INDEMNIFICATION
AGREEMENT

       

      


      THIS
INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the __
day of ________, 2009, by and between Two Harbors Investment Corp., a Maryland
corporation (the “Company”), and ________________________
(“Indemnitee”).

       

      WHEREAS,
at the request of the Company, Indemnitee currently serves as a [director] [and] [officer] of
the Company and may, therefore, be subjected to claims, suits or proceedings
arising as a result of his service; and

       

      WHEREAS,
as an inducement to Indemnitee to continue to serve as such [director] [and] [officer],
the Company has agreed to indemnify and to advance expenses and costs incurred
by Indemnitee in connection with any such claims, suits or proceedings, to the
maximum extent permitted by law; and

       

      WHEREAS,
the parties by this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;

       

      NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:

       

      Section
1.                      Definitions.  For
purposes of this Agreement:

       

      (a)           “Change
in Control” means a change in control of the Company occurring after the
Effective Date of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the
Company is then subject to such reporting requirement; provided, however, that,
without limitation, such a Change in Control shall be deemed to have occurred
if, after the Effective Date (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 15% or more of the combined voting power
of all of the Company’s then-outstanding securities entitled to vote generally
in the election of directors without the prior approval of at least two-thirds
of the members of the Board of Directors in office immediately prior to such
person’s attaining such percentage interest; (ii) the Company is a party to a
merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the Board
of Directors then in office, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or (iii) at any time,
a majority of the members of the Board of Directors are not individuals (A) who
were directors as of the Effective Date or (B) whose election by the Board of
Directors or nomination for election by the Company’s stockholders was approved
by the affirmative vote of at least two-thirds of the directors then in office
who were directors as of the Effective Date or whose election or nomination for
election was previously so approved.

       

      
        
           

        

        
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      (b)           “Corporate
Status” means the status of a person as a present or former director, officer,
employee or agent of the Company or as a director, trustee, officer, partner,
manager, managing member, fiduciary, employee or agent of any other foreign or
domestic corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other enterprise that such person is or was
serving in such capacity at the request of the Company.  As a
clarification and without limiting the circumstances in which Indemnitee may be
serving at the request of the Company, service by Indemnitee shall be deemed to
be at the request of the Company if Indemnitee serves or served as a director,
trustee, officer, partner, manager, managing member, fiduciary, employee or
agent of any corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other enterprise (i) of which a majority of the
voting power or equity interest is owned directly or indirectly by the Company
or (ii) the management of which is controlled directly or indirectly by the
Company.

       

      (c)           “Disinterested
Director” means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification and/or advance of Expenses is
sought by Indemnitee.

       

      (d)           “Effective
Date” means the date set forth in the first paragraph of this
Agreement.

       

      (e)           “Expenses”
means any and all reasonable and out-of-pocket attorneys’ fees and costs,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, federal, state, local or foreign taxes imposed
on Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, ERISA excise taxes and penalties and any other disbursements or
expenses incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in or
otherwise participating in a Proceeding.  Expenses shall also include
Expenses incurred in connection with any appeal resulting from any Proceeding
including, without limitation, the premium, security for and other costs
relating to any cost bond supersedeas bond or other appeal bond or its
equivalent.

       

      (f)           “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither is, nor in the past five years has been,
retained to represent:  (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement or of other indemnitees under similar
indemnification agreements), or (ii) any other party to or participant or
witness in the Proceeding giving rise to a claim for indemnification or advance
of Expenses hereunder.  Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.

       

      (g)           “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry, administrative hearing or
any other proceeding, whether brought by or in the right of the Company or
otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative (formal or informal) nature,
including any appeal therefrom, except one pending or completed on or before the
Effective Date, unless otherwise specifically agreed in writing by the Company
and Indemnitee.  If Indemnitee reasonably believes that a given
situation may lead to or culminate in the institution of a Proceeding, such
situation shall also be considered a Proceeding.

       

      
        
           

        

        
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      Section
2.                      Services by
Indemnitee.  This Agreement shall not impose any independent
obligation on Indemnitee or the Company to continue Indemnitee’s service to the
Company.  This Agreement shall not be deemed an employment contract
between the Company (or any other entity) and Indemnitee.

