NEWCASTLE INVESTMENT CORP.
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
UNDERWRITING AGREEMENT
January 6, 2004
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, NY 10080
Ladies and Gentlemen:
Newcastle Investment Corp., a corporation organized and existing under the
laws of Maryland (the "Company"), proposes to issue and sell shares of Common
Stock, $.01 par value per share (the "Common Stock"), or warrants to purchase a
number of shares of Common Stock (the "Common Stock Warrants"), or both, or
shares of Preferred Stock, $.01 par value per share (the "Preferred Shares"),
from time to time, in one or more offerings on terms to be determined at the
time of sale. The Preferred Shares may be offered in the form of depositary
shares (the "Depositary Shares") represented by depositary receipts (the
"Depositary Receipts"). The Common Stock Warrants will be issued pursuant to a
Common Stock Warrant Agreement (the "Warrant Agreement") between the Company and
a warrant agent (the "Warrant Agent"). Each series of Preferred Shares may vary
as to the specific number of shares, title, stated value, liquidation
preference, issuance price, ranking, dividend rate or rates (or method of
calculation), dividend payment dates, any redemption or sinking fund
requirements, any conversion provisions and any other variable terms as set
forth in the applicable articles supplementary (each, the "Articles
Supplementary") relating to such Preferred Shares. As used herein, "Securities"
shall mean the Common Stock, the Common Stock Warrants, the Preferred Shares,
the Depositary Shares and the Depositary Receipts; and "Warrant Securities"
shall mean the Common Stock issuable upon exercise of Common Stock Warrants. As
used herein, "you" and "your," unless the context otherwise requires, shall mean
the parties to whom this Agreement is addressed together with the other parties,
if any, identified in the applicable Terms Agreement (as hereinafter defined) as
additional co-managers with respect to Underwritten Securities (as hereinafter
defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities through
you or through an underwriting syndicate managed by you, the Company will enter
into an agreement (the "Terms Agreement") providing for the sale of such
Securities (the "Underwritten
Securities") to, and the purchase and offering thereof by, you and such other
underwriters, if any, selected by you as have authorized you to enter into such
Terms Agreement on their behalf (the "Underwriters," which term shall include
you whether acting alone in the sale of the Underwritten Securities or as a
member of an underwriting syndicate and any Underwriter substituted pursuant to
Section 9 hereof). The Terms Agreement relating to the offering of Underwritten
Securities shall specify the number of Underwritten Securities of each class or
series to be initially issued, including the number of Common Stock Warrants, if
any (the "Initial Underwritten Securities"), whether the Initial Underwritten
Securities shall be in the form of Depositary Shares and the fractional amount
of Preferred Shares represented by each Depositary Share, the names of the
Underwriters participating in such offering (subject to substitution as provided
in Section 9 hereof), the number of Initial Underwritten Securities which each
such Underwriter severally agrees to purchase, the names of such of you or such
other Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to be
purchased by the Underwriters from the Company, any initial public offering
price, the time, date and place of delivery and payment, any delayed delivery
arrangements and any other variable terms of the Initial Underwritten Securities
(including, but not limited to, current ratings (in the case of Preferred Shares
and Depositary Shares only), designations, liquidation preferences, conversion
provisions, redemption provisions and sinking fund requirements and the terms of
the Warrant Securities and the terms, prices and dates upon which such Warrant
Securities may be purchased). In addition, each Terms Agreement shall specify
whether the Company has agreed to grant to the Underwriters an option to
purchase additional Underwritten Securities to cover over-allotments, if any,
and the number of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit A
hereto, may take the form of an exchange of any standard form of written
communication between you and the Company. Each offering of Underwritten
Securities through you or through an underwriting syndicate managed by you will
be governed by this Agreement, as supplemented by the applicable Terms
Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-109597) for the
registration of up to $750,000,000 of the Securities and Warrant Securities and
debt securities of the Company, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), and the Company has filed such amendments thereto as
may have been required prior to the execution of the applicable Terms Agreement.
Such registration statement (as amended, if applicable) has been declared
effective by the Commission. Such registration statement and the prospectus
constituting a part thereof, in each case as supplemented by a prospectus
supplement relating to the offering of Underwritten Securities (the "Prospectus
Supplement"), including in each case all documents incorporated therein by
reference as of the date of the Prospectus Supplement and as of the applicable
Closing Time (as hereinafter defined), and the information, if any, deemed to be
a part thereof pursuant to Rule 430A(b) or Rule 434 of the 1933 Act Regulations
as from time to time amended or supplemented pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are
collectively referred to herein as the "Registration Statement" and
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the "Prospectus", respectively; provided, however, that a Prospectus Supplement
shall be deemed to have supplemented the Prospectus only with respect to the
offering of Underwritten Securities to which it relates. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. If the Company elects to rely
on Rule 434 under the 1933 Act Regulations, all references to the Prospectus
shall be deemed to include, without limitation, the form of prospectus and the
abbreviated term sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectus").
If the Company files a registration statement to register a portion of the
Securities and Warrant Securities and relies on Rule 462(b) for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration statement
referred to above (No. 333-109597) and the Rule 462 Registration Statement, as
each such registration statement may be amended pursuant to the 1933 Act. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing, shall be deemed to include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR").
The Company and Fortress Investment Group LLC, a limited liability company
organized and existing under the laws of Delaware and the manager of the Company
(the "Manager"), each confirms as follows its agreements with you.
1. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company represents
and warrants to you, as of the date hereof, and to you and each Underwriter
named in the applicable Terms Agreement, as of the date thereof, the Closing
Time (as hereinafter defined) and each Date of Delivery, if any (as hereinafter
defined) (in each case, a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective and at each time thereafter on which the
Company filed an Annual Report on Form 10-K with the Commission, complied, and
as of each Representation Date will comply, in all material respects with the
requirements of the 1933 Act and 1933 Act Regulations; the Registration
Statement, at the time the Registration Statement became effective and at each
time thereafter on which the Company filed an Annual Report on Form 10-K with
the Commission, did not, and at each time thereafter on which any amendment to
the Registration Statement becomes effective or the Company files an Annual
Report on Form 10-K with the Commission and as of each Representation Date will
not, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
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the statements therein not misleading; and the Prospectus, as of the date
hereof, does not, and as of each Representation Date will not, include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter through
you expressly for use in the Registration Statement or Prospectus.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
under the 1934 Act (the "1934 Act Regulations"), and, when read together with
the other information in the Prospectus, at the time the Registration Statement
became effective and as of the applicable Representation Date or during the
period specified in Section 3(a)(vi), did not and will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(iii) Ernst & Young LLP, the accountants who have certified the
financial statements included in the Registration Statement, are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (excluding any documents
incorporated therein by reference pursuant to the 1934 Act after the execution
of the applicable Terms Agreement), except as set forth in the Registration
Statement and the Prospectus, there has been no material adverse change or any
development involving a prospective material adverse change in the business,
prospects, properties, operations, condition (financial or other) or results of
operations of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business and since the date
of the latest balance sheet presented or incorporated by reference in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and its subsidiaries taken as a
whole, except for liabilities or obligations which are reflected in or
incorporated by reference in the Registration Statement and the Prospectus
(excluding any documents incorporated therein by reference pursuant to the 1934
Act after the execution of the applicable Terms Agreement).
(v) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the Preferred
Shares in accordance with the provisions of a Deposit Agreement (each, a
"Deposit Agreement"), among the Company, the financial institution named in the
Deposit Agreement (the "Depositary") and the holders of the Depositary Receipts
issued thereunder, have, as of each Representation Date, been duly authorized by
the Company and such Underwritten Securities have been duly authorized for
issuance and sale pursuant to this Agreement and such Underwritten Securities,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract (as hereinafter
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defined), will be validly issued, fully paid and non-assessable and will not be
subject to preemptive or other similar rights; the Preferred Shares, if
applicable, conform to the provisions of the Articles Supplementary; and the
Underwritten Securities being sold pursuant to the applicable Terms Agreement
conform in all material respects to all statements relating thereto contained in
the Prospectus.
(vi) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement and
countersigned by the Warrant Agent as provided in the Warrant Agreement, will
have been duly executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the benefits
provided by the Warrant Agreement under which they are to be issued; the
issuance of the Warrant Securities upon exercise of the Common Stock Warrants
will not be subject to preemptive or other similar rights; and the Common Stock
Warrants conform in all material respects to all statements relating thereto
contained in the Prospectus.
(vii) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares, or the
Warrant Securities, will have been duly and validly authorized and reserved for
issuance upon such conversion or exercise by all necessary corporate action and
such shares, when issued upon such conversion or exercise, will be duly and
validly issued and will be fully paid and non-assessable, and the issuance of
such shares upon such conversion or exercise will not be subject to preemptive
or other similar rights; the shares of Common Stock issuable upon conversion of
any of the Preferred Shares or the Depositary Shares, or the Warrant Securities,
conform in all material respects to the descriptions thereof in the Prospectus.
