Document:

Exhibit 10.2

 Exhibit 10.2 
  
  
 MANAGEMENT AGREEMENT 
 by and between 
 American Capital
Agency Corp. 
 and 
 American Capital Agency Management, LLC 
 Dated as of May 20, 2008 
  
  

 MANAGEMENT AGREEMENT, dated as of May 20, 2008, by and between American Capital Agency Corp., a
Delaware corporation (the “Company”) and American Capital Agency Management, LLC, a Delaware limited liability company (the “Manager”), a subsidiary of a wholly-owned portfolio company of American Capital
Strategies, Ltd., a Delaware corporation (“American Capital”). 
 W I T N E S
S E T H: 
 WHEREAS, the Company is a newly formed corporation which intends to invest exclusively in
single-family residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments, if applicable, are guaranteed by (i) a U.S. Government agency such as the Government National
Mortgage Association, or (ii) a U.S. Government-sponsored entity such as the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (collectively, “Agency Securities”) and intends to qualify as a
real estate investment trust for federal income tax purposes and will elect to receive the tax benefits accorded by Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”); and 
 WHEREAS, the Company desires to retain the Manager to administer the business activities and day-to-day operations of the Company and to perform services
for the Company in the manner and on the terms set forth herein and the Manager wishes to be retained to provide such services. 
 NOW
THEREFORE, in consideration of the premises and agreements hereinafter set forth, the parties hereto hereby agree as follows: 
 Section 1. Definitions. 
 (a) The following terms shall have the meanings set forth in this Section 1(a):

 “Administrative Services Agreement” means an agreement between the Manager and American Capital whereby
American Capital agrees to provide the Manager with the personnel, services and resources necessary for the Manager to perform its obligations and responsibilities under this Agreement in exchange for certain fees payable by the Manager. 

“Affiliate” means (i) any Person directly or indirectly controlling, controlled by, or under common control with
such other Person, (ii) any executive officer, general partner or employee of such other Person, (iii) any member of the board of directors or board of managers (or bodies performing similar functions) of such Person, and (iv) any
legal entity for which such Person acts as an executive officer or general partner. 

 “Agency Securities” has the meaning set forth in the Recitals.

 “Agreement” means this Management Agreement, as amended, supplemented or otherwise modified from time to
time. 
 “American Capital” has the meaning set forth in the Recitals. 
 “Automatic Renewal Term” has the meaning set forth in Section 10(b) hereof. 
 “Board of Directors” means the board of directors of the Company. 
 “Business Day” means any day except a Saturday, a Sunday or a day on which banking institutions in New York, New York are
not required to be open. 
 “Claim” has the meaning set forth in Section 8(c) hereof. 
 “Closing Date” means the date of closing of the Initial Public Offering. 
 “Code” has the meaning set forth in the Recitals. 
 “Common Stock” means the common stock, par value $0.01, of the Company. 
 “Company” has the meaning set forth in the Recitals. 
 “Company Indemnified Party” has meaning set forth in Section 8(b) hereof. 
 “Company Permitted Disclosure Parties” has the meaning set forth in Section 5(b) hereof. 
 “Conduct Policies” has the meaning set forth in Section 2(k) hereof. 
 “Confidential Information” has the meaning set forth in Section 5 hereof. 
 “Effective Termination Date” has the meaning set forth in Section 10(c) hereof. 
  

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 “Equity” means the Company’s month-end stockholders’ equity,
adjusted to exclude the effect of any unrealized gains or losses included in either retained earnings or other comprehensive income (loss), each computed in accordance with GAAP. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 “GAAP” means generally accepted accounting principles in effect in the United States on the date such principles are
applied. 
 “Governing Instruments” means, with regard to any entity, the articles of incorporation or
certificate of incorporation and bylaws in the case of a corporation, the partnership agreement in the case of a general or limited partnership or the certificate of formation and operating agreement in the case of a limited liability company, the
trust instrument in the case of a trust, or similar governing documents in each case as amended. 
 “Indemnified
Party” has the meaning set forth in Section 8(b) hereof. 
 “Independent Director” means a
member of the Board of Directors who is “independent” in accordance with the Company’s Governing Instruments and the rules of Nasdaq or such other securities exchange on which the shares of Common Stock are listed. 
 “Initial Public Offering” means the Company’s sale of Common Stock to the public through underwriting pursuant to
the Company’s Registration Statement on Form S-11 (No. 333-149167). 
 “Investment Committee” means the
investment committee formed by the Manager, the members of which shall consist of officers of American Capital, the Manager and/or American Capital’s other Affiliates. 
 “Initial Term” has the meaning set forth in Section 10(a) hereof. 
 “Investment Company Act” means the Investment Company Act of 1940, as amended. 
 “Investment Guidelines” means the investment guidelines proposed by the Investment Committee and approved by the Board of
Directors, a copy of which is attached hereto as Exhibit A, as the same may amended, restated, modified, supplemented or waived by the Investment Committee, subject to the consent of a majority of the entire Board of Directors (which must
include a majority of the then incumbent Independent Directors). 
  

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 “Losses” has the meaning set forth in Section 8(a) hereof.

 “Management Fee” means the management fee, calculated and payable monthly in arrears, in an amount equal
to one-twelfth of 1.25% of Equity. 
 “Manager” has the meaning set forth in the Recitals. 
 “Manager Indemnified Party” has the meaning set forth in Section 8(a) hereof. 
 “Manager Permitted Disclosure Parties” has the meaning set forth in Section 5(a) hereof. 
 “Nasdaq” means The NASDAQ Stock Market, Inc. 
 “Notice of Proposal to Negotiate” has the meaning set forth in Section 10(d) hereof. 
 “Person” means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint
venture, any federal, state, county or municipal government or any bureau, department or agency thereof or any other legal entity and any fiduciary acting in such capacity on behalf of the foregoing. 
 “REIT” means a “real estate investment trust” as defined under the Code. 
 “SEC” means the United States Securities and Exchange Commission. 
 “Securities Act” means the Securities Act of 1933, as amended. 
 “Subsidiary” means any subsidiary of the Company and any partnership, the general partner of which is the Company or any
subsidiary of the Company, and any limited liability company, the managing member of which is the Company or any subsidiary of the Company. 
  

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 “Termination Fee” means a termination fee equal to three (3) times
the average annual Management Fee earned by the Manager during the 24-month period immediately preceding the most recently completed calendar quarter prior to the Effective Termination Date. 
 “Termination Notice” has the meaning set forth in Section 10(c) hereof. 
 “Termination Without Cause” has the meaning set forth in Section 10(c) hereof. 
 (b) As used herein, accounting terms relating to the Company and its Subsidiaries, if any, not defined in Section 1(a) and accounting terms partly
defined in Section 1(a), to the extent not defined, shall have the respective meanings given to them under United States generally accepted accounting principles. As used herein, “calendar quarters” shall mean the period from
January 1 to March 31, April 1 to June 30, July 1 to September 30 and October 1 to December 31 of the applicable year. 
 (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section references are to this Agreement unless otherwise specified. 
 (d) The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms. The words include, includes and including shall be deemed to be followed by the phrase “without limitation.” 
 Section 2. Appointment and Duties of the Manager. 
 (a) The Company hereby appoints the Manager to manage the investments and day-to-day operations of the Company and its Subsidiaries, subject at all times to the further terms and conditions set forth in this Agreement
and to the supervision of, and such further limitations or parameters as may be imposed from time to time by, the Board of Directors. The Manager hereby agrees to use its commercially reasonable efforts to perform each of the duties set forth
herein, provided that funds are made available by the Company for such purposes as set forth in Section 7 hereof. The appointment of the Manager shall be exclusive to the Manager, except to the extent that the Manager elects, in its sole and
absolute discretion, in accordance with the terms of this Agreement, to cause the duties of the Manager as set forth herein to be provided by third parties. 
 (b) The Manager, in its capacity as manager of the investments and the operations of the Company, at all times will be subject to the supervision and direction of the Board of Directors and will have only such
functions and authority as the Board of Directors 

