Exhibit 10.34

 

SS&C TECHNOLOGIES, INC.
Processing Services Agreement

 

This Processing Services Agreement (“Agreement”) is made by and between Five
Oaks Investment Corp., a Maryland corporation whose principal place of business
is 540 Madison Avenue, 19th Floor, New York, NY 10022 (“Client”), and SS&C
Technologies, Inc., a Delaware corporation whose principal place of business is
80 Lamberton Road, Windsor, CT 06095 (“SS&C”). Capitalized terms are defined in
Article 21 unless otherwise indicated.

 

WHEREAS, Client is in the business of providing investment services and desires
that SS&C provide certain Processing Services as set forth below.

 

NOW, THEREFORE, in consideration of the mutual promises and upon the terms and
conditions set forth below, the Parties agree as follows:

 

1.                   Processing Services

 

1.1 During the Initial Term and any Renewal Term, SS&C shall provide Client with
the investment accounting and data processing services set forth on Attachment A
hereto (collectively, the “Processing Services ”). As part of the Processing
Services, SS&C shall provide:

 

1.1.1 Data Access as set forth in Article 5 hereof;

 

1.1.2 All Equipment that is part of the SS&C Environment deemed necessary or
desirable by SS&C from time to time to perform the Processing Services and to
enable Data Access;

 

1.1.3 Computer operating system software (“Operating System Software”) and
database software (“Database Software”), and such other software systems as it
deems desirable from time to time pursuant to SS&C’s licenses with Third Party
Software licensors;

 

1.1.4 Connectivity between the SS&C Environment and Client’s computing systems;
and

 

1.1.5 Such ancillary services as set forth in Work Requests that may be executed
by SS&C and Client from time to time.

 

1.2 The Processing Services are for the benefit of Client only.

 

2.                   Additional Services

 

2.1 SS&C will undertake to perform the tasks described on any Work Request
agreed to from time to time by SS&C and Client.

 

2.2 Each Work Request shall set forth the fees estimated for the services that
SS&C will perform under such Work Request. Such fees shall be based upon certain
assumptions set forth in the Work Request, and unless otherwise expressly
provided therein, are estimates only and not fixed fees.

 

3.                   Connectivity

 

3.1 A means of connectivity between Client’s computing systems and the SS&C
Environment (“Connectivity”) must be established in order for Client to have
Data Access, to provide Client Data to SS&C, and for SS&C to provide the
Processing Services hereunder.

 

3.2 If Client chooses Connectivity via the Internet, Client understands that the
Internet is an unregulated, public network over which SS&C exerts no control.
SS&C assumes no obligation or liability with respect to Connectivity, including
without limitation, the availability, performance, accuracy, dependability,
privacy, security, authenticity or completeness of data transmitted over or
obtained using the Internet, or any intrusion, virus, disruption, loss of
communication, loss or corruption of data, or other error caused or permitted by
or introduced through Client’s use of the Internet. SS&C has implemented
security measures associated with Client’s Internet access including use of a
firewall, multi-level password protection, and acceptance of only authorized
protocols. Notwithstanding these security measures provided by SS&C at its
Internet site, Client is responsible for implementing adequate firewall,
password and other security measures to protect its systems, data and
applications from unwanted intrusion, whether over the Internet or by other
means.

 

 

 

 

3.3 If Client chooses Connectivity via data communication lines, SS&C shall, at
Client’s expense, be responsible for obtaining telecommunications connectivity
between the SS&C Environment and the facilities and computing systems of Client.
SS&C or Client shall lease such data transmission lines from a third party
vendor (the “Data Lines”). SS&C shall obtain the Data Lines and coordinate with
such vendor to resolve any problems with the Data Lines; however, SS&C shall
have no obligation to maintain them (other than to obtain and maintain leases
thereof and to manage the relationship with such vendor or any replacement
telecommunications carrier with respect to the Data Lines) or any obligation or
liability with respect to the availability, performance, maintenance or other
matters involving the Data Lines and not arising as a result of a material
breach of SS&C’s obligations under this Processing Services Agreement. SS&C and
Client may agree to change the means of telecommunications connectivity or
service providers.

 

3.4 All interconnectivity to each Party’s computing systems and/or networks
shall be only through each Party’s security gateways/firewalls; (ii) neither
Party will access nor try to access, nor permit any unauthorized employees,
representatives or agents to access nor try to access, the other’s computing
systems and/or networks without express written authorization; (iii) each Party
will prior to any attempt to access the other’s computing systems and/or
networks, use the latest available version of a commercially available Virus
detection/scanning program; (iv) upon detecting a Virus, each Party shall not
try to access the other’s computing systems and/or networks until any Virus has
been eliminated.

 

3.5 Client may require certain software interfaces between service providers of
Client and the SS&C Environment for the delivery of certain Client Data. Such
Client Data shall be delivered to SS&C directly by Client or through Client’s
agents, asset managers, custodians or other third parties designated to SS&C in
writing (“Client Agent”), in an electronic form to be agreed to by Client and
SS&C. SS&C shall not serve as a Client Agent. SS&C is not responsible for and
makes no representations or warranties regarding (i) the compatibility or
performance of interfaces not developed and provided by SS&C, or (ii) the
accuracy, completeness, timeliness or integrity of any Client Data provided to
the SS&C Environment via any interfaces, whether or not developed by SS&C.

 

4.                   Exclusions and Limitations

 

4.1 Client may identify certain third party entities that Client desires to
provide services to Client in connection with the Processing Services (but not
in place thereof), such as prime brokers that provide certain securities trade
services for Client, market data providers and custodians. SS&C shall coordinate
appropriate data communications with such third parties as Client shall direct
in connection with the provision of the Processing Services. Such communications
may involve SS&C sending and receiving electronic data files, providing limited
access to the Processing Software, and establishing connectivity from such third
parties to the SS&C Environment, as Client may reasonably direct. Client will
pay any fees or expenses of such third parties. Such fees and expenses are not
included in the Monthly Charge (as defined in Section 8.1). Any expenses to
provide connectivity from such third parties to the SS&C Environment shall be
borne by Client. SS&C shall not have any obligation or liability with respect to
the data provided, its timeliness, accuracy or otherwise, or with respect to any
other matter related to such third parties’ provision of services to Client.

 

4.2 Client is responsible for providing and maintaining: (i) its own computing
systems, including personal computers and workstations, and (ii) data and other
networks to enable Client to have Data Access to the SS&C Environment via the
Connectivity chosen by Client.

 

 

 

 

4.3 SS&C shall not be responsible for any failure to provide Processing
Services, including any failure to meet a Service Level, that is directly
attributable to (i) a Force Majeure Event; (ii) breaches of this Agreement by
Client; (iii) any act or omission by Client (even if it does not constitute a
breach of this Agreement), provided that such act or omission adversely impacts
SS&C's performance of the Processing Services and SS&C has used all Commercially
Reasonable Efforts to perform notwithstanding such act or omission; (iv) a
failure of, or defect in, Equipment (including telecommunications Data Lines and
related Equipment) or Software (other than SS&C Software), or a vendor’s failure
to deliver Equipment used by SS&C in providing the Processing Services (and any
related repeated instances pending SS&C's correction of the failure or defect)
if such failure or defect was not preventable or discoverable through normal
testing or maintenance procedures; (v) malfunctions within Client’s computing
systems and/or data networks not in any way attributable to viruses received
from SS&C; or (vi) problems with Data Lines. The foregoing are referred to
herein collectively as "Excused Performance.” None of (i) through (vi) causing
SS&C fail to provide Processing Services shall constitute a Termination Event.