(viii) The applicable Warrant Agreement, if any, and the applicable
Deposit Agreement, if any, will have been duly authorized, executed and
delivered by the Company prior to the issuance of any applicable Underwritten
Securities, and each constitutes a valid and legally binding agreement of the
Company enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws relating to or
affecting creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in equity or at
law); and the Warrant Agreement, if any, and the Deposit Agreement, if any, each
conforms in all material respects to all statements relating thereto contained
in the Prospectus.
(ix) If applicable, upon execution and delivery of the Depositary
Receipts pursuant to the terms of the Deposit Agreement, the persons in whose
names such Depositary Receipts are registered will be entitled to the rights
specified therein and in the Deposit Agreement, except as enforcement of such
rights may be limited by bankruptcy, insolvency or other similar laws relating
to or affecting creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(x) The amended and restated management and advisory agreement (the
"Management Agreement"), dated as of June 23, 2003, between the Company and the
Manager has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent
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that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting enforcement of creditors' rights or by
general equitable principles.
(xi) The execution, delivery, and performance of this Agreement, the
applicable Terms Agreement, any Warrant Agreement or any Deposit Agreement and
the consummation of the transactions contemplated hereby and thereby do not and
will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement, instrument, franchise, license
or permit to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective properties or assets
may be bound and which is material to the business of the Company and its
subsidiaries taken as a whole or (ii) violate or conflict with any provision of
the charter, by-laws, limited liability company agreement or partnership
agreement, as the case may be, of the Company or any of the subsidiaries listed
on Schedule I hereto (the "Subsidiaries") or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets. The Company has no
other significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X) that are not set forth on Schedule I. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement, the applicable Terms Agreement, any Warrant
Agreement or any Deposit Agreement, or the consummation of the transactions
contemplated hereby or thereby, by the Registration Statement and by the
Prospectus, including the issuance, sale and delivery of the Underwritten
Securities to be issued, sold and delivered by the Company pursuant to the
applicable Terms Agreement, any Warrant Agreement or any Deposit Agreement,
except the registration under the 1933 Act of the Underwritten Securities and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Underwritten Securities by you.
(xii) The authorized, issued and outstanding stock of the Company is
as set forth in the Prospectus under "Capitalization" or in the latest balance
sheet incorporated by reference therein (except for subsequent issuances, if
any, pursuant to reservations, agreements, employee benefit plans, dividend
reinvestment plans, employee and director stock option plans or the exercise of
convertible securities referred to in the Prospectus or otherwise referred to in
the Prospectus), and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and were not issued in violation of or subject to any preemptive
or similar rights that entitle or will entitle any person to acquire any
Underwritten Securities from the Company upon issuance thereof by the Company,
except for such rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement.
(xiii) The Company and each of the Company's subsidiaries has been
duly organized and is validly existing as a corporation, partnership, limited
liability company or real
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estate investment trust in good standing under the laws of its respective
jurisdiction of organization. Each of the Company and its subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation,
partnership, limited liability company or real estate investment trust in each
jurisdiction in which the character or location of its properties (owned, leased
or licensed) or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good standing
which will not in the aggregate have a material adverse effect on the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). Each of the Company and its subsidiaries has all requisite
power and authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses and permits of and from all
public, regulatory or governmental agencies and bodies (collectively,
"Governmental Licenses"), to own, lease and operate their respective properties
and conduct their respective businesses as are now being conducted and as
described in the Registration Statement and the Prospectus, except where the
failure to possess any such Governmental Licenses would not in the aggregate
have a Material Adverse Effect; and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the Registration Statement
and the Prospectus.
(xiv) Except as described in the Registration Statement or the
Prospectus, there is no legal or governmental proceeding to which the Company or
any of its subsidiaries is a party, or any property of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, are reasonably likely to
have a Material Adverse Effect, and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened or contemplated by others.
(xv) Neither the Company nor any of its affiliates have taken nor
will take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Underwritten Securities.
(xvi) The financial statements, including the notes thereto, and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates indicated and
condition and results of operations for the periods specified; except as
otherwise stated in the Registration Statement and the Prospectus, said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved; and the financial statements, including the notes thereto, and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information required to be
stated therein.
(xvii) The pro forma financial statements, including the notes
thereto, included or incorporated by reference in the Registration Statement and
the Prospectus have been prepared in accordance with the applicable requirements
of the 1933 Act and the 1933 Act Regulations with respect to pro forma financial
statements and include all adjustments necessary to present fairly the pro forma
financial position of the Company at the respective dates indicated
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and the results of operations for the respective periods specified. The
assumptions used in preparing the pro forma financial statements provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts. All historical financial statements and
information and all pro forma financial statements and information required by
the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations are included, or incorporated by reference, in the Registration
Statement and the Prospectus.
(xviii) No relationship, direct or indirect, exists between or among
any of the Company or any affiliate of the Company, on the one hand, and any
director, officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the 1933 Act,
1934 Act, and the 1933 Act Regulations to be described in the Registration
Statement or the Prospectus which is not so described or is not described as
required. There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed or incorporated by reference in the Registration Statement and the
Prospectus.
(xix) The Company and its Subsidiaries maintain a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xx) No holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the
Underwritten Securities contemplated in the applicable Terms Agreement.
(xxi) The Company is not, and upon consummation of the transactions
contemplated in this Agreement, the applicable Terms Agreement and in the
Prospectus will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(xxii) (A) The Company and its subsidiaries have good and marketable
fee simple title or leasehold title, as the case may be, to all real property
owned or leased, as applicable, by the Company or any subsidiary, and good title
to all other properties owned by them (collectively, the "Properties"), and any
improvements thereon and all other assets that are required for the operation of
such properties in the manner in which they currently are operated, free and
clear of all liens, encumbrances, claims, security interests and defects, except
such as are Permitted Encumbrances (as hereinafter defined); (B) all liens,
charges, encumbrances,
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claims or restrictions on or affecting any of the Properties and the assets of
any of the Company or its subsidiaries that are required to be disclosed in the
Prospectus are disclosed therein; (C) each of the Properties complies with all
applicable codes, laws and regulations (including, without limitation, building
and zoning codes, laws and regulations and laws relating to access to the
properties), except if and to the extent disclosed in the Prospectus and except
for such failures to comply that would not in the aggregate have a Material
Adverse Effect; (D) there are in effect for the Properties and the assets of
each of the Company and its subsidiaries insurance policies covering the risks
and in amounts that are commercially reasonable for the Properties and the types
of assets owned by the Company and its subsidiaries and that are consistent with
the types and amounts of insurance typically maintained by prudent owners of
properties similar to such assets in the markets in which such assets are
located, and neither the Company nor any of its subsidiaries has received from
any insurance company notice of any material defects or deficiencies affecting
the insurability of any such assets or any notices of cancellation or intent to
cancel any such policies; and (E) neither the Company nor any of its
subsidiaries has knowledge of any pending or threatened, litigation, moratorium,
condemnation proceedings, zoning change, or other similar proceeding or action
that could in any manner affect the size of, use of, improvements on,
construction on, access to or availability of utilities or other necessary
services to the Properties, except such proceedings or actions that would not
have a Material Adverse Effect. All of the leases and subleases material to the
business of the Company and its subsidiaries considered as one enterprise, and
under which the Company or any of its subsidiaries holds the Properties, are in
full force and effect, and neither the Company nor any of its subsidiaries has
received any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any of its subsidiaries of the continued possession of
the leased or subleased premises under any such lease or sublease. "Permitted
Encumbrance" shall mean (a) liens on Properties securing any of the Company or
any subsidiaries obligations, (b) other liens which are expressly described in
the Prospectus and (c) customary easements and encumbrances and other exceptions
to title which do not materially impair the operation, development or use of the
Properties for the purposes intended therefor as contemplated in the Prospectus.
