8-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 11, 2009

CAPITOL ACQUISITION CORP.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-33769	26-0435458
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

509 7th Street, N.W. Washington, D.C.	20004
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 202-654-7060

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

COMMENCING SHORTLY AFTER THE FILING OF THIS CURRENT REPORT ON FORM 8-K, CAPITOL ACQUISITION CORP. (“CAPITOL”) INTENDS TO HOLD PRESENTATIONS FOR CERTAIN OF ITS STOCKHOLDERS AND WARRANTHOLDERS, AS WELL AS OTHER PERSONS WHO MIGHT BE INTERESTED IN PURCHASING CAPITOL SECURITIES, REGARDING ITS PROPOSED BUSINESS COMBINATION WITH TWO HARBORS INVESTMENT CORP. (“TWO HARBORS”), AS DESCRIBED IN THIS REPORT.

CAPITOL INTENDS TO FILE A PROXY STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) AND TWO HARBORS INTENDS TO FILE A REGISTRATION STATEMENT WITH THE SEC, IN EACH CASE, THAT WILL CONTAIN A PRELIMINARY PROXY STATEMENT/PROSPECTUS, IN CONNECTION WITH THE PROPOSED TRANSACTION. STOCKHOLDERS AND WARRANTHOLDERS OF CAPITOL AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, THE PROXY STATEMENT/PROSPECTUS IN CONNECTION WITH CAPITOL’S SOLICITATION OF PROXIES FOR THE SPECIAL MEETINGS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PERSONS CAN ALSO READ CAPITOL’S FINAL PROSPECTUS, DATED NOVEMBER 8, 2007, IN CONNECTION WITH CAPITOL’S INITIAL PUBLIC OFFERING (“IPO”) FOR A DESCRIPTION OF THE SECURITY HOLDINGS OF THE CAPITOL OFFICERS AND DIRECTORS AND THEIR RESPECTIVE INTERESTS IN THE SUCCESSFUL CONSUMMATION OF THE PROPOSED TRANSACTION. THE DEFINITIVE PROXY STATEMENT/PROSPECTUS WILL BE MAILED TO CAPITOL STOCKHOLDERS AND WARRANTHOLDERS, AS THE CASE MAY BE, AS OF A RECORD DATE TO BE ESTABLISHED FOR VOTING ON THE PROPOSED TRANSACTION. STOCKHOLDERS AND WARRANTHOLDERS WILL ALSO BE ABLE TO OBTAIN A COPY OF THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, WITHOUT CHARGE, BY DIRECTING A REQUEST TO: CAPITOL ACQUISITION CORP., 509 7^TH STREET, N.W., WASHINGTON, D.C. 20004. FREE COPIES OF THESE DOCUMENTS, ONCE AVAILABLE, CAN ALSO BE OBTAINED, WITHOUT CHARGE, AT THE SEC’S INTERNET SITE (HTTP://WWW.SEC.GOV).

CAPITOL, TWO HARBORS, TWO HARBORS’ EXTERNAL MANAGER AND THEIR RESPECTIVE DIRECTORS, EXECUTIVE OFFICERS, AFFILIATES AND OTHER PERSONS MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING OF CAPITOL STOCKHOLDERS AND CAPITOL WARRANTHOLDERS TO BE HELD TO APPROVE THE PROPOSED TRANSACTION. AS PART OF THE PROPOSED TRANSACTION, AN AFFILIATE OF CAPITOL’S FOUNDERS WILL BE PROVIDING CERTAIN SERVICES TO TWO HARBORS’ EXTERNAL MANAGER PURSUANT TO WHICH SUCH ENTITY WILL BE PAID A PERCENTAGE OF THE MANAGEMENT FEES TO BE PAID BY TWO HARBORS. ADDITIONALLY, THE UNDERWRITERS IN CAPITOL’S IPO CONSUMMATED IN NOVEMBER 2007 MAY ASSIST CAPITOL IN THESE EFFORTS. THE UNDERWRITERS ARE ENTITLED TO RECEIVE DEFERRED UNDERWRITING COMPENSATION UPON COMPLETION OF THE PROPOSED TRANSACTION. ADDITIONAL INFORMATION REGARDING THE INTERESTS OF POTENTIAL PARTICIPANTS WILL BE INCLUDED IN THE PROXY STATEMENT/PROSPECTUS AND OTHER MATERIALS TO BE FILED BY CAPITOL AND TWO HARBORS WITH THE SEC.

This report and the exhibits hereto are not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Capitol or Two Harbors, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

This report and the exhibits hereto include “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Two Harbors’ actual results may differ from its expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Capitol’s and Two Harbors’ expectations with respect to future performance, anticipated financial impacts of the merger and related transactions; approval of the merger and related transactions by security holders; the satisfaction of the closing conditions to the merger and related transactions; and the timing of the completion of the merger and related transactions.

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the parties’ control and difficult to predict. Factors that may cause such differences include the possibility that the expected growth will not be realized, or will not be realized within the expected time period, due to, among other things, (1) the real estate investment trust (“REIT”) environment; (2) changes in the commercial finance and the real estate markets; (3) general economic conditions; (4) legislative and regulatory changes (including changes to laws governing the taxation of REITs). Other factors include the possibility that the merger does not close, including due to the failure to receive required security holder approvals, or the failure of other closing conditions.

The foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in Capitol’s most recent filings with the SEC. All subsequent written and oral forward-looking statements concerning Capitol and Two Harbors, the merger, the related transactions or other matters and attributable to Capitol and Two Harbors or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Capitol and Two Harbors do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based.

Item 1.01 Entry into a Material Definitive Agreement.

On June 11, 2009, Capitol Acquisition Corp., a Delaware corporation (“Capitol”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Capitol, Two Harbors Investment Corp., a Maryland corporation (“Two Harbors”), Two Harbors Merger Corp., a Delaware corporation and a wholly-owned subsidiary of Two Harbors (“Merger Sub”), and Pine River Capital Management L.P., the sole stockholder of Two Harbors (“Pine River”).

The following summaries of the merger and related transactions, the Merger Agreement and the other agreements to be entered into by the parties are qualified in their entirety by reference to the text of the agreements, certain of which are attached as exhibits hereto and are incorporated herein by reference.

Upon the consummation of the transactions contemplated by the Merger Agreement, Merger Sub will be merged with and into Capitol, with Capitol surviving the merger and becoming a wholly-owned subsidiary of Two Harbors. Under the terms of the Merger Agreement, Capitol’s outstanding common stock and warrants will be converted into common stock and warrants of Two Harbors, on a one-to-one basis. Capitol’s initial officers, directors and security holders (the “Capitol Founders”) have agreed to surrender for cancellation 100% of the shares of Capitol common stock acquired by them prior to Capitol’s initial public offering (the “IPO”). As described in more detail below, as a condition of the transaction, Capitol’s stockholders will be asked to approve an amendment to Capitol’s amended and restated certificate of incorporation to permit the transaction and Capitol’s warrantholders will be asked to amend the exercise price of their warrants to $11.00 per share in exchange for extending the warrant expiration by one year to November 7, 2013.

Two Harbors is a newly organized real estate investment trust (“REIT”) that intends to focus on residential mortgage-backed securities (“RMBS”) and will be externally managed by PRCM Advisers LLC (the “Two Harbors Manager”), a subsidiary of Pine River Capital Management L.P. (“Pine River”), a multi-strategy asset management firm with more than $800 million in assets under management. Two Harbors was formed solely to complete the business combination with Capitol and has no material assets or liabilities. Two Harbors’ only assets following the business combination will be the funds released to it from Capitol’s trust account upon consummation of the business combination. Two Harbors intends to pursue a relative value strategy targeting all subsets of the RMBS market. This strategy will seek to capture inefficiencies created by the current dislocations in non-Agency and Agency RMBS, and longer-term opportunities in residential mortgage assets.

If approved, the merger is expected to be consummated by the end of the third quarter of 2009, after the required approval by the stockholders and warrantholders of Capitol and the fulfillment of certain other closing conditions, as described herein and in the Merger Agreement.

Initial Charter Amendment

In the prospectus included in the registration statement for Capitol’s IPO, Capitol undertook to consummate an initial business combination in which it acquired an operating business with a fair market value equal to at least 80% of the balance in Capitol’s trust account (excluding deferred underwriting discounts and commissions). If the operating business was affiliated with any of the Capitol Founders, Capitol was required to have such transaction approved by its disinterested independent directors and obtain a fairness opinion from an independent investment banking firm that the transaction was fair to the unaffiliated stockholders from a financial point of view. In the proposed transaction, (i) Capitol will ultimately be acquired by Two Harbors, (ii) neither Two Harbors nor Merger Sub is an operating business, (iii) the fair market value of Two Harbors and Merger Sub on the date of the transaction is less than 80% of the balance of

the trust account and (iv) the transaction will not be approved by disinterested independent directors (because there are no disinterested directors) and Capitol will not be receiving a fairness opinion from an independent investment banking firm that the business combination is fair to unaffiliated stockholders from a financial point of view. Accordingly, the proposed transaction does not satisfy the IPO requirements. However, Capitol considered and analyzed numerous companies and acquisition opportunities in its search for an attractive business combination candidate, none of which was believed to be as attractive to public stockholders as the proposed transaction. Accordingly, Capitol is proposing to amend the terms of its amended and restated certificate of incorporation to allow for the consummation of the proposed transaction.

The Merger Agreement

The Merger Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Two Harbors, Capitol or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates; were solely for the benefit of the parties to the Merger Agreement; may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of Two Harbors, Capitol or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by Two Harbors and Capitol.

Representations and Warranties

The Merger Agreement contains representations and warranties of Capitol relating, among other things, to:

• proper organization and similar corporate matters;

• capital structure;

• the authorization, performance and enforceability of the merger agreement;

• permits and compliance with applicable laws;

• tax matters;

• SEC reports, financial statements and Sarbanes-Oxley;

• absence of undisclosed liabilities;

• contracts;

• assets and properties;

• absence of certain changes or events;

• employee matters;

• compliance with laws;

• litigation; and

• regulatory matters and compliance.

The Merger Agreement contains representations and warranties of each of Two Harbors and Merger Sub relating, among other things, to:

• proper organization and similar corporate matters;

• capital structure;

• the authorization, performance and enforceability of the merger agreement;

• litigation;

• tax matters;

• REIT matters; and

• regulatory matters and compliance.

Covenants

Capitol and Two Harbors have each agreed to use commercially reasonable efforts to take such actions as are necessary, proper or advisable to consummate the transaction. They have also agreed to continue to operate their respective businesses in the ordinary course prior to the closing and not to take certain specified actions without the prior written consent of the other party.

Capitol has agreed to cease, and to cause its officers, directors, employees, representatives and agents, including the Capitol Founders, to cease negotiations or discussions with any other party with respect to an alternative transaction, to return or destroy all related confidential information, and to avoid entering into any such negotiations or discussions until the closing of the merger. However, the Merger Agreement provides that Capitol’s board of directors may, at any time prior to the meeting of stockholders, furnish information and participate in discussions or negotiations with respect to a proposal that the board determines in good faith, upon consultation with legal and financial advisors, could lead to a Superior Proposal (as defined in the Merger Agreement), so long as such proposal was not obtained pursuant to a breach of the Merger Agreement by Capitol. The Merger Agreement provides that the board of directors may make a Change in Recommendation (as defined in the Merger Agreement) or terminate the Merger Agreement and enter into a definitive agreement with respect to a Superior Proposal if it determines in good faith that such action is required by the board’s fiduciary duties to Capitol. Capitol must promptly advise Two Harbors of any request for information or receipt of any Acquisition Proposal (as defined in the Merger Agreement).

The Merger Agreement also contains additional covenants of the parties, including, among others, covenants providing for:

• the protection of confidential information of the parties and, subject to the confidentiality requirements, the provision of reasonable access to information;

• Capitol and Two Harbors to prepare and file a proxy statement and registration statement, which shall contain this proxy statement/prospectus, to solicit proxies from the Capitol stockholders and warrantholders to vote on the proposals that will be presented for

consideration at the special meeting and register, under the Securities Act, the Two Harbors shares and warrants that will be issued to the security holders of Capitol pursuant to the merger agreement, respectively;

• Two Harbors to waive its rights to make claims against Capitol to collect from the trust fund established for the benefit of the holders of shares of Capitol common stock sold in the IPO (“Public Shares”) for any monies that may be owed to it by Capitol;

• Two Harbors to make an election to qualify as a real estate investment trust within the meaning of Section 856 of the Internal Revenue Code in connection with the filing of its initial tax return;

• Two Harbors to file a registration statement relating to the resale of the warrants (and underlying shares) held by the Capitol Founders and Pine River; and

• Two Harbors to use its reasonable best efforts to cause the Two Harbors shares issued in the merger to be listed on the NYSE or NYSE Amex, subject to official notice of issuance, as of or prior to the effective time of the merger.

Conditions to Closing

General Conditions

Consummation of the transactions is conditioned on (i) the holders of (a) a majority of the Public Shares voted at the Company’s stockholder meeting to approve the merger and (b) a majority of Capitol’s outstanding shares entitled to vote thereon, at a meeting called for this and other related purposes, approving the initial charter proposal and the merger proposal and the holders of a majority of Capitol’s outstanding warrants approving the warrant amendment (described below) and (ii) the holders of fewer than 30% of the Public Shares voting against the merger and properly demanding that their Public Shares be converted into a pro-rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the merger.

In addition, the consummation of the transactions contemplated by the Merger Agreement is conditioned upon, among other things:

• no statute, rule, ruling, regulation, judgment, decision, order, injunction, writ or decree shall have been enacted, entered, ordered, promulgated, issued or enforced by any court or other governmental authority that is in effect and prohibits, enjoins or restricts the consummation of the Transactions;

• the execution by and delivery to each party of each of the various transaction documents;

• the delivery by each party to the other party of a certificate to the effect that the representations and warranties of each party are true and correct as of the closing, except as would not reasonably be expected to have a material adverse effect on such party, and all covenants contained in the merger agreement have been materially complied with by each party;

• receipt by each of Capitol and Two Harbors of an opinion from its counsel, in form and substance reasonably satisfactory to such party to the effect that (a) the merger will be treated as a contribution governed by Section 351 of the Internal Revenue Code or a reorganization under Section 368(a) of the Internal Revenue Code and (b) the holders of Capitol’s stock will recognize no gain or loss on the exchange of those shares for shares of Two Harbors common stock (except to the extent that a holder of Capitol’s stock receives cash in exchange for any portion of its stock);

• the trust account containing not less than $100 million after taking into account payment of certain identified expenses set forth in the Merger Agreement;

• receipt by Capitol of an opinion from Richards, Layton & Finger P.A. relating to the initial charter amendment;

• amendment of Capitol’s amended and restated certificate of incorporation to provide for the initial charter amendment; and

• the S-4 registration statement shall have become effective, no stop order suspending its effectiveness, or proceeding to that effect, shall have been implemented by the SEC.

Capitol’s Conditions to Closing

The obligations of Capitol to consummate the transactions contemplated by the Merger Agreement, in addition to the conditions described above in the preceding paragraph, are conditioned upon each of the following, among other things:

• there shall have been no material adverse change in the business of Two Harbors since the date of the merger agreement; and

• receipt by Capitol of an opinion of Clifford Chance US LLP regarding the qualification of Two Harbors as a REIT under the Internal Revenue Code.

Two Harbors’ and Merger Sub’s Conditions to Closing

The obligations of Two Harbors and Merger Sub to consummate the transactions contemplated by the Merger Agreement also are conditioned upon, among other things, there being no material adverse change in the business of Capitol since the date of the merger agreement.

Waivers

If permitted under applicable law, either Two Harbors or Capitol may waive any inaccuracies in the representations and warranties made to such party contained in the Merger Agreement and waive compliance with any agreements or conditions for the benefit of the waiving party. The condition requiring that the holders of fewer than 30% of the Public Shares affirmatively vote against the merger proposal and demand conversion of their shares into cash may not be waived.

Termination

The Merger Agreement may be terminated at any time (provided that such termination is not available to a party whose action or failure to act has been a principal cause of or resulted in the failure of the merger to be consummated before such date and such action or failure to act is a breach of the merger agreement), but not later than the closing, as follows:

• by mutual written agreement of Capitol and Two Harbors;

• by either Capitol or Two Harbors if

• at the Capitol stockholder meeting, or any adjournment or postponement, the Merger Agreement shall fail to be approved or the holders of 30% or more of the Public Shares exercise conversion rights;

• the merger is not consummated by September 8, 2009 (or October 8, 2009 if the only obligation of the parties to effect the merger is the effectiveness of the registration statement);

• a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the merger, which order, decree, ruling or other action is final and nonappealable; or

• if the other party has breached or failed to perform any of its covenants or representations and warranties in any respect that would constitute a failure of the applicable closing condition and has not cured its breach within thirty days of the notice of an intent to terminate, provided that the terminating party is itself not in material breach;

• by Two Harbors if:

• Capitol’s board of directors or any committee makes or publicly proposes to make a Change in Recommendation (as defined in the Merger Agreement) to stockholders with respect to the merger proposal; or

• Capitol’s board of directors or any committee approve or recommends or, within two days of receiving an inquiry, proposal, offer or expression of interest with respect to an Alternative Transaction (as defined in the Merger Agreement), takes no position with respect to an Alternative Transaction; and

• by Capitol if its board of directors or any committee causes Capitol to enter into an Alternative Transaction as a result of it receiving a Superior Proposal (as defined in the Merger Agreement) for a transaction (provided Capitol has complied in all respects its applicable obligation under the Merger Agreement, including paying the termination fee described below).

In the event the Merger Agreement is terminated (i) by Pine River as a result of Capitol entering into an Alternative Transaction and such Alternative Transaction is consummated within 12 months or (ii) by Capitol if it enters into an Alternative Transaction as a result of it receiving a Superior Proposal for a transaction, Capitol has agreed to pay a termination fee to Pine River in the amount of $5 million (x) at closing of the Alternative Transaction or (y) upon termination of the Merger Agreement, respectively.

Management Agreement

Concurrent with the consummation of the merger, Two Harbors will enter into a management agreement with the Two Harbors Manager pursuant to which the Two Harbors Manager will provide the day-to-day management of Two Harbors’ operations. The management agreement requires the Two Harbors Manager to manage Two Harbors’ business affairs in conformity with investment guidelines and other policies that are approved and monitored by Two Harbors’ board of directors. The Two Harbors Manager is entitled to receive from Two Harbors a base management fee equal to 1.5% per annum, calculated and payable quarterly in arrears, of Two Harbors’ stockholders’ equity (as defined in the management agreement). Two Harbors is also obligated to reimburse certain expenses incurred by the Two Harbors Manager. The management agreement has an initial three-year term and will be renewed for one-year terms thereafter unless terminated by either Two Harbors or the Two Harbors Manager. Under

certain circumstances, the Two Harbors Manager is entitled to receive a termination fee from Two Harbors equal to three times the sum of the average annual management fee during the 24-month period immediately preceding such termination, calculated as of the end of the most recently completed fiscal quarter before the date of termination.

Shared Facilities and Services Agreement

Concurrent with the consummation of the Merger, the Two Harbors Manager will enter into a Shared Facilities and Services Agreement with Pine River, pursuant to which Pine River will provide the Two Harbors Manager with access to, among other things, Pine River’s information technology, office space, personnel and other resources necessary to enable the Two Harbors Manager to perform its obligations under the management agreement. Two Harbors will be required to reimburse Pine River and its employees for all out-of-pocket expenses incurred in connection with providing the services under this agreement.

Sub-Management Agreement

Concurrent with the consummation of the merger, the Two Harbors Manager, Pine River and CLA Founders LLC (the “Sub-Manager”), an affiliate of the Capitol Founders, will enter into a Sub-Management Agreement, pursuant to which the Sub-Manager has agreed to provide certain services to the Two Harbors Manager. In exchange for such services, the Sub-Manager will receive a sub-management fee of 20% of the management fee earned by the Two Harbors Manager under the Management Agreement with respect to the first $1 billion of Two Harbors’ stockholders’ equity and 10% of the management fee earned by the Two Harbors Manager under the Management Agreement with respect to Two Harbors’ stockholders’ equity in excess of $1 billion. Unless terminated earlier, the Sub-Management Agreement will terminate on the fifth anniversary of the merger, at which time the Sub-Manager would be paid a fee equal to 7.7 times the annualized rate of the last quarterly payment of the sub-manager fee, subject to certain adjustments. The Sub-Management Agreement provides that, if the Manager or certain Pine River affiliates manage certain other public investment vehicles, including other REITs, the Manager will negotiate in good faith to provide the Sub-Manager the right to enter into a sub-management agreement on substantially the same terms as the Sub-Management Agreement or an alternative arrangement reasonably acceptable to the Manager and the Sub-Manager.

Warrant Amendment

In connection with the proposed transaction, Capitol is seeking the approval from the holders of its warrants to (i) increase the exercise price of Capitol’s warrants from $7.50 per share to $11.00 per share and (ii) extend the expiration date of the warrants from November 7, 2012 to November 7, 2013. Assuming approval by the holders of Capitol’s warrants, the amendments will be effective immediately upon consummation of the merger. Approval of the warrant amendment is a condition to consummating the merger. Certain of the Capitol Founders, as well as Pine River, have executed voting and support agreements whereby such parties have agreed, among other things, to vote in favor of the warrant amendment proposal at the special meeting.

Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits.

(d) Exhibits:

Exhibit	Description
2.1	Agreement and Plan of Merger, dated as of June 11, 2009 by and among Capitol Acquisition Corp., Two Harbors Investment Corp., Two Harbors Merger Sub and Pine River Capital Management L.P.
4.1	Form of Amendment to Warrant Agreement.
10.1	Form of Management Agreement.*
10.2	Form of Sub-Management Agreement.*
10.3	Form of Voting and Support Agreement.
99.1	Press release of Capitol Acquisition Corp. dated June 11, 2009.
99.2	Investor Presentation.

* To be filed by amendment.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 11, 2009	CAPITOL ACQUISITION CORP.
	By:	/s/ Mark D. Ein
		Mark D. Ein
		Chief Executive Officer

EX-2.1

Exhibit 2.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

among

PINE RIVER CAPITAL MANAGEMENT L.P.,

TWO HARBORS INVESTMENT CORP.,

TWO HARBORS MERGER CORP.,

and

CAPITOL ACQUISITION CORP.

