EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of August 9, 2011, is entered into
by and between American Capital Mortgage Investment Corp., a Maryland
corporation (the “Company”), and American Capital, Ltd., a Delaware corporation
(“American Capital”).
WHEREAS, the Company will issue and sell to American Capital 2,000,000 shares of
the Company’s common stock, par value $0.01 per share (the “Common Stock”)
pursuant to that certain Stock Purchase Agreement, dated as of August 3, 2011
(the "Purchase Agreement") in a transaction not registered under the Securities
Act of 1933, as amended (the “Securities Act”).
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 to this Agreement hereby agree as
follows:

Section 1.
Certain Definitions.

In addition to the terms defined elsewhere in this Agreement, the following
terms, as used herein, shall have the following meanings:
“Affiliate” of any Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlled by” and “under common control with”) as used with respect to any
Person means the possession, directly or indirectly through one or more
intermediaries, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
“Agreement” means this Registration Rights Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to this Registration Rights Agreement as the same may
be in effect at the time such reference becomes operative.
“Business Day” means any day other than Saturday, Sunday or a day on which
commercial banks in New York, New York are directed or permitted to be closed.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Holders” means American Capital, as holder of record of Registrable Common
Stock (as defined below) and (ii) any Affiliate of American Capital that is a
partnership, limited liability company, corporation or similar entity and (iii)
a direct or indirect transferee of such Registrable Common Stock from American
Capital. For purposes of this Agreement, the Company may deem and treat a
registered holder of Registrable Common Stock as the Holder and absolute owner
thereof, and the Company shall not be affected by any notice to the contrary.
“IPO” means the initial public offering of the Company's Common Stock.
“IPO Date” means the closing date of the IPO.
“Person” means any individual, sole proprietorship, partnership, limited
liability

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company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof)
or any other entity.
“Prospectus” means the prospectus or prospectuses included in any Registration
Statement (including without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act and any term sheet filed pursuant
to Rule 433 under the Securities Act), as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Common Stock covered by such Registration Statement and by
all other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus or prospectuses.
“Registrable Common Stock” means each of the 2,000,000 shares of Common Stock
issued and sold to American Capital in connection with the Purchase Agreement
upon original issuance thereof and at all times subsequent thereto, including
upon the transfer thereof by the original Holder or any subsequent Holder and
any securities issued in respect of such securities by reason of or in
connection with any exchange for or replacement of such securities or any stock
dividend, stock distribution, stock split, purchase in any rights offering or in
connection with any combination of shares, recapitalization, merger or
consolidation, or any other equity securities issued pursuant to any other pro
rata distribution with respect to the Common Stock, until, in the case of any
such securities, the earliest to occur of (i) the date on which it has been
registered effectively pursuant to the Securities Act and disposed of in
accordance with the Registration Statement relating to it or (ii) the date on
which either it is distributed to the public or is saleable, in each case
pursuant to Rule 144 promulgated by the SEC pursuant to the Securities Act.
“Registration Statement” means any registration statement of the Company filed
with the SEC under the Securities Act which covers any of the Registrable Common
Stock pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all materials incorporated by
reference or deemed to be incorporated by reference in such Registration
Statement.
“Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar Rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such rule.
“SEC” means the Securities and Exchange Commission.
“underwritten registration or underwritten offering” means a registration in
which securities of the Company are sold to underwriters for reoffering to the
public.
“Underwriting Agreement” means the Underwriting Agreement dated August 3, 2011
by and among the Company, American Capital MTGE Management, LLC, a Delaware
limited liability company and the Manager of the Company, and Citigroup Global
Markets Inc.,

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Deutsche Bank Securities Inc., UBS Securities LLC and Wells Fargo Securities,
LLC, as representatives for the underwriters named on Schedule A of such
Underwriting Agreement.

Section 2.
Demand Registrations.