(xxiii) Except as disclosed in the Registration Statement and
Prospectus or as would not have a Material Adverse Effect: (A) each Property,
including, without limitation, the Environment (as defined below) associated
with such Property, is free of any Hazardous Substance (as hereinafter defined)
in violation of any Environmental Law (as defined below) applicable to such
Property, except for Hazardous Substances that would not result in a Material
Adverse Effect; (B) neither the Company nor any of its subsidiaries has during
the period of its ownership caused or suffered to occur any Release (as defined
below) of any Hazardous Substance into the Environment on, in, under or from any
Property in violation of any Environmental Law applicable to such Property, and
no condition exists on, in, under or, to the knowledge of the Company or any of
its subsidiaries adjacent to, any Property that could result in the incurrence
of material liabilities or any material violations of any Environmental Law
applicable to such Property, or give rise to the imposition of any Lien (as
hereinafter defined) under any Environmental Law; (C) neither the Company nor
any of its subsidiaries is engaged in any manufacturing at the Properties that
(1) requires the use, handling, transportation, storage, treatment or disposal
of any Hazardous Substance (other than cleaning solvents and similar materials
and other than insecticides and herbicides that are used in the ordinary course
of
9
operating the Properties and in compliance with all applicable Environmental
Laws) or (2) requires permits or is otherwise regulated pursuant to any
Environmental Law; (D) neither the Company nor any of its subsidiaries has
received any notice of a claim under or pursuant to any Environmental Law
applicable to a Property or under common law pertaining to Hazardous Substances
on or originating from any Property; (E) neither the Company nor any of its
subsidiaries has received any notice from any Governmental Authority (as
hereinafter defined) claiming any violation of any Environmental Law that is
uncured or unremediated as of the date hereof; and (F) no Property is included
or, to the knowledge of the Company or any of its subsidiaries, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
hereinafter defined) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response, Compensation, and
Liability Information System database maintained by the EPA, and has not
otherwise been identified by the EPA as a potential CERCLA removal, remedial or
response site or included or, to the knowledge of the Company or any of its
subsidiaries, proposed for inclusion on, any similar list of potentially
contaminated sites pursuant to any other applicable Environmental Law nor has
the Company or any of its subsidiaries received any written notice from the EPA
or any other Governmental Authority proposing the inclusion of any Property on
such list; and (G) there are no underground storage tanks located on or in any
Property which have not been disclosed to the Underwriters.
As used herein, the term "Hazardous Substance" shall include,
without limitation, any hazardous substance, hazardous waste, toxic or dangerous
substance, pollutant, solid waste or similarly designated materials, including,
without limitation, oil, petroleum or any petroleum-derived substance or waste,
asbestos or asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation or any constituent
of any such substance, pollutant or waste, including any such substance,
pollutant or waste identified or regulated under any Environmental Law
(including, without limitation, materials listed in the United States Department
of Transportation Optional Hazardous Material Table, 49 C.F.R. Section 172.101,
as heretofore amended, or in the EPA's List of Hazardous Substances and
Reportable Quantities, 40 C.F.R. Part 302, as heretofore amended); "Environment"
shall mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings, structures, and ambient workplace
and indoor air; "Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. Section 6901, et seq.), the Clean Air Act, as amended (42
U.S.C. Section 7401, et seq.), the Clean Water Act, as amended (33 U.S.C.
Section 1251, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601, et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Section 1801, et seq.), and all other federal, state
and local laws, ordinances, regulations, rules, orders, decisions and permits
relating to the protection of the environment or of human health from
environmental effects; "Governmental Authority" shall mean any federal, state or
local governmental office, agency or authority having the duty or authority to
promulgate, implement or enforce any Environmental Law; "Lien" shall mean, with
respect to any Property, any mortgage, deed of trust, pledge, security interest,
lien, encumbrance, penalty, fine, charge, assessment, judgment or other
liability in, on or affecting such Property; and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the
10
abandonment or discard of barrels, containers, tanks (including, without
limitation, underground storage tanks) or other receptacles containing or
previously containing any Hazardous Substance or any release, emission,
discharge or similar term, as those terms are defined or used in any
Environmental Law.
(xxiv) The Company and each of its subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by it and have paid or made provision for the payment of
all taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which such entity is obligated
to withhold from amounts owning to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return), except, in all cases, for any such amounts
that the Company is contesting in good faith and except in any case in which the
failure to so file or pay would not in the aggregate have a Material Adverse
Effect. No deficiency assessment with respect to a proposed adjustment of the
Company's or any of its subsidiaries' federal, state, or other taxes is pending
or, to the best of the Company's knowledge, threatened which could reasonably be
expected in the aggregate to have a Material Adverse Effect. There is no tax
lien, whether imposed by any federal, state, or other taxing authority,
outstanding against the assets, properties or business of the Company or any of
its subsidiaries, other than tax liens for taxes not yet due.
(xxv) There are no contracts or other documents which are required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits thereto which have not been so described and filed as required.
(xxvi) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter, by-laws, limited liability company agreement,
certificate of limited partnership or partnership agreement, as the case may be,
(ii) is in default under, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of their properties or assets is subject
or (iii) is in violation in any respect of any statute or any judgment, decree,
order, rule or regulation of any court or governmental or regulatory agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets, except in the case of (ii) or (iii) above any
violation or default that would not have a Material Adverse Effect.
(xxvii) The Company and each of its subsidiaries own or possess
adequate right to use all trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, know-how and
other intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus, except where the
failure to own or possess such right would not in the aggregate have a Material
Adverse Effect, and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such right of others which claim, if the
11
subject of an unfavorable decision, ruling or judgment, could in the aggregate
reasonably be expected to result in a Material Adverse Effect.
(xxviii) No labor disturbance by the employees of the Company, the
Manager or any of their respective subsidiaries exists or, to the best of the
Company's knowledge, is imminent which might be expected to have a Material
Adverse Effect.
(xxix) The Company does not have, and does not anticipate incurring
any liabilities under, the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time.
(xxx) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the Prospectus are
based on or derived from sources which the Company believes to be reliable and
accurate.
(xxxi) Commencing with its taxable year ended December 31, 2002, the
Company has been, and upon the sale of the Underwritten Securities pursuant to
the applicable Terms Agreement, the Company will continue to be organized and
operated in conformity with the requirements for qualification and taxation as a
real estate investment trust (a "REIT") under the Internal Revenue Code of 1986,
as amended (the "Code"), and the Company's proposed method of operation as
described in the Prospectus will enable it to continue to meet the requirements
for qualification and taxation as a REIT under the Code, and no actions have
been taken (or not taken which are required to be taken) which would cause such
qualification to be lost.
(b) Representations and Warranties of the Manager. The Manager represents
and warrants to you, as of the date hereof, and to you and each Underwriter
named in the applicable Terms Agreement, as of each Representation Date as
follows:
(i) The information concerning the Manager and its affiliates (other
than the Company and its subsidiaries) included or incorporated by reference in
the Registration Statement and Prospectus is true and correct in all material
respects.
(ii) The Manager has been duly organized and is validly existing as
a limited liability company and is in good standing under the laws of Delaware.
The Manager is duly qualified to do business and is in good standing as a
foreign limited liability company in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
Material Adverse Effect. The Manager has all requisite power and authority, and
all necessary Governmental Licenses, to own, lease and operate its properties
and conduct its business as it is now being conducted, except where the failure
to possess such Governmental Licenses will not in the aggregate have a Material
Adverse Effect, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed or incorporated by reference in the
Registration Statement and the Prospectus.
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(iii) This Agreement, the related Terms Agreement and the Management
Agreement have each been duly and validly authorized, executed and delivered by
the Manager. The Management Agreement constitutes a valid and binding agreement
of the Manager, enforceable in accordance with its terms, except to the extent
that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting enforcement of creditors' rights or by
general equitable principles.
(iv) The Manager is not (i) in violation of its charter or limited
liability company agreement or (ii) in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute such a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon, any property or assets of the Manager or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or in violation in any
respect of any statute or any judgment, decree, order, rule or regulation of any
court or governmental or regulatory agency or body having jurisdiction over the
Manager or any of its subsidiaries or any of their properties or assets, except
in the case of (ii) above any default or event that would not have a Material
Adverse Effect.
(v) Except as described in the Registration Statement and
Prospectus, there is no legal or governmental proceeding to which the Manager or
any of its subsidiaries is a party, or of which any property of the Manager or
any of its subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Manager or any of its subsidiaries, are reasonably
likely to have a Material Adverse Effect, and to the best of the Manager's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened or contemplated by others.
(vi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Manager
of its obligations hereunder which have not been made or the failure of which to
have been made in the aggregate would not have a Material Adverse Effect.
(vii) The Manager is not prohibited by the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), or the rules and regulations
thereunder, from acting under the Management Agreement as contemplated by the
Registration Statement and Prospectus.
(viii) With respect to each taxable year ended December 31, 1998,
1999, 2000, 2001 and 2002, Newcastle Investment Holdings Corp. ("NIH"), a
corporation organized and existing under the laws of the State of Maryland, has
operated, and currently intends to operate, in conformity with the requirements
for qualification and taxation as a REIT under the Code. NIH qualified as a REIT
for its taxable years ended December 31, 1998, 1999, 2000, 2001 and 2002.
