EXHIBIT 1.1
_________ Shares of Common Stock
NEWCASTLE INVESTMENT CORP.
UNDERWRITING AGREEMENT
January____, 2002
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Newcastle Investment Corp., a corporation organized and existing under the
laws of Maryland (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of ________ shares (the "Firm Shares")
of its common stock, par value $.01 per share (the "Common Stock") and, for the
sole purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional ______ shares
(the "Additional Shares") of Common Stock. The Firm Shares and any Additional
Shares purchased by the Underwriters are referred to herein as the "Shares." The
Shares are more fully described in the Registration Statement referred to below.
The Company, Fortress Partners, L.P., a limited partnership organized and
existing under the laws of Delaware (the "Operating Partnership"), and Fortress
Investment Group LLC, a limited liability company organized and existing under
the laws of Delaware (the "Manager"), each confirms as follows its agreements
with the Representatives and each of the other Underwriters named in Schedule I
hereto.
1. Representations and Warranties.
(a) Representations and Warranties of the Company and the Operating
Partnership. Each of the Company and the Operating Partnership represents and
warrants to, and agrees with, each of the Underwriters that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-11 (No.
333-71932), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of shares of common stock, which registration statement, as so amended,
has been declared effective by the Commission and copies of which have
heretofore been delivered to the Underwriters. The registration statement, as
amended at the time it became effective, including the exhibits and information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the "Registration Statement." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration
Statement, which became effective upon filing, no other document with respect to
the Registration Statement has heretofore been filed with the Commission. No
stop order suspending the effectiveness of either the Registration Statement or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or, to the Company's knowledge,
threatened by the Commission. The Company, if required by the rules and
regulations of the Commission (the "Rules and Regulations"), proposes to file
the Prospectus with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. The Prospectus, in the form in which it is to be filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if the
Prospectus is not to be filed with the Commission pursuant to Rule 424(b), the
Prospectus in the form included as part of the Registration Statement at the
time the Registration Statement became effective, is hereinafter referred to as
the "Prospectus," except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the offering and sale of the Shares (the "Offering") which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus." 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
("▇▇▇▇▇").
(ii) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the
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Regulations, when any supplement to or amendment of the Prospectus is filed with
the Commission and at the Closing Date and the Additional Closing Date, if any
(as hereinafter respectively defined), the Registration Statement and the
Prospectus and any amendments thereof and supplements thereto complied or will
comply in all material respects with the applicable provisions of the Act and
the Rules and Regulations and did not and will not contain an untrue statement
of a material fact and did not and will not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading and (ii)
in the case of the Prospectus or any related Preliminary Prospectus in light of
the circumstances under which they were made, not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Rules and Regulations) and
when any amendment thereof or supplement thereto was first filed with the
Commission, such Preliminary Prospectus and any amendments thereof and
supplements thereto complied in all material respects with the applicable
provisions of the Act and the Rules and Regulations and did not contain an
untrue statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No representation and warranty is made in this subsection (a)(ii),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you specifically for use therein ("Underwriters'
Information"). The parties acknowledge and agree that the Underwriters'
Information consists solely of the material included in paragraphs ___, ___ and
___ under the caption "Underwriting" in the Prospectus.
(iii) Ernst & Young LLP and Deloitte & Touche, the accountants who
have certified the financial statements and supporting schedules included in the
Registration Statement, are each independent public accountants as required by
the Act and the Rules and Regulations.
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, 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 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 the
Registration Statement and the Prospectus.
(v) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and the Operating Partnership
and this Agreement has been duly and validly executed and delivered by each of
the Company and the Operating Partnership.
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(vi) The management agreement (the "Management Agreement"), dated as
of June 10, 1988, as amended on November 23, 1999 and January [ ], 2002, between
the Company, the Operating Partnership and the Manager has been duly authorized,
executed and delivered by each of the Company and the Operating Partnership and
constitutes a valid and binding agreement of the Company and the Operating
Partnership 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.
(vii) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby 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 IV
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 IV. 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
or the consummation of the transactions contemplated hereby, by the Registration
Statement and by the Prospectus, including the issuance, sale and delivery of
the Shares to be issued, sold and delivered by the Company hereunder, except the
registration under the Act of the Shares 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 Shares by the Underwriters.
