SHARED FACILITIES AND SERVICES AGREEMENT
Exhibit
10.4
THIS
SHARED FACILITIES AND SERVICES AGREEMENT (this “Agreement”), dated as
of October 28, 2009, is entered into by PRCM Advisers LLC, a Delaware limited
liability company (the “Manager”) and Pine
River Capital Management L.P., a Delaware limited partnership (“Pine
River”).
WHEREAS,
the Manager was formed to manage the business affairs of Two Harbors Investment
Corp., a Maryland Corporation (the “Company”), in
conformity with the policies and investment guidelines established by the
Company’s board of directors, pursuant to the terms of that certain Management
Agreement, dated as of the date hereof (the “Management
Agreement”), by and among the Company, the Manager and Two Harbors
Operating Company LLC; and
WHEREAS,
the Manager desires to utilize the personnel and other resources of Pine River
that may be necessary or appropriate for the Manager to carry out its duties and
perform its obligations under the Management Agreement, and Pine River is
willing to make such personnel and other resources available for the Manager’s
use.
NOW,
THEREFORE, in consideration of the mutual promises set forth below, the parties
hereby agree as follows:
1. Services
Provided. Pine River shall provide the Manager with personnel
and other resources necessary or appropriate for the Manager to carry out its
duties and perform its obligations under the Management Agreement (collectively,
the “Resources”).
2. Office
Personnel. All Pine River personnel who provide services
hereunder shall be employees of Pine River or its affiliates, and shall not be
employees of the Manager. Pine River shall provide the Manager with a
management team for the Company along with any other support personnel necessary
for the Manager to provide the services it is required to provide under the
Management Agreement. Initially, the management team shall consist of
the following individuals:
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Name
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Title
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▇. ▇▇▇▇▇▇
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Chairman
and Director
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▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Chief
Executive Officer, President and Director
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▇▇▇▇▇▇▇
▇▇▇▇▇
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Chief
Financial Officer and Treasurer
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▇▇▇▇▇▇
▇▇▇▇
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Co-Chief
Investment Officer
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▇▇▇▇▇▇▇
▇▇▇▇
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Co-Chief
Investment Officer
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▇▇▇▇▇▇▇
▇’▇▇▇▇▇
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General
Counsel and Corporate Secretary
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▇▇▇▇▇▇
▇▇▇▇▇▇
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Vice
President — Business
Development
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The
Manager shall have no right to specify the actual person or persons who will
perform services for the Manager under this
Agreement. Notwithstanding the foregoing, however, Pine River will
employ good faith efforts to identify suitable personnel possessing the
necessary skill and training to facilitate the provision of adequate services
under this Agreement. In addition, upon a good faith demonstration by
the Manager that any person supplied by Pine River is not suitable for the
Manager’s needs under this Agreement, Pine River will, to the extent available,
substitute other qualified personnel for such unsuitable
personnel. Office personnel shall be advised that, while providing
services to the Manager, they are to follow the directions of the officers of
the Manager and are to act in the best interests of the
Manager.
3. Pine River
Employees. Pine River shall at all times during the term of
the Agreement provide the following benefits to all Pine River personnel who
provide services to the Manager from time to time (the “Manager Personnel”),
whether or not such Manager Personnel are also officers of the Manager or the
Company: (a) any and all compensation and benefits (including
vacation, holiday and sick pay, life and health insurance, and pension benefits)
comparable to those maintained for Pine River’s employees not engaged in
rendering services to the Manager or as required by any applicable employment
practices, policies and contracts and (b) the payment of all required federal,
state, and local taxes, social security contributions and federal and state
unemployment compensation insurance taxes, subject in each case to the Company’s
obligation to reimburse the Manager for the Company’s allocable share of the
compensation paid by the Manager to its personnel serving as the Company’s
principal financial officer and general counsel and personnel hired by the
Manager to serve as in-house legal, tax, accounting, consulting, auditing,
administrative, information technology, valuation, computer programming and
development and back-office resources to the Company. Pine River
shall also maintain worker’s compensation and liability insurance covering
Manager Personnel in compliance with applicable law. Such liability
insurance shall contain limits for personal injury and property damage
comparable to those maintained for Pine River’s employees not engaged in
rendering services to the Manager.
