Exhibit 1.1
Shares of % Series B Cumulative Redeemable Preferred Stock
NEWCASTLE INVESTMENT CORP.
FORM OF UNDERWRITING AGREEMENT
March , 2003
Bear, Xxxxxxx & Co. Inc.
Advest, Inc.
BB&T Capital Markets,
a division of Xxxxx & Xxxxxxxxxxxx, Inc.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Newcastle Investment Corp., a corporation organized and existing under the
laws of Maryland (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of ________ shares (the "Firm Shares")
of its ___% Series B Cumulative Redeemable Preferred Stock, par value $.01 per
share, liquidation preference $25.00 per share (the "Series B Preferred Stock")
and, for the sole purpose of covering over-allotments in connection with the
sale of the Firm Shares, at the option of the Underwriters, up to an additional
________ shares (the "Additional Shares") of Series B Preferred Stock. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares." The Shares are more fully described in the Registration
Statement referred to below. Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") is acting
as lead manager in connection with the offering and sale of the Shares (the
"Offering").
The Company, Newcastle Investment Holdings Corp. ("NIH"), a corporation
organized and existing under the laws of the State of Maryland, and Fortress
Investment Group LLC, a limited liability company organized and existing under
the laws of Delaware and the manager of the Company (the "Manager"), each
confirms as follows its agreements with the Underwriters.
1. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-11 (No.
333-103598), and amendments thereto, and related preliminary prospectuses for
the registration under the Securities Act of
1933, as amended (the "Act"), of shares of Series B Cumulative Redeemable
Preferred Stock, which registration statement, as so amended, has been declared
effective by the Commission and copies of which have heretofore been delivered
to the Underwriters. The registration statement, as amended at the time it
became effective, including the exhibits and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "Registration Statement."
If the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Act registering
additional shares of Series B Preferred Stock (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which
became effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. No stop order
suspending the effectiveness of either the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the Company's knowledge, threatened by
the Commission. The Company, if required by the rules and regulations of the
Commission (the "Rules and Regulations"), proposes to file the Prospectus with
the Commission pursuant to Rule 424(b) of the Rules and Regulations. The
Prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, or, if the Prospectus is not to be
filed with the Commission pursuant to Rule 424(b), the Prospectus in the form
included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus or prospectus supplement shall be provided
to the Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b) of the Rules and Regulations), the term "Prospectus" shall refer to such
revised prospectus or prospectus supplement, as the case may be, from and after
the time it is first provided to the Underwriters for such use. Any preliminary
prospectus or prospectus subject to completion included in the Registration
Statement or filed with the Commission pursuant to Rule 424 under the Act is
hereafter called a "Preliminary Prospectus." All references in this Agreement to
the Registration Statement, the Rule 462(b) Registration Statement, a
Preliminary Prospectus and the Prospectus, or any amendments or supplements to
any of the foregoing, shall be deemed to include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
(ii) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Rules and Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission and at the Closing Date
and the Additional Closing Date, if any (as hereinafter respectively defined),
the Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact and did not and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus, any related
Preliminary Prospectus or any wrapper or supplement prepared in connection with
the distribution of the Directed Shares (as hereinafter defined) in light of the
circumstances under which they were made, not
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misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Rules and Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Act and the Rules and Regulations and did
not contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this subsection
(a)(ii), however, with respect to any information contained in or omitted from
the Registration Statement or the Prospectus or any related Preliminary
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through you specifically for use therein
("Underwriters' Information"). The parties acknowledge and agree that the
Underwriters' Information consists solely of the list of Underwriters under the
section "Underwriting" in the Prospectus and the material included in paragraphs
six, nine, ten and eleven and the fourth and fifth sentences of paragraph eight
under the caption "Underwriting" in the Prospectus.
(iii) Ernst & Young LLP, the accountants who have certified the
financial statements included in the Registration Statement, are independent
public accountants as required by the Act and the Rules and Regulations.
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development involving a prospective material adverse
change in the business, prospects, properties, operations, condition (financial
or other) or results of operations of the Company and its subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary course of
business and since the date of the latest balance sheet presented in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and its subsidiaries taken as a
whole, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus.
(v) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and this Agreement has been duly
and validly executed and delivered by the Company.
(vi) The amended and restated management advisory agreement (the
"Management Agreement"), dated as of March 4, 2003, between the Company and the
Manager has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
enforcement of creditors' rights or by general equitable principles.
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(vii) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement, instrument, franchise, license or permit to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective properties or assets may be bound
and which is material to the business of the Company and its subsidiaries taken
as a whole or (ii) violate or conflict with any provision of the charter,
by-laws, limited liability company agreement or partnership agreement, as the
case may be, of the Company or any of the subsidiaries listed on Schedule II
hereto (the "Subsidiaries") or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets. The Company has no other significant
subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X) that are
not set forth on Schedule II. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby or thereby, by the
Registration Statement and by the Prospectus, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered by the Company
hereunder, except the registration under the Act of the Shares and such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters.
(viii) The Company has the authorized capitalization set forth in
the Prospectus and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and were not issued in violation of or subject to any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares from the
Company upon issuance thereof by the Company, except for such rights as may have
been fully satisfied or waived prior to the effectiveness of the Registration
Statement. The Shares to be delivered on the Closing Date and the Additional
Closing Date, if any, (as hereinafter respectively defined) have been duly and
validly authorized and, when delivered by the Company in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable and
will not have been issued in violation of or subject to any preemptive or
similar rights that entitle or will entitle any person to acquire any Shares
from the Company upon issuance thereof by the Company. At or prior to the
Closing Date, the Company will have executed and filed Articles Supplementary
(the "Articles Supplementary") to the Company's Articles of Amendment and
Restatement establishing the terms of the Shares with the State Department of
Assessments and Taxation of the State of Maryland. All of the issued shares of
capital stock of each Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable and (except as set forth in the
Prospectus) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims; the Series B Preferred Stock, the
Firm Shares and the Additional Shares conform to the descriptions
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thereof contained in the Registration Statement and the Prospectus and such
description conforms to the rights set forth in the Articles Supplementary.