(a)    Right to Request Registration. From and after the date hereof, any Holder
or Holders (“Initiating Holders”) may request registration under the Securities
Act of all or part of the Registrable Common Stock (“Demand Registration”) at
any time and from time to time; provided further, that the Company shall not
file any registration statement pursuant to any Demand Registration until 365
days after the date of the Purchase Agreement.
Within ten (10) Business Days after receipt of any such request for Demand
Registration, the Company shall give written notice of such request to all other
Holders of Registrable Common Stock, if any, and shall, subject to the
provisions of Section 2(c) hereof, include in such registration all such
Registrable Common Stock with respect to which the Company has received written
requests for inclusion therein within twenty (20) Business Days after the
receipt of the Company's notice.
(b)    Priority on Demand Registrations. If the managing underwriters of a
requested Demand Registration advise the Company in writing that in their
opinion the shares of Registrable Common Stock proposed to be included in any
such registration exceeds the number of securities that can be sold in such
offering and/or that the number of shares of Registrable Common Stock proposed
to be included in any such registration would materially adversely affect the
price per share of the Company's equity securities to be sold in such offering,
the Company shall include in such registration only the number of shares of
Registrable Common Stock that, in the opinion of such managing underwriters, can
be sold. If the number of shares that can be sold is less than the number of
shares of Registrable Common Stock proposed to be registered, the Company shall
allocate the amount of Registrable Common Stock to be so sold among the Holders
pro rata on the basis of Registrable Common Stock requested to be included in
such registration by each Holder electing to participate in such registration.
If the number of shares that can be sold, as determined by the managing
underwriters, exceeds the number of shares of Registrable Common Stock proposed
to be sold, such excess shall be allocated pro rata among the other holders of
Common Stock, if any, desiring to participate in such registration based on the
amount of such Common Stock initially requested to be registered by such Holders
or as such Holders may otherwise agree.
(c)    Restrictions on Demand Registrations. The Company shall not be obligated
to effect any Demand Registration within six (6) months after the effective date
of a previous Demand Registration or a previous registration under which the
Initiating Holders had piggyback rights pursuant to Section 3 hereof wherein the
Initiating Holders were permitted to register, and sold, at least 50% of the
shares of Registrable Common Stock requested to be included therein. The Company
may (i) postpone for up to ninety (90) days the filing or the effectiveness of a
Registration Statement for a Demand Registration if, based on the good faith
judgment of the Company's board of directors, such postponement or withdrawal is
necessary in order to avoid premature disclosure of a matter the board has
determined would not be in the best interest of the Company to be disclosed at
such time or (ii) postpone the filing of a Demand Registration in the

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event the Company shall be required to prepare audited financial statements as
of a date other than its fiscal year and (unless the Holders requesting such
registration agree to pay the expenses of such an audit); provided, however,
that in no event shall the Company withdraw a Registration Statement under
clause (i) after such Registration Statement has been declared effective; and
provided, further, however, that in any of the events described in clause (i) or
(ii) above, the Initiating Holders requesting such Demand Registration shall be
entitled to withdraw such request. The Company shall provide written notice to
the Initiating Holders requesting such Demand Registration of (x) any
postponement or withdrawal of the filing or effectiveness of a Registration
Statement pursuant to this Section 2(c), (y) the Company's decision to file or
seek effectiveness of such Registration Statement following such withdrawal or
postponement and (z) the effectiveness of such Registration Statement.
(d)    Selection of Underwriters. If any of the Registrable Common Stock covered
by a Demand Registration hereof is to be sold in an underwritten offering,
American Capital shall have the right to select the managing underwriter(s) to
administer the offering subject to the approval of the Company, which approval
shall not be unreasonably withheld.
(e)    Effective Period of Demand Registrations. After any Demand Registration
filed pursuant to this Agreement has become effective, the Company shall use its
best efforts to keep such Demand Registration effective for a period equal to
180 days from the date on which the SEC declares such Demand Registration
effective (or if such Demand Registration is not effective during any period
within such 180 days, such 180-day period shall be extended by the number of
days during such period when such Demand Registration is not effective), or such
shorter period that shall terminate when all of the Registrable Common Stock
covered by such Demand Registration has been sold pursuant to such Demand
Registration. If the Company shall withdraw or reduce the number of shares of
Registrable Common Stock that is subject to any Demand Registration pursuant to
subsection (b) of this Section 2 (a “Withdrawn Demand Registration”), the
Initiating Holders of the Registrable Common Stock remaining unsold and
originally covered by such Withdrawn Demand Registration shall be entitled to a
replacement Demand Registration that (subject to the provisions of this Section
2) the Company shall use its best efforts to keep effective for a period
commencing on the effective date of such Demand Registration and ending on the
earlier to occur of the date (i) that is 180 days from the effective date of
such Demand Registration and (ii) on which all of the Registrable Common Stock
covered by such Demand Registration has been sold. Such additional Demand
Registration otherwise shall be subject to all of the provisions of this
Agreement.
(f)    Underwritten Offerings. Notwithstanding the foregoing, in no event shall
the Company be obligated to effect more than one (1) underwritten offering
hereunder in any single six (6) month period, with the first such period
measured from the date of the first Demand Registration and ending on the same
date during the six (6) months following such Demand Registration, whether or
not a Business Day.

