NORTHSTAR REALTY FINANCE CORP. SHARES OF 8.75% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK UNDERWRITING AGREEMENT
Exhibit
99.1
NORTHSTAR
REALTY FINANCE CORP.
SHARES
OF
8.75% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
September
7, 2006
WACHOVIA
CAPITAL MARKETS, LLC
BANC
OF
AMERICA SECURITIES LLC
KEYBANC
CAPITAL MARKETS
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
As
Representatives of the several Underwriters
named
in
Schedule I
c/o
Wachovia Capital Markets, LLC
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
c/o
Banc
of America Securities LLC
▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
NorthStar
Realty Finance Corp., a Maryland corporation (the “Company”)
and
NorthStar Realty Finance Limited Partnership, a Delaware limited partnership
(the “Operating
Partnership”)
agree
with each of the Underwriters listed on Schedule I hereto (collectively, the
“Underwriters”),
for
whom Wachovia Capital Markets, LLC, Banc of America Securities LLC, KeyBanc
Capital Markets and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated are acting as
Representatives (in such capacity, the “Representatives”)
on the
terms set forth herein, with respect to (i) the sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares (the “Initial
Shares”)
of
8.75% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share,
of the Company (“Preferred
Stock”)
set
forth in Schedule I hereto, and (ii) the grant of the option described in
Section 1(b) hereof to purchase all or any part of the number of additional
shares of Preferred Stock set forth in Schedule III hereto, respectively,
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 Preferred 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 on the terms set forth herein 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-3 (No. 333-132890), 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 amendments to the registration statement and
such
amendments or supplements to the related preliminary prospectus. Such
registration statement has been declared effective under the Securities Act
by
the Commission. 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 exhibits thereto and any prospectus supplement relating to the
Shares that is filed with the Commission and deemed by virtue of Rule 430B
under the Securities Act Regulations to be part of the registration statement,
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. Each preliminary prospectus
(including each preliminary prospectus supplement) relating to the Shares filed
with the Commission pursuant to Rule 424(b) under the Securities Act) is
hereinafter called a “Preliminary
Prospectus.”
The
term “Prospectus”
means
the final prospectus relating to the Shares, as first filed with the Commission
pursuant to 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. Any reference
herein to the Registration Statement, the Prospectus or any Preliminary
Prospectus shall be deemed to refer to and include the documents incorporated
by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
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) any information
identified in Schedule II 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.
The
term
“Material
Adverse Effect”
or
“Material
Adverse Change”
means
any material adverse effect on, or change with respect to, the assets, business
operation, earnings, prospects, properties or financial condition, present
or
prospective, of the Company and its Subsidiaries taken as a whole.
All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement, any Preliminary Prospectus or the Prospectus (or other references
of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in the
Registration Statement, any Preliminary Prospectus or the Prospectus, as the
case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the
Exchange Act which is incorporated by reference in the Registration Statement,
such Preliminary Prospectus or the Prospectus, as the case may be.
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 Preferred Stock of
$24.2125, the Company agrees to sell to the Underwriters the Initial Shares
and
each Underwriter agrees, severally and not jointly, to purchase from the Company
that proportion of Initial Shares set forth in Schedule I opposite the name
of
such Underwriter, plus any additional number of Initial Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof, 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.
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(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 Preferred
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 set forth in Schedule III, 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 written 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). The number of Option Shares to be purchased
by
each Underwriter shall be the same percentage 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 (48) 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,
as the case may be, upon at least forty-eight (48) hours’ prior notice. The
Company will cause the certificates representing the Initial Shares to be sold
by them to be made available for checking and packaging at least twenty-four
(24) hours prior to the Closing Time (as defined below) with respect thereto
at
the office of ▇▇▇▇▇▇▇▇ Chance US 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 fifth 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 (48) 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 (48) hours’ prior notice. The Company will
cause the certificates representing the Option Shares to be sold by it to be
made available for checking and packaging at least twenty-four (24) 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
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;
(ii) the
outstanding partnership interests of the Operating Partnership have been duly
and validly authorized and issued; 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 required to be set forth in Exhibit 21.1 to the Company’s Form 10-K
for the fiscal year ended December 31, 2005 (the “Subsidiaries”)
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 the existence of which, in each case of
(A), (B) and (C), is required to be disclosed in the Prospectus and the
Disclosure Package and are not so disclosed;
(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, except to the extent, in the case of
the
Subsidiaries, that the failure to be so organized would not, individually or
in
the aggregate, reasonably be expected to have a Material Adverse Effect and
is
in good standing under the laws of its respective jurisdiction of incorporation
or organization except to the extent, that the failure to be so qualified or
in
good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(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
except to the extent that the failure to have such power or authority would
not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, 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 would not reasonably be expected to have a Material Adverse
Effect;
4
(vii) except
as
disclosed in both the Prospectus and the Disclosure Package, the Operating
Partnership is neither contractually prohibited nor contractually 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 contractually prohibited nor contractually restricted, directly or
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 contractually 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 except for any such prohibitions and restrictions that would not
individually or in the aggregate reasonably be expected to have Material Adverse
Effect or to the extent that any such restriction would currently materially
limit the Company’s ability to pay dividends or that would be reasonably likely
to materially limit the future payment of dividends on Preferred
Stock;
(x) 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, 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;
(xi) 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, and,
except as disclosed in the Prospectus and the Disclosure Package, free and
clear
of any pledge, lien, encumbrance, security interest or other claim except for
any pledge, lien, encumbrance, security interest or other claim that would