 

5.                   Data Access

 

5.1 Subject to the terms and conditions of this Agreement, SS&C hereby grants to
Client Data Access, via remote access Connectivity to the SS&C Environment,
during the Term of this Agreement. Client may access the SS&C Environment solely
to view Client’s Data through the use of the Processing Software’s Web Portal,
but not to use the Processing Software to process or manipulate any data,
including Client Data (“Use”). Data Access transfers to Client neither title nor
any proprietary or intellectual property rights to the Processing Software nor
any copyrights, patents, or trademarks, embodied or used in connection
therewith, except for the rights expressly granted herein. Client may not copy
the Processing Software.

 

5.2 Client’s Data Access requires that SS&C separately license and have
installed on its computing system certain software owned by certain third party
software licensors (“Third Party Software”) or such other Third Party Software
as SS&C identifies to Client from time to time as reasonably required. SS&C
hereby grants Client the right to use such Third Party Software on SS&C’s
computing system.

 

6.                   Term

 

6.1 This Agreement shall be effective and binding upon Client and SS&C as of the
Effective Date and shall continue in full force and effect for a period of three
(3) years (the “Initial Term”) unless sooner terminated in accordance with its
terms. Unless either Party provides the other with a written notice of
termination at least ninety (90) days prior to the commencement of any Renewal
Term, after the Initial Term, this Agreement will automatically renew for
additional successive terms of one (1) year each (each such additional
three-year term a “Renewal Term”). The Term of this Agreement shall run from the
Effective Date through the Initial Term, and any Renewal Term, until and unless
terminated in accordance with its terms.

 

7.                   Termination

 

7.1 Termination by SS&C for Cause. SS&C may, by written notice to Client,
terminate this Agreement if any of the following events ("Termination Events")
occur: (a) Client is in breach of any material term, condition or provision of
this Agreement, or of any other agreement between SS&C (or any affiliate of
SS&C) and Client (or any affiliate of Client), which breach, if capable of being
cured, is not cured within thirty (30) days after SS&C gives Client written
notice of such breach; or (b) Client (i) terminates or suspends its business,
(ii) becomes insolvent, admits in writing its inability to pay its debts as they
mature, makes an assignment for the benefit of creditors, or becomes subject to
direct control of a trustee, receiver or similar authority, or (iii) becomes
subject to any bankruptcy or insolvency proceeding under federal or state
statutes. If any Termination Event occurs, termination will become effective
immediately or on the date set forth in the written notice of termination.

 

 

 

 

7.2 Termination by Client for Cause. Client may, by written notice to SS&C,
terminate this Agreement if any of the following events ("Client Termination
Events") occur: (a) SS&C is in breach of any material term, condition or
provision of this Processing Services Agreement, which breach, if capable of
being cured, is not cured within thirty (30) days after Client gives SS&C
written notice of such breach; or (b) SS&C (i) terminates or suspends its
business, (ii) becomes insolvent, admits in writing its inability to pay its
debts as they mature, makes an assignment for the benefit of creditors, or
becomes subject to direct control of a trustee, receiver or similar authority,
or (iii) becomes subject to any bankruptcy or insolvency proceeding under
federal or state statutes. If any Client Termination Event occurs, termination
will become effective immediately or on the date set forth in the written notice
of termination.

 

7.3 Within thirty (30) days after the date of termination of this Agreement for
any reason whatsoever, each Party shall return to the other any tangible
Confidential Information in its possession.

 

7.4 Termination of this Agreement for any reason under this Section 7 shall not
affect (i) any liabilities or obligations of

either Party arising before such termination (including payment of Charges) or
(ii) any damages or other remedies to which a Party may be entitled for breach
of this Agreement.

 

7.5 Articles 7, 8, 11, 13, 14, 16, 18, 19, 20, 21, and 22 and shall survive the
expiration or termination of this Processing Services Agreement.

 

8.                   Charges

 

8.1 In consideration for the Processing Services, Client shall pay to SS&C, on a
monthly basis, the fee set forth in Attachment B (the “Monthly Charge”). Monthly
Charges shall commence for the month in which the Processing Services commence
for Client and thereafter throughout the Initial Term and any Renewal Term.
Prior to the end of the Initial Term or any Renewal Term, SS&C may propose
changes to the rates/charges set forth in Attachment B by giving the Client
written notice at least one hundred twenty (120) days prior to the renewal date.
Notwithstanding the above, in the absence of such notification of revised
rates/charges from SS&C to Client prior to the end of the Initial Term or any
Renewal Term, the basis points used to calculate the monthly charges for the
next Renewal Term will increase from the basis points used to calculate the
monthly charges then in effect by the percentage change in the United States
Consumer Price Index plus three (3) percent. The United States Consumer Price
Index referred to in the preceding sentence is the United States Consumer Price
Index (All Urban Consumers (“CPI”) published by the United States Department of
Labor, Bureau of Labor Statistics. In no event will the basis points used to
calculate the monthly charges for any year be less than the previous year’s
basis points used to calculate the monthly charges.

 

8.2 In addition to the Monthly Charges, Client shall pay any charges and
expenses for services performed from time to time pursuant to Work Requests as
and when due based on SS&C’s then current rates unless otherwise agreed upon in
the Work Request.

 

8.3 Payment shall be made to SS&C at the address on the fee statement or such
other address as SS&C may specify. A late payment charge of one and one-half
percent (11/2%) per month (annual rate of 18%), or the maximum rate allowed by
law, whichever is less, will be added to all amounts due under this Agreement if
not paid within thirty (30) days of the due date. If it should become necessary
to turn this account over for collection, Client is responsible for all of
SS&C's collection costs, including reasonable attorney's fees. SS&C reserves the
right, in its sole and absolute discretion, to discontinue the Processing
Services provided hereunder within ten (10) days of receipt by Client of a
discontinuation notice without any liability to Client or any other third party
if Client is more than thirty (30) days past due on any amounts owed to SS&C
under this Agreement.

 

8.4 All amounts payable to SS&C as specified herein are in United States dollars
and are net of all sales, use, property and related taxes and customs duties.
Client shall pay sums equal to all taxes and customs duties paid or payable by
SS&C hereunder, but exclusive of United States Federal, State and Local taxes
based upon the net income of SS&C. All taxes due by Client hereunder shall
become due and payable when billed by SS&C to Client, or when assessed, levied
or billed by the appropriate tax authority, even if such billing occurs
subsequent to expiration or termination of this Agreement.

 

 

 

 

8.5 Expenses incurred by SS&C in connection with Work Requests for travel,
lodging, meals, telephone, shipping,duplicating and other direct expenses are
billed to Client at actual cost, and are in addition to the estimated fees set
forth therein, unless otherwise provided for in a Work Request.

 

8.6 Fees and expenses incurred in connection with Work Requests will be billed
to Client monthly. They are due and payable by Client upon receipt of SS&C’s
invoice.