Section 3.
Piggyback Registrations.

(a)    Right to Piggyback. Beginning 180 days after the date of the Purchase
Agreement and until the termination of the Management Agreement, whenever the
Company proposes to

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register any of its common equity securities under the Securities Act (other
than a registration statement on Form S-8 or on Form S-4 or any similar
successor forms thereto), whether for its own account or for the account of one
or more stockholders of the Company, and the registration form to be used may be
used for any registration of Registrable Common Stock (a “Piggyback
Registration”), the Company shall give prompt written notice (in any event
within ten (10) business days after its receipt of notice of any exercise of
other demand registration rights) to all Holders of its intention to effect such
a registration and, subject to Sections 3(b) and 3(c), shall include in such
registration all Registrable Common Stock with respect to which the Company has
received written requests for inclusion therein within twenty (20) days after
the receipt of the Company's notice. The Company may postpone or withdraw the
filing or the effectiveness of a Piggyback Registration at any time in its sole
discretion.
(b)    Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number that
can be sold in such offering and/or that the number of shares of Registrable
Common Stock proposed to be included in any such registration would adversely
affect the price per share of the Company's equity securities to be sold in such
offering, the underwriting shall be allocated among the Company and all Holders
pro rata on the basis of the Common Stock and Registrable Common Stock offered
for such registration by the Company and each Holder, respectively, electing to
participate in such registration.
(c)    Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of a holder of the Company's
securities other than Registrable Common Stock (“Non-Holder Securities”), and
the managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number that can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration would
adversely affect the price per share of the Company's equity securities to be
sold in such offering, the underwriting shall be allocated among the holders of
Non-Holder Securities and all Holders pro-rata on the basis of the Non-Holder
Securities and Registrable Common Stock offered for such registration by the
holder of Non-Holder Securities and each Holder, respectively, electing to
participate in such registration.
(d)    Selection of Underwriters. If any Piggyback Registration is an
underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.
(e)    Other Registrations. If the Company has previously filed a Registration
Statement with respect to Registrable Common Stock pursuant to Section 2 hereof
or pursuant to this Section 3, and if such previous registration has not been
withdrawn or abandoned, the Company shall not be obligated to cause to become
effective any other registration of any of its securities under the Securities
Act, whether on its own behalf or at the request of any holder or holders of
such securities, until a period of at least three (3) months has elapsed from
the effective date of such previous registration.
Section 4.
Holdback Agreement.

In connection with an underwritten primary or secondary offering to the public,
each

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Holder agrees, subject to any exceptions that may be agreed upon at the time of
such offering, not to sell or otherwise transfer or dispose of any shares of
Registrable Common Stock (or other securities) of the Company held by them
(other than Registrable Common Stock included in such offering in accordance
with the terms hereof) for a period equal to the lesser of one hundred eighty
(180) days following the effective date of a Registration Statement of the
Company filed under the Securities Act or such shorter period as the managing
underwriter shall agree to; provided that all other stockholders who own more
than ten percent (10%) of the outstanding Common Stock of the Company and all
officers and directors of the Company enter into similar agreements. Such
agreement shall be in writing in form reasonably satisfactory to the Company and
the managing underwriter. The Company may impose stop-transfer instructions with
respect to the shares of Registrable Common Stock (or other securities) subject
to the foregoing restriction until the end of said period.

