2
NORTHSTAR REALTY FINANCE CORP.
SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
December [__], 2005
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
BANC OF AMERICA SECURITIES LLC
JMP SECURITIES LLC
as Representatives of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
NorthStar Realty Finance Corp., a Maryland corporation (the
"Company"), and NorthStar Realty Finance Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), each confirms its agreement with each
of the Underwriters listed on Schedule I hereto (collectively, the
"Underwriters"), for whom Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., Banc of
America Securities LLC and JMP Securities LLC are acting as Representatives (in
such capacity, collectively, the "Representatives"), with respect to (i) the
sale by the Company of 8,000,000 shares (the "Initial Shares") of Common Stock,
par value $0.01 per share, of the Company (the "Common Stock") and the purchase
by the Underwriters, acting severally and not jointly, of the respective number
of shares of Common Stock set forth opposite the names of each of the
Underwriters listed in Schedule I hereto, and (ii) the grant of the option
described in Section 1(b) hereof to purchase all or any part of 1,200,000
additional shares of Common Stock to cover over-allotments (the "Option
Shares"), if any, from the Company to the Underwriters, acting severally and not
jointly, in the respective numbers of shares of Common Stock set forth opposite
the names of the Underwriters in Schedule I hereto. The Initial Shares and all
or any part of the Option Shares are hereinafter called, collectively, the
"Shares."
The Company understands that the Underwriters propose to make
a public offering of the Shares as soon as the Underwriters deem advisable after
this Underwriting Agreement (the "Agreement") has been executed and delivered.
The Company has filed a registration statement on Form S-11
(No. 333-128962), including a preliminary prospectus, with the Securities and
Exchange Commission (the "Commission") for the registration of the Shares under
the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations
thereunder (the "Securities Act Regulations"). The Company has prepared and
filed such amendments to the registration statement and such amendments or
supplements to the related preliminary prospectus as have been required to the
date hereof. Such registration statement has been declared effective under the
Securities Act by the Commission. The Company agrees to file such post-effective
amendments or supplements as may hereafter be required. Such registration
statement as amended at the time it was declared effective by the Commission
(and, if the Company files a post-effective amendment to such registration
statement which becomes effective prior to the Closing Time (as defined below),
such registration statement as so amended) and including all information deemed
to be a part of the registration statement pursuant to Rule 430A of the
Securities Act Regulations or otherwise, is hereinafter called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
Securities Act Regulations is hereinafter called the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the 462(b) Registration Statement. The preliminary prospectus, dated as
of November 23, 2005, included in the Registration Statement before it became
effective under the Securities Act, and any preliminary form of prospectus filed
with the Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Securities Act Regulations is hereinafter called the
"Preliminary Prospectus." The term "Prospectus" means the final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Securities Act Regulations, and any amendments thereof or supplements
thereto. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
The term "Disclosure Package" means (i) the Preliminary
Prospectus, as most recently amended or supplemented as of the date hereof, (ii)
the Issuer Free Writing Prospectuses (as defined below), if any, identified in
Schedule II hereto, (iii) any other Free Writing Prospectus (as defined below)
that the parties hereto shall hereafter expressly agree to treat as part of the
Disclosure Package, and (iv) the information identified in Schedule III hereto.
The term "Issuer Free Writing Prospectus" means any issuer
free writing prospectus, as defined in Rule 433 of the Securities Act
Regulations. The term "Free Writing Prospectus" means any free writing
prospectus, as defined in Rule 405 of the Securities Act Regulations.
1. Sale and Purchase.
------------------
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of Common Stock of $[___], the Company agrees to sell to the Underwriters the
Initial Shares and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Initial Shares set forth in Schedule I
opposite such Underwriter's name, plus any additional number of Initial Shares
which such Underwriter may become obligated to
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purchase pursuant to the provisions of Section 8 hereof, subject in each case,
to such adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share of Common Stock set forth in paragraph (a) above, the Company
hereby grants an option to the Underwriters, acting severally and not jointly,
to purchase from the Company all or any part of the Option Shares, plus any
additional number of Option Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time within such 30-day period only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Shares upon notice by the Representatives to the
Company setting forth the number of Option Shares as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Shares. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than five full business days after the exercise of such option, nor in any event
prior to the Closing Time (as defined below). If the option is exercised as to
all or any portion of the Option Shares, the Company will sell that number of
Option Shares then being purchased and each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Shares then being purchased which the number of Initial Shares set forth
in Schedule I opposite the name of such Underwriter bears to the total number of
Initial Shares, subject in each case to such adjustments among the Underwriters
as the Representatives in their sole discretion shall make to eliminate any
sales or purchases of fractional shares.
2. Payment and Delivery.
---------------------
(a) Initial Shares. The Initial Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of The Depository Trust Company ("DTC")
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representatives by the Company
upon at least forty-eight hours' prior notice. The Company will cause the
certificates representing the Initial Shares to be made available for checking
and packaging at least twenty-four hours prior to the Closing Time (as defined
below) with respect thereto at the office of King & Spalding LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at the office of DTC or its
designated custodian, as the case may be (the "Designated Office"). The time and
date of such delivery and payment shall be 9:30 a.m., New York City time, on the
third (fourth, if the determination of the
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purchase price of the Initial Shares occurs after 4:30 p.m., New York City time)
business day after the date hereof (unless another time and date shall be agreed
to by the Representatives and the Company). The time and date at which such
delivery and payment are actually made is hereinafter called the "Closing Time."
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representatives by the Company upon at least forty-eight hours'
prior notice. The Company will cause the certificates representing the Option
Shares to be made available for checking and packaging at least twenty-four
hours prior to the Date of Delivery with respect thereto at the Designated
Office. The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on the date specified by the Representatives in the notice given
by the Representatives to the Company of the Underwriters' election to purchase
such Option Shares or on such other time and date as the Company and the
Representatives may agree upon in writing.
3. Representations and Warranties of the Company and the Operating
---------------------------------------------------------------
Partnership.
------------
The Company and the Operating Partnership, jointly and severally,
represent and warrant to the Underwriters, as of the date hereof, as of the
Closing Time and as of any Date of Delivery, that:
(i) the Company has an authorized capitalization as set forth in both
the Prospectus and the Disclosure Package; the outstanding shares of
capital stock of the Company and NRFC Sub-REIT Corp., a Maryland
corporation and a subsidiary of the Operating Partnership (the "Private
REIT"), have been duly and validly authorized and issued and are fully paid
and nonassessable; the outstanding partnership interests of the Operating
Partnership have been duly and validly authorized and issued;
(ii) the outstanding partnership interests of the Operating
Partnership directly or indirectly owned of record and beneficially by the
Company are as described in both the Prospectus and the Disclosure Package;
all of the outstanding shares of capital stock of the Private REIT are
directly and indirectly owned of record and beneficially by the Operating
Partnership and the Company, respectively;
(iii) except as disclosed in both the Prospectus and the Disclosure
Package, there are no outstanding (A) securities or obligations of the
Company or the subsidiaries of the Company set forth in Exhibit 21.1 to the
Registration
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Statement (the "Subsidiaries"), which are all of the subsidiaries of the
Company, convertible into or exchangeable for any capital stock of or
partnership interests, membership interests or other equity interests, as
the case may be, in the Company or any such Subsidiary, (B) warrants,
rights or options to subscribe for or purchase from the Company or any
Subsidiary any such capital stock or any such convertible or exchangeable
securities or obligations, or (C) obligations of the Company or any
Subsidiary to issue any securities or obligations, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or
options;
(iv) each of the Company and the Subsidiaries has been duly
incorporated or organized and is validly existing as a corporation, general
or limited partnership or limited liability company, as the case may be, in
good standing under the laws of its respective jurisdiction of
incorporation or organization;
(v) each of the Company and the Subsidiaries have the corporate,
partnership or limited liability company power, as the case may be, and
authority to own their respective properties and conduct their respective
businesses, each as described in each of the Registration Statement, the
Prospectus and the Disclosure Package, and, in the case of the Company and
the Operating Partnership, to execute and deliver this Agreement and to
consummate the transactions described in this Agreement;
(vi) the Company and the Subsidiaries are duly qualified or licensed
and in good standing in each jurisdiction where such qualification or
license is required except where the failure, individually or in the
aggregate, to be so qualified or licensed could not reasonably be expected
to have a material adverse effect on the assets, business, operations,
earnings, prospects, properties or condition (financial or otherwise),
present or prospective, of the Company and the Subsidiaries taken as a
whole (any such effect or change, where the context so requires, is
hereinafter called a "Material Adverse Effect" or "Material Adverse
Change");
(vii) except as disclosed in both the Prospectus and the Disclosure