(ix) The Company and each of the Company's subsidiaries has been
duly organized and is validly existing as a corporation, partnership, limited
liability company or real estate investment trust in good standing under the
laws of its respective jurisdiction of organization. Each of the Company and its
subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation, partnership, limited liability company or real estate
investment trust in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a material adverse
effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). Each of the Company and its subsidiaries
has all requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits of
and from all public, regulatory or governmental agencies and bodies
(collectively, "Governmental Licenses"), to own, lease and operate their
respective properties and conduct their respective businesses as are now being
conducted and as described in the Registration Statement and the Prospectus,
except where the failure to possess any such Governmental Licenses would not in
the aggregate have a Material Adverse Effect; and no such consent, approval,
authorization, order, registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(x) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Company or any of its subsidiaries is a
party, or any property of the Company or any of its subsidiaries is the subject
which, singularly or in the aggregate, if determined adversely to the Company or
any of its subsidiaries, are reasonably likely to have a Material Adverse
Effect, and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened or
contemplated by others.
(xi) Neither the Company nor any of its affiliates have taken nor
will take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Series B Preferred
Stock to facilitate the sale or resale of the Shares.
(xii) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and condition and results of operations
for the periods specified; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(xiii) The pro forma financial statements, including the notes
thereto, included in the Registration Statement and the Prospectus have been
prepared in accordance with the applicable requirements of the Act and the Rules
and Regulations with respect to pro forma financial statements and include all
adjustments necessary to present fairly the pro forma
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financial position of the Company at the respective dates indicated and the
results of operations for the respective periods specified. The assumptions used
in preparing the pro forma financial statements provide a reasonable basis for
presenting the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding historical
financial statement amounts.
(xiv) No relationship, direct or indirect, exists between or among
any of the Company or any affiliate of the Company, on the one hand, and any
director, officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Rules
and Regulations to be described in the Registration Statement or the Prospectus
which is not so described or is not described as required. There are no
outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company to or
for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration
Statement and the Prospectus.
(xv) The Company and its Subsidiaries maintain a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xvi) No holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(xvii) The Company is not, and upon consummation of the transactions
contemplated hereby and in the Prospectus will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(xviii) (A) The Company and its subsidiaries have good and
marketable fee simple title or leasehold title, as the case may be, to all real
property owned or leased, as applicable, by the Company or any subsidiary, and
good title to all other properties owned by them (collectively, the
"Properties"), and any improvements thereon and all other assets that are
required for the operation of such properties in the manner in which they
currently are operated, free and clear of all liens, encumbrances, claims,
security interests and defects, except such as are Permitted Encumbrances (as
hereinafter defined); (B) all liens, charges, encumbrances, claims or
restrictions on or affecting any of the Properties and the assets of any of the
Company or its subsidiaries that are required to be disclosed in the Prospectus
are disclosed therein; (C) each of the Properties complies with all applicable
codes, laws and regulations (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to the properties),
except if and to the extent disclosed in the Prospectus and except for such
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failures to comply that would not in the aggregate have a Material Adverse
Effect; (D) there are in effect for the Properties and the assets of each of the
Company and its subsidiaries insurance policies covering the risks and in
amounts that are commercially reasonable for the Properties and the types of
assets owned by the Company and its subsidiaries and that are consistent with
the types and amounts of insurance typically maintained by prudent owners of
properties similar to such assets in the markets in which such assets are
located, and neither the Company nor any of its subsidiaries has received from
any insurance company notice of any material defects or deficiencies affecting
the insurability of any such assets or any notices of cancellation or intent to
cancel any such policies; and (E) neither the Company nor any of its
subsidiaries has knowledge of any pending or threatened, litigation, moratorium,
condemnation proceedings, zoning change, or other similar proceeding or action
that could in any manner affect the size of, use of, improvements on,
construction on, access to or availability of utilities or other necessary
services to the Properties, except such proceedings or actions that would not
have a Material Adverse Effect. All of the leases and subleases material to the
business of the Company and its subsidiaries considered as one enterprise, and
under which the Company or any of its subsidiaries holds the Properties, are in
full force and effect, and neither the Company nor any of its subsidiaries has
received any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any of its subsidiaries of the continued possession of
the leased or subleased premises under any such lease or sublease. "Permitted
Encumbrance" shall mean (a) liens on Properties securing any of the Company or
any subsidiaries obligations, (b) other liens which are expressly described in,
or which are incorporated by reference into, the Prospectus and (c) customary
easements and encumbrances and other exceptions to title which do not materially
impair the operation, development or use of the Properties for the purposes
intended therefor as contemplated in the Prospectus.