Section 5.
Registration Procedures.

Whenever the Holders request that any Registrable Common Stock be registered
pursuant to this Agreement, the Company shall use its commercially reasonable
efforts to effect and maintain the registration and the sale of such Registrable
Common Stock in accordance with the intended methods of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:
(a)    prepare and file with the SEC a Registration Statement with respect to
such Registrable Common Stock and use its best efforts to cause such
Registration Statement to become effective as soon as practicable thereafter;
and before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, furnish to the Holders of Registrable Common Stock covered
by such Registration Statement and the underwriter or underwriters, if any,
copies of all such documents proposed to be filed, including, if requested by
such Holders, documents incorporated by reference in the Prospectus and, if
requested by such Holders, the exhibits incorporated or deemed incorporated by
reference, and such Holders shall have the opportunity to object to any
information pertaining to such Holders that is contained therein and the Company
will make the corrections reasonably requested by such Holders with respect to
such information prior to filing any Registration Statement or amendment thereto
or any Prospectus or any supplement thereto;
(b)    prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective, in the case of Demand
Registration, for a period not less than 180 days, or such shorter period as is
necessary to complete the distribution of the securities covered by such
Registration Statement and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
(c)    furnish to each seller of Registrable Common Stock (without charge) such
number of copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and

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such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Common Stock owned by such seller,
and the Company consents to the use of such Prospectus, including each
preliminary Prospectus, by Holders of Registrable Common Stock, in connection
with the offering and sale of Registrable Common Stock covered by any such
Prospectus;
(d)    use its commercially reasonable efforts to register or qualify such
Registrable Common Stock under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable Common
Stock owned by such seller (provided, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph (d), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction);
(e)    notify each seller of such Registrable Common Stock, at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of any event as a result of which the Registration
Statement, including the Prospectus contained therein, contains an untrue
statement of a material fact or omits any fact required to be stated therein or
necessary to make the statements therein not misleading, and, at the request of
any such seller, the Company shall prepare a supplement or amendment to such
Registration Statement so that, as thereafter delivered to the purchasers of
such Registrable Common Stock, such Prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading;
(f)    in the case of an underwritten offering, enter into such customary
agreements (including underwriting agreements in customary form) and take all
such other actions as the Holders of a majority of number of shares of the
Registrable Common Stock being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Common Stock (including making executive officers of the Company available to
participate in, and cause them to cooperate with the underwriters in connection
with, “road-show” and other customary marketing activities (including one-on-one
meetings with prospective purchasers of the Registrable Common Stock), and cause
to be delivered to the underwriters and the sellers, if any, opinions of counsel
to the Company in customary form, covering such matters as are customarily
covered by opinions for an underwritten public offering as the underwriters may
request and addressed to the underwriters and the sellers;
(g)    subject to receipt of reasonably acceptable confidentiality agreements,
make available, for inspection by representative of a seller of Registrable
Common Stock, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement;
(h)    to use its commercially reasonable efforts to cause all such Registrable
Common Stock to be listed on each securities exchange on which securities of the
same class issued by the