Dated as of June 11, 2009

ARTICLE I	DEFINITIONS	1
Section 1.1.	Defined Terms	1
Section 1.2.	Interpretation.	8
ARTICLE II	THE MERGER	8
Section 2.1.	The Merger	8
Section 2.2.	Effective Time; Closing	9
Section 2.3.	Articles of Incorporation and Bylaws.	9
Section 2.4.	Directors and Officers.	9
ARTICLE III	EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES	9
Section 3.1.	Effect on Capital Stock and Warrants	9
Section 3.2.	Converting Shares	10
Section 3.3.	No Further Ownership Rights in Shares	10
Section 3.4.	Stock Transfer Books	10
Section 3.5.	Affiliates	10
Section 3.6.	Certain Adjustments	11
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	11
Section 4.1.	Organization; Qualification.	11
Section 4.2.	Capitalization	11
Section 4.3.	Authority; Approval.	12
Section 4.4.	Consents and Approvals; No Violations.	12
Section 4.5.	SEC Reports; Financial Statements and Sarbanes-Oxley Act.	13
Section 4.6.	Absence of Undisclosed Liabilities	13
Section 4.7.	Absence of Certain Changes or Events.	14
Section 4.8.	Contracts	14
Section 4.9.	Litigation	14
Section 4.10.	Permits; Compliance with Applicable Law	14
Section 4.11.	Tax Matters.	14
Section 4.12.	Assets and Properties	15
Section 4.13.	Transactions with Affiliates	15
Section 4.14.	Employee Matters.	15
Section 4.15.	Required Votes of the Company’s Stockholders and Warrantholders	16
Section 4.16.	Trust Account.	16
Section 4.17.	Brokers	16
Section 4.18.	Disclosure	16

Section 4.19.	Section 203 of the DGCL	16
Section 4.20.	No Additional Representations	16
ARTICLE V	REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB AND PINE RIVER	17
Section 5.1.	Organization	17
Section 5.2.	Capitalization.	17
Section 5.3.	Authority; Approval	18
Section 5.4.	Consents and Approvals; No Violations.	18
Section 5.5.	New Company/No Operations of Parent and Merger Sub	18
Section 5.6.	Litigation	19
Section 5.7.	Brokers	19
Section 5.8.	REIT.	19
Section 5.9.	Tax Matters.	19
Section 5.10.	No Additional Representations	20
ARTICLE VI	COVENANTS	20
Section 6.1.	Conduct of the Parties.	20
Section 6.2.	No Solicitation	23
Section 6.3.	Proxy Statement/Prospectus; S-4 Registration Statement; Information Supplied.	24
Section 6.4.	Stockholders and Warrantholders Meeting.	25
Section 6.5.	Filings; Other Actions; Notification.	25
Section 6.6.	Access to Information	26
Section 6.7.	Further Assurances	26
Section 6.8.	Commercially Reasonable Efforts	26
Section 6.9.	Indemnification; Directors’ and Officers’ Insurance.	26
Section 6.10.	Affiliates	27
Section 6.11.	Certain Litigation	27
Section 6.12.	Confidentiality	28
Section 6.13.	Public Disclosure	28
Section 6.14.	Listing	28
Section 6.15.	Section 16 Matters	28
Section 6.16.	Trust Account.	28
Section 6.17.	Share Purchases	29
Section 6.18.	Amended and Restated Certificate of Incorporation	29
Section 6.19.	REIT Election	29

- ii -

Section 6.20.	Ancillary Agreements	29
Section 6.21.	Asset Acquisition	30
Section 6.22.	Resignation Letters	30
Section 6.23.	Public Offerings	30
Section 6.24.	Parent Share Contribution	30
Section 6.25.	Registration Statement	30
Section 6.26.	Restrictions	30
ARTICLE VII	CONDITIONS	30
Section 7.1.	Conditions to Each Party’s Obligation to Effect the Merger	30
Section 7.2.	Conditions to the Obligations of the Company	31
Section 7.3.	Conditions to the Obligations of Parent and Merger Sub	32
ARTICLE VIII	TERMINATION	32
Section 8.1.	Termination	32
Section 8.2.	Effect of Termination	33
Section 8.3.	Termination Fee.	34
ARTICLE IX	MISCELLANEOUS	34
Section 9.1.	Non-survival of Representations and Warranties	34
Section 9.2.	Notices	34
Section 9.3.	Entire Agreement	35
Section 9.4.	Waiver	35
Section 9.5.	Amendment	35
Section 9.6.	No Third-Party Beneficiary	35
Section 9.7.	Assignment; Binding Effect	36
Section 9.8.	CONSENT TO JURISDICTION AND SERVICE OF PROCESS	36
Section 9.9.	Specific Performance	36
Section 9.10.	Invalid Provisions	36
Section 9.11.	GOVERNING LAW	36
Section 9.12.	Counterparts	36
Section 9.13.	Expenses	37
Section 9.14.	Enforcement	37

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EXHIBITS:

EXHIBIT A Advisor Agreements

EXHIBIT B Form of Amended and Restated Certificate of Incorporation

EXHIBIT C Investment Criteria for Asset Acquisitions

EXHIBIT D Form of Management Agreement

EXHIBIT E Sponsors Voting and Support Agreements

EXHIBIT F Form of Warrant Amendment Agreement

EXHIBIT G Form of Affiliates Letter

EXHIBIT H Escrow Termination Agreement

EXHIBIT I Directors and Officers of Parent

EXHIBIT J Letter Amendment Agreements

EXHIBIT K Form of Sub-Management Agreement

EXHIBIT L Voting Agreement

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of June 11, 2009, among Pine River Capital Management L.P., a Delaware limited partnership (“Pine River”), Two Harbors Investment Corp., a Maryland corporation (“Parent”), Two Harbors Merger Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Capitol Acquisition Corp., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, the boards of directors of each of Parent, Merger Sub and the Company have unanimously approved the merger of Merger Sub with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, the boards of directors of each of Parent, Merger Sub and the Company have unanimously determined that the Merger is fair to and in the best interests of their respective stockholders;

WHEREAS, the board of directors of the Company has unanimously approved the Amended and Restated Certificate of Incorporation (the “Proposed Charter Amendment”);

WHEREAS, prior to or simultaneously with the execution of this Agreement, and as a condition and inducement to Parent and Pine River to enter into this Agreement, the Company and the officers, directors and stockholders of the Company set forth on Attachment A hereto (each a “Sponsor” and collectively the “Sponsors”) are entering into the Sponsors Voting and Support Agreements pursuant to which the Sponsors have, among other things, agreed, upon the terms and subject to the conditions thereof, to vote their Shares, if any, acquired after the IPO in favor of adopting this Agreement;

WHEREAS, prior to or simultaneously with the execution of this Agreement, CLA Founders LLC (the “Sponsor Vehicle”) and Parent are entering into a Sub-Management Agreement, pursuant to which, the Sponsor Vehicle shall be engaged as a sub-advisor to the Manager, to assist the Manager in providing advisory services to the REIT pursuant to the Management Agreement; and

WHEREAS, for federal income tax purposes, it is intended that the Merger qualify as a contribution governed by Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”).

NOW, THEREFORE, the parties hereby agree as follows

ARTICLE I

DEFINITIONS

Section 1.1. Defined Terms. Capitalized terms used but not otherwise defined herein shall have the meanings set forth below:

“Acquisition Proposal” means any inquiry, proposal, offer or expression of interest by any Person (other than Parent and its Affiliates) relating to a merger, consolidation, share exchange, reorganization, recapitalization, liquidation, dissolution or other similar transaction or business combination involving the Company, or the issuance of any securities (or rights to acquire securities) of the Company, or any similar transaction, or any agreement, arrangement or understanding requiring the Company to abandon, terminate or fail to consummate the Transactions.

“Advisor Agreements” means the economic agreements entered into among the Company and its financial advisors and attached hereto as Exhibit A.

“Affiliates” shall mean any Person that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by Contract or otherwise.

“Agreement” has the meaning set forth in the Preamble.

“Alternative Transaction” means the sale, transfer or other disposition, directly or indirectly, including through an asset sale, stock sale or issuance, merger, amalgamation or other similar transaction, of all or a substantial portion of the Company, in a transaction or a series of transactions with one or more Persons (other than Parent and its Affiliates), excluding in each case, (i) any liquidation of the Company or similar transaction or (ii) any one or more transactions pursuant to arrangements contemplated by Section 6.17.

“Amended and Restated Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company substantially in the form attached hereto as Exhibit B.

“Ancillary Agreements” means the Warrant Amendment Agreement, the Sponsors Voting and Support Agreements, the Advisor Agreements, the Management Agreement, the Escrow Termination Agreement, the Registration Rights Agreement, the Sub-Management Agreement, the Voting Agreement and the Letter Amendment Agreements.

“Balance Sheet” has the meaning set forth in Section 4.6.

“Business Combination” shall mean the Business Combination (as defined in the Proposed Charter Amendment) between the Company, Parent and Merger Sub contemplated by this Agreement.

“Business Day” means a day on which the banks are opened for business (Saturdays, Sundays, statutory and civic holidays excluded) in New York, New York, United States.

“Bylaws” has the meaning set forth in Section 2.3(b).

“Certificate of Merger” has the meaning set forth in Section 2.2.

“Change in Recommendation” means (i) the withdrawal of, or modification in a manner adverse to Parent of, the Company Recommendation or (ii) the recommendation by the Company’s board of directors or any committee thereof to the Company’s Stockholders to vote in favor of any Acquisition Proposal.

“Closing” has the meaning set forth in Section 2.2.

“Closing Date” has the meaning set forth in Section 2.2.

“Code” has the meaning set forth in the Recitals.

“Company” has the meaning set forth in the Preamble.

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“Company Contracts” means: (a) any “material contract” as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC; (b) all Contracts to which the Company is a party or by which any of the Company’s assets may be bound, subjected or affected, which either (i) creates or imposes a liability greater than $100,000 and (ii) may not be cancelled by the Company on 30 days’ or less prior notice; (c) all Contracts concerning a partnership, joint venture, joint development or other cooperation arrangement; (d) all material Contracts with any Governmental Authority; (e) all material Contracts relating to or evidencing Indebtedness of the Company (or the creation, incurrence, assumption, securing or guarantee thereof); (f) all material Contracts for the purchase of any business, corporation, partnership, joint venture, association or other business organization or any division, material assets, material operating unit or material product line thereof; (g) all material Contracts relating to employment, change of control, retention, severance or material consulting or advising arrangements; (h) all Contracts relating to securities of the Company; and (i) all Contracts which are otherwise material to the Company taken as a whole (other than the Transaction Documents and other contracts contemplated by this Agreement) which are not described in any of the categories specified above.

“Company Disclosure Schedule” has the meaning set forth in Article IV.

“Company Recommendation” means the recommendation of the Company’s board of directors to the Company Stockholders to grant the Company Stockholder Approval.

“Company Stockholder Approval” means (i) the affirmative vote of a majority of the outstanding Shares entitled to vote thereon at the Company Stockholders Meeting in person or by proxy to approve the Proposed Charter Amendment, (ii) the affirmative vote of a majority of the outstanding Shares entitled to vote thereon at the Company Stockholders Meeting in person or by proxy to adopt this Agreement, (iii) the affirmative vote of a majority of the outstanding IPO Shares voted at the Company Stockholders Meeting in Person or by proxy to approve the Business Combination and (iv) any other approvals of the Company Stockholders necessary to approve this Agreement and the Transactions.

“Company Stockholders” means holders of Shares.

“Company Stockholders Meeting” has the meaning set forth in Section 6.4(a).

“Company Warrantholder Approval” means the approval by proxy or written consent of a majority of the Company Warrantholders to the Warrant Amendment Agreement.

“Company Warrantholders” means holders of Warrants.

“Company Warrantholders Meeting” has the meaning set forth in Section 6.4(a).

“Confidentiality Agreement” has the meaning set forth in Section 6.12.

“Contract” has the meaning set forth in Section 4.4(b).

“Conversion Consideration” has the meaning set forth in Section 3.2.

“Conversion Price” has the meaning set forth in Section 3.2.

“Converting Shares” has the meaning set forth in Section 3.2.

“Converting Stockholder” has the meaning set forth in Section 3.2.

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“Costs” has the meaning set forth in Section 6.9(a).

“DGCL” has the meaning set forth in Section 2.1.

“D&O Insurance” has the meaning set forth in Section 6.9(b).

“Effective Time” has the meaning set forth in Section 2.2.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” of any Person means any other Person that, together with such Person, would be treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“Escrow Termination Agreement” means the termination agreement entered into among the Company, Continental Stock Transfer & Trust Company and Citigroup Global Markets Inc. and attached hereto as Exhibit H.

“Exchange Act” has the meaning set forth in Section 4.4(a).

“Exchange Ratio” has the meaning set forth in Section 3.1(a).

“Expenses” means the out-of-pocket fees and expenses of a party, including related to its advisors, counsel and accountants, incurred by the party or on its behalf in connection with the Transactions, including the out-of-pocket expenses related to the preparation, printing, filing and mailing of the S-4 Registration Statement and the Proxy Statement/Prospectus and the solicitation of Company Stockholder Approval.

“GAAP” means United States generally accepted accounting principles.

“Governmental Authority” has the meaning set forth in Section 4.4(a).

“Indebtedness” means, with respect to any Person on any date of determination (without duplication): (a) the principal of, interest on and premium (if any) in respect of indebtedness of such Person for borrowed money; (b) the principal of, interest on and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) the principal component of all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable and such obligation is satisfied within 90 days of incurrence); (d) capitalized lease obligations of such Person; (e) the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables); and (f) the principal component of Indebtedness of other Persons to the extent guaranteed by such Person.

“Indemnified Parties” has the meaning set forth in Section 6.9(a).

“Investment Criteria” means the investment criteria set forth on Exhibit C, pursuant to which Parent will acquire mortgages and mortgage-backed securities.

“IPO” means the initial public offering of the Company, effected on November 14, 2007.

“IPO Shares” means the Shares issued in the IPO (excluding, for the avoidance of doubt, Shares issued to the Sponsors prior to the IPO).

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“Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended, unless expressly specified otherwise.

“Letter Agreements” means each of the letter agreements dated November 1, 2007 between the Company, Citigroup Global Markets Inc. and each of the Sponsors, respectively.

“Letter Amendment Agreement” means each of the amendments to the Letter Agreements attached hereto as Exhibit J.

“Liability” means any and all claims, debts, liabilities, obligations and commitments of whatever nature, whether known or unknown, asserted or unasserted, fixed, absolute or contingent, matured or unmatured, accrued or unaccrued, liquidated or unliquidated or due or to become due, and whenever or however arising (including those arising out of any Contract or tort, whether based on negligence, strict liability or otherwise) and whether or not the same would be required by GAAP to be reflected as a liability in financial statements or disclosed in the notes thereto.

“Lien” means any lien, charge, pledge, security interest, claim or other encumbrance.

“Management Agreement” means the management agreement to be entered into between Parent and an Affiliate of Pine River substantially in the form attached hereto as Exhibit D.

“Manager” means PRCM Advisers LLC, a Delaware limited liability company.

“Material Adverse Effect” means, with respect to any Person, an event, circumstance, change or effect that has had, or is reasonably likely to have, (a) a material adverse effect on the business, assets, condition (financial or otherwise) or results of operations of such Person and its subsidiaries taken as a whole other than any event, circumstance, change or effect resulting from (i) general economic, market or political conditions, (ii) matters generally affecting the industries or market sectors in which such Person operates, (iii) the announcement or expectation of the Transactions, (iv) any of the requirements or limitations imposed on such Person pursuant to this Agreement or the other Transaction Documents, (v) changes in Law, (vi) changes in GAAP, (vii) acts of war or terrorism, (viii) fluctuations in the share price of such Person’s common stock, except, in the case of the foregoing clauses (i), (ii) and (vii) only, to the extent such changes do not have a materially disproportionate impact on such Person and its subsidiaries, taken as a whole, relative to other companies in the industries in which such Person and its subsidiaries conduct their business or (b) a material adverse effect on the ability of such Person to perform its obligations under this Agreement or any of the other Transaction Documents, or that would prevent or materially delay the consummation of the Transactions.

“Merger” has the meaning set forth in the Recitals.

“Merger Consideration” has the meaning set forth in Section 3.1(a).

“Merger Sub” has the meaning set forth in the Preamble.

“NYSE” means the New York Stock Exchange.

“NYSE Amex” means NYSE Amex Equities.

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“Parent” has the meaning set forth in the Preamble.

“Parent Shares” has the meaning forth in Section 3.1(a).

“Permits” has the meaning set forth in Section 4.10.

“Permitted Liens” means (i) Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings (if then appropriate), (ii) mechanics’, carriers’, workers’ and other similar Liens arising or incurred in the ordinary course of business, and (iii) other Liens that individually or in the aggregate with other title defects, do not materially impair the value of the property subject to such Liens or other such title defect or the use of such property in the conduct of the business.

“Person” means any individual, sole proprietorship, firm, corporation (including any non-profit corporation and public benefit corporation), general or limited partnership, limited liability partnership, joint venture, limited liability company, estate, trust, association, organization, labor union, institution, entity or Governmental Authority, including any successor (by merger or otherwise) of such Person.

“Pine River” has the meaning set forth in the Preamble.

“Proposed Charter Amendment” has the meaning set forth in the Recitals.

“Proxy Statement/Prospectus” has the meaning set forth in Section 6.3(a).

“Public Stockholders” means the holders of the IPO Shares.

“Registration Rights Agreement” means the registration rights agreement containing customary terms and conditions to be entered into between the Parent, the Sponsors and Pine River.

“REIT” has the meaning set forth in Section 6.19.

“S-4 Registration Statement” has the meaning set forth in Section 6.3(a).

“SEC” means the Securities and Exchange Commission.

“SEC Reports” has the meaning set forth in Section 4.5(a).

“Securities Act” has the meaning set forth in Section 3.3.

“Shares” has the meaning set forth in Section 3.1(a).

“Sponsor” has the meaning set forth in the Recitals.

“Sponsor Vehicle” has the meaning set forth in the Recitals.

“Sponsor Voting and Support Agreements” means the agreements entered into between the Company and the Sponsors and attached hereto as Exhibit E.

“Sub-Management Agreement” means the Sub-Management Agreement to be entered into between the Manager, Pine River and the Sponsor Vehicle substantially in the form attached hereto as Exhibit K.

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“Superior Proposal” means any bona fide written Acquisition Proposal pursuant to which a third party would own 50% or more of the assets, revenue or net income of the Company, or in the case of the issuance of securities (or rights to acquire securities) of the Company, such third party would represent 50% or more of the voting power in the Company, on terms that the board of directors of the Company determines in its good faith judgment are more favorable to the Company’s stockholders than the Transactions (taking into account the various legal, financial and regulatory aspects of the proposal and the Person making the proposal and any changes to the Transactions proposed by Parent or Pine River in response to the receipt by the Company of such proposal) and that is not subject to any material contingency unless, in the good faith judgment of the board of directors of the Company, such contingency is reasonably capable of being satisfied.

“Surviving Company” has the meaning set forth in Section 2.1.

“Tax” means any federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any governmental authority or any obligation to pay taxes imposed on any entity for which a party to this Agreement is liable as a result of any indemnification provision or other Contractual obligation.

“Tax Return” means any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

“Termination Date” has the meaning set forth in Section 8.1(b)(ii).

“Transaction Documents” means this Agreement, including all Schedules and Exhibits hereto, including the Company Disclosure Schedules, and the Ancillary Agreements.

“Termination Fee” has the meaning set forth in Section 8.3 (a).

“Transactions” means the transactions contemplated by the Transaction Documents.

“Trust Account” means the trust account established by the Company in connection with the consummation of the IPO and into which the Company deposited a designated portion of the net proceeds from the IPO.

“Trust Agreement” means the Investment Management Trust Agreement dated November 8, 2007 between Continental Stock Transfer & Trust Company and the Company.

“Voting Agreement” means the Voting Agreement between the Company and Pine River attached hereto as Exhibit L.

“Warrant” has the meaning set forth in Section 4.2.

“Warrant Amendment Agreement” means the warrant amendment agreement to be entered into between the Company and Continental Stock Transfer & Trust Company substantially in the form attached hereto as Exhibit F.

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Section 1.2. Interpretation.

(a) When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated.

(b) The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(c) The parties have participated jointly in negotiating and drafting this Agreement. If an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

(d) The words “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation.”

(e) The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

(f) All terms defined in this Agreement have their defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein.

(g) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.

(h) If any action is to be taken by any party hereto pursuant to this Agreement on a day that is not a Business Day, such action shall be taken on the next Business Day following such day.

(i) References to a Person are also to its permitted successors and assigns.

(j) The use of “or” is not intended to be exclusive unless expressly indicated otherwise.

(k) “Reasonable best efforts” or similar terms shall not require the waiver of any rights under this Agreement.

(l) A “subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

(m) The term “ordinary course of business” (or similar terms) shall be deemed to be followed by the words “consistent with past practice.

ARTICLE II

THE MERGER

Section 2.1. The Merger. Upon the terms and subject to the conditions set forth herein and in accordance with the Delaware General Corporation Law (the “DGCL”), at the Effective Time, Merger Sub shall be merged with and into the Company, the separate existence of Merger Sub shall thereupon cease and the Company shall continue as the surviving corporation (the “Surviving Company”) and a wholly owned subsidiary of Parent. The Merger shall have the effects set forth in the DGCL.

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Section 2.2. Effective Time; Closing. As promptly as practicable (but in no event more than two Business Days) after the satisfaction or waiver of the conditions to the Merger set forth in Article VII (other than conditions that by their nature are to be satisfied at the Closing, but subject to such conditions), the Surviving Company shall (i) file in the office of the Secretary of State of the State of Delaware, a certificate of merger (the “Certificate of Merger”) meeting the requirements of the DGCL and (ii) execute, acknowledge, deliver, file and/or record all such other instruments, and take all such other actions, as may be required in order to cause the Merger to become effective in accordance with the provisions of the DGCL. The date and time on which the Merger becomes effective in accordance with the applicable provisions of the DGCL is hereinafter referred to as the “Effective Time.” Prior to such filing, a closing (the “Closing”) shall be held at the offices of Graubard Miller, The Chrysler Building, 405 Lexington Avenue, New York, New York. The date of the Closing is referred to as the “Closing Date.”

Section 2.3. Articles of Incorporation and Bylaws.

(a) The certificate of incorporation of Merger Sub as in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Company until amended in accordance with the DGCL.

(b) The bylaws of Merger Sub as in effect immediately prior to the Effective Time (“Bylaws”) shall be the bylaws of the Surviving Company until amended in accordance with the DGCL.

Section 2.4. Directors and Officers.

(a) The board of directors of Parent will take all action necessary to increase the size of the board of directors to seven directors and shall elect to the board of directors of Parent the persons listed on Exhibit I and the remaining directors of Parent not designated to remain on Parent’s board of directors after the Effective Time shall resign from Parent’s board of directors, in each case effective as of the Effective Time.

(b) The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Company and the officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Company, in each case until duly removed or replaced in accordance with the Bylaws of the Surviving Company and the DGCL.

ARTICLE III

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT

CORPORATIONS; EXCHANGE OF CERTIFICATES

Section 3.1. Effect on Capital Stock and Warrants. As of the Effective Time, by virtue of the Merger and without any action on the part of any holder thereof:

(a) each issued and outstanding share of common stock, par value $0.0001 per share, of the Company (the “Shares”) (other than Converting Shares and any Shares to be cancelled in accordance with Section 3.1(c) hereof) shall be converted into the right to receive one (the “Exchange Ratio”) fully paid and nonassessable share of common stock, par value $0.01 per share, of Parent (the “Parent Shares”) (the “Merger Consideration”);

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(b) all such Shares shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration or the Conversion Consideration, as applicable;

(c) (i) each Share that is owned by the Company (other than Shares held either in a fiduciary or agency capacity that are beneficially owned by third parties), (ii) each Share that is owned by Parent or Merger Sub (other than Shares held either in a fiduciary or agency capacity that are beneficially owned by third parties), and (iii) each Share that is owned by a Sponsor and that was acquired by such Sponsor prior to the IPO shall be transferred to the Company and shall be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

(d) each issued and outstanding share of common stock of Merger Sub shall be converted into and become one fully paid and nonassessable share of common stock of the Surviving Company; and

(e) subject to the Warrant Amendment Agreement, each unexercised and unexpired Warrant to purchase Shares of the Company which is outstanding immediately prior to the Effective Time shall automatically become exercisable for the kind and amount of securities which the holder of a Warrant would have owned immediately after the Effective Time if such holder had exercised the Warrant immediately before the Effective Time.

Section 3.2. Converting Shares. Each Company Stockholder who at the Company Stockholder Meeting votes against the Business Combination (each, a “Converting Stockholder”) may, contemporaneously with such vote, demand that the Company convert its Shares (the “Converting Shares”) into cash. To perfect such conversion, each Converting Stockholder must deliver its certificate to Continental Stock Transfer & Trust Company, as trustee for the Trust Account, physically or electronically using Depository Trust Company’s DWAC (Deposit Withdrawal at Custodian) System at any time up to the Company Stockholders Meeting. If so demanded and properly perfected, the Company shall, promptly after the Closing, convert such Converting Shares into cash at a per share conversion price (the “Conversion Price”), calculated as of two Business Days prior to the Closing, equal to the quotient determined by dividing (A) the amount then held in the Trust Account, by (B) the total number of IPO Shares then outstanding (the “Conversion Consideration”). The Converting Shares shall thereafter be cancelled.

Section 3.3. No Further Ownership Rights in Shares. All Conversion Consideration delivered upon the surrender of certificates in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares theretofore represented by such certificates. Until surrendered as contemplated by this Section 3.3, each certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon surrender the Conversion Consideration. No interest will be paid or will accrue on the cash or any other amounts payable upon the surrender of any certificate.

Section 3.4. Stock Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Company of the Shares that were outstanding immediately prior to the Effective Time.

Section 3.5. Affiliates. Notwithstanding anything to the contrary herein, no Parent Shares or Warrants shall be delivered to a Person who may be deemed an “affiliate” of the Company for purposes of Rule 145 under the Securities Act of 1933 (together with the rules and regulations thereunder, the “Securities Act”) until such Person has executed and delivered an agreement, substantially in the form of Exhibit G, to Parent.