Package, the Operating Partnership is neither prohibited nor restricted,
directly or indirectly, from paying dividends to the Company, or from
making any other distribution with respect to the Operating Partnership's
partnership interests or from repaying to the Company or another subsidiary
of the Company any amounts which may from time to time become due under any
loans or advances to the Operating Partnership from the Company or another
subsidiary of the Company, or from transferring the Operating Partnership's
property or assets to the Company or another subsidiary of the Company;
(viii) except as disclosed in both the Prospectus and the Disclosure
Package, the Private REIT is neither prohibited nor restricted, directly or
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indirectly, from paying dividends to the Operating Partnership, or from
making any other distribution with respect to the Private REIT's shares of
capital stock or from repaying to the Company, the Operating Partnership or
another subsidiary of the Company any amounts which may from time to time
become due under any loans or advances to the Private REIT from the
Company, the Operating Partnership or another subsidiary of the Company, or
from transferring the Private REIT's property or assets to the Company, the
Operating Partnership or another subsidiary of the Company;
(ix) except as disclosed in both the Prospectus and the Disclosure
Package, no Subsidiary (other than the Operating Partnership and the
Private REIT, which are covered above) is either prohibited or restricted,
directly or indirectly, from paying dividends to the Operating Partnership
or the Private REIT, to the extent such Subsidiary is a direct subsidiary
of the Operating Partnership or the Private REIT, or from making any other
distribution with respect to the outstanding membership interests of such
Subsidiary or from repaying to the Company, the Operating Partnership or
another subsidiary of the Company any amounts which may from time to time
become due under any loans or advances to such Subsidiary from the Company,
the Operating Partnership or another subsidiary of the Company, or from
transferring such Subsidiary's property or assets to the Company, the
Operating Partnership or another subsidiary of the Company;
(x) the Company does not own, directly or indirectly, any capital
stock or other equity securities of any corporation or any ownership
interest in any partnership, joint venture or other entity other than as
disclosed in both the Prospectus and the Disclosure Package;
(xi) the Agreement of Limited Partnership of the Operating
Partnership, dated as of October 19, 2004 (the "Partnership Agreement"),
has been duly and validly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally or by general principles of equity;
(xii) the Company is the sole general partner of the Operating
Partnership and the holder of units of partnership interest in the
Operating Partnership ("OP Units") representing an ownership interest in
the Operating Partnership in the percentage set forth in both the
Prospectus and the Disclosure Package, free and clear of any pledge, lien,
encumbrance, security interest or other claim;
(xiii) neither the Company nor any Subsidiary is in breach of or in
default under (nor has any event occurred which with notice, lapse of time,
or both would constitute a breach of, or default under), its respective
organizational
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documents, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by which
any of them or their respective properties or assets is bound, except for
such breaches or defaults which could not reasonably be expected to have a
Material Adverse Effect;
(xiv) the execution, delivery and performance of this Agreement and
consummation of the transactions contemplated herein will not (A) conflict
with, or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under): (1) any provision of the
organizational documents of the Company or any Subsidiary, or (2) any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or their respective
assets or properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any Subsidiary, except in the case of this
clause (2) for such breaches or defaults which could not reasonably be
expected to have a Material Adverse Effect; or (B) result in the creation
or imposition of any lien, charge, claim or encumbrance upon any property
or asset of the Company or any Subsidiary, except for such liens, charges,
claims or encumbrances which could not reasonably be expected to have a
Material Adverse Effect;
(xv) this Agreement has been duly authorized, executed and delivered
by each of the Company and the Operating Partnership and is a legal, valid
and binding agreement of each of the Company and the Operating Partnership
enforceable against the Company and the Operating Partnership in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general equitable principles, and except to the extent
that the indemnification and contribution provisions of Section 9 hereof
may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(xvi) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
Company's or the Operating Partnership's execution, delivery and
performance of this Agreement, the consummation of the transactions
contemplated herein by the Company or the Operating Partnership, including
the Company's issuance, sale and delivery of the Shares, other than (A)
such as have been obtained, or will have been obtained at the Closing Time
or the relevant Date of Delivery, as the case may be, under the Securities
Act and the Securities Exchange Act of 1934 (the "Exchange Act"), or (B)
any necessary qualification under the securities or "blue sky" laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters;
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(xvii) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, required in order to conduct their respective
businesses as described in both the Prospectus and the Disclosure Package,
except to the extent that any failure to have any such licenses,
authorizations, consents or approvals, to make any such filings or to
obtain any such authorizations, consents or approvals could not,
individually or in the aggregate, have a Material Adverse Effect; neither
the Company nor any of the Subsidiaries is in violation of, in default
under, or has received any notice regarding a possible violation, default
or revocation of any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or any of the Subsidiaries the
effect of which could reasonably be expected to result in a Material
Adverse Change;
(xviii) the Registration Statement has been declared effective under
the Securities Act by the Commission; the Rule 462(b) Registration
Statement, if any, is effective; no stop order suspending the effectiveness
or the use of the Registration Statement, including any Rule 462(b)
Registration Statement, has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission;
(xix) the Preliminary Prospectus, as of its date and as of the date
hereof, complied, the Registration Statement, as of each effective date and
as of the date hereof, complied or will comply, and the Prospectus and any
further amendments or supplements to the Registration Statement, the
Preliminary Prospectus or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, comply in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations; the Registration Statement, as of each
effective date and as of the date hereof, did not, does not and 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 the statements
therein not misleading; the Preliminary Prospectus, as of its date, did not
contain and the Prospectus or any amendment or supplement thereto, as of
their respective dates, the date hereof, the Closing Time and on each Date
of Delivery (if any), 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 the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no warranty or representation with respect to any statement
contained in the Registration Statement, the Preliminary Prospectus or the
Prospectus or any amendment or supplement to any of the foregoing in
reliance upon and in conformity with the information concerning the
Underwriters and furnished in writing by or on behalf of the Underwriters
through the
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Representatives to the Company expressly for use therein (that information
being limited to that described in the penultimate sentence of the first
paragraph of Section 9(b) hereof);
(xx) as of the date hereof, the Disclosure Package did not, and at the
time of each sale of Shares and at the Closing Time and each Date of
Delivery, the Disclosure Package will not, contain any untrue statement of
a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; as of its issue date or date of first use
and at all subsequent times through the date hereof, each Issuer Free
Writing Prospectus did not, and at the time of each sale of Shares and at
the Closing Time and each Date of Delivery, each such Issuer Free Writing
Prospectus will not, contain any untrue statement of a material fact or
omit to state any 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 Company makes no warranty or
representation with respect to any statement contained in the Disclosure
Package in reliance upon and in conformity with the information concerning
the Underwriters and furnished in writing by or on behalf of the
Underwriters through the Representatives to the Company expressly for use
therein (that information being limited to that described in the
penultimate sentence of the first paragraph of Section 9(b) hereof);
(xxi) each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public offering and sale
of the Shares did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement;
(xxii) the Company is eligible to use Free Writing Prospectuses in
connection with the public offering of the Shares contemplated herein
pursuant to Rules 164 and 433 under the Securities Act; any Free Writing
Prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act Regulations has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and
the Securities Act Regulations; and each Free Writing Prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under
the Securities Act Regulations or that was prepared by or on behalf of or
used by the Company complies or will comply in all material respects with
the requirements of the Securities Act and the Securities Act Regulations;
(xxiii) except for the Issuer Free Writing Prospectuses identified in
Schedule II hereto, and any electronic road show relating to the public
offering of the Shares contemplated herein, the Company has not prepared,
used or referred
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to, and will not, without the prior consent of the Representatives,
prepare, use or refer to, any Free Writing Prospectus;
(xxiv) the Preliminary Prospectus, the Prospectus and any Issuer Free
Writing Prospectuses (to the extent any such Issuer Free Writing Prospectus
was required to be filed with the Commission) delivered to the Underwriters
for use in connection with the public offering of the Shares contemplated
herein have been and will be identical to the versions of such documents
transmitted to the Commission for filing via the Electronic Data Gathering
Analysis and Retrieval System ("▇▇▇▇▇"), except to the extent permitted by
Regulation S-T;
(xxv) the Company filed the Registration Statement with the Commission
before using any Issuer Free Writing Prospectus; and each Issuer Free
Writing Prospectus was preceded or accompanied by the most recent
Preliminary Prospectus satisfying the requirements of Section 10 under the
Securities Act;
(xxvi) except as disclosed in both the Prospectus and the Disclosure