not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
5
(xii) 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 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, individually
or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect;
(xiii) 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 would individually or in aggregate
not
reasonably be expected to have a Material Adverse Effect and which would not
reasonably be expected to have a material adverse effect on the Company and
the
Operating Partnership’s ability to perform their agreed upon obligations under
the Agreement; 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 would
individually or in aggregate not reasonably be expected to have a Material
Adverse Effect;
(xiv) 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;
(xv) 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 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, or
(C),
any such approvals, authorizations, consents, orders, or filings that if not
obtained or made, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect and which would not reasonably be
expected to have a material adverse effect on the Company and the Operating
Partnership’s ability to perform their agreed upon obligations under the
Agreement;
6
(xvi) 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 would not,
individually or in the aggregate, reasonably be expected to 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 would reasonably be expected to result in a Material Adverse
Change;
(xvii) 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;
(xviii) the
Preliminary Prospectus, as of its date and as of the date hereof, complied
or
complies, the Registration Statement, as of each effective date and as of the
date hereof, complied, complies or will comply in all material respects, and
the
Prospectus as of its date and any further amendments or supplements to the
Registration Statement, the Preliminary Prospectus or the Prospectus will comply
in all material respects, when they become effective or are filed with the
Commission, as the case may be, with the requirements of the Securities Act
and
the Securities Act Regulations; the Registration Statement, as of each effective
date, did 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
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);
(xix) for
the
purposes of this Agreement, the “Applicable
Time”
is
1:15 p.m. (Eastern Standard Time) on the date of this Agreement; the
Disclosure Package as of the Applicable Time, did not include 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; and each Issuer Free Writing Prospectus
included in the Disclosure Package does not conflict with the information
contained in the Registration Statement, the Preliminary Prospectus or the
Prospectus and each such Issuer Free Writing Prospectus, as supplemented by
and
taken together with the other information comprising the Disclosure Package
as
of the Applicable Time, did not include 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);
7
(xx) 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 to, and
will
not, without the prior consent of the Representatives, prepare, use or refer
to,
any Free Writing Prospectus;
(xxi) at
the
earliest time after the filing of the Registration Statement that the Company
or
another offering participant made a bona
fide
offer
(within the meaning of Rule 164(h)(2) of the Securities Act Regulations of
the
Shares and (ii) as of the date hereof, the Company was not and is not an
Ineligible Issuer (as defined in Rule 405 of the Securities Act Regulations),
without taking account of any determination by the Commission pursuant to Rule
405 of the Securities Act Regulations that it is not necessary that the Company
be considered an Ineligible Issuer;
(xxii) 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
in
all material respects 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;
(xxiii) the
Company filed the Registration Statement with the Commission before using any
Issuer Free Writing Prospectus;
(xxiv) 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 that would individually
or in
the aggregate reasonably be expected to have a Material Adverse
Effect;
(xxv) 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 or incorporated by reference 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 statement schedules included or incorporated
by
reference 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
Data”
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;
8
(xxvi) 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,
independent as required by the Securities Act and the Securities Act
Regulations;
(xxvii) ▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, whose reports on the consolidated and combined financial
statements of the Company and its subsidiaries constitute part of each of the
Registration Statement, the Prospectus and the Disclosure Package, is, and
was
during the periods covered by its reports, independent as required by the
Securities Act and the Securities Act Regulations;
(xxviii) 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 would 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;
(xxix) the
Preferred Stock, conforms in all material respects to the descriptions thereof
contained in the Prospectus and Disclosure Package;
(xxx) 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 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;
(xxxi) 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. The Articles Supplementary designating the rights and
preferences of the Preferred Stock (the “Articles Supplementary”) will be in
full force and effect on or prior to the Closing Time and any Date of Delivery
and will be filed with the Maryland State Department of Assessment and Taxation
(the “SDAT”) and will comply with applicable legal requirements. The terms of
the Preferred Stock will conform in all material respects to all statements
relating thereto contained in the Prospectus and such description will conform
in all material respects to the rights set forth in the Articles
Supplementary;
9
(xxxii) all
of
the outstanding OP Units have been duly authorized and validly issued, and
were
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;
(xxxiii) the
Preferred Stock has been or the Company will use its best efforts to have the
Preferred Stock registered under Section 12(b) of the Exchange Act and the
Shares have been approved or the Company will use its commercially reasonable
best efforts to obtain approval for listing of the Shares on the New York Stock
Exchange (the “NYSE”),
subject to official notice of issuance;
(xxxiv) 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;
(xxxv) 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;
(xxxvi) 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;
(xxxvii) any
certificate signed by any officer of the Company or the Operating Partnership
delivered to the Representatives or to counsel for the 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;
(xxxviii) the
form
of certificate used to evidence the Preferred 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;
(xxxix) 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 would not reasonably be expected to have a Material
Adverse Effect; 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 would not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect;
10
(xl) 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;
(xli) 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 that are known to the Company 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 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, except to the extent that the indemnification
and contribution may be limited by federal or state securities laws and public
policy considerations in respect thereof;
(xlii) 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 would
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect;
(xliii) 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;
11
(xliv) (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 Company’s last fiscal year, 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
material weakness in the design or operation of internal control over financial