       

      Section
3.                      General.  The
Company shall indemnify, and advance Expenses to, Indemnitee (a) as
provided in this Agreement and (b) otherwise to the maximum extent
permitted by Maryland law in effect on the Effective Date and as amended from
time to time; provided, however, that no change in Maryland law shall have the
effect of reducing the benefits available to Indemnitee hereunder based on
Maryland law as in effect on the Effective Date.  The rights of
Indemnitee provided in this Section 3 shall include, without limitation, the
rights set forth in the other sections of this Agreement, including any
additional indemnification permitted by Section 2-418(g) of the Maryland General
Corporation Law (the “MGCL”).

       

      Section
4.                      Standard for
Indemnification.  If, by reason of Indemnitee’s Corporate
Status, Indemnitee is, or is threatened to be, made a party to any Proceeding,
Indemnitee shall be indemnified against all judgments, penalties, fines, taxes
and interest and amounts paid in settlement (collectively, “Liabilities”) and
all Expenses actually and reasonably incurred by him or on his behalf in
connection with any such Proceeding unless it is established by clear and
convincing evidence that (a) the act or omission of Indemnitee was material
to the matter giving rise to the Proceeding and (i) was committed in bad
faith or (ii) was the result of active and deliberate dishonesty,
(b) Indemnitee actually received an improper personal benefit in money,
property or services or (c) in the case of any criminal Proceeding,
Indemnitee had reasonable cause to believe that his conduct was
unlawful.

       

      Section
5.                      Certain Limits on
Indemnification.  Notwithstanding any other provision of this
Agreement (other than Section 6), Indemnitee shall not be entitled
to:

       

      (a)           indemnification
hereunder if the Proceeding was one by or in the right of the Company and
Indemnitee is adjudged to be liable to the Company;

       

      (b)           indemnification
hereunder if Indemnitee is adjudged to be liable on the basis that personal
benefit was improperly received in any Proceeding charging improper personal
benefit to Indemnitee, whether or not involving action in the Indemnitee’s
Corporate Status; or

       

      (c)           indemnification
or advance of Expenses hereunder if the Proceeding was brought by Indemnitee
unless: (i) the Proceeding was brought to enforce indemnification under
this Agreement, and then only to the extent in accordance with and as authorized
by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a
resolution of the stockholders entitled to vote generally in the election of
directors or of the Board of Directors or an agreement approved by the Board of
Directors to which the Company is a party expressly provides
otherwise.

       

      
        
           

        

        
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      Section
6.                      Court-Ordered
Indemnification.  Notwithstanding any other provision of this
Agreement, a court of appropriate jurisdiction, upon application of Indemnitee
and such notice as the court shall require, may order indemnification in the
following circumstances:

       

      (a)           if
it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1)
of the MGCL, the court shall order indemnification, in which case Indemnitee
shall be entitled to recover the Expenses of securing such reimbursement;
or

       

      (b)           if
it determines that Indemnitee is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not
Indemnitee (i) has met the standards of conduct set forth in Section
2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an
improper personal benefit under Section 2-418(c) of the MGCL, the court may
order such indemnification as the court shall deem proper.  However,
indemnification with respect to any Proceeding by or in the right of the Company
or in which liability shall have been adjudged in the circumstances described in
Section 2-418(c) of the MGCL shall be limited to Expenses.

       

      Section
7.                      Indemnification for Expenses
and Liabilities of a Party Who is Wholly or Partly
Successful.  Notwithstanding any other provision of this
Agreement, and without limiting any such provision, to the extent that
Indemnitee was or is, by reason of his Corporate Status, made a party to (or
otherwise becomes a participant in) any Proceeding and is successful, on the
merits or otherwise, in the defense of such Proceeding, Indemnitee shall be
indemnified for all Expenses and Liabilities actually and reasonably incurred by
him or on his behalf in connection therewith.  If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all
Expenses and Liabilities actually and reasonably incurred by him or on his
behalf in connection with each such claim, issue or matter, allocated on a
reasonable and proportionate basis.  For purposes of this Section 7
and, without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

       