2. Purchase, Sale and Delivery of the Shares.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on
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the basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities less the amount of any
distribution payable with respect to an Initial Underwritten Security but not
payable with respect to an Option Security. Such option, if granted, will expire
30 days or such lesser number of days as may be specified in the applicable
Terms Agreement after the Representation Date relating to the Initial
Underwritten Securities, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the applicable Terms
Agreement), subject to such adjustments as you in your discretion shall make to
eliminate any sales or purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the office of
Sidley Austin Brown & Wood LLP, 787 Seventh Avenue, New York, New York 10019, or
at such other place as shall be agreed upon by you and the Company, at 10:00
A.M., New York City time, on the third or fourth business day (as permitted
under Rule 15c6-1 under the 1934 Act) (unless postponed in accordance with the
provisions of Section 9) specified in the applicable Terms Agreement or at such
other time as shall be agreed upon by you and the Company (each such time and
date being referred to as a "Closing Time"). In addition, in the event that any
or all of the Option Securities are purchased by the Underwriters, payment of
the purchase price for, and delivery of certificates representing, such Option
Securities, shall be made at the above-mentioned offices of Sidley Austin Brown
& Wood LLP, or at such other place as shall be agreed upon by you and the
Company on each Date of Delivery as specified in the notice from you to the
Company. Unless otherwise specified in the applicable Terms Agreement, payment
shall be made by wire transfer in Federal (same day) funds to the Company upon
delivery of certificates for the Underwritten Securities to you, through the
facilities of the Depository Trust Company, if applicable, for the respective
accounts of the Underwriters for the Underwritten Securities to be purchased by
them against receipt therefor signed by you. The Underwritten Securities or, if
applicable, the Depositary Receipts evidencing the Depositary Shares, shall be
in such authorized denominations and registered in such names as you may request
in writing at least one business
14
day prior to the applicable Closing Time or Date of Delivery, as the case may
be. The Underwritten Securities, which may be in temporary form, will be made
available for examination and packaging by you on or before the first business
day prior to the Closing Time or Date of Delivery, as the case may be.
(d) If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to the
Closing Time, the names of any institutional investors with which it is proposed
that the Company will enter into Delayed Delivery Contracts and the number of
Underwritten Securities to be purchased by each of them, and the Company will
advise you, at least two business days prior to the Closing Time, of the names
of the institutions with which the making of Delayed Delivery Contracts is
approved by the Company and the number of Underwritten Securities to be covered
by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
3. Covenants.
(a) Covenants of the Company. The Company covenants and agrees with you
and each Underwriter participating in the offering of Underwritten Securities as
follows:
(i) If the Company does not elect to rely on Rule 434 under the 1933
Act Regulations, immediately following the execution of the applicable Terms
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten Securities are
being issued, the names of the Underwriters participating
15
in the offering and the number of Underwritten Securities which each severally
has agreed to purchase, the names of the Underwriters acting as co-managers in
connection with the offering, the price at which the Underwritten Securities are
to be purchased by the Underwriters from the Company, the initial public
offering price, if any, the selling concession and reallowance, if any, any
delayed delivery arrangements, and such other information as you and the Company
deem appropriate in connection with the offering of the Underwritten Securities;
and the Company will promptly transmit copies of the Prospectus Supplement to
the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations
and will furnish to the Underwriters named therein as many copies of the
Prospectus (including such Prospectus Supplement) as you shall reasonably
request. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, immediately following the execution of the applicable Terms
Agreement, the Company will prepare an abbreviated term sheet that complies with
the requirements of Rule 434 under the 1933 Act Regulations and will provide the
Underwriters with copies of the form of Rule 434 Prospectus, in such number as
you shall reasonably request, and promptly file or transmit for filing with the
Commission the form of Prospectus complying with Rule 434(c)(2) of the 1933 Act
Regulations in accordance with Rule 424(b) of the 1933 Act Regulations.
(ii) The Company will notify you immediately, and if written notice
is requested by you, confirm such notice in writing as soon as reasonably
practicable, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; and the Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(iii) At any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement or other documents proposed to be filed or used a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement or other documents in a
form to which you or counsel for the Underwriters shall reasonably object.
(iv) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents
16
incorporated or deemed to be incorporated by reference therein) as such
Underwriter reasonably requests.
(v) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act in connection with sales of the Underwritten Securities,
such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(vi) If at any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of either such counsel, at any such
time to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, then the Company will promptly prepare and, subject to Section
3(a)(iii), file with the Commission such amendment or supplement, whether by
filing documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Underwriters a reasonable number of copies of such
amendment or supplement.
(vii) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities, the Warrant Securities, if
any, and the shares of Common Stock issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, for offering and sale under the
applicable securities laws and real estate syndication laws of such states and
other jurisdictions of the United States as you may designate. In each
jurisdiction in which the Underwritten Securities, the Warrant Securities, if
any, and the shares of Common Stock issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may be
required for the distribution of the Underwritten Securities and the Warrant
Securities, if any; provided, however, that the Company shall not be obligated
to (A) qualify as a foreign entity in any jurisdiction where it is not so
qualified, (B) file any general consent to service of process, or (C) take any
action that would subject it to income taxation in any such jurisdiction..
(viii) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the 1933 Act Regulations) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration Statement.
17
(ix) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
period prescribed by the 1934 Act and the 1934 Act Regulations.
(x) During the period of 30 days from the date of the Prospectus
Supplement, the Company will not, directly or indirectly, without your prior
written consent, (a) issue, sell, offer or agree to sell, grant any option for
the sale of, pledge, make any short sale or maintain any short position,
establish or maintain a "put equivalent position" (within the meaning of Rule
16-a-1(h) under the 1934 Act), enter into any swap, derivative transaction or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock (whether any such
transaction is to be settled by delivery of Common Stock, other securities, cash
or other consideration) or otherwise dispose of, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common Stock)
or interest therein of the Company or of any of its subsidiaries, other than the
Company's sale of Underwritten Securities pursuant to the applicable Terms
Agreement and the Company's issuance of Common Stock (i) upon the exercise of
presently outstanding options; (ii) in connection with acquisitions by the
Company or a subsidiary, and (iii) the grant and exercise of options under, or
the issuance and sale of shares pursuant to, employee stock option plans in
effect on the date hereof or (b) file a registration statement under the 1933
Act registering shares of Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock) or any interest in shares of
Common Stock, except for a registration statement on Form S-8 with respect to
shares of Common Stock issuable under the Newcastle Investment Corp.
Nonqualified Stock Option and Incentive Award Plan, as amended from time to
time.
(xi) If the Preferred Shares or Depositary Shares are convertible
into shares of Common Stock or if Common Stock Warrants are issued, the Company
will reserve and keep available at all times, free of preemptive or other
similar rights, a sufficient number of shares of Common Stock or Preferred
Shares, as the case may be, for the purpose of enabling the Company to satisfy
any obligations to issue such shares upon conversion of the Preferred Shares or
the Depositary Shares, as the case may be, or upon exercise of the Common Stock
Warrants.
(xii) If the Underwritten Securities are Common Stock, Preferred
Shares or Depositary Shares, the Company will use its best efforts to list such
shares of Common Stock, Preferred Shares or Depositary Shares, as the case may
be, on the New York Stock Exchange or such other national securities exchange on
which the Company's shares of Common Stock are then listed. If the Preferred
Shares or Depositary Shares are convertible into shares of Common Stock, the
Company will use its best efforts to list the shares of Common Stock issuable
upon conversion of the Preferred Shares or Depositary Shares on the New York
Stock Exchange or such other national securities exchange on which the Company's
shares of Common Stock are then listed.
(xiii) The Company will apply the net proceeds from the sale of the
Underwritten Securities as set forth under "Use of Proceeds" in the Prospectus.
18
(xiv) If applicable, the Company will use its best efforts to list,
subject to notice of issuance, the Underwritten Securities on the NYSE.
(xv) The Company will use its best efforts to meet the requirements
to qualify as a "real estate investment trust" under the Code for each of its
taxable years for so long as the Board of Directors of the Company deems it in
the best interests of the Company's shareholders to remain so qualified.
(b) Covenant of the Manager. The Manager covenants and agrees with you and
each Underwriter participating in the offering of Underwritten Securities, and
with the Company that, during any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of
Underwritten Securities, it shall notify you and the Company of the occurrence
of any material events respecting its activities, affairs or condition,
financial or otherwise, if, but only if, as a result of any such event it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of each
such counsel, at any such time to amend or supplement the Registration Statement
or the Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Manager will forthwith supply such information to
the Company as shall be necessary for the Company to prepare an amendment or
supplement to the Registration Statement or the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, then the
Company will promptly prepare and, subject to Section 3(a)(iii), file with the
Commission such amendment or supplement, whether by filing documents pursuant to
the 1933 Act, the 1934 Act or otherwise, as may be necessary to correct such
untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
4. Payment of Expenses.
(a) Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company will pay
all expenses incident to the performance of its obligations under this Agreement
or the applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the reproduction and filing of this Agreement, the applicable Terms Agreement
and, if applicable, a Deposit Agreement, (iii) the preparation, issuance and
delivery of the Underwritten Securities and the Warrant Securities, if any, to
the Underwriters, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Underwritten Securities, the Warrant
Securities and the Common Shares issuable upon conversion of Preferred Shares or
the Depositary Shares, if any, under securities laws and real estate syndication
laws in accordance with the provisions of Section 3(a)(vii), including filing
fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Survey (if applicable), (vi) the reproduction and delivery to the Underwriters
of copies of any Blue Sky Survey (if applicable), (vii) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, each preliminary prospectus and
of the Prospectus and any amendments or supplements thereto, (viii) the
providing and delivery to the Underwriters of
19
copies of the applicable Warrant Agreement, if any, (ix) any fees charged by
nationally recognized statistical rating organizations for the rating of the
Securities, (x) the fees and expenses, if any, incurred with respect to the
listing of the Underwritten Securities, or the Common Shares issuable on
conversion of the Preferred Shares or the Depositary Shares, if any, on any
national securities exchange, (xi) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities Dealers, Inc.