reporting which is reasonably likely 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 would
significantly affect internal control over financial reporting;
(xlv) the
Company and each of the Subsidiaries has filed on a timely basis all material
federal, state, local and foreign tax returns required to be filed through
the
date hereof or have properly requested extensions thereof, and all such tax
returns are true, correct and complete in all material respects, and have paid
all material taxes required to be paid, including any tax 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, would reasonably be expected to have a Material Adverse Effect;
all
material tax liabilities are adequately provided for on the respective books
of
such entities;
(xlvi) the
statements set forth in the Disclosure Package and the Prospectus under the
caption “Additional Federal Tax Considerations,” insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate and complete and fairly summarize the federal income tax considerations
described therein;
(xlvii) 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 Company and its Subsidiary
and
generally 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;
(xlviii) 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 would not, individually or in the aggregate, reasonably
be
expected to result in a Material Adverse Change; 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 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;
12
(xlix) 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 and Disclosure Package, 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;
(l) 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 officers and or directors of the Subsidiaries
or any of the members of the immediate families of any such officers or
directors;
(li) 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;
(lii) to
the
Company’s knowledge, no lessee of any portion of any of the real properties
leased or owned by the Company or any of the Subsidiaries (collectively, 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, would not reasonably be expected to have
a
Material Adverse Effect;
(liii) to
the
Company’s knowledge 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 would individually or in the aggregate
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;
13
(liv) in
connection with the offer and sale of the Shares, the Company has not offered
shares of its Preferred Stock or any other securities convertible into or
exchangeable or exercisable or redeemable for Preferred Stock in a manner 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 identified in Schedule II or the Registration
Statement;
(lv) the
Company has not incurred any liability for any finder’s fees or similar payments
in connection with the transactions herein contemplated;
(lvi) 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, that is required by the Securities Act and the Securities Act Regulations
to be described in the Registration Statement or the Prospectus and which is
not
so described;
(lvii) the
Company and the Subsidiaries and to the knowledge of the Company 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;
(lviii) the
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company”, as such terms are defined in the Investment
Company Act of 1940, as amended (the “Investment
Company Act”);
(lix) 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
(lx) 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 years ended December 31, 2004 and December 31, 2005 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 their tax years ended
December 31, 2006 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 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.
14
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 each
case 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 reasonably designate and to maintain such qualifications
in
effect as long as reasonably 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 file
a
general consent to the service of process under the laws of any such
jurisdiction;
(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 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;
15
(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, the Disclosure Package,
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) unless
otherwise publicly available in electronic format on the website of the Company
or the Commission to furnish to the Underwriters for a period of two (2) 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 Preferred 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, (1) would
result in the Prospectus or the Disclosure Package containing an untrue
statement of a material fact or omitting 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, (2) would result
in
any Issuer Free Writing Prospectus conflicting with the information contained
in
the Registration Statement relating to the Shares or the Prospectus, or (3)
would make it necessary 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 the Prospectus, or so that the Prospectus or the Disclosure Package
will comply with the Securities Act and the Securities Act
Regulations;
16
(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, be required by the
Securities Act or requested by the Commission;
(k) Except
with respect to filings by the Company under the Exchange Act, during the period
of time a prospectus is required to be delivered in connection with the sale
of
Shares hereunder, 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 (2) 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 Shares by the Company in accordance with the
statements under the caption “Use
of
Proceeds”
in
the
Prospectus and the Disclosure Package;
(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 eighteen
(18) months after 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);
(p) to
use
its commercially reasonable best efforts to list the Shares on the NYSE and
to
file with the NYSE all documents and notices required by the NYSE of companies
that seek to have securities listed on the NYSE;
(q) to
engage
and maintain, at its expense, a registrar and transfer agent for the
Preferred 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
Preferred Stock or any other securities convertible into or exchangeable or
exercisable or redeemable for Preferred Stock in a manner in violation of the
Securities Act;
(t) not
to
distribute any prospectus or other offering material, other than the
Registration Statement, the Prospectus and the Disclosure Package, in connection
with the offer and sale of the Shares;
17
(u) to
refrain during a period of 60 days from the date of the Prospectus, without
the
prior written consent of Wachovia Capital Markets, 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, voluntarily making any public announcement
of a disposition or transfer, 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 Preferred Stock or any securities convertible into or
exercisable or exchangeable for Preferred 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 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 60 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 NorthStar Capital Investment Corp. (“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 Preferred Stock, whether any such
swap
or transaction described in clause (1) or (2) above is to be settled by delivery
of Preferred 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 Preferred Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to directly or indirectly 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 Preferred Stock during such 60-day period without the prior
written consent of Wachovia Capital Markets, LLC on behalf of the Underwriters,
(D) any shares of Preferred Stock issued by the Company upon redemption of
any
of the Contribution Units or (E) the issuance of Preferred Stock or units
of the Operating Partnership in connection with the acquisition of assets in
a
transaction exempt from the requirements of the Securities Act;
(v) 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;
(w) 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;
and
(x) that
the
Company and the Operating Partnership will use their best efforts to enable
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.