  

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may delegate to it, including, without limitation, the functions and authority identified herein and delegated to the Manager hereby. The Manager will be
responsible for the day-to-day operations of the Company and will perform (or cause to be performed) such services and activities relating to the investments and operations of the Company as may be appropriate, which may include, without limitation:

 (i) forming and maintaining the Investment Committee, which will have the following responsibilities: (A) proposing
the Investment Guidelines to the Board of Directors, (B) reviewing the Company’s investment portfolio for compliance with the Investment Guidelines on a monthly basis, (C) reviewing the Investment Guidelines adopted by the Board of
Directors on a periodic basis, (D) reviewing the diversification of the Company’s investment portfolio and the Company’s hedging and financing strategies on a monthly basis, and (E) generally be responsible for conducting or
overseeing the provision of the services set forth in this Section 2. 
 (ii) serving as the Company’s consultant
with respect to the periodic review of the investments, borrowings and operations of the Company and other policies and recommendations with respect thereto, including, without limitation, the Investment Guidelines, in each case subject to the
approval of the Board of Directors; 
 (iii) serving as the Company’s consultant with respect to the selection, purchase,
monitoring and disposition of the Company’s investments; 
 (iv) serving as the Company’s consultant with respect to
decisions regarding any financings, hedging activities or borrowings undertaken by the Company or its Subsidiaries, including (1) assisting the Company in developing criteria for debt and equity financing that is specifically tailored to the
Company’s investment objectives, and (2) advising the Company with respect to obtaining appropriate financing for its investments; 
 (v) advising the Company with respect to incentive plans that the Company may establish for the Independent Directors; 
 (vi) purchasing and financing investments on behalf of the Company; 
 (vii) providing the
Company with portfolio management; 
 (viii) engaging and supervising, on behalf of the Company and at the Company’s
expense, independent contractors that provide real estate, investment banking, securities brokerage, insurance, legal, accounting, transfer agent, registrar and such other services as may be required relating to the Company’s operations or
investments (or potential investments); 
  

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 (ix) providing executive and administrative personnel, office space and office services
required in rendering services to the Company; 
 (x) performing and supervising the performance of administrative functions
necessary in the management of the Company as may be agreed upon by the Manager and the Board of Directors, including, without limitation, the services in respect of any equity incentive plan the Company may establish for the Independent Directors,
the collection of revenues and the payment of the Company’s debts and obligations and maintenance of appropriate information technology services to perform such administrative functions; 
 (xi) communicating on behalf of the Company with the holders of any equity or debt securities of the Company as required to satisfy the
reporting and other requirements of any governmental bodies or agencies or trading exchanges or markets and to maintain effective relations with such holders, including website maintenance, logo design, analyst presentations, investor conferences
and annual meeting arrangements; 
 (xii) counseling the Company in connection with policy decisions to be made by the Board
of Directors; 
 (xiii) evaluating and recommending to the Company hedging strategies and engaging in hedging activities on
behalf of the Company, consistent with such strategies, as so modified from time to time, with the Company’s qualification as a REIT and with the Investment Guidelines; 
 (xiv) counseling the Company regarding the maintenance of its qualification as a REIT and monitoring compliance with the various REIT
qualification tests and other rules set out in the Code and U.S. Treasury regulations promulgated thereunder; 
 (xv)
counseling the Company regarding the maintenance of its exemption from status as an investment company under the Investment Company Act and monitoring compliance with the requirements for maintaining such exemption; 
 (xvi) furnishing reports and statistical and economic research to the Company regarding the activities and services performed for the
Company or its Subsidiaries, if any, by the Manager; 
  

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 (xvii) monitoring the operating performance of the Company’s investments and
providing periodic reports with respect thereto to the Board of Directors, including comparative information with respect to such operating performance and budgeted or projected operating results; 
 (xviii) investing and re-investing any monies and securities of the Company (including in short-term investments, payment of fees, costs
and expenses, or payments of dividends or distributions to stockholders and partners of the Company) and advising the Company as to its capital structure and capital-raising activities; 
 (xix) causing the Company to retain qualified accountants and legal counsel, as applicable, to (i) assist in developing appropriate
accounting procedures, compliance procedures and testing systems with respect to financial reporting obligations and compliance with the provisions of the Code applicable to REITs and, if applicable, taxable REIT subsidiaries and (ii) conduct
quarterly compliance reviews with respect thereto; 
 (xx) causing the Company to qualify to do business in all jurisdictions
in which such qualification is required and to obtain and maintain all appropriate licenses; 
 (xxi) assisting the Company in
complying with all regulatory requirements applicable to the Company 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 and documents, if any, required under the Exchange Act or the Securities Act; 
 (xxii) taking all necessary
actions to enable the Company and any Subsidiaries to make required tax filings and reports, including soliciting stockholders for required information to the extent necessary under the Code and U.S. Treasury regulations applicable to REITs;

 (xxiii) handling and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or
other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company’s day-to-day operations; 
 (xxiv) arranging marketing materials, advertising, industry group activities (such as conference participations and industry organization
memberships) and other promotional efforts designed to promote the business of the Company; 
  

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 (xxv) using commercially reasonable efforts to cause expenses incurred by or on behalf of
the Company to be commercially reasonable or commercially customary and within any budgeted parameters or expense guidelines set by the Board of Directors from time to time; 
 (xxvi) performing such other services as may be required from time to time for the management and other activities relating to the assets
of the Company as the Board of Directors shall reasonably request or the Manager shall deem appropriate under the particular circumstances; and 
 (xxvii) using commercially reasonable efforts to cause the Company to comply with all applicable laws. 
 (c) The Manager may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of the persons and firms referred to in Section 7(b) hereof as the Manager deems necessary or advisable in connection with
the management and operations of the Company. In performing its duties under this Section 2, the Manager shall be entitled to rely reasonably on qualified experts and professionals (including, without limitation, accountants, legal counsel and
other professional service providers) hired by the Manager at the Company’s sole cost and expense. 
 (d) The Manager shall refrain
from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Investment Guidelines, (ii) would adversely affect the qualification of the Company as a REIT under the Code or the Company’s status as
an entity excluded from investment company status under the Investment Company Act, or (iii) would violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or of any exchange on which the
securities of the Company may be listed or that would otherwise not be permitted by the Company’s Governing Instruments. If the Manager is ordered to take any action by the Board of Directors, the Manager shall promptly notify the Board of
Directors if it is the Manager’s judgment that such action would adversely affect such status or violate any such law, rule or regulation or the Governing Instruments. Notwithstanding the foregoing, neither the Manager nor any of its Affiliates
(including American Capital) shall be liable to the Company, the Board of Directors, or the Company’s stockholders for any act or omission by the Manager or any of its Affiliates, except as provided in Section 8 of this Agreement.