(viii) The Company has the authorized capitalization set forth 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 Shares 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; the Shares to be delivered on the Closing Date and the Additional
Closing Date, if any, (as hereinafter respectively defined) have been duly and
validly authorized and, when delivered by the Company in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable and
will not have been issued in violation of or subject to any preemptive or
similar rights that entitle or will entitle any person to acquire any Shares
from the Company upon
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issuance thereof by the Company; and all of the issued shares of capital stock
of each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and (except as set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; the Common Stock, the Firm Shares and the
Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(ix) The Company and each of its subsidiaries has been duly
organized and is validly existing as a corporation, partnership, limited
liability company or real 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 its
properties and conduct its business as it is 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.
(x) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Company or any of its subsidiaries is a
party, or of which 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.
(xi) 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 Shares.
(xii) The financial statements, including the notes thereto, and
supporting schedules included 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, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
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(xiii) [The assumptions used in preparing the pro forma financial
statements included in each of the Registration Statement and the Prospectus
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.]
(xiv) 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 Shares
contemplated hereby.
(xv) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(xvi) (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 defined below); (B) all liens, charges,
encumbrances, 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 assets
of each of the Company and its subsidiaries insurance policies covering the
risks and in amounts that are commercially reasonable for the types of assets
owned by them 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 none of the or 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 subsidiary 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 subsidiary holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary 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 subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any subsidiary 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
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Company or any subsidiaries obligations, (b) other liens which are expressly
described in, or which are incorporated by reference into, 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.
(xvii) Except as disclosed in the 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 defined below) 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 defined below) under any
Environmental Law; (C) neither the Company nor any of its subsidiaries is
engaged in or intends to engage 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
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 defined
below) 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 defined below) 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 Representatives.
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
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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 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.
(xviii) 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 the Company and each of
its subsidiaries 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 tax, assessment or similar charge 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 it's 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.
(xix) The Shares are registered pursuant to Section 12(g) of the
Exchange Act and have been approved for listing, subject to notice of issuance,
on the New York Stock Exchange, Inc. (the "NYSE"), and the Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Shares under the Exchange Act, nor has the Company received
any notification that the SEC is contemplating terminating such registration.
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(xx) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations and which have
not been so described or filed.
(xxi) 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 (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 Company 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 (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 any violation or default that would
not have a Material Adverse Effect.
(xxii) The Company and each of its subsidiaries own or possess
adequate right to use all trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ 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 subject
of an unfavorable decision, ruling or judgment, could in the aggregate
reasonably be expected to result in a Material Adverse Effect.
(xxiii) 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.
(xxiv) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA")), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to the Company's non-qualified stock
option and incentive award plan (the "Plan") or any other employee benefit plan
of the Company or the Subsidiaries which could have a Material Adverse Effect;
the Plan and any other employee benefit plan of the Company or the Subsidiaries
is in compliance in all material respects with applicable law; including ERISA
and the Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from any "pension plan" of the Company or the Subsidiaries; and each
such "pension plan" (as defined in ERISA) for which the Company would have any
liability that is intended to
9
be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
could cause the loss of such qualification.
(xxv) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company believes to be
reliable and accurate.
(xxvi) With respect to each taxable year ended December 31, 1998,
1999, 2000 and 2001, the Company has operated and currently intends to continue
to operate in such a manner as to qualify to be taxed as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"), and the Company qualified as a REIT for its taxable years ended
December 31, 1998, 1999, 2000 and 2001 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 with respect to the year
ending December 31, 2002.
(xxvii) There are no business relationships or related-party
transactions involving the Company, the Manager or any other person required to
be described in the Prospectus which have not been so described as required.
(b) Representations and Warranties of the Manager. The Manager represents
and warrants to each of the Underwriters that:
(i) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Regulations, when any supplement to or amendment
of the Prospectus is filed with the Commission and at the Closing Date and the
Additional Closing Date, if any, (as hereinafter respectively defined), the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact and did not and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus or any related
Preliminary Prospectus in light of the circumstances under which they were made,
not misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Rules and Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Act and the Rules and Regulations and did
not contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this subsection
(b)(i), however, with respect to any information contained in or omitted from
the Registration Statement or the Prospectus or any related Preliminary
Prospectus or any
10
amendment thereof or supplement thereto in reliance upon and in conformity with
the Underwriter's Information.
(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 in the Registration Statement and the
Prospectus.