      Section
8.                      Advance of Expenses for a
Party.  If, by reason of Indemnitee’s Corporate Status,
Indemnitee is, or is threatened to be, made a party to any Proceeding, the
Company shall, without requiring a preliminary determination of Indemnitee’s
ultimate entitlement to indemnification hereunder, advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with such
Proceeding within ten days after the receipt by the Company of a statement or
statements requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding.  Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and
shall include or be preceded or accompanied by a written affirmation by
Indemnitee of Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Company as authorized by law and by this
Agreement has been met and a written undertaking by or on behalf of Indemnitee,
in substantially the form attached hereto as Exhibit A or in such
form as may be required under applicable law as in effect at the time of the
execution thereof, to reimburse the portion of any Expenses advanced to
Indemnitee relating to claims, issues or matters in the Proceeding as to which
it shall ultimately be established that the standard of conduct has not been met
by Indemnitee and which have not been successfully resolved as described in
Section 7 of this Agreement.  To the extent that Expenses advanced to
Indemnitee do not relate to a specific claim, issue or matter in the Proceeding,
such Expenses shall be allocated on a reasonable and proportionate
basis.  The undertaking required by this Section 8 shall be an
unlimited general obligation by or on behalf of Indemnitee and shall be accepted
without reference to Indemnitee’s financial ability to repay such advanced
Expenses and without any requirement to post security therefor.

       

      
        
           

        

        
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      Section
9.                      Indemnification and Advance
of Expenses of a Witness.  Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee is or may be, by reason of his
Corporate Status, made a witness or otherwise asked to participate in any
Proceeding, whether instituted by the Company or any other party, and to which
Indemnitee is not a party, he shall be advanced all reasonable Expenses and
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith within ten days after the receipt by the
Company of a statement or statements requesting such advance or advances from
time to time, whether prior to or after final disposition of such
Proceeding.  Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee.

       

      Section
10.                                Procedure for Determination
of Entitlement to Indemnification.

       

      (a)           To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification.  Indemnitee may submit one or more such requests from
time to time and at such time(s) as Indemnitee deems appropriate in his sole
discretion.  The officer of the Company receiving any such request
from Indemnitee shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.

       

      (b)           Upon
written request by Indemnitee for indemnification pursuant to Section 10(a)
above, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall promptly be made in the specific case:
(i) if a Change in Control shall have occurred, by Independent Counsel, in a
written opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee, which Independent Counsel shall be selected by the Indemnitee and
approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of
the MGCL, which approval will not be unreasonably withheld; or (ii) if a
Change in Control shall not have occurred, (A) by the Board of Directors by a
majority vote of a quorum consisting of Disinterested Directors or, if such a
quorum cannot be obtained, then by a majority vote of a duly authorized
committee of the Board of Directors consisting solely of one or more
Disinterested Directors, (B) if Independent Counsel has been selected by the
Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and
approved by the Indemnitee, which approval shall not be unreasonably withheld,
by Independent Counsel, in a written opinion to the Board of Directors, a copy
of which shall be delivered to Indemnitee or (C) if so directed by a majority of
the members of the Board of Directors, by the stockholders of the
Company.  If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten days after such
determination.  Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination in the
discretion of the Board of Directors or Independent Counsel if retained pursuant
to clause (ii)(B) of this Section 10(b).  Any Expenses incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company shall
indemnify and hold Indemnitee harmless therefrom.

       

      
        
           

        

        
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      (c)           The
Company shall pay the reasonable fees and expenses of Independent Counsel, if
one is appointed.

       

      Section
11.                                Presumptions and Effect of
Certain Proceedings.

       

      (a)           In
making any determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 10(a) of this Agreement, and the Company shall have the burden of
proof to overcome that presumption in connection with the making of any
determination contrary to that presumption.

       

      (b)           The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, upon a plea of nolo contendere or its
equivalent, or entry of an order of probation prior to judgment, does not create
a presumption that Indemnitee did not meet the requisite standard of conduct
described herein for indemnification.

       

      (c)           The
knowledge and/or actions, or failure to act, of any other director, officer,
employee or agent of the Company or any other director, trustee, officer,
partner, manager, managing member, fiduciary, employee or agent of any other
foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise shall not be imputed
to Indemnitee for purposes of determining any other right to indemnification
under this Agreement.

       

      (d)           For
purposes of any determination of whether any act or omission of the Indemnitee
met the requisite standard of conduct described herein for indemnification, each
act of the Indemnitee shall be deemed to have met such standard if the
Indemnittee’s action is based on the records or books of accounts of the
Company, including financial statements, or on information supplied to the
Indemnitee by the officers of the Company in the course of their duties, or on
the advice of legal counsel for the Company or on information or records given
or reports made to the Company by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the
Company.  The provisions of this Section 11(d) shall not be deemed to
be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement or under applicable law.

       

      
        
           

        

        
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      Section
12.                                Remedies of
Indemnitee.