(if applicable) and (xii) all travel expenses of the Company's officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Underwritten
Securities (other than as shall have been specifically approved by the
Underwriters to be paid for by the Underwriters). The Company also will pay or
cause to be paid: (i) the cost of preparing stock certificates; (ii) the cost
and charges of any transfer agent or registrar; and (iii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 4. It is understood,
however, that except as provided in this Section 4 and Section 6 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Underwritten
Securities by them, and any advertising expenses connected with any offers they
may make.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5, Section 8(a)(i),
the first clause of Section 8(a)(iii) or Section 8(a)(vi) hereof, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters,
incurred in connection herewith.
5. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase Underwritten Securities pursuant to the applicable
Terms Agreement, shall be subject to the accuracy of the representations and
warranties of the Company and the Manager herein contained as of the date hereof
and as of the Closing Time, to the absence from any certificates, opinions,
written statements or letters furnished to you or to Sidley Austin Brown & Wood
LLP ("Underwriters' Counsel") pursuant to this Section 5 of any misstatement or
omission to the performance by the Company and the Manager of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, (ii) if Preferred Shares or
Depositary Shares are being offered, the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the
Company, including such Preferred Shares or Depositary Shares, as the case may
be, as of the date of the applicable Terms Agreement shall not have been lowered
or withdrawn since the date of the applicable Terms Agreement nor shall any such
rating organization have publicly announced that it has placed any such
preferred stock of the Company on what is commonly termed a "watch list" for
possible downgrading, (iii) there shall not have come to your attention any
facts that would cause you to believe that the Prospectus, together with the
applicable Prospectus Supplement, at the time it was required to be delivered to
purchasers of the Underwritten Securities, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time, not
misleading and (iv) the Underwritten Securities or the
20
Common Stock issuable upon conversion thereof, as applicable in accordance with
Section 3(a)(xii) hereof, shall be approved for listing on or before the 30th
day after Closing Time in accordance with such Section 3(a)(xii).
(b) At the Closing Time you shall have received the written opinion of
Skadden, Arps, Slate, Meagher & Flom llp, counsel for the Company and the
Manager, dated the Closing Time and based upon certificates containing certain
factual representations and covenants of the Company, addressed to the
Underwriters substantially in the form attached hereto as Annex I.
(c) At the Closing Time you shall have received the written opinion of
Piper Rudnick LLP, special Maryland counsel to the Company, dated the Closing
Time, addressed to the Underwriters substantially in the form attached hereto as
Annex II.
(d) All proceedings taken in connection with the sale of the Underwritten
Securities as contemplated by this Agreement and the applicable Terms Agreement
shall be satisfactory in form and substance to you and to Underwriters' Counsel,
and the Underwriters shall have received from Underwriters' Counsel a favorable
opinion, dated as of the Closing Time, with respect to the issuance and sale of
the Underwritten Securities, the Registration Statement and the Prospectus and
such other related matters as you may reasonably require, and the Company shall
have furnished to Underwriters' Counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such opinion,
Underwriters' Counsel may rely upon the opinion of Piper Rudnick LLP as to
matters of Maryland law.
(e) At the Closing Time you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the Closing
Time to the effect that (i) the condition set forth in subsection (a) of this
Section 5 has been satisfied, (ii) as of the date hereof and as of the Closing
Time, the representations and warranties of the Company set forth in Section
1(a) hereof are accurate, (iii) as of the Closing Time, the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed
and (iv) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus (excluding any documents
incorporated by reference pursuant to the 1934 Act after the execution of the
applicable Terms Agreement), the Company and its subsidiaries have not sustained
any material loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development involving
a material adverse change, in the business prospects, properties, operations,
condition (financial or otherwise), or results of operations of the Company and
its subsidiaries taken as a whole, except in each case as described in or
contemplated by the Registration Statement and the Prospectus.
(f) At the Closing Time you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Manager, dated the Closing
Time to the effect that (i) as of the date hereof and as of the Closing Time,
the representations and warranties of the Manager set forth in Section 1(b)
hereof are accurate, (ii) as of the Closing Time, the obligations of the Manager
to be performed hereunder on or prior thereto have been duly performed and (iii)
subsequent to the date of the Registration Statement and Prospectus (excluding
any documents incorporated by reference pursuant to the 1934 Act after the
execution of the applicable Terms
21
Agreement), there has not been any material adverse change in the business
prospects, properties, operations, condition (financial or otherwise), or
results of operations of the Manager and its subsidiaries taken as a whole that
could reasonably be expected in the aggregate to have a Material Adverse Effect.
(g) At the time this Agreement and the applicable Terms Agreement are
executed, you shall have received a letter agreement from the Manager and
Fortress Principal Investment Holdings LLC ("FPIH"), and each director, officer
or related party of the Company and the Manager designated by you and listed on
Schedule II hereto, substantially in the forms attached hereto as Annex III and
Annex IV, respectively.
(h) At the time that the applicable Terms Agreement is executed and at the
Closing Time, you shall have received a comfort letter from Ernst & Young LLP,
independent public accountants for the Company, dated, respectively, as of the
date of the applicable Terms Agreement and as of the Closing Time, addressed to
the Underwriters and in form and substance satisfactory to the Underwriters and
Underwriters' Counsel.
(i) The Company shall have complied with the provisions of Section
3(a)(iii) hereof with respect to the furnishing of prospectuses.
(j) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) The Company shall have furnished the Underwriters and Underwriters'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
(l) In the event the Underwriters exercise their option provided in a
Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company hereunder shall be true and correct as of each Date of Delivery, and, at
the relevant Date of Delivery, you shall have received:
(i) A certificate, dated such Date of Delivery, of the Chief
Executive Officer and Chief Financial Officer of the Company, confirming that
the certificate delivered at Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel for the Company and the Manager, in form and substance satisfactory
to Underwriters' Counsel, dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as the opinion
required by Sections 5(b) hereof.
(iii) The favorable opinion of Piper Rudnick LLP, special Maryland
counsel to the Company, in form and substance satisfactory to Underwriters'
Counsel, dated such Date of Delivery, relating to the Option Securities and
otherwise substantially to the same effect as the opinion required by Section
5(c) hereof.
22
(iv) The favorable opinion of Underwriters' Counsel, dated such Date
of Delivery, relating to the Option Securities and otherwise to the same effect
as the opinion required by Sections 5(d) hereof.
(v) A letter from Ernst & Young llp, independent public accountants
for the Company, in form and substance satisfactory to you and dated such Date
of Delivery, substantially the same in scope and substance as the letter
furnished to you pursuant to Section 5(h) hereof.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, the applicable Terms Agreement may be
terminated by you by notice to the Company at any time at or prior to Closing
Time, which notice shall be confirmed in writing by the Underwriters as soon as
reasonably practicable if so requested by the Company, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 10 shall survive any such
termination and remain in full force and effect.
6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to
be part of the Registration Statement pursuant to Rule 430A(b) or Rule 434
of the 1933 Act Regulations, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any Preliminary Prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company;
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by you), reasonably incurred
in investigating,
23
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) or any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto). The foregoing indemnity agreement with respect
to any Preliminary Prospectus shall not inure to the benefit of any Underwriter
who failed to deliver the Prospectus (as then amended or supplemented, provided
to the several Underwriters in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Time) to the person asserting
any losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured, as determined by a court of
competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section 6, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any Preliminary Prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto) or
such Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by you, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party)
24
also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Underwritten Securities pursuant to the applicable Terms
Agreement (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus bear to the aggregate initial public offering price
of the Underwritten Securities as set forth on the cover of the Prospectus.
25
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities pursuant to the applicable Terms
Agreement underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement.