Package, there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary or, to the extent that such
proceeding affects the properties or assets of the Company or any
Subsidiary, any of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitral panel or agency
which could result in a judgment, decree, award or order which could
reasonably be expected to have a Material Adverse Effect;
(xxvii) the consolidated and combined financial statements of the
Company and its subsidiaries and NorthStar Realty Finance Corp. Predecessor
(as defined in the financial statements included in each of the
Registration Statement, the Prospectus and the Disclosure Package), the
consolidated financial statements of ALGM I Owners LLC and its subsidiaries
and the financial statements of NorthStar Funding LLC which are included in
each of the Registration Statement, the Prospectus and the Disclosure
Package, in each case including the notes to such financial statements
(collectively, the "Historical Financial Statements") present fairly the
combined or consolidated, as applicable, financial position of the Company,
NorthStar Realty Finance Corp. Predecessor, ALGM I Owners LLC or NorthStar
Funding LLC (collectively, the "Covered Entities"), as applicable, as of
the dates indicated and the combined or consolidated, as applicable,
results of operations and changes in financial position and cash flows of
such Covered Entity for the periods specified; such Historical Financial
Statements have been prepared in conformity with generally accepted
accounting principles as applied in the United States and on a consistent
basis during the periods involved and in accordance with Regulation S-X
promulgated by the Commission; the financial
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statement schedules included in the Registration Statement and the amounts
in both the Prospectus and the Disclosure Package under the captions
"Prospectus Summary - Summary Selected Historical Consolidated and Combined
Financial Information" and "Selected Historical Consolidated and Combined
Financial Information" fairly present the information shown therein and
have been compiled on a basis consistent with the Historical Financial
Statements; no pro forma financial information, financial statements or
supporting schedules other than the Historical Financial Statements are
required to be included in the Registration Statement, the Prospectus or
the Disclosure Package;
(xxviii) Ernst & Young LLP, whose reports on the consolidated and
combined financial statements of the Company and its subsidiaries and
NorthStar Realty Finance Corp. Predecessor, the consolidated financial
statements of ALGM I Owners LLC and its subsidiaries, and the financial
statements of NorthStar Funding LLC constitute part of each of the
Registration Statement, the Prospectus and the Disclosure Package, is, and
was during the periods covered by its reports, an independent registered
public accounting firm as required by the Securities Act and the Securities
Act Regulations;
(xxix) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP is an independent registered public
accounting firm as required by the Securities Act and the Securities Act
Regulations;
(xxx) subsequent to the respective dates of the Historical Financial
Statements, and except as may be otherwise disclosed in each of the
Registration Statement, the Prospectus and the Disclosure Package, there
has not been (A) any Material Adverse Change or any development or
transaction that could reasonably be expected to result in a Material
Adverse Change, whether or not arising in the ordinary course of business,
(B) any transaction that is material to the Company and the Subsidiaries
taken as a whole, contemplated or entered into by the Company or any of the
Subsidiaries, (C) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any Subsidiary that is material to
the Company and the Subsidiaries taken as a whole or (D) any dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock or any Subsidiary on any of its equity interests;
(xxxi) the Common Stock, the OP Units and the OP Units which are
structured as profits interests (the "LTIP Units") described in the
Registration Statement, the Prospectus and the Disclosure Package conform
in all material respects to the descriptions thereof contained in such
documents;
(xxxii) there are no persons with registration or other similar rights
to have any equity or debt securities of the Company or the Subsidiaries,
including securities which are convertible into or exchangeable or
redeemable for equity securities of the Company or the Subsidiaries,
registered pursuant to the Registration Statement or otherwise registered
by the Company or the Operating
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Partnership under the Securities Act, except for such registration or
similar rights which are fairly summarized in both the Prospectus and the
Disclosure Package or granted pursuant to that certain Registration Rights
Agreement (the "Registration Rights Agreement"), dated as of October 29,
2004, by and among the Company, NorthStar Partnership, L.P., NorthStar
Funding Managing Member Holdings LLC and NS Advisors Holdings LLC;
(xxxiii) the Shares have been duly authorized and, when issued and
duly delivered against payment therefor as contemplated by this Agreement,
will be validly issued, fully paid and non-assessable, free and clear of
any pledge, lien, encumbrance, security interest or other claim, and the
issuance and sale of the Shares by the Company is not subject to preemptive
or other similar rights arising by operation of law, under the
organizational documents of the Company or any Subsidiary or under any
agreement to which the Company or any Subsidiary is a party or otherwise;
(xxxiv) all of the outstanding OP Units have been duly authorized and
are validly issued, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and were not issued in violation of any
preemptive or other similar rights arising by operation of law, under the
organizational documents of the Company or the Operating Partnership or
under any agreement to which the Company or any Subsidiary is a party or
otherwise;
(xxxv) the Common Stock has been registered under Section 12(b) of the
Exchange Act and the Shares have been approved for listing on the New York
Stock Exchange (the "NYSE"), subject to official notice of issuance;
(xxxvi) the Company has not taken, directly or indirectly, any action
which is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Shares;
(xxxvii) neither the Company nor any of its affiliates (A) is required
to register as a "broker" or "dealer" in accordance with the provisions of
the Exchange Act, or the rules and regulations thereunder (the "Exchange
Act Regulations"), or (B) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the
meaning of Article I of the By-laws of the National Association of
Securities Dealers, Inc. (the "NASD")) any member firm of the NASD;
(xxxviii) the Company has not relied upon the Representatives or legal
counsel for the Representatives for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(xxxix) any certificate signed by any officer of the Company or the
Operating Partnership delivered to the Representatives or to counsel for
the
-12-
Underwriters pursuant to the terms or provisions of this Agreement shall be
deemed a representation and warranty by the Company to each Underwriter as
to the matters covered thereby;
(xl) the form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the organizational
documents of the Company and the requirements of the NYSE;
(xli) the Company and the Subsidiaries have good and marketable title
in fee simple to all real property, if any, and good title to all personal
property, if any, owned by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, claims, restrictions,
mortgages and defects in such title (collectively, the "Encumbrances"),
except such Encumbrances that are disclosed in both the Prospectus and the
Disclosure Package or could not reasonably be expected to materially and
adversely affect the value of such property or interfere with the use made
or proposed to be made of such property by the Company and the
Subsidiaries; any real or personal property leased by the Company or any
Subsidiary is held under a lease which is a valid and binding agreement,
enforceable against the Company or such Subsidiary (to the extent a party
thereto) and, to the Company's knowledge, the other parties thereto, except
(A) as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by general
principles of equity, (B) as otherwise disclosed in both the Prospectus and
the Disclosure Package or (C) for such exceptions that are not,
individually or in the aggregate, material to the Company or such
Subsidiary and would not reasonably be expected to interfere with the use
made or proposed to be made of such property by the Company or such
Subsidiary;
(xlii) except as disclosed in both the Prospectus and the Disclosure
Package, the mortgages, if any, encumbering any real property owned in fee
simple by the Company or a Subsidiary are not and will not be: (A)
convertible (in the absence of foreclosure) into an equity interest in such
real property or in the Company or any Subsidiary, (B) cross-defaulted to
any indebtedness other than indebtedness of the Company or any of the
Subsidiaries or (C) cross-collateralized to any property or assets not
owned by the Company or any of the Subsidiaries;
(xliii) the descriptions of legal or governmental proceedings,
contracts, leases and other legal documents in each of the Registration
Statement, the Prospectus and the Disclosure Package constitute fair and
accurate summaries of such proceedings or documents, and there are no legal
or governmental proceedings, contracts, leases or other documents of a
character required to be described in the Registration Statement, the
Prospectus or the Disclosure Package or filed as exhibits to the
Registration Statement which are not so described or filed; all agreements
between the Company or any of the Subsidiaries and third parties expressly
referenced in both the Prospectus and the Disclosure Package are
-13-
legal, valid and binding obligations of the Company or the Subsidiaries, to
the extent a party thereto, and, to the knowledge of the Company, of the
other parties thereto, enforceable against the Company or Subsidiaries in
accordance with their respective terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and by general equitable
principles and neither the Company nor any Subsidiary is in breach or
default under any such agreements;
(xliv) the Company or the Subsidiaries own or possess adequate
licenses or other rights to use all material patents, trademarks, service
marks, trade names, copyrights, software licenses, trade secrets, other
intangible property rights and know-how (collectively "Intangibles")
necessary for the Company and the Subsidiaries taken together as a whole
(the "Consolidated Company") to conduct the business of the Consolidated
Company as described in both the Prospectus and the Disclosure Package, and
neither the Company nor any Subsidiary has received notice of infringement
of or conflict with (and the Company and the Subsidiaries know of no such
infringement of or conflict with) asserted rights of others with respect to
any Intangibles which could reasonably be expected to have a Material
Adverse Effect;
(xlv) the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that, with respect to the
Consolidated Company, (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of the consolidated financial
statements of the Company in conformity with generally accepted accounting
principles as applied in the United States and to maintain asset
accountability; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(xlvi) (A) the Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under