       

      (a)           If
(i) a determination is made pursuant to Section 10(b) of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement,
(ii) advance of Expenses is not timely made pursuant to Section 8 of this
Agreement, (iii) no determination of entitlement to indemnification shall
have been made pursuant to Section 10(b) of this Agreement within 60 days after
receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 7 of this Agreement within ten
days after receipt by the Company of a written request therefor, or
(v) payment of indemnification pursuant to any other section of this
Agreement or the charter or Bylaws of the Company is not made within ten days
after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication in an
appropriate court located in the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or advance of
Expenses.  Alternatively, Indemnitee, at his option, may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association.  Indemnitee
shall commence a proceeding seeking an adjudication or an award in arbitration
within 180 days following the date on which Indemnitee first has the right to
commence such proceeding pursuant to this Section 12(a); provided, however,
that the foregoing clause shall not apply to a proceeding brought by Indemnitee
to enforce his rights under Section 7 of this Agreement.  Except as
set forth herein, the provisions of Maryland law (without regard to its
conflicts of laws rules) shall apply to any such arbitration.  The
Company shall not oppose Indemnitee’s right to seek any such adjudication or
award in arbitration.

       

      (b)           In
any judicial proceeding or arbitration commenced pursuant to this
Section 12, Indemnitee shall be presumed to be entitled to indemnification
or advance of Expenses, as the case may be, under this Agreement and the Company
shall have the burden of proving by clear and convincing evidence that
Indemnitee is not entitled to indemnification or advance of Expenses, as the
case may be.  If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 12, Indemnitee shall not be required
to reimburse the Company for any advances pursuant to Section 8 of this
Agreement until a final determination is made with respect to Indemnitee’s
entitlement to indemnification (as to which all rights of appeal have been
exhausted or lapsed).  The Company shall, to the fullest extent not
prohibited by law, be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 12 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is
bound by all of the provisions of this Agreement.

       

      (c)           If
a determination shall have been made pursuant to Section 10(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 12, absent a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement
not materially misleading, in connection with the request for
indemnification.

       

      (d)           In
the event that Indemnitee, pursuant to this Section 12, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled to
advance of Expenses in connection therewith and to recover from the Company, and
shall be indemnified by the Company for, any and all Expenses and Liabilities
actually and reasonably incurred by him in such judicial adjudication or
arbitration.  If it shall be determined in such judicial adjudication
or arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advance of Expenses sought, the Expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.

       

      
        
           

        

        
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      (e)           Interest
shall be paid by the Company to Indemnitee at the maximum rate allowed to be
charged for judgments under the Courts and Judicial Proceedings Article of the
Annotated Code of Maryland for amounts which the Company pays or is obligated to
pay for the period commencing with the date on which the Company was requested
to advance expenses in accordance with Section 8 of this Agreement or to make
the determination of entitlement to indemnification under Section 12(a)
above.  Indemnitee requests indemnification, reimbursement or advance
of any Expenses and ending on the date such payment is made to Indemnitee by the
Company.

       

      Section
13.                                Defense of the Underlying
Proceeding.

       

      (a)           Indemnitee
shall notify the Company promptly in writing upon being served with any summons,
citation, subpoena, complaint, indictment, request or other document relating to
any Proceeding which may result in the right to indemnification or the advance
of Expenses hereunder and shall include with such notice a description of the
nature of the Proceeding and a summary of the facts underlying the
Proceeding.  The failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to indemnification or the advance of Expenses under this Agreement
unless the Company’s ability to defend in such Proceeding or to obtain proceeds
under any insurance policy is materially and adversely prejudiced thereby, and
then only to the extent the Company is thereby actually so
prejudiced.

       

      (b)           Subject
to the provisions of the last sentence of this Section 13(b) and of
Section 13(c) below, the Company shall have the right to defend Indemnitee
in any Proceeding which may give rise to indemnification hereunder; provided,
however, that the Company shall notify Indemnitee of any such decision to defend
within 15 calendar days following receipt of notice of any such Proceeding under
Section 13(a) above.  The Company shall not, without the prior
written consent of Indemnitee, which shall not be unreasonably withheld or
delayed, consent to the entry of any judgment against Indemnitee or enter into
any settlement or compromise which (i) includes an admission of fault of
Indemnitee, (ii) does not include, as an unconditional term thereof, the
full release of Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to
Indemnitee or (iii) would impose any Expense, Liability or limitation on
Indemnitee.  This Section 13(b) shall not apply to a Proceeding
brought by Indemnitee under Section 12 of this Agreement.