8. Termination of Agreement.
(a) Termination; General. This Agreement (excluding the applicable Terms
Agreement) may be terminated for any reason at any time by the Company or by you
upon the giving of 30 days' written notice of such termination to the other
party hereto. The Underwriters may also terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of such Terms Agreement or
since the respective dates as of which information is given in the Prospectus
26
(excluding any documents incorporated therein by reference pursuant to the 1934
Act after the execution of the applicable Terms Agreement), any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable or
inadvisable to market the Underwritten Securities or to enforce contracts for
the sale of the Underwritten Securities, or (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission or the
New York Stock Exchange, or if trading generally on the New York Stock Exchange
has been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by
said exchange or by such system or by order of the Commission, the NASD or any
other governmental authority having jurisdiction, or (iv) a material disruption
has occurred in commercial banking or securities settlement or clearance
services in the United States, or (v) if a banking moratorium has been declared
by either Federal or New York authorities, or (vi) Preferred Shares or
Depositary Shares are being offered and the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the
Company, including such Preferred Shares or Depositary Shares, as the case may
be, as of the date of the applicable Terms Agreement shall have been lowered or
withdrawn since such date or if any such rating organization shall have publicly
announced that it has placed any such preferred stock of the Company on what is
commonly termed a "watch list" for possible downgrading.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
8, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 10 shall survive such termination and remain in full force and effect.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase the Underwritten Securities pursuant to the applicable
Terms Agreement, and if the Underwritten Securities with respect to which such
default relates do not (after giving effect to arrangements, if any, made by you
pursuant to subsection (b) below) exceed in the aggregate 10% of the number of
the Underwritten Securities, the Underwritten Securities to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of the Underwritten Securities set
forth opposite their respective names in the applicable Terms Agreement bear to
the aggregate number of Underwritten Securities set forth opposite the names of
the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Underwritten Securities, you may in your discretion arrange for yourself or for
another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase such Underwritten Securities, to which
such default relates on the terms contained herein. In the event that within
five calendar days after such a default you do not arrange for the purchase of
27
the Underwritten Securities to which such default relates as provided in this
Section 9, this Agreement or, in the case of a default with respect to Option
Securities, the obligations of the Underwriters to purchase and of the Company
to sell the Option Securities shall thereupon terminate, without liability on
the part of the Company with respect thereto (except in each case as provided in
Section 4, 6(a) and 7 hereof) or the Underwriters, but nothing in this Agreement
shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that the Underwritten Securities to which the default
relates are to be purchased by the non-defaulting Underwriters, or are to be
purchased by another party or parties as aforesaid, you or the Company shall
have the right to postpone the Closing Time, as the case may be for a period,
not exceeding five business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents and arrangements, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the Prospectus
which, in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement and the applicable Terms Agreement with respect
to such Underwritten Securities.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, the Company and the
Manager contained in this Agreement, including the agreements contained in
Section 4, the indemnity agreements contained in Section 6 and the contribution
agreements contained in Section 7, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof or by or on behalf of the Company or the
Manager, any of their respective officers, directors, partners or members or any
controlling person thereof, and shall survive delivery of and payment for the
Underwritten Securities to and by the Underwriters. The representations
contained in Section 1 and the agreements contained in this Section 10 and
Sections 4, 6 and 7 hereof shall survive the termination of this Agreement and
the applicable Terms Agreement, including termination pursuant to Section 5 or 9
hereof.
11. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed and
confirmed in writing, to such Underwriter c/o Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower,
10th Floor, New York, NY 10080, Attention: Alexander S. Rubin, with a copy to
Sidley Austin Brown & Wood LLP, 787 Seventh Avenue, New York, New York 10019,
Attention: J. Gerard Cummins;
(b) if sent to the Company or the Manager, shall be mailed, delivered, or
faxed and confirmed in writing c/o Fortress Investment Group, 1251 Avenue of the
Americas, New York, New York 10020, Attention: Randal A. Nardone, Secretary,
with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New
York, New York 10036-6522, Attention: David J. Goldschmidt;
28
provided, however, that any notice to an Underwriter pursuant to Section 6 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
12. Parties. This Agreement and the applicable Terms Agreement shall inure
solely to the benefit of, and shall be binding upon, the Underwriters, the
Company and the Manager and the controlling persons, directors, officers,
employees and agents referred to in Section 6 and 7, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term "successors
and assigns" shall not include a purchaser, in its capacity as such, of
Underwritten Securities from any of the Underwriters.
13. Governing Law. This Agreement and the applicable Terms Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, but without regard to principles of conflicts of law.
14. Counterparts. This Agreement and the applicable Terms Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
15. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement and the applicable Terms Agreement.
16. Time is of the Essence. Time shall be of the essence of this Agreement
and the applicable Terms Agreement. As used herein, the term "business day"
shall mean any day when the Commission's office in Washington, D.C. is open for
business.
[signature page follows]
29
If the foregoing correctly sets forth the understanding between you, on
the one hand, and the Company and the Manager, on the other hand, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
NEWCASTLE INVESTMENT CORP.
By: /s/ Wesley R. Edens
--------------------------------
Name: Wesley R. Edens
Title: Chief Executive Officer
FORTRESS INVESTMENT GROUP LLC,
solely with respect to Sections 1(b), 3(b),
5(f) and (g), 10 and 12
By: /s/ Randal A. Nardone
--------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
Accepted as of the date first above written
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Alexander S. Rubin
--------------------------------
Name: Alexander S. Rubin
Title: Managing Director
Exhibit A
NEWCASTLE INVESTMENT CORP.
[Title of Securities]
TERMS AGREEMENT
Dated: [ ]
To: Newcastle Investment Corp.
1251 Avenue of the Americas
New York, New York 10020
Attention: [ ]
Ladies and Gentlemen:
We understand that Newcastle Investment Corp., a corporation organized and
existing under the laws of Maryland (the "Company"), proposes to issue and sell
[ ], set forth below (the "Underwritten Securities"). Subject to the terms and
conditions set forth or incorporated by reference herein, the underwriters named
below (the "Underwriters") offer to purchase, severally and not jointly, the
respective numbers of Initial Underwritten Securities and Option Securities, if
any, (as such terms are defined in the Underwriting Agreement referred to below)
set forth below opposite their respective names, at the purchase price set forth
below.
NUMBER
OF SHARES OF
INITIAL
UNDERWRITTEN
UNDERWRITER SECURITIES
----------- ----------
------------
Total..................................
============
A-1
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
[If applicable, fractional amount of Preferred Shares represented by each
Depositary Share:]
[Current Ratings:]
[Dividend Rate: [ % per annum], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public offering price per share: $ [, plus accumulated dividends, if
any, from ,20 .]
Purchase price per share: $ [, plus accumulated dividends, if any,
from ,20 .]
[Conversion provisions:]
[Redemption provisions:]
[Sinking fund requirements:]
Purchase price per share:
Number of Option Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Terms of Lock-up:
Other terms:
Closing date and location:
Common Stock Warrants
Number of Common Stock Warrants to be issued:
Warrant Agent:
Issuable jointly with Common Stock: [Yes] [No]
[Number of Common Stock Warrants issued with each share of Common Stock:]
[Detachable data:]
Date from which Common Stock Warrants are exercisable:
Date on which Common Stock Warrants expire:
Exercise price(s) of Common Stock Warrants:
Initial public offering price: $
Purchase price: $
Title of Warrant Securities:
Principal amount purchasable upon exercise of one Common Stock Warrant:
Interest rate: Payable:
Date of maturity:
Redemption provisions:
Sinking fund requirements:
A-2
[Delayed Delivery Contracts: [authorized] [not authorized]
[Date of delivery:
Minimum contract:
Maximum aggregate principal amount:
Fee: %]
Other terms:
[Closing date and location:]
All of the provisions contained in the Underwriting Agreement attached as Annex
A hereto are hereby incorporated by reference in their entirety herein and shall
be deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document are
used herein as therein defined.
A-3
Please accept this offer no later than 7:00 P.M. (New York City time) on
[-] by signing a copy of this Terms Agreement in the space set forth below
and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: ________________________________
Name:
Title:
Accepted:
NEWCASTLE INVESTMENT CORP.
By: ____________________________
Name:
Title:
FORTRESS INVESTMENT GROUP LLC
By: ____________________________
Name:
Title:
A-4
Exhibit B
NEWCASTLE INVESTMENT CORP.
[Title of Securities]
DELAYED DELIVERY CONTRACT
, 20__
Newcastle Investment Corp.
1251 Avenue of the Americas
New York, New York 10020
Attention: [ ]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Newcastle Investment Corp. (the
"Company"), and the Company agrees to sell to the undersigned on ____________,
20__ (the "Delivery Date"), _______________ of the Company's [insert title of
security] (the "Securities"), offered by the Company's Prospectus dated
____________, ____, as supplemented by its Prospectus Supplement dated
____________, 20__, receipt of which is hereby acknowledged at a purchase price
of $______ [and, $__________ per Warrant, respectively] to the Delivery Date,
and on the further terms and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to purchase on the
Delivery Date shall be made to the Company or its order by certified or official
bank check in New York Clearing House funds at the office of ____________, on
the Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned in definitive form and in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject only to the conditions that (1)
the purchase of Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before ____________, 20__,
shall have sold to the Underwriters of the Securities (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Terms Agreement dated ____________, 20__, between the Company and the
Underwriters. The obligation of the undersigned to take delivery of and make
payment for Securities shall not be affected by the failure of any purchaser to
take delivery of and make payments for Securities pursuant to other contracts
similar to this contract. The undersigned represents and warrants to you that
its investment in the Securities is not, as of the date hereof, prohibited under
the laws of any jurisdiction to which the undersigned is subject and which
govern such investment.