the Exchange Act), which (1) are designed to ensure that material
information relating to the Company, including its consolidated
subsidiaries, is made known to the Company's principal executive officer
and its principal financial officer by others within those entities,
particularly during the periods in which the periodic reports required
under the Exchange Act are being prepared, (2) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement, and (3) are effective in all material respects to
perform the functions for which they were established, and (B) based on the
evaluation of the Company's disclosure controls and procedures described
above, the Company is not aware of (1) any significant deficiency or
material weakness in the design or operation of internal control over
financial reporting which are reasonably likely
-14-
to adversely affect the Company's ability to record, process, summarize and
report financial information, or (2) any fraud, whether or not material,
that involves management or other employees who have a significant role in
the Company's internal control over financial reporting. Since the most
recent evaluation of the Company's disclosure controls and procedures
described above, there have been no significant changes in internal control
over financial reporting or in other factors that could significantly
affect internal control over financial reporting;
(xlvii) the Company and each of the Subsidiaries has filed on a timely
basis all necessary material federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and have
paid all material taxes shown as due thereon and if due and payable, any
related or similar assessment, fine or penalty levied against the Company
or any of the Subsidiaries; and no tax deficiency has been asserted against
any such entity, nor does any such entity know of any tax deficiency which
is likely to be asserted against any such entity which, individually or in
the aggregate, if determined adversely to any such entity, could reasonably
be expected to have a Material Adverse Effect; all material tax liabilities
are adequately provided for on the respective books of such entities;
(xlviii) the Company maintains insurance, including title insurance
(in each case, issued by insurers of recognized financial responsibility)
of the types and in the amounts generally deemed adequate for the business
of the Consolidated Company and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not
limited to, directors and officers liability insurance, title insurance,
insurance covering real and personal property owned or leased by the
Company and the Subsidiaries against theft, damage, destruction,
environmental liabilities, acts of vandalism, terrorism, earthquakes,
floods and all other risks customarily insured against, all of which
insurance is in full force and effect;
(xlix) the Company and the Subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and
state occupational safety and health and environmental laws, regulations
and rules to conduct the business of the Consolidated Company, and the
Company and the Subsidiaries are in compliance with all terms and
conditions of any such permits, licenses or approvals, except for any
failure to have required permits, licenses or other approvals or to comply
with the terms and conditions of such permits, licenses or approvals which
could not, individually or in the aggregate, result in a Material Adverse
Change;
(l) the Company and the Subsidiaries are in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in
-15-
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any
material liability; neither the Company nor any of the Subsidiaries has
incurred and none of them expect to incur any material liability under (A)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (B) Section 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder ("Code"); each "pension plan" for which the Company or any of
the Subsidiaries would have any liability that is intended to 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
would cause the loss of such qualification;
(li) none of the Company, any of the Subsidiaries or, to the knowledge
of the Company, any officer, director, employee or agent purporting to act
on behalf of the Company or any of the Subsidiaries has at any time (A)
made any contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (B) made any
payment of funds or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus, or (C) engaged in any material transactions, maintained any
bank account or used any material corporate funds except for transactions,
bank accounts and funds which have been or are, as applicable, reflected in
the books and records of the Company and the Subsidiaries;
(lii) except as disclosed in both the Prospectus and the Disclosure
Package, there are no material outstanding loans, advances or guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the
benefit of any of the officers or directors of the Company or any of the
Subsidiaries or any of the members of the immediate families of any such
officers or directors;
(liii) all securities issued by the Company, any of the Subsidiaries
or any trusts established by the Company or any of the Subsidiaries have
been issued and sold in compliance with (A) all applicable federal and
state securities laws and (B) the applicable corporate or partnership law
of the jurisdiction of incorporation of the Company or Subsidiary, as
applicable;
(liv) each of the real properties leased or owned by the Company or
any of the Subsidiaries (collectively, the "Properties") complies with all
applicable zoning laws, ordinances, regulations and deed restrictions or
other covenants in all material respects, except such failure to comply
which does not materially impair the value of any of the Properties and
will not result in a forfeiture or reversion of title; neither the Company
nor any Subsidiary has received from any governmental authority any written
notice of any condemnation of or zoning change affecting any of the
Properties or any part thereof, and neither the Company nor any Subsidiary
knows of any such condemnation or zoning change which is threatened
-16-
and which, individually or in the aggregate, if consummated could
reasonably be expected to have a Material Adverse Effect;
(lv) to the best of the Company's knowledge, (A) no lessee of any
portion of any of the Properties is in default under any of the leases
governing such Properties and there is no event which, but for the passage
of time or the giving of notice or both, would constitute a default under
any of such leases, except such defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect; and (B) no tenant under any lease pursuant to which any of the
Properties is leased has an option or right of first refusal to purchase
the Property leased thereunder or the premises or buildings which
constitute a part of such Property, except for such options or rights of
first refusal which, if exercised, could not reasonably be expected to have
a Material Adverse Effect or as provided by law;
(lvi) neither the Company nor any of the Subsidiaries has any
liability under any applicable environmental, health, safety or similar law
or otherwise relating to any Hazardous Material (as hereinafter defined)
and there are no notices of potential liability or claims pending or, to
the knowledge of the Company, threatened against the Company or any of the
Subsidiaries or concerning any of the Properties under any applicable
environmental, health, safety or similar law or otherwise relating to any
Hazardous Material, except for such liabilities or claims which could not
reasonably be expected to have a Material Adverse Effect; neither the
Company nor any of the Subsidiaries or, to the knowledge of the Company,
any other person, has contaminated or caused conditions that threaten to
contaminate any of the Properties with Hazardous Materials, except for such
contamination or threats of contamination which could not reasonably be
expected to have a Material Adverse Effect; neither the Properties nor any
other land ever owned by the Company or any of the Subsidiaries is included
on or, to the knowledge of the Company, is proposed for inclusion on the
National Priorities List pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. ▇▇.▇▇. 9601 et seq.,
or any similar list or inventory of contaminated properties.
As used herein, "Hazardous Material" shall mean any hazardous material,
hazardous waste, hazardous substance, hazardous constituent, toxic
substance, pollutant, contaminant, asbestos, petroleum, petroleum waste,
radioactive material, biohazardous material, explosive or any other
material, the presence of which in the environment is prohibited,
regulated, or serves as the basis of liability, as defined, listed, or
regulated by any applicable federal, state, or local environmental law,
ordinance, rule, or regulation;
(lvii) in connection with the offer and sale of the Shares, the
Company has not offered shares of its Common Stock or any other securities
convertible into or exchangeable or exercisable or redeemable for Common
Stock in a manner
-17-
in violation of the Securities Act; and the Company has not distributed and
will not distribute any offering material in connection with the offer and
sale of the Shares except for the Preliminary Prospectus, the Prospectus,
any Issuer Free Writing Prospectus or the Registration Statement;
(lviii) the Company has complied and will comply with all the
provisions of Florida Statutes, Section 517.075 (Chapter 92-198, Laws of
Florida); and neither the Company nor any of the Subsidiaries or affiliates
does business with the government of Cuba or with any person or affiliate
located in Cuba;
(lix) the Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein
contemplated;
(lx) except as disclosed in both the Prospectus and the Disclosure
Package, no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required by the Securities Act and
the Securities Act Regulations to be described in the Registration
Statement, the Prospectus or the Disclosure Package and which is not so
described;
(lxi) the Company, the Subsidiaries and the officers and directors of
the Company and the Subsidiaries, in their capacities as such, are, and at
the Closing Time and any Date of Delivery will be, in compliance in all
material respects with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and
the rules and regulations promulgated thereunder;
(lxii) the Consolidated Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(lxiii) the statistical and market related data included in the
Registration Statement, the Prospectus and the Disclosure Package are based
on or derived from sources that the Company believes to be reliable and
accurate; and
(lxiv) each of the Company and the Private REIT is organized and has
operated in conformity with the requirements for qualification as a real
estate investment trust (a "REIT") under the Code; each of the Company and
the Private REIT qualified as a REIT for the taxable year ended December
31, 2004 and the present and contemplated method of operation of the
Company and the Subsidiaries will enable each of the Company and the
Private REIT to meet the requirements for qualification and taxation as a
REIT under the Code for 2005 and subsequent taxable years; and each of the
Company and the Private REIT intends to continue to qualify as a REIT until
the respective Board of Directors of the Company or the Private REIT
determines that it is no longer in the best
-18-
interests of the Company or the Private REIT, as the case may be, to
continue to qualify as a REIT; neither the Company nor any of the
Subsidiaries has taken any action that could reasonably be expected to
cause the Company or the Private REIT to fail to qualify as a REIT under
the Code at any time.