 (e) The Company (including the Board of Directors) agrees to take all actions reasonably required to permit and enable the Manager to
carry out its duties and obligations under this Agreement, including, without limitation, all steps reasonably necessary to allow the Manager to file any registration statement or other filing required to be made under the Securities Act, Exchange
Act, Nasdaq, Code or other applicable law, rule or regulation on behalf of the Company in a timely manner. The Company further agrees to use commercially reasonable efforts to make available to the Manager all resources, information and materials

  

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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 Company. 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, as
applicable, 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. 
 (f) Reporting Requirements. (i) As frequently as the Manager may deem reasonably necessary or advisable, or at the direction of the Board of Directors, the Manager shall prepare, or, at the sole cost and
expense of the Company, cause to be prepared, with respect to any investment, reports and other information with respect to such investment as may be reasonably requested by the Company. 
 (ii) The Manager shall prepare, or, at the sole cost and expense of the Company, cause to be prepared, all reports, financial or
otherwise, with respect to the Company reasonably required by the Board of Directors in order for the Company to comply with its Governing Instruments, or any other materials required to be filed with any governmental body or agency, and shall
prepare, or, at the sole cost and expense of the Company, cause to be prepared, all materials and data necessary to complete such reports and other materials including, without limitation, an annual audit of the Company’s books of account by a
nationally recognized independent accounting firm. 
 (iii) The Manager shall prepare, or, at the sole cost and expense to the
Company, cause to be prepared, regular reports for the Board of Directors to enable the Board of Directors to review the Company’s acquisitions, portfolio composition and characteristics, credit quality, performance and compliance with the
Investment Guidelines and policies approved by the Board of Directors. 
 (g) Directors, officers, employees and agents of the Manager,
American Capital or their respective Affiliates may serve as directors, officers, agents, nominees or signatories for the Company or any of its Subsidiaries, to the extent permitted by their Governing Instruments and pursuant to the Administrative
Services Agreement, as from time to time amended, by any resolutions duly adopted by the Board of Directors. When executing documents or otherwise acting in such capacities for the Company or any of its Subsidiaries, such Persons shall indicate in
what capacity they are executing on behalf of the Company or any of its Subsidiaries. Without limiting the foregoing, but subject to Section 12 below, the Manager will provide the Company with a management team, including a Chief Executive
Officer, Chief Financial Officer and Chief Investment Officer or similar positions, along with appropriate support personnel to provide the management services to be provided by the Manager to the Company hereunder, who shall devote such of their
time to the management of the Company as necessary and appropriate, commensurate with the level of activity of the Company from time to time. 
  

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 (h) The Manager shall provide personnel for service on the Investment Committee. 
 (i) The Manager shall maintain reasonable and customary “errors and omissions” insurance coverage and other customary insurance coverage.

 (j) The Manager shall provide such internal audit, compliance and control services as may be required for the Company to comply with
applicable law (including the Securities Act and Exchange Act), regulation (including SEC regulations) and the rules and requirements of Nasdaq and as otherwise reasonably requested by the Company or its Board of Directors from time to time.

 (k) The Manager acknowledges receipt of the Company’s Code of Business Conduct and Ethics and Policy on Insider Trading and
Communications Policy (collectively, the “Conduct Policies”) and agrees to require the persons who provide services to the Company to comply with such Conduct Policies in the performance of such services hereunder or such comparable
policies as shall in substance hold such persons to at least the standards of conduct set forth in the Conduct Policies. 
 Section 3. Additional Activities of the Manager; Non-Solicitation; Restrictions. 
 (a) Except as provided, the last
sentence of this Section 3(a) and/or the Investment Guidelines, nothing in this Agreement shall (i) prevent the Manager or any of its Affiliates, officers, directors or employees, from engaging in other businesses or from rendering
services of any kind to any other Person or entity, whether or not the investment objectives or policies of any such other Person or entity are similar to those of the Company or (ii) in any way bind or restrict the Manager or any of 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 any of its Affiliates, officers, directors or employees may be
acting. While information and recommendations supplied to the Company 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 Company, they
may be different from the information and recommendations supplied by the Manager or any Affiliate of the Manager to others. The Company shall be entitled to equitable treatment under the circumstances in receiving information, recommendations and
any other services, but the Company 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 others. The Company shall have the benefit of the
Manager’s best judgment and effort in rendering services hereunder and, in furtherance of the foregoing, the Manager shall not undertake activities that, in its good faith judgment, will adversely affect the performance of its obligations under
this Agreement. 
  

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 (b) In the event of a Termination Without Cause of this Agreement by the Company pursuant to
Section 10(c) hereof, the Company shall not, without the consent of the Manager, employ or otherwise retain any employee of the Manager or any of its Affiliates (including American Capital) or any person who has been in the employ of the
Manager or any of its Affiliates at any time within the two (2) year period immediately preceding the date on which such person commences employment with or is otherwise retained by the Company for two (2) years after such termination of
this Agreement. The Company acknowledges and agrees that, in addition to any damages the Manager shall be entitled to equitable relief for any violation of this agreement by the Company, including, without limitation, injunctive relief. 

Section 4. Bank Accounts. At the direction of the Board of Directors, the Manager may establish and maintain one or more bank accounts in
the name of the Company or any Subsidiary, and may collect and deposit into any such account or accounts, and disburse funds from any such account or accounts, under such terms and conditions as the Board of Directors may approve; and 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 Company or any Subsidiary. 
 Section 5. Records; Confidentiality. 
 (a) The Manager shall maintain appropriate books of accounts and records relating to services performed hereunder, and such books of account and records shall be accessible for inspection by representatives of the Company or any Subsidiary
at any time during normal business hours. The Manager shall keep confidential any and all non-public information, written or oral, obtained by it in connection with the services rendered hereunder (“Confidential Information”) and
shall not use Confidential Information except in furtherance of its duties under this Agreement or disclose Confidential Information, in whole or in part, to any Person other than (i) to its Affiliates, officers, directors, employees, agents,
representatives or advisors who need to know such Confidential Information for the purpose of rendering services hereunder, (ii) to appraisers, financing sources and others in the ordinary course of the Company’s business ((i) and
(ii) collectively, “Manager Permitted Disclosure Parties”), (iii) in connection with any governmental or regulatory filings of the Company or disclosure or presentations to Company investors, (iv) to governmental
officials having jurisdiction over the Company, (v) as requested by law or legal process to which the Manager or any Person to whom disclosure is permitted hereunder is a party, or (vi) with the consent of the Company. The Manager agrees
to inform each of its Manager Permitted Disclosure Parties of the non-public nature of the Confidential Information and to direct such Persons to treat such Confidential Information in accordance with the terms hereof. Nothing herein shall prevent
the Manager from disclosing Confidential Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of, or pursuant to any law or regulation, any regulatory agency or authority, (iii) to the
extent reasonably required in connection with the exercise of any remedy hereunder, or (iv) to its legal counsel or independent auditors; provided, however that with respect to clauses (i) and (ii), it is agreed that, so long as not
legally prohibited, the Manager will provide the Company with prompt written notice of such order, request or demand so that the Company may seek, at its sole expense, an appropriate protective order and/or waive the Manager’s compliance with
the provisions of this Agreement. If, failing the entry of a protective order or the receipt of a waiver 

  