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Company are then listed or, if no such similar securities are then listed, on a
national securities exchange selected by the Company;
(i)    provide a transfer agent and registrar for all such Registrable Common
Stock not later than the effective date of such Registration Statement;
(j)    if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an underwritten
offering, at the time of delivery of any Registrable Common Stock sold pursuant
thereto), letters from the Company's independent certified public accountants
addressed to each selling Holder (unless such selling Holder does not provide to
such accountants the appropriate representation letter required by rules
governing the accounting profession) and each underwriter, if any, stating that
such accountants are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations adopted by the SEC
thereunder, and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with primary or secondary
underwritten public offerings, as the case may be;
(k)    make generally available to its stockholders a consolidated earnings
statement (which need not be audited) for the 12 months (or, if applicable, such
shorter period that the Company has been in existence) beginning after the
effective date of a Registration Statement as soon as reasonably practicable
after the end of such period, which earnings statement shall satisfy the
requirements of an earning statement under Section 11(a) of the Securities Act
and Rule 158 thereunder;
(l)    cooperate with each selling Holder of Registrable Common Stock and each
underwriter participating in the disposition of such Registrable Common Stock
and their respective counsel in connection with any filings required to be made
with the Financial Industry Regulatory Authority, Inc. and make reasonably
available its employees and personnel and otherwise provide reasonable
assistance to the underwriters (taking into account the needs of the Company's
businesses and the requirements of the marketing process) in the marketing of
Registrable Common Stock in any underwritten offering;
(m)    use its best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Common Stock for sale in any
jurisdiction and, if such an order or suspension is issued, to use reasonable
efforts to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify each seller of Registrable Common Stock being sold
of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose;
(n)    promptly notify each seller of Registrable Common Stock and the
underwriter or underwriters, if any:
(i)    when the Registration Statement, pre-effective amendment, the Prospectus
or any prospectus supplement or post-effective amendment to the Registration
Statement has been filed and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective;
(ii)    of any written request by the SEC for amendments or supplements to the

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Registration Statement or Prospectus;
(iii)    of the notification to the Company by the SEC of its initiation of any
proceeding with respect to the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement; and
(iv)    of the receipt by the Company of any notification with respect to the
suspension of the qualification of any Registrable Common Stock for sale under
the applicable securities or blue sky laws of any jurisdiction.
(o)    At all times after the Company has filed a registration statement with
the SEC pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports and other documents required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and take such further action as any
Holders may reasonably request, all to the extent required to enable such
Holders to be eligible to sell Registrable Common Stock pursuant to Rule 144
under the Securities Act (or any similar rule then in effect).
(p)    As a condition to being included in any Registration Statement, the
Company may require each seller of Registrable Common Stock as to which any
registration is being effected to furnish to the Company any other information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
(q)    Each seller of Registrable Common Stock agrees by having its stock
treated as Registrable Common Stock hereunder that, upon notice of the happening
of any event as a result of which the Prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits any material
fact necessary to make the statements therein not misleading (a “Suspension
Notice”), such seller will forthwith discontinue disposition of Registrable
Common Stock until such seller is advised in writing by the Company that the use
of the Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 5(e) hereof, and, if so directed by the
Company, such seller, at its option, either will destroy or deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such seller's possession, of the Prospectus covering such Registrable
Common Stock current at the time of receipt of such notice; provided, however,
that such postponement of sales of Registrable Common Stock by the Holders shall
not exceed thirty (30) days in the aggregate in any three-month period or ninety
(90) days in the aggregate in any one year except as a result of a refusal by
the SEC to declare any post-effective amendment to the Registration Statement
effective after the Company has used all commercially reasonable efforts to
cause such post-effective amendment to be declared effective, in which case the
Company shall terminate the suspension of the use of the Registration Statement
immediately following the effective date of the post-effective amendment. If the
Company shall give any notice to suspend the disposition of Registrable Common
Stock pursuant to a Prospectus, the Company shall extend the period of time
during which the Company is required to maintain the Registration Statement
effective pursuant to this Agreement by the number of days during the period
from and including the date of the giving of such notice to and including the
date such seller either is advised by the Company that the use of the Prospectus
may be resumed or receives the copies of the supplemented or amended Prospectus
contemplated by Section 5(e). In any event, the Company shall not be entitled to
deliver more than three (3) Suspension Notices in

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any one year.

Section 6.
Registration Expenses.