(iii) This 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 in violation of its charter or limited
liability company agreement or in default (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 any violation or
default that would not have a Material Adverse Effect.
(v) Except as described in the 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.
11
(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
Prospectus.
(viii) There are no business relationships or related-party
transactions involving the Company, the Manager or any other person required to
be described in the Prospectus which have not been so described as required.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_______, the number of Firm Shares set forth opposite the
respective names of the Underwriters on Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Underwriters' Counsel"), 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 Exchange Act) (unless postponed in accordance with the
provisions of Section 9 hereof) after the determination of the initial public
offering price of the Shares, or such other time not later than ten business
days after such date as shall be agreed upon by you and the Company (such time
and date of payment and delivery being herein called the "Closing Date").
Payment for the Shares shall be made to or upon the order of the
Company of the purchase price by wire transfer in Federal (same day) funds to
the Company upon delivery of certificates for the Shares to you through the
facilities of the Depository Trust Company for the respective accounts of the
several Underwriters against receipt therefor signed by you. Certificates for
the Shares to be delivered to you shall be registered in such name or names and
shall be in such denominations as you may request at least one business day
before the Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to ______ Additional Shares at the same purchase price per
share to be paid by the Underwriters to the Company for the Firm Shares as set
forth in this Section 2, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the
12
Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to the total number of Firm Shares being purchased
from the Company, subject, however, to such adjustments to eliminate any
fractional shares as Bear ▇▇▇▇▇▇▇ & Co. Inc. in its sole discretion shall make.
Payment for the Additional Shares shall be made to or upon the order
of the Company of the purchase price by wire transfer in Federal (same day)
funds to the Company at the offices of Underwriters' Counsel, or such other
location as may be mutually acceptable, upon delivery of the certificates for
the Additional Shares to you for the respective accounts of the Underwriters.
3. Offering.
(a) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
4. Covenants.
(a) Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(i) If the Registration Statement has not yet been declared
effective the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to you of such
timely filing. If the Company elects to rely on Rule 434, the Company will
prepare and file a term sheet that complies with the requirements of Rule 434.
The Company will notify you (and, if requested by you, will confirm
such notice in writing) (i) when the Registration Statement and any amendments
thereto become effective, (ii) of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement
13
or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(ii) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Underwriters or the Company include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Act or the Regulations, the Company will notify you promptly and
prepare and file with the Commission an appropriate amendment or supplement (in
form and substance satisfactory to you) which will correct such statement or
omission and will use its best efforts to have any amendment to the Registration
Statement declared effective as soon as possible.
(iii) The Company will promptly deliver to each of the Underwriters
and Underwriters' Counsel a copy of the Registration Statement, including all
consents and exhibits filed therewith and all amendments thereto, and the
Company will promptly deliver to each of the Underwriters such number of copies
of any preliminary prospectus, the Prospectus, the Registration Statement, and
all amendments of and supplements to such documents, if any, as you may
reasonably request. Prior to 10:00 A.M., New York time, on the business day next
succeeding the date of this Agreement and from time to time thereafter the
Company will furnish the Underwriters with copies of the Prospectus in such
quantities as you may reasonably request.
(iv) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(v) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act), an earnings statement of
the Company and its subsidiaries (which need not be audited) complying
14
with Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).
(vi) During the period of 180 days from the date of the Prospectus,
the Company will not, directly or indirectly, without your prior written
consent, 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 Securities Exchange Act of 1934, as amended), 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 Shares hereunder and the
Company's issuance of Common Stock (i) upon the conversion or exchange of
outstanding convertible or exchangeable securities; (ii) upon the exercise of
presently outstanding options; (iii) in connection with acquisitions by the
Company or a subsidiary; and (iv) 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.
(vii) During the period of three years from the effective date of
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to security holders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company listed; and
(ii) such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(viii) The Company will apply the net proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(ix) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the NYSE.
(x) The Company will use its best efforts to continue 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 with each
Underwriter and with the Company that, during the period when the Prospectus is
required to be delivered under the 1933 Act or 1934 Act, it shall notify you and
the Company of the occurrence of any material events respecting its activities,
affairs or condition, financial or otherwise, if, as a result of any such event
it is necessary, in the opinion of counsel, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances
15
existing at the time it is delivered to a purchaser, and 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 Prospectus so that, as so
amended or supplemented, the Prospectus will not contain 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 existing at the time it is
delivered to a purchaser, not misleading.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of producing any
Agreement among Underwriters, this Agreement, the Blue Sky Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 4(a)(iv) hereof,
including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NYSE;
(v) 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 Shares and (vi) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. (the "NASD") of the terms of the sale of the Shares. 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 5.