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hereunder, the Manager is required to disclose Confidential Information, the Manager may disclose only that portion of such information that is legally
required without liability hereunder; provided, that the Manager agrees to exercise its reasonable best efforts to obtain reliable assurance that confidential treatment will be accorded such information. Notwithstanding anything herein to the
contrary, each of the following shall be deemed to be excluded from provisions hereof: any Confidential Information that (A) is available to the public from a source other than the Manager, (B) is released in writing by the Company to the
public or to persons who are not under similar obligation of confidentiality to the Company, or (C) is obtained by the Manager from a third-party which, to the best of the Manager’s knowledge, does not constitute a breach by such
third-party of an obligation of confidence with respect to the Confidential Information disclosed. The provisions of this Agreement shall survive the expiration or earlier termination of this Agreement for a period of one year. 
 (b) The Company shall keep confidential any and all Confidential Information and shall not use Confidential Information except in furtherance of the
terms of this Agreement or disclose Confidential Information, in whole or in part, to any Person other than (i) to its Affiliates, officers or directors who need to know such Confidential Information for the purpose of fulfilling the
Company’s obligations hereunder (collectively, “Company Permitted Disclosure Parties”), (ii) as requested by law or legal process to which the Company or any Person to whom disclosure is permitted hereunder is a party, or
(iii) with the consent of the Manager. The Company agrees to (i) inform each of its Company Permitted Disclosure Parties of the non-public nature of the Confidential Information and to direct such Persons to treat such Confidential
Information in accordance with the terms hereof and (ii) not disclose any Confidential Information to its Company Permitted Disclosure Parties upon the expiration or nonrenewal of this Agreement in accordance with Section 10. Nothing
herein shall prevent the Company from disclosing Confidential Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of, or pursuant to any law or regulation, any regulatory agency or
authority, (iii) to the extent reasonably required in connection with the exercise of any remedy hereunder, or (iv) to its legal counsel or independent auditors; provided, however that with respect to clauses (i) and (ii), it
is agreed that, so long as not legally prohibited, the Company will provide the Manager with prompt written notice of such order, request or demand so that the Manager may seek, at its sole expense, an appropriate protective order and/or waive the
Company’s compliance with the provisions of this Agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder, the Company is required to disclose Confidential Information, the Company may disclose only that
portion of such information that is legally required without liability hereunder; provided, that the Company agrees to exercise its reasonable best efforts to obtain reliable assurance that confidential treatment will be accorded such information.
Notwithstanding anything herein to the contrary, each of the following shall be deemed to be excluded from provisions hereof: any Confidential Information that (A) is available to the public from a source other than the Company, (B) is
released in writing by the Manager to the public or to persons who are not under similar obligation of confidentiality to the Manager, or (C) is obtained by the Company from a third-party which, to the best of the Company’s knowledge, does
not constitute breach by such third-party of an obligation of confidence with respect to the Confidential Information disclosed. For the avoidance of doubt, information about the systems, employees, policies, procedures and investment portfolio
(other than investments in which the Company and Manager have co-invested) shall be deemed to be included within the meaning of “Confidential Information” for purposes of the Company’s obligations pursuant to this Section 5(b).

  

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 Section 6. Compensation. 
 (a) For the services rendered under this Agreement, the Company shall pay the Management Fee to the Manager. The Manager will not receive any
compensation for the period prior to the Closing Date other than expenses incurred and reimbursed pursuant to Section 7 hereof. 
 (b)
The parties acknowledge that the Management Fee is intended to compensate the Manager for the costs and expenses it will incur pursuant to the Administrative Services Agreement, as well as certain expenses not otherwise reimbursable under
Section 7 below, in order for the Manager to provide the Company the investment advisory services and certain general management services rendered under this Agreement. 
 (c) The Management Fee shall be payable in arrears in cash, in monthly installments commencing with the month in which this Agreement is executed. If
applicable, the initial and final installments of the Management Fee shall be pro-rated based on the number of days during the initial and final month, respectively, that this Agreement is in effect. The Manager shall calculate each monthly
installment of the Management Fee, and deliver such calculation to the Company, within fifteen (15) days following the last day of each calendar month. The Company shall pay the Manager each installment of the Management Fee within five
(5) Business Days after the date of delivery to the Company of such computations. 
 Section 7. Expenses of the Company.

 (a) The Manager shall be responsible for the expenses related to any and all personnel of the Manager and its Affiliates who provide
services to the Company pursuant to this Agreement or to the Manager pursuant to the Administrative Services Agreement (including each of the officers of the Company and any directors of the Company who are also directors, officers, employees or
agents of the Manager, American Capital or any of their Affiliates), including, without limitation, salaries, bonus and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance with respect to such
personnel. 
 (b) The Company shall pay all of its costs and expenses and shall reimburse the Manager or its Affiliates for expenses of the
Manager and its Affiliates incurred on behalf of the Company, excepting only those expenses that are specifically the responsibility of the Manager pursuant to Section 7(a) of this Agreement. Without limiting the generality of the foregoing, it
is specifically agreed that the following costs and expenses of the Company or any Subsidiary shall be paid by the Company and shall not be paid by the Manager or Affiliates of the Manager: 
 (i) all costs and expenses associated with the formation and capital raising activities of the Company and its Subsidiaries, if any,
including, without limitation, the costs and expenses of (A) the preparation of the Company’s registration statements, (B) the initial public offering of the Company, (C) the original incorporation and initial organization of the
Company, and (D) any subsequent offerings and any filing fees and costs of being a public company, including, without limitation, filings with the SEC, the Financial Industry Regulatory Authority, Inc. and Nasdaq (and any other exchange or
over-the-counter market), among other such entities; 
  

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 (ii) all costs and expenses in connection with the acquisition, disposition, financing,
hedging and ownership of the Company’s or any Subsidiary’s investments, including, without limitation, costs and expenses incurred in contracting with third parties to provide such services, such as legal fees, accounting fees, consulting
fees, trustee fees, appraisal fees, insurance premiums, commitment fees, brokerage fees and guaranty fees; 
 (iii) all legal,
audit, accounting, consulting, brokerage, listing, filing, custodian, transfer agent, rating agency, registration and other fees and charges, printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution,
transfer, registration and stock exchange listing of the Company’s or any Subsidiary’s equity securities or debt securities; 
 (iv) all expenses relating to communications to holders of equity securities or debt securities issued by the Company or any Subsidiary and other third party services utilized in maintaining relations with holders of
such securities and in complying with the continuous reporting and other requirements of governmental bodies or agencies (including, without limitation, the SEC), 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 Company’s or any Subsidiary’s securities and the cost of any reports to third parties required under any indenture to
which the Company or any Subsidiary is a party; 
 (v) all costs and expenses of money borrowed by the Company or its
Subsidiaries, if any, including, without limitation, principal, interest and the costs associated with the establishment and maintenance of any credit facilities, warehouse loans, repurchase facilities and other indebtedness of the Company and its
Subsidiaries, if any (including commitment fees, legal fees, closing and other costs); 
 (vi) all taxes and license fees
applicable to the Company or any Subsidiary, including interest and penalties thereon; 
  