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Section 3.6. Certain Adjustments. If after the date hereof and on or prior to the Effective Time the outstanding Shares or Parent Shares shall be changed by reason of any reclassification, recapitalization, split-up, combination or exchange of shares, or any dividend payable in stock or other securities shall be declared thereon with a record date within such period, or any similar event shall occur, the Exchange Ratio shall be appropriately adjusted.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Merger Sub that, except as set forth in the SEC Reports filed with the SEC and publicly available not later than two Business Days prior to the date of this Agreement or in the disclosure schedule delivered by the Company to Parent prior to the execution and delivery of this Agreement (it being agreed that any disclosure set forth on any particular section of the Company Disclosure Schedule shall be deemed disclosed in another section of the Company Disclosure Schedule if the relevance of such disclosure to such other section is reasonably apparent)(the “Company Disclosure Schedule”):

Section 4.1. Organization; Qualification.

(a) The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to own, license, use, lease and operate its assets and properties and to carry on its business as it is now being conducted.

(b) The Company is duly qualified or licensed to do business and in good standing in each jurisdiction in which the assets or property owned, licensed, used, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except in such jurisdictions where the failure to be so duly qualified or licensed and in good standing has not had and would not reasonably be expected to have a Material Adverse Effect on the Company.

Section 4.2. Capitalization. The authorized capital stock of the Company consists of 75,000,000 Shares and 1,000,000 shares of preferred stock. At the close of business on the date of this Agreement, (i) 32,811,257 Shares were issued and outstanding, (ii) no shares of preferred stock were issued and outstanding and (iii) 33,249,000 warrants entitling the holder to purchase one Company Share per warrant (each, a “Warrant”) were issued and outstanding. All outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable, and have not been issued in violation of any preemptive or similar rights. Except as set forth above in this Section 4.2, there are no outstanding (x) shares of capital stock or other voting securities of the Company, (y) securities of the Company convertible into or exchangeable for shares of capital stock or other securities of the Company or (z) subscriptions, options, warrants, puts, calls, phantom stock rights, stock appreciation rights, stock-based performance units, agreements, understandings, claims or other commitments or rights of any type granted or entered into by the Company relating to the issuance, sale, repurchase or transfer of any securities of the Company or that give any Person or entity the right to receive any economic benefit or right similar to or derived from the economic benefits and rights of securities of the Company. Except with respect to the right of Converting Stockholders to be paid the Conversion Price, there are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any securities of the Company or to vote or to dispose of any shares of the capital stock of the Company.

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Section 4.3. Authority; Approval.

(a) The Company has all requisite power and authority to execute and deliver this Agreement, the Transaction Documents to which it is a party and to perform and consummate the Transactions. The execution, delivery and performance of this Agreement, the Transaction Documents to which it is a party and the consummation by the Company of the Transactions have been duly authorized by all necessary corporate action on the part of the Company and no corporate or other proceedings on the part of the Company are necessary to authorize this Agreement, the Transaction Documents to which it is a party or to consummate the Transactions, other than (i) the Company Stockholder Approval and Company Warrantholder Approval and (ii) the filing of the Proposed Charter Amendment with the Secretary of State of Delaware. This Agreement has been duly executed and delivered by the Company and, assuming due execution and delivery by Parent, Merger Sub and Pine River, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(b) The board of directors of the Company, by resolution duly adopted at a meeting duly called and held has (i) determined that this Agreement and the Transactions are fair and in the best interest of the Company and the Company Stockholders, (ii) adopted a resolution approving this Agreement, setting forth the Proposed Charter Amendment and declaring the advisability of this Agreement and the Proposed Charter Amendment, (iii) directed that this Agreement, the Proposed Charter Amendment and the Business Combination be submitted to the Company Stockholders for consideration at the Company Stockholders Meeting and (iv) resolved to make the Company Recommendation.

Section 4.4. Consents and Approvals; No Violations.

(a) The execution, delivery and performance by the Company, of this Agreement, the Transaction Documents to which it is a party and the consummation by the Company of the Transactions do not and will not require any filing or registration with, notification to, or authorization, permit, consent or approval of, or other action by or in respect of, any foreign or domestic governmental body, self-regulatory organization, court or arbiter, agency, commission, official or regulatory or other authority (collectively, “Governmental Authority”) other than (i) the filing of the Certificate of Merger as contemplated by Article II hereof, (ii) compliance with any applicable requirements of the Securities and Exchange Act of 1934 (together with the rules and regulations thereunder, the “Exchange Act”), (iii) compliance with any applicable requirements of the NYSE Amex and (iv) the filing of the Amended and Restated Certificate of Incorporation as contemplated by Section 6.18 hereof.

(b) The execution, delivery and performance by the Company, of this Agreement, the Transaction Documents to which it is a party and the consummation by the Company, of the Transactions do not and will not (i) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation, acceleration or loss of benefits or the creation or acceleration of any right or obligation under or result in the creation of any Lien upon any of the properties or assets of the Company under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, loan, credit agreement, lease, license, permit, concession, franchise, purchase order, sales order contract, agreement or other instrument, understanding or obligation, whether written or oral (a “Contract”), to which the Company is a party or by which any of its properties or assets may be bound or (ii) violate any judgment, order, writ, preliminary or permanent injunction or decree or any statute, law, ordinance, rule or regulation of any Governmental Authority applicable to the Company or any of its properties or assets, except in the case of clauses (i) or (ii) for violations, breaches or defaults that would not reasonably be

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expected to have a Material Adverse Effect on the Company. The consummation by the Company of the Transactions do not and will not conflict with or result in any breach of any provision of the Amended and Restated Certificate of Incorporation.

Section 4.5. SEC Reports; Financial Statements and Sarbanes-Oxley Act.

(a) The Company has timely filed all required registration statements, reports, schedules, forms, statements and other documents required to be filed by it with the SEC since July 24, 2007 (collectively, as they have been amended since the time of their filing and including all exhibits thereto, the “SEC Reports”). None of the SEC Reports, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements (including, in each case, the notes and schedules thereto) included in the SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the financial position of the Company as of the respective dates thereof and the results of their operations and cash flows for the respective periods then ended.

(b) The Company has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To the Company’s knowledge, such disclosure controls and procedures are effective in timely alerting the Company’s principal executive officer and principal financial officer to material information required to be included in the Company’s periodic reports required under the Exchange Act.

(c) The Company has established and maintained a system of internal controls. To the Company’s knowledge, such internal controls are sufficient to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP.

(d) There are no outstanding loans or other extensions of credit made by the Company to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company. The Company has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

Section 4.6. Absence of Undisclosed Liabilities. The Company has no Liabilities of any kind or character except for Liabilities (i) in the amounts set forth or reserved on the December 31, 2008 Company balance sheet or the notes thereto, as included in the Form 10-K the Company filed with the SEC on March 16, 2009 (the “Balance Sheet”), (ii) arising after December 31, 2008 in the ordinary course of business, (iii) incurred in connection with the Transactions or (iv) which are not, individually or in the aggregate, material. Section 4.6 of the Company Disclosure Schedule lists all Liabilities incurred by the Company since March 31, 2009.

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Section 4.7. Absence of Certain Changes or Events.

(a) Since December 31, 2008, the Company has conducted its business only in the ordinary course in all material respects and there has not been a Material Adverse Effect on the Company.

(b) Since December 31, 2008, the Company has not taken any action which, if taken after the date hereof and prior to the Closing without the prior written consent of Parent, would violate Section 6.1(a) hereof.

Section 4.8. Contracts. Each Company Contract is valid, binding and enforceable against the Company and, to the knowledge of the Company, against each other party thereto in accordance with its terms, and is in full force and effect. The Company has performed all material obligations required to be performed by it to date under, and is not in material default or delinquent in performance or any other respect (claimed or actual) in connection with, any Company Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default thereunder. To the knowledge of the Company, no other party to any Company Contract is in material default in respect thereof, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, except in each case as would not reasonably be expected to have a Material Adverse Effect on the Company.

Section 4.9. Litigation. There are no material suits, claims, actions, proceedings or investigations pending or, to the knowledge of the Company, threatened, before any Governmental Authority of any nature, brought by or against any of the Company or, to the knowledge of the Company, any of its respective officers or directors involving or relating to the Company or the assets, properties or rights of the Company or the Transactions. There is no material judgment, decree, injunction, rule or order of any Governmental Authority of any nature outstanding or, to the knowledge of the Company, threatened against the Company.

Section 4.10. Permits; Compliance with Applicable Law. The Company holds all permits, licenses, authorizations, certificates, variances, exemptions, orders and approvals of all Governmental Authorities necessary for the lawful conduct of its business as presently conducted and to own its assets and properties (the “Permits”), except for failures to hold such Permits that would not reasonably be expected to have a Material Adverse Effect on the Company. The Company is in compliance with the terms of each Permit, except where the failure so to comply would not reasonably be expected to have a Material Adverse Effect on the Company. The businesses of the Company has not been and is not being conducted in violation of any Law except for violations that would not reasonably be expected to have a Material Adverse Effect on the Company. No investigation or review by any Governmental Authority with respect to the Company is pending or, to the best knowledge of the Company, threatened, nor has any Governmental Authority indicated an intention to conduct any such investigation or review, other than, in each case, where the outcome would not reasonably be expected to have a Material Adverse Effect on the Company.

Section 4.11. Tax Matters.

(a) All U.S. federal and state income Tax Returns and all other material Tax Returns required to be filed with any taxing authority by, or with respect to the Company have been filed in accordance with all applicable law, and such Tax Returns are true, correct and complete in all material respects. The Company has timely paid all Taxes shown as due and payable on such Tax Returns or that are otherwise due. The Company has made provision for all material Taxes payable by it for which no Tax Return has yet been filed. The Balance Sheet reflects an adequate reserve for all material Taxes payable by the Company for all taxable periods and portions thereof through the date of such Balance Sheet.

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(b) There is no action, suit, proceeding, audit or claim now pending or, to the knowledge of the Company, threatened against or with respect to the Company in respect of any Tax and no taxing authority has given written notice of the commencement of any audit, examination or deficiency action with respect to any such Taxes.

(c) The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party. The Company has not made any payments, is not obligated to make any payments and is not a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 162(m) or 280G of the Code.

(d) There are no outstanding Contracts or waivers extending the statutory period of limitations applicable to any claim for, or the period for the collection or assessment of, material Taxes of the Company due for any taxable period.

(e) The Company has not received written notice of any claim, and, to the knowledge of the Company, no claim has ever been made, by any taxing authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction.

(f) The Company has not requested, nor is the subject of or bound by, any private letter ruling, technical advise memorandum, closing agreement or similar ruling, memorandum or agreement with any taxing authority with respect to any material Taxes, nor is any such request outstanding.

(g) The Company has not participated in a “listed transaction,” as defined in Treasury Regulation § 1.6011-4(b)(2).

(h) The Company is not and has not been a United States real property holding corporation within the meaning of Code Section 897(c) at any time since its inception.

Section 4.12. Assets and Properties. The Company has valid title to or a valid leasehold interest in all of its material assets and properties (whether real, personal or mixed, or tangible) (including all assets and properties recorded on the Balance Sheet, other than assets and properties disposed of in the ordinary course of business since December 31, 2008), in each case free and clear of any Liens other than Permitted Liens.

Section 4.13. Transactions with Affiliates. Except as contemplated by the Transaction Documents, there are no Contracts or transactions between the Company and any of its Affiliates including the Sponsors and any of its employees, officers or directors.

Section 4.14. Employee Matters.

(a) The Company does not and is not required to, and has not and has never been required to, maintain, sponsor, contribute to, or administer any pension, retirement, savings, money purchase, profit sharing, deferred compensation, medical, vision, dental, hospitalization, prescription drug and other health plan, cafeteria, flexible benefits, short-term and long-term disability, accident and life insurance plan, bonus, stock option, stock purchase, stock appreciation, phantom stock, incentive and special compensation plan or any other employee or fringe benefit plan, program or contract and does not have any liability of any kind with respect to any of the foregoing (under ERISA or otherwise). The Company does not have any contract, plan or commitment, whether or not legally binding, to create any

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of the foregoing other than as contemplated by this Agreement. Neither the Company nor any of its ERISA Affiliates has, during any time in the six-year period preceding the Closing Date, contributed to, sponsored, maintained or administered any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is or was subject to Title IV of ERISA or Section 412 of the Code.

(b) The execution and delivery of this Agreement and the other Transaction Documents and the consummation of the Transactions will not (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any stockholder, director or employee of the Company or (ii) result in the acceleration of the time of payment or vesting of any such benefits.

Section 4.15. Required Votes of the Company’s Stockholders and Warrantholders. Other than the Company Stockholder Approval and Company Warrantholder Approval, no approval of the Company Stockholders or Company Warrantholders is required in connection with the Transactions.

Section 4.16. Trust Account.

(a) As of May 31, 2009, the Company has $259,078,472.17, including interest thereon, held in the Trust Account. Amounts in the Trust Account are invested in United States Government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended. The Company has performed all material obligations required to be performed by it to date under, and is not in material default or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default thereunder. There are no claims or proceedings pending with respect to the Trust Account. Since May 31, 2009, the Company has not released any money from the Trust Account.

(b) As of the Effective Time, the obligations of the Company to dissolve or liquidate shall terminate, and as of the Effective Time, the Company shall have no obligation whatsoever to dissolve and liquidate the assets of the Company by reason of the consummation of the Transactions, and following the Effective Time, no Company Stockholder shall be entitled to receive any amount from the Trust Account except to the extent such Company Stockholder is a Converting Stockholder.

Section 4.17. Brokers. No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company.

Section 4.18. Disclosure. No representation or warranty contained in this Agreement or any other Transaction Document, and no statement contained in the Company Disclosure Schedule or in any certificate, list or other writing furnished by the Company pursuant to this Agreement, contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained herein or therein, in the light of the circumstances under which they were made, not misleading.

Section 4.19. Section 203 of the DGCL. Prior to the date of this Agreement, the Company’s board of directors has taken all action necessary to ensure that the restrictions on business combinations contained in Section 203 of the DGCL will not apply with respect to or as a result of this Agreement, the Sponsors Voting and Support Agreements or the transactions contemplated hereby (including without limitation the Merger) and thereby.

Section 4.20. No Additional Representations. Except for the representations and warranties made by the Company in this Article IV or pursuant to the certificate to be delivered pursuant to Section 7.3(d), neither the Company nor any other person makes any representation or warranty with respect to the Company (or its business, operations, assets, liabilities, condition (financial or otherwise) or prospects).

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB AND PINE RIVER

Parent, Merger Sub and Pine River jointly and severally represent and warrant to the Company as follows:

Section 5.1. Organization. Each of Parent, Merger Sub and Pine River is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and has all requisite power and authority to own, license, use, lease and operate its assets and properties and to carry on its business as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not be reasonably expected to prevent or materially delay the consummation of the Merger.

Section 5.2. Capitalization.

(a) The authorized capital stock of Parent consists of 450,000,000 Parent Shares and 50,000,000 shares of preferred stock. At the close of business on the date of this Agreement, (i) 1,000 Parent Shares were issued and outstanding and (ii) no shares of preferred stock were issued and outstanding. All outstanding shares of capital stock of Parent have been duly authorized and validly issued and are fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. Except as set forth above in this Section 5.2(a) there are no outstanding (x) shares of capital stock or other voting securities of Parent, (y) securities of Parent convertible into or exchangeable for shares of capital stock or other securities of the Company or (z) subscriptions, options, warrants, puts, calls, phantom stock rights, stable appreciation rights, stock based performance units, agreements, understanding, claims or other commitments or rights of any type granted or entered into by Parent relating to the issuance, sale, repurchase or transfer of any securities of Parent or that give any Person or entity the right to receive any economic benefit or right similar to or derived from the economic benefits and rights of securities of Parent. There are no outstanding obligations of Parent to repurchase, redeem or otherwise acquire any securities of Parent or to vote or to dispose of any shares of the capital stock of Parent.

(b) The Parent Shares to be issued in the Merger will, upon such issuance, be validly issued, fully paid and non-assessable.

(c) The authorized capital stock of Merger Sub consists of 100 shares of common stock and no shares of preferred stock. At the close of business on the date of this Agreement, (i) 100 shares of common stock were issued and outstanding and (ii) no shares of preferred stock were issued and outstanding. All outstanding shares of capital stock of Merger Sub are owned beneficially and of record by Parent, have been duly authorized and validly issued and are fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. Except as set forth above in this Section 5.2(c) there are no outstanding (x) shares of capital stock or other voting securities of Merger Sub, (y) securities of Merger Sub convertible into or exchangeable for shares of capital stock or other securities of the Company or (z) subscriptions, options, warrants, puts, calls, phantom stock rights, stable appreciation rights, stock based performance units, agreements, understanding, claims or other commitments or rights of any type granted or entered into by Merger Sub relating to the issuance, sale, repurchase or transfer of any securities of Merger Sub or that give any Person or entity the right to receive

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any economic benefit or right similar to or derived from the economic benefits and rights of securities of Merger Sub. There are no outstanding obligations of Merger Sub to repurchase, redeem or otherwise acquire any securities of Merger Sub or to vote or to dispose of any shares of the capital stock of Merger Sub.

Section 5.3. Authority; Approval. Each of Parent, Merger Sub and Pine River has all requisite power and authority to execute and deliver this Agreement, the Transaction Documents to which it is a party and to perform and consummate the Transactions. The execution, delivery and performance of this Agreement, the Transaction Documents to which it is a party and the consummation of the Transactions have been duly authorized by all necessary corporate or other action on the part of Parent, Merger Sub and Pine River and no corporate or other proceedings on the part of Parent, Merger Sub or Pine River are necessary to authorize this Agreement, the Transaction Documents to which it is a party or to consummate the Transactions. No vote of Parent’s stockholders is required to approve this Agreement or the Transactions. This Agreement has been duly executed and delivered by Parent, Merger Sub and Pine River, as the case may be, and, assuming due execution and delivery by the Company, constitutes a valid and binding obligation of each of Parent, Merger Sub and Pine River enforceable against them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

Section 5.4. Consents and Approvals; No Violations.

(a) The execution, delivery and performance by Parent and Merger Sub of this Agreement, the Transaction Documents to which it is a party and the consummation by Parent and Merger Sub of the Transactions do not and will not require any filing or registration with, notification to, or authorization, permit, consent or approval of, or other action by or in respect of, any Governmental Authority other than (i) the filing of the Certificate of Merger as contemplated by Article II hereof, (ii) compliance with any applicable requirements of the Securities Act and the Exchange Act, (iii) compliance with any applicable requirements of the NYSE Amex and (iv) compliance with any state securities, takeover and “blue sky” laws.

(b) The execution, delivery and performance by Parent and Merger Sub of this Agreement the Transaction Documents to which it is a party and the consummation by Parent and Merger Sub of the Transactions do not and will not (i) conflict with or result in any breach of any provision of the certificate of incorporation or bylaws of Parent and Merger Sub, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation, acceleration or loss of benefits under, or result in the creation of any Lien upon any of the properties or assets of Parent or Merger Sub under, any of the terms, conditions or provisions of Contract to which Parent or Merger Sub is a party or by which any of their respective properties or assets may be bound or (iii) violate any judgment, order, writ, preliminary or permanent injunction or decree or any statute, law, ordinance, rule or regulation of any Governmental Authority applicable to Parent or Merger Sub, or any of their respective properties or assets, except in the case of clauses (ii) or (iii) for violations, breaches or defaults that would not reasonably be expected to prevent or materially delay the consummation of the Transactions.

Section 5.5. New Company/No Operations of Parent and Merger Sub. Parent was incorporated on May 21, 2009. Merger Sub was incorporated on May 22, 2009. Neither Parent (other than Merger Sub) nor Merger Sub have any subsidiaries or otherwise own any equity interests in any Person. Since their respective inceptions, neither Parent nor Merger Sub has engaged in any activity or entered into any Contract, other than such actions incident to (i) its organization and (ii) the preparation, negotiation and execution of this Agreement, the Ancillary Agreements, and the Transactions. Neither

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Parent nor Merger Sub has had any operations or generated any revenues or has any liabilities other than those incurred in connection with the foregoing and in association with the Transactions as provided in this Agreement.

Section 5.6. Litigation. There are no material suits, claims, actions, proceedings or investigations pending or, to the knowledge of Parent or Pine River, threatened, before any Governmental Authority of any nature, brought by or against any of Parent, Merger Sub or Pine River or, to the knowledge of Parent or Pine River, any of its respective officers or directors involving or relating to Parent or the assets, properties or rights of Parent, Merger Sub or the Transactions. There is no material judgment, decree, injunction, rule or order of any Governmental Authority of any nature outstanding or, to the knowledge of Parent or Merger Sub, threatened against Parent or Merger Sub.

Section 5.7. Brokers. Other than the fees to be paid to Credit Suisse in connection with the Transaction pursuant to an engagement letter dated April 22, 2009, a complete and correct copy of which has been provided to the Company prior to the date hereof, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent, Merger Sub or Pine River.

Section 5.8. REIT.

(a) Parent’s taxable year will be the calendar year. As of June 30, 2009, Parent’s only asset will consist of (i) 100% of the outstanding shares of Merger Sub, and (ii) $1,000 held in a bank checking account of Parent. Prior to the Effective Time, Merger Sub has held no assets.

(b) Commencing with its taxable year ending December 31, 2009, Parent has been organized in a manner consistent with the requirements for qualification and taxation as a REIT under the Code and Parent intends to operate in a manner that will enable it to meet the requirements for qualification and taxation as a REIT under the Code.

Section 5.9. Tax Matters.

(a) All U.S. federal and state income Tax Returns and all other material Tax Returns required to be filed with any taxing authority by, or with respect to Parent and Merger Sub have been filed in accordance with all applicable law, and such Tax Returns are true, correct and complete in all material respects. Parent or Merger Sub has timely paid all Taxes shown as due and payable on such Tax Returns or that are otherwise due. Each of Parent and Merger Sub has made provision for all material Taxes payable by it for which no Tax Return has yet been filed.

(b) There is no action, suit, proceeding, audit or claim now pending or, to the knowledge of Parent, threatened against or with respect to Parent or Merger Sub in respect of any Tax and no taxing authority has given written notice of the commencement of any audit, examination or deficiency action with respect to any such Taxes.

(c) Each of Parent and Merger Sub has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party. Each of Parent and Merger Sub has not made any payments, is not obligated to make any payments and is not a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 162(m) or 280G of the Code.

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(d) There are no outstanding Contracts or waivers extending the statutory period of limitations applicable to any claim for, or the period for the collection or assessment of, material Taxes of Parent or Merger Sub due for any taxable period.

(e) Each of Parent and Merger Sub has not received written notice of any claim, and, to the knowledge of Parent, no claim has ever been made, by any taxing authority in a jurisdiction where Parent or Merger Sub does not file Tax Returns that Parent or Merger Sub is or may be subject to taxation by that jurisdiction.

(f) Each of Parent and Merger Sub has not requested, nor is the subject of or bound by, any private letter ruling, technical advise memorandum, closing agreement or similar ruling, memorandum or agreement with any taxing authority with respect to any material Taxes, nor is any such request outstanding.

(g) Each of Parent and Merger Sub has not participated in a “listed transaction,” as defined in Treasury Regulation § 1.6011-4(b)(2).

(h) Each of Parent and Merger Sub is not and has not been a United States real property holding corporation within the meaning of Code Section 897(c) at any time since its inception.

Section 5.10. No Additional Representations. Except for the representations and warranties made by Parent, Merger Sub and Pine River in this Article V or pursuant to the certificate to be delivered pursuant to Section 7.2(d), neither the Parent, Merger Sub, Pine River nor any other Person makes any representation or warranty with respect to Parent or Merger Sub.

ARTICLE VI

COVENANTS

Section 6.1. Conduct of the Parties.