B-1
Promptly after completion of the sale to the Underwriters, the Company will mail
or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the Company
that all necessary corporate action for the due execution and delivery of this
contract and the payment for and purchase of the Securities has been taken by it
and no further authorization or approval of any governmental or other regulatory
authority is required for such execution, delivery, payment or purchase, and
that, upon acceptance hereof by the Company and mailing or delivery of a copy as
provided below, this contract will constitute a valid and binding agreement of
the undersigned in accordance with its terms.
This contract will inure to the benefit of and binding upon the parties hereto
and their respective successors, but will not be assignable by either party
hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery Contracts for
a number of Securities in excess of ________ and that the acceptance of any
Delayed Delivery Contract is in the Company's sole discretion and, without
limiting the foregoing, need not be on a first-come, first-served basis. If this
contract is acceptable to the Company, it is requested that the Company sign the
form of acceptance on a copy hereof and mail or deliver a signed copy hereof to
the undersigned at its address set forth below. This will become a binding
contract between the Company and the undersigned when such copy is so mailed or
delivered.
B-2
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
____________________________________
(Name of Purchaser)
By:_________________________________
(Title)
____________________________________
____________________________________
(Address)
Accepted as of the date
first above written.
NEWCASTLE INVESTMENT CORP.
By:________________________________
(Title)
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser with whom
details of delivery on the Delivery Date may be discussed are as follows:
(Please print.)
Telephone No.
Name (including
Area Code)
B-3
SCHEDULE I
Subsidiaries
Fortress Realty Holdings Inc.
Commercial Asset Holdings LLC
Fortress CBO Investments I Corp.
Fortress CBO Holdings I Inc.
Newcastle CDO I Corp.
Fortress CBO Investments I, Ltd.
Newcastle CDO I, Ltd.
Fortress Asset Trust
LIV Holdings LLC
Monterrey Belgium S.A.
Monterrey B.V.
Karl S.A.
Steinhage B.V.
Beta Invest s.p.r.l.
Alpha Invest s.p.r.l.
Seminole s.p.r.l.
Melodicum s.p.r.l.
Polytrophus s.p.r.l.
Centrum Invest s.p.r.l.
Trealen s.p.r.l.
Fortress Finance (Belgium) s.p.r.l.
NIC Holdings I LLC
Newcastle CDO Holdings LLC
Impac Commercial Holdings, Inc.
Impac Commercial Assets Corporation
Impac Commercial Capital Corporation
Newcastle CDO II Holdings LLC
Newcastle CDO II, Ltd.
Newcastle CDO II Corp.
NIC TRS Holdings, Inc.
Newcastle CDO III Holdings LLC
Newcastle CDO III, Ltd.
Newcastle CDO III Corp.
NIC GCMRepo LLC
NIC DBRepo LLC
NIC NK LLC
SCHEDULE II
Executive Officers, Directors and Related Persons
Wesley R. Edens
David J. Grain
Stuart A. McFarland
David K. McKown
Peter M. Miller
Kenneth M. Riis
Jonathan Ashley
Debra A. Hess
Erik P. Nygaard
Randal A. Nardone
Peter L. Briger, Jr.
Robert I. Kauffman
Michael E. Novogratz
Daniel Bass
ANNEX I
Form of Opinion of Counsel to be delivered pursuant to Section 5(b)
1. The Company is a corporation duly incorporated and existing under the
laws of the State of Maryland and is in good standing with the State Department
of Assessments and Taxation of Maryland.
2. The Company has the status in the jurisdictions set forth in Schedule__
hereto opposite the jurisdiction set forth therein as of the date listed on such
Schedule __.
3. The Subsidiaries listed on Schedule __ hereto have the status set forth
in Schedule hereto opposite the jurisdiction set forth therein as of the
respective dates set forth on Schedule __.
4. The Manager has been duly formed under the laws of the State of
Delaware and is in good standing and is duly authorized to transact business
under the laws of the State of Delaware.
5. The Manager has the power and authority to execute and deliver the
Underwriting Agreement and the related Terms Agreement (together, the
"Underwriting Agreement") and to consummate the transactions to be consummated
by such party contemplated pursuant to the Underwriting Agreement.
6. The Underwriting Agreement has been duly executed and delivered by the
Company, to the extent such execution and delivery are governed by the laws of
the State of New York, and the Underwriting Agreement has been duly authorized,
executed and delivered by the Manager.
7. The execution and delivery by the Company of the Underwriting
Agreement, and the consummation by the Company of the transactions contemplated
thereby, including the issuance and sale of the Shares, will not (i) constitute
a violation of, or a breach or default under, the terms of any Applicable
Contract or (iii) violate or conflict with, or result in any contravention of,
any Applicable Law or any Applicable Order. We do not express any opinion,
however, as to whether the execution, delivery or performance by the Company of
the Underwriting Agreement or the issuance and sale of the Shares will
constitute a violation of, or a default under, any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of the Company or any of its
subsidiaries.
8. No Governmental Approval, which has not been obtained or taken and is
not in full force and effect, is required to authorize, or is required in
connection with, the execution or delivery of the Underwriting Agreement by the
Company or the consummation by the Company of the transactions contemplated
thereby.
9. To our knowledge, there are no legal or governmental proceedings
pending or threatened in writing to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its subsidiaries is
subject that are required to be disclosed in the Prospectus pursuant to Item 103
of Regulation S-K of the Rules and Regulations that are not
so disclosed, and, to our knowledge, there are no contracts to which the Company
or any of its subsidiaries is a party that are required to be filed as an
exhibit to the Registration Statement pursuant to Item 601 of Regulation S-K of
the Rules and Regulations which have not been filed as required.
10. The form of certificate used to evidence the Common Stock complies in
all material respects with the applicable requirements of the New York Stock
Exchange, Inc.
11. The issuance and sale of the Securities by the Company are not subject
to any preemptive rights or any similar rights arising under any Applicable
Contract.
12. The statements in the Prospectus under the caption "Underwriting,"
insofar as such statements purport to summarize certain provisions of the
Underwriting Agreement, fairly summarize such provisions in all material
respects.
13. The statements set forth in the Prospectus under the caption "ERISA
Considerations" insofar as such statements purport to summarize certain
provisions of the laws referred to therein, fairly summarize such provisions in
all material respects.
14. Although the discussion set forth in the Registration Statement under
the caption "Federal Income Tax Considerations" does not purport to discuss all
possible United States Federal income tax consequences of the ownership and
disposition of the Common Stock of the Company, such discussion, though general
in nature, constitutes, in all material respects, a fair and accurate summary
under current law of the material United States Federal income tax consequences
of the ownership and disposition of the Company's Common Stock, subject to the
qualifications set forth therein. The United States Federal income tax
consequences of the ownership and disposition of the Company's Common Stock by
an investor will depend upon that holder's particular situation, and we express
no opinion as to the completeness of the discussion set forth in "Federal Income
Tax Considerations" as applied to any particular holder.
15. The Company is not, and solely after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
under the caption "Use of Proceeds" in the Prospectus will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
16. Commencing with the Company's initial taxable year that ended December
31, 2002, the Company was organized in conformity with the requirements for
qualification as a REIT under the Code, and its actual method of operation
through the date of this letter has enabled, and its proposed method of
operation will enable it to meet the requirements for qualification and taxation
as a REIT. As noted in the Registration Statement, the Company's qualification
and taxation as a REIT depend upon its ability to meet, through actual annual
operating results, certain requirements including requirements relating to
distribution levels and diversity of stock ownership, and the various
qualification tests imposed under the Code, the results of which are not
reviewed by us. Accordingly, no assurance can be given that the actual results
of the Company's operation for any one taxable year satisfy the requirements for
taxation as a REIT under the Code.
2
17. The Registration Statement, at the time it became effective, and the
Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and the Rules
and Regulations, except that in each case we do not express any opinion as to
the financial statements and schedules and other financial data included therein
or excluded therefrom, or the exhibits thereto, and, except to the extent
expressly stated in paragraphs 14, 15 and 16, we do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
For purposes of these opinions, "Applicable Contracts" means those
agreements or instruments identified in Schedule I hereto. "Applicable Laws"
means the rules and regulations of the State of New York and the federal laws of
the United States of America, in each case, which, in our experience, are
normally applicable to transactions of the type contemplated by the Underwriting
Agreement (other than the United States federal securities laws, state and
foreign securities or blue sky laws, antifraud laws and the rules and
regulations of the National Association of Securities Dealers, Inc.), without
our having made any special investigation as to the applicability of any
specific law, rule or regulation. "Governmental Authorities" means any court,
regulatory body, administrative agency or governmental body of the State of New
York or the United States of America having jurisdiction over the Company under
Applicable Laws. "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, qualification or registration with,
any Governmental Authority required to be made or obtained by the Company
pursuant to Applicable Laws, other than any consent, approval, license,
authorization, validation, filing, qualification or registration which may have
become applicable as a result of the involvement of any other party (other than
the Company) in the transactions contemplated by the Underwriting Agreement or
because of such parties' legal or regulatory status or because of any other
facts specifically pertaining to such parties. "Applicable Orders" means those
judgments, orders or decrees identified on Schedule hereto.