 15 

 (vii) all fees paid to and expenses of third-party advisors and independent contractors,
consultants, managers and other agents engaged by the Company or any Subsidiary or by the Manager for the account of the Company or any Subsidiary; 
 (viii) all insurance costs incurred by the Company or any Subsidiary, including, without limitation, the cost of obtaining and maintaining (A) liability or other insurance to indemnify (1) the Manager,
(2) the directors and officers of the Company, and (3) underwriters of any securities of the Company, (B) “errors and omissions” insurance coverage, and (C) any other insurance deemed necessary or advisable by the Board
of Directors for the benefit of the Company and its directors and officers; 
 (ix) all compensation and fees paid to
directors of the Company or any Subsidiary (excluding those directors who are also directors, officers, employees or agents of American Capital or any of its Affiliates), and all expenses of all directors of the Company or any Subsidiary incurred in
their capacity as such; 
 (x) all third-party legal, accounting and auditing fees and expenses and other similar services
relating to the Company’s or any Subsidiary’s operations (including, without limitation, all quarterly and annual audit or tax fees and expenses); 
 (xi) all third-party 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 Company, or which the Company is authorized or obligated to pay under applicable law or its Governing Instruments or by the Board of Directors; 
 (xii) subject to Section 8 below, any judgment or settlement of pending or threatened proceedings (whether civil, criminal or
otherwise) against the Company or any Subsidiary, or against any trustee, director or officer of the Company or any Subsidiary in his capacity as such for which the Company or any Subsidiary is required to indemnify such trustee, director or officer
by any court or governmental agency, or settlement of pending or threatened proceedings; 
 (xiii) all travel and related
expenses of directors, officers and employees of the Company and the Manager, incurred in connection with attending meetings of the Board of Directors or holders of securities of the Company or any Subsidiary or performing other business activities
that relate to the Company or any Subsidiary, including, without limitations, travel and related expenses incurred in connection with the purchase, consideration for purchase, financing, refinancing, sale or other disposition of any investment or
potential investment of the Company; provided, however, that the Company shall only be responsible for a proportionate share of such expenses, as determined by the Manager in good faith, where such expenses were not incurred solely for the
benefit of the Company; 
  

 16 

 (xiv) all expenses of organizing, modifying or dissolving the Company or any Subsidiary
and costs preparatory to entering into a business or activity, or of winding up or disposing of a business activity of the Company or its Subsidiaries, if any; 
 (xv) 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 Company or any Subsidiary, including, without limitation, in connection with any dividend reinvestment plan; 
 (xvi) all costs and expenses related to (A) the design and maintenance of the Company’s web site or sites and (B) the
Company’s pro rata share of any computer software, hardware or information technology services that is used by the Company; 
 (xvii) all costs and expenses incurred with respect to market information systems and publications, research publications and materials, and settlement, clearing and custodial fees and expenses; provided, however, that the
Company shall only be responsible for a proportionate share of such expenses, as determined by the Manager in good faith, where such expenses were not incurred solely for the benefit of the Company; 
 (xviii) all costs and expenses incurred with respect to administering the Company’s incentive plans; 
 (xix) rent (including disaster recovery facilities costs and expenses), telephone, utilities, office furniture, equipment, machinery and
other office, internal and overhead expenses of the Manager and its Affiliates required for the Company’s operations; provided, however, that the Company shall only be responsible for a proportionate share of such expenses, as
determined by the Manager in good faith, where such expenses were not incurred solely for the benefit of the Company; and 
 (xx) all other expenses actually incurred by the Manager or its Affiliates or their respective officers, employees, representatives or agents, or any Affiliates thereof, 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 Company’s compliance with all governmental and regulatory matters). 
 (c) Costs and expenses incurred by the Manager on behalf of the Company shall be reimbursed monthly to the Manager. The Manager shall prepare a written
statement in reasonable detail documenting the costs and expenses of the Company and those 

  

 17 

 
incurred by the Manager on behalf of the Company during each month, and shall deliver such written statement to the Company within thirty (30) days
after the end of each month. The Company shall pay all amounts payable to the Manager pursuant to this Section 7(c) within five (5) Business Days after the receipt of the written statement without demand, deduction, offset or delay. 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 Company. The provisions of this Section 7 shall survive the expiration or earlier termination of
this Agreement to the extent such expenses has previously been incurred or are incurred in connection with such expiration or termination. 
 Section 8. Limits of the Manager’s Responsibility. 
 (a) The Manager assumes no responsibility under this
Agreement other than to render the services called for hereunder in good faith 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 as set
forth in the Investment Guidelines. The Manager and its Affiliates, and the directors, officers, employees and stockholders of the Manager and its Affiliates, will not be liable to the Company, any Subsidiary of the Company, the Board of Directors,
or the Company’s stockholders for any acts or omissions by the Manager, its officers, employees or its Affiliates, performed in accordance with and pursuant to this Agreement, except by reason of acts constituting bad faith, willful misconduct,
gross negligence or reckless disregard of their respective duties under this Agreement. The Company shall, to the full extent lawful, reimburse, indemnify and hold harmless the Manager, its Affiliates, and the directors, officers, employees and
stockholders of the Manager and its Affiliates (each, a “Manager Indemnified Party”), of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever, (including reasonable
attorneys’ fees) (collectively “Losses”) in respect of or arising from any acts or omissions of such Manager Indemnified Party performed in good faith under this Agreement and, in respect of any such Manager Indemnified Party,
not constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties of such Manager Indemnified Party under this Agreement. 
 (b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold harmless the Company, and the directors, officers and stockholders of the Company and each Person, if any, controlling the Company (each,
a “Company Indemnified Party”; a Manager Indemnified Party and a Company Indemnified Party are each sometimes hereinafter referred to as an “Indemnified Party”) of and from any and all Losses in respect of or
arising from (i) any acts or omissions of the Manager constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties of the Manager under this Agreement or (ii) any claims by the Manager’s employees
relating to the terms and conditions of their employment by the Manager. 
 (c) In case any such claim, suit, action or proceeding (a
“Claim”) is brought against any Indemnified Party in respect of which indemnification may be sought by such Indemnified Party pursuant hereto, the Indemnified Party shall give prompt written notice thereof to the indemnifying party,
which notice shall include all documents and information in 

  

 18 

 
the possession of or under the control of such Indemnified Party reasonably necessary for the evaluation and/or defense of such Claim and shall specifically
state that indemnification for such Claim is being sought under this Section; provided, however, that the failure of the Indemnified Party to so notify the indemnifying party shall not limit or affect such Indemnified Party’s rights to
be indemnified pursuant to this Section. Upon receipt of such notice of Claim (together with such documents and information from such Indemnified Party), the indemnifying party shall, at its sole cost and expense, in good faith defend any such Claim
with counsel reasonably satisfactory to such Indemnified Party, which counsel may, without limiting the rights of such Indemnified Party pursuant to the next succeeding sentence of this Section, also represent the indemnifying party in such
investigation, action or proceeding. In the alternative, such Indemnified Party may elect to conduct the defense of the Claim, if (i) such Indemnified Party reasonably determines that the conduct of its defense by the indemnifying party could
be materially prejudicial to its interests, (ii) the indemnifying party refuses to defend (or fails to give written notice to the Indemnified Party within ten (10) days of receipt of a notice of Claim that the indemnifying party assumes
such defense), or (iii) the indemnifying party shall have failed, in such Indemnified Party’s reasonable judgment, to defend the Claim in good faith. The indemnifying party may settle any Claim against such Indemnified Party without such
Indemnified Party’s consent, provided (i) such settlement is without any Losses whatsoever to such Indemnified Party, (ii) the settlement does not include or require any admission of liability or culpability by such Indemnified Party
and (iii) the indemnifying party obtains an effective written release of liability for such Indemnified Party from the party to the Claim with whom such settlement is being made, which release must be reasonably acceptable to such Indemnified
Party, and a dismissal with prejudice with respect to all claims made by the party against such Indemnified Party in connection with such Claim. The applicable Indemnified Party shall reasonably cooperate with the indemnifying party, at the
indemnifying party’s sole cost and expense, in connection with the defense or settlement of any Claim in accordance with the terms hereof. If such Indemnified Party is entitled pursuant to this Section to elect to defend such Claim by counsel
of its own choosing and so elects, then the indemnifying party shall be responsible for any good faith settlement of such Claim entered into by such Indemnified Party. Except as provided in the immediately preceding sentence, no Indemnified Party
may pay or settle any Claim and seek reimbursement therefor under this Section. 
 (d) The provisions of this Section 8 shall survive
the expiration or earlier termination of this Agreement. 
 Section 9. No Joint Venture. The Company and the Manager are not
partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them. 
 Section 10. Term; Renewal. 
 (a)
Initial Term. This Agreement shall become effective on the Closing Date and shall continue in operation, unless terminated in accordance with the terms hereof, until —, 2011 (the “Initial
Term”). 
  