(xix) Except as disclosed in the Prospectus or as would not have a
Material Adverse Effect: (A) each Property, including, without limitation, the
Environment (as defined below) associated with such Property, is free of any
Hazardous Substance (as hereinafter defined) in violation of any Environmental
Law (as defined below) applicable to such Property, except for Hazardous
Substances that would not result in a Material Adverse Effect; (B) neither the
Company nor any of its subsidiaries has during the period of its ownership
caused or suffered to occur any Release (as defined below) of any Hazardous
Substance into the Environment on, in, under or from any Property in violation
of any Environmental Law applicable to such Property, and no condition exists
on, in, under or, to the knowledge of the Company or any of its subsidiaries
adjacent to, any Property that could result in the incurrence of material
liabilities or any material violations of any Environmental Law applicable to
such Property, or give rise to the imposition of any Lien (as hereinafter
defined) under any Environmental Law; (C) neither the Company nor any of its
subsidiaries is engaged in any manufacturing at the Properties that (1) requires
the use, handling, transportation, storage, treatment or disposal of any
Hazardous Substance (other than cleaning solvents and similar materials and
other than insecticides and herbicides that are used in the ordinary course of
operating the Properties and in compliance with all applicable Environmental
Laws) or (2) requires permits or is otherwise regulated pursuant to any
Environmental Law; (D) neither the Company nor any of its subsidiaries has
received any notice of a claim under or pursuant to any Environmental Law
applicable to a Property or under common law pertaining to Hazardous Substances
on or originating from any Property; (E)
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neither the Company nor any of its subsidiaries has received any notice from any
Governmental Authority (as hereinafter defined) claiming any violation of any
Environmental Law that is uncured or unremediated as of the date hereof; and (F)
no Property is included or, to the knowledge of the Company or any of its
subsidiaries, proposed for inclusion on the National Priorities List issued
pursuant to CERCLA (as hereinafter defined) by the United States Environmental
Protection Agency (the "EPA") or on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained by the EPA,
and has not otherwise been identified by the EPA as a potential CERCLA removal,
remedial or response site or included or, to the knowledge of the Company or any
of its subsidiaries, proposed for inclusion on, any similar list of potentially
contaminated sites pursuant to any other applicable Environmental Law nor has
the Company or any of its subsidiaries received any written notice from the EPA
or any other Governmental Authority proposing the inclusion of any Property on
such list; and (G) there are no underground storage tanks located on or in any
Property which have not been disclosed to the Underwriters.
As used herein, the term "Hazardous Substance" shall include,
without limitation, any hazardous substance, hazardous waste, toxic or dangerous
substance, pollutant, solid waste or similarly designated materials, including,
without limitation, oil, petroleum or any petroleum-derived substance or waste,
asbestos or asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation or any constituent
of any such substance, pollutant or waste, including any such substance,
pollutant or waste identified or regulated under any Environmental Law
(including, without limitation, materials listed in the United States Department
of Transportation Optional Hazardous Material Table, 49 C.F.R. Section 172.101,
as heretofore amended, or in the EPA's List of Hazardous Substances and
Reportable Quantities, 40 C.F.R. Part 302, as heretofore amended); "Environment"
shall mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings, structures, and ambient workplace
and indoor air; "Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. Section 6901, et seq.), the Clean Air Act, as amended (42
U.S.C. Section 7401, et seq.), the Clean Water Act, as amended (33 U.S.C.
Section 1251, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601, et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Section 1801, et seq.), and all other federal, state
and local laws, ordinances, regulations, rules, orders, decisions and permits
relating to the protection of the environment or of human health from
environmental effects; "Governmental Authority" shall mean any federal, state or
local governmental office, agency or authority having the duty or authority to
promulgate, implement or enforce any Environmental Law; "Lien" shall mean, with
respect to any Property, any mortgage, deed of trust, pledge, security interest,
lien, encumbrance, penalty, fine, charge, assessment, judgment or other
liability in, on or affecting such Property; and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or discard
of barrels, containers, tanks (including, without limitation, underground
storage tanks) or other receptacles containing or previously containing any
Hazardous Substance or any release, emission, discharge or similar term, as
those terms are defined or used in any Environmental Law.
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(xx) The Company and each of its subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by it and have paid or made provision for the payment of
all taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which such entity is obligated
to withhold from amounts owning to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return), except, in all cases, for any such amounts
that the Company is contesting in good faith and except in any case in which the
failure to so file or pay would not in the aggregate have a Material Adverse
Effect. No deficiency assessment with respect to a proposed adjustment of the
Company's or any of its subsidiaries' federal, state, or other taxes is pending
or, to the best of the Company's knowledge, threatened which could reasonably be
expected in the aggregate to have a Material Adverse Effect. There is no tax
lien, whether imposed by any federal, state, or other taxing authority,
outstanding against the assets, properties or business of the Company or any of
its subsidiaries.
(xxi) The Shares are registered pursuant to Section 12(g) of the
Exchange Act and have been approved for listing, subject to notice of issuance,
on the New York Stock Exchange, Inc. (the "NYSE"), and the Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Shares under the Exchange Act, nor has the Company received
any notification that the SEC is contemplating terminating such registration.
(xxii) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations and which have not been so
described or filed.
(xxiii) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter, by-laws, limited liability company agreement,
certificate of limited partnership or partnership agreement, as the case may be,
(ii) is in default under, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of their properties or assets is subject
or (iii) is in violation in any respect of any statute or any judgment, decree,
order, rule or regulation of any court or governmental or regulatory agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets, except in the case of (ii) or (iii) above any
violation or default that would not have a Material Adverse Effect.
(xxiv) The Company and each of its subsidiaries own or possess
adequate right to use all trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses, know-how and
other intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus, except where the
failure to own or possess such right would not in the aggregate have a Material
Adverse Effect, and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not
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received any notice of any claim of conflict with, any such right of others
which claim, if the subject of an unfavorable decision, ruling or judgment,
could in the aggregate reasonably be expected to result in a Material Adverse
Effect.
(xxv) No labor disturbance by the employees of the Company, the
Manager or any of their respective subsidiaries exists or, to the best of the
Company's knowledge, is imminent which might be expected to have a Material
Adverse Effect.
(xxvi) The Company does not have, and does not anticipate incurring
any liabilities under, the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time.
(xxvii) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company believes to be
reliable and accurate.
(xxviii) Commencing with its taxable year ended December 31, 2002,
the Company has been, and upon the sale of the Shares, the Company will continue
to be organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a "REIT") under
the Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
proposed method of operation as described in the Prospectus will enable it to
continue to meet the requirements for qualification and taxation as a REIT under
the Code, and no actions have been taken (or not taken which are required to be
taken) which would cause such qualification to be lost.