       

      
        
           

        

        
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      (c)           Notwithstanding
the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is
a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that he may have separate
defenses or counterclaims to assert with respect to any issue which may not be
consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that an actual or apparent
conflict of interest or potential conflict of interest exists between Indemnitee
and the Company, or (iii) if the Company fails to assume the defense of
such Proceeding in a timely manner, Indemnitee shall be entitled to be
represented by separate legal counsel of Indemnitee’s choice, subject to the
prior approval of the Company, which shall not be unreasonably withheld, at the
expense of the Company.  In addition, if the Company fails to comply
with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any Proceeding to deny or to recover from
Indemnitee the benefits intended to be provided to Indemnitee hereunder,
Indemnitee shall have the right to retain counsel of Indemnitee’s choice,
subject to the prior approval of the Company, which shall not be unreasonably
withheld, at the expense of the Company (subject to Section 12(d) of this
Agreement), to represent Indemnitee in connection with any such
matter.

       

      Section
14.                                Non-Exclusivity; Survival of
Rights; Subrogation.

       

      (a)           The
rights of indemnification and advance of Expenses as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the charter or Bylaws of the Company, any
agreement or a resolution of the stockholders entitled to vote generally in the
election of directors or of the Board of Directors, or
otherwise.  Unless consented to in writing by Indemnitee, no
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal, regardless of whether a claim with
respect to such action or inaction is raised prior or subsequent to such
amendment, alteration or repeal.  No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right
or remedy shall be cumulative and in addition to every other right or remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion of any right or remedy hereunder, or
otherwise, shall not prohibit the concurrent assertion or employment of any
other right or remedy.

       

      (b)           In
the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.

       

      Section
15.                                Insurance.  The
Company will use its reasonable best efforts to acquire directors and officers
liability insurance, on terms and conditions deemed appropriate by the Board of
Directors, with the advice of counsel, covering Indemnitee or any claim made
against Indemnitee by reason of his Corporate Status and covering the Company
for any indemnification or advance of Expenses made by the Company to Indemnitee
for any claims made against Indemnitee by reason of his Corporate
Status.  Without in any way limiting any other obligation under this
Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee
arising out of the amount of any deductible or retention and the amount of any
excess of the aggregate of all Liabilities and Expenses incurred by Indemnitee
in connection with a Proceeding over the coverage of any insurance referred to
in the previous sentence.  The purchase, establishment and maintenance
of any such insurance shall not in any way limit or affect the rights or
obligations of the Company or Indemnitee under this Agreement except as
expressly provided herein, and the execution and delivery of this Agreement by
the Company and the Indemnitee shall not in any way limit or affect the rights
or obligations of the Company under any such insurance policies.  If,
at the time the Company receives notice from any source of a Proceeding to which
Indemnitee is a party or a participant (as a witness or otherwise) the Company
has director and officer liability insurance in effect, the Company shall give
prompt notice of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

       

      Section
16.                                Coordination of
Payments.  The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable or payable or
reimbursable as Expenses hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.

       

      Section
17.                                Reports to
Stockholders.  To the extent required by the MGCL, the Company
shall report in writing to its stockholders the payment of any amounts for
indemnification of, or advance of Expenses to, Indemnitee under this Agreement
arising out of a Proceeding by or in the right of the Company with the notice of
the meeting of stockholders of the Company next following the date of the
payment of any such indemnification or advance of Expenses or prior to such
meeting.

       

      Section
18.                                Duration of Agreement;
Binding Effect.

       

      (a)           This
Agreement shall continue until and terminate on the later of (i) the date that
Indemnitee shall have ceased to serve as a director, officer, employee or
agent of the Company or as a director, trustee, officer, partner,
manager, managing member, fiduciary, employee or agent of any other foreign or
domestic corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving in such capacity at the request of
the Company and (ii) the date that Indemnitee is no longer subject to any actual
or possible Proceeding (including any rights of appeal thereto and any
Proceeding commenced by Indemnitee pursuant to Section 12 of this
Agreement).

       

      (b)           The
indemnification and advance of Expenses provided by, or granted pursuant to,
this Agreement shall be binding upon and be enforceable by the parties hereto
and their respective successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be a director, officer, employee or agent of
the Company or a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise that such person is or was serving in such capacity at
the request of the Company, and shall inure to the benefit of Indemnitee and his
spouse, assigns, heirs, devisees, executors and administrators and other legal
representatives.