 

8.7 Client may desire, or the Processing Services may require Client to use,
certain third party services or products, including without limitation, Third
Party Software, Data Lines, securities market pricing services and other
services or products. Such services or products are not included in the Monthly
Charges. Client shall pay for such services or products in the amounts invoiced
to it (the foregoing are referred to as “Pass-Through Expenses”).

 

9.                   Client Data

 

9.1 Client shall provide SS&C with Client Data to enable SS&C to provide the
Processing Services. SS&C shall not be responsible or liable for the accuracy,
completeness, integrity or timeliness of any Client Data provided to SS&C by
Client or any Client Agent.

 

9.2 All Client Data shall remain the property of Client. The Client Data shall
not be (i) used by SS&C other than in connection with providing the Processing
Services, (ii) disclosed, sold, assigned, leased or otherwise provided to third
parties by SS&C, or (iii) commercially exploited by or on behalf of SS&C, its
employees or agents.

 

9.3 Subject to Section 13.8, at Client’s expense, SS&C shall upon written
request, promptly return to Client, in the format and on the media in use as of
the date of request, all, or any requested portion of, the Client Data.

 

9.4 Subject to Section 13.8, SS&C will provide data backup and archiving in
accordance with industry standards andshall maintain and store Client Data for a
rolling period of three (3) years starting from the date Processing Services
commenced for Client, after which SS&C will return such Client Data to Client.
SS&C will not delete or destroy any Client Data or media on which Client Data
resides during such three (3) year rolling period.

 

9.5 SS&C shall not disclose or use any Client Data except for the purpose of
carrying out its obligations under thisAgreement. SS&C shall not disclose Client
Data to its third party service providers without the consent of Client. SS&C
shall ensure that each person or entity to whom or to which SS&C may disclose
Client Data in connection with SS&C’s performance of its obligations under this
Agreement shall, prior to any such disclosure of information, agree to use or
disclose such Client Data only for the purpose of carrying out SS&C’s
obligations under this Agreement. SS&C shall maintain effective information
security measures to protect Client Data from unauthorized disclosure or use.

 

10.                  Personal Information

 

10.1 From time to time SS&C may obtain access to certain Personal Information
from Client. "Personal Information" shall include customer personal information
provided to, and maintained by, Client in confidence, including but not limited
to: personally identifiable financial information as defined by Title V of the
Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801, et seq., and its implementing
regulations (the “Gramm-Leach-Bliley Act”). Personal Information shall not
include any personal information not required by law to be kept confidential.

 

 

 

 

10.2 To the extent applicable, SS&C shall comply with the provisions of the
Gramm-Leach-Bliley Act regarding the restrictions on the use, disclosure and
safeguarding of Personal Information.

 

11.                  Work Product

 

11.1 SS&C shall be the sole and exclusive owner of all work product owned by it
as of, during and after the Term, and of all modifications, upgrades and
enhancements to such work product created by SS&C or on its behalf. Client shall
be the sole and exclusive owner of any manuals, output and other work product
prepared by SS&C specifically for Client and paid for by Client as part of the
Processing Services. The Processing Software and any modification, enhancement,
upgrade or other work done with respect to the Processing Software (including
software interfaces), whether or not done specifically for Client, shall not be
work for hire and shall remain the property of SS&C.

 

11.2 Except for the limited license to Use the Processing Software granted to
Client herein, nothing in this Agreement is intended to grant a license or any
other intellectual property right to Client, and no such license is granted.
Client acknowledges that SS&C retains all right, title and interest (including,
without limitation, all copyright, trade secret and other proprietary rights) in
and to the Equipment owned by SS&C, software (including the Processing Software,
and all versions, releases, enhancements and additions), and processes used in
connection with or for the provision of the Processing Services, including
without limitation all such right, title and interest in and to any and all
copies, modifications, translations and other derivative works that duplicate or
are based in any way on the Processing Services provided under this Agreement.

 

12.                  Security

 

12.1 SS&C shall maintain and enforce at all of its locations where Client Data
is received, accessed, stored, processed, or transmitted, security procedures
that provide reasonable and necessary security designed to prevent infiltration
of or unauthorized access to any and all systems, databases and networks which
receive, access, store, process or transmit Client Data, including
firewall-based protections, Virus testing and scanning, intrusion detection and
access control with appropriate password and other authentication protections.

 

13.                  Confidentiality

 

13.1 "Disclosing Party" means the Party furnishing Confidential Information and
"Receiving Party" means the Party receiving the Confidential Information
disclosed by the Disclosing Party. "Confidential Information" means information
designated as confidential or which ought to be considered as confidential from
its nature or from the circumstances surrounding its disclosure. "Confidential
Materials" means the part of any tangible media upon or within which any part of
the Confidential Information is recorded or reproduced in any form, excluding
any storage device that forms a part of computer hardware.

 

13.2 Confidential Information includes, without limiting the generality of the
foregoing, the terms of this Agreement, schedules, and all information in any
medium: (i) relating to the Disclosing Party's software or hardware products or
services, or to its research and development projects or plans; (ii) relating to
the Disclosing Party's business, policies, strategies, operations, finances,
plans or opportunities, including the identity of, or particulars about, the
Disclosing Party's clients; and (iii) marked or otherwise identified as
confidential, restricted, secret or proprietary, including, information acquired
by inspection.

 

 

 

 

13.3 Except for Client Data, Confidential Information does not include
information that the Receiving Party can establish: (i) has become generally
available to the public or commonly known in either Party's business other than
as a result of a breach by the Receiving Party of any obligation to the
Disclosing Party; (ii) was known to the Receiving Party prior to disclosure to
the Receiving Party by the Disclosing Party by reason other than having been
previously disclosed in confidence to the Receiving Party; (iii) was disclosed
to the Receiving Party on a non-confidential basis by a third party who did not
owe an obligation of confidence to the Disclosing Party with respect to the
disclosed information; (iv) was independently developed by the Receiving Party
without any reference to, or use of, any part of the Confidential Information;
or (v) is required to be disclosed by law, regulation, or court order (provided
that the Party subject to such law, regulation or court order shall notify the
other Party of any such use or requirement prior to disclosure in order to
afford such other Party an opportunity to seek a protective order to prevent or
limit disclosure of the information to third parties)

 

13.4 During the Term, the Receiving Party may: (i) disclose Confidential
Information received from the Disclosing Party only to its subcontractors,
agents, representatives, advisors, employees, officers and directors and
affiliates who have a need to know such information exclusively for the purpose
of executing its obligations or exercising its rights under this Agreement; (ii)
reproduce the Confidential Information received from the Disclosing Party only
as required to execute its obligations or exercise its rights under this
Agreement; or (iii) disclose Confidential Information as required by law,
provided the Receiving Party gives the Disclosing Party prompt notice prior to
such disclosure to allow the Disclosing Party to make a reasonable effort to
obtain a protective order or otherwise protect the confidentiality of such
information.

 

13.5 Except as otherwise specifically provided in this Agreement, the Receiving
Party shall not during the Term, andafter expiration or earlier termination
hereof: (i) disclose, in whole or in part, any Confidential Information received
directly or indirectly from the Disclosing Party; or (ii) sell, rent, lease,
transfer, encumber, pledge, reproduce, publish, transmit, translate, modify,
reverse engineer, compile, disassemble or otherwise use the Confidential
Information in whole or in part.