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the Company
and the Manager, representatives of the independent public accountants for the
Company and the Underwriters at which the contents and the Prospectus and
related matters were discussed and, no facts have come to the attention of such
counsel which would lead such counsel to believe that either the Registration
Statement, at the time it became effective (including the information deemed to
be part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b) or Rule 434, if applicable), or any amendment thereof made prior to
the Closing Date, as of the date of such amendment, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits 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 (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and schedules and other financial data included or
incorporated by reference therein).
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ANNEX II
Form of Opinion of Counsel to be delivered pursuant to Section 5(c)
1. The Company is a corporation duly incorporated and existing under and
by virtue of the laws of the State of Maryland and is in good standing with the
State Department and Assessments and Taxation of the State of Maryland.
2. The Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization" and "Description of Capital
Stock."
3. All of the Company's issued and outstanding shares of common stock have
been duly and validly authorized and issued, are fully paid and non-assessable
and are not now in violation of or subject to any preemptive or similar rights
arising under Maryland law, the Charter or the Bylaws.
4. The Shares have been duly authorized and, when issued in accordance
with the Underwriting Agreement and upon payment therefor in the manner
contemplated by the Underwriting Agreement, will be validly issued, fully paid
and non-assessable and free of any preemptive right arising under Maryland law,
the Charter or the Bylaws.
5. The Shares conform in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption "Description
of Capital Stock."
6. The Company has the corporate power (i) to own, lease and operate its
properties and to conduct its business in all material respects as described in
the Prospectus and (ii) to execute and deliver the Underwriting Agreement and to
perform its respective obligations thereunder.
7. The Underwriting Agreement and the related Terms Agreement (together,
the "Underwriting Agreement") has been duly authorized, executed and, so far as
is known to us, delivered by the Company.
8. The Management Agreement has been duly authorized, executed and, so far
as is known to us, delivered by the Company.
9. The form of certificate used to evidence the Shares complies in all
material respects with the Maryland General Corporation Law and with any
applicable requirements of the Charter and the Bylaws.
10. The execution, delivery and performance of the Underwriting Agreement
and the consummation of the transactions contemplated thereby by the Company do
not and will not violate any provision of the Charter or the Bylaws of the
Company, or, so far as is known to us, any judgment, decree, order, statute,
rule or regulation of any court or any public, government or regulatory agency
or body of the State of Maryland having jurisdiction over the Company or any of
its properties or assets.
11. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any government agency
or body of the State of Maryland having jurisdiction over the Company or any of
its properties or assets is required for the execution, delivery and performance
of the Underwriting Agreement or the consummation of the transactions
contemplated thereby.
The statements under the captions "Important Provisions of Maryland Law
and of Our Charter and Bylaws," and "Description of Securities" in the
Prospectus and in Item 15 of Part II of the Registration Statement, insofar as
such statements constitute summaries of the legal matters, documents or
proceedings referred to therein, are accurate and fair in all material respects.
2
ANNEX III
Form of Lock-Up Agreement for Manager and FPIH
January , 2004
Merrill Lynch & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, NY 10080
Attention:
Re: Proposed Public Offering by Newcastle Investment Corp.
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement and related Terms
Agreement (together, the "Underwriting Agreement") between Newcastle Investment
Corp., a Maryland corporation (the "Company"), and you as the Underwriter (the
"Underwriter") named therein, relating to the underwritten public offering (the
"Offering") of common stock, $.01 par value per share (the "Common Stock"), of
the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned, the manager of the Company/an affiliate of the manager of the
Company, hereby agrees that, during a period of 45 days from the date of the
Underwriting Agreement (the "Lock-Up Period"), the undersigned will not, without
the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
directly or indirectly, (i) offer, sell, agree to offer or sell, solicit offers
to purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of any Relevant Security, or (ii) establish
or increase a "put equivalent position" or liquidate or decrease a "call
equivalent position" with respect to any Relevant Security (in each case within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder), or otherwise enter into
any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any Relevant Security, whether or not such transaction is to be settled by
delivery of Relevant Securities, other securities, cash or other consideration;
provided, however, that the foregoing shall not prohibit any pledge of a
Relevant Security beneficially owned by the undersigned in connection with any
loan agreement entered into prior to the date hereof (an "Existing Pledge")
between the undersigned and a financial institution for a loan that is recourse
to the undersigned (a "Recourse Loan"), and provided further, that it is
understood that under no circumstances shall this letter agreement limit or
otherwise effect in any respect the rights of the lender or lenders under any
Recourse Loan to dispose of, or to take any other action with respect to, any
Relevant Security under an Existing Pledge. As used herein "Relevant Security"
means the Common Stock, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable
for, any Common Stock or other such equity security provided, however, that the
foregoing shall not prohibit (i) the transfer or other distribution of a
Relevant Security beneficially owned by the
undersigned to its members so long as the transferee of such securities agrees
to be bound by the provisions of this agreement and confirms that such
transferee is in compliance with the terms of this letter agreement as if such
transferee had been bound by this letter agreement from the original date of
this letter agreement.
The undersigned hereby further agrees that, during the Lock-up Period, the
undersigned (x) will not participate as a selling security holder in the filing
with the Securities and Exchange Commission of any registration statement, or
circulate or participate in the circulation of any preliminary or final
prospectus or other disclosure document with respect to any proposed offering or
sale of a Relevant Security owned by the undersigned and (y) will not exercise
any rights the undersigned may have to require registration with the Securities
and Exchange Commission of any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
The Company is not a party to or an intended beneficiary of this letter
agreement and has no right or obligation to enforce any of its terms.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Delivery of a signed copy of this letter by telecopier or facsimile
transmission shall be effective as delivery of the original hereof.
Very truly yours,
[NAME OF ENTITY]
By:
-------------------------------------
Name:
Title:
2
ANNEX IV
Form of Lock-Up Agreement for
Executive Officers, Directors and Related Persons
of the Company and the Manager
January , 2004
Merrill Lynch & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, NY 10080
Attention:
Re: Proposed Public Offering by Newcastle Investment Corp.
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement and related Terms
Agreement (together, the "Underwriting Agreement") between Newcastle Investment
Corp., a Maryland corporation (the "Company"), and you as the Underwriter (the
"Underwriter") named therein, relating to the underwritten public offering (the
"Offering") of common stock, $.01 par value per share (the "Common Stock"), of
the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned, an officer and/or director of the Company or its manager, Fortress
Investment Group LLC, hereby agrees that, during a period of 45 days from the
date of the Underwriting Agreement (the "Lock-Up Period"), the undersigned will
not, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, directly or indirectly, (i) offer, sell, agree to offer or sell,
solicit offers to purchase, grant any call option or purchase any put option
with respect to, pledge, borrow or otherwise dispose of any Relevant Security,
or (ii) establish or increase a "put equivalent position" or liquidate or
decrease a "call equivalent position" with respect to any Relevant Security (in
each case within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder), or
otherwise enter into any swap, derivative or other transaction or arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any Relevant Security, whether or not such transaction is to be
settled by delivery of Relevant Securities, other securities, cash or other
consideration; provided, however, that the foregoing shall not prohibit (i) any
pledge of a Relevant Security beneficially owned by the undersigned in
connection with any loan agreement entered into prior to the date hereof (an
"Existing Pledge") between the undersigned and a financial institution for a
loan that is recourse to the undersigned (a "Recourse Loan") or (ii) any future
pledge of any Relevant Securities currently subject to an Existing Pledge made
in connection with a Recourse Loan.
Notwithstanding the restrictions noted above, the undersigned may transfer
any Relevant Security for no value or without consideration for charitable or
estate planning purposes so long as the transferee of such securities agrees to
be bound by the provisions of this agreement and confirms that such transferee
is in compliance with the terms of this letter agreement as if such transferee
had been bound by this letter agreement from the original date of this letter
agreement. As used herein "Relevant Security" means the Common Stock, any other
equity security of the Company or any of its subsidiaries and any security
convertible into, or exercisable or exchangeable for, any Common Stock or other
such equity security.
The undersigned hereby further agrees that, during the Lock-up Period, the
undersigned (x) will not file or participate as a selling security holder in the
filing with the Securities and Exchange Commission of any registration
statement, or circulate or participate in the circulation of any preliminary or
final prospectus or other disclosure document with respect to any proposed
offering or sale of a Relevant Security and (y) will not exercise any rights the
undersigned may have to require registration with the Securities and Exchange
Commission of any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
The Company is not a party to or an intended beneficiary of this letter
agreement and has no right or obligation to enforce any of its terms.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Delivery of a signed copy of this letter by telecopier or facsimile
transmission shall be effective as delivery of the original hereof.
Very truly yours,
----------------------------
Print Name:
-------------------------
2