(a) From the date hereof until the earlier to occur of the Effective Time or the termination of this Agreement pursuant to its terms, except as expressly permitted by this Agreement, consented to in writing by the Parent (which consent shall not be unreasonably withheld), or required by applicable Law or the rules and regulations of the NYSE Amex, the Company (i) shall conduct its business in the ordinary course, (ii) shall use commercially reasonable efforts to (x) preserve intact its present business organization and relationships with third parties, (y) maintain in effect all of its Permits and (z) keep available the services of its present directors, officers and employees and (iii) shall not:

(i) except in connection with the Proposed Charter Amendment, amend its certificate of incorporation or bylaws (whether by merger, consolidation or otherwise);

(ii) split, combine or reclassify any shares of capital stock or other equity securities of the Company or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the capital stock or other equity securities of the Company, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any capital stock or other equity securities of the Company;

(iii) (x) issue, deliver or sell, or authorize the issuance, delivery or sale of, any capital stock, warrant or other equity securities of the Company, or (y) amend any term of any capital stock or other equity securities of the Company (in each case, whether by merger, consolidation or otherwise);

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(iv) except as set forth in Section 6.17, acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, or businesses, other than in the ordinary course of business;

(v) sell, lease or otherwise transfer, or create or incur any Lien on, any assets, securities, properties, or businesses of the Company, other than in the ordinary course of business;

(vi) make any material loans, advances or capital contributions to, or investments in, any other Person;

(vii) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof;

(viii) enter into any hedging arrangements;

(ix) enter into or amend any Company Contract or enter into any agreement or arrangement that limits or otherwise restricts in any respect the Company, or any successor thereto or that could, after the Closing Date, limit or restrict in any respect Parent or the Company, from engaging or competing in any line of business, in any location or with any Person or, except in the ordinary course of business, otherwise waive, release or assign any material rights, claims or benefits of the Company;

(x) increase compensation, bonus or other benefits payable to any director, officer or employee of the Company;

(xi) change the Company’s methods of accounting, except as required by concurrent changes in Law or GAAP;

(xii) settle, or offer or propose to settle, any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company, including any litigation, arbitration, proceeding or dispute that relates to the Transactions;

(xiii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, materially amend any Tax Returns or file claims for material Tax refunds, enter any material closing agreement, settle any material Tax claim, audit or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or take any action (or fail to take any action) that could prevent Parent from qualifying as a REIT;

(xiv) take any action or omit to take any action that is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied;

(xv) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable the provisions of Section 203 of the DGCL or any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom; or

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(xvi) agree, resolve or commit to do any of the foregoing.

(b) From the date hereof until the earlier to occur of the Effective Time or the termination of this Agreement pursuant to its terms, except as expressly permitted by this Agreement, consented to in writing by the Company (which consent shall not be unreasonably withheld), or required by applicable Law, each of Parent and Merger Sub shall not:

(i) amend its certificate of incorporation or bylaws (whether by merger, consolidation or otherwise);

(ii) split, combine or reclassify any shares of capital stock or other equity securities of Parent or Merger Sub or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the capital stock or other equity securities of Parent or Merger Sub, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any capital stock or other equity securities of Parent or Merger Sub;

(iii) issue, deliver or sell, or authorize the issuance, delivery or sale of, any capital stock, warrant or other equity securities of Parent or Merger Sub, or amend any term of any capital stock or other equity securities of Parent or Merger Sub (in each case, whether by merger, consolidation or otherwise);

(iv) except as contemplated by this Agreement, acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, or businesses;

(v) sell, lease or otherwise transfer, or create or incur any Lien on, any assets, securities, properties, or businesses of Parent or Merger Sub;

(vi) make any loans, advances or capital contributions to, or investments in, any other Person;

(vii) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof;

(viii) enter into any hedging arrangements;

(ix) enter into or amend any material contract or enter into any agreement or arrangement that limits or otherwise restricts in any respect the Company, or any successor thereto or that could, after the Closing Date, limit or restrict in any respect Parent, Merger Sub or the Surviving Company, from engaging or competing in any line of business, in any location or with any Person or otherwise waive, release or assign any material rights, claims or benefits of Parent or Merger Sub;

(x) increase compensation, bonus or other benefits payable to any director, officer or employee of Parent;

(xi) change Parent’s or Merger Sub’s methods of accounting, except as required by concurrent changes in Law or GAAP;

(xii) settle, or offer or propose to settle, any material litigation, investigation, arbitration, proceeding or other claim involving or against Parent or Merger Sub, including any litigation, arbitration, proceeding or dispute that relates to the Transactions;

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(xiii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, materially amend any Tax Returns or file claims for material Tax refunds, enter any material closing agreement, settle any material Tax claim, audit or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability;

(xiv) take any action or omit to take any action that is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied;

(xv) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable the provisions of any state takeover law or state law (including without limitation the Maryland General Corporation Law) that purports to limit or restrict business combinations or the ability to acquire or vote shares, in each case to any individual or entity (other than Parent or Merger Sub), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom; or

(xvi) agree, resolve or commit to do any of the foregoing.

Section 6.2. No Solicitation. From the date hereof until the Effective Time:

(a) The Company shall, and shall cause its officers, directors, employees, representatives and agents, including the Sponsors, to, immediately cease any activities, discussions or negotiations with any parties that may be ongoing with respect to an Acquisition Proposal, and request the return or destruction of all confidential information regarding the Company provided to any such persons on or prior to the date of this Agreement pursuant to the terms of any confidentiality agreements or otherwise. The Company shall not, and shall cause its officers, directors, employees, representatives and agents, including the Sponsors, not to, directly or indirectly, (i) solicit, participate in, initiate or encourage (including by way of furnishing information), or take any other action designed or reasonably likely to facilitate or encourage any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal or (ii) participate in any discussions or negotiations (including by way of furnishing information) regarding any Acquisition Proposal; provided, however, that, at any time prior to the Company Stockholder Approval, in response to an Acquisition Proposal received by the Company (other than as a result of a material breach by the Company of this Section 6.2) after the date hereof that the board of directors of the Company determines in good faith, after consultation with its legal and financial advisors, may reasonably be expected to lead to a Superior Proposal, and subject to compliance with the following provisions of this Section 6.2, (x) furnish information with respect to the Company to the person making such Superior Proposal pursuant to a confidentiality agreement no less restrictive on the other party than the Confidentiality Agreement and (y) participate in discussions or negotiations regarding such Acquisition Proposal.

(b) Except as set forth in this Section 6.2, neither the board of directors of the Company nor any committee thereof shall (i) make or publicly propose to make a Change in Recommendation, (ii) approve or recommend or take no position with respect to, or publicly propose to approve or recommend or take no position with respect to, an Acquisition Proposal or (iii) cause the Company to enter into any agreement related to any Acquisition Proposal (other than a confidentiality agreement as contemplated by Section 6.2(a)). Notwithstanding the foregoing, if prior to the Company Stockholder Approval the board of directors of the Company determines in good faith, after consultation with outside counsel that it is required to do so to comply with its fiduciary duties to the Company Stockholders under applicable law, the board of directors of the Company may, provided that the Company has complied in all material respects with its obligations under this Section 6.2(b), in response to a Superior Proposal that was received by the Company after the date hereof, (x) make a Change in

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Recommendation or (y) in the event the Company enters into any agreement related to any Acquisition Proposal (other than a confidentiality agreement as contemplated by Section 6.2(a)) pursuant to (iii) above, terminate this Agreement, but in each such case only at a time that is after the third business day following Parent’s receipt of written notice advising Parent that the board of directors of the Company has received a Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the person making such Superior Proposal, and with regard to (y), only if the Company is in compliance in all material respects with Sections 6.2, 8.1(d) and 8.3 and simultaneously with taking such action it terminates this Agreement and also executes a definitive agreement to implement such Superior Proposal.

(c) The Company shall promptly advise Parent orally and in writing of any request for information or of any Acquisition Proposal, the material terms and conditions of such request or Acquisition Proposal and the identity of the person making such request or Acquisition Proposal. The Company will keep Parent reasonably informed on a reasonably current basis of any material change in the details (including amendments) of any such request or Acquisition Proposal. The Company will promptly provide Parent with any documents received from any such person and promptly provide Parent such information as it may reasonably request.

(d) Nothing contained in this Section 6.2 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14e-2 or Rule 14d-9 promulgated under the Exchange Act or from making any disclosure to the Company’s stockholders if, in the good faith judgment of the board of directors of the Company, after consultation with outside counsel, failure so to disclose would be inconsistent with applicable law; provided, however, that any Change in Recommendation included in such public disclosure shall be subject to Section 8.1(c).

(e) The parties hereto agree that irreparable damage would occur in the event that the provisions of this Section 6.2 were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed by the parties hereto that Parent shall be entitled to an immediate injunction or injunctions, without the necessity of proving the inadequacy of money damages as a remedy and without the necessity of posting any bond or other security, to prevent breaches of the provisions of this Section 6.2 and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, specific performance being the sole remedy with respect to this Section 6.2 if it is available. Without limiting the foregoing, it is understood that any violation of the restriction set forth above by any officer, director, employee, investment banker, attorney, accountant, consultant or other agent or advisor of the Company or any Sponsor shall be deemed to be a breach of this Agreement by the Company.

Section 6.3. Proxy Statement/Prospectus; S-4 Registration Statement; Information Supplied.

(a) The Company and Parent shall prepare the Proxy Statement/Prospectus (as defined below), and Parent shall prepare and file with the SEC a Registration Statement on Form S-4 in connection with the Company Stockholder Meeting and Company Warrantholder Meeting and the issuance of Parent Shares and the conversion of the Warrants pursuant to the Merger (including the joint proxy statement and prospectus (the “Proxy Statement/Prospectus”) constituting a part thereof) (the “S-4 Registration Statement”) in each case as promptly as practicable following the date of this Agreement. The Company and Parent shall use their respective reasonable best efforts to respond to any comments made by the SEC, and Parent shall use its reasonable best efforts to have the S-4 Registration Statement declared effective by the SEC, in each case as promptly as practicable after such filing, and promptly thereafter the Company shall mail the Proxy Statement/Prospectus to the shareholders and warrantholders of the Company.

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(b) The Company and Parent each agrees that none of the information supplied or to be supplied by it for inclusion or incorporation by reference in (i) the S-4 Registration Statement will, at the time the S-4 Registration Statement becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (ii) the Proxy Statement/Prospectus and any amendment or supplement thereto will, at the date of mailing to shareholders and at the time of the meeting of shareholders of the Company to be held in connection with the Transactions, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Parent will cause the S-4 Registration Statement to comply as to form in all material respects with the applicable provisions of the Securities Act and the rules and regulations thereunder.

Section 6.4. Stockholders and Warrantholders Meeting.

(a) The Company will take, in accordance with applicable Law and its Certificate of Incorporation and Bylaws, all action necessary to convene a meeting of holders of Shares (the “Company Stockholders Meeting”) and Warrants (the “Company Warrantholders Meeting”) as promptly as practicable after the S-4 Registration Statement is declared effective to obtain the Company Stockholder Approval and Company Warrantholder Approval. Subject to Section 6.2 hereof, the Company Recommendation shall be included in the Proxy Statement/Prospectus and the Company’s board of directors shall otherwise recommend in favor of granting the Company Stockholder Approval and shall take all lawful action to solicit such approval.

(b) If on the date of the Company Stockholders Meeting and Company Warrantholders Meeting the Company has not received proxies representing a sufficient number of Shares to obtain the Company Stockholder Approval and Company Warrantholder Approval, respectively, then the Company shall, if requested by Parent, adjourn the Company Stockholders Meeting and Company Warrantholders Meeting until such date or dates as shall be specified by Parent, and subject to the terms and conditions of this Agreement shall continue to use its reasonable best efforts, together with its proxy solicitor, to assist in the solicitation of proxies from stockholders with a view towards obtaining the Company Stockholders Approval and Company Warrantholder Approval.

Section 6.5. Filings; Other Actions; Notification.

(a) The Company and Parent each shall, upon request by the other, furnish the other with all information concerning itself, its officers, directors and shareholders and such other matters as may be reasonably necessary or advisable in connection with the Proxy Statement/Prospectus, the S-4 Registration Statement or any other statement, filing, notice or application made by or on behalf of Parent or the Company to any third party and/or any Governmental Authority in connection with the Transactions. Parent shall use commercially reasonable efforts to deliver audited financial statements of Parent as soon as practicable to the Company and to incorporate such audited financial statements into the S-4 Registration Statement.

(b) Subject to applicable Law, the Company and Parent each shall (i) keep the other apprised of the status of matters relating to completion of the Transactions, including promptly furnishing the other with copies of notices or other communications received by Parent or the Company, as the case may be, from any third party and/or any Governmental Authority with respect to the Transactions and (ii) provide each other, if reasonable under the circumstances, with an opportunity to review and comment on any written communication (and participate in any meetings) with any such third party and/or any Governmental Authority. The Company and Parent each shall give prompt notice to the other of any

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change that is reasonably likely to result in a Material Adverse Effect on the Company, Parent or Pine River or a material delay in any party’s ability to consummate the transactions contemplated hereby, as applicable, or of any failure to the other party’s conditions set out in Article VII.

Section 6.6. Access to Information. The Company and Parent each shall, upon request by the other, furnish the other with all information concerning themselves, their respective directors, officers, stockholders and partners and such other matters as may be reasonably necessary or advisable in connection with the Transactions, or any other statement, filing, notice or application made by or on behalf of the Company and Parent to any third party and/or any Governmental Authority in connection with the Transactions.

Section 6.7. Further Assurances. Subject to the terms and conditions hereof, each of the parties hereto shall use its commercially reasonable efforts to fulfill or obtain the fulfillment of the conditions precedent to the consummation of the Transactions contemplated hereby, including the execution and delivery of any documents, certificates, instruments or other papers that are reasonably required for the consummation of the Transactions contemplated hereby.

Section 6.8. Commercially Reasonable Efforts. Upon the terms and subject to the conditions set forth in this Agreement and except where a different standard is expressly applicable, each of the parties agrees to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Transactions, including using commercially reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VII to be satisfied; (ii) the obtaining of all consents, approvals or waivers from third parties required to consummate the Transactions; (iii) the defending against any lawsuits, actions or proceedings, judicial or administrative, challenging this Agreement or the consummation of the Transactions, and seeking to have any preliminary injunction, temporary restraining order, stay or other legal restraint or prohibition entered or imposed by any court or other Governmental Authority that is not yet final and nonappealable vacated or reversed; and (iv) the execution or delivery of any additional instruments reasonably necessary to consummate the Transactions, and to fully carry out the purposes of this Agreement, including, without limitation, providing certificates as to factual matters in connection with legal opinions.

Section 6.9. Indemnification; Directors’ and Officers’ Insurance.

(a) From and after the Effective Time, each of Parent and the Surviving Company agrees that it will (i) indemnify and hold harmless, to the extent the Company is obligated to indemnify and hold harmless such Persons as of the date of this Agreement (and Parent and the Surviving Company shall also advance expenses as incurred to the extent the Company is obligated to advance such expenses as of the date of this Agreement, provided the Person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Person is not entitled to indemnification), each present and former director and officer of the Company (in each case, when acting in such capacity) (the “Indemnified Parties”), against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, settlements, losses, claims, damages or liabilities (collectively, “Costs”) incurred in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, including the Transactions and (ii) include and cause to be maintained in effect in the Surviving Company’s (or any successor’s) constitutional documents after the Effective Time provisions regarding the elimination of liability of directors and officers and the indemnification of the Indemnified Parties that are no less advantageous to the intended beneficiaries than the corresponding provisions contained in the current certificate of incorporation and bylaws of the Company.

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(b) Prior to the Effective Time, the Company shall, and if the Company is unable to, Parent shall cause the Surviving Company as of the Effective Time to, obtain and fully pay for “tail” insurance policies with a claims period of six years from and after the Effective Time from one or more insurance carriers with the same or better credit rating as the Company’s current insurance carriers with respect to directors’ and officers’ liability insurance and fiduciary liability insurance (collectively, “D&O Insurance”) with benefits and levels of coverage at least as favorable as the Company’s existing policies with respect to matters existing or occurring at or prior to the Effective Time (including in connection with this Agreement or the transactions or actions contemplated hereby). If the Company and the Surviving Company for any reason fail to obtain such “tail” insurance policies as of the Effective Time, the Surviving Company shall, and Parent shall cause the Surviving Company to, continue to maintain in effect for a period of six years from and after the Effective Time the D&O Insurance in place as of the date hereof with benefits and levels of coverage at least as favorable as provided in the Company’s existing policies as of the date hereof, or the Surviving Company shall, and Parent shall cause the Surviving Company to, purchase comparable D&O Insurance for such six-year period with benefits and levels of coverage at least as favorable as provided in the Company’s existing policies as of the date hereof; provided, however, that in no event shall Parent or the Surviving Company be required to expend for such policies an annual premium amount in excess of 250% of the annual premiums currently paid by the Company for such insurance; and, provided further that if the annual premiums of such insurance coverage exceed such amount, the Surviving Company shall obtain a policy with the greatest coverage available for a cost not exceeding such amount.

(c) If Parent or the Surviving Company or any of their respective successors or assigns (i) shall consolidate with or merge into any other corporation or entity and shall not be the continuing or surviving entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Company shall assume all of the obligations set forth in this Section 6.9.

(d) The provisions of this Section 6.9 are intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Parties.

(e) The rights of the Indemnified Parties under this Section 6.9 shall be in addition to any rights such Indemnified Parties may have under the Amendment and Restated Certificate of Incorporation or Bylaws of the Company, or under any applicable Contracts or Laws.

Section 6.10. Affiliates. At least 45 days prior to the Company Stockholders Meeting (with updates thereafter as appropriate), the Company shall deliver to Parent a letter identifying each Person who may be deemed an “affiliate” of the Company for purposes of Rule 145 under the Securities Act. The Company shall use its reasonable best efforts to obtain a written agreement from each Person who may be so deemed as soon as practicable and, in any event, at least 30 days prior to the Company Stockholders Meeting, substantially in the form of Exhibit G hereto.

Section 6.11. Certain Litigation. The Company shall give the Parent a reasonable opportunity to consult in the defense of any stockholder litigation against the Company and its directors relating to the Transactions. In addition, the Company shall not voluntarily cooperate with any third party that may hereafter seek to restrain or prohibit or otherwise oppose the Sponsors Voting and Support Agreements, the Proposed Charter Amendment, the Business Combination, the Merger, this Agreement or the Transactions and Parent and the Company shall cooperate to resist any such effort to restrain or prohibit or otherwise oppose the Sponsors Voting and Support Agreements, the Proposed Charter Amendment, the Business Combination, the Merger, this Agreement or the Transactions.

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Section 6.12. Confidentiality. Subject to Section 6.13 below, each of the parties hereto agrees that all information exchanged in connection with the Merger (and not required to be filed with the SEC pursuant to applicable Law) shall be subject to the Non-Disclosure Agreement, dated as of April 30, 2009, between Pine River and the Company (the “Confidentiality Agreement”), which shall remain in full force and effect after the date hereof pursuant to its terms.

Section 6.13. Public Disclosure. From the date of this Agreement until the earlier to occur of the Effective Time or the termination of this Agreement pursuant to its terms, the parties shall cooperate in good faith to jointly prepare all press releases and public announcements pertaining to this Agreement and the Transactions, and no party shall issue or otherwise make any public announcement or communication pertaining to this Agreement or the Transactions without the prior consent of Parent (in the case of the Company) or the Company (in the case of Parent), except as required by any Laws or by the rules and regulations of, pursuant to any agreement with the NYSE Amex, or to the extent such information was previously disclosed in a public announcement or communication permitted under this Section 6.13. Each party will not unreasonably withhold approval from the others with respect to any press release or public announcement. If any party determines that it is required by any Laws or by the rules and regulations of, or pursuant to any agreement with, the NYSE Amex, to make this Agreement and the terms of the Transactions public or otherwise issue a press release or make public disclosure with respect thereto, it shall, to the extent permitted by Law, at a reasonable time before making any public disclosure, consult with the other party regarding such disclosure and give the other party reasonable time to comment on such release or announcement in advance of such issuance. This provision will not apply to communications by any party to its counsel, accountants and other professional advisors.

Section 6.14. Listing. Prior to the Effective Time, Parent shall use its reasonable best efforts to cause the Parent Shares to be issued in connection with the Merger to be listed on the NYSE or NYSE Amex, subject to official notice of issuance, as of or prior to the Effective Time.

Section 6.15. Section 16 Matters. Prior to the Effective Time, Parent and the Company shall take all reasonable steps as may be required or permitted to cause any dispositions of the Shares and Warrants that occur or are deemed to occur by reason of or pursuant to the Transactions by each individual who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act, including by taking steps in accordance with the No-Action Letter, dated January 12, 1999, issued by the SEC regarding such matters.

Section 6.16. Trust Account.

(a) Immediately upon the Effective Time, the Company shall cause the Trust Account to be disbursed to pay (i) Company Stockholders with whom the Company may enter into forward or other contracts to purchase their Shares, (ii) the deferred underwriters’ compensation owed by the Company in connection with the IPO, (iii) expenses of the Sponsors incurred on behalf of the Company, and (iv) third parties (e.g., professionals, printers, etc.) who have rendered and/or will render services to the Company in connection with its operations and efforts to effect a business combination, including the Merger, (v) on account of any Company Tax Liabilities, (vi) any Expenses incurred by Pine River or its Affiliates in connection with the Transactions and the Transaction Documents, (vii) up to $1,450,000 of committed expenses and obligations of the Company and (viii) the cost of D&O Insurance obtained in accordance with Section 6.9 hereof.

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(b) Immediately upon the Effective Time, the Company shall disburse of the balance of the funds held in the Trust Account as directed by Parent in writing, to pay Converting Shareholders and to be used by Parent and the Company for working capital requirements.

(c) Notwithstanding anything in this Agreement to the contrary, each of Parent, Pine River and Merger Sub acknowledges that it has read the Company’s final prospectus dated November 8, 2007 and understands that the Company has established the Trust Account for the benefit of the Public Stockholders and that the Company may disburse monies from the Trust Account only (a) to the Public Stockholders in the event they elect to convert their shares for the Conversion Price and/or the liquidation of the Company, (b) to the Company after, or concurrently with, the consummation of a business combination, and (c) to the Company in limited amounts for its working capital requirements and tax obligations. Each of Parent, Pine River and Merger Sub further acknowledge that, if the transactions contemplated by this Agreement, or, upon termination of this Agreement, another business combination, are not consummated by November 8, 2009, the Company will be obligated to return to its stockholders the amounts being held in the Trust Account. Accordingly, except (subject to the occurrence of the Effective Time) as set forth in Section 6.16(a) and Section 8.3, each of Parent, Pine River and Merger Sub, for itself and its subsidiaries, affiliated entities, directors, officers, employees, stockholders, representatives, advisors and all other associates and affiliates, hereby waive all rights, title, interest or claim of any kind against the Company to collect from the Trust Account any monies that may be owed to them by the Company for any reason whatsoever, including but not limited to a breach of this Agreement by the Company or any negotiations, agreements or understandings with the Company (whether in the past, present or future), and will not seek recourse against the Trust Account at any time for any reason whatsoever. This paragraph will survive this Agreement and will not expire and will not be altered in any way without the express written consent of the Company.

Section 6.17. Share Purchases. The parties agree and acknowledge that, following the initial filing of the Proxy Statement/Prospectus with the SEC, the Company and Pine River may seek to purchase, or enter into binding contracts to purchase, Shares either in the open market or in privately negotiated transactions. Any such purchases or contracts would be entered into and effected either (i) pursuant to a 10b(5)-1 plan, (ii) at a time when the Company, Pine River, the Sponsors and their respective Affiliates are not aware of any material nonpublic information regarding the Company or its securities or (iii) pursuant to agreements between the buyer and seller of such Shares in a form that would not violate the insider trading rules; provided, that any such purchases or contracts entered into by the Company, the Sponsors and their representative Affiliates shall require the prior approval of Parent.

Section 6.18. Amended and Restated Certificate of Incorporation. Immediately prior to the Closing, the Company shall file the Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware such that the Amended and Restated Certificate of Incorporation shall be in full force and effect on the Closing.

Section 6.19. REIT Election. The Parent shall make a timely election to qualify as a real estate investment trust within the meaning of Section 856 of the Code (a “REIT”) in connection with the filing of its initial Tax Return and the Surviving Company and Parent, if requested by Parent, shall make an election to treat the Surviving Company as a taxable REIT subsidiary within the meaning of Section 856(l) of the Code, effective as of the Closing Date.

Section 6.20. Ancillary Agreements. The Company shall enforce and perform all of its rights and obligations under the Ancillary Agreements and shall not agree to amend, waive or modify such rights or such agreements without the prior written consent of Parent.

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Section 6.21. Asset Acquisition. Promptly following the Effective Time, Parent shall begin acquiring mortgages and mortgage-backed securities meeting the requirements set forth in the Investment Criteria.

Section 6.22. Resignation Letters. Parent shall use commercially reasonable efforts to have the present directors of the Company deliver resignation letters, effective as of the Effective Time, no less than three Business Days prior to the Effective Time.

