to the Manager hereunder shall be the revised compensation
then agreed upon by the parties to this Agreement. The REIT and the Manager
agree to execute and deliver an amendment to this Agreement setting forth such
revised compensation promptly upon reaching an agreement regarding same. In the
event that the REIT and the Manager are unable to agree to the terms of the
revised compensation to be payable to the Manager during such 45-day period,
this Agreement shall terminate, such termination to be effective on the
expiration of the Current Term or Renewal Term then in effect, as applicable.
11.    Action Upon Termination. In connection with any termination of this
Agreement, the Manager shall promptly:
11.1.1    pay over to the REIT or any subsidiary of the REIT all money collected
and held for the account of the REIT or any subsidiary of the REIT by the
Manager pursuant to this Agreement;
11.1.2    deliver to the REIT an accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the
period following the date of the last accounting furnished to the Board of
Directors with respect to the REIT or any subsidiary of the REIT;
11.1.3    deliver to the REIT all property and documents of the REIT or any
subsidiary of the REIT then in the custody of the Manager;
11.1.4    assign to the REIT any authorized agreements the Manager executed in
its name on behalf of the REIT (and obtain the counter-parties’ consent
thereto); and
11.1.5    assign to the REIT all proprietary information with respect to the
REIT, including, without limitation, software, models, intellectual property,
licenses, tradenames and trademarks (but subject to the limitations set forth in
Section 28 hereof).
12.    Survival of Obligations. The REIT’s obligation to make payments hereunder
and the limitations set forth herein shall survive the termination of this
Agreement. The covenants and agreements of the Manager contained herein (for
expenses through the effective date of termination) shall survive the
termination of this Agreement.

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13.    Assignments.
13.1    Assignment by the Manager. This Agreement shall terminate automatically
in the event that the Manager assigns all or any part of this Agreement
(including, without limitation, any transfer or assignment by operation of law),
unless such assignment is consented to in advance in writing by the REIT. In the
event an assignment by the Manager is consented to by the REIT, in accordance
with this Section 13.1, such assignment shall bind the assignee under this
Agreement in the same manner as the Manager is bound, and the Manager shall be
released from all of its obligations, duties and responsibilities under this
Agreement and all liability therefore and in respect hereof accruing on or after
that date. In addition, the assignee shall execute and deliver to the REIT a
counterpart of this Agreement naming such assignee as Manager, and the REIT
shall deliver to the assigning Manager a duly executed instrument evidencing the
release of the assigning Manager from such obligations, duties and
responsibilities as aforesaid.
14.    Release of Money or Other Property Upon Written Request. The Manager
agrees that any money or other property of the REIT or any subsidiary of the
REIT held by the Manager under this Agreement shall be held by the Manager as
custodian for the REIT or such subsidiary, and the Manager’s records shall be
appropriately marked clearly to reflect the ownership of such money or other
property by the REIT or such subsidiary.
14.1    Procedures. Upon the receipt by the Manager of a written request signed
by a duly authorized officer of the REIT or an authorized member of the Board of
Directors requesting the Manager to release to the REIT or any subsidiary of the
REIT any money or other property then held by the Manager for the account of the
REIT or any subsidiary of the REIT under this Agreement, the Manager shall
release such money or other property to the REIT or such subsidiary of the REIT
within a reasonable period of time, but in no event later than the earlier to
occur of (i) thirty (30) days following such request, or (ii) the date of the
termination of this Agreement.
14.2    Limitations. The Manager and its Affiliates, directors, officers,
stockholders, equity holders, employees, representatives and agents, and any
Affiliates thereof, shall not be liable to the REIT, any subsidiaries of the
REIT, the Board of Directors or the REIT’s or its subsidiaries’ stockholders for
any acts performed or omissions to act by the REIT or any subsidiary of the REIT
in connection with the money or other property released to the REIT or any
subsidiary of the REIT in accordance with this Section 14, except in the event
that the Manager was grossly negligent, acted with reckless disregard or engaged
in willful misconduct or fraud while discharging its duties under this
Agreement.
14.3    Indemnification. The REIT and any subsidiary of the REIT shall indemnify
the Manager and its Affiliates, directors, officers, stockholders, equity
holders, employees, representatives and agents, and any Affiliates thereof,
against any and all expenses, costs, losses, damages, liabilities, demands,
charges and claims of any nature whatsoever, which arise in connection with the
Manager’s release of such money or other property to the REIT or any subsidiary
of the REIT in accordance with the terms of this Section 14, except in the event
that the Manager was grossly negligent, acted with reckless disregard or engaged
in willful misconduct or fraud while discharging its duties under this
Agreement. Indemnification pursuant to this provision shall be in addition to
any right of the Manager and its Affiliates, directors, officers, stockholders,
equity holders, employees, representatives and agents, and any Affiliates
thereof, to indemnification under Section 8 of this Agreement.
15.    Representations, Warranties and Covenants.
15.1    REIT in Favor of the Manager. The REIT hereby represents and warrants to
the Manager as follows:
15.1.1    Due Formation. The REIT is duly organized, validly existing and in
good standing under the laws of Maryland, has the power to own its assets and to
transact the business in which it is now engaged and is duly qualified to do
business and is in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except for failures to be so qualified, authorized or licensed
that could not in the