18
(y) that
the
Company will disclose in each annual report of the Company distributed to
investors pursuant to Section 13(a) of the Exchange Act, a per share market
value of the Preferred Stock as reported on the NYSE.
(z) The
Company will prepare a final term sheet, containing a description of final
terms
of the Shares and the offering thereof, in the form approved by the
Representatives and attached as Schedule II hereto, and to file such term sheet
as an Issuer Free Writing Prospectus pursuant to Rule 433(d) within the time
required by such Rule.
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, the Disclosure Package, 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 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 Company’s costs and expenses for preparation
of the road show materials and (ix) 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.
(b) If
this
Agreement shall be terminated by Wachovia Capital Markets, LLC and Banc of
America Securities LLC 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 for all actual out-of-pocket expenses (such
as
printing, facsimile, courier service, direct computer expenses, accommodations,
travel and the reasonable 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 to be performed
at or prior to the Closing Time and to the satisfaction of the following further
conditions at the Closing Time or on each Date of Delivery, as
applicable:
19
(a) The
Company shall furnish to the Underwriters at the Closing Time and on each Date
of Delivery an opinion of (i) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, corporate counsel for
the Company and the Subsidiaries and (ii) Hunton & ▇▇▇▇▇▇▇▇ LLP, special tax
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
reasonably satisfactory to ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters,
to the effect set forth in Exhibits A and B hereto, respectively. The Company
shall additionally furnish to the Underwriters as of the Closing Time and on
each Date of Delivery an additional opinion of Hunton & ▇▇▇▇▇▇▇▇ LLP to the
effect that the Company is not, and the transactions contemplated by the
Underwriting Agreement will not cause the Company to become, an “investment
company” or any entity controlled by an “investment company” under the
Investment Company Act.
(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
Delivery and in form and substance reasonably satisfactory to ▇▇▇▇▇▇▇▇ Chance
US
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 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
authorized 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 validly issued, fully paid and non-assessable;
(iv) the
statements under the captions “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,” “Description of Common
Stock and Preferred 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, and “Description of the Series A Preferred Stock” in the
Prospectus and the Disclosure Package, insofar as such statements constitute
summaries of the charter of the Company (the “Company Charter”), the bylaws of
the Company (the “Company
Bylaws”)
or
Maryland law, constitute accurate summaries thereof in all material
respects;
20
(v) As
of
September 7, 2006, the Company had 42,681,833 common shares issued and
outstanding (the “Company
Outstanding Shares”).
All
of the Company Outstanding Shares have been duly and validly authorized and
issued and are fully paid and nonassessable; and none of the Company Outstanding
Shares were issued in violation of any preemptive or similar rights arising
under the Company Charter, the Company Bylaws or the Maryland General
Corporation Law (the “MGCL”);
(vi) 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
other than one hundred and twenty-five (125) shares of the Private REIT’s 12.5%
Series A Cumulative Non-Voting Preferred Stock which are held by outside
investors;
(vii) 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;
(viii) 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 the Series A Preferred Stock”;
(ix) the
form
of certificate used to represent the Preferred Stock complies in all material
respects with all applicable statutory requirements of the New York Stock
Exchange, the MGCL and with any applicable requirements of the Company Charter
and the Company Bylaws; and
(x) 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.
(xi) The
Articles Supplementary have been duly authorized by all necessary corporate
action and stockholder action on behalf of the Company and have been filed
with
the Maryland State Department of Assessments and Taxation (the “Maryland SDAT”).
(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.
(d) The
Representatives shall have received at the Closing Time and on each Date of
Delivery the favorable opinion of ▇▇▇▇▇▇▇▇ Chance US LLP, dated the Closing
Time
or such Date of Delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives.
(e) 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.
21
(f) 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 prior to the filing
thereof.
(g) 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 of
the
Representatives.
(h) All
filings with the Commission required by Rule 424 and Rule 430B 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.
(i) 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 Prospectus
and the Disclosure Package.
(j) The
Shares shall have been approved for listing on the NYSE or the Company will
use
its commercially reasonable best efforts to have listed on the NYSE, subject
to
notice of issuance.