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

       

      (c)           The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.

       

      (d)           The
Company and Indemnitee agree herein that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of
proof, and further agree that such breach may cause Indemnitee irreparable
harm.  Accordingly, the parties hereto agree that Indemnitee may
enforce this Agreement by seeking injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and
that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining any other relief to which he may be
entitled.  Indemnitee shall further be entitled to such specific
performance and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, without the necessity of
posting bonds or other undertakings in connection therewith.  The
Company acknowledges that, in the absence of a waiver, a bond or undertaking may
be required of Indemnitee by a court, and the Company hereby waives any such
requirement of such a bond or undertaking.

       

      Section
19.                                Severability.  If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section, paragraph or
sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section, paragraph
or sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested
thereby.

       

      Section
20.                                Identical
Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same
Agreement.  One such counterpart signed by the party against whom
enforceability is sought shall be sufficient to evidence the existence of this
Agreement.

       

      Section
21.                                Headings.  The
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

       

      Section
22.                                Modification and
Waiver.  No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

       

      Section
23.                                Notices.  All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed or (ii) mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is so
mailed:

       

      (a)           If
to Indemnitee, to the address set forth on the signature page
hereto.

       

      (b)           If
to the Company, to:

       

      
        	
                Two
      Harbors Investment Corp.

              
	
                601
      Carlson Parkway, Suite 330

              
	
                Minnetonka,
      MN 55305

              
	
                Attn:
      General Counsel

              


      

      


       

      or to
such other address as may have been furnished in writing to Indemnitee by the
Company or to the Company by Indemnitee, as the case may be.

      


      Section
24.                                Governing
Law.  The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Maryland, without regard to its conflicts of laws rules.

       

      Section
25.                                Miscellaneous.  Use
of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate.

       

      


       

      [SIGNATURE
PAGE FOLLOWS]

       

       

       

       

       

       

      
        
           

        

        
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      IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.

       

      
        	 
      	 
      	
                COMPANY:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                TWO
      HARBORS INVESTMENT CORP.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                By:  ________________________________

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                INDEMNITEE:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                ____________________________________

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Address:

              


      

       

       

       

       

       

       

       

       

       

       

       

       

      
 

      
        
           

        

        
          Indemnification
Agreement

          
            

          

        

        
           

        

      

      


      


      EXHIBIT
A

       

      FORM OF
UNDERTAKING TO REPAY EXPENSES ADVANCED

       

      The Board
of Directors of Two Harbors Investment Corp.

      


      Re:  Undertaking
to Repay Expenses Advanced

      


      Ladies
and Gentlemen:

      


      This
undertaking is being provided pursuant to that certain Indemnification Agreement
dated the _____ day of ______________, 20____, by and between Two Harbors
Investment Corp., a Maryland corporation (the “Company”), and the undersigned
Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to
advance of Expenses in connection with [Description of Proceeding]
(the “Proceeding”).

       

      Terms
used herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.

       

      I am
subject to the Proceeding by reason of my Corporate Status or by reason of
alleged actions or omissions by me in such capacity.  I hereby affirm
my good faith belief that at all times, insofar as I was involved as [a director] [an officer] of the Company,
in any of the facts or events giving rise to the Proceeding, I (1) did not
act with bad faith or active or deliberate dishonesty, (2) did not receive
any improper personal benefit in money, property or services and (3) in the
case of any criminal proceeding, had no reasonable cause to believe that any act
or omission by me was unlawful.

       

      In
consideration of the advance of Expenses by the Company for reasonable
attorneys’ fees and related Expenses incurred by me in connection with the
Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with
the Proceeding, it is established that (1) an act or omission by me was
material to the matter giving rise to the Proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty or
(2) I actually received an improper personal benefit in money, property or
services or (3) in the case of any criminal proceeding, I had reasonable
cause to believe that the act or omission was unlawful, then I shall promptly
reimburse the portion of the Advanced Expenses relating to the claims, issues or
matters in the Proceeding as to which the foregoing findings have been
established unless it is otherwise determined that I am entitled to
indemnification under the Indemnification Agreement or otherwise.

       

      [Signatures appear on the following
page.]

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

       

       

       

       

       

       

       

      IN
WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___
day of ____________________, 20____.

      


      


       

      _____________________________