(b) Representations and Warranties of the Manager. The Manager represents
and warrants to each of the Underwriters that:
(i) The information in the sections "Fortress Investment Group LLC"
and "Principals of Fortress Investment Group" under the caption "Fortress
Investment Group and our Management Agreement" in the Prospectus is true and
correct in all material respects.
(ii) The Manager has been duly organized and is validly existing as
a limited liability company and is in good standing under the laws of Delaware.
The Manager is duly qualified to do business and is in good standing as a
foreign limited liability company in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
Material Adverse Effect. The Manager has all requisite power and authority, and
all necessary Governmental Licenses, to own, lease and operate its properties
and conduct its business as it is now being conducted, except where the failure
to possess such Governmental Licenses will not in the aggregate have a Material
Adverse Effect, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
(iii) This Agreement and the Management Agreement have each been
duly and validly authorized, executed and delivered by the Manager. The
Management Agreement constitutes a valid and binding agreement of the Manager,
enforceable in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency,
10
reorganization or other laws affecting enforcement of creditors' rights or by
general equitable principles.
(iv) The Manager is not (i) in violation of its charter or limited
liability company agreement or (ii) in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute such a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon, any property or assets of the Manager or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or in violation in any
respect of any statute or any judgment, decree, order, rule or regulation of any
court or governmental or regulatory agency or body having jurisdiction over the
Manager or any of its subsidiaries or any of their properties or assets, except
in the case of (ii) above any default or event that would not have a Material
Adverse Effect.
(v) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Manager or any of its subsidiaries is a
party, or of which any property of the Manager or any of its subsidiaries is the
subject which, singularly or in the aggregate, if determined adversely to the
Manager or any of its subsidiaries, are reasonably likely to have a Material
Adverse Effect, and to the best of the Manager's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened or
contemplated by others.
(vi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Manager
of its obligations hereunder which have not been made or the failure of which to
have been made in the aggregate would not have a Material Adverse Effect.
(vii) The Manager is not prohibited by the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), or the rules and regulations
thereunder, from acting under the Management Agreement as contemplated by the
Prospectus.
(c) Representations and Warranties of NIH. NIH represents and warrants to
each of the Underwriters that:
(i) With respect to each taxable year ended December 31, 1998, 1999,
2000, 2001 and 2002, NIH has operated, and currently intends to operate, in such
a manner as to qualify to be taxed as a REIT under the Code. NIH qualified as a
REIT for its taxable years ended December 31, 1998, 1999, 2000, 2001 and 2002.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_____, the number of Firm Shares set forth opposite the
respective names of the Underwriters on Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
11
(b) Payment of the purchase price for, and delivery of certificates for,
the Shares shall be made at the office of Sidley Xxxxxx Xxxxx & Xxxx llp, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Underwriters' Counsel"), or at such
other place as shall be agreed upon by you and the Company, at 10:00 A.M., New
York City time, on the third or fourth business day (as permitted under Rule
15c6-1 under the Exchange Act) (unless postponed in accordance with the
provisions of Section 9 hereof) after the determination of the initial public
offering price of the Shares, or such other time not later than ten business
days after such date as shall be agreed upon by you and the Company (such time
and date of payment and delivery being herein called the "Closing Date").
Payment for the Shares shall be made to or upon the order of the
Company of the purchase price by wire transfer in Federal (same day) funds to
the Company upon delivery of certificates for the Shares to you through the
facilities of the Depository Trust Company for the respective accounts of the
several Underwriters against receipt therefor signed by you. Certificates for
the Shares to be delivered to you shall be registered in such name or names and
shall be in such denominations as you may request at least one business day
before the Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the Underwriters the option
to purchase up to ________ Additional Shares at the same purchase price per
share to be paid by the Underwriters to the Company for the Firm Shares as set
forth in this Section 2, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to the total number of Firm Shares being purchased
from the Company, subject, however, to such adjustments to eliminate any
fractional shares as Bear Xxxxxxx in its sole discretion shall make.
Payment for the Additional Shares shall be made to or upon the order
of the Company of the purchase price by wire transfer in Federal (same day)
funds to the Company at
12
the offices of Underwriters' Counsel, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to you
for the respective accounts of the Underwriters.
3. Offering.
(a) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the
terms and conditions set forth in the Prospectus.
(b) The Company and the Underwriters hereby agree that up to of the
Firm Shares to be purchased by the Underwriters (the "Directed Shares") shall be
reserved for sale by the Underwriters to officers and directors of the Company,
officers and employees of the Manager and their families, and other persons
associated with the Company (the "Directed Shares Purchasers"), as part of the
distribution of the Shares by the Underwriters subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. and all other applicable laws, rules and
regulations. To the extent that such Directed Shares are not orally confirmed
for purchase by such persons by the end of the first day after the date of this
Agreement, such Directed Shares will be offered to the public as part of the
offering contemplated hereby. Except as expressly provided in Section 7(b)
hereto, under no circumstances will Bear Xxxxxxx or any other Underwriter be
liable to the Company or to any of the Directed Shares Purchasers for any action
taken or omitted to be taken other than any such action or inaction resulting
from the bad faith or willful misconduct of any Underwriter in connection with
the transactions effected with regard to the Directed Shares Purchasers.
4. Covenants.
(a) Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(i) If the Registration Statement has not yet been declared
effective the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to you of such
timely filing. If the Company elects to rely on Rule 434, the Company will
prepare and file a term sheet that complies with the requirements of Rule 434.
The Company will notify you (and, if requested by you, will confirm
such notice in writing) (i) when the Registration Statement and any amendments
thereto become effective, (ii) of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(ii) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Underwriters or the Company include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement
13
the Prospectus or Registration Statement to comply with the Act or the Rules and
Regulations, the Company will notify you promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and substance
satisfactory to you) which will correct such statement or omission and will use
its best efforts to have any amendment to the Registration Statement declared
effective as soon as possible.