Section 6.23. Public Offerings. Except as contemplated by this Agreement, Pine River shall not engage in any other public offering of securities of it or of those of a newly formed company until the Closing Date.

Section 6.24. Parent Share Contribution. Immediately after the Effective Time, Pine River shall contribute the 1,000 Parent Shares it owns to Parent and such Parent Shares shall be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor.

Section 6.25. Registration Statement. Promptly after the SEC has declared the S-4 Registration Statement effective, Pine River shall, at the Company’s expense, file a registration statement with the SEC registering for resale the Warrants (and underlying Shares) held by the Sponsors and Pine River and use commercially reasonable efforts to have such registration statement declared effective at, or soon as reasonably practicable after, the Closing Date.

Section 6.26. Restrictions. From the date hereof until the earlier of the Effective Time or the termination of this Agreement pursuant to its terms, except for the transaction contemplated by this Agreement, Pine River shall not, and shall cause its Affiliates not to, (i) take any action to form a mortgage-backed securities REIT or engage in any transaction substantially similar in structure or nature thereto, whether or not through the acquisition of a special purpose acquisition company, an offering of securities or otherwise or (ii) enter into any discussions, negotiations or agreement with respect to any transaction contemplated in clause (i). Pine River shall use commercially reasonable efforts to cause its officers, directors, employees, representatives and agents not to take any of the actions contemplated by the immediately preceding sentence.

ARTICLE VII

CONDITIONS

Section 7.1. Conditions to Each Party’s Obligation to Effect the Merger. The respective obligation of each party to effect the Merger shall be subject to the satisfaction or waiver of the following conditions:

(a) Stockholder Approval. The Company Stockholder Approval shall have been obtained.

(b) Warrantholder Approval. The Company Warrantholder shall have been obtained.

(c) Amended and Restated Certificate of Incorporation. The Company shall have received an opinion of Richards, Layton & Finger, P.A. in form and substance reasonably satisfactory to both Parent and the Company, that the Proposed Charter Amendment is permissible under the DGCL and the Amended and Restated Certificate of Incorporation shall have been filed with the Secretary of State of Delaware and shall be in full force and effect.

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(d) Converting Stockholders. Public Stockholders holding thirty percent or more of the IPO Shares shall not have voted against approval of the Business Combination and elected to convert their IPO Shares.

(e) Registration Statement. The S-4 Registration Statement shall have become effective in accordance with the provisions of the Securities Act. No stop order suspending the effectiveness of the S-4 Registration Statement shall have been issued by the SEC and remain in effect and no proceeding to that effect shall have been commenced or threatened. All necessary state securities or blue sky authorizations shall have been received.

(f) Legal Action. No statute, rule, ruling, regulation, judgment, decision, order, injunction, writ or decree shall have been enacted, entered, ordered, promulgated, issued or enforced by any court or other Governmental Authority that is in effect and prohibits, enjoins or restricts the consummation of the Transactions.

(g) Tax Legal Opinion. Each of the Company and Parent shall have received an opinion of its respective counsel, in form and substance reasonably satisfactory to such party, dated as of the Closing Date, and based upon customary assumptions, qualifications and representations, warranties and covenants contained in an officer’s certificate, to the effect that for federal income tax purposes (A) the Merger will be treated as a contribution governed by Section 351 of the Code or a reorganization under Section 368(a) of the Code and (B) the holders of Shares will recognize no gain or loss on the exchange of those Shares for Parent Shares (except to the extent that a holder of Shares receives cash in exchange for any portion of its Shares), and such opinion shall not have been withdrawn. The parties to this Agreement agree to make representations to each other in an agreed upon form, and the receipt of such representation letters by such counsel shall be a condition to the issuance of its opinion.

(h) Trust Account. The Trust Account shall contain no less than $100,000,000, after taking into account all payments described in Section 6.16(a).

Section 7.2. Conditions to the Obligations of the Company. The obligations of the Company to effect the Merger shall be subject to the satisfaction or waiver of the following conditions:

(a) Representations Accurate. Each of the representations and warranties made by Parent and Merger Sub in this Agreement that is qualified by reference to materiality or Material Adverse Effect shall be true and correct, and each of the other representations and warranties made by the Parent and Merger Sub in this Agreement shall be true and correct except as would not reasonably be expected to have a Material Adverse Effect, in each case as of the date of this Agreement and at and as of the Closing Date as if made on that date (except in any case that representations and warranties that expressly speak as of a specified date or time need only be true and correct as of such specified date or time).

(b) Performance. Each of Parent and Merger Sub shall have performed and complied, in all material respects, with each agreement, covenant and obligation required by this Agreement to be so performed or complied with by it at or before the Closing Date.

(c) Material Adverse Effect. Since the date of this Agreement there has not been a Material Adverse Effect on Parent.

(d) Officer’s Certificate. Parent shall have delivered to the Company a certificate, dated the Closing Date and duly executed by the Chief Executive Officer of Parent, in form and substance reasonably satisfactory to the Company, to the effect of (a) - (c) of this Section 7.2.

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(e) Ancillary Agreements. Each of the Ancillary Agreements shall be valid, binding and enforceable against each party that executed such Ancillary Agreement in accordance with its terms, and shall be in full force and effect, except as a result of the failure of Citigroup Global Markets Inc., the Company or any of the Sponsors to duly execute any such Ancillary Agreement.

(f) REIT Legal Opinion. The Company shall have received the opinion of Clifford Chance US LLP, in form and substance reasonably satisfactory to the Company, dated as of the Closing Date, and based upon customary assumptions, qualifications, and representations, warranties and covenants contained in an officer’s certificate, regarding the qualification of Parent as a REIT under the Code.

Section 7.3. Conditions to the Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to effect the Merger shall be subject to the satisfaction or waiver of the following conditions:

(a) Representations Accurate. Each of the representations and warranties made by the Company in this Agreement that is qualified by reference to Material Adverse Effect shall be true and correct, and each of the other representations and warranties made by the Company in this Agreement shall be true and correct except as would not reasonably be expected to have a Material Adverse Effect, in each case as of the date of this Agreement and at and as of the Closing Date as if made on that date (except in any case that representations and warranties that expressly speak as of a specified date or time need only be true and correct as of such specified date or time).

(b) Performance. The Company shall have performed and complied, in all material respects, with each agreement, covenant and obligations required by this Agreement so performed or complied with by it at or before the Closing Date.

(c) Material Adverse Effect. Since the date of this Agreement there has not been a Material Adverse Effect on the Company.

(d) Officer’s Certificate. The Company shall have delivered to Parent a certificate, dated the Closing Date and duly executed by the Chief Executive Officer of the Company, in form and substance reasonably satisfactory to Parent, to the effect of (a) - (c) of this Section 7.3.

(e) Ancillary Agreements. Each of the Ancillary Agreements shall be valid, binding and enforceable against each party that executed such Ancillary Agreement in accordance with its terms, and shall be in full force and effect, except as a result of the failure of Citigroup Global Markets Inc., Pine River, the Manager or any of their respective Affiliates to duly execute any such Ancillary Agreement.

ARTICLE VIII

TERMINATION

Section 8.1. Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after the Company Stockholder Approval:

(a) by mutual written consent of Parent and the Company;

(b) by either Parent or the Company:

(i) if the Company Stockholder Approval shall not have been obtained at the Company Stockholder Meeting or any adjournment or postponement thereof (but not later than the Termination Date);

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(ii) if the Effective Time shall not have occurred by September 8, 2009 or, if the only condition to obligation of the parties to effect the Merger set forth in Article VII (other than conditions which by their nature are satisfied at Closing) that is unsatisfied and unwaived as of September 8, 2009, is Section 7.1(d), October 8, 2009 (the “Termination Date”);

(iii) if any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Transactions and such order, decree or ruling or other action shall have become final and nonappealable; or

(iv) if the other party shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement that (i) would give rise to the failure of a condition set forth in Article VII and (ii) cannot be or has not been cured within 30 calendar days after receipt of written notice thereof;

(c) by Parent:

(i) if the Company’s board of directors or any committee thereof makes or publicly proposes to make a Change in Recommendation pursuant to Section 6.2(b)(i); or

(ii) if the Company’s board of directors or any committee thereof approves or recommends or, after two Business Days following receipt of an Acquisition Proposal, takes no position with respect to, or publicly proposes to approve or recommend or, after five Business Days following receipt of an Acquisition Proposal, take no position with respect to, an Acquisition Proposal pursuant to Section 6.2(b)(ii).

(d) by the Company if the Company’s board of directors or any committee thereof causes the Company to enter into any agreement related to any Acquisition Proposal (other than a confidentiality agreement as contemplated by Section 6.2(a)) pursuant to Section 6.2(b)(iii), provided that (i) the Company has complied with all provisions thereof, including the notice provisions therein and (ii) has paid the Termination Fee to Pine River pursuant to Section 8.3; and

(e) notwithstanding anything else contained in this Agreement, the right to terminate this Agreement under this Section 8.1(b), (c) or (d) shall not be available to any party (i) that is in material breach of its obligations hereunder or (ii) whose failure to fulfill its obligations or to comply with its covenants under this Agreement has been the cause of, or resulted in, the failure to satisfy any condition to the obligations of Parent or the Company hereunder.

Section 8.2. Effect of Termination. In the event of a termination of this Agreement by either the Company or Parent as provided in Section 8.1, this Agreement shall forthwith become void except as specifically provided herein and, except as provided in this Section 8.2, Section 6.12 [Confidentiality], Section 6.16 [Trust Account], Section 8.3 [Termination Fee] and Article IX [Miscellaneous], each of which will survive termination and there shall be no liability or obligation on the part of any party hereto or their respective officers or directors; provided, however, that nothing herein shall relieve any party for liability for any willful breach hereof.

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Section 8.3. Termination Fee.

(a) In the event that Parent elects to terminate this Agreement pursuant to Section 8.1(c) and an Alternative Transaction is consummated within twelve months following such termination, then the Company shall pay to Pine River an amount in cash equal to $5,000,000 (the “Termination Fee”). The Termination Fee shall be paid by wire transfer or other means reasonably acceptable to Pine River immediately upon the consummation of the Alternative Transaction.

(b) In the event that the Company elects to terminate this Agreement pursuant to Section 8.1(d), the Company shall pay or cause to be paid an amount in cash equal to the Termination Fee to Pine River by wire transfer or other means reasonably acceptable to Pine River immediately upon the termination of this Agreement.

(c) The Termination Fee shall be the sole and exclusive remedy of Parent, Merger Sub and Pine River against the Company and any of its current, former or future directors, officers, representatives or affiliates for any loss or damage suffered in connection with this Agreement or the Transactions. In the event that the Company fails to pay the Termination Fee pursuant to this Section 8.3 when the payment thereof is not the subject of a bona fide dispute, Parent, Merger Sub and Pine River shall be entitled to seek and receive, in addition to the Termination Fee pursuant to this Section 8.3, interest thereon and Parent, Merger Sub and Pine River’s costs and expenses of collection thereof (including reasonable attorneys’ fees and expenses).

ARTICLE IX

MISCELLANEOUS

Section 9.1. Non-survival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 9.1 shall not limit any covenant or agreement which by its terms contemplates performance after the Effective Time.

Section 9.2. Notices. All notices, requests and other communications under this Agreement must be in writing and will be deemed to have been duly given upon receipt to the parties at the following addresses or facsimiles (or at such other address or facsimile for a party as shall be specified by the notice):

If to the Company:

Capitol Acquisition Corporation

509 7th Street, NW

Washington, DC 20004

Attention: Mark Ein

Facsimile: (202) 654-7063

With copies (which shall not constitute notice) to:

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, NY 10174-1901

Attention: David Alan Miller

Facsimile: (212) 818-8881

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and

Latham & Watkins LLP

555 Eleventh Street, N.W., Suite 1000

Washington, DC 20003

Attention: Paul Sheridan and David Brown

Facsimile: (202) 637-2201

If to Parent, Merger Sub or Pine River:

Pine River Capital Management LP

601 Carlson Parkway, Suite 330

Minnetonka, MN 55305

Attention: Tim O’Brien

Facsimile: (612) 238-3301

With a copy (which shall not constitute notice) to:

Clifford Chance US LLP

31 West 52 ^nd Street

New York, NY 10019

Attention: Brian Hoffmann and Jay Bernstein

Facsimile: (212) 878-8375

Section 9.3. Entire Agreement. This Agreement and the other Transaction Documents supersede all prior and contemporaneous discussions and agreements, both written and oral, among the parties with respect to the subject matter of this Agreement and the other Transaction Documents and constitute the sole and entire agreement among the parties to this Agreement with respect to the subject matter of this Agreement and the other Transaction Documents.

Section 9.4. Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative.

Section 9.5. Amendment. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party to this Agreement at any time before or after obtaining the Company Stockholder Approval, but, after the Company Stockholder Approval, no amendment shall be made that by Law or in accordance with the rules of NYSE Amex requires further approval by such stockholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

Section 9.6. No Third-Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person except as provided in Section 6.9 [Indemnification; Directors’ and Officers’ Insurance] and Section 9.14 [Enforcement].

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Section 9.7. Assignment; Binding Effect. Neither this Agreement nor any right, interest or obligation under this Agreement may be assigned by any party to this Agreement by operation of law or otherwise without the prior written consent of the other parties to this Agreement and any attempt to do so will be void. Subject to the foregoing, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties to this Agreement and their respective successors and assigns.

Section 9.8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OR ANY STATE COURT LOCATED IN THE STATE OF DELAWARE IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE BROUGHT ONLY IN SUCH COURT (AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN); PROVIDED, HOWEVER, THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS SECTION 9.8 AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION OF SAID COURTS OR IN THE STATE OF DELAWARE OTHER THAN FOR SUCH PURPOSE. Any and all process may be served in any action, suit or proceeding arising in connection with this Agreement by complying with the provisions of Section 9.2. Such service of process shall have the same effect as if the party being served were a resident in the State of Delaware and had been lawfully served with such process in such jurisdiction. The parties hereby waive all claims of error by reason of such service. Nothing herein shall affect the right of any party to service process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the other in any other jurisdiction to enforce judgments or rulings of the aforementioned courts.

Section 9.9. Specific Performance. The parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

Section 9.10. Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

Section 9.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD FOR THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

Section 9.12. Counterparts. This Agreement may be executed in any number of counterparts, all of which will constitute one and the same instrument.

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Section 9.13. Expenses. The Surviving Company shall pay all Expenses of Parent, Merger Sub and Pine River in connection with the transactions contemplated in Article III. Whether or not the Merger is consummated, all costs and Expenses incurred in connection with this Agreement and the other Transaction Documents shall be paid by the party incurring such expense, except as contemplated by this Agreement, including Sections 6.16 [Trust Account] and 6.25 [Registration Statement] and any other Transaction Documents; provided, however, that the Company shall be responsible for all costs and Expenses of the financial printer and any SEC filing fees.

Section 9.14. Enforcement. In addition to any other right it may have under this Agreement, Pine River shall be entitled to all of the rights of Parent and Merger Sub under this Agreement, including the right to enforce the terms and conditions of this Agreement on behalf of Parent and Merger Sub.

[Signature Page Follows]

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

CAPITOL ACQUISITION CORP.
By:	/s/ Mark D. Ein
Name:	Mark D. Ein
Title:	CEO
PINE RIVER CAPITAL MANAGEMENT L.P.
By:	/s/ Jeff Stolt
Name:	Jeff Stolt
Title:	CFO
TWO HARBORS INVESTMENT CORP.
By:	/s/ Thomas Siering
Name:	Thomas Siering
Title:	President
TWO HARBORS MERGER CORP.
By:	/s/ Thomas Siering
Name:	Thomas Siering
Title:	President

[Signature Page to Agreement and Plan of Merger]

EX-4.1

Exhibit 4.1

SUPPLEMENT & AMENDMENT TO WARRANT AGREEMENT

This Supplement and Amendment to the Warrant Agreement dated as of             , 2009 (the “Amendment”), is executed by Capitol Acquisition Corp., a Delaware corporation (the “Company”), Two Harbors Investment Corp. (“Two Harbors”) and Continental Stock Transfer & Trust Company, a New York corporation (the “Warrant Agent”).

WHEREAS, the Company and Warrant Agent are parties to that certain Warrant Agreement dated as of November 8, 2007 (the “Warrant Agreement”); and

WHEREAS, the parties desire to supplement and amend the Warrant Agreement upon the terms and conditions herein provided.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms use herein and not otherwise defined herein shall have the meanings ascribed to them in the Warrant Agreement.

2. Amendment to Warrant Agreement.

(a) Section 3.1 of the Warrant Agreement is hereby amended and restated in its entirety as follows:

“3.1. Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at a Warrant Price of $11.00, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date for a period of not less than 10 business days; provided, however, that any such reduction shall be identical in percentage terms among all of the Warrants.”

(b) Section 3.2 of the Warrant Agreement is hereby amended and restated in its entirety as follows:

“3.2 Duration of Warrants. A Warrant may be exercised only during the period (“Exercise Period”) commencing on the consummation by the Company of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination (“Business Combination”) (as described more fully in the Company’s Registration Statement) and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) November 7, 2013 or (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Agreement (“Expiration Date”). Except with respect to the right to receive the Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will provide notice to registered holders of the Warrants of such extension of not less than 20 days.”

(c) Section 3.3.5 of the Warrant Agreement is hereby amended and restated in its entirety as follows:

“3.3.5 Limitations on Exercise. Notwithstanding anything to the contrary contained herein, no Warrant may be exercised if it would cause the holder to Beneficially Own, within the meaning of Two Harbor’s Articles of Amendment and Restatement, greater than 9.8% of the outstanding Common Stock.”

(d) Section 4.12 of the Warrant Agreement is hereby amended and restated in its entirety as follows:

“4.12 Reorganization of Company. If the Company consolidates or merges with or into, or transfers or leases all or substantially all its assets to, any person, upon consummation of such transaction the Warrants shall automatically become exercisable for the kind and amount of securities, cash or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger, transfer or lease if such holder had exercised the Warrant immediately before the effective date of the transaction; provided that (i) if the holders of Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of Common Stock in such consolidation or merger that affirmatively make such election or (ii) if a tender or exchange offer shall have been made to and accepted by the holders of Common Stock under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4. Immediately upon the consummation of a business combination between the Company and Two Harbors Investment Corp. (“Two Harbors”), (i) each holder of a Warrant shall be entitled to receive a new Warrant representing the right to purchase one share of Two Harbors common stock, (ii) all references to the “Company” in this Agreement shall mean Two Harbors and (iii) Two Harbors shall assume all of the rights and all of the obligations of the Company under this Agreement. If Two Harbors subsequently consolidates or merges with or into, or transfers or leases all or substantially all its assets to, any person, upon consummation of such transaction, concurrently with the consummation of such transaction, the corporation or other entity formed by or surviving any such consolidation or merger if other than the Company, or the person to which such sale or conveyance shall have been made, shall enter into a supplemental Warrant Agreement so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 4. The successor Company shall mail to Warrant holders a notice describing the supplemental Warrant Agreement.

If the issuer of securities deliverable upon exercise of Warrants under the supplemental Warrant Agreement is an affiliate of the formed, surviving, transferee or lessee corporation, that issuer shall join in the supplemental Warrant Agreement.

If this Section 4.12 applies, Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6 do not apply.”

3. Amendment. All references in the Warrant Agreement (and in the other agreements, documents and instruments entered into in connection therewith) to the “Warrant Agreement” shall be deemed for all purposes to refer to the Warrant Agreement, as amended by this Amendment.

4. Remaining Provisions of Warrant Agreement. Except as expressly provided herein, the provisions of the Warrant Agreement shall remain in full force and effect in accordance with their terms and shall be unaffected by this Amendment.

5. Counterparts. This Amendment may be executed in counterparts, each of which when executed shall be deemed an original and both of which when executed shall be deemed one and the same instrument.

6. Headings. The headings to this Amendment are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the principles of conflicts of law of any jurisdiction.

8. Effective Time. This Amendment shall be effective immediately prior to the consummation of a business combination between the Company and Two Harbors.

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the authorized officers of each of the undersigned as of the date first above written.

CAPITOL ACQUISITION CORP.

By:

Name:

Title:

TWO HARBORS INVESTMENT CORP.

By:

Name:

Title:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

By:

Name:

Title:

EX-10.3

Exhibit 10.3

FORM OF SPONSOR’S VOTING AND SUPPORT AGREEMENT

SPONSOR’S VOTING AND SUPPORT AGREEMENT, dated as of June [•], 2009 (this “Agreement”), by and among Capitol Acquisition Corp. (the “Company”), Pine River Capital Management L.P. (“Pine River”), Two Harbors Investment Corp. (“Parent”), Two Harbors Merger Corp. (“Merger Sub”), PRCM Advisers LLC (the “Manager”) and [                    ] (the “Sponsor”) (capitalized terms used but not defined herein have the meanings set forth in Article I).

WHEREAS, on the date hereof, the Company, Pine River, Parent and Merger Sub are entering into a merger agreement (the “Merger Agreement”) whereby Merger Sub will be merged with and into the Company and pursuant to which each issued and outstanding share of common stock of the Company (the “Shares”) shall be converted into the right to receive a certain number of fully paid and nonassessable shares of common stock of Parent upon the terms and subject to the conditions set forth in the Merger Agreement;

WHEREAS, as a condition to Pine River’s, Parent’s and Merger Sub’s willingness to enter into the Merger Agreement, Pine River, Parent and Merger Sub have requested that the Company and Sponsor enter into this Agreement pursuant to which Sponsor agrees to vote any Shares acquired after the IPO (“Post-IPO Shares”) in favor of the Merger at the Company Stockholders Meeting (as defined herein);

WHEREAS, in connection with the Merger, the Company is seeking an agreement substantially in the form attached hereto as Exhibit B (the “Warrant Agreement Amendment”) to amend the Warrant Agreement, made as of November 8, 2007 (the “Warrant Agreement”), between the Company and Continental Stock Transfer & Trust Company (the “Warrant Agent”) to, among other things, increase the exercise price and duration of the Company’s warrants (the “Warrants”);

WHEREAS, Section 9.8 of the Warrant Agreement requires the written consent of the registered holders of a majority of the then-outstanding Warrants to amend the Warrant Agreement;

WHEREAS, as a condition to Pine River’s, Parent’s and Merger Sub’s willingness to enter into the Merger Agreement, Pine River, Parent and Merger Sub have requested that the Company and Sponsor enter into this Agreement pursuant to which Sponsor, as a holder of Warrants, if any, agrees to give his written consent to the Warrant Agreement Amendment at the Company Warrantholders Meeting (as defined herein);

WHEREAS, Sponsor is the record and beneficial owner of, and has the right to vote and dispose of, (i) that number of Shares (such Shares, together with any other Shares of the Company beneficially owned or acquired by the Sponsor after the date hereof whether acquired directly or indirectly, being collectively referred to herein with respect to such Sponsor as the “Sponsor Shares”), if any, and (ii) that number of Warrants (such Warrants, together with any other Warrants of the Company beneficially owned or acquired by the Sponsor after the date hereof whether acquired directly or indirectly, being collectively referred to herein with respect to such Sponsor as the “Sponsor Warrants”), if any, set forth opposite Sponsor’s name on Exhibit A hereto;

WHEREAS, as a condition to Pine River’s, Parent’s and Merger Sub’s willingness to enter into the Merger Agreement, Pine River, Parent and Merger Sub have also requested that the Company and Sponsor enter into this Agreement pursuant to which Sponsor agrees to certain transfer restrictions in respect of his Shares and/or Warrants and to the cancellation of his Cancellation Securities (as defined below), if any, at or prior to the Closing Date; and

WHEREAS, Sponsor desires Pine River, Parent, Merger Sub and the Company to enter into the Merger Agreement and Sponsor desires the Company and the Warrant Agent to enter into the Warrant Agreement Amendment:

NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. For purposes of this Agreement, the following terms have the following meanings (capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Merger Agreement):

“Agreement” shall have the meaning set forth in the Recitals.

“Cancellation Securities” shall have the meaning set forth in Section 4.1.

“Company” shall have the meaning set forth in the Recitals.

2

“Escrow Agreement” means that Stock Escrow Agreement dated November 8, 2007 between the Company, the Sponsors, and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”).

“Expiration Date” means the earlier of (i) the Closing Date and (ii) the termination of the Merger Agreement in accordance with its terms.

“Manager” shall have the meaning set forth in the Recitals.

“Merger Agreement” shall have the meaning set forth in the Recitals.

“Merger Sub” shall have the meaning set forth in the Recitals.