(k) The
NASD
shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(l) 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 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; and
(iii) 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 Company
and
its subsidiaries taken as a whole, (C) any obligation, direct or
contingent, that is material to the Company and its subsidiaries, taken as
a
whole, incurred by the Company or the Subsidiaries, (D) any change in the
capital stock or outstanding indebtedness of the Company or any Subsidiary
that
is material to the Company and its subsidiaries, taken as a whole, or (E) 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.
22
(m) 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 have requested prior to the date
hereof.
(n) The
Articles Supplementary shall have been filed and accepted by the
SDAT.
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 senior 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 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, 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 opinion of the Representatives, materially adversely
affects or will materially adversely affect the business or operations of the
Consolidated Company.
If
the
Representatives elects 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 be under no 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).
23
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
forty-eight (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 forty-eight (48) hour
period, (a) if the total number of Defaulted Shares does not exceed ten percent
(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 ten percent (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 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 (5) 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.
24
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 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, the Disclosure Package 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), (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
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 (1), (2) and (3), insofar as any such
loss, expense, liability, damage or claim arises out of or is based upon 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). 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 if it so elects, 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
materially prejudiced 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.
(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, 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, the Disclosure Package, the Preliminary Prospectus 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, Preliminary 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 (including the table thereunder),
the
third paragraph and tenth 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(xviii), Section 3(xix) 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.
25
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 if they so elect 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 Underwriters will not relieve the
Underwriters of any obligation hereunder, except to the extent that their
ability to defend is materially prejudiced by such failure or delay. 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 reasonably satisfactory
to
the Company, the Operating Partnership, or such person, as the case may be,
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 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, the Operating Partnership and by the Underwriters
,
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, the
Operating Partnership and the Underwriters 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 shall be deemed
to be equal to the gross proceeds from the offering of Shares (before deducting
discounts and expenses) received by each of them and benefits received by the
Underwriters shall be deemed to be equal to the underwriting discounts and
commissions received by the Underwriters. The relative fault of the Company,
the
Operating Partnership and of the Underwriters 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 the Operating Partnership or by the Underwriters
and
the intent of the parties and their relative 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.
26
(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 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.
(e) The
provisions of this Section shall not affect any agreement among the Company
and
the Operating Partnership with respect to indemnification.
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, 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.
27
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 both Wachovia Capital Markets, LLC,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel and
Banc of America Securities LLC, ▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or if to the Company or the Operating Partnership,
shall be sufficient in all respects if delivered to the Company at the offices
of the Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel.
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. Waiver
of Jury Trial.
Each
of
the Company and the Operating Partnership hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
15. No
Fiduciary Duty.
The
Company and the Operating Partnership hereby acknowledge that (a) the purchase
and sale of the Shares pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the Underwriters and
any
affiliate through which it may be acting, on the other, (b) the Underwriters
are
acting as principal and not as an agent or fiduciary of the Company or the
Operating Partnership and (c) the engagement by the Company of the Underwriters
in connection with the offering and the process leading up to the offering
is as
independent contractors and not in any other capacity. Furthermore, the Company
and the Operating Partnership agree that it is solely responsible for making
its
own judgments in connection with the offering (irrespective of whether any
of
the Underwriters has advised or is currently advising the Company or the
Operating Partnership on related or other matters). The Company and the
Operating Partnership agree that it will not claim that the Underwriters have
rendered advisory services of any nature or respect, or owe an agency, fiduciary
or similar duty to the Company and the Operating Partnership, in connection
with
such transaction or the process leading thereto.
16. Integration.
Except
as
set forth herein, this Agreement supersedes all prior agreements and
understandings (whether written or oral) among the Company, the Operating
Partnership and the Underwriters, or any of them, with respect to the subject
matter hereof.
17. 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.
28
18. 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.
29
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: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇
Title:
General Counsel
|
||
|
NORTHSTAR
REALTY FINANCE LIMITED PARTNERSHIP
|
||
| By: | NorthStar Realty Finance Corp., its sole general partner | |
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
Chief Financial Officer
|
||
Accepted
and agreed to as
of
the
date first above written:
WACHOVIA
CAPITAL MARKETS, LLC
By:
/s/
▇▇▇▇▇▇
▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇
Title:
Managing Director
For
themselves and as Representatives of the other Underwriters named on Schedule
I
hereto.
BANC
OF
AMERICA SECURITIES LLC
By:
/s/
▇▇▇▇
▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇
Title:
Principal
For
themselves and as Representatives of the other Underwriters named on Schedule
I
hereto.
30
SCHEDULE
I
|
Underwriter
|
Number
of Initial Shares to
be
Purchased
|
|||
|
Wachovia
Capital Markets, LLC
|
1,265,000
|
|||
|
Banc
of America Securities LLC
|
715,000
|
|||
|
KeyBanc
Capital Markets
|
110,000
|
|||
|
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & Company, Incorporated
|
110,000
|
|||
|
Total
|
2,200,000
|
|||
31
SCHEDULE
II
ISSUER
FREE WRITING PROSPECTUSES
32
SCHEDULE
III
Price
to
Public: $25.00 per share
Number
of
Shares: 330,000
33
Exhibit
A
Form
of
Corporate Opinion of
▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP
(1) The
Operating Partnership is a limited partnership existing under the laws of the
State of Delaware and is in good standing with the Secretary of State of the
State of Delaware and has the partnership power and authority to own, lease
and
operate its properties and conduct its business as described in the Prospectus,
dated April 26, 2006, the Preliminary Prospectus Supplement, dated September
5,
2006, and the Prospectus Supplement, dated September 7, 2006, and to enter
into
and perform its obligations under the Underwriting Agreement.