It is understood, however, that except as provided in this Section, and Sections
7 and 11 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 Shares by them, and any advertising expenses connected with any offers they
may make.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company, the Operating Partnership and the Manager herein
contained, as of the date hereof and as of the Closing Date (for purposes of
this Section 6 "Closing Date" shall refer to the Closing Date for the Firm
Shares and any Additional Closing Date, if different, for the Additional
Shares), to the absence from any certificates, opinions, written statements or
letters furnished to you or to Underwriters' Counsel pursuant to this Section 6
of any misstatement or omission, to the performance by the Company, the
Operating Partnership and the Manager of their respective obligations hereunder,
and to each of the following additional terms and conditions:
16
(a) The Registration Statement shall have become effective and all
stock exchange approval has been received not later than 5:30 P.M., New York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by you; if the Company shall have elected to
rely upon Rule 430A or Rule 434 of the Regulations, the Prospectus shall have
been filed with the Commission in a timely fashion in accordance with Section
4(a) hereof; and, at or prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the written opinion
of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, the
Operating Partnership and the Manager, dated the Closing Date 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 Date you shall have received the written opinion
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special Maryland counsel to the Company,
dated the Closing Date, addressed to the Underwriters substantially in the form
attached hereto as Annex II.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated 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 Date, with respect to the issuance and sale of the Shares, 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.
(e) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated the
Closing Date to the effect that (i) the condition set forth in subsection (a) of
this Section 6 has been satisfied, (ii) as of the date hereof and as of the
Closing Date, the representations and warranties of the Company set forth in
Section 1(a) hereof are accurate, (iii) as of the Closing Date, 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, 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 Prospectus.
(f) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Manager, dated the
Closing Date to the effect that (i) as of the date hereof and as of the Closing
Date, the representations and warranties
17
of the Manager set forth in Section 1(b) hereof are accurate, and (ii) as of the
Closing Date, 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, the Manager 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 Manager and its subsidiaries taken as a whole which could
reasonably be expected in the aggregate to have a Material Adverse Effect.
(g) At the time this Agreement is executed and at the Closing Date,
you shall have received a comfort letter, from Ernst & Young LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to the Underwriters and Underwriters' counsel.
(h) At the time this Agreement is executed and at the Closing Date,
you shall have received a comfort letter, from Deloitte & Touche LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Underwriters
and in form and substance satisfactory to the Underwriters and Underwriters'
counsel.
(i) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
(j) You shall have received a lock-up agreement from (i) the Manager
and each director or officer of the Company designated by you and listed on
Schedule II substantially in the form attached hereto as Annex III, (ii) each
shareholder designated by you and listed on Schedule III substantially in the
form attached hereto as Annex IV, and (iii) shareholders, other than those
listed in (i) or (ii) above, holding in the aggregate at least [ ]% of the
Company's outstanding common stock substantially in the form attached hereto as
Annex V.
(k) At the Closing Date, the Shares shall have been approved for
listing on the NYSE upon notice of issuance.
(l) The Company shall have complied with the provisions of Section
4(a)(iii) hereof with respect to the furnishing of prospectuses.
18
(m) 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.
(n) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone. Any such telephone notice shall be confirmed promptly thereafter in
writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
provided, however, that the Company will not be liable in any such case to the
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. 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 Date) 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
19
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.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have including under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. This indemnity
will be in addition to any liability which any Underwriter may otherwise have
including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 7 to the extent that it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability that such indemnifying party may have otherwise
than on account of the indemnity agreement hereunder). In case any such claim or
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate at its own expense in the defense of such action, and to the extent
it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party; provided,
however, that such counsel to the indemnifying party shall not (except with the
written consent of the indemnified party) also be counsel to the indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
or parties unless (i) the employment of such counsel shall have been authorized
in writing by one of the indemnifying parties in connection with the
20
defense of such action, (ii) the indemnifying parties shall not have employed
counsel to have charge of the defense of such action within a reasonable time
after notice of commencement of the action or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or reasonably
could have been a party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes and unconditional release of the indemnified party from
all liability on claims that are or reasonably could have been the subject
matter of such action 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 the
indemnified party.
8. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions 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 Shares or, if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities 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, shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and (y) the underwriting discount received by the Underwriters, respectively, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company, on the one hand, and of the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, 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
21
it would not be just and equitable if contribution pursuant to this Section 8
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. Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the shares
are 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 such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within in
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 8. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 8 or otherwise. The obligations of the
Underwriters to contribute pursuant to this Section 8 are several in proportion
to the respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares 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 Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, 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 Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a)
22
and 8 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 Firm Shares or Additional Shares 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 Date or Additional Closing Date, 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 with respect to
such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, the Company, the
Operating Partnership and the Manager contained in this Agreement, including the
agreements contained in Section 5, the indemnity agreements contained in Section
7 and the contribution agreements contained in Section 8, 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, the Operating Partnership 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 Shares to and by the
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8 and 11(d) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when
(i) you and the Company shall have received notification of the effectiveness of
the Registration Statement or (ii) the execution of this Agreement. If either
the initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York City time, on the fifth full business
day after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you
notifying the Company. Notwithstanding the foregoing, the provisions of this
Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in full
force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if (A) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; or
(B) if trading on the NYSE shall have been suspended, or minimum or maximum
23
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, by the NYSE or by order of the Commission
or any other governmental authority having jurisdiction; or (C) if a banking
moratorium has been declared by any state or federal authority or if any new
restriction materially adversely affecting the distribution of the Firm Shares
or the Additional Shares, as the case may be, shall have become effective or if
a material disruption in commercial banking or securities settlement or
clearance services shall have occurred; or (D) (i) there has occurred any
outbreak or escalation of hostilities or acts of terrorism involving the United
States or there is a declaration of a national emergency or war by the United
States or (ii) there shall have been any other such calamity or crisis or any
change in political, financial or economic conditions, if the effect of any such
event in (i) or (ii) as in your judgment makes it impracticable or inadvisable
to proceed with the offering, sale and delivery of the Firm Shares or the
Additional Shares, as the case may be, on the terms and in the manner
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be
in writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company, the Operating Partnership or the Manager to perform any agreement
herein or comply with any provision hereof, the Company will, subject to demand
by you, reimburse the Underwriters for all out-of-pocket expenses (including the
fees and expenses of their counsel), incurred by the Underwriters in connection
herewith.
12. 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 Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity Capital Markets,
with a copy to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
(b) if sent to the Company, the Operating Partnership or the
Manager, shall be mailed, delivered, or faxed and confirmed in writing to c/o
Fortress Investment Group, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary, with a copy to Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇;
provided, however, that any notice to an Underwriter pursuant to Section 7 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.
24
13. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company, the Operating Partnership
and the Manager and the controlling persons, directors, officers, employees and
agents referred to in Section 7 and 8, 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 Shares from any of
the Underwriters.
14. Governing Law. This 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.
15. Counterparts. This 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.
16. 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.
17. Time is of the Essence. Time shall be of the essence of this
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]
25
If the foregoing correctly sets forth the understanding between you, on
the one hand, and the Company, the Operating Partnership 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. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
NEWCASTLE INVESTMENT CORP.
By: ___________________________________
Name:
Title:
FORTRESS PARTNERS, L.P.
By: ___________________________________
Name:
Title:
FORTRESS INVESTMENT GROUP LLC
By: ___________________________________
Name:
Title:
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By: ________________________________
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
SCHEDULE I
Number of Additional
Shares to be Purchased
Total Number of if Maximum
Firm Shares Option
Name of Underwriter to be Purchased Exercised
------------------- --------------- ----------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
[Names of other Underwriters]
Total..................
SCHEDULE II
[Names of executive officers and directors subject to the lock-up provision]
SCHEDULE III
[Names of significant shareholders subject to the lock-up provision]
SCHEDULE IV
[Subsidiaries]
ANNEX I
[Form of Opinion of Counsel to be delivered pursuant to Section 6(b)]
ANNEX II
[Form of Opinion of Counsel to be delivered pursuant to Section 6(c)]
ANNEX III
[Form of Lock-Up Agreement for Manager, Executive Officers and Directors]
ANNEX IV
[Form of Lock-Up Agreement for Significant Stockholders]
ANNEX V
[Form of Lock-Up Agreement for Other Stockholders]