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aggregate have a material adverse effect on the business operations, assets or
financial condition of the REIT and its subsidiaries, taken as a whole. The REIT
does not do business under any fictitious business name.
15.1.2    Power and Authority. The REIT has the power and authority to execute,
deliver and perform this Agreement and all obligations required under this
Agreement and has taken all necessary action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required under this Agreement. Except as shall
have been obtained, no consent of any other person, including, without
limitation, stockholders and creditors of the REIT, and no license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
by the REIT in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement and all obligations
required under this Agreement. This Agreement has been, and each instrument or
document required under this Agreement will be, executed and delivered by a duly
authorized officer of the REIT, and this Agreement constitutes, and each
instrument or document required under this Agreement when executed and delivered
under this Agreement will constitute, the legally valid and binding obligation
of the REIT enforceable against the REIT in accordance with its terms.
15.1.3    Execution, Delivery and Performance. The execution, delivery and
performance of this Agreement and the documents or instruments required under
this Agreement will not violate any provision of any existing law or regulation
binding on the REIT, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the REIT, or the Governing
Instruments of, or any securities issued by, the REIT or of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which the REIT is a party or by which the REIT or any of its assets may be
bound, the violation of which would have a material adverse effect on the
business operations, assets or financial condition of the REIT and its
subsidiaries, taken as a whole, and will not result in, or require, the creation
or imposition of any lien on any of its property, assets or revenues pursuant to
the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking (other than the pledge of amounts payable
to the Manager under this Agreement to secure the Manager’s obligations to its
lenders).
15.2    Manager in Favor of the REIT. The Manager hereby represents and warrants
to the REIT as follows:
15.2.1    Due Formation. The Manager is duly organized, validly existing and in
good standing under the laws of Delaware, has the power to own its assets and to
transact the business in which it is now engaged and is duly qualified to do
business and is in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except for failures to be so qualified, authorized or licensed
that could not in the aggregate have a material adverse effect on the business
operations, assets or financial condition of the Manager and its subsidiaries,
taken as a whole. The Manager does not do business under any fictitious business
name.
15.2.2    Power and Authority. The Manager has the power and authority to
execute, deliver and perform this Agreement and all obligations required under
this Agreement and has taken all necessary corporate action to authorize this
Agreement on the terms and conditions hereof and the execution, delivery and
performance of this Agreement and all obligations required under this Agreement.
Except as shall have been obtained, no consent of any other person including,
without limitation, stockholders and creditors of the Manager, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
by the Manager in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement and all obligations
required under this Agreement. This Agreement has been and each instrument or
document required under this Agreement will be executed and delivered by a duly
authorized officer of the Manager, and this Agreement constitutes, and each
instrument or document required under this Agreement when executed and delivered
under this Agreement will constitute, the legally valid and binding obligation
of the Manager enforceable against the Manager in accordance with its terms.

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15.2.3    Execution, Delivery and Performance. The execution, delivery and
performance of this Agreement and the documents or instruments required under
this Agreement will not violate any provision of any existing law or regulation
binding on the Manager, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the Manager, or the governing
instruments of, or any securities issued by, the Manager or of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which the Manager is a party or by which the Manager or any of its assets may be
bound, the violation of which would have a material adverse effect on the
business operations, assets or financial condition of the Manager and its
subsidiaries, taken as a whole, and will not result in, or require, the creation
or imposition of any lien on any of its property, assets or revenues pursuant to
the provisions of any such mortgage indenture, lease, contract or other
agreement, instrument or undertaking.
15.2.4    No Limitations. The personnel of the Manager providing services to the
REIT on the Manager’s behalf pursuant to this Agreement will be free of legal
and contractual impediments to their provision of services pursuant to the terms
of this Agreement.
16.    Notices. Unless expressly provided otherwise in this Agreement, all
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when (1) delivered by hand, (2) otherwise delivered by
reputable overnight courier against receipt therefor, or (3) upon actual receipt
of registered or certified mail, postage prepaid, return receipt requested. The
parties may deliver to each other notice by electronically transmitted facsimile
copies or electronically transmitted mail (i.e., e-mail), provided that such
facsimile or e-mail notice is followed within 24 hours by any type of notice
otherwise provided for in this Section 16. Any party may alter the address or
other contact information to which communications or copies are to be sent by
giving notice of such change of address or other contact information in
conformity with the provisions of this Section 16 for the giving of notice. Any
notice shall be duly addressed to the parties as follows:

16.1    If to the REIT:
James R. Mountain
ARMOUR Residential REIT, Inc.
3001 Ocean Drive, Suite 201
Vero Beach, FL 32963
Telecopy: (561) 348-2408
E-mail: jrm@armourcap.com

with a copy given in the manner prescribed above, to:

Holland & Knight LLP
701 Brickell Avenue, Suite 3300
Miami, FL 33131
Telecopy: (305) 789-7799
Attn.: Bradley D. Houser, Esq.
E-mail: bradley.houser@hklaw.com

16.1    If to the Manager:

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Jeffrey Zimmer
ARMOUR Capital Management LP
3001 Ocean Drive, Suite 201
Vero Beach, FL 32963
Telecopy: (561) 348-2408
E-mail: jz@armourcap.com

17.    Binding Nature of Agreement: Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns as provided
in this Agreement.
18.    Entire Agreement. This Agreement and the Sub-Management Agreement contain
the entire agreement and understanding among the parties hereto with respect to
the subject matter of this Agreement and the Sub-Management Agreement, and
supersede all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter of this Agreement and the Sub-Management
Agreement. The express terms of this Agreement and the Sub-Management Agreement
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms of this Agreement or the Sub-Management
Agreement. This Agreement may not be modified or amended other than in
accordance with Section 27.
19.    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES TO THE CONTRARY.
20.    Jurisdiction; Waiver of Jury Trial. Any proceeding or action based upon,
arising out of or related to this Agreement or the transactions contemplated
hereby shall be brought in any state court of the State of Florida or, in the
case of claims to which the federal courts have subject matter jurisdiction, any
federal court of the United States of America, in either case, located in the
State of Florida, and each of the parties irrevocably submits to the exclusive
jurisdiction of each such court in any such proceeding or action, waives any
objection it may now or hereafter have to personal jurisdiction, venue or to
convenience of forum, agrees that all claims in respect of the proceeding or
action shall be heard and determined only in any such court, and agrees not to
bring any proceeding or action arising out of or relating to this Agreement or
the transactions contemplated hereby in any other court. Nothing herein
contained shall be deemed to affect the right of any party to serve process in
any manner permitted by law or to commence legal proceedings or otherwise
proceed against any other party in any other jurisdiction, in each case, to
enforce judgments obtained in any action, suit or proceeding brought pursuant to
this Section 20. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION DIRECTLY OR
INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT.
21.    No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any party hereto, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. Except as otherwise provided in this Agreement, the rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law. No waiver of any
provision hereunder shall be effective unless it is in writing and is signed by
the party asserted to have granted such waiver.

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22.    Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed part of this
Agreement.
23.    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts of this Agreement, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
24.    Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
25.    Gender. Words used herein regardless of the number and gender
specifically used shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.
26.    Attorneys’ Fees. Should any action or other proceeding be necessary to
enforce any of the provisions of this Agreement or the various transactions
contemplated hereby, the prevailing party will be entitled to recover its actual
reasonable attorneys’ fees and expenses from the non-prevailing party.
27.    Amendments. This Agreement may not be amended, modified or changed (in
whole or in part), except by a formal, definitive written agreement expressly
referring to this Agreement, which agreement is executed by all of the parties.
The parties hereto expressly acknowledge that no consent or approval of the
REIT’s stockholders is required in connection with any amendment, modification
or change to this Agreement.
28.    Authority. Each signatory to this Agreement warrants and represents that
such signatory is authorized to sign this Agreement on behalf of and to bind the
party on whose behalf such signatory is signing this Agreement.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Seventh Amended and
Restated Management Agreement as of the date first written above.
“REIT”
ARMOUR RESIDENTIAL REIT, INC.,
a Maryland corporation

By:
/s/ James R. Mountain
 
James R. Mountain
 
Chief Financial Officer
 
 

“MANAGER”
ARMOUR CAPITAL MANAGEMENT LP,
a Delaware limited partnership

By:
/s/ Jeffrey J. Zimmer
 
Jeffrey J. Zimmer
 
Co-Chief Executive Officer