 

13.6 The Receiving Party shall exercise the same care in preventing unauthorized
disclosure or use of the Confidential Information that it takes to protect its
own information of a similar nature, but in no event less than reasonable care.
The Receiving Party shall notify the Disclosing Party immediately upon discovery
of any loss, unauthorized disclosure or use of Confidential Information, or any
other breach of this Article by the Receiving Party, and assisting the
Disclosing Party in every reasonable way to help the Disclosing Party regain
possession of the Confidential Information and to prevent further unauthorized
disclosure or use.

 

13.7 The Receiving Party acknowledges that: (i) the Disclosing Party possesses
and will continue to possess Confidential Information that has been created,
discovered or developed by or on behalf of the Disclosing Party, or otherwise
provided to the Disclosing Party by third parties, which information has
commercial value and is not in the public domain; (ii) unauthorized use or
disclosure of Confidential Information is likely to cause injury not readily
measurable in monetary damages, and therefore irreparable; (iii) in the event of
an unauthorized use or disclosure of Confidential Information, the Disclosing
Party shall be entitled, without waiving any other rights or remedies, to such
injunctive or equitable relief as may be deemed proper by a court of competent
jurisdiction; (iv) subject to the rights expressly granted to the Receiving
Party in this Agreement, the Disclosing Party and its licensors retain all
right, title and interest in and to the Confidential Information, including
without limiting the generality of the foregoing, title to all Confidential
Materials regardless of whether provided by or on behalf of the Disclosing Party
or created by the Receiving Party; and (v) any disclosure by the directors,
officers, employees, and agents of the Receiving Party shall be deemed to be
disclosure by the Receiving Party and the Receiving Party shall be liable for
any such disclosure as if the Receiving Party had disclosed the Confidential
Information.

 

13.8 All Confidential Information disclosed by the Disclosing Party shall be and
shall remain the property of the Disclosing Party. Within five days after being
so requested by the Disclosing Party, except to the extent the Receiving Party
is advised in writing by counsel such destruction is prohibited by law, it shall
return or destroy all documents thereof furnished to it by the Disclosing Party
and it shall also destroy all written material, memoranda, notes, copies,
excerpts and other writings or recordings whatsoever prepared by it or its
employees based upon, containing or otherwise reflecting any Confidential
Information, Confidential Materials, or Client Data. Any destruction of
materials shall be confirmed by the receiving party in writing; provided,
however, that any party may retain (i) one copy of the Confidential Information,
Confidential Materials, or Client Data that it deems necessary to comply with
any obligations under all applicable laws, rules, regulations and (ii) any
Confidential Information, Confidential Materials, or Client Data it believes
cannot reasonably be destroyed (such as oral communications reflecting
Confidential Information or Confidential Materials, firm electronic mail back-up
records, back-up server tapes and any similar such automated record-keeping or
other retention systems), which shall remain in perpetuity subject to the
confidentiality terms of this Agreement. Any Confidential Information,
Confidential Materials, or Client Data that are not returned or destroyed,
including without limitation any oral Confidential Information, Confidential
Materials, or Client Data, shall remain in perpetuity subject to the
confidentiality obligations set forth in this Agreement.

 

 

 

 

14.                Representations and Warranties

 

14.1 Mutual Representations and Warranties. Each Party represents and warrants
to the other that, as of the Effective Date:

 

14.1.1 It is a legal entity duly created, validly existing and is in good
standing under the laws of the state in which it is created, and is in good
standing in each other jurisdiction where the failure to be in good standing
would have a material adverse effect on its business or its ability to perform
its obligations under this Agreement;

 

14.1.2 It has all necessary legal power and authority to own, lease and operate
its assets and to carry on its business as presently conducted and as it will be
conducted pursuant to this Agreement;

 

14.1.3 It has all necessary legal power and authority to enter into this
Agreement and to perform its obligations hereunder, and the execution and
delivery of this Agreement and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary actions on its part;

 

14.1.4 This Agreement constitutes a legal, valid and binding obligation of such
Party, enforceable against it in accordance with its terms;

 

14.1.5 It is not a party to, and is not bound or affected by or subject to, any
instrument, agreement, charter or by-law provision, law, rule, regulation,
judgment or order which would be contravened or breached as a result of the
execution of this Processing Services Agreement or the consummation of the
transactions contemplated by this Agreement;

 

14.1.6 It is not the subject of any pending or threatened litigation (including
claims subject to arbitration) that would prevent SS&C from performing its
obligations under this Agreement; and

 

14.1.7 Each is in compliance with all applicable laws, rules, orders,
regulations and other legal requirements in effect as the same may relate in a
material way to each of its respective businesses and provision or use of the
Processing Services.

 

14.2 Disclaimer. Except as expressly set forth herein, SS&C makes no warranties,
whether express, implied, or statutory regarding or relating to the Processing
Services furnished or provided to Client under this Agreement. SS&C specifically
disclaims all implied warranties of merchantability and fitness for a particular
purpose with respect to the Processing Services.

 

15.                Indemnification

 

15.1 Intellectual Property Indemnification. SS&C shall defend and/or handle at
its own cost and expense any and all claims, suits, actions or proceedings at
law or in equity against Client (“Proceedings”), or its directors, officers,
employees, and agents for actual or alleged infringement of any patent,
copyright or other property right (including, but not limited to,
misappropriation of trade secrets) based on or in connection with the Processing
Software or the Processing Services.

 

 

 

 

Client shall give to SS&C, in reasonable detail, prompt written notice of any
threat, warning, or notice of any such claim or action against Client or SS&C of
which it is aware and which would be expected to have an adverse impact on
Client's use of the Processing Services and the Processing Software.

 

15.2 Remedy for Loss of Right to Use. If Client is enjoined from using the
Processing Software or the Processing Services is enjoined, SS&C shall (i)
obtain, at no expense to Client, the right to continue to use them, (ii) provide
Client with substitute or modified software or services that are qualitatively
and functionally equivalent to the Processing Software or Processing Services or
(iii) if either (i) or (ii) is not commercially practicable, terminate this
Agreement.

 

15.3 Indemnification Procedures. With respect to each Party’s indemnification
obligation under this Section 15, the indemnifying Party shall have the
exclusive right to defend any claim, action or allegation and make settlements
thereof so long as such settlements do not increase the indemnified Party’s
costs or adversely affect its rights under this Agreement. The indemnified Party
may not settle or compromise such claim, action or allegation, except with prior
written consent of the indemnifying Party. The indemnified Party shall give such
assistance and information as the indemnifying Party may reasonably require to
settle or oppose such claims; provided that any assistance above a de minimis
level shall be given at the indemnifying Party’s expense.

 

16.                Limitations of Liability

 

16.1 Exclusion of Consequential and other Damages. In no event shall either
Party shall be liable to the other for any claim for any indirect, incidental,
consequential, exemplary or punitive damages in connection with or arising out
of this Processing Services Agreement, including without limitation cost of
cover, loss of income or profit or business losses resulting from interruption
of business, regardless of the form of action, whether in contract, tort or
otherwise, and even if such Party has been advised of the possibility of such
damages.