 19 

 (b) Automatic Renewal Terms. After the Initial Term, this Agreement shall be deemed renewed
automatically each year for an additional one-year period (an “Automatic Renewal Term”) unless the Company or the Manager elects not to renew this Agreement in accordance with Section 10(c) of this Agreement. 
 (c) Nonrenewal of this Agreement Without Cause. Notwithstanding any other provision of this Agreement to the contrary, upon the expiration of the
Initial Term and upon 180 days’ prior written notice to the Manager or the Company (the “Termination Notice”), either the Company (but only with the approval of a majority of the Independent Directors) or the Manager may,
without cause, in connection with the expiration of the Initial Term or any Automatic Renewal Term, decline to renew this Agreement (any such nonrenewal, a “Termination Without Cause”). If the Company issues the Termination Notice,
the Company shall be obligated to (i) specify the reason for nonrenewal in the Termination Notice and (ii) pay the Manager the Termination Fee before or on the last day of the Initial Term or Automatic Renewal Term (the “Effective
Termination Date”). In the event of a Termination Without Cause, nonrenewal of this Agreement shall be without any further liability or obligation of either party to the other, except as provided in Section 3(b), Section 8 and
Section 14 of this Agreement. The Manager shall cooperate with the Company in executing an orderly transition of the management of the Company’s assets to a new manager. The Company may terminate this Agreement for cause pursuant to
Section 12 hereof even after a Termination Without Cause and, in such case, no Termination Fee shall be payable. 
 (d) Unfair
Manager Compensation. Notwithstanding the provisions of subsection (c) above, if the reason for nonrenewal specified in the Company’s Termination Notice is that a majority of the Independent Directors have determined that the
Management Fee payable to the Manager is unfair, the Company shall not have the foregoing nonrenewal right in the event the Manager agrees that it will continue to perform its duties hereunder during the Automatic Renewal Term that would commence
upon the expiration of the Initial Term or then current Automatic Renewal Term at a fee that the majority of the Independent Directors determine to be fair; provided, however, the Manager shall have the right to renegotiate the Management Fee
by delivering to the Company, not less than 120 days prior to the pending Effective Termination Date, written notice (a “Notice of Proposal to Negotiate”) of its intention to renegotiate the Management Fee. Thereupon, the Company
and the Manager shall endeavor to negotiate the Management Fee in good faith. Provided that the Company and the Manager agree to a revised Management Fee or other compensation structure within sixty (60) days following the Company’s
receipt of the Notice of Proposal to Negotiate, the Termination Notice from the Company shall be deemed of no force and effect, and this Agreement shall continue in full force and effect on the terms stated herein, except that the Management Fee or
other compensation structure shall be the revised Management Fee or other compensation structure then agreed upon by the Company and the Manager. The Company and the Manager agree to execute and deliver an amendment to this Agreement setting forth
such revised Management Fee or other compensation structure promptly upon reaching an agreement regarding same. In the event that the Company and the Manager are unable to agree to a revised Management Fee or other compensation structure during such
sixty (60) day period, this Agreement shall terminate on the Effective Termination Date and the Company shall be obligated to pay the Manager the Termination Fee upon the Effective Termination Date. 
  

 20 

 Section 11. Assignments. 
 (a) Assignments by the Manager. This Agreement shall terminate automatically without payment of the Termination Fee in the event of its
assignment, in whole or in part, by the Manager, unless such assignment is consented to in writing by the Company with the consent of a majority of the Independent Directors. Any such permitted assignment shall bind the assignee under this Agreement
in the same manner as the Manager is bound, and the Manager shall be liable to the Company for all errors or omissions of the assignee under any such assignment. In addition, the assignee shall execute and deliver to the Company a counterpart of
this Agreement naming such assignee as the Manager. Notwithstanding the foregoing, the Manager may (i) assign this Agreement to an Affiliate of the Manager that is a successor to the Manager by reason of a restructuring or other internal
reorganization among the Manager and any one or more of its Affiliates without the consent of the majority of the Independent Directors and (ii) delegate to one or more of its Affiliates the performance of any of its responsibilities hereunder
so long as it remains liable for any such Affiliate’s performance. Nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this Agreement. 
 (b) Assignments by the Company. This Agreement shall terminate automatically in the event of its assignment, in whole or in part, by the Company,
unless such assignment is consented to in writing by the Manager. Any such permitted assignment shall bind the assignee under this Agreement in the same manner as the Company is bound. In addition, the assignee shall execute and deliver to the
Manager a counterpart of this Agreement. 
 Section 12. Termination of the Manager for Cause. At the option of the Company and at
any time during the term of this Agreement, this Agreement shall be and become terminated upon 60 days’ written notice of termination from the Board of Directors to the Manager, without payment of the Termination Fee, if any of the following
events shall occur, which shall be determined by a majority of the Independent Directors: 
 (a) the Manager shall commit any act of fraud,
misappropriation of funds, or embezzlement against the Company or shall be grossly negligent in the performance of its duties under this Agreement (including such action or inaction by the Manager which materially impairs the Company’s ability
to conduct its business); 
 (b) the Manager shall fail to provide adequate or appropriate personnel necessary for the Manager to originate
investment opportunities for the Company and to manage and develop the Company’s portfolio; provided, that such default has continued uncured for a period of sixty (60) days after written notice thereof, which notice shall contain a
request that the same be remedied; 
  

 21 

 (c) the Manager shall commit a material breach of any provision of this Agreement (including the failure
of the Manager to use reasonable efforts to comply with the Investment Guidelines); provided, that such default has continued uncured for a period of sixty (60) days after written notice thereof, which notice shall contain a request that
the same be remedied; 
 (d) (A) the Manager shall commence any case, proceeding or other action (1) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (2) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Manager shall make a general assignment for the benefit of its creditors; or (B) there shall be commenced against the Manager any case, proceeding or other action of a nature referred
to in clause (A) above which (1) results in the entry of an order for relief or any such adjudication or appointment or (2) remains undismissed, undischarged or unbonded for a period of 90 days; or (C) the Manager shall take any
action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (A) or (B) above; or (D) the Manager shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or 
 (e) upon the dissolution of the Manager. 
 If any of the events specified above shall occur, the Manager shall give prompt written notice thereof to the Board of Directors. 
 Section 13. Action Upon Termination. From and after the effective date of termination of this Agreement pursuant to Sections 10, 11, or 12 of
this Agreement, the Manager shall not be entitled to compensation for further services hereunder, but shall be paid all compensation accruing to the date of termination and, if terminated or not renewed pursuant to Section 10, the Termination
Fee. Upon any such termination, the Manager shall forthwith: 
 (a) after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or a Subsidiary all money collected and held for the account of the Company or a Subsidiary pursuant to this Agreement; 
 (b) deliver to the Board of Directors a full 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 Company and any Subsidiaries; and 
  