(iii) The Company will promptly deliver to each of the Underwriters
and Underwriters' Counsel a copy of the Registration Statement, including all
consents and exhibits filed therewith and all amendments thereto, and the
Company will promptly deliver to each of the Underwriters such number of copies
of any preliminary prospectus, the Prospectus, the Registration Statement, and
all amendments of and supplements to such documents, if any, as you may
reasonably request. Prior to 10:00 A.M., New York time, on the business day next
succeeding the date of this Agreement and from time to time thereafter the
Company will furnish the Underwriters with copies of the Prospectus in such
quantities as you may reasonably request.
(iv) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(v) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act), an earnings statement of
the Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).
(vi) During the period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to security holders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company are listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(vii) The Company will apply the net proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(viii) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the NYSE.
14
(ix) The Company will use its best efforts to meet the requirements
to qualify as a "real estate investment trust" under the Code for each of its
taxable years for so long as the Board of Directors of the Company deems it in
the best interests of the Company's shareholders to remain so qualified.
(b) Covenant of the Manager. The Manager covenants with each Underwriter
and with the Company that, during the period when the Prospectus is required to
be delivered under the Act or the Exchange Act, it shall notify you and the
Company of the occurrence of any material events respecting its activities,
affairs or condition, financial or otherwise, if, but only if, as a result of
any such event it is necessary, in the opinion of counsel, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
and the Manager will forthwith supply such information to the Company as shall
be necessary for the Company to prepare an amendment or supplement to the
Prospectus so that, as so amended or supplemented, the Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of producing any
Agreement among Underwriters, this Agreement, the Blue Sky Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 4(a)(iv) hereof,
including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NYSE;
(v) all travel expenses of the Company's officers and employees and any other
expense of the Company incurred in connection with attending or hosting meetings
with prospective purchasers of the Shares (other than as shall have been
specifically approved by the Underwriters to be paid for by the Underwriters)
and (vi) the filing fees incident to, and the fees and disbursements of counsel
for the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Shares. The Company also will pay or cause to be paid: (i) the
cost of preparing stock certificates; (ii) the cost and charges of any transfer
agent or registrar; and (iii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 5. It is understood, however, that except as
provided in this Section, and Sections 7 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
15
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company, the Manager and NIH herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date"
shall refer to the Closing Date for the Firm Shares and any Additional Closing
Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company, the Manager and NIH of their
respective obligations hereunder, and to each of the following additional terms
and conditions:
(a) The Registration Statement shall have become effective and all stock
exchange approval has been received not later than 5:30 P.M., New York time, on
the date of this Agreement, or at such later time and date as shall have been
consented to in writing by you; if the Company shall have elected to rely upon
Rule 430A or Rule 434 of the Rules and Regulations, the Prospectus shall have
been filed with the Commission in a timely fashion in accordance with Section
4(a) hereof; and, at or prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the written opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx llp, counsel for the Company and the
Manager, dated the Closing Date and based upon certificates containing certain
factual representations and covenants of the Company, addressed to the
Underwriters substantially in the form attached hereto as Annex I.
(c) At the Closing Date you shall have received the written opinion of
Xxxxx Xxxxxxx LLP, special Maryland counsel to the Company, dated the Closing
Date, addressed to the Underwriters substantially in the form attached hereto as
Annex II.
(d) All proceedings taken in connection with the sale of the Firm Shares
and the Additional Shares as herein contemplated shall be satisfactory in form
and substance to you and to Underwriters' Counsel, and the Underwriters shall
have received from Underwriters' Counsel a favorable opinion, dated as of the
Closing Date, with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company shall have furnished to Underwriters'
Counsel such documents as they request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Sidley Xxxxxx Xxxxx & Xxxx llp may
rely upon the opinion of Xxxxx Xxxxxxx LLP as to matters of Maryland law.
(e) At the Closing Date you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the Closing
Date to the effect that (i) the condition set forth in subsection (a) of this
Section 6 has been satisfied, (ii) as of the date hereof and as of the Closing
Date, the representations and warranties of the Company set forth in Section
1(a) hereof are accurate, (iii) as of the Closing Date, the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed
and (iv) subsequent to the respective dates as of which information is given in
the Registration Statement and the
16
Prospectus, the Company and its subsidiaries have not sustained any material
loss or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development involving
a material adverse change, in the business prospects, properties, operations,
condition (financial or otherwise), or results of operations of the Company and
its subsidiaries taken as a whole, except in each case as described in or
contemplated by the Prospectus.
(f) At the Closing Date you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Manager, dated the Closing
Date to the effect that (i) as of the date hereof and as of the Closing Date,
the representations and warranties of the Manager set forth in Section 1(b)
hereof are accurate, (ii) as of the Closing Date, the obligations of the Manager
to be performed hereunder on or prior thereto have been duly performed and (iii)
subsequent to the date of the Registration Statement and Prospectus, there has
not been any material adverse change in the business prospects, properties,
operations, condition (financial or otherwise), or results of operations of the
Manager and its subsidiaries taken as a whole that could reasonably be expected
in the aggregate to have a Material Adverse Effect.
(g) At the Closing Date you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of NIH, dated the Closing Date to
the effect that (i) as of the date hereof and as of the Closing Date, the
representations and warranties of NIH set forth in Section 1(c) hereof are
accurate and (ii) as of the Closing Date, the obligations of NIH to be performed
hereunder on or prior thereto have been duly performed.
(h) At the time this Agreement is executed and at the Closing Date, you
shall have received a comfort letter, from Ernst & Young llp, independent public
accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to the Underwriters and Underwriters' counsel.