4. Certain Covenants:
------------------
The Company and the Operating Partnership, jointly and severally,
agree with the Underwriters:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions (both domestic and foreign) as the
Representatives may designate and to maintain such qualifications in effect as
long as requested by the Representatives for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of
the Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representatives promptly and, if requested by
the Representatives, will confirm such advice in writing, when such
post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus with the Commission pursuant to Rule 424(b) under the
Securities Act within the time period set forth in Rule 424(b) and to furnish
promptly (and with respect to the initial delivery of such Prospectus, not later
than the second business day following the execution and delivery of this
Agreement or on such other day as the parties may mutually agree) to the
Underwriters copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) in such
quantities and at such locations as the Underwriters may reasonably request for
the purposes contemplated by the Securities Act Regulations, which Prospectus
and any amendments or supplements thereto furnished to the Underwriters will be
identical to the version created to be transmitted to the Commission for filing
via ▇▇▇▇▇, except to the extent permitted by Regulation S-T;
(d) to advise the Representatives promptly (and if required by the
Representatives, to confirm such advice in writing) when the Registration
Statement has become effective and when any post-effective amendment thereto
become effective under the Securities Act Regulations;
(e) to furnish a copy of each proposed Free Writing Prospectus to the
Representatives and counsel for the Underwriters and obtain the consent of the
-19-
Representatives prior to referring to, using or filing with the Commission any
Free Writing Prospectus pursuant to Rule 433(d) under the Securities Act, other
than the Issuer Free Writing Prospectuses, if any, identified in Schedule II
hereto;
(f) to comply with the requirements of Rules 164 and 433 of the Securities
Act Regulations applicable to any Issuer Free Writing Prospectus, including
timely filing with the Commission, legending and record keeping, as applicable;
(g) to advise the Representatives immediately and, if requested by the
Representatives, confirming such advice in writing, of (1) the receipt of any
comments from, or any request by, the Commission for amendments or supplements
to the Registration Statement, the Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus, or for additional information with respect
thereto, or (2) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus, or of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes and, if the Commission or any other
government agency or authority should issue any such order, to make every
reasonable effort to obtain the lifting or removal of such order as soon as
possible and to advise the Representatives promptly of the lifting or removal of
such order; to advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement, the Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus and to file no such amendment
or supplement to which the Representatives, upon advice of counsel after
discussion with the Company and counsel for the Company, shall reasonably object
in writing;
(h) to furnish to the Underwriters for a period of two years from the date
of this Agreement (1) as soon as available, copies of all annual, quarterly and
current reports or other communications supplied to holders of shares of Common
Stock, (2) as soon as practicable after the filing thereof, copies of all
reports filed by the Company with the Commission or any national securities
exchange on which any class of securities of the Company are listed; and (3)
such additional information as the Underwriters from time to time reasonably
request (any financial statements so requested 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);
(i) to advise the Underwriters promptly of the happening of any event known
to the Company within the time during which a Prospectus relating to the Shares
(or in lieu thereof the notice referred to in Rule 173(a) under the Securities
Act Regulations) is required to be delivered under the Securities Act or the
Securities Act Regulations which, in the judgment of the Company or in the
reasonable opinion of the Representatives or counsel for the Underwriters, (1)
would require the making of any change in the Prospectus or the Disclosure
Package so that the Prospectus or the Disclosure Package would not include an
untrue statement of a material fact or omit to state a material fact
-20-
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, (2)
as a result of which any Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement relating
to the Shares, or (3) if it is necessary at any time to amend or supplement the
Prospectus or the Disclosure Package to comply with the Securities Act and the
Securities Act Regulations and, during such time, to promptly prepare and
furnish to the Underwriters copies of the proposed amendment or supplement
before filing any such amendment or supplement with the Commission and
thereafter promptly furnish at the Company's own expense to the Underwriters and
to dealers, copies in such quantities and at such locations as the
Representatives may from time to time reasonably request of an appropriate
amendment or supplement to the Prospectus or the Disclosure Package so that the
Prospectus or the Disclosure Package as so amended or supplemented will not, in
the light of the circumstances when it (or in lieu thereof the notice referred
to in Rule 173(a) under the Securities Act Regulations) is so delivered, be
misleading, or, in the case of any Issuer Free Writing Prospectus, conflict with
the information contained in the Registration Statement, or so that the
Prospectus or the Disclosure Package will comply with the Securities Act and the
Securities Act Regulations;
(j) to file promptly with the Commission any amendment or supplement to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(k) prior to filing with the Commission any amendment or supplement to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus, to furnish a copy thereof to the Underwriters and
counsel for the Underwriters and obtain the consent of the Representatives to
the filing;
(l) to furnish promptly to the Representatives a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein);
(m) during the period referred to in paragraph (i) above, to furnish to the
Representatives, not less than two full business days before filing with the
Commission, a copy of any document proposed to be filed with the Commission
pursuant to Section 13, 14, or 15(d) of the Exchange Act and during such period
to file all such documents in the manner and within the time periods required by
the Exchange Act and the Exchange Act Regulations;
(n) to apply the net proceeds of the sale of the Shares in accordance with
the statements under the caption "Use of Proceeds" in the Prospectus and the
Disclosure Package;
-21-
(o) to make generally available to its security holders and to deliver to
the Representatives as soon as practicable, but in any event not later than the
end of the fiscal quarter first occurring after the first anniversary of the
effective date of the Registration Statement, an earnings statement complying
with the provisions of Section 11(a) of the Securities Act (in such form, at the
option of the Company, as complies with the provisions of Rule 158 of the
Securities Act Regulations) covering a period of 12 months beginning after the
effective date of the Registration Statement;
(p) to use its best efforts to maintain the listing of the Shares on the
NYSE and to file with the NYSE all documents and notices required by the NYSE of
companies that have securities that are listed on the NYSE;
(q) to engage and maintain, at its expense, a registrar and transfer agent
for the Common Stock;
(r) not to take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(s) in connection with the offer and sale of the Shares, not to offer
shares of Common Stock or any other securities convertible into or exchangeable
or exercisable or redeemable for Common Stock in a manner in violation of the
Securities Act;
(t) not to distribute any prospectus or other offering material, other than
the the Prospectus and the Disclosure Package, in connection with the offer and
sale of the Shares;
(u) to cause each of the Company and the Private REIT to properly and
timely elect to be taxed as a REIT under the Code for the taxable year ended
December 31, 2004;
(v) to refrain during a period of 90 days from the date of the Prospectus,
without the prior written consent of Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. and
Banc of America Securities LLC, from, directly or indirectly, (1) offering,
pledging, selling, contracting to sell, selling any option or contract to
purchase, purchasing any option or contract to sell, granting any option for the
sale of, or otherwise disposing of or transferring (or entering into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of), any share of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or filing any registration statement under the Securities Act with
respect to any of the foregoing (except for (i) a registration statement on Form
S-3 relating to the resale of shares of Common Stock that may be issued upon
redemption of any of the 4,705,915 OP Units (the "Contribution Units") issued to
NorthStar Partnership, L.P., NS Advisors Holdings LLC and NorthStar Funding
Managing Member Holdings LLC in exchange for their contribution of certain
assets and related liabilities and rights on
-22-
October 29, 2004 which the Company is required to file pursuant to the
Registration Rights Agreement, (ii) a registration statement on Form S-3
relating to a proposed dividend reinvestment plan or employee stock purchase
plan of the Company, (iii) a universal shelf registration statement on Form S-3
and/or Form S-4 relating to securities that may be offered or sold by the
Company, provided that the Company will not sell any securities pursuant to such
registration statement within 90 days from the date of the Prospectus, and (iv)
a registration statement on Form S-8 with respect to grants of stock options,
restricted stock, LTIP Units or other stock based awards to employees,
co-employees of the Company and NCIC, consultants or directors pursuant to an
employee benefit plan in existence on the date hereof), or (2) entering into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to (A) the Shares
to be issued hereunder, (B) any shares of Common Stock issued by the Company
upon the exercise of an option outstanding on the date hereof and referred to in
the Prospectus and the Disclosure Package, (C) grants of stock options,
restricted stock or LTIP Units to employees, co-employees of the Company and
NCIC, consultants or directors of the Company pursuant to an employee benefit
plan of the Company in existence on the date hereof and described in the
Prospectus and the Disclosure Package, provided that the grantees thereof agree
not to sell, offer, dispose of or otherwise transfer any such stock options (or
the shares underlying such options), restricted stock or LTIP Units or Common
Stock during such 90-day period without the prior written consent of Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc. and Banc of America Securities LLC on behalf of the
Underwriters, or (D) any shares of Common Stock issued by the Company upon
redemption of any of the Contribution Units;
(w) not to, and to use its best efforts to cause its officers, directors
and affiliates not to, (1) take, directly or indirectly prior to termination of
the underwriting syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the Company, or which
may cause or result in, or which might in the future reasonably be expected to
cause or result in, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of any of the Shares,
(2) sell, bid for, purchase or, except as provided herein, pay anyone any
compensation for soliciting purchases of the Shares or (3) pay or agree to pay
to any person any compensation for soliciting any order to purchase any other
securities of the Company;
(x) to cause each officer and director of the Company and to use its
reasonable best efforts to cause NCIC to furnish to the Representatives, prior
to the Closing Time, a letter or letters, substantially in the form of Exhibit A
hereto, pursuant to which each such person shall agree not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any shares
of Common Stock or securities convertible into or exchangeable for Common Stock
or
-23-
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 90 days from the
date of the Prospectus, without the prior written consent of Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc. and Banc of America Securities LLC on behalf of the
Underwriters, and to direct the transfer agent for the Common Stock to place
stop transfer restrictions upon such securities for such periods of time and to
refrain from taking any actions which could impede the ability of the
Representatives to enforce the provisions of such letter or letters;
(y) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement and will file with the Commission
such reports as may be required pursuant to Rule 463 of the Securities Act
Regulations;
(z) that the Company and the Operating Partnership will use their best
efforts to allow each of the Company and the Private REIT to meet the
requirements to qualify as a REIT under the Code until the respective Board of
Directors of the Company or the Private REIT determines that it is no longer in
the best interests of the Company or the Private REIT, as the case may be, to
qualify as a REIT; and
(aa) that the Company and the Operating Partnership will use their best
efforts not to invest, or otherwise use the net proceeds received from the sale
of the Shares, in such a manner as would require the Company or any of its
subsidiaries to register as an investment company under the Investment Company
Act.
5. Payment of Expenses:
--------------------
(a) The Company and the Operating Partnership agree to pay all costs and
expenses incident to the performance of their obligations under this Agreement,
whether or not the transactions contemplated hereunder are consummated or this
Agreement is terminated, including expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any
amendments or supplements thereto, and the printing and furnishing of copies of
each thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the preparation, issuance and delivery of the certificates for
the Shares to the Underwriters, including any stock or other transfer taxes or
duties payable upon the sale of the Shares to the Underwriters, (iii) the
printing of this Agreement and any dealer agreements and furnishing of copies of
each to the Underwriters and to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale under
state laws that the Company and the Representatives have mutually agreed are
appropriate and the determination of their eligibility for investment under
state law as aforesaid, including the legal fees and filing fees and other
disbursements of counsel for the Underwriters relating thereto, and the printing
and furnishing of copies of any blue sky surveys or legal investment surveys to
the Underwriters and to dealers, (v) filing for review of the public offering of
the Shares
-24-
by the NASD, including the legal fees and filing fees and other
disbursements of counsel for the Underwriters relating thereto, (vi) the fees
and expenses of any outside counsel and accountants for the Company, any
transfer agent or registrar for the Shares and miscellaneous expenses of the
Company referred to in the Registration Statement, (vii) the fees and expenses
incurred in connection with the listing of the Shares on the NYSE, (viii) the
costs and expenses of the road show (but excluding the costs and expenses of
travel and accommodations for the Underwriters), (ix) preparing and distributing
one set of bound volumes of transaction documents to each of Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc. and Banc of America Securities LLC and their legal counsel
and (x) the performance of the Company's and the Operating Partnership's other
obligations hereunder. The travel and accommodation expenses of the Underwriters
and their counsel shall not be borne by or reimbursed by the Company. Upon the
request of the Representatives, the Company will provide funds in advance for
filing fees.
