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AMENDMENT NO. 1
TO THE
SUPPLEMENTAL AGREEMENT
TO
THE STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO.1 TO THE SUPPLEMENTAL AGREEMENT TO THE STOCK PURCHASE
AGREEMENT (this "Amendment"), dated as of January 21, 2000, is by and among
FORTRESS CAP LLC, a Maryland corporation ("Fortress"), and CAPSTEAD MORTGAGE
CORPORATION, a Maryland corporation ("Capstead"). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Supplemental
Agreement to the Stock Purchase Agreement, dated as of December 9, 1999 (the
"Agreement").
WHEREAS, in connection with Fortress' Investment Corp.'s investment in
the Preferred Stock, the Fortress' Investment Corp. and Capstead entered into
the Agreement in order to set forth certain rights and obligations in connection
with the purchase of Preferred Stock and the ongoing management of Capstead;
WHEREAS, Fortress Investment Corp. has assigned the Preferred Stock and
its rights and obligations associated therewith to Fortress pursuant to an
Assignment Agreement dated as of January 12, 2000 and attached hereto as Exhibit
A;
WHEREAS, the Board has determined not to hold the Special Meeting as
provided in the Agreement and instead to submit the matters to be approved by
Capstead's stockholders at its annual meeting of stockholders;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, representations, warranties, covenants and conditions set forth in
the Agreement, and other good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. All references in the Agreement to "Special Meeting" shall mean "Annual
Meeting."
2. The third "Whereas" clause is hereby deleted it its entirety and replaced
with the following:
WHEREAS, the Board of Directors of Capstead (the "Board") has
determined to submit for approval at Capstead's annual meeting of stockholders
(the "Annual Meeting"), a slate of seven nominees, which shall include Xxxxxx X.
Xxxxx, Xxxxxx X. Xxxxxxxx, Xxxx X. Xxxxx, Xxxx X. Low, two persons recommended
to the nominating committee of the Board by Messrs. Xxxxx and Xxxxxxxx (both of
whom shall be an independent director for purposes of the Securities Exchange
Act of 1934, as amended, Section 162(m) of the Internal Revenue Code and the
rules
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of the New York Stock Exchange (an "Independent Director")) and one nominee
recommended to the nominating committee of the Board by Messrs. Xxxxx and Low
(who shall also be an Independent Director). Messrs. Xxxxx and