“Parent” shall have the meaning set forth in the Recitals.

“Pine River” shall have the meaning set forth in the Recitals.

“Pine River Parties” means Pine River, Parent, Merger Sub and the Manager.

“Post-IPO Shares” shall have the meaning set forth in the Recitals.

3

“Sponsor” shall have the meaning set forth in the Recitals.

“Sponsor Shares” shall have the meaning set forth in the Recitals.

“Sponsor Warrants” shall have the meaning set forth in the Recitals.

“Sub-Management Agreement” shall have the meaning set forth in Section 4.2.

“Warrant Agent” shall have the meaning set forth in the Recitals.

“Warrant Agreement” shall have the meaning set forth in the Recitals.

“Warrant Agreement Amendment” shall have the meaning set forth in the Recitals.

“Warrants” shall have the meaning set forth in the Recitals.

Section 1.2 Gender. For the purposes of this Agreement, the words “he,” “his” or “himself” shall be interpreted to include the masculine, feminine and corporate, other entity or trust form.

ARTICLE II

COVENANTS TO SUPPORT THE MERGER

Section 2.1 Voting of Sponsor Securities.

(a) Sponsor, as a holder of Post-IPO Shares, if any, hereby agrees that from and after the date hereof until the earlier of (i) receipt of the Company Stockholder Approval and (ii) the termination of the Merger Agreement in accordance with its terms, at any Company Stockholders Meeting, or in connection with any written consent of the Company’s stockholders, Sponsor will (A) appear at such Company Stockholders Meeting or otherwise cause his Post-IPO Shares, if any, to be counted as present thereat for purposes of calculating a quorum and (B) vote or cause to be voted (including by written consent, if applicable) all of his Post-IPO Shares, if any, (1) for approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement (without regard to any Change in Recommendation), (2) against any Acquisition Proposal, without regard to the terms of such Acquisition Proposal, or any other transaction, proposal, agreement or action made in opposition to adoption of the Merger Agreement or in competition or inconsistent with the Merger and the other transactions contemplated by the Merger Agreement, (3) against any other action that is intended or could prevent, impede, or, in any material respect, interfere with, delay the transactions contemplated by the Merger Agreement, or (4) in favor of any other matter necessary to the consummation of the transactions contemplated by the Merger Agreement.

4

(b) Sponsor, as a holder of Sponsor Warrants, if any, hereby agrees that from and after the date hereof until the earlier of (i) receipt of the Company Stockholder Approval and (ii) the termination of the Merger Agreement in accordance with its terms, in connection with any Company Warrantholders Meeting or request for written consent at or through which proxies or written consents of the Company’s Warrant holders are solicited to approve and adopt the Warrant Agreement Amendment, Sponsor will execute and deliver to the Company a proxy or written consent, as applicable, with respect to Sponsor’s Sponsor Warrants, if any, to consent to the Warrant Agreement Amendment.

Section 2.2 No Restraint on Officer or Director Action. The agreements set forth herein shall in no way restrict any director or officer in the exercise of his fiduciary duties as a director or officer of the Company. Each Sponsor has executed this Agreement solely in his capacity as the beneficial owner of Sponsor Shares and/or Sponsor Warrants and no action taken by any such director or officer solely in such Person’s capacity as a director or officer of the Company shall be deemed to constitute a breach of any provision of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties of Sponsor. Sponsor hereby represents and warrants to the Company and the Pine River Parties as follows:

(a) Sponsor has all requisite legal capacity or other power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. [Following to be included for Sponsors who are not natural persons:] [Sponsor is duly formed, validly existing and in good standing in the jurisdiction of its formation. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by Sponsor.] This Agreement has been duly executed and delivered by Sponsor and, assuming this Agreement constitutes a valid and binding obligation of the Company and the Pine River Parties, constitutes a valid and binding obligation of Sponsor enforceable against the Sponsor in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. Except for such informational filings with the Securities and Exchange Commission as may be necessary under the Exchange Act, neither the execution, delivery or performance of this Agreement by Sponsor nor the consummation by Sponsor of the transactions contemplated hereby will (i) require Sponsor to make any filing with, or obtain any permit, authorization, consent or approval of, any Governmental Entity, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation or acceleration under, or result in the creation of any Lien upon any of the properties or assets of the Sponsor under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement or other instrument or obligation to which Sponsor is a party or by which Sponsor or any of Sponsor’s properties or assets, including the Sponsor Shares or Sponsor Warrants, may be bound (other than the Escrow Agreement) or (iii) result in a violation by Sponsor of any Law applicable to Sponsor or any of Sponsor’s properties or assets, including the Sponsor Shares or Sponsor Warrants.

(b) The Sponsor Shares, if any, set forth opposite such Sponsor’s name on Exhibit A hereto and the certificates representing such Sponsor Shares are held of record or beneficially by the Sponsor and the Sponsor has good and marketable title to such Sponsor Shares, free and clear of any Liens,

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proxies, voting trusts or agreements, understandings or arrangements, except for any such Liens arising hereunder or under the Escrow Agreement. Neither the Sponsor nor any affiliate of the Sponsor owns of record or beneficially any securities of the Company, or any options, warrants or rights exercisable for securities of the Company, other than the Shares and Warrants set forth on Exhibit A hereto. Other than under this Agreement, neither Sponsor nor any affiliate of Sponsor has granted or appointed any proxy, power of attorney or other rights (except any expired or effectively revoked proxy) with respect to any Sponsor Shares.

(c) The Sponsor Warrants, if any, set forth opposite such Sponsor’s name on Exhibit A hereto and the certificates representing such Sponsor Warrants are now, and until the Expiration Date will be, held of record or beneficially by Sponsor, and Sponsor has good and marketable title to such Sponsor Warrants, free and clear of any Liens, proxies, voting trusts or agreements, understandings or arrangements, except for any such Liens arising hereunder or under the Subscription Agreement, dated as of October 12, 2007, relating to the purchase of the Sponsor Warrants. Other than under this Agreement, neither Sponsor nor any affiliate of Sponsor has granted or appointed any proxy, power of attorney or other rights (except any expired or effectively revoked proxy) with respect to any such Sponsor Warrants.

(d) No broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Sponsor.

(e) Sponsor understands and acknowledges that Pine River, Parent and Merger Sub are entering into the Merger Agreement in reliance upon Sponsor’s execution and delivery of this Agreement.

(f) As of the date of this Agreement, there is no litigation, suit, claim, action, proceeding or investigation pending or, to the knowledge of Sponsor, threatened against Sponsor, or any property or asset of Sponsor, before any Governmental Entity that (i) seeks to delay or prevent the consummation of the transactions contemplated by this Agreement, the Merger Agreement or the Warrant Agreement Amendment or (ii) relates to the Sponsor Shares or the Sponsor Warrants.

Section 3.2 Representations and Warranties of the Company. The Company represents and warrants to Sponsor and the Pine River Parties as follows: (a) this Agreement has been duly and validly authorized by the Company, including by its board of directors, (b) this Agreement has been duly executed and delivered by a duly authorized officer or other representative of the Company, (c) assuming this Agreement constitutes a valid and binding agreement of the other parties, this Agreement constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, and (d) except for such informational filings with the Securities and Exchange Commission as may be necessary under the Exchange Act, neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will (i) require the Company to make any filing with, or obtain any permit, authorization, consent or approval of, any Governmental Entity, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation or acceleration under, or result in the creation of any Lien upon any of the properties or assets of the Company under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement or other instrument or obligation to which the Company is a party or by which the Company or any of its properties or assets may be bound, other than, the Escrow Agreement or (iii) result in a violation by the Company of any Law applicable to the Company or any of its properties or assets.

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Section 3.3 Representations and Warranties of the Pine River Parties. (a) Each of the Pine River Parties represents and warrants to Sponsor and the Company as follows: (a) this Agreement has been duly and validly authorized by such party (including by its board of directors or other applicable governing body), (b) this Agreement has been duly executed and delivered by a duly authorized officer or other representative of such party, (c) assuming this Agreement constitutes a valid and binding agreement of the other parties, this Agreement constitutes a valid and binding agreement of such party, enforceable against such party in accordance with its terms, and (d) except for such informational filings with the Securities and Exchange Commission as may be necessary under the Exchange Act, neither the execution, delivery or performance of this Agreement by such party nor the consummation by such party of the transactions contemplated hereby will (i) require such party to make any filing with, or obtain any permit, authorization, consent or approval of, any Governmental Entity, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation or acceleration under, or result in the creation of any Lien upon any of the properties or assets of such party under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement or other instrument or obligation to which such party is a party or by which such party or any of such party’s properties or assets may be bound or (iii) result in a violation by such party of any Law applicable to such party or any of such party’s properties or assets.

(b) Parent represents and warrants to Sponsor that the Sub-Management Agreement among PRCM Advisers LLC, CLA Founders LLC and Pine River to be entered into on the Closing has been duly authorized and approved by all necessary action of Parent.

ARTICLE IV

SHARE CANCELLATION AND OTHER AGREEMENTS

Section 4.1 Surrender and Cancellation of Securities. On or prior to the Closing Date, Sponsor shall cause the Company to instruct its transfer agent to cancel all of the Sponsor Shares set forth opposite Sponsor’s name on Exhibit A hereto, but not including any Post-IPO Shares beneficially owned or acquired by the Sponsor after the date hereof whether acquired directly or indirectly, (the “Cancellation Securities”), except that after the Closing, Sponsor will continue to hold Sponsor’s Sponsor Warrants, subject to the revision of the terms of such Warrants pursuant to the Warrant Agreement Amendment. On the Closing Date the transfer agent shall cancel such Cancellation Securities in accordance with Section 3.1(c) of the Merger Agreement, if not previously cancelled. Without limiting the provisions of Section 5.1, Sponsor hereby agrees to execute such additional documents and to provide the Company or its transfer agent with any further assurances as may be necessary to effect the cancellation of the Cancellation Securities.

Section 4.2 Sub-Management Agreement. Pine River, the Manager and Sponsor agree that on the date of this Agreement, Pine River, the Manager and CLA Founders LLC shall enter into the sub-management agreement (the “Sub-Management Agreement”) attached hereto as Exhibit C.

Section 4.3 Escrow Agreement Termination. The Company and Sponsor agree that on or prior to the Closing Date, the Company, Citigroup Global Markets Inc. and each Sponsor shall enter into an agreement to terminate the Escrow Agreement effective on the Closing Date.

Section 4.4 Registration Rights Agreement. Pine River, the Company and Sponsor agree that on or prior to the Closing Date, Pine River, the Parent and Sponsor shall enter into Registration Rights Agreement in form to be agreed upon by the parties thereto.

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Sponsor, jointly and severally with the other Sponsors, agrees to reimburse the Company with respect to all operating expenses incurred by the Company prior to May 12, 2009 and in excess of $1,450,000.00, which includes an aggregate of $650,000 in success fees to be paid to three of the Company’s consultants upon the Closing.

ARTICLE V

Section 5.1 Further Assurances. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws to consummate and make effective the transactions contemplated hereby. At the other party’s reasonable request and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated hereby. Sponsor acknowledges that Parent and the Company may disclose information regarding Sponsor, this Agreement and the transactions contemplated hereby in filings required to be made by Parent and/or the Company under the Securities Act or the Exchange Act.

Section 5.2 Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

Section 5.3 Termination. This Agreement, and all rights and obligations of the parties hereunder, shall terminate on the Expiration Date. Nothing in this Section 6.3 shall relieve any party from liability for willful breach of this Agreement.

Section 5.4 Stop Transfer. The Company shall not register the transfer of any certificate representing Sponsor’s Sponsor Shares or Sponsor Warrants unless such transfer is made in accordance with the terms of this Agreement.

Section 5.5 Expenses. Except as otherwise provided in this Agreement or in the Merger Agreement, each party shall bear its own expenses in connection with the transactions contemplated by this Agreement.

Section 5.6 Amendments. This Agreement may be amended by the parties hereto, by duly authorized action taken. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

Section 5.7 Extension; Waiver. The parties hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

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Section 5.8 Notice. All notices and other communications hereunder shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(i) if to any Pine River Party, to:

Pine River Capital Management LP

601 Carlson Parkway, Suite 330

Minnetonka, MN 55305

Attention: Tim O’Brien

Facsimile: (612) 238-3301

with a copy to:

Clifford Chance US LLP

31 West 52^nd Street

New York, New York 10019

Attention: Jay Bernstein and Brian Hoffmann

Facsimile: (212) 878-8375

(ii) if to the Company, to:

Capitol Acquisition Corporation

509 7th Street, NW

Washington, D.C. 20004

Attention: Mark Ein

Facsimile: (202) 654-7063

with a copy to:

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, NY 10174-1901

Attention: David Alan Miller

Facsimile: (212) 818-8881

and

Latham & Watkins LLP

555 Eleventh Street, N.W.

Washington, DC 20004

Attention: Paul F. Sheridan, Jr.

                    David I. Brown

Facsimile: 202-637-2201

(iii) if to Sponsor, to the address set forth under the name of Sponsor on the signature pages hereto (or at such other address for Sponsor as shall be specified by like notice)

with a copy to:

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, NY 10174-1901

Attention: David Alan Miller

Facsimile: (212) 818-8881

and

Latham & Watkins LLP

555 Eleventh Street, N.W.

Washington, DC 20004

Attention: Paul F. Sheridan, Jr.

                    David I. Brown

Facsimile: 202-637-2201

Section 5.9 Interpretation. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. When a reference is made in this

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Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement is the result of the joint efforts of the Pine River Parties, the Company, and Sponsor and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and there shall be no construction against any party based on any presumption of that party’s involvement in the drafting thereof. The words “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation.” A “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. The term “ordinary course of business” (or similar terms) shall be deemed to be followed by the words “consistent with past practice.”

Section 5.10 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. This Agreement shall be binding upon Sponsor upon the execution of this Agreement by the Pine River Parties, the Company and Sponsor.

Section 5.11 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and the instruments referred to herein, including, for the avoidance of doubt, the Merger Agreement, the Escrow Agreement Amendment, the Revenue Sharing Agreement and the Registration Rights Agreement) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

Section 5.12 Severability. This Agreement shall be deemed severable; the invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of the balance of this Agreement or of any other term hereof, which shall remain in full force and effect. If of any of the provisions hereof are determined to be invalid or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible.

Section 5.13 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity, including damages, which shall include reasonable out-of-pocket expenses and any other damages actually suffered. THE PARTIES HEREBY (i) SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN THE STATE OF DELAWARE AND AGREE NOT TO BRING ANY ACTIONS RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY OTHER COURT, OTHER THAN TO ENFORCE THE JUDGMENTS OF SUCH COURTS, (ii) AGREE NOT TO OBJECT TO VENUE IN SUCH COURTS OR TO CLAIM THAT SUCH FORUM IS INCONVENIENT AND (iii) AGREE THAT NOTICE OR THE SERVICE OF PROCESS IN ANY PROCEEDING SHALL BE PROPERLY SERVED OR DELIVERED IF DELIVERED IN THE MANNER CONTEMPLATED BY SECTION 5.13 HEREOF. IN ADDITION, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

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Section 5.14 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW.

Section 5.15 Publicity. Except as otherwise required by law, court process or the rules of any applicable securities exchange or as contemplated or provided elsewhere herein, no party hereto shall issue any press release or otherwise make any public statement with respect to the transactions contemplated by this Agreement without prior consultation with the other parties hereto.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, each party has duly signed this Agreement, all as of the date first written above.

PINE RIVER PARTIES:

PINE RIVER CAPITAL MANAGEMENT L.P.

By:

Name:

Title:

TWO HARBORS INVESTMENT CORP.

By:

Name:

Title:

TWO HARBORS MERGER CORP.

By:

Name:

Title:

PRCM ADVISERS LLC

By:

Name:

Title:

THE COMPANY:

CAPITOL ACQUISITION CORP.

By:

Name:

Title:

(Signature Page to Sponsors’ Voting and Support Agreement)

SPONSOR:

[Name, if entity]

By:

Name:

Address:

(Signature Page to Sponsors’ Voting and Support Agreement)

EX-99.1

Exhibit 99.1

Capitol Acquisition Corp. and Two Harbors Investment Corp. to

Merge, Form New Residential Mortgage REIT Managed by an Affiliate

of Pine River Capital Management

Veteran Pine River Investment Team with Proven Track Record Well Positioned to

Capitalize on Unprecedented Dislocation in RMBS Market

NEW YORK, June 11, 2009 – Capitol Acquisition Corp. (“Capitol”) (NYSE Amex: CLA), a public investment vehicle, Pine River Capital Management L.P., a multi-strategy asset management firm with over $800 million in assets under management, and Two Harbors Investment Corp. (“Two Harbors”), a newly organized real estate investment trust (REIT) announced today that they have signed an agreement and plan of merger pursuant to which Capitol will be acquired by Two Harbors. Two Harbors intends to focus on residential mortgage backed securities and will be externally managed by PRCM Advisers LLC (“PRCM”), a subsidiary of Pine River Capital Management L.P. (“Pine River”). The transaction is expected to be completed by the end of the third quarter of 2009, pending approval by Capitol’s stockholders and warrant holders and subject to certain closing conditions, including the amendment of Capitol’s charter to remove certain provisions customarily contained in the charters of special purpose acquisition companies, in order to permit the merger.

“We believe Two Harbors represents a compelling opportunity for investors to capitalize on historically unprecedented values in the $11 trillion U.S. mortgage market,” said Mark Ein, Chairman and Chief Executive Officer of Capitol who will become Vice Chairman of Two Harbors upon completion of the transaction. “We are excited to partner with Pine River and their veteran team with a proven track record of investing in residential mortgage backed securities. We believe that Two Harbors, as a newly formed REIT, created at or near book value with no legacy assets, will be well positioned to generate attractive risk-adjusted returns,” added Mr. Ein.

Two Harbors intends to pursue a relative value strategy targeting all subsets of the RMBS market. This strategy seeks to capture inefficiencies created by the current dislocations in non-Agency and Agency securities, and longer-term opportunities in residential mortgage assets.

Under the terms of the merger agreement, the common stock of Capitol issued through Capitol’s November 2007 initial public offering will convert on a share-for-share basis into 100% of the common stock of Two Harbors. Capitol’s founders will retire 100% of their pre-IPO founders’ shares. As a condition of the transaction, Capitol’s warrant holders will be asked to amend the strike price of their warrants to $11.00 per share in exchange for extending the warrant expiration by one year to November 7, 2013.

“We are delighted to partner with the Capitol team to create an efficient public vehicle for investors to access the RMBS market,” said Brian Taylor, Founder and Chief Executive Officer of Pine River who will serve as Chairman of Two Harbors upon completion of the transaction. “Together with Capitol’s team of accomplished investors and executives, we look forward to offering Pine River’s expertise in portfolio management and mortgage backed securities to a new group of investors,” added Mr. Taylor.

RMBS Investment Veterans Named Co-CIOs

Two Harbors’ investment team will be led by Co-Chief Investment Officers Steve Kuhn and Bill Roth. Mr. Kuhn joined Pine River from Goldman Sachs Asset Management in January 2008. He has over 16 years of experience investing in and trading mortgage backed, asset backed and related securities at Goldman Sachs, Citadel and Cargill. Mr. Roth will join Pine River effective June 16, 2009 after having worked at Citigroup Global Markets Inc. since 1981, most recently as a Managing Director in the firm’s proprietary trading group managing mortgage backed and asset backed securities portfolios.

High Quality Infrastructure and Oversight

Two Harbors will be externally-managed by PRCM a wholly-owned subsidiary of Pine River. Pine River is a leading independent global alternative investment advisor with over $800 million in assets under management, 54 employees, 19 investment professionals and six partners, with an average of 18 years experience in the alternative investment management industry. Pine River has regulatory registrations in five nations and operates from offices in New York, London, Hong Kong, San Francisco and Minnesota. Under a management agreement between PRCM and Two Harbors, PRCM will earn an annual management fee of 1.5% of shareholders’ equity, but will not charge any additional performance fees.

The management of Two Harbors will be led by Chief Executive Officer Tom Siering, who joined Pine River as a Partner in 2006 from EBF & Associates where he was head of the Value Investment Group. Jeff Stolt, a Pine River Partner and Chief Financial Officer, will serve as Two Harbors’ Chief Financial Officer.

The Board will be led by Messrs. Taylor and Ein. Prior to Founding Pine River in 2002, Mr. Taylor was Partner and head of the convertible arbitrage group at EBF & Associates, a Minnesota based private investment firm. Mr. Ein has a long track record of building successful growth businesses. Prior to founding and serving as CEO of Capitol, he established Venturehouse Group, LLC, a technology holding company that spawned and grew several notable portfolio companies. Mr. Ein was also a Principal with The Carlyle Group and worked at Brentwood Associates and in the CMBS business at Goldman Sachs. They will be joined by Mr. Siering and four independent directors to be named later.

Credit Suisse Securities (USA) LLC is serving as financial advisor to Pine River. Clifford Chance US LLP is advising Pine River and Graubard Miller and Latham & Watkins LLP are advising Capitol.

Other Merger Agreement Terms

Upon completion of the merger the approximately $260 million currently held in trust by Capitol, less expenses and any amounts released to Capitol’s common stockholders electing their right to conversion or used by Capitol to purchase shares in forward sales or other transactions, will be used by Two Harbors for the purposes of investing in residential mortgage backed securities. The merger is conditioned upon a minimum amount of proceeds remaining after expenses and completion of such conversions or forward sales.

Under a sub-management agreement between PRCM, Pine River and CLA Founders LLC, an affiliate of the founders of Capitol, CLA Founders LLC will receive a portion of the management fees paid to PRCM in exchange for providing services in support of PRCM’s performance under its management agreement with Two Harbors.

Conference Call Information

Capitol and Pine River will host a conference call at 11:30am Eastern Time today (June 11, 2009) to discuss the proposed merger of Two Harbors and Capitol. The call will be open to the public and can be accessed by dialing 877-941-2332 (callers within the U.S.) or 480-629-9726 (callers outside the U.S.). The number should be dialed at least 10 minutes prior to the start of the call. The passcode for the call will be 4094795. The slides complementary to the presentation will be available prior to the call on the web site of the SEC at www.sec.gov as part of Capitol’s 8-K filing today and on the Investor Relations page of Capitol’s website, www.capitolacquisition.com.

Capitol Acquisition Corp.

Capitol Acquisition Corp. is a Washington D.C. special purpose acquisition company formed for the purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more operating businesses or assets. Its efforts in identifying a prospective target business are not limited to a particular industry. Founded by Mark D. Ein, Capitol has an experienced team of Directors and Advisors with complementary backgrounds and a history of success as investors, entrepreneurs, executives and advisors. Capitol priced its initial public offering (“IPO”) of 26,249,000 million units on November 8, 2007, including the underwriters’ over-allotment option, generating $258.9 million in net proceeds. As of March 31, 2009, Capitol held approximately $259.1 million in a trust account maintained by an independent trustee, which will be released upon the consummation of the business combination. Additional information is available at www.capitolacquisition.com.

Two Harbors Investment Corp.

Two Harbors is a newly-formed REIT focused on investing in, financing and managing residential mortgage-backed securities. Two Harbors was formed solely to complete the business combination with Capitol and has no material assets or liabilities. Two Harbors will be externally managed and advised by PRCM Advisers, a wholly-owned subsidiary of Pine River.

Pine River Capital Management L.P.

Pine River is a leading independent global alternative asset management firm, registered as an investment adviser under the Investment Advisers Act of 1940. Founded in 2002, with offices in Hong Kong, London, New York, and San Francisco, and headquartered in Minnetonka, Minnesota, Pine River manages approximately $800 million in assets across five hedge fund strategies. The firm’s six partners have worked together an average of 14 years and have an average of 18 years investment experience. The firm maintains registrations with the SEC and NFA in the United States, the FSA in the United Kingdom, the SFC in Hong Kong, the SEBI in India, and the TSEC in Taiwan.

Forward-looking statements

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Two Harbors’ actual results may differ from its expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Capitol’s and Two Harbors’ expectations with respect to future performance, anticipated financial impacts of the merger and related transactions; approval of the merger and related transactions by shareholders; the satisfaction of the closing conditions to the merger and related transactions; and the timing of the completion of the merger and related transactions.