(2) Assuming
due authorization by the Company of the execution and delivery of the
Underwriting Agreement by the Operating Partnership, the Underwriting Agreement
has been duly authorized, executed and delivered by the Operating
Partnership.
(3) The
Company’s Registration Statement on Form S-3 (File No. 333-132890
(the “Registration
Statement”)
has
been declared effective under the Securities Act of 1933, as amended (the
“Act”),
and,
to such counsel’s knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have
been instituted or are pending under the Act.
(4) All
regulatory consents, authorizations, approvals and filings required to be
obtained or made by the Company under the Federal laws of the United States
and
the laws of the State of New York for the issuance, sale and delivery of the
Shares by the Company to you have been obtained or made; provided,
however,
that
such counsel need not express any opinion with respect to any state securities
laws that may be applicable to the issuance, sale or delivery of the
Shares.
(5) The
execution and delivery by the Company and the Operating Partnership of the
Underwriting Agreement, the issuance of the Shares and the sale of the Shares
by
the Company to you pursuant to the Underwriting Agreement do not, and the
performance by the Company of its obligations under the Underwriting Agreement
will not, (A) violate the certificate of limited partnership of the
Operating Partnership, (B) violate any Federal or State of New York court
order or administrative decree known to us or any Federal law of the United
States or law of the State of New York applicable to the Company or the
Operating Partnership, or (C) result in a default under or breach of any
agreement filed as an exhibit to the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2005 under Item 601(b)(10) of
Regulation S-K under the Act; provided,
however,
that,
for the purposes of this paragraph (5), such counsel need not express any
opinion with respect to Federal or state securities laws, other antifraud laws
and fraudulent transfer laws and the Employee Retirement Income Security Act
of
1974 and related laws; provided,
further,
that
insofar as performance by the Company of its obligations under the Underwriting
Agreement is concerned, such counsel need not express any opinion as to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
and to general equity principles.
Such
counsel may state that its opinion is limited to the Federal laws of the United
States, the laws of the State of New York, and the Revised Uniform Limited
Partnership Act of the State of Delaware, and that it is expressing no opinion
as to the effect of the laws of any other jurisdiction. With respect to all
matters of Maryland law, such counsel may rely upon the opinion, dated
September 14, 2006, of ▇▇▇▇▇▇▇ LLP delivered pursuant to Section 6(b)
of the Underwriting Agreement, and may state that its opinion is subject to
the
same assumptions, qualifications and limitations with respect to such matters
as
are contained in such opinion of ▇▇▇▇▇▇▇ LLP.
A-1
Such
counsel may also state that it has relied as to certain matters upon information
obtained from public officials, officers of the Company and the Operating
Partnership and their respective subsidiaries and other sources believed by
such
counsel to be responsible, and that it has assumed that the certificates for
the
Shares conform to the specimen thereof examined by such counsel and have been
duly countersigned and registered by the transfer agent and registrar of the
Shares, that the Underwriting Agreement has been duly authorized, executed
and
delivered by the Underwriters, and that the signatures on all documents examined
by such counsel are genuine, assumptions which we it has not independently
verified.
Such
counsel shall also provide to the Underwriters a letter, dated the Closing
Date
and each Date of Delivery, to the effect that as counsel to the Company, it
reviewed the Registration Statement, the Basic Prospectus, the Preliminary
Prospectus Supplement, dated September 5, 2006 (the “Preliminary
Prospectus Supplement”),
the
Issuer Free Writing Prospectus, dated September 7, 2006 (the “Issuer Free
Writing Prospectus”) and filed pursuant to Rule 433 under the Securities Act,
(such Issuer Free Writing Prospectus, taken together with the Basic Prospectus
and the Preliminary Prospectus Supplement, being referred to herein as the
“Pricing
Disclosure Package”),
and
the Prospectus Supplement and participated in discussions with Representatives
of the Underwriters and those of the Company, Maryland counsel to the Company,
special tax counsel to the Company and special counsel to the Company with
respect to matters arising under the Investment Company Act of 1940, as amended
(the “Investment
Company Act”).