 22 

 (c) deliver to the Board of Directors all property and documents of the Company and any Subsidiaries
then in the custody of the Manager. 
 Section 14. Release of Money or Other Property Upon Written Request. 
 The Manager agrees that any money or other property of the Company (which such term, for the purposes of this Section, shall be deemed to include any and
all of its Subsidiaries, if any) held by the Manager shall be held by the Manager as custodian for the Company, and the Manager’s records shall be appropriately and clearly marked to reflect the ownership of such money or other property by the
Company. Upon the receipt by the Manager of a written request signed by a duly authorized officer of the Company requesting the Manager to release to the Company any money or other property then held by the Manager for the account of the Company
under this Agreement, the Manager shall release such money or other property to the Company within a reasonable period of time, but in no event later than 60 days following such request. Upon delivery of such money or other property to the Company,
the Manager shall not be liable to the Company, the Board of Directors, or the Company’s stockholders or partners for any acts or omissions by the Company in connection with the money or other property released to the Company in accordance with
this Section. The Company shall indemnify the Manager, its directors, officers, stockholders, employees and agents against any and all expenses, 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 Company in accordance with the terms of this Section 14. Indemnification pursuant to this provision shall be in addition to any right of the Manager to
indemnification under Section 8 of this Agreement. 
 Section 15. Representations and Warranties. 
 (a) The Company hereby represents and warrants to the Manager as follows: 
 (i) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the corporate power
and authority and the legal right to own and operate its assets, to lease any property it may operate as lessee and to conduct the business in which it is now engaged and is duly qualified as a foreign corporation and 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 Company. 
 (ii) The Company has the corporate power and
authority and the legal right to make, deliver and perform this Agreement and all obligations required hereunder 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 

  

 23 

 
obligations required hereunder. No consent of any other Person, including stockholders and creditors of the Company, 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 Company in connection with this Agreement or the execution, delivery, performance, validity or
enforceability of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of the Company, and this Agreement
constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 

(iii) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate
any provision of any existing law or regulation binding on the Company, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Company, or the Governing Instruments of, or any securities issued by
the Company or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Company is a party or by which the Company 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 Company and its Subsidiaries, if any, taken as a whole, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues
pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking. 
 (b) The
Manager hereby represents and warrants to the Company as follows: 
 (i) The Manager is duly organized, validly existing and
in good standing under the laws of the State of Delaware, has the limited liability company power and authority and the legal right to own and operate its assets, to lease the property it operates as lessee and to conduct the business in which it is
now engaged and is duly qualified as a foreign corporation and 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. 
 (ii) The Manager has the limited liability company power and authority and the legal right to make, deliver and perform this Agreement and
all obligations required hereunder 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 hereunder. No
consent of any other Person, including members and creditors of the Manager, and no license, permit, approval or 

  

 24 

 
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 hereunder. This Agreement has been, and each instrument or document required hereunder will be,
executed and delivered by a duly authorized officer of the Manager, and this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of
the Manager enforceable against the Manager in accordance with its terms. 
 (iii) The execution, delivery and performance of
this Agreement and the documents or instruments required hereunder 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 will not result in, or require, the creation or imposition of any lien or any
of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking. 
 Section 16. Miscellaneous. 
 (a) Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered against receipt or upon actual receipt of
(i) personal delivery, (ii) delivery by reputable overnight courier, (iii) delivery by facsimile transmission with telephonic confirmation or (iv) delivery by registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below (or to such other address as may be hereafter notified by the respective parties hereto in accordance with this Section 16): 
  

			
	The Company:	    	 American Capital Agency Corp.
 2 Bethesda Metro
Center, 14th Floor
 Bethesda, MD 20814
 Attention: Chief Financial Officer
 Fax: 301-968-9301

		
	with a copy to:	    	 Skadden, Arps, Slate, Meagher & Flom LLP
 4 Times
Square
 New York, New York 10036
 Attention: David J.
Goldschmidt, Esq.
 Fax: (212) 735-2000

  

 25 

			
	The Manager:	    	 American Capital Agency Management, LLC
 c/o American
Capital Strategies, Ltd.
 2 Bethesda Metro Center, 14th
Floor
 Bethesda, MD 20814
 Attention: Chief Financial Officer

 Fax: 301-951-5651

		
	with a copy to:	    	 Skadden, Arps, Slate, Meagher & Flom LLP
 4 Times
Square
 New York, New York 10036
 Attention: David J.
Goldschmidt, Esq.
 Fax: (212) 735-2000

 (b) 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 herein. 
 (c) Integration. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes 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 hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. 
 (d) Amendments. This Agreement, nor any terms hereof, may not be amended, supplemented
or modified except in an instrument in writing executed by the parties hereto. 
 (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. 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) WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND 

  

 26 

 
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 
 (g) Survival of Representations and Warranties. All representations and warranties made hereunder, and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement. 
 (h) No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of
a 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. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 
 (i) Costs and Expenses. Each party hereto shall bear its own costs and expenses (including the fees and disbursements of counsel and accountants)
incurred in connection with the negotiations and preparation of and the closing under this Agreement, and all matter incident thereto. 
 (j) Section Headings. The section and subsection headings in this Agreement are for convenience in reference only and shall not be deemed to alter or affect the interpretation of any provisions hereof. 
 (k) Counterparts. This Agreement may be executed by the parties to this Agreement on any number of separate counterparts (including by telecopy),
and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 
 (l) Severability. Any
provision of this Agreement which 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. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 27 

 IN WITNESS WHEREOF, each of the parties hereto have executed this Management Agreement as of the date
first written above. 
  

			
	American Capital Agency Corp.
		