(i) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
(j) At the Closing Date, the Shares shall have been approved for listing
on the NYSE upon notice of issuance.
(k) The Company shall have complied with the provisions of Section
4(a)(iii) hereof with respect to the furnishing of prospectuses.
17
(l) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(m) The Company shall have furnished the Underwriters and Underwriters'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing or by
telephone. Any such telephone notice shall be confirmed promptly thereafter in
writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact included in the
supplement or prospectus wrapper material distributed in connection with the
reservation and sale of the Directed Shares to officers and directors of the
Company officers and employees of the Manager and their families, and other
persons associated with the Company, or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein when
considered in conjunction with the Prospectus or preliminary prospectus not
misleading; provided, however, that the Company will not be liable in any such
case to the extent but only to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through you expressly for use
therein. The parties agree that such information provided by or on behalf of any
Underwriter through you consists solely of the material referred to in the last
sentence of Section 1(a)(ii) hereof. The foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter who failed to deliver the Prospectus (as then amended or
supplemented, provided to the several Underwriters in the requisite quantity and
on a timely basis to permit proper delivery on or prior to the Closing Date) to
the person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or
18
omission was cured, as determined by a court of competent jurisdiction in a
decision not subject to further appeal, in such Prospectus and such Prospectus
was required by law to be delivered at or prior to the written confirmation of
sale to such person. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, each of the directors of the Company, each of the officers
of the Company who shall have signed the Registration Statement, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, against any losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. The parties
agree that such information provided by or on behalf of any Underwriter through
you consists solely of the material referred to in the last sentence of Section
1(a)(ii) hereof. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 7 to the extent that it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability that such indemnifying party may have otherwise
than on account of the indemnity agreement hereunder). In case any such claim or
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate at its own expense in the defense of such action, and to the extent
it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party; provided,
however, that such counsel to the indemnifying party shall not (except with the
written consent of the indemnified party) also be counsel to the indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to
19
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel shall have been authorized in writing by one
of the indemnifying parties in connection with the defense of such action, (ii)
the indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or reasonably could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless (x) such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability on
claims that are or reasonably could have been the subject matter of such action
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party and
(y) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or judgment.
8. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, from the offering of the Shares or, if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and
the Underwriters, on the other hand, shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and (y) the underwriting discount received by the Underwriters, respectively, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company, on the one hand, and of the Underwriters, on the
20
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the shares are underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within in the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 8. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8 or otherwise. The obligations of the Underwriters to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the Firm
Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such
21
a default you do not arrange for the purchase of the Firm Shares or Additional
Shares, as the case may be, to which such default relates as provided in this
Section 9, this Agreement or, in the case of a default with respect to the
Additional Shares, the obligations of the Underwriters to purchase and of the
Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, the Company, NIH and
the Manager contained in this Agreement, including the agreements contained in
Section 5, the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof or by or on behalf of the Company, NIH or the
Manager, any of their respective officers, directors, partners or members or any
controlling person thereof, and shall survive delivery of and payment for the
Shares to and by the Underwriters. The representations contained in Section 1
and the agreements contained in Sections 5, 7, 8 and 11(d) hereof shall survive
the termination of this Agreement, including termination pursuant to Section 9
or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when (i) you
and the Company shall have received notification of the effectiveness of the
Registration Statement or (ii) the execution of this Agreement. If either the
initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York City time, on the fifth full business
day after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you
notifying the Company. Notwithstanding the foregoing, the provisions of this
Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in full
force and effect.
22
(b) You shall have the right to terminate this Agreement at any time prior
to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if (A) there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings business affairs or business prospects of the Company; or (B) any
domestic or international event or act or occurrence has materially disrupted,
or in your opinion will in the immediate future materially disrupt, the market
for the Company's securities or securities in general; or (C) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the NYSE, or if trading on the NYSE shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, by the NYSE or by order of
the Commission or any other governmental authority having jurisdiction; or (D)
if a banking moratorium has been declared by any state or federal authority or
if any new restriction materially adversely affecting the distribution of the
Firm Shares or the Additional Shares, as the case may be, shall have become
effective or if a material disruption in commercial banking or securities
settlement or clearance services shall have occurred; or (E) (i) there has
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (ii) there shall have been any other such calamity
or crisis or any change in political, financial or economic conditions, if the
effect of any such event in (i) or (ii) as in your judgment makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms and
in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or Section 11(b)(B),
(C)(with respect to the second clause only), (D) or (E) hereof), or if the sale
of the Shares provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth herein is not satisfied or because
of any refusal, inability or failure on the part of the Company, the Manager or
NIH to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel)
incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed and
confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets,
with a copy to Sidley Xxxxxx Xxxxx & Xxxx llp, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: J. Xxxxxx Xxxxxxx;
(b) if sent to the Company, NIH or the Manager, shall be mailed,
delivered, or faxed and confirmed in writing c/o Fortress Investment Group, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx,
Secretary, with a copy to Skadden, Arps,
23
Slate, Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Xxxxx X. Xxxxxxxxxxx;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
13. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company, NIH and the Manager and
the controlling persons, directors, officers, employees and agents referred to
in Section 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
17. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature page follows]
24
If the foregoing correctly sets forth the understanding between you, on
the one hand, and the Company, NIH and the Manager, on the other hand, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
NEWCASTLE INVESTMENT CORP.
By:
-----------------------------------------
Name:
Title:
NEWCASTLE INVESTMENT HOLDINGS CORP.,
solely with respect to Sections 1(c) and 6(g)
By:
-----------------------------------------
Name:
Title:
FORTRESS INVESTMENT GROUP LLC,
solely with respect to Sections 1(b), 4(b)
and 6(f)
By:
-----------------------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
ADVEST, INC.
BB&T CAPITAL MARKETS,
A DIVISION OF XXXXX & XXXXXXXXXXXX INC.