(b) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Operating Partnership to comply, in all material respects, with the terms or to
fulfill, in all material respects, any of the conditions of this Agreement, or
if for any reason the Company or the Operating Partnership shall be unable to
perform its or their obligations under this Agreement, the Company will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(such as printing, facsimile, courier service, direct computer expenses,
accommodations, travel and the fees and disbursements of Underwriters' counsel
and any other advisors, accountants, appraisers, etc.) reasonably incurred by
such Underwriters in connection with this Agreement or the transactions
contemplated herein.
6. Conditions of the Underwriters' Obligations:
--------------------------------------------
The obligations of the Underwriters hereunder to purchase Shares at
the Closing Time or on each Date of Delivery, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company and
the Operating Partnership hereunder on the date hereof and at the Closing Time
and on each Date of Delivery, as applicable, the performance by the Company and
the Operating Partnership of their respective obligations hereunder and to the
satisfaction of the following further conditions at the Closing Time or on each
Date of Delivery, as applicable:
(a) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Company and the Subsidiaries, addressed to the Underwriters and
dated the Closing Time and each Date of Delivery and in form and substance
satisfactory to King & Spalding LLP, counsel for the Underwriters, as set forth
in Exhibits B and C hereto.
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of ▇▇▇▇▇▇▇ LLP, special Maryland counsel for
the Company, addressed to the Underwriters and dated the Closing Time and each
Date of
-25-
Delivery and in form and substance satisfactory to King & Spalding LLP,
counsel for the Underwriters, stating that:
(i) each of the Company and the Private REIT 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 of Assessments
and Taxation of Maryland and has the corporate power to own its properties
and to conduct its business in all material respects as described in each
of the Prospectus and the Disclosure Package;
(ii) the Company has the corporate power to enter into and perform
this Agreement and to consummate the transactions contemplated herein; this
Agreement has been duly executed and, so far as is known to such counsel,
delivered by the Company;
(iii) the issuance of the Shares has been duly authorized and, when
and if issued and delivered against payment therefor in accordance with
this Agreement, the Registration Statement and the resolutions adopted by
the Board of Directors of the Company, or duly authorized committees
thereof, relating to, among other matters, (a) the sale and issuance of the
Shares, and (b) the authorization of the execution, delivery and
performance by the Company of this Agreement (collectively, the
"Resolutions"), the Shares will be (assuming that upon such issuance the
total number of shares of Common Stock issued and outstanding will not
exceed the total number of shares of Common Stock authorized to be issued
under the charter of the Company (the "Company Charter")) validly issued,
fully paid and non-assessable and will be free and clear of any pledge,
lien, encumbrance, security interest or other claim arising under the
Maryland General Corporation Law (the "MGCL") in connection with the
issuance of the Shares;
(iv) the statements under the captions "Prospectus Summary -
Restrictions on Ownership of Stock," "Risk Factors - Risks Related to Our
Company - Maryland takeover statutes may prevent a change of our control.
This could depress our stock price," "Risk Factors - Risks Related to Our
Company - Our authorized but unissued common and preferred stock and other
provisions of our charter and bylaws may prevent a change in our control,"
"Investment Policies and Policies with Respect to Certain Activities -
Interested Director, Officer and Employee Transactions," "Management -
Liability and Indemnification of Officers and Directors," "Description of
Stock" and "Important Provisions of Maryland Law and of Our Charter and
Bylaws" in each of the Registration Statement, the Prospectus and the
Disclosure Package, insofar as such statements constitute summaries of the
Company Charter, the bylaws of the Company (the "Company Bylaws") or
Maryland law, constitute accurate summaries thereof in all material
respects;
-26-
(v) the Company has an authorized capitalization as set forth in both
the Prospectus and the Disclosure Package under the caption
"Capitalization" and the outstanding shares of stock of the Company (other
than the Shares) (the "Company Outstanding Shares") and the outstanding
shares of stock of the Private REIT (the "Private REIT Outstanding Shares")
have been duly authorized and are validly issued, fully paid and
nonassessable; the Private REIT Outstanding Shares are owned of record by
the Operating Partnership;
(vi) the issuance and sale of the Shares by the Company are not
subject to preemptive or other similar rights arising under the Company
Charter, the Company Bylaws or the MGCL;
(vii) the Shares conform in all material respects to the descriptions
thereof contained in each of the Prospectus and the Disclosure Package
under the caption "Description of Stock";
(viii) the form of certificate used to represent the Common Stock
complies in all material respects with all applicable statutory
requirements of the MGCL and with any applicable requirements of the
Company Charter and the Company Bylaws; and
(ix) the execution and delivery by the Company of this Agreement and
the consummation by the Company of the transactions contemplated hereby
have been duly authorized by the Company and do not and will not conflict
with the Company Charter or the Company Bylaws.
(c) On the date of this Agreement and at the Closing Time and each Date of
Delivery (if applicable), the Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP letters dated the respective dates of delivery thereof and
addressed to the Representatives, in form and substance satisfactory to the
Representatives, containing statements and information of the type specified in
AU Section 634 "Letters for Underwriters and Certain other Requesting Parties"
issued by the American Institute of Certified Public Accountants with respect to
the Historical Financial Statements of the Covered Entities and certain
financial information of the Company and the Subsidiaries included in the
Registration Statement, the Prospectus and the Disclosure Package, and such
other matters customarily covered by comfort letters issued in connection with
registered public offerings; provided, that the letters delivered at the Closing
Time and each Date of Delivery (if applicable) shall use a "cut-off" date no
more than three business days prior to such Closing Time or such Date of
Delivery, as the case may be. In the event that the letters referred to above
set forth any changes in indebtedness, decreases in total assets or retained
earnings or increases in borrowings, it shall be a further condition to the
obligations of the Representatives that (i) such letters shall be accompanied by
a written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (ii) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it
-27-
impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement.
(d) On the date of this Agreement and at the Closing Time and each Date of
Delivery (if applicable), the Representatives shall have received from Ernst &
Young LLP letters dated the respective dates of delivery thereof and addressed
to the Representatives, in form and substance satisfactory to the
Representatives, containing statements and information of the type specified in
AU Section 634 "Letters for Underwriters and Certain other Requesting Parties"
issued by the American Institute of Certified Public Accountants with respect to
the Historical Financial Statements of the Covered Entities and certain
financial information of the Company and the Subsidiaries included in the
Registration Statement, the Prospectus and the Disclosure Package, and such
other matters customarily covered by comfort letters issued in connection with
registered public offerings; provided, that the letters delivered at the Closing
Time and each Date of Delivery (if applicable) shall use a "cut-off" date no
more than three business days prior to such Closing Time or such Date of
Delivery, as the case may be. In the event that the letters referred to above
set forth any changes in indebtedness, decreases in total assets or retained
earnings or increases in borrowings, it shall be a further condition to the
obligations of the Representatives that (i) such letters shall be accompanied by
a written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (ii) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement.
(e) The Representatives shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of King & Spalding LLP, dated the Closing
Time or such Date of Delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives.
(f) The Registration Statement shall have become effective not later than
5:00 p.m., New York City time, on the date of this Agreement, or such later time
and date as the Representatives shall approve.
(g) No amendment or supplement to the Registration Statement, the
Prospectus or any document in the Disclosure Package shall have been filed to
which the Representatives shall have objected in writing.
(h) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the Prospectus or any document in the
Disclosure Package shall have been issued, and no proceedings for such purpose
shall have been initiated or threatened, by the Commission, and no suspension of
the qualification of the Shares for offering or sale in any jurisdiction, or the
initiation or threatening of any proceedings for any of such purposes, shall
have occurred; (ii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction
-28-
of the Representatives; (iii) the Registration Statement does 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 the statements therein not misleading;
and (iv) the Prospectus and the Disclosure Package, as of their respective
dates, as of the Closing Time or such Date of Delivery, do 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 the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, in
each case, that the Company makes no warranty or representation with respect to
any statement contained in the Registration Statement, the Prospectus, the
Disclosure Package or any amendment or supplement to any of the foregoing in
reliance upon and in conformity with the information concerning the Underwriters
and furnished in writing by or on behalf of the Underwriters through the
Representatives to the Company expressly for use in the Registration Statement,
the Prospectus or the Disclosure Package (that information being limited to that
described in the penultimate sentence of the first paragraph of Section 9(b)
hereof).
(i) All filings with the Commission required by Rule 424 and Rule 430A
under the Securities Act to have been filed by the Closing Time shall have been
made within the applicable time period prescribed for such filing by such Rules.
(j) Between the time of execution of this Agreement and the Closing Time or
the relevant Date of Delivery, (i) there shall not have been any Material
Adverse Change, and (ii) no transaction which is material and unfavorable to the
Company shall have been entered into by the Company or any of the Subsidiaries,
in each case, which in the Representatives' sole judgment, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Registration Statement.
