Exhibit 10.18
 
AMENDMENT NUMBER 1 TO GUARANTY AGREEMENT
 
    
THIS AMENDMENT NUMBER 1 TO GUARANTY AGREEMENT, dated as of November 15, 2010
(this “Amendment”) is entered into by TWO HARBORS INVESTMENT CORP., a Delaware
limited liability company (“Guarantor”). Capitalized terms used and not
otherwise defined herein are used as defined in the Guaranty Agreement (as
defined below).
 
WHEREAS, Guarantor entered into that certain Guaranty Agreement in favor Wells
Fargo Bank, N.A. (“Buyer”), dated as of August 4, 2010 (as amended,
supplemented, restated or otherwise modified to the date hereof, the “Guaranty
Agreement”); and
 
WHEREAS, the Guarantor, with the consent of Buyer, desires to amend the Guaranty
Agreement in certain respects as provided herein;
 
NOW THEREFORE, in consideration of the premises and the other mutual covenants
contained herein, the parties hereto agree as follows:
 
SECTION 1.    Amendments. Effective as of the Effective Date (as defined below),
the Guaranty Agreement is hereby amended as follows:
 
1.1    Section 1(e) of the Guaranty Agreement is hereby amended and restated in
its entirety as follows:
“(e)    “Liquidity”: With respect to Guarantor and any date, the aggregate
amount of unrestricted cash or cash equivalents held by Guarantor (including
cash held in the Collection Account net of amounts payable under clauses first
through fourth of Section 5.02 of the Master Repurchase Agreement on the next
following Remittance Date); provided that Guarantor may elect to designate that
an amount equal to the Margin Credit that is outstanding as of any date be
included in the calculation of Liquidity of Guarantor.”
SECTION 2.    Effective Date. This Amendment shall become effective as of the
date (the “Effective Date”) on which each of the following conditions precedent
shall have been satisfied:
 
2.1    Amendment. Buyer shall have received counterparts of this Amendment,
executed and delivered by a duly authorized officer of each party hereto.
 
2.2    Repurchase Agreement Amendment. Amendment Number 1 to the Repurchase
Agreement, dated as of the date hereof, shall have become effective according to
its terms.
 
2.3    Other Information. Seller shall have taken such other action, including
delivery of approvals, consents, opinions, documents and instruments, as Buyer
may reasonably request.
 
SECTION 3.    Miscellaneous.
 
3.1    References in Guaranty Agreement. Upon the effectiveness of this
Amendment, each reference in the Guaranty Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”, or words of like import shall mean and be a
reference to the Guaranty Agreement as amended hereby, and each reference to the
Guaranty Agreement in any other Repurchase Documents or any other document,
instrument or agreement, executed and/or delivered in connection with any
Repurchase Documents shall mean and be a reference to the Guaranty Agreement as
amended hereby.
    
3.2    Effect on Guaranty Agreement. Except as specifically amended hereby, the
Guaranty Agreement shall remain in full force and effect. This Amendment shall
not constitute a novation of the Guaranty Agreement, but shall constitute an
amendment thereof.
 
3.3    No Waiver. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Person under
the Guaranty Agreement or any other document, instrument or agreement executed
in connection therewith, nor constitute a waiver of any provision contained
therein.
 
3.4    Successors and Assigns. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

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3.5    Counterparts. This Amendment may be executed in any number of
counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument but all
of which together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page by facsimile or other electronic means
shall be effective as delivery of a manually executed counterpart of this
Amendment.
 
3.6    Headings. The descriptive headings of the various sections of this
Amendment are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.
 
3.7    Amendments. This Amendment may not be amended or otherwise modified
except as provided in the Guaranty Agreement.
 
3.8    GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
 
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duty authorized, as of the date first above
written.
 
 
TWO HARBORS INVESTMENT CORP.
 
By: /s/ Jeff Stolt            
Name: Jeff Stolt
Title: Chief Financial Officer
 
 
 
Solely for purposes of Section 17 of the Guaranty Agreement, consented to by:
WELLS FARGO BANK, N.A.
 
 
By: /s/ Andrew W. Riebe        
Name: Andrew W. Riebe
Title: Director