 

16.2 Limit on Amount of Direct Damages Recoverable. SS&C’s liability to Client
for direct damages in connection with or arising out of this Agreement shall be
limited to the actual Monthly Charges paid by Client for Processing Services
provided during the six (6) months immediately prior to a claim for such
liability.

 

16.3 Force Majeure. Subject to section 16.4 below, neither Party shall be liable
for any failure or delay in the performance of its obligations under this
Processing Services Agreement, if any, to the extent such failure or delay is
caused, directly or indirectly, by: blackouts, fire, flood, earthquake, elements
of nature or acts of God; labor disruptions or strikes; acts of war, terrorism,
cyber-terrorism, riots, civil disorders, rebellions or revolutions; quarantines,
embargoes and other similar governmental action; or any other cause beyond the
reasonable control of such party ("Force Majeure Events").

 

16.4 Effect of Force Majeure. Upon the occurrence of a Force Majeure Event, the
non-performing Party shall be excused from any further performance or observance
of the affected obligation(s) for as long as such circumstances prevail and such
Party continues to attempt to recommence performance or observance whenever and
to whatever extent possible without delay. Any Party so delayed in its
performance will immediately notify the other by telephone or by the most timely
means otherwise available (to be confirmed in writing within five (5) Business
Days of the inception of such delay) and describe in reasonable detail the
circumstances causing such delay.

 

17.                Assignment

 

17.1 Neither this Agreement nor any rights under this Agreement may be assigned
or otherwise transferred by Client, in whole or in part, whether directly or by
operation of law, without the prior written consent of SS&C. Any such consent
may be conditioned upon the payment of additional fees to SS&C in such amounts
as SS&C may determine. For purposes of this Agreement: (i) a change of control
of Client, sale of substantially all of the assets of Client and/or a merger or
consolidation involving Client or any affiliate of Client effecting, directly or
indirectly, a change of control of Client, shall be deemed to be an assignment
or transfer of this Agreement and the rights under it by operation of law
requiring the written consent of SS&C; (ii) a “change of control” shall be
deemed to have occurred if any person or entity not in control of the Client
before the Effective Date, acquires, after the Effective Date, the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of the Client, whether through the ownership of voting
securities, by contract or otherwise; (iii) an affiliate of a person or entity
is a person or entity that controls, is under common control with or is
controlled by such other person or entity; (iv) control means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through the ownership of
voting securities, by contract or otherwise; (v) the terms “person” and “entity”
include an individual, a corporation, partnership, association, trust, fund or
any organized group of persons, whether incorporated or not and any receiver,
bankruptcy trustee or similar official.

 

 

 

 

17.2 Any assignment or other transfer of this Agreement by Client without the
prior written consent of SS&C as required above shall constitute a material
breach of this Agreement. SS&C may assign this Agreement to a successor to its
business in connection with a change of control of SS&C or sale of substantially
all of its assets.

 

17.3 Subject to the foregoing, this Agreement will be binding upon and will
inure to the benefit of the parties and their respective successors and assigns.
Any attempted delegation, transfer or assignment prohibited by this Agreement
shall be null and void.

 

18.                Independent Contractors

 

18.1 The relationship of SS&C and Client established by this Agreement is that
of independent contractors. Nothing in this Agreement shall be construed to
create any agency or employment relationship between SS&C and Client. Neither
Party shall have any right, power or authority to assume, create or incur any
expense, liability or obligation, express or implied, on behalf of the other.

 

19.                Subcontracting

 

19.1 SS&C may subcontract Processing Services as long as such services are not
subcontracted in their entirety without Client’s written consent. All
subcontractors shall be required to execute documents binding the subcontractor
to confidentiality and non-disclosure agreements that are at least as protective
as this Agreement with respect to confidentiality of Confidential Information
under Section 13.

 

19.2 SS&C is responsible for work performed by SS&C subcontractors under this
Agreement.

 

20.                Notices

 

20.1 Any notice required or permitted under the terms of this Agreement or
required by law must be in writing and must be (a) delivered in person, (b) sent
by first class certified or registered mail, (c) sent by overnight courier, in
each case properly posted and fully prepaid to the appropriate address set forth
below, or (d) sent by facsimile. Either Party may change its facsimile number or
its address for notice by notice to the other Party given in accordance with
this section. Notices will be considered to have been given at the time of
actual delivery in person, three (3) business days after deposit in the mail as
set forth above, or one (1) day after delivery to an overnight courier service,
or if sent by facsimile, notice will be considered delivered upon confirmation
that the facsimile transmission has been successful by the transmission report
denoting “OK” or any similar notation.

 

 

 

 

If to SS&C, to:

Mr. Normand A. Boulanger

President and C.O.O. SS&C Technologies, Inc.

80 Lamberton Road Windsor, CT 06095

860-298-4969 (facsimile)

E-mail: nboulanger@sscinc.com

 

With a Copy to:

Mr. Paul Igoe

Senior Vice President and General Counsel

SS&C Technologies, Inc.

80 Lamberton Road

Windsor, CT 06095

Facsimile: 860-298-4969

E-mail: PIgoe@sscinc.com

 

If to Client:

David Oston

Chief Financial Officer

Five Oaks Investment Corp.

540 Madison Avenue, 19th Floor

New York, NY 10022

Phone: 212-257-5073

Facsimile: 212-257-5099

E-mail: doston@oakcirclecapital.com

 

Client’s Billing Address

Sean Quinn

Chief Financial Officer

Five Oaks Investment Corp.

540 Madison Avenue, 19th Floor

New York, NY 10022

Phone: 212-257-5078

Facsimile: 212-257-5088

E-mail: squinn@oakcirclecapital.com

 

 

 

 

21. Certain Definitions

 

In this Agreement, in addition to other defined terms herein, the following
terms shall have the indicated meanings: “Business Day” means any day when the
New York Stock Exchange is open for business.

 

"Client Data" means all data of Client provided to SS&C by Client related to
SS&C’s providing Processing Services, including but not limited to data related
to securities trades and other transaction data, investment returns, issue
descriptive data, market data and the like, and all output and derivatives
thereof.

 

"Commercially Reasonable Efforts" means the level of effort that a reasonable
information technology outsourcing vendor would, in good faith and consistent
with industry standards, undertake to provide the Processing Services pursuant
to this Agreement in a professional and workmanlike manner.

 

"Data Access" means Client’s access to the Client Data via Connectivity to the
SS&C Environment solely to allow viewing of Client Data, and not for the purpose
of the use of SS&C’s Processing Software or the entry or manipulation of Client
Data. Data Access shall be available during those hours of any day during which
the SS&C Environment is available for Data Access.

 

"Effective Date" means the later of the dates on which both Parties execute this
Agreement.

 

"Equipment" means the computer, communications and other equipment owned or
leased by SS&C and used by SS&C in connection with providing the Processing
Services. Equipment includes, without limitation, all associated accessories and
peripheral devices used in the provision of Processing Services.

 

"Losses" means all losses, liabilities, damages and claims, and all related
costs and expenses (including any and all reasonable legal fees and reasonable
costs of investigation, litigation, settlement, judgment, appeal, interest and
penalties) incurred by an indemnified Party hereunder in connection with an
indemnified claim.

 

"Parties" means Client and SS&C, and "Party" means either one of them.