(k) The Shares shall have been approved for listing on the NYSE.
(l) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(m) The Representatives shall have received lock-up agreements from each
officer and director of the Company and NCIC as provided in Section 4(x) hereof,
in the form of Exhibit A attached hereto, and such letter agreements shall be in
full force and effect.
(n) The Representatives shall have received, at the Closing Time and on
each Date of Delivery, a certificate of the Company's Chief Executive Officer
and Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company and the
Operating Partnership in this Agreement are true and correct, as if made on
and as of the Closing Time or such Date of Delivery, as applicable, and the
Company and the Operating Partnership have complied with all of their
respective obligations
-29-
hereunder and satisfied all of the conditions on their part to be performed
or satisfied at or prior to the Closing Time or such Date of Delivery, as
applicable;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Securities Act;
(iii) the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, the Disclosure Package, any
amendment or supplement thereto, and this Agreement, and that at the time
Registration Statement was declared effective and, giving effect to any
amendments or supplements thereto, all times subsequent thereto up to the
Closing Date or such Date of Delivery, as applicable, the Registration
Statement, the Prospectus and the Preliminary Prospectus, and any
amendments or supplements thereto, contained all material information
required to be included therein by the Securities Act and the Securities
Act Regulations and in all material respects conformed to the requirements
of the Securities Act and the Securities Act Regulations; the Registration
Statement, and any amendments thereto, did not and, as of the Closing Time
or such Date of Delivery, as applicable, does 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 the statements therein not
misleading and the Prospectus and the Disclosure Package, and any
amendments and supplements thereto, did not and, as of the Closing Time or
such Date of Delivery, as applicable, do 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 the statements therein, in the light of the
circumstances under which they were made, not misleading, provided,
however, in each case, that the signers thereof shall make no warranty or
representation with respect to any statement contained in the Registration
Statement, the Prospectus or the Disclosure Package or any amendment or
supplement to any of the foregoing in reliance upon and in conformity with
the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representatives to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the penultimate sentence of
the first paragraph of Section 9(b) hereof); and since the effective date
of the Registration Statement, there has occurred no event required to be
set forth in an amendment or supplement to the Prospectus or the Disclosure
Package which has not been so set forth; and
(iv) subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus and the Disclosure
Package, there has not been (A) any Material Adverse Change, (B) any
transaction that is material to the Consolidated Company, (C) any
obligation, direct or contingent, that is material to the Consolidated
Company, incurred by the Company or the
-30-
Subsidiaries, (D) any change in the capital stock or outstanding
indebtedness of the Company or any Subsidiary that is material to the
Consolidated Company, (E) any dividend or distribution of any kind
declared, paid or made on the capital stock or other equity interests of
the Company or any Subsidiary, or (F) any loss or damage (whether or not
insured) to the Properties which has been sustained or will have been
sustained which could reasonably be expected to have a Material Adverse
Effect.
(o) The Company and the Operating Partnership shall have furnished to the
Underwriters such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement, the Prospectus and
the Disclosure Package, the representations, warranties and statements of the
Company and the Operating Partnership contained herein, and the performance by
the Company and the Operating Partnership of their covenants contained herein,
and the fulfillment of any conditions contained herein, as of the Closing Time
or any Date of Delivery, as the Underwriters may reasonably request.
7. Termination:
------------
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, at any time prior
to the Closing Time or any Date of Delivery, (a) if any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (b) if there has been since the respective
dates as of which information is given in the Registration Statement, the
Prospectus or the Disclosure Package, any Material Adverse Change, or any
development involving a prospective Material Adverse Change, or material change
in management of the Company or any Subsidiary, whether or not arising in the
ordinary course of business, or (c) if there has occurred any outbreak or
escalation of hostilities or other national or international calamity or crisis
(including, without limitation, any terrorist or similar attack) or change in
national or international economic, political or other conditions the effect of
which on the financial markets of the United States is such as to make it, in
the judgment of the Representatives, impracticable to market the Shares or
enforce contracts for the sale of the Shares, or (d) if trading in any
securities of the Company has been suspended by the Commission or by the NYSE,
or if trading generally on the NYSE, the American Stock Exchange or in the
Nasdaq over-the-counter market has been suspended (including an automatic halt
in trading pursuant to market-decline triggers, other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or the NASD or the over-the-counter market or by order of the Commission or any
other governmental authority, or (e) a general banking moratorium shall have
been declared by any federal, Maryland or New York authority, or (f) if there
has been any downgrade in the rating of any of the Company's debt securities or
preferred stock by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), or (g) any
federal, state,
-31-
local or foreign statute, regulation, rule or order of any court or other
governmental authority has been enacted, published, decreed or otherwise
promulgated which, in the reasonable opinion of the Representatives, materially
adversely affects or will materially adversely affect the business or operations
of the Consolidated Company, or (h) any action has been taken by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
which, in the reasonable opinion of the Representatives, could reasonably be
expected to have a material adverse effect on the securities markets in the
United States.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments:
--------------------------------------
If any Underwriter shall default at the Closing Time or on any Date of
Delivery in its obligation to take up and pay for the Shares to be purchased by
it under this Agreement on such date, the Representatives shall have the right,
within 48 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 48-hour period, (a) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and (b) if the total number of Defaulted Shares
exceeds 10% of such total, the Representatives may terminate this Agreement by
notice to the Company, without liability of any party to any other party except
that the provisions of Sections 5 and 9 hereof shall at all times be effective
and shall survive such termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by
-32-
the Representatives with the approval of the Company or selected by the Company
with the approval of the Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with the same effect as if such
substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company, the Operating Partnership and
------------------------------------------------------------------------
the Underwriters:
-----------------
(a) The Company and the Operating Partnership, jointly and severally,
agree to indemnify, defend and hold harmless each Underwriter and any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or controlling person may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability, damage or claim arises out of or is based upon (1) any
breach of any representation, warranty or covenant of the Company or the
Operating Partnership contained herein, (2) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereof), any Issuer Free Writing Prospectus that the Company has
filed or was required to file with the Commission, or the Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include the
Preliminary Prospectus and the Prospectus as of their respective dates and as
amended or supplemented by the Company), (3) any omission or alleged omission to
state a material fact required to be stated in any such Registration Statement,
or necessary to make the statements made therein not misleading, or (4) any
omission or alleged omission from any such Issuer Free Writing Prospectus or
Prospectus of a material fact necessary to make the statements made therein, in
the light of the circumstances under which they were made, not misleading;
except, in the case of each of clauses (2), (3) and (4), insofar as any such
loss, expense, liability, damage or claim arises out of or is based upon (A) any
untrue statement or alleged untrue statement of a material fact or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus and any
Issuer Free Writing Prospectus, in the light of the circumstances under which
they were made) not misleading, in each such case, to the extent contained in
and in conformity with information furnished in writing by such Underwriter
through the Representatives to the Company expressly for use therein (that
information being limited to that described in Section 9(b) hereof), or (B) the
failure by or on behalf of the Underwriters to send or give a copy of the
Preliminary Prospectus or any Issuer Free
-33-
Writing Prospectus to the person asserting any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Preliminary Prospectus and any Issuer Free Writing
Prospectus, in the light of the circumstances under which they were made) not
misleading at or prior to the written confirmation of the sale of Shares to such
person if such statement or omission was corrected in the Preliminary Prospectus
or such Issuer Free Writing Prospectus, unless such failure to deliver the
Preliminary Prospectus or such Issuer Free Writing Prospectus was a result of
noncompliance by the Company with its obligations under this Agreement. The
indemnity agreement set forth in this Section 9(a) shall be in addition to any
liability which the Company and the Operating Partnership may otherwise have.
If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company or the Operating
Partnership pursuant to the foregoing paragraph of this Section 9(a), such
Underwriter shall promptly notify the Company or the Operating Partnership, as
the case may be, in writing of the institution of such action, and the Company
or the Operating Partnership, as the case may be, shall assume the defense of
such action, including the employment of counsel and payment of expenses;
provided, however, that any failure or delay to so notify the Company or the
Operating Partnership, as the case may be, will not relieve the Company or the
Operating Partnership of any obligation hereunder, except to the extent that
their ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person 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 Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
or the Operating Partnership, as the case may be, in connection with the defense
of such action, or the Company or the Operating Partnership, as the case may be,
shall not have employed counsel reasonably satisfactory to the Underwriter or
controlling person, as the case maybe, to have charge of the defense of such
action within a reasonable time or such indemnified party or parties shall have
reasonably concluded (based on the advice of counsel) that there may be defenses
available to it or them which are different from or additional to those
available to the Company or the Operating Partnership (in which case neither the
Company nor the Operating Partnership shall 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 Company or the Operating
Partnership, as the case may be, and paid as incurred (it being understood,
however, that neither the Company nor the Operating Partnership shall be liable
for the expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related
actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, neither the
Company nor the Operating Partnership shall be liable for any settlement of any
such claim or action effected without its consent.