Such
counsel shall state that on the basis of the information that such counsel
gained in the course of the performance of the services referred to above,
considered in the light of its understanding of the applicable law (including
the requirements of Form S-3 and the character of the prospectus
contemplated thereby) and the experience such counsel has gained through its
practice under the Securities Act, it confirms to the Underwriters that, in
its
opinion, each part of the Registration Statement, when such part became
effective, and the Basic Prospectus, as supplemented by the Prospectus
Supplement, as of the date of the Prospectus Supplement, appeared on their
face
to be appropriately responsive, in all material respects relevant to the
offering of the Shares, to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Further, nothing
that came to such counsel’s attention in the course of such review has caused it
to believe that, insofar as relevant to the offering of the Shares,
(a) any
part
of the Registration Statement, when such part became effective, contained any
untrue statement of a material fact, or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or
(b) the
Pricing Disclosure Package, as of 1:15 P.M. on September 7, 2006 (which
such counsel may state is the time that the Underwriters have informed it is
prior to the time of the first sale of the Shares by any Underwriter), when
considered together with the price to the public, the number of shares, and
the
underwriting discount for the Shares set forth on the cover of the Prospectus
Supplement, contained any untrue statement of a material fact or omitted 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,
or
(c) the
Basic
Prospectus, as supplemented by the Prospectus Supplement, as of the date of
the
Prospectus Supplement and as of the Closing Date, contained any untrue statement
of a material fact or omitted 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.
A-2
In
addition, such counsel shall state that it does not know of any litigation
or
any governmental proceeding instituted or threatened against the Company or
any
of its consolidated subsidiaries that would be required to be disclosed in
the
Basic Prospectus, as supplemented by the Prospectus Supplement, and is not
so
disclosed.
Such
counsel shall be entitled to state that the limitations inherent in the
independent verification of factual matters and the character of determinations
involved in the registration process are such, however, that it does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Pricing Disclosure Package. Such counsel may also state that
it does not express any opinion or belief as to the financial statements or
schedules or other financial data derived from accounting records or as to
any
statistical data contained in the Registration Statement, the Basic Prospectus,
the Prospectus Supplement or the Pricing Disclosure Package, or as to the report
of management’s assessment of the effectiveness of internal control over
financial reporting or the auditors’ attestation report thereon, each as
included in the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Pricing Disclosure Package or as to the descriptions therein
of Federal and state income tax and Investment Company Act statutes regulations,
proceedings or as to other matters referred to in the opinion of Hunton &
▇▇▇▇▇▇▇▇ LLP, as special tax counsel to the Company and special counsel to
the
Company, addressed to the Underwriters, dated the Closing Date and each Date
of
Delivery.
A-3
Exhibit
B
Form
of
Tax Opinion of
Hunton
& ▇▇▇▇▇▇▇▇ LLP
|
HUNTON
& ▇▇▇▇▇▇▇▇ LLP
RIVERFRONT
PLAZA, EAST TOWER
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TEL
804 • 788 • 8200
FAX
804 • 788 • 8218
|
|
|
September
___, 2006
|
WACHOVIA
CAPITAL MARKETS, LLC
BANC
OF
AMERICA SECURITIES LLC
KEYBANC
CAPITAL MARKETS
As
Representatives of the several Underwriters
named
in
Schedule I
c/o
Wachovia Capital Markets, LLC
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
c/o
Banc
of America Securities LLC
▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
NorthStar
Realty Finance Corp.
Qualification
as
Real
Estate Investment Trust
Ladies
and Gentlemen:
We
have
acted as special tax counsel to NorthStar Realty Finance Corp., a Maryland
corporation (the “Company”), in connection with the preparation of a
registration statement on Form S-3 (No. 333-132890) (the “Registration
Statement”), declared effective by the Securities and Exchange Commission
(“SEC”) on April 26, 2006, with respect to the offer and sale of shares of
Preferred Stock, par value $0.01 per share, of the Company (the “Preferred
Stock”), shares of preferred stock, par value $0.01 per share, of the Company
(the “Preferred Stock”), depositary shares representing preferred stock
(“Depositary Shares”), debt securities of the Company (“Debt Securities”),
warrants entitling the holders to purchase Preferred Stock, Preferred Stock,
Depositary Shares, or Debt Securities, and units comprising one or more of
the
preceding securities of the Company to be offered from time-to-time, having
an
aggregate public offering price not to exceed $1,000,000,000, and the offer
and
sale of up to 250,000,000 shares of Preferred Stock by the Company pursuant
to a
prospectus supplement filed as a part of the Registration Statement (the
“Prospectus Supplement”). You have requested our opinion regarding certain U.S.
federal income tax matters.
B-1
The
Company owns interests in senior and subordinated debt investments secured
primarily by income-producing real estate properties; commercial real estate
debt securities, including commercial mortgage-backed securities, unsecured
debt
issued by real estate investment trusts (“REITs”), and credit tenant loans; and
real estate properties that are primarily net leased to corporate tenants.
The
Company holds its assets through NorthStar Realty Finance Limited Partnership
(the “Operating Partnership”). The Operating Partnership owns all of the
Preferred Stock of NRFC Sub-REIT Corp., a Maryland corporation (the “Private
REIT”), which owns substantially all of the Company’s investments. The Operating
Partnership also indirectly owns approximately 83.3% of the preferred equity
in
N-Star Real Estate CDO I, Ltd. (“CDO I”), which was the issuer in a
collateralized debt obligation securitization. The Company and CDO I have
elected to treat CDO I as a taxable REIT subsidiary (“TRS”) of the
Company.