 

"Pass-Through Expenses" has the meaning set forth in Section 8.7.

 

"Processing Software" means SS&C’s proprietary off-the-shelf base software, and
associated software modules, used in providing the Processing Services.

 

"Software" means any computer software that relates to the Processing Services,
and includes any software of Client, the Processing Software and Third Party
Software.

 

“SS&C Environment" means the SS&C configuration of systems, Equipment, Software
and operations in support of SS&C’s provision of Processing Services.

 

"SS&C Facilities" means the facilities owned or leased by SS&C and from which
the SS&C will provide the Processing Services.

 

"Third Party Software" means any Software that is owned by a person other than
SS&C or Client and used to provide the Processing Services.

 

"Third Party Software License" means a license agreement that authorizes Client
or SS&C to use Third Party Software.

 

"Virus" means files, programs or program code, computer instructions, devices or
techniques designed to affix themselves to, bury themselves within or send
instructions to, other files, programs or program code in order to cause
malfunctions, errors or destruction or corruption of data when affixed or at a
later time or that can or were designed to threaten, infect, assault, vandalize,
defraud, disrupt damage, disable, alter, inhibit or shut down the Software
and/or Client’s processing environment, including, but not limited to, other
programs, data storage and computer libraries or otherwise prevent Client from
using the Software as intended.

 

 

 

 

"Work Request" refers to the written agreement between Client and SS&C for
SS&C’s performing additional services that are related to the Processing
Services but for which SS&C shall be paid in addition to the Charges set forth
on Attachment B hereto.

 

22. Miscellaneous

 

22.1 Waiver. Any waiver of the provisions of this Agreement or of a Party's
rights or remedies under this Agreement must be in writing to be effective.
Failure, neglect, or delay by a Party to enforce the provisions of this
Agreement or its rights or remedies at any time, will not be construed and will
not be deemed to be a waiver of such Party's rights under this Agreement and
will not in any way affect the validity of the whole or any part of this
Agreement or prejudice such Party's right to take subsequent action.

 

22.2 Severability. If any term, condition, or provision in this Agreement is
found to be invalid, unlawful or unenforceable to any extent, the Parties shall
endeavor in good faith to agree to such amendments that will preserve, as far as
possible, the intentions expressed in this Agreement. If the Parties fail to
agree on such an amendment, such invalid term, condition or provision will be
severed from the remaining terms, conditions and provisions, which will continue
to be valid and enforceable to the fullest extent permitted by law.

 

22.3 Entire Agreement. This Agreement (including any attachments, schedules,
Work Requests and addenda hereto) contains the entire agreement of the parties
with respect to the subject matter hereof and supersedes all previous
communications, representations, understandings and agreements, either oral or
written, between the Parties with respect thereto.

 

22.4 Modification. This Agreement may not be amended or modified except by a
writing signed by both Parties.

 

22.5 USA Export Control. Client may not use any SS&C or Third Party Software
outside of the United States, or otherwise export or re-export the Software
without the prior written consent of SS&C and only in accordance with applicable
United States and non-U.S. export laws and regulations.

 

22.6 Use of Client’s Name. SS&C is subject to federal and state securities laws.
SS&C may make disclosures required by such laws. Subject to the confidentiality
provisions of Section 13, SS&C may (i) refer to Client in generic client lists,
new client announcements and product brochures and marketing materials
indicating that Client is a client of SS&C; and (ii) issue a press release,
subject to Client's prior reasonable review and consent, announcing that Client
has engaged SS&C to provide software. SS&C may disclose to third party vendors
(including software vendors) that provide products and/or services that may be
used by Client, or that are used in conjunction with SS&C's products or
services, that Client is a client of SS&C and such other information that is
reasonably needed by such third party vendors.

 

22.7 No Waiver of Rights. No exercise or enforcement by either Party of any
right or remedy under this Agreement, including termination, will preclude the
enforcement by such Party of any other right or remedy under this Agreement or
under applicable law.

 

22.8 Counterparts. This Agreement may be executed in counterparts, each of which
when so executed will be deemed to be an original. Such counterparts together
will constitute one agreement. Signatures may be exchanged via facsimile or
electronic mail and the parties hereto agree that signatures so exchanged shall
be binding to the same extent as if original signatures were exchanged.

 

 

 

 

22.9 Choice of Law; Choice of Forum. This Agreement shall be interpreted,
construed and in all respects governed under the laws of the State of
Connecticut without regard to conflicts of law principles. Any action, suit or
proceeding related to any dispute, claim or controversy or otherwise related to
the rights and obligations of the parties under this Processing Services
Agreement shall be brought in the Superior Court of the State of Connecticut,
Hartford County or in the United States District Court for the District of
Connecticut. The parties hereto submit to the exclusive jurisdiction of such
courts.

 

22.10 No Oral Representations or Warranty. No employee or agent of SS&C has
authority to bind SS&C to any oral representations or warranty concerning the
Processing Software or the Processing Services. Any oral or written
representation or warranty not expressly contained in this Agreement (or in any
written amendment hereto) will not be enforceable.

 

22.11 No Solicitation. Each Party shall not directly or indirectly solicit any
officer or employee of the other to leave the employ of the other.

 

22.15 Voidability at SS&C’s Option. This Agreement shall be voidable at SS&C’s
option if Client does not enter into and deliver it on or before April 30, 2015.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set
forth below.

 

Five Oaks Investment Corp.   SS&C Technologies Inc.       By

/s/ David Oston

  By

/s/ Paul Igoe

Name

David Oston

  Name

Paul Igoe

Title

Chief Financial Officer

  Title

SVP, General Counsel & Secretary

Date

May 7, 2015

  Date

May 14, 2015

Address   

540 Madison Avenue, 19th Floor

  Address   

80 Lamberton Road

 

New York, NY 10016

   

Windsor, CT 06095

 

 

 

 

ATTACHMENT A: PROCESSING SERVICES

 

The following Processing Services will be performed for Client in accordance
with prevailing US GAAP accounting and reporting requirements.

 

Residential Mortgage Loan Accounting Services

1.Residential Mortgage Loan Transaction Processing

Processing of daily loan transactions including:

nLoan setup based on terms provided via legal loan purchase documentation in
agreed upon electronic format provided by Client

nProcess new loan purchases

nProcess interest accruals

nFee tracking

nAmortization of deferred revenues, premiums and discounts

nRecording of loan payments and reconciliation based on remittance reports
provided by the master servicer

 

2.Wire Processing – Loan Purchases

SS&C will setup the wire to settle the loan purchase and verify financing
haircut per terms of warehouse line and notify Client of amount required to
complete the loan purchase.