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(b) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Operating Partnership, the Company's
directors, the Company's officers that signed the Registration Statement, and
any person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company, the Operating
Partnership or any such person may incur under the Securities Act, the Exchange
Act or otherwise, insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (1) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereof), any Issuer Free Writing Prospectus that the Company has
filed or was required to file with the Commission, or the Prospectus, (2) any
omission or alleged omission to state a material fact required to be stated in
any such Registration Statement, or necessary to make the statements made
therein not misleading, or (3) any omission or alleged omission from any such
Issuer Free Writing Prospectus or the Prospectus of a material fact necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, but in each case only insofar as such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such Registration Statement, Issuer Free Writing Prospectus or Prospectus in
reliance upon and in conformity with information furnished in writing by the
Underwriters through the Representatives to the Company expressly for use
therein. The statements set forth in the table in the first paragraph, the
eighth paragraph, the tenth through sixteenth paragraphs and the nineteenth
paragraph under the caption "Underwriting" in the Preliminary Prospectus, the
Prospectus and the Disclosure Package (to the extent such statements relate to
the Underwriters) constitute the only information furnished by or on behalf of
any Underwriter through the Representatives to the Company for purposes of
Section 3(xix), Section 3(xx) and this Section 9. The indemnity agreement set
forth in this Section 9(b) shall be in addition to any liabilities that such
Underwriter may otherwise have.
If any action is brought against the Company, the Operating Partnership or
any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company, the Operating
Partnership or such person shall promptly notify the Representatives in writing
of the institution of such action and the Representatives, on behalf of the
Underwriters, shall assume the defense of such action, including the employment
of counsel and payment of expenses. The Company, the Operating Partnership or
such person shall have the right to employ its own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Company,
the Operating Partnership or such person unless the employment of such counsel
shall have been authorized in writing by the Representatives in connection with
the defense of such action or the Representatives shall not have employed
counsel to have charge of the defense of such action within a reasonable time or
such indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriters (in which
case the Representatives shall
-35-
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 such Underwriter and paid as incurred (it being understood,
however, that the Underwriters shall not be liable for the expenses of more than
one separate firm of attorneys in any one action or series of related actions in
the same jurisdiction (other than local counsel in any such jurisdiction)
representing the indemnified parties who are parties to such action). Anything
in this paragraph to the contrary notwithstanding, no Underwriter shall be
liable for any settlement of any such claim or action effected without the
written consent of the Representatives.
(c) If the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) and (b)
of this Section 9 in respect of any losses, expenses, liabilities, damages or
claims referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Operating
Partnership on the one hand and by the Underwriters on the other hand, each from
the offering of the Shares, or (ii) if (but only if) the allocation provided by
clause (i) above 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 and the Operating Partnership
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, expenses, liabilities,
damages or claims, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Operating Partnership on the
one hand and by the Underwriters on the other hand shall be deemed to be in the
same proportion as the total proceeds from the offering of the Shares (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company (which, for purposes of this subsection, account for the relative
benefits received by the Company and the Operating Partnership) bear to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and the Operating Partnership on the one hand and
of the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Company and/or the Operating Partnership or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
(d) The Company, the Operating Partnership and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
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
-36-
equitable considerations referred to in clause (i) and, if applicable, clause
(ii) of subsection (c) above. Notwithstanding the provisions of this Section 9,
no Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Survival:
---------
The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Company and the Operating
Partnership contained in Sections 3, 4 and 5 of this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter, or any person who controls any Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or
on behalf of the Company, its directors and officers, the Operating Partnership
or any person who controls the Company or the Operating Partnership within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the sale and delivery of
the Shares. The Company and the Operating Partnership and each Underwriter agree
promptly to notify the others of the commencement of any litigation or
proceeding against it and, in the case of the Company or the Operating
Partnership, against any of their respective officers and directors, in
connection with the sale and delivery of the Shares, or in connection with the
Registration Statement or Prospectus.
11. Duties:
-------
Nothing in this Agreement shall be deemed to create a partnership, joint
venture or agency relationship between the parties. The Underwriters undertake
to perform such duties and obligations only as expressly set forth herein. Such
duties and obligations of the Underwriters with respect to the Shares shall be
determined solely by the express provisions of this Agreement, and the
Underwriters shall not be liable except for the performance of such duties and
obligations with respect to the Shares as are specifically set forth in this
Agreement. The Company acknowledges that the Underwriters disclaim any implied
duties (including any fiduciary duty), covenants or obligations arising from the
Underwriters' performance of the duties and obligations expressly set forth
herein.
12. Notices:
--------
Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram and, if to the Underwriters, shall
be sufficient in all respects if delivered to Friedman, Billings, ▇▇▇▇▇▇ & Co.,
Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate
Department; or if to the Company or the Operating Partnership, shall be
sufficient in all respects if delivered to
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the Company at the offices of the Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
13. Governing Law; Headings:
------------------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
14. Parties at Interest:
--------------------
The Agreement herein set forth has been and is made solely for the benefit
of the Underwriters, the Company, the Operating Partnership and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts and Facsimile Signatures:
--------------------------------------
This Agreement may be signed by the parties in counterparts which together
shall constitute one and the same agreement among the parties. A facsimile
signature shall constitute an original signature for all purposes.
-38-
If the foregoing correctly sets forth the understanding among the Company,
the Operating Partnership and the Underwriters, please so indicate in the space
provided below for the purpose, whereupon this Agreement shall constitute a
binding agreement among the Company, the Operating Partnership and the
Underwriters.
Very truly yours,
NORTHSTAR REALTY FINANCE CORP.
By:_____________________________
Name:
Title:
NORTHSTAR REALTY FINANCE LIMITED
PARTNERSHIP
By: NorthStar Realty Finance Corp., its sole general
partner
By:_____________________________
Name:
Title:
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
BANC OF AMERICA SECURITIES LLC
JMP SECURITIES LLC
By: FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By: ______________________________________
Name:
Title:
For themselves and as Representatives of the other Underwriters named on
Schedule I hereto.
S-2
SCHEDULE I
Underwriter Number of Initial
----------- Shares to be Purchased
----------------------
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
Banc of America Securities LLC
JMP Securities LLC
Total........................................ 8,000,000
=========
SCHEDULE II
ISSUER FREE WRITING PROSPECTUSES
SCHEDULE III
Price to Public: $[ ] per share
Underwriting Discounts and Commissions: $[ ] per share
Exhibit A
FORM OF LOCK-UP LETTER
_____________ ___, 2005
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
Banc of America Securities LLC
JMP Securities LLC
as Representatives of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that Friedman, Billings, ▇▇▇▇▇▇ & Co.,
Inc., Banc of America Securities LLC and JMP Securities LLC (collectively, the
"Representatives") propose to enter into an Underwriting Agreement (the
"Underwriting Agreement"), as Representatives of the several underwriters named
in Schedule I of the Underwriting Agreement (the "Underwriters"), with NorthStar
Realty Finance Corp., a Maryland corporation (the "Company"), and NorthStar
Realty Finance Limited Partnership, a Delaware limited partnership (the
"Operating Partnership"), providing for the public offering (the "Public
Offering") by (inter alia) the Underwriters of shares (the "Shares") of common
stock, par value $0.01 per share, of the Company (the "Common Stock").
To induce the Underwriters to continue its efforts in connection with
the Public Offering, the undersigned hereby agrees that, without the prior
written consent of Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. and Banc of America
Securities LLC, it will not, during the period commencing on the date hereof and
ending on the 90th day anniversary of the date of the final prospectus relating
to the Public Offering (such period, the "Lock-Up Period" and such prospectus,
the "Prospectus"), (1) offer, pledge, sell, loan, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any of the following (whether now owned by the
undersigned or hereafter acquired): (a) Common Stock, (b) any securities
convertible into or exercisable or exchangeable for any shares of Common Stock,
including any units of limited partnership interest ("Units") issued by the
Operating Partnership or (c) any rights to purchase or otherwise acquire Common
Stock held by the undersigned or acquired by the undersigned after the date
hereof, or that may be deemed to be beneficially owned by the undersigned; (2)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Common Stock or
Units, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise; or (3) redeem any Units. The undersigned further agrees that it will
not publicly disclose the intention to make any such offer, sale, pledge,
redemption or disposition or to enter into any transaction described in the
preceding sentence during the Lock-Up Period without, in each case, the
A-1
prior written consent of Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. and Banc of
America Securities LLC. In addition, the undersigned agrees that, without prior
written consent of Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. and Banc of America
Securities LLC, it will not, during the Lock-Up Period, make any demand for or
exercise any right with respect to, the registration under the Securities Act of
1933, as amended (the "Securities Act"), of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer that would
constitute a violation or breach of this letter. This letter shall be binding on
the undersigned and the respective successors, heirs, personal representatives
and assigns of the undersigned.
The Company is not a party to or an intended beneficiary of this
lock-up agreement and has no right or obligation to enforce any of its terms.
The parties hereto acknowledge that the preceding sentence is included herein to
ensure compliance with the requirement of Section 856(a)(2) of the Internal
Revenue Code of 1986, as amended (the "Code") that the shares of stock of a
"real estate investment trust" under the Code be transferable.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
agreement between the Company, the Operating Partnership and the
Representatives. The terms of this lock-up agreement shall expire in the event
the Public Offering is not consummated on or before March 1, 2006.
Very truly yours,
(Printed or Typed Name)
By:
-------------------------------------------------
(SEAL)
----------------------------------------------
Title:
----------------------------------------------
A-2
Exhibit B
---------
Form of Corporate Opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
B-1
Exhibit C
---------
Form of Tax Opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
C-1