4. Charges for
Services.
(a) Out of Pocket
Expenses. The Manager shall reimburse Pine River for all
out-of-pocket expenses incurred by Pine River and its applicable Manager
Personnel in the performance of services for the Manager under this
Agreement.
(b) Office
Personnel. The Manager shall have no obligation to reimburse
Pine River or its affiliates for the salary, bonus, benefit and other
compensation costs of the personnel of Pine River and its affiliates who provide
services to the Manager under this Agreement, except that, the Manager shall
reimburse Pine River and its affiliates for, without duplication, the allocable
share of the compensation paid by Pine River and its affiliates to their
respective personnel serving as the Company’s principal financial officer and
general counsel and personnel employed by Pine River and its affiliates as
in-house legal, tax, accounting, consulting, auditing, administrative,
information technology, valuation, computer programming and development and
back-office resources to the Company. The allocable share of such out
of pocket costs shall be based upon commercially reasonable estimates of the
percentage of time devoted by such personnel of Pine River and its affiliates to
the Company’s affairs. Pine River shall provide the Manager with such
information as the Manager may reasonably request to support the determination
of the allocable share of such costs. Pine River and its affiliates
shall be responsible for the compensation paid by Pine River and its affiliates
to their respective personnel serving as the Company’s Chief Executive Officer,
President, and Chief Investment Officer and the investment professionals of Pine
River and its affiliates.
(c) Other Reimbursable
Costs. The Manager shall reimburse Pine River for all other
costs and expenses incurred by Pine River in connection with the provision of
services hereunder, to the extent such costs and expenses are reimbursable by
the Company to the Manager under the Management Agreement.
(d) Payments and
Records. The Manager shall pay the aggregate amount due to
Pine River under this Section 4
quarterly on the same day the Company reimburses the Manager for its expenses
pursuant to Section 10 of the Management Agreement. Pine River shall
maintain accurate records of the Manager Personnel (e.g.,
title, wage rate, and time used) provided to the Manager pursuant to this
Agreement, and, upon request, the Manager shall be entitled to review such
records at reasonable times.
2
5. Term. The
term of this Agreement shall begin as of the date hereof and it shall extend
until October 28, 2012 (the “Initial
Term”). At the expiration of the Initial Term, the term shall
be automatically extended for one additional year each year thereafter provided
the Management Agreement has not been terminated. Following a
termination of the Management Agreement (for any reason and by any party
thereto), any party to this Agreement shall have the right to terminate this
Agreement by providing 30 days advance written notice of termination to all
other parties hereto.
6. Miscellaneous.
(a) All
provisions of this Agreement shall be binding upon the parties hereto, their
respective successors, legal representatives and assigns. No party
shall have the right to assign all or any portion of its obligations under or
interest in this Agreement, except monies which may be due pursuant hereto,
without the prior written consent of all other parties.
(b) No
waiver by any party hereto of any of its rights under this Agreement shall be
effective unless in writing and signed by an officer of the party waiving such
right. No waiver of any breach of this Agreement shall constitute a
waiver of any subsequent breach, whether or not of the same
nature. This Agreement may not be modified except by a writing signed
by each of the parties hereto; provided, however, absent the written consent of
the Company, this Agreement may not be modified so as to increase the obligation
of the Company to reimburse amounts to the Manager under the Management
Agreement.
(c) This
Agreement constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof, and cancels and supersedes any and all prior written
or oral contracts or negotiations between the parties hereto with respect to the
subject matter hereof.
(d) 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 laws
of the State of New York, without regard to conflicts of law principles
thereof.
(e) The
descriptive headings of the several sections hereof are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
(f) Any
notice, request or other communication required or permitted in this Agreement
shall be in writing and shall be sufficiently given if hand-delivered to the
applicable party at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: General Counsel.
(g) Wherever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
their respective names by their duly authorized representatives as of the date
first above written.
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PRCM
ADVISERS LLC
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇
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Name:
▇▇▇▇ ▇▇▇▇▇
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Title:
Chief Financial Officer
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PINE
RIVER CAPITAL MANAGEMENT L.P.
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇
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Name:
▇▇▇▇ ▇▇▇▇▇
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Title:
Chief Financial Officer
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[Shared
Services Agreement Signature Page]