(a)    All fees and expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, listing application fees, printing, word processing, telephone, messenger
and delivery expenses, transfer agent's and registrar's fees, cost of
distributing Prospectuses in preliminary and final form as well as any
supplements thereto, and fees and disbursements of counsel for the Company, one
counsel retained by the Holders of Registrable Common Stock (in accordance with
Section 6(b)) and all independent certified public accountants and other Persons
retained by the Company (all such expenses being herein called “Registration
Expenses”) (but not including any underwriting discounts or commissions
attributable to the sale of Registrable Common Stock or fees and expenses of
more than one counsel representing the Holders of Registrable Common Stock,
which shall be borne by the Holders), shall be borne by the Company (whether or
not any Registration Statement is declared effective or any of the transactions
described herein is consummated). In addition, the Company shall pay its
internal expenses, the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which they are to be
listed.
(b)    In connection with each registration initiated hereunder (whether a
Demand Registration or a Piggyback Registration), the Company shall reimburse
the Holders covered by such registration or sale for the reasonable fees and
disbursements of one law firm chosen by the Holders of a majority of the number
of shares of Registrable Common Stock included in such registration sale.
(c)    The obligation of the Company to bear the expenses described in Section
6(a) and to reimburse the Holders for the expenses described in Section 6(b)
shall apply irrespective of whether a registration, once properly demanded, if
applicable, becomes effective, is withdrawn or suspended, is converted to
another form of registration and irrespective of when any of the foregoing shall
occur; provided, however, that Registration Expenses for any Registration
Statement withdrawn solely at the request of a Holder of Registrable Common
Stock (unless withdrawn following postponement of filing by the Company in
accordance with Section 2(c) or any supplements or amendments to a Registration
Statement or Prospectus resulting from a misstatement furnished to the Company
by a Holder shall be borne by such Holder.

Section 7.
Indemnification.

(a)    The Company shall indemnify and hold harmless, to the fullest extent
permitted by law, each Holder, its officers, directors and Affiliates, employees
and agents of such Holder and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) from and against all losses, claims, damages, liabilities,
judgments and expenses (including without limitation, the reasonable fees and
other expenses incurred in connection with any suit, action, investigation or
proceeding or any claim

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asserted) caused by, arising out of, in connection with or based upon, any
untrue or alleged untrue statement of material fact contained in any
Registration Statement, Prospectus (including any preliminary Prospectus) or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading or any violation or alleged violation by
the Company of the Securities Act, the Exchange Act or applicable “blue sky”
laws, except insofar as the same are made in reliance and in conformity with
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use therein or caused by such Holder's failure to deliver
to such Holder's immediate purchaser a copy of the Prospectus or any amendments
or supplements thereto (if the same was required by applicable law to be so
delivered) after the Company has furnished such Holder with a sufficient number
of copies of the same.
(b)    In connection with any Registration Statement in which a Holder of
Registrable Common Stock is participating, each such Holder shall furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and, shall indemnify, to the fullest extent permitted by law, the
Company, its officers, directors, Affiliates, and each Person who “controls” the
Company within the meaning of the Securities Act (excluding American Capital to
the extent that American Capital is the Holder of the Registrable Common Stock),
against all losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue or alleged untrue statement of material fact contained in
the Registration Statement, Prospectus or preliminary Prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading, but only to the extent that the same are
made in reliance and in conformity with information relating to such Holder
furnished in writing to the Company by such Holder expressly for use therein or
caused by such Holder's failure to deliver to such Holder's immediate purchaser
a copy of the Prospectus or any amendments or supplements thereto (if the same
was required by applicable law to be so delivered) after the Company has
furnished such Holder with a sufficient number of copies of the same; provided,
however, that the obligation to indemnify shall be several, not joint and
several, among such Holders and the liability of each such Holder shall be in
proportion to and limited to the net amount received by such Holder from the
sale of Registrable Common Stock pursuant to such Registration Statement.
(c)    Any Person entitled to indemnification hereunder shall (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, such indemnifying party shall
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party shall not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld,
conditioned or delayed). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for each party indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party there may