By: Bear, Xxxxxxx & Co. Inc.
By:
-------------------------------
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
SCHEDULE I
Number of
Additional Shares
to be
Total Number of Firm Purchased if
Shares to be Maximum Option
Name of Underwriter Purchased Exercised
------------------- --------- ---------
Bear, Xxxxxxx & Co. Inc...........
Advest, Inc.
BB&T Capital Markets,
a division of Xxxxx & Xxxxxxxxxxxx Inc.
Total.......................
========= =========
SCHEDULE II
Subsidiaries
Fortress Realty Holdings Inc.
Commercial Asset Holdings, LLC
Fortress CBO Investments I Corp.
Fortress CBO Holdings I Inc.
Newcastle CDO I Corp.
Fortress CBO Investments I, Ltd.
Newcastle CDO I, Ltd.
Fortress Asset Trust
LIV Holdings LLC
Monterrey Belgium S.A.
Monterrey B.V.
Xxxx X.X.
Xxxxxxxxx B.V.
Beta Invest S.A.
Alpha Invest S.A.
Seminole A.S.
Melodicum S.A.
Polytrophus S.A.
Centrum Invest S.A.
Trealen S.A.
NIC Holdings I LLC
Newcastle CDO Holdings LLC
Newcastle CDO II Holdings LLC
Newcastle CDO II Limited
ANNEX I
Form of Opinion of Counsel to be delivered pursuant to Section 6(b)
1. The Company is a corporation duly incorporated and existing under the
laws of the State of Maryland and is in good standing with the State Department
of Assessments and Taxation of Maryland.
2. The Company has the status in the jurisdictions set forth in Schedule
hereto opposite the jurisdiction set forth therein.
3. NIH has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Maryland.
4. The Subsidiaries listed on Schedule hereto have the status set
forth in Schedule hereto opposite the jurisdiction set forth therein.
5. Fortress Investment Group LLC has been duly organized and is validly
existing as a limited liability company in good standing under the laws of the
State of Delaware.
6. The Manager has the power and authority to execute and deliver the
Underwriting Agreement and to consummate the transactions to be consummated by
such party contemplated thereby.
7. The Underwriting Agreement has been duly executed and delivered by each
of the Company and NIH, to the extent such execution and delivery are governed
by the laws of the State of New York, and the Underwriting Agreement has been
duly authorized, executed and delivered by the Manager.
8. The Management Agreement has been duly executed and delivered by the
Company, to the extent such execution and delivery are governed by the laws of
the State of New York, and the Management Agreement has been duly authorized,
executed and delivered by the Manager. The Management Agreement is a valid and
binding agreement of each of the Company and the Manager, enforceable in
accordance with its terms.
9. The execution and delivery by the Company and NIH of the Underwriting
Agreement, and the consummation by the Company of the transactions contemplated
thereby, including the issuance and sale of the Shares, will not (i) constitute
a violation of, or a breach or default under, the terms of any Applicable
Contract or (iii) violate or conflict with, or result in any contravention of,
any Applicable Law or any Applicable Order. We do not express any opinion,
however, as to whether the execution, delivery or performance by the Company or
NIH of the Underwriting Agreement will constitute a violation of, or a default
under, any covenant, restriction or provision with respect to financial ratios
or tests or any aspect of the financial condition or results of operations of
the Company or any of its subsidiaries.
10. No Governmental Approval, which has not been obtained or taken and is
not in full force and effect, is required to authorize, or is required in
connection with, the execution or
delivery of the Underwriting Agreement by the Company or NIH or the consummation
by the Company of the transactions contemplated thereby.
11. To our knowledge, there are no legal or governmental proceedings
pending or threatened in writing to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its subsidiaries is
subject that are required to be disclosed in the Prospectus pursuant to Item 103
of Regulation S-K of the Rules and Regulations that are not so disclosed, and,
to our knowledge, there are no contracts to which the Company or any of its
subsidiaries is a party that are required to be filed as an exhibit to the
Registration Statement pursuant to Item 601 of Regulation S-K of the Rules and
Regulations which have not been filed as required.
12. The form of certificate used to evidence the Series B Preferred Stock
complies in all material respects with the applicable requirements of the New
York Stock Exchange, Inc.
13. The issued and outstanding shares of capital stock of the Company as
set forth in the Prospectus under the caption "Capitalization" are free and
clear of any preemptive rights or any similar rights arising under any
Applicable Contract, and the issuance and sale of the Securities by the Company
are not subject to any preemptive rights or any similar rights arising under any
Applicable Contract.
14. The statements in the Prospectus under the caption "Underwriting,"
insofar as such statements purport to summarize certain provisions of the
Underwriting Agreement, fairly summarize such provisions in all material
respects.
15. The statements set forth in the Prospectus under the caption "ERISA
Considerations" insofar as such statements purport to summarize certain
provisions of the laws referred to therein, fairly summarize such provisions in
all material respects.
16. Although the discussion set forth in the Registration Statement under
the caption "Federal Income Tax Considerations" does not purport to discuss all
possible United States Federal income tax consequences of the ownership and
disposition of the Series B Preferred Stock of the Company, such discussion,
though general in nature, constitutes, in all material respects, a fair and
accurate summary under current law of the material United States Federal income
tax consequences of the ownership and disposition of the Company's Series B
Preferred Stock, subject to the qualifications set forth therein. The United
States Federal income tax consequences of the ownership and disposition of the
Company's Series B Preferred Stock by an investor will depend upon that holder's
particular situation, and we express no opinion as to the completeness of the
discussion set forth in "Federal Income Tax Considerations" as applied to any
particular holder.