	By:	 	 /s/ Samuel A. Flax

	Name:	 	Samuel A. Flax
	Title:	 	Executive Vice President and Secretary
	
	American Capital Agency Management, LLC
		
	By:	 	 /s/ Samuel A. Flax

	Name:	 	Samuel A. Flax
	Title:	 	Vice President and Secretary

  

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 Exhibit A 
 Investment Guidelines 
 Capitalized terms used but not defined herein shall have the meanings
ascribed thereto in that certain Management Agreement, dated as of May     , 2008, as may be amended from time to time (the “Management Agreement”), by and between American Capital Agency Corp. (the
“Company”) and American Capital Agency Management, LLC (the “Manager”). 
 1. The Company shall not make
any investments other than investments in Agency Securities. 
 2. The Company’s leverage may not exceed 10 times its stockholders’
equity (as computed in accordance with GAAP) (the “Leverage Threshold.”) In the event that the Company’s leverage inadvertently exceeds the Leverage Threshold, the Company may not utilize additional leverage without prior approval
from the Board of Directors until the Company is once again in compliance with the Leverage Threshold. 
 3. No investment shall be made that
would cause the Company to fail to qualify as a REIT under the Code. 
 4. No investment shall be made that would cause the Company to be
regulated as an investment company under the Investment Company Act. 
 5. A majority of the Independent Directors must approve any
transaction between the Company and/or any of its subsidiaries on the one hand and the Manager and/or any of its Affiliates (including, but not limited to American Capital) on the other hand. 
 These Investment Guidelines may be amended, restated, modified, supplemented or waived by the Board of Directors (which must include a majority of the
Independent Directors) without the approval of the Company’s stockholders.Exhibit 10.4

 Exhibit 10.4 
 AMERICAN CAPITAL AGENCY CORP. 
 EQUITY INCENTIVE PLAN FOR INDEPENDENT DIRECTORS 
 RESTRICTED STOCK AGREEMENT 
 This
Restricted Stock Agreement (this “Agreement”) is executed and delivered as of May 20, 2008 (the “Grant Date”) by and between American Capital Agency Corp., a Delaware corporation (the “Company”) and Morris A Davis,
a director of the Company (the “Grantee”). The Grantee and the Company hereby agree as follows: 
  

	1.	Grant. Pursuant to the American Capital Agency Corp. Equity Incentive Plan for Independent Directors (the “Plan”), the Company hereby grants to the Grantee 1,500
shares of the Company’s common stock, $0.01 par value (the “Shares”). 

  

	2.	Restrictions. Subject to Section 3 hereof, the Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of and shall be subject to the
risk of forfeiture described in Section 4 hereof (the “Restrictions”) from the Grant Date until (i) the first anniversary thereof with respect to one-third of the Shares, (ii) the second anniversary thereof with respect to
an additional one-third of the Shares, and (iii) the third anniversary thereof with respect to the remaining one-third of the Shares. 

  

	3.	Lapse of Restrictions. 

  

	 	(a)	Unless the Restrictions shall have been terminated pursuant to clauses (b), (c) or (d) of this Section 3, the Restrictions shall lapse with respect to one-third of
the Shares on the first, second and third anniversaries of the Grant Date. 

  

	 	(b)	In the event of the Grantee’s death or disability, the Restrictions shall lapse with respect to all Shares subject to the Restrictions on the date of the Grantee’s death
or the occurrence of the Grantee’s disability. 

  

	 	(c)	In the event that the Grantee’s service as a director of the Company is terminated other than for any of the reasons set forth in Section 4 hereof, the Restrictions shall
lapse with respect to all Shares subject to the Restrictions on the date of such termination. 

  

	 	(d)	Upon a Change of Control (as defined in the Plan), the Restrictions shall lapse with respect to all Shares subject to the Restrictions on the date of the Change of Control.

  

	4.	Forfeiture Events. If (a) the Grantee terminates his service as a director of the Company, except for a termination due to the Grantee’s death or disability, or
(b) the Grantee’s service as a director is terminated pursuant to a Removal for Cause (as defined in the Plan), all Shares subject to the Restrictions as of the date of any such termination shall be forfeited on such date.

	5.	Certain Tax Matters. 

  

	 	(a)	Tax Consequences. The Grantee acknowledges that it shall recognize ordinary income at the times the Restrictions lapse with respect to the Shares in an amount equal to the
fair market value of the Shares on each such date and the Company shall be required to collect all applicable withholding taxes with respect to such income. The obligations of the Company under the Plan are conditioned on the Grantee making
arrangements for the payment of any such taxes. Notwithstanding anything herein to the contrary, the release of the Shares from the Restrictions shall be conditioned upon the Grantee making adequate provision for federal, state or other tax
withholding obligations, if any, which arise upon such release (unless the Section 83(b) election described in Section 5(b) hereof has been filed), whether by withholding, direct payment to the Company, or otherwise.

  

	 	(b)	Section 83(b) Election. The Grantee acknowledges that he has been informed that he may file with the Internal Revenue Service within 30 days of the Grant Date an
election, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), to be taxed currently on the fair market value of the Shares on the Grant Date. The Grantee acknowledges that it is the Grantee’s
sole responsibility to file timely the election under Section 83(b) of the Code, even if the Grantee requests the Company or its representative to make this filing on the Grantee’s behalf. 

  

	 	(c)	No Tax Advice. By signing this Agreement, the Grantee represents that he has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement and that he is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands and agrees that he (and not the Company) shall be
responsible for any tax liability that may arise as a result of the transactions contemplated by this Agreement. 

  

	6.	Restrictive Legend. The certificate representing the Shares subject to the Restrictions shall bear the following legend: 

 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE COMPANY. 
  

 2 

 The Grantee shall be entitled to have such legend removed from such certificate upon the lapse of the
Restrictions on the Shares. 
  

	7.	Entire Agreement; Plan Controls. This Agreement and the Plan contain the entire understanding and agreement of the parties concerning the subject matter hereof, and supersede
all earlier negotiations and understandings, written or oral, between the parties with respect thereto. This Agreement is made under and subject to the provisions of the Plan, and all of the provisions of the Plan are hereby incorporated by
reference into this Agreement. In the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall govern. By signing this Agreement, the Grantee confirms that he has received a copy
of the Plan and has had an opportunity to review the contents thereof. 

  

	8.	Miscellaneous. 

 (a) Notices. Any notice
required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee either at his address herein below set forth or
such other address as he may designate in writing to the Company, or to the Company to the attention of the Secretary, at the Company’s address or such other address as the Company may designate in writing to the Grantee. 
 (b) Failure to Enforce Not a Waiver. The failure of the Company or the Grantee to enforce at any time any provision of this Agreement shall in no
way be construed to be a waiver of such provision or of any other provision hereof. 
 (c) Governing Law. This Agreement shall be
governed by and construed according to the laws of the State of Delaware without giving effect to the choice of law principles thereof. 
 (d)
Amendments. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties. 
 (e)
Agreement Not a Contract of Employment. Neither this Agreement nor any other action taken in connection herewith shall constitute or be evidence of any agreement or understanding, express or implied, that the Grantee is an employee of the
Company or any subsidiary of the Company. 
 (f) Captions. The captions and headings of the sections and subsections of this Agreement
are included for convenience only and are not to be considered in construing or interpreting this Agreement. 
 (g) Counterparts. This
Agreement may be executed in counterparts, each of which when signed by the Company or the Grantee will be deemed an original and all of which together will be deemed the same agreement. 
  

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 (h) Assignment. The Company may assign its rights and delegate its duties under this Agreement. If
any such assignment or delegation requires consent of any state securities authorities, the parties agree to cooperate in requesting such consent. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to
the restrictions on transfer herein set forth, be binding upon the Grantee, his heirs, executors, administrators, successors and assigns. 
 (i) Severability. This Agreement will be severable, and the invalidity or unenforceability of any term or provision hereof will not affect the validity or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any invalid or unenforceable term or provision, the parties intend that there be added as a part of this Agreement a valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be
possible. 
 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized representative and the Grantee has
hereunto set his hand as of the Grant Date. 
  

			
	AMERICAN CAPITAL AGENCY CORP.
		
	By:	 	 /s/ Samuel A. Flax

	Name:	 	Samuel A. Flax
	Title:	 	Executive Vice President and Secretary
	
	GRANTEE
	
	 /s/ Morris A. Davis

	Name:	 	Morris A Davis

  

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