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be one or more legal or equitable defenses available to such indemnified party
which are in addition to or may conflict with those available to another
indemnified party with respect to such claim. Failure to give prompt written
notice shall not release the indemnifying party from its obligations hereunder.
No indemnifying party shall, without the prior written consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
or other compromise (i) which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation or (ii) which includes
any statement of admission of fault, culpability or failure to act by or on
behalf of such indemnified party.
(d)    The indemnification provided for under this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities or the
termination of this Agreement.
(e)    If the indemnification provided for in or pursuant to this Section 7 is
unavailable, unenforceable or insufficient to hold harmless any indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions which result
in such losses, claims, damages, liabilities or expenses as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
on the one hand and of the indemnified party on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party, and by such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. In no event shall
the liability of any selling Holder be greater in amount than the amount of net
proceeds received by such Holder upon such sale or the amount for which such
indemnifying party would have been obligated to pay by way of indemnification if
the indemnification provided for under Section 7(a) or 7(b) hereof had been
available under the circumstances. The indemnity and contribution agreements
contained in this Section 7 are in addition to any liability which the
indemnifying Persons may otherwise have to the indemnified parties hereunder,
under applicable law or at equity.

Section 8.
Participation in Underwritten Registrations.

No Person may participate in any registration hereunder that is underwritten
unless such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements,
opinions and other documents required under the terms of such underwriting
arrangements.

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Section 9.
Rule 144.

The Company covenants that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder in accordance with the requirements of the
Securities Act and the Exchange Act, and it will take such further action as any
Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the Securities Act (to the extent such
information is available), to the extent required to enable such Holder to sell
Registrable Common Stock without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such information and requirements.

Section 10.
Miscellaneous.

(a)    Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile or similar writing) and shall
be given,
If to the Company:
American Capital Mortgage Investment Corp.
2 Bethesda Metro Center, 14th Floor
Bethesda, Maryland 20814
Attention: Chief Executive Officer
Facsimile No.: (301) 968-9221

If to American Capital:
American Capital, Ltd.
2 Bethesda Metro Center, 14th Floor
Bethesda, Maryland 20814
Attention: Chief Executive Officer
Facsimile No.: (301) 654-6714

If to a transferee Holder, to the address of such Holder set forth in the
transfer documentation provided to the Company; or such other address or
facsimile number as such party (or transferee) may hereafter specify for the
purpose by notice to the other parties. Each such notice, request or other
communication shall be effective (a) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section 10(a) and the
appropriate facsimile confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
(b)    No Waivers. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise

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thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
(c)    Expenses. Except as otherwise provided for herein or otherwise agreed to
in writing by the parties, all costs and expenses incurred in connection with
the preparation of this Agreement shall be paid by the Company.
(d)    Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, it being understood that subsequent Holders of the
Registrable Common Stock are intended third party beneficiaries hereof.
(e)    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 New York, without regard to
principles of conflicts of law (other than Section 5-1401 of the General
Obligations Law). Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court for any district within such state for the purpose of any
action or judgment relating to or arising out of this Agreement or any of the
transactions contemplated hereby and to the laying of venue in such court.
(f)    Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the County and State of New York, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 10(a) shall be deemed
effective service of process on such party.
(g)    Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
(h)    Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(i)    Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter of this Agreement and supersedes
all prior agreements and understandings, both oral and written, between the
parties with respect to the transactions

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contemplated herein. No provision of this Agreement or any other agreement
contemplated hereby is intended to confer on any Person other than the parties
hereto any rights or remedies.
(j)    Captions. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
(k)    Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
(l)    Amendments. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given without the
prior written consent of the Holders of a majority of the then-outstanding
shares of Registrable Common Stock; provided, further, that the consent or
agreement of the Company shall be required with regard to any termination,
amendment, modification or supplement of, or waivers or consents to departures
from, the terms hereof, which affect the Company's obligations hereunder.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by
each of the parties hereto as of the date first written above
AMERICAN CAPITAL MORTGAGE INVESTMENT CORP.

By:        /s/ Samuel A. Flax        
Name: Samuel A. Flax
Title: Executive Vice President
and Secretary

AMERICAN CAPITAL, LTD.

By:        /s/ Samuel A. Flax        
Name: Samuel A. Flax
Title: Executive Vice President and Secretary