17. The Company is not, and solely after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
under the caption "Use of Proceeds" in the Prospectus will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
18. Commencing with the Company's initial taxable year that ended December
31, 2002, the Company was organized in conformity with the requirements for
qualification as a
2
REIT under the Code, and its actual method of operation through the date of this
letter has enabled, and its proposed method of operation will enable it to meet
the requirements for qualification and taxation as a REIT. As noted in the
Registration Statement, the Company's qualification and taxation as a REIT
depend upon its ability to meet, through actual annual operating results,
certain requirements including requirements relating to distribution levels and
diversity of stock ownership, and the various qualification tests imposed under
the Code, the results of which are not reviewed by us. Accordingly, no assurance
can be given that the actual results of the Company's operation for any one
taxable year satisfy the requirements for taxation as a REIT under the Code.
19. The Registration Statement, at the time it became effective, and the
Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and the Rules
and Regulations, except that in each case we do not express any opinion as to
the financial statements and schedules and other financial data included therein
or excluded therefrom, or the exhibits thereto, and, except to the extent
expressly stated in paragraphs 14 and 15, we do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
For purposes of these opinions, "Applicable Contracts" means those
agreements or instruments identified in Schedule I hereto. "Applicable Laws"
means the rules and regulations of the State of New York and the federal laws of
the United States of America, in each case, which, in our experience, are
normally applicable to transactions of the type contemplated by the Underwriting
Agreement (other than the United States federal securities laws, state and
foreign securities or blue sky laws, antifraud laws and the rules and
regulations of the National Association of Securities Dealers, Inc.), without
our having made any special investigation as to the applicability of any
specific law, rule or regulation. "Governmental Authorities" means any court,
regulatory body, administrative agency or governmental body of the State of New
York or the United States of America having jurisdiction over the Company or NIH
under Applicable Laws. "Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing, qualification or
registration with, any Governmental Authority required to be made or obtained by
the Company or NIH pursuant to Applicable Laws, other than any consent,
approval, license, authorization, validation, filing, qualification or
registration which may have become applicable as a result of the involvement of
any other party (other than the Company or NIH) in the transactions contemplated
by the Underwriting Agreement or because of such parties' legal or regulatory
status or because of any other facts specifically pertaining to such parties.
"Applicable Orders" means those judgments, orders or decrees identified on
Schedule hereto.
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the Company
and the Manager, representatives of the independent public accountants for the
Company and the Underwriters at which the contents and the Prospectus and
related matters were discussed and, no facts have come to the attention of such
counsel which would lead such counsel to believe that either the Registration
Statement, at the time it became effective (including the information deemed to
be part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b) or Rule 434, if applicable), or any amendment thereof made prior to
the Closing Date, as of the date of such amendment, contained any untrue
statement of a material fact or omitted to state any
3
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date (or any amendment
thereof or supplement thereto made prior to the Closing Date as of the date of
such amendment or supplement) and as of the Closing Date, contained or contains
an untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no belief or opinion with
respect to the financial statements and schedules and other financial data
included or incorporated by reference therein).
4
ANNEX II
Form of Opinion of Counsel to be delivered pursuant to Section 6(c)
1. The Company is a corporation duly organized and existing under and by
virtue of the laws of the State of Maryland and is in good standing with the
State Department and Assessments and Taxation of the State of Maryland.
2. NIH is a corporation duly organized and existing under and by virtue of
the laws of the State of Maryland and is in good standing with the State
Department and Assessments and Taxation of the State of Maryland.
3. The Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization" and "Description of Capital
Stock."
4. All of the Company's issued and outstanding shares of common stock have
been duly and validly authorized and issued, are fully paid and non-assessable
and are not now in violation of or subject to any preemptive or similar rights
arising under Maryland law, the Charter or the Bylaws.
5. The Shares have been duly authorized and, when issued in accordance
with the Underwriting Agreement and upon payment therefor in the manner
contemplated by the Underwriting Agreement, will be validly issued, fully paid
and non-assessable and free of any preemptive right arising under Maryland law,
the Charter or the Bylaws.
6. The Shares conform in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption "Description
of Series B Preferred Stock."
7. Each of the Company and NIH has the corporate power (i) to own, lease
and operate its properties and to conduct its business in all material respects
as described in the Prospectus and (ii) to execute and deliver the Underwriting
Agreement and to perform its respective obligations thereunder.
8. The relative rights, preferences, interests and powers of the Series B
Preferred Stock are set forth in the Articles of Amendment and Restatement,
including the Articles Supplementary relating to the Series B Preferred Stock,
and all such provisions relating to the Series B Preferred Stock are valid under
Title 8 of the Corporations and Associations Article of the Annotated Code of
Maryland.
9. The Underwriting Agreement has been duly authorized, executed and, so
far as is known to us, delivered by each of the Company and NIH.
10. The Management Agreement has been duly authorized, executed and, so
far as is known to us, delivered by the Company.
11. The form of certificate used to evidence the Shares complies in all
material respects with the Maryland General Corporation Law and with any
applicable requirements of the Charter and the Bylaws.
12. The execution, delivery and performance of the Underwriting Agreement
and the consummation of the transactions contemplated thereby by the Company and
NIH do not and will not violate any provision of the Charter or the Bylaws of
the Company, the charter or by-laws of NIH or, so far as is known to us, any
judgment, decree, order, statute, rule or regulation of any court or any public,
government or regulatory agency or body of the State of Maryland having
jurisdiction over the Company or NIH or any of their respective properties or
assets.
13. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any government agency
or body of the State of Maryland having jurisdiction over the Company or NIH or
any of their respective properties or assets is required for the execution,
delivery and performance of the Underwriting Agreement or the consummation of
the transactions contemplated thereby.
14. The statements under the captions "Important Provisions of Maryland
Law and of Our Charter and Bylaws," "Description of Capital Stock" and
"Description of Series B Preferred Stock" in the Prospectus and in Item 34 of
Part II of the Registration Statement, insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
are accurate and fair in all material respects.
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