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside our control and difficult to predict. Factors that may cause such differences include, but are not limited to, the possibility that the expected growth will not be realized, or will not be realized within the expected time period, due to, among other things, (1) the REIT environment; (2) changes in the commercial finance and the real estate markets; (3) general economic conditions; (4) legislative and regulatory changes (including changes to laws governing the taxation of REITs). Other factors include the possibility that the merger does not close, including due to the failure to receive required stockholder approvals, or the failure of other closing conditions.

Capitol and Two Harbors caution that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in Capitol’s most recent filings with the Securities and Exchange Commission (“SEC”). All subsequent written and oral forward-looking statements concerning Capitol and Two Harbors, the merger, the related transactions or other matters and attributable to Capitol and Two Harbors or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Capitol and Two Harbors caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Capitol and Two Harbors do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based.

Additional Information

Capitol intends to file a proxy statement, and Two Harbors intends to file a registration statement, with the SEC, in each case, that will contain a preliminary proxy statement/prospectus in connection with the proposed transaction and to mail a definitive proxy statement/prospectus and other relevant documents to Capitol stockholders and warrant holders. As part of the proposed transaction, Capitol’s officers, directors and affiliates will be providing certain services to PRCM after the transaction and will receive a percentage of the management fees to be paid by Two Harbors. Stockholders and warrant holders of Capitol and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus, and amendments thereto, and definitive proxy statement and prospectus in connection with solicitation of proxies for the special meetings of Capitol’s stockholders and Capitol’s warrant holders to be held to approve the transaction because these proxy statements/prospectuses will contain important information about Capitol, Two Harbors and the proposed transactions. Such Persons can also read Capitol’s final prospectus from its initial public offering dated November 8, 2007, its annual report on form 10-K for the fiscal year ended December 31, 2008, which was filed with the SEC on March 16, 2009 (“Annual Report”) and other reports as filed with the SEC, for a description of the security holdings of Capitol’s officers and directors and their affiliates and their other respective interests in the successful consummation of the proposed transaction. The definitive proxy statement/prospectus will be mailed to stockholders and warrant holders as of a record date to be established for voting on the merger. Stockholders and warrant holders will also be able to obtain a copy of the preliminary and definitive proxy statements/prospectuses, without charge, once available, at the SEC’s Internet site at http://www.sec.gov or by directing a request to: Capitol Acquisition Corp., 509 7th Street, NW, Washington, DC 20004, telephone (202) 654-7060.

Participation in Solicitation

Capitol, Two Harbors, PRCM and their respective directors, executive officers, affiliates and other persons may be deemed to be participants in the solicitation of proxies for the special meetings of Capitol’s stockholders and Capitol’s warrant holders to approve the proposed transaction. A list of the names of those directors and officers and descriptions of their interests in Capitol is contained in Capitol’s Annual Report. Capitol’s stockholders may also obtain additional information about the interests of its directors and officers in the transactions by reading the preliminary proxy statement/prospectus and other relevant materials to be filed by Capitol and Two Harbors with the SEC when they become available. Information regarding Two Harbors’ directors and executive officers and other potential participants will be contained in Capitol’s preliminary proxy statement/prospectus and other relevant materials to be filed by Capitol and Two Harbors with the SEC when they become available.

Disclaimer

This press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Capitol or Two Harbors, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

Media Contact:

Chuck Dohrenwend or Pen Pendleton, The Abernathy MacGregor Group, 212-371-5999

Investor Contact:

Andrew Garcia, Vice President, Business Development, Two Harbors Investment Corp., (612) 238-3307

Mark Ein, Chief Executive Officer, Capitol Acquisition Corp., (202) 654-7001

EX-99.2

Two Harbors

Investment Corp.

Investor Presentation

Capitol Acquisition

Corp.

June 2009

Exhibit 99.2

2

Two Harbors

Investment Corp.

Safe Harbor Statement

THIS PRESENTATION IS BEING PRESENTED BY CAPITOL ACQUISITION CORP. (“CAPITOL” OR “CLA”), PINE RIVER CAPITAL MANAGEMENT (“PINE RIVER”) AND TWO HARBORS

INVESTMENT CORP. (“TWO HARBORS”).

NEITHER CAPITOL, TWO HARBORS NOR ANY OF ITS RESPECTIVE AFFILIATES MAKES ANY REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF

THE INFORMATION CONTAINED IN THIS PRESENTATION. THE SOLE PURPOSE OF THIS PRESENTATION IS TO ASSIST PERSONS IN DECIDING WHETHER THEY WISH TO

PROCEED WITH A FURTHER REVIEW OF THE PROPOSED TRANSACTION DISCUSSED HEREIN AND IS NOT INTENDED TO BE ALL-INCLUSIVE OR TO CONTAIN ALL THE

INFORMATION THAT A PERSON MAY DESIRE IN CONSIDERING THE PROPOSED TRANSACTION DISCUSSED HEREIN.  IT IS NOT INTENDED TO FORM THE BASIS OF ANY

INVESTMENT DECISION OR ANY OTHER DECISION IN RESPECT OF THE PROPOSED TRANSACTION. 

CAPITOL INTENDS TO FILE A PROXY STATEMENT AND TWO HARBORS INTENDS TO FILE A REGISTRATION STATEMENT, IN EACH CASE, THAT WILL CONTAIN A PROXY

STATEMENT/PROSPECTUS, WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) IN CONNECTION WITH THE PROPOSED TRANSACTION.  AS PART OF THE 

PROPOSED TRANSACTION, AN AFFILIATE OF CLA’S OFFICERS, DIRECTORS AND AFFILIATES WILL BE PROVIDING CERTAIN SERVICES TO TWO HARBORS’ MANAGER AFTER

THE TRANSACTION AND WILL RECEIVE FROM TWO HARBORS’ MANAGER A PERCENTAGE OF THE MANAGEMENT FEES TO BE PAID BY TWO HARBORS.  STOCKHOLDERS AND

WARRANT HOLDERS OF CLA ARE URGED TO READ THE PROXY STATEMENT AND PROSPECTUS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN

IMPORTANT INFORMATION.  SUCH PERSONS CAN ALSO READ CLA’S FINAL PROSPECTUS, DATED NOVEMBER 8, 2007, ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL

YEAR ENDED DECEMBER 31, 2008 (THE “ANNUAL REPORT”) AND OTHER REPORTS AS FILED WITH THE SEC, FOR A DESCRIPTION OF THE SECURITY HOLDINGS OF CLA’S

OFFICERS AND DIRECTORS AND THEIR AFFILIATES AND THEIR OTHER RESPECTIVE INTERESTS IN THE SUCCESSFUL CONSUMMATION OF THE PROPOSED TRANSACTION. 

THE DEFINITIVE PROXY STATEMENT/PROSPECTUS WILL BE MAILED TO STOCKHOLDERS AND WARRANT HOLDERS, AS THE CASE MAY BE, AS OF A RECORD DATE TO BE

ESTABLISHED FOR VOTING ON THE PROPOSED TRANSACTION.  FREE COPIES OF THESE DOCUMENTS CAN ALSO BE OBTAINED, WHEN AVAILABLE, AT THE SEC’S INTERNET

SITE (http://www.sec.gov). 

CLA, TWO HARBORS, TWO HARBORS’ EXTERNAL MANAGER AND THEIR RESPECTIVE DIRECTORS AND EXECUTIVE OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN THE

SOLICITATION OF PROXIES FOR THE SPECIAL MEETINGS OF CLA’S STOCKHOLDERS AND CLA’S WARRANT HOLDERS TO APPROVE THE PROPOSED TRANSACTION. 

INFORMATION ABOUT CLA’S DIRECTORS AND EXECUTIVE OFFICERS IS AVAILABLE IN ITS ANNUAL REPORT.  ADDITIONALLY, THE UNDERWRITERS IN CLA’S INITIAL PUBLIC

OFFERING MAY ASSIST CLA IN THESE EFFORTS.  THE UNDERWRITERS ARE ENTITLED TO RECEIVE DEFERRED UNDERWRITING COMPENSATION UPON COMPLETION OF THE

PROPOSED TRANSACTION.  ADDITIONAL INFORMATION REGARDING THE INTERESTS OF POTENTIAL PARTICIPANTS WILL BE INCLUDED IN THE PROXY STATEMENT AND

THE REGISTRATION STATEMENT AND OTHER MATERIALS TO BE FILED BY CLA AND TWO HARBORS WITH THE SEC. 

THIS PRESENTATION SHALL NOT CONSTITUTE A SOLICITATION OF A PROXY, CONSENT OR AUTHORIZATION WITH RESPECT TO ANY SECURITIES OR IN RESPECT OF THE

PROPOSED TRANSACTION.

THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, NOR SHALL THERE BE ANY SALE OF

SECURITIES IN ANY JURISDICTIONS IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE

SECURITIES LAWS OF ANY SUCH JURISDICTION.  NO OFFERING OF SECURITIES SHALL BE MADE EXCEPT BY MEANS OF A PROSPECTUS MEETING THE REQUIREMENTS OF

SECTION 10 OF THE SECURITIES ACT OF 1933, AS AMENDED.

3

Two Harbors

Investment Corp.

Forward Looking Statements

THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION

REFORM ACT OF 1995.  FORWARD-LOOKING STATEMENTS INVOLVE NUMEROUS RISKS AND UNCERTAINTIES.  TWO HARBORS’S ACTUAL RESULTS MAY DIFFER FROM ITS

EXPECTATIONS, ESTIMATES, AND PROJECTIONS AND, CONSEQUENTLY, YOU SHOULD NOT RELY ON THESE FORWARD-LOOKING STATEMENTS AS PREDICTIONS OF FUTURE

EVENTS.  FORWARD-LOOKING STATEMENTS ARE NOT HISTORICAL IN NATURE AND CAN BE IDENTIFIED BY WORDS SUCH AS “ANTICIPATE,” “ESTIMATE,” “WILL,” “SHOULD,”

“EXPECT,” “BELIEVE,” “INTEND,” “SEEK,” “PLAN,” AND SIMILAR EXPRESSIONS OR THEIR NEGATIVE FORMS, OR BY REFERENCES TO STRATEGY, PLANS, OR INTENTIONS.  

STATEMENTS REGARDING THE FOLLOWING SUBJECTS, AMONG OTHERS, ARE FORWARD-LOOKING BY THEIR NATURE:  THE STATEMENTS (I) REGARDING THE PROPOSED TERMS

AND STRUCTURE OF THE PROPOSED TRANSACTION, THE TERMS OF TWO HARBORS’S SECURITIES UPON COMPLETION OF THE PROPOSED TRANSACTION AND THE PROPOSED

TERMS AND STRUCTURE OF TWO HARBORS’S MANAGEMENT AND ORGANIZATION UPON COMPLETION OF THE PROPOSED TRANSACTION; (II) REGARDING THE ESTIMATED

BOOK VALUE OF TWO HARBORS UPON CLOSING OF THE PROPOSED TRANSACTION; (III) REGARDING TWO HARBORS’S PROPOSED INVESTMENT STRATEGIES AND INVESTMENT

GOALS, TARGETED INVESTMENTS AND THE OPPORTUNITIES FOR INVESTMENT; (IV) REGARDING CERTAIN EXPECTED MARKET TRENDS, INCLUDING THE ROLE PRIVATE

CAPITAL IS EXPECTED TO PLAY IN FINANCING THE RESIDENTIAL MORTGAGE MARKET, THAT THE INCREASED SUPPORT AND INVOLVEMENT OF THE U.S. GOVERNMENT MAY

OFFER POTENTIAL FOR ATTRACTIVE NON-RECOURSE FINANCING ALTERNATIVES IMPROVING INVESTMENT RETURNS, THAT AGENCY RMBS ARE LIKELY TO REMAIN AT LOW

PRICES TO LIBOR FOR SOME TIME, AND THE PROJECTED PREPAYMENT SPEEDS OF CERTAIN ASSETS (INCLUDING THAT SOME PREPAYMENTS ARE LIKELY TO REMAIN SLOWER

THAN PROJECTIONS); (V) THAT CERTAIN NON-AGENCY RMBS ARE PRICED AT LEVELS THAT COMPENSATE FOR CREDIT RISK AND HAVE UPSIDE TO POTENTIAL GOVERNMENT

PROGRAMS PROVIDING NON-RECOURSE TERM FINANCING, AND CERTAIN AGENCY RMBS SPREADS ARE EXPECTED TO REMAIN WIDE; (VI) REGARDING TWO HARBORS’S

EXPECTATION TO GENERATE AN ATTRACTIVE ROE; (VII) REGARDING TWO HARBORS’ ABILITY TO QUICKLY DEPLOY ITS CAPITAL AND THE PRICES AT WHICH AND THE EXTENT

TO WHICH TWO HARBORS WILL INVEST ITS CAPITAL; (VIII) REGARDING TWO HARBORS’S FINANCING STRATEGY AND USE OF LEVERAGE, INCLUDING TWO HARBORS’S TARGET

LEVERAGE RATIO AND POTENTIAL USE OF GOVERNMENT PROGRAMS; (IX) REGARDING THE EXPECTED TERMS OF THE TALF PROGRAM; AND (X) RELATING TO THE WARRANTS

AS A POTENTIAL SOURCE OF CAPITAL GROWTH, INCLUDING THE BOOK VALUE OF TWO HARBORS POST WARRANT EXERCISE AND THE USE OF PROCEEDS BY TWO HARBORS

UPON EXERCISE OF THE WARRANTS.

THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES.  TWO HARBORS UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-

LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE.  IMPORTANT FACTORS, AMONG OTHERS, THAT MAY AFFECT ACTUAL

RESULTS INCLUDE:  UNCERTAINTIES AS TO THE TIMING OF THE PROPOSED TRANSACTION; APPROVAL OF THE PROPOSED TRANSACTION BY CAC’S STOCKHOLDERS AND

WARRANT HOLDERS; THE SATISFACTION OF CLOSING CONDITIONS TO THE PROPOSED TRANSACTION; COSTS RELATED TO THE PROPOSED TRANSACTION; CHANGES IN

ECONOMIC CONDITIONS GENERALLY, CHANGES IN TWO HARBORS’S INDUSTRY AND CHANGES IN THE COMMERCIAL FINANCE AND THE REAL ESTATE MARKETS SPECIFICALLY;

LEGISLATIVE AND REGULATORY CHANGES; AVAILABILITY OF DEBT AND EQUITY CAPITAL TO TWO HARBORS ON FAVORABLE TERMS, OR AT ALL; AVAILABILITY OF SUITABLE

INVESTMENT OPPORTUNITIES THAT SATISFY TWO HARBORS’S INVESTMENT OBJECTIVES AND STRATEGIES; EXPECTATIONS REGARDING THE TIMING OF GENERATING

REVENUES; THE DEGREE AND NATURE OF TWO HARBORS’S COMPETITION; TWO HARBORS’S DEPENDENCE ON ITS MANAGER AND INABILITY TO FIND A SUITABLE

REPLACEMENT IN A TIMELY MANNER, OR AT ALL, IF TWO HARBORS OR ITS MANAGER WERE TO TERMINATE THE MANAGEMENT AGREEMENT; CHANGES IN THE RELATIONSHIPS

AMONG, OR THE BUSINESS OR INVESTMENT OBJECTIVES AND STRATEGIES OF, AND CONFLICTS OF INTEREST AMONG, TWO HARBORS AND PINE RIVER, INCLUDING THE

MANAGER; LIMITATIONS IMPOSED ON TWO HARBORS’S BUSINESS BY ITS EXEMPTIONS UNDER THE 1940 ACT; CHANGES IN INTEREST RATES AND INTEREST RATE SPREADS; THE

PERFORMANCE, FINANCIAL CONDITION AND LIQUIDITY OF BORROWERS; INFLATION; CHANGES IN GAAP; CHANGES IN PERSONNEL AND LACK OF AVAILABILITY OF QUALIFIED

PERSONNEL; MARKET TRENDS; POLICIES AND RULES APPLICABLE TO REITS; AND OTHER FACTORS NOT PRESENTLY IDENTIFIED.

4

Two Harbors

Investment Corp.

Proven Manager

with Strong Track

Record

Capitol Acquisition (NYSE Amex: CLA) to merge with a subsidiary of Two

Harbors Investment Corp., a newly created mortgage REIT to capitalize on

severe dislocation in residential mortgage backed securities (RMBS) market.

At

current

CLA

price,

an

investor

creates

a

share

in

Two

Harbors

at

1.00x

initial

Book

Value

vs.

1.40x

trading

average

for

non-Agency

public

peers.

(1)

Externally

managed

by

PRCM

Advisers,

an

affiliate

of

Pine

River,

a

global

fixed-income focused asset manager.

Since February 2008 inception, Pine River’s MBS strategy has returned

95.6% net

(2)

with no negative months.

Team and infrastructure in place to rapidly invest proceeds and manage

future growth.

Attractive 1.5% management fee structure with no additional performance

fees.

Opportunity

Transaction Highlights

(1)           Please see slide 24 entitled “Comparables:  Non-Agency and Agency REITS” for more information. 

(2)           For more information with respect to the performance of Pine River’s MBS strategy including key assumptions used in deriving such performance, please see slide 8 entitled “Pine River’s MBS Strategy Historical Returns”. 

.

5

Two Harbors

Investment Corp.

With no legacy assets, Two Harbors is positioned to invest 100% of

Capitol’s trust fund proceeds into RMBS with potential for attractive risk

adjusted returns and Return on Equity (ROE).

Cross-product approach targeting all sub-sets of the RMBS market enables

Two Harbors to best capture inefficiencies.

Expected

government

financing

programs

such

as

TALF

II

(1)

(if

expanded

to

RMBS) could increase return on equity.

Compelling

Targeted Returns

Transaction Highlights

(1)

Term Asset-Backed Securities Loan Facility (TALF).

(2)

As of June 9, 2009 closing price.

Capitol’s public shareholders to own 100% of Two Harbors post

completion.

Expected market capitalization of $252 million based on 26.25 million

common

shares

and

current

stock

price

of

$9.61

(2)

(reduced

by

the

amounts converted by stockholders exercising their conversion rights

and the amounts that may be used to enter into forward or other

contracts to purchase shares of Capitol).

Warrants struck at $11.00 provide accretive growth capital.

Pro Forma

Ownership

6

Two Harbors

Investment Corp.

Experienced, Cohesive Team:

Six partners together for average of 14 years.

–

Average 18 years hedge fund

experience.

54 employees, 19 investment professionals.

No senior management turnover.

Historically low attrition.

Overview of Pine River Capital Management

Founded June 2002 with offices in New York, London, Hong Kong, San Francisco and Minnesota.

Over $800 million assets under management

(1)

.

–

Experienced manager of non-Agency, Agency and other mortgage related assets.

–

Pine River has never suspended or withheld cash from investors.

Established Infrastructure:

Strong corporate governance.

Registrations: SEC/NFA (U.S.), FSA (U.K.),

SFC (Hong Kong), SEBI (India) and TSEC

(Taiwan).

Proprietary technology.

Global footprint.

Minnetonka, MN               •

London

•

Hong Kong

•

San Francisco               •

New York

Global multi-strategy asset management firm providing comprehensive portfolio

management, transparency and liquidity to institutional and high

net worth investors.

(1)

Estimate as of June 1, 2009.

7

Two Harbors

Investment Corp.

The Two Harbors Team

Board consists of seven directors, majority independent, including:

–

Chairman, Brian Taylor, CEO and Founder, Pine River;

–

Vice-Chairman, Mark Ein, CEO, Capitol;

–

Director, Tom Siering, Partner, Pine River; and

–

Four independent directors.

Tom Siering, CEO.

Jeff Stolt, CFO.

Steve Kuhn, Co-Chief Investment Officer.

Bill Roth, Co-Chief Investment Officer.

Tim O’Brien, General Counsel.

Andrew Garcia, VP Business Development.

Management Team

Board of Directors

8

Two Harbors

Investment Corp.

Pine River’s MBS Strategy Historical Returns

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Net Monthly Return

N/A

2.93%

1.26%

2.83%

4.10%

4.09%

2.49%

2.11%

9.56%

2.46%

3.26%

4.32%

Net Annual Return

N/A

2.93%

4.23%

7.18%

11.57%

16.13%

19.02%

21.52%

33.15%

36.42%

40.87%

46.95%

Jan-09

Feb-09

Mar-09

Apr-09

May-09

(Estimate)

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Net Monthly Return

8.50%

5.01%

4.48%

5.09%

6.38%

Net Annual Return

8.50%

13.94%

19.04%

25.10%

33.08%

Annualized Net Life to Date Return

3 Month Net Return

Annualized Standard Deviation

6 Month Net Return

Positive Months

12 Month Net Return

LTD Net Return

Nisswa Fixed Income Fund L.P. Estimated

May 1, 2009 Assets Under Management

95.56%

16.80%

38.82%

75.28%

65.37%

7.84%

16/16

$202.2 Million

Beginning in September 2008, the data reflects the actual performance of Nisswa Fixed Income Fund L.P.  

For the period from February 2008 to August 2008, Pine River’s fixed income strategy was conducted through Nisswa Master Fund Ltd., a multi-strategy hedge fund that focuses on both investment grade

and non-investment grade global convertible arbitrage, capital structure arbitrage, SPAC warrant arbitrage and fixed income arbitrage.  The performance data included above for this period reflects the

performance of this strategy as a component of Nisswa Master Fund Ltd.  The performance information relating to this strategy is derived from the strategy attribution contained in the monthly investor

reports of Nisswa Master Fund Ltd. which separately reported on the results of this strategy, except that the performance information shown above reflects the payment of full incentive fees to the manager,

even if such fees were not paid.  The strategy performance information is based on a number of important assumptions with respect to the allocation of leverage, stock loan fees and interest income and

expenses.  For example, Pine River allocated fund leverage and expenses among Nisswa Master Fund Ltd.’s various strategies based on margin requirements across the positions in each strategy.  

Investors should note that the investment strategy of each of Nisswa Fixed Income Fund L.P. and the fixed income strategy component of Nisswa Master Fund Ltd. is different from the investment strategy

that Two Harbors intends to employ in several important respects.  Nisswa Fixed Income Fund L.P. (and before September 2008 the fixed income strategy component of Nisswa Master Fund Ltd.) traded

actively in fixed-rate, adjustable and interest only securities, Collateralized Mortgage Obligations, trades in mortgage backed securities to be delivered by a U.S. government-sponsored mortgage entity at a

future date, and equity investments in REITs, and actively hedged its trading positions.  However, Two Harbors initially expects to invest predominately in Agency and non-Agency RMBS with a buy-and-

hold emphasis.  In addition, whereas Nisswa Master Fund Ltd. and Nisswa Fixed Income Fund L.P. charge a 1.5% management fee as well as a 20% incentive fee, Two Harbors will only pay a 1.5%

management fee.  Two Harbors investment strategy may differ from that of Nisswa Fixed Income Fund L.P. additionally, in that it intends to use greater leverage with regard to its investments in Agency

securities.  Accordingly investors should not assume that they will experience returns, if any, comparable to those experienced by investors in Nisswa Fixed Income Fund L.P. or the fixed income strategy

component of the Nisswa Master Fund Ltd. 

Past performance is not indicative of future results.  Return on capital is calculated based on average monthly capital, not beginning of month capital. Assumes a 1.5% management fee and 20% incentive fee.

9

Two Harbors

Investment Corp.

Two Harbors Investment Approach

Holistic approach across non-Agency and Agency RMBS.

Continuous top-down market assessment to identify most

attractive segments.

Detailed analyses to find the most mispriced

securities.

Find and invest in smaller opportunities often ignored by larger

funds.

Strong focus on risk management to preserve value and maximize

returns.

10

Two Harbors

Investment Corp.

Market Opportunity

Traditional providers of capital have left the market.

–

Fannie Mae & Freddie Mac, historically the overseers of relative

value and

effectively the world’s two largest mortgage “hedge funds”, cannot participate in

the current price discrepancies.

–

The capital bases of traditional market participants such as proprietary trading

desks and hedge funds have been reduced.

Continued forced selling by remaining participants has led to significant price declines.

Two Harbors will be positioned to capitalize upon severe dislocations in the $11.0 trillion

U.S. mortgage market.

(1)

(1)

FBR Miller.

11

Two Harbors

Investment Corp.

0%

1%

2%

3%

4%

5%

6%

7%

Jan-04

Oct-04

Jul-05

Apr-06

Jan-07

Oct-07

Jul-08

Apr-09

FN30CC

1moLIB

Agency securities are trading at wide spreads to

LIBOR and are likely to remain wide for some

time.

Source:

UBS Mortgage Strategy.

Non-Agency securities are trading at low

prices.