In
giving
this opinion letter, we have examined the following:
1. the
Company’s Articles of Amendment and Restatement;
2. the
Private REIT’s Articles of Incorporation;
3. the
Operating Partnership’s Agreement of Limited Partnership;
4. the
Registration Statement, the prospectus filed as a part thereof (the
“Prospectus”), and the Prospectus Supplement;
5. the
TRS
elections for CDO I and NS Servicing LLC (“NS Servicing”); and
6. such
other documents as we have deemed necessary or appropriate for purposes of
this
opinion.
In
connection with the opinions rendered below, we have assumed, with your consent,
that:
1. each
of
the documents referred to above has
been
duly authorized, executed, and delivered; is authentic, if an original, or
is
accurate, if a copy; and has not been amended;
2. during
its taxable year ending December 31, 2006, and future taxable years, the Company
and the Private REIT will operate in a manner that will make the factual
representations contained in a certificate, dated the date hereof and executed
by a duly appointed officer of the Company and the Private REIT (the “Officer’s
Certificate”), true for such years;
3. the
Company will not make any amendments to its organizational documents or the
organizational documents of the Operating Partnership, the Private REIT, CDO
I,
or NS Servicing after the date of this opinion that would affect its
qualification as a REIT for any taxable year; and
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4. no
action
will be taken by the Company, the Operating Partnership, the Private REIT,
CDO
I, or NS Servicing after the date hereof that would have the effect of altering
the facts upon which the opinions set forth below are based.
In
connection with the opinions rendered below, we also have relied upon the
correctness of the factual representations contained in the Officer’s
Certificate. No facts have come to our attention that would cause us to question
the accuracy and completeness of such factual representations in a material
way.
Based
solely on the documents and assumptions set forth above, the representations
set
forth in the Officer’s Certificate, the discussions in the Prospectus under the
caption “Federal Income Tax Considerations” and under “Additional Federal Income
Tax Considerations” in the Prospectus Supplement (which are incorporated herein
by reference), and without further investigation, we are of the opinion
that:
(a) each
of
the Company and the Private REIT qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
“Code”), for their taxable years ended December 31, 2004 and December 31, 2005,
and the Company’s and the Private REIT’s organization and current and proposed
methods of operation will enable each of them to continue to qualify as a REIT
for its taxable year ending December 31, 2006, and in the future;
and
(b) the
descriptions of the law and the legal conclusions contained in the Prospectus
under the caption “Federal Income Tax Considerations” and in the Prospectus
Supplement under the caption “Additional Federal Income Tax Considerations” are
correct in all material respects and the discussions thereunder fairly summarize
the federal income tax considerations that are likely to be material to a holder
of the Preferred Stock.
We
will
not review on a continuing basis the Company’s compliance with the documents or
assumptions set forth above, or the representations set forth in the Officer’s
Certificate. Accordingly, no assurance can be given that the actual results
of
the Company’s operations for its 2006 and subsequent taxable years will satisfy
the requirements for qualification and taxation as a REIT. Although we have
made
such inquiries and performed such investigations as we have deemed necessary
to
fulfill our professional responsibilities as counsel, we have not undertaken
an
independent investigation of all the facts referred to in this letter or the
Officer’s Certificate.
The
foregoing opinions are based on current provisions of the Code, the Treasury
regulations (the “Regulations”), published administrative interpretations
thereof, and published court decisions. The Internal Revenue Service has not
issued Regulations or administrative interpretations with respect to various
provisions of the Code relating to REIT qualification. No assurance can be
given
that the law will not change in a way that will prevent the Company or the
Private REIT from qualifying as REITs.
The
foregoing opinions are limited to the U.S. federal income tax matters addressed
herein, and no other opinions are rendered with respect to other federal tax
matters or to any issues arising under the tax laws of any other country, or
any
state or locality. We undertake no obligation to update the opinions expressed
herein after the date of this letter. This opinion letter is solely for the
information and use of the addressees, and it speaks only as of the date hereof.
This opinion letter may not be distributed, relied upon for any purpose by
any
other person, quoted in whole or in part or otherwise reproduced in any
document, or filed with any governmental agency without our express written
consent.
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CIRCULAR
230 DISCLOSURE
TO
ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE,
WE
INFORM YOU THAT (A) ANY UNITED STATES FEDERAL TAX ADVICE CONTAINED HEREIN WAS
NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF
AVOIDING UNITED STATES FEDERAL TAX PENALTIES, (B) ANY SUCH ADVICE WAS WRITTEN
TO
SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTION OR MATTER ADDRESSED HEREIN
AND (C) ANY INVESTOR TO WHOM THE TRANSACTIONS OR MATTERS ARE BEING PROMOTED,
MARKETED OR RECOMMENDED SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES
FROM AN INDEPENDENT TAX ADVISOR.
Very
truly yours,
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