 

3.Warehouse Financing Transaction Processing

nEstablish appropriate financing structure for each loan as directed by Client

nIdentify appropriate warehouse provider and maintain the haircut percentage

nReconcile net payments to each warehouse line on a loan-by-loan basis

 

4.Data Management

Tracking and maintenance of loan specific information such as:

nReference data as provided by Client in a mutually agreed upon format

nScheduled interest rate adjustments for floating, adjustable, and rate reset
loans, where applicable

nAppropriate index rate tables

nOwnership structure (e.g. warehouse lender) of each loan

 

5.Mortgage Loan and MSR Valuation

nValue loans based on Client provided market values

nSS&C will book changes in fair market value through realized gains and losses

nSS&C will provide MountainView with the loan details required to value the
mortgage servicing rights

 

6.Reconciliation and Exception Resolution

SS&C assumes the lead role in managing the exception process.

nCustodian

oDaily reconciliation of cash activity between SS&C and Client’s custodian(s)

oReconciliation of loan closings

nMaster Servicer

oMonthly reconciliation of loan level cash activity between SS&C and the third
party servicer data inclusive of principal, interest and servicing fees.

oReconciliation of unpaid principal balances

oReconciliation of expected vs. actual principal and interest payments

nWarehouse Lines

oMonthly reconciliation of net payment between master servicer, warehouse lender
and SS&C

oReconciliation of financing balances

 

 

 

 

7.Loan Accounting

nTrack portfolio investments at the loan, investor and portfolio level

nCalculate income accruals and process coupon interest

nCalculate book value and amortization

nCalculate realized gain / loss on sales

nMaintain unrealized gain / loss information on active holdings

nCreation of monthly general ledger entries in accordance with Client’s GL
requirements

nBook the mark-to-market accounting entries based on client provided market
values

 

8.Financing Accounting

nWarehouse lines

oTrack and record interest expense

oRecord pay down of repo balance

nFHLB loans

oRecord loan amount and calculate interest expense

oRecord pay down of financing balance

 

9.Reporting

The reports listed below are representative of the types of reports we would
typically provide in support of the accounting and reporting services.

 

Loan Reports

nLoan Amortization Schedule

nLoan Maturity

nDue vs. Paid Reconciliation

nLoan Delinquency

nAged Receivables

 

Accounting

nGeneral Ledger Entries

nTransactions

nMortgage Loan and Financing Trial Balance

 

Financial Reporting

nSupporting Schedules for Footnote 5 – Mortgage Loans Held-For-Sale, at Fair
Value

nMortgage Loans Section of Footnote 13 – Financial Instruments

nMortgage Loan and Associated Repurchase Agreements Section of Footnote 10 –
Repurchase Agreements.

 

Securities Accounting Services – Owned Investments

1.Securities Transaction Processing

SS&C will process daily securities transactions received from Client on trade
date inclusive of:

nProcessing securities transactions (buys/sells/cancels/corrects)

nResearch trade breaks with Client’s traders and retain all necessary
information regarding trade corrections for audit trail purposes

 

2.Derivatives Processing

SS&C will process daily derivatives transactions as directed by Client

nTracking and amortization of fees, premium and discount

nPayment processing

nConfirmation tracking

nCounterparty reconciliation

nUpcoming Payments report

 

3.Data Management

SS&C will maintain the following from each identified source:

nSecurities

oSecurity Master reference and analytic data

oTrack and monitor corporate action notices (voluntary and involuntary)

oTracking of RMBS analytic information provided by Client

oMonthly pricing from Client identified sources

oCash flow schedules or prepayment speeds as directed by Client

 

 

 

 

nDerivatives

oInitial deal setup and applicable reference data in accordance with
documentation provided by Client

 

4.Investment Pricing

nSS&C will value the securities on a monthly basis in accordance with the agreed
upon valuation policy

nSS&C uses the following control reports:

oPrice Variance, Missing or Stale Prices, and Tolerance Checks

nSS&C will value the derivative holdings based on counterparty values

 

5.Daily Cash Settlement

nReview and reconcile projected cash versus actual cash settlements to identify
differences

nResearch overdue interest payments

 

6.Reconciliation and Exception Resolution

Daily reconciliation between SS&C and Client’s custody bank(s). SS&C will
establish and maintain connectivity to each custodian and will be responsible
for the gathering of all information required to facilitate the daily
reconciliation process. SS&C assumes the lead role in managing the exception
process.

nReconciliation of custodial cash movements including cash transfers, fees
assessed and investment related cash transactions

nReconciliation of trade settlements

nReconciliation of income, paydowns and corporate actions

nReconciliation of securities holdings

 

7.Investment Accounting

nTrack portfolio investments at the individual purchase lot level

nCalculate income accruals and process coupon interest

nCalculate book value and amortization

nMaintain multi-currency accounting records as required

nCalculate realized gain / loss on sales

nMaintain unrealized gain / loss information on active holdings

nCreation of monthly General Ledger entries in accordance with Client’s GL
requirements

 

8.Impairment Analysis and Processing

On a quarterly basis SS&C will provide an impairment analysis based on Client
defined business rules such as continuous loss positions, ratings changes, and
securities in default.

nImpairment analysis by business rule with suggested impairments

nCalculation and maintenance of both credit and non-credit impairment amounts

nProcessing of impairments as directed by Client

 

9.Reporting – Securities and Derivative Investing Activity Only

The following reports are indicative of the deliverables provided by SS&C. It is
assumed that Client will utilize SS&C’s standard reporting deliverables. Report
customizations can be performed and are subject to additional fees.

 

Operational Reports

nMonthly reconciliation of cash balances to custody balances with variance
reporting and aging

nMonthly comparison of par value to custody par values

nMonthly reconciliation of market values and ending accrued values to custody

 

Investment Accounting Reports

nCash Positions

nHoldings

nUnsettled Trades

nBook Value Progression

nProfit and Loss

nAged Income

nTransaction

nSecurity Cash Activity

nNon-Security Cash Activity

nPortfolio Inventory and Valuation

nYield to Estimated Maturity / Weighted Average Portfolio

 

 

 

 

Financial Reporting

nConsolidated Footnote Disclosure (Regulatory 10K and 10Q)

nInvestment Fixed Maturities

nMaturity Distribution Report

nProceeds from Fixed Maturities

nConcentration of Credit Risk

nContinuous Loss Analysis

nGeneral Ledger

 

Management Reports

nAsset Sector

nBond Appraisal

nFixed Income Analytics

nIndustry Sector

nBond Analytics

 

Securities Accounting Services – Securities in Trust

 

1.Data Management

SS&C will maintain the following from each identified source

nSecurity Master reference and analytic data

nMonthly pricing from Client identified sources

 

2.Reconciliation and Exception Resolution

Monthly reconciliation between SS&C and trustee(s). SS&C will establish and
maintain connectivity to each trustee and will be responsible for the gathering
of all information required to facilitate the reconciliation process.

nReconciliation of principal paydowns

nReconciliation of securities holdings and par amounts

 

3.Investment Accounting

nTrack portfolio investments at the individual purchase lot level

nProcess principal paydowns

 

4.Investment Pricing

nSS&C will value the securities on a monthly basis in accordance with the agreed
upon valuation policy

 

5.Trust Asset Reports

nHoldings with valuations

 

 

 

 

General Ledger and Financial Reporting Support Services

SS&C will establish and maintain a General Ledger on behalf of Client for the
following entities, Five Oaks Investment Corporation, Five Oaks Acquisition
Corporation and Five Oaks Insurance LLC. Client will be solely responsible for
the integrity and controls related to the creation of your financial statements.
SS&C is responsible for providing the services below to support the generation
of the Client’s financial statements.

 

SS&C will prepare and maintain the Client’s Accounting Books and Records for
Client’s investment in Agency and Non-agency RMBS, Multi-family RMBS,
residential mortgage loans, Mortgage servicing Rights, MBS securitization
trusts, Repurchase Agreements, FHLB debt, residential loan warehouse facilities,
short securities, TBAs, Options, Futures, Swaps, Swaptions and Futures inclusive
of:

·Process a monthly journal entry of investment subledger activity

·Prepare monthly financial reports, trial balance and soft close

·Prepare quarterly financial reports and hard close

oTrial Balance

oConsolidated Balance Sheet

oConsolidated Income Statement

oComprehensive Income

oStockholder’s Equity

oStatement of Cashflows

oInvestment Results Report (MTD, YTD)

oRealized Gains/Losses Report

oUnrealized Profit/Loss Report

oConsolidated General Ledger

·Prepare the following financial statement footnotes

oAFS Securities

oMortgage Loans HFS

oRestricted Cash

oRepurchase Agreements

oDerivatives

oFinancial Instruments

·Calculate and record the management company’s management fee

·Calculate and record the administration fees based on the agreed upon fee
schedule

·Track and record REIT expenses as directed by Client

·Assist Client and your outside auditors with preparation of financial
statements

 

 

 

 

ATTACHMENT B: CHARGES

 

Monthly Charge

SS&C will provide the Investment Accounting Services to the Client in accordance
with the terms set forth below subject to a minimum monthly fee of US$7,500.

 

I.Investment Accounting Services

i.Residential Mortgage Loan Accounting Services

SS&C will provide the Processing Services related to Client’s investments in
residential mortgage loan for an annual fee of $750 per active loan. The active
loan count will be taken as of each month end and loans that were included in a
securitization will be included in the active loan count in the month of such
securitization.

 

ii.Securities Accounting Services - Owned Securities

The “Asset Value” will be calculated as the cumulative market value of Client’s
investments (excluding repurchase agreements) plus accrued income plus trade
date cash as of the last day of each month. The Monthly Charge will be
calculated by multiplying each month’s Asset Value by one-twelfth (1/12th) of
the appropriate basis point set forth below.

 

Asset Value Annual Basis Points $0 - $500,000,000 2.75 basis points $500,000,001
– $1,000,000,000 2.5 basis points All remaining U.S. Dollars 2 basis points

  

iii.Securities Accounting Services – Securities in Trust

Securities tracked for purposes of consolidation will be subject to a monthly
fee of $100 per CUSIP.

 

II.Financial Reporting Services

i.General Ledger and Financial Reporting Support Services

SS&C will provide the financial reporting support services for a fixed monthly
fee of $12,500. The scope of services will be consistent with current products
and related disclosures and the current entity structure of Client. Changes in
the scope of these items may increase this fee. The calculation of taxes for
taxable entities is specifically excluded from SS&C responsibilities. This fee
is in addition to the monthly fee.

 

Optional Services and Additional Charges

 

Customizations and Development

Customization/development of reports, interfaces, statements etc. as required by
the Client will be provided at the following rates during the Initial Term.
Thereafter, SS&C’s then current rates will apply. This fee will be in addition
to the monthly fee.

Vice President/Director/Manager Level US$400 per person per hour Accountant
Level US$250 per person per hour

 

REIT Compliance Reporting Support Services

Upon written request from Client SS&C will compile and analyze the investment
data for the following REIT compliance tests listed below. SS&C’s sole
responsibility in regards to Client’s REIT compliance is to provide Client with
investment related data. Client is solely and exclusively responsible for
ensuring that it complies with law and its governing documents. SS&C is not
responsible for monitoring Client’s compliance with (i) law, (ii) its governing
documents or (iii) any investment restrictions or compliance with the investment
restrictions.

 

▪Gross Income Tests

o75% and 95% Gross Income Tests

 

▪Asset Tests

o75% Test

o5% Issuer Exposure

o10% Voting Rights

oTRS Ownership as a percentage of total REIT assets

 

 

 

 

SS&C will provide the REIT Compliance Reporting Support Services for the
following rates during the Initial Term. Thereafter, SS&C’s then current rates
will apply. This fee is in addition to the monthly fee.

Vice President/Director Level US$350 per person per hour Manager Level US$300
per person per hour Senior Accountant Level US$250 per person per hour Staff
Accountant Level US$200 per person per hour

 

Additional Charges

Fees for market data and pricing information, telecommunications line charges or
other third party fees are not included in the above fees and will be charged to
the Client.

 

 

 

 

Addendum to Processing Services Agreement

 

This Addendum to Processing Services Agreement (“Addendum”) is entered into by
and between SS&C Technologies, Inc. (“SS&C”) and Five Oaks Investment Corp.
(“Client”) and is effective on the later of the dates on which both Parties
execute this Addendum (the “Addendum Effective Date”).

 

BACKGROUND

A.SS&C and Client have entered into a Processing Services Agreement dated May
21, 2015 (the “Agreement”).

 

B.The Parties desire to amend the Agreement as set forth in this Addendum. For
avoidance of doubt, in the event of any conflict between the terms and
conditions of the Agreement and this Addendum, the terms of this Addendum shall
control.

 

Now, therefore, the Parties agree as follows:

 

1.GENERAL

1.1Capitalized terms not otherwise herein defined shall have the meanings given
to them in the
Agreement.

 

2.MODIFICATION OF THE AGREEMENT.

2.1Section 6.1 is deleted and replaced with the following:

 

6.1 This Agreement shall be effective and binding upon Client and SS&C as of the
Effective Date and shall continue in full force and effect for a period of five
(5) years (the “Initial Term”) unless sooner terminated in accordance with its
terms. Client may terminate this Agreement as of the end of year 3 or 4 by
providing SS&C written notice of termination at least ninety (90) days prior to
the end of such periods. Unless either Party provides the other with a written
notice of termination at least ninety (90) days prior to the commencement of any
Renewal Term, after the Initial Term, this Agreement will automatically renew
for additional successive terms of one (1) year each (each such additional
one-year term a “Renewal Term”). The Term of this Agreement shall run from the
Effective Date through the Initial Term, and any Renewal Term, until and unless
terminated in accordance with its terms.

 

3.COUNTERPARTS

3.1This Addendum may be executed in counterparts, each of which when so executed
will be deemed to be an original. Such counterparts together will constitute one
agreement. Signatures may be exchanged via facsimile or electronic mail and the
parties hereto agree that signatures so exchanged shall be binding to the same
extent as if original signatures were exchanged.

 

4.ENTIRE AGREEMENT.

4.1The Agreement, as amended by this Addendum, constitutes the entire agreement
of the Parties in connection with the subject matter hereof and supersedes all
prior agreements, understandings and discussions, whether oral or written, of
the parties and remains in full force and effect. Each Party warrants that the
signatory signing on its behalf has the authority to contractually bind it to
the terms and conditions set forth herein.

 

IN WITNESS WHEREOF, SS&C and Client have caused this Addendum to be executed by
their duly authorized representatives, effective as of the Addendum Effective
Date.

 

AGREED TO AND ACCEPTED BY:

Five Oaks Investment Corp.   SS&C Technologies, Inc.       By

/s/ David Oston

  By

/s/ Normand A. Boulanger

Name

David Oston

  Name

Normand A. Boulanger

Title

Chief Financial Officer

  Title

President & COO

Date

June 9, 2015

  Date

June 10, 2015