Significant opportunities in both non-Agency and Agency securities.

Source:

Amherst Securities.

Note:

All prices are indicative month-end levels for 2006 / 2007 vintages.

Historical Pricing on Senior Non-Agency Securities

Agency Spreads

FN 30-yr Current Coupon vs. LIBOR

30

40

50

60

70

80

90

100

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Prime - 30 Year Fixed

Alt - A - 30 Year Fixed

Option Arm Super Senior

Market Opportunity

12

Two Harbors

Investment Corp.

(1)

Actual results will be impacted by the risks inherent in any mortgage backed securities portfolio, including by the matters discussed in the Proxy Statement/Prospectus under "Risk Factors."  Investors are urged to read this

document

in

its

entirety

when

available,

including

the

section

under

"Risk

Factors.”

Assumes

no

shareholder

conversions.

(2)

Haircut is defined as the percent of market value one must pledge as collateral to finance a security.

(3)

The following assumptions were used for each security type: Agency Hybrids: 15 Constant Prepayment Rate (CPR); Non-Agency Super Senior: 1 CPR, 30 Constant Default Rate (CDR), 70 Loss Severity; Non-Agency

Mezzanine: 4 CPR, 15 CDR, 70 Loss Severity; MBS Derivatives: 25 CPR.

(4)

Assumes 9x borrowings.

(5)

Assumes LIBOR is flat to current level.

Hypothetical Portfolio

Hypothetical

Portfolio

(1)

% of Equity

Finance

Interest

Interest

Return on

Security Type

Low

Mid

High

Equity

Haircut

Assets

Yield

Rate

Income

Expense

Equity

Agency hybrids

15%

20%

25%

$50.2

10%

$502.1

4%

1.0%

$20.1

($4.5)

31.0%

Non-Agency super senior

35%

45%

55%

113.0

100%

113.0

16%

–

18.1

–

16.0%

Non-Agency mezzanine

10%

20%

30%

50.2

100%

50.2

30%

–

15.1

–

30.0%

MBS derivatives

5%

15%

25%

37.7

100%

37.7

40%

–

15.1

–

40.0%

100%

$251.1

$703.0

$68.3

($4.5)

25.4%

Estimated shareholder equity:

$251.1

Total leverage:

1.8x

(4)

(3)

(5)

($ in millions)

(2)

In the discussions leading up to the execution of the merger agreement, Two Harbors presented the following hypothetical portfolio information to the Board of Directors of Capitol for its

consideration and review.  Such hypothetical portfolio information does not represent any actual assets held or borrowings made by Two Harbors.  Instead, the presentation illustrates the types and

performance characteristics of a portfolio of assets that Two Harbors believes should be available for purchase in the market and illustrates the costs of borrowings that Two Harbors believes should be

available upon completion of the merger.  There can be no assurance that a portfolio of the type presented will be available for purchase upon consummation of the merger at the prices assumed.

In addition, the returns from the portfolio are based on a number of assumptions detailed below.  Actual results will vary from the amounts shown in the presentation below.

13

Two Harbors

Investment Corp.

Non-Agency Discount Example

Super Senior Bond backed by Option Arm

Collateral (CWALT 2006-OA17 2A1).

–

First 27.8% of loss is absorbed by

junior bonds.

–

Receives protection from the Senior

Support and Subordinate bonds

from credit losses.

–

Pays a coupon of COFI

(2)

+ 150bps,

where most Option Arms pay 1mo

Libor + a smaller margin.

SUPER

SENIOR BONDS

27.8%-100%

Illustrative non-Agency Security Investment

SUPPORT

BONDS

Voluntary CPR

(1)

of 1, which implies only

1% of the people in the trust (annually) 

will be able to refinance.

A constant default rate of 35, which means

35% of the trust per year will be defaulted.

Loss severity of 70%, which assumes all

loan liquidated out of the trust will trade

for 30 cents on the dollar.

Purchase price: $34.00.

Yield: 18.5 percent.

Security

Assumptions

Risk / Reward Profile of this Bond

(1)

Constant prepayment rate.

(2)

Other

assumptions:

1%

voluntary

CPR,

30

CDR,

Cost

of

Funds

Index

(“COFI”)

flat

at

1.38%.

Dollar Price

50%

55%

60%

65%

70%

75%

$34

44.0%

37.0%

31.0%

25.0%

18.0%

12.0%

Yields

at

Various

Loss

Severity

Assumptions

(2)

Implied liquidation % of the entire pool: over 95 percent.

Implied total % loss on the collateral: 66.7 percent.

This bond does not represent an actual asset held by Two Harbors.  Instead, the presentation illustrates the analysis PRCM Advisors expects to perform in analyzing potential bonds for

purchase by Two Harbors.  There can be no assurance that an asset of the type presented will be available for purchase upon consummation of the merger at the assumed price, or at all.

14

Two Harbors

Investment Corp.

The TALF Program –

Potential Catalyst

Currently available for select Asset Backed and Commercial Mortgage Backed securities.

Treasury has proposed expansion to include “certain non-Agency residential mortgage backed

securities”.

(1)

Key loan aspects expected to include:

–

Non-recourse financing;

–

Possible terms of up to 5-years

(2)

;

–

Haircuts and spreads based on average life and type of asset; and

–

Reduced spreads on loans benefiting from government guarantees.

Non-recourse term financing, such as that contemplated by TALF II, could have an

impact on expected Return on Equity.

(1)

The timing of the expansion of the TALF to Non-Agency RMBS and the terms of such expansion have not yet been published by the U.S. Treasury.  There can be no assurance that TALF will be so expanded or if so

expanded that TALF will offer financing terms that will be attractive to Two Harbors.

(2)

If

TALF

were

expanded

to

RMBS,

this

assumes

the

term

would

follow

the

TALF

expansion

to

CMBS.

15

Two Harbors

Investment Corp.

0

10

20

30

40

50

60

70

Incentive to Prepay in bps (May 2009)

LLB

Generic

0

10

20

30

40

50

60

70

Incentive to Prepay in bps

2003

2009 May

Source:

Merrill Lynch Fixed Income Strategy and J.P. Morgan Securities Inc.

Capacity constraints of mortgage originators.

Significant declines in homeowners equity reduces

borrower’s ability to access funding.

Low

Loan

Balance

(LLB)

–

Fixed

costs

reduce

borrower’s incentive; busy brokers avoid low-fee

business.

Fixed costs represent higher barriers to smaller

borrowers.

Prepayment speeds remain slower than 2003

despite government intervention.

Some prepayments likely to remain slower than

projections.

Prepayment Cycle Creates Pricing Opportunities

Fannie 30-yr. Prepayment Curves

Fannie 30-yr Prepayment Curves by Loan Attributes

16

Two Harbors

Investment Corp.

Agency Inverse IO Example

Agency Inverse IO bonds are an inherently levered way to take advantage of slow

prepayment speeds on specific types of collateral pools, such as

LLBs.

5 CPR

15 CPR

25 CPR

35 CPR

45 CPR

53 CPR

Price  10-03

61.0%

53.0%

45.0%

31.0%

14.0%

(1.0%)

Yields at Various Prepayment Speeds

Agency Inverse IO Bond Example

Loan Size Data (as of April 2009)

Average

Original

Original

Current

Minimum

Maximum

$68,300

$64,900

$21,000

$85,000

1 month

May-09

18.6

Apr-09

14.4

Mar-09

18.4

Feb-09

13.2

Jan-09

8.1

Dec-08

5.6

Nov-08

9.3

Oct-08

8.1

Sep-08

7.2

Aug-08

8.4

Jul-08

13.9

Jun-08

16.5

Constant Prepayment

Rates (CPRs)

This bond does not represent an actual asset held by Two Harbors.  Instead, the presentation illustrates the analysis PRCM

Advisors expects to perform in analyzing potential bonds for

purchase by Two Harbors.  There can be no assurance that an asset of the type presented will be available for purchase upon consummation of the merger at the assumed price, or at all.

17

Two Harbors

Investment Corp.

Supported by 35 operational and administrative

professionals, including:

–

11 member accounting team;

–

3 member legal team;

–

7 member operations and settlement team; and

–

6 member software development team.

Pine River Offers Extensive MBS Expertise

Two

Harbors’

Co-Chief

Investment

Officers

Steve Kuhn –

Partner and Head of Fixed Income Trading.

–

Goldman Sachs Portfolio Manager from 2002 to 2007.

–

16 years investing in and trading mortgage backed securities and

other fixed income

securities for firms including Goldman Sachs Asset Management, Citadel and Cargill.

Bill Roth –

Portfolio Manager (beginning June 16, 2009).

–

Citi and Salomon Brothers 1981 –

2009; Managing Director since 1997.

–

Managing Director in the bank’s proprietary trading group managing MBS and ABS

portfolios.

Pine River’s Mortgage Backed strategy has returned 95.6% net of fees since inception,

February 2008.

(1)

Jiayi Chen –

Trader.

–

Formerly Goldman Sachs Asset

Management, risk management.

Brendan McAllister –

Trader.

–

Formerly UBS Securities, member of top

mortgage sales team.

Diana

Denhardt

–

Repo

Funding

Analyst.

–

20 years financing experience at EBF &

Associates and Cargill.

(1)

For

more

information

with

respect

to

the

performance

of

Pine

River’s

MBS

strategy

including

key

assumptions

used

in

deriving

such

performance,

please

see

slide

8

entitled

“Pine

River’s

MBS

Strategy

Historical

Returns”.

18

Two Harbors

Investment Corp.

Two Harbors Investment Team Goals

Create highest return on equity in the mortgage REIT sector.

Capture significant capital appreciation resulting from government

policies, including if TALF

is expanded to cover RMBS.

Maintain investment flexibility across entire RMBS sector to best

take advantage of opportunities as the mortgage market evolves.

19

Two Harbors

Investment Corp.

Opportunity for Investors

$2.6

Cash and Cash Equivalents

$9.56

Initial Book Value Per Share

(2)

Valuation Summary

($ in millions, except per share amounts)

June/July 2009

$251.1

Initial Book Value

1.00x

Assumed Price/Initial Book Value

$10.6

Less: Estimated Transaction & Other Expenses

Note:

Balance sheet as of March 31, 2009, balances and estimates subject to change.

(1)

As of June 9, 2009.

(2)

Assumes 100% of sponsors’

promote shares retired and existing 33.2 million warrants amended to an out-of-the-money strike price of $11.00.

26.25

Fully Diluted Shares (treasury method)

$252.3

Fully Diluted Equity Value

$259.1

Add: Cash Held in Trust

$9.61

Assumed

Price

Per

Share

(1)

Capitol’s common stockholders expected to create Two Harbors at or near Book Value.

Estimated Value at Closing

20

Two Harbors

Investment Corp.

124%

109%

156%

100%

50.0%

70.0%

90.0%

110.0%

130.0%

150.0%

170.0%

Agency REIT

Mean

Chimera

Investment

Corp

Redwood

Trust

Two

Harbors

Non-Agency REIT's

Non-Agency REIT Mean

Non-Agency

Mean: 140%

1.0x

6.6x

7.0x

0.7x

–

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

Agency REIT

Mean

Chimera

Investment

Corp

Redwood

Trust

Two

Harbors

Non-Agency REIT's

Non-Agency REIT Mean

Non-Agency

Mean: 3.6x

3.0x 

2.9x 

Efficient structure creates Two Harbors at a lower Price to Book

Value, using less leverage

than other publicly traded residential mortgage REITs.

Target

Leverage

Price to Book Value

Opportunity for Investors

Note:

Agency

REIT

Mean

comprised

of

American

Capital

Agency,

Annaly

Mortgage,

Anworth

Mortgage,

Capstead

Mortgage,

Hatteras

Financial

and

MFA

Mortgage.

Non-Agency REIT Mean comprised of Chimera Investment Corp. and Redwood Trust.  Prices as of June 9, 2009.

(1)

Target Leverage defined here as Total Liabilities divided by Total Equity.

(2)

Current leverage of 0.7x pro forma for recent equity offerings. Unadjusted for the equity offerings, target leverage would be 2.9x.

(3)

Current leverage of 6.6x pro forma for recent equity offering. Unadjusted for the equity offering, target leverage would be 9.6x.

(2)

(2)

(3)

(3)

(1)

21

Two Harbors

Investment Corp.

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1.5x

$9.50

$9.61

$9.75

$10.00

$10.50

$11.00

$11.50

$12.00

$12.50

$13.00

$13.50

$14.00

$14.50

Common Price

Two Harbors Price to BV

Non-Agency REIT Mean Price to BV

Price to Book Value

Transaction expected to create Two Harbors closer to Book Value than would be possible

in a traditional IPO or through secondary market purchases.

Opportunity for Investors

Note:

Assumes 100% of sponsors’

promote shares retired and existing 33.2 million warrants amended to an out-of-the-money strike price of $11.00.

Non-Agency

Mean: 1.40x

22

Two Harbors

Investment Corp.

Structure Creates

Attractive Return

Profile

Severe dislocation has led to capital outflows and potential

investment opportunities throughout the sector.

Government programs to inject liquidity into market provides

additional upside.

Deep, broad experience and disciplined investment approach.

Generated 95.6%

(1)

return and no negative return months since

Steve Kuhn launched Pine River’s MBS strategy in February 2008.

CLA’s

public stockholders expected to create Two Harbors at

1.00x initial Book Value vs. 1.40x average for non-Agency public

peers

(2)

.

High targeted return on equity with moderate leverage.

Market

Opportunity

Investment Team

Investment Summary

Building Next

Great Mortgage

REIT

Highly experienced team of mortgage specialists brought

together to create next great mortgage REIT franchise.

(1)

For more information with respect to the performance of Pine River’s MBS strategy including key assumptions used in deriving such performance, please see slide 8 entitled “Pine River’s MBS Strategy Historical Returns”.

(2)

Please

see

slide

24

entitled

“Comparables:

Non-Agency

and

Agency

REITS”

for

more

information.

Two Harbors

Investment Corp.

Appendix

24

Two Harbors

Investment Corp.

Comparables: Non-Agency and Agency REITs

($ in millions, except per share data)

Price

Market

Price /

Div. Yield:

Debt /

%

Expense

Company

Ticker

6/9/2009

Cap

2009E EPS

2010E EPS

Book

Most Recent

Equity

Agency

Ratio

Non-Agency REITs

Chimera Investment Corp.

CIM

$3.51

$2,353

8.6x

6.8x

1.24x

9.1%

0.7x

39%

3.4%

Redwood Trust

RWT

15.00

1,162

30.6

8.3

1.56

6.7

6.6

0

8.3

Mean

19.6x

7.5x

1.40x

7.9%

3.6x

20%

5.9%

Agency REITs

Annaly Mortgage

NLY

$14.79

$8,051

6.4x

6.4x

1.01x

13.5%

6.4x

1.5%

MFA Mortgage

MFA

6.61

1,472

6.5

6.1

1.08

13.3

6.2

1.6

Hatteras Financial

HTS

25.83

935

5.7

5.6

1.16

16.3

7.1

1.5

Capstead Mortgage

CMO

12.68

805

5.3

5.6

1.23

17.7

8.4

1.8

Anworth Mortgage

ANH

6.84

695

5.7

6.1

1.03

17.5

6.7

2.2

American Capital Agency

AGNC

20.36

305

5.4

5.9

1.06

16.7

7.3

3.3

Mean

5.8x

5.9x

1.09x

15.8%

7.0x

2.0%

Overall Mean

12.7x

6.7x

1.25x

11.9%

5.3x

3.9%

(5)

(6)

(1)

(2)

(3)

(4)

(1)

Source:

SNL Financial, FactSet and company filings.

Note: 

REIT Means calculated using the average of the non-Agency peer group mean and the Agency peer group mean.  Prices as of June 9, 2009.

(1)

Based on IBES consensus estimates, where available.

(2)

Most recent announced quarterly dividend annualized, divided by current share price.

(3)

Debt / Equity Leverage defined here as Total Liabilities divided by Total Equity.

(4)

Expense ratio is all non-interest expense less non-recurring expenses and any provisions for loan losses divided by end of period total equity for the most recent quarter.

(5)

Pro forma for recent equity offerings.

(6)

Pro forma for recent equity offering.

25

Two Harbors

Investment Corp.

1.26x

1.00x

0.02x

(0.14x)

(0.13x)

(0.01x)

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1.5x

Initial

Adjust warrants

Retire sponsor shares

Adjust deferred IPO fees

Transaction expenses

Final

We de-SPAC the SPAC

By re-striking warrants at $11.00, retiring the sponsor shares, and restructuring the deferred

fees, we de-SPAC the SPAC.

Non-Agency

Mean: 1.40x

(1)

As of June 9, 2009 closing price.

(1)

Current CLA Share Price    Multiple of Book Value

26

Two Harbors

Investment Corp.

Restructured Warrants Source of Growth Capital

Consent requires majority of warrant

holders.

Any cash warrant exercises will be at a

premium to the initial liquidation value.

Proceeds expected to be redeployed in

accretive investments.

Note:

Assumes re-strike of 33.249 million warrants at $11.00 and exercise

of all warrants for cash.  However, 7,000,000 warrants each relating

to one share of stock of Two Harbors, which will be held by CLA’s

sponsors following the consummation of the merger, are

exercisable on a cashless basis. If these warrants are exercised, the

Book Value per Share would be less than $10.37 due to dilution

and

the

greater

the

price

of

Two

Harbors’

stock

price

at

the

time

of

exercise of these warrants, the greater the dilutive impact.

Warrant Exercise

($ in millions, except per share data)

Warrant strike price to be amended to $11.00.

Pre

Post

Book Value

$251.1

$616.8

Basic Shares Outstanding (mm)

26.25

59.50

Book Value per Share

$9.56

$10.37

% Increase

8.4%

27

Two Harbors

Investment Corp.

Capitol Shareholder Options

Holders of record of CLA stock have the option of receiving a share of Two Harbors or a

pro rata distribution of the cash held in CLA’s trust (currently $9.87).

Capitol Acquisition

Shareholder

The acquisition is

approved

If unable to complete a transaction

by 11/8/2009, shareholder receives

pro rata share of cash-in-trust

(currently $9.87).

The acquisition is

rejected and CLA

liquidates in 11/09

Shareholder receives pro rata share

of cash-in-trust (currently $9.87).

CLA shareholder

votes “no”

Shareholder holds share of

Two Harbors.

CLA shareholder

votes “yes”

28

Two Harbors

Investment Corp.

Experienced Team

to Pine River’s inception, Brian was with EBF & Associates from 1988 to 2002; he was named head of the convertible arbitrage group in 1994 and

Partner in 1997. His responsibilities included portfolio management, marketing, product development, and trading information systems development. 

He holds a B.S. from Millikin University in Decatur, Illinois and an M.B.A. from the University of Chicago and passed the Illinois CPA exam.

and CEO of Venturehouse Group, LLC, a technology holding company that creates, invests in and builds technology, communications and related

business services companies.  Notable portfolio companies include Matrics Technologies, sold to Symbol Technologies in 2004; Cibernet Corporation,

sold to MACH S.a.r.l in 2007; and an early investment in XM Satellite Radio.  He is also the President of Leland Investments, a private investment firm.

Mark is also Co-Chairman and majority owner of Kastle Systems, a leading provider of building and office security systems. Mark is also the Founder and

Owner of the Washington Kastles, the World Team Tennis franchise in Washington, D.C. From 1992 to 1999, Mark was a Principal with The Carlyle

Group. Prior to Carlyle, Mark worked at Brentwood Associates and Goldman, Sachs (in the commercial MBS group). Mark holds a B.S. from the

University of Pennsylvania’s Wharton School of Finance and an M.B.A. from the Harvard Business School.

Associates in Minnetonka, MN from 1999 until 2006.  He was the portfolio manager for Merced Partners, LP and Tamarack International Limited during

that period.  Tom was named a partner of EBF in 1997. He supervised a staff of thirteen people located both in Minnesota and London. This staff was

comprised of traders, analysts and support personnel.  Tom joined EBF in 1989 as a Trader. Prior to his employment at EBF, from 1987 to 1989, Tom

held various trading positions in the Financial Markets Department at Cargill, Inc. From 1981 until 1987 Tom was employed in the Domestic Soybean

Processing Division at Cargill in both trading and managerial roles. Tom holds a B.B.A. from the University of Iowa with a major in Finance.

based in New York and Beijing from 2002 to 2007, where he was part of a team that managed approximately $40 billion in mortgage backed securities.

From 1999 to 2002, Steve was a Japanese convertible bond trader at Citadel Investment Group in Chicago. Prior to that, he was head of mortgage

backed securities trading at Cargill. He has 16 years mortgage-related trading experience. Steve holds a B.A. in Economics with Honors from Harvard.

asset-backed securities. Prior to joining Pine River in 2009, Bill was Managing Director at Citigroup and its predecessor firm, Salomon Brothers Inc.

From 2004 to 2009, Bill managed a proprietary trading book at Citigroup with particular focus on mortgage and asset-backed securities. From 1994 to

2004, Bill was part of the Salomon/Citi New York Mortgage Sales Department. From 1981 to 1994, Bill was based in Chicago and managed the Chicago

Financial Institutions Sales Group for Salomon. He was awarded the Masters in Business Administration with a concentration in Finance from the

University of Chicago Graduate School of Business. Bill holds a B.S. in Finance and Economics from Miami University.

Brian

Taylor,

Chairman.

Brian

Taylor

founded

Pine

River

in

2002

and

is

responsible

for

management

of

the

business

and

oversight

of

the

funds.

Prior

Mark

D.

Ein,

Vice-Chairman.

Mark

Ein

has

served

as

CEO

of

Capitol

Acquisition

Corp.

since

its

inception

in

November

2007.

Mark

is

the

Founder

Thomas

Siering,

Chief

Executive

&

Director.

Prior

to

joining

Pine

River

in

2006,

Tom

was

head

of

the

Value

Investment

Group

at

EBF &

Steve

Kuhn,

Co-Chief

Investment

Officer.

Prior

to

joining

Pine

River

in

2008,

Steve

was

a

Vice

President

and

Portfolio

Manager

at

Goldman

Sachs

Bill

Roth,

Co-Chief

Investment

Officer.

Bill

has

28

years

of

experience

in

the

Fixed

Income

Markets,

with

specific

expertise

in

mortgage-backed

and

29

Two Harbors

Investment Corp.

Experienced Team

Jeff Stolt, Chief Financial Officer.

Prior to co-founding Pine River in 2002, Jeff was the Controller at EBF & Associates from 1997 to 2002. In this

role, Jeff oversaw the preparation of all fund accounting statements, managed the offshore administrator relationship, managed the audit process and was

responsible for tax planning and reporting. Jeff began employment with EBF in 1989. Prior to that, Jeff was an accountant in Cargill, Inc.’s Financial

Markets Department from 1986 until 1989. Jeff holds a B.S. in Accounting and Finance from the Minnesota State University.

Tim O’Brien, General Counsel.

Prior to joining Pine River in 2007, Tim previously served as Vice President and General Counsel of NRG Energy,

Inc. from 2004 until 2006. He served as Deputy General Counsel of NRG Energy from 2000 to 2004 and Assistant General Counsel from 1996 to 2000.

Prior to joining NRG, Tim was an associate at Sheppard, Mullin, Richter & Hampton in Los Angeles and San Diego, California. He holds a B.A. in

History

from

Princeton

University

and

a

Juris

Doctor

degree

from

the

University

of

Minnesota

Law

School.

Tim

attended

an

eight-week

Advanced

Management Program at Harvard Business School in the spring of 2007.

Andrew

Garcia,

VP

Business

Development.

Prior

to

joining

in

2008,

Andrew

was

the

Event

Driven

and

Business

Combination

Companies

(SPAC)

specialist

in

the

Capital

Markets

division

at

Maxim

Group

in

New

York.

Before

joining

Maxim

Group,

he

was

the

head

trader

at

Laterman

&

Company.

From 2001 to 2005, he covered institutional event-driven and risk arbitrage investors as a sales trader, equity sales person, and middle markets sales

person at Cathay Financial, Oppenheimer & Co., and CIBC Oppenheimer Corp. Andrew holds a B.A. from Kenyon College.

30

Two Harbors

Investment Corp.

Contact Details

Mark Ein

Chairman and CEO

Capitol Acquisition Corp.

202 654 7001

mark@capitolacquisition.com

For further information, please contact:

Andrew Garcia

VP of Business Development

Two Harbors Investment Corp.

612 238 3307

andrew.garcia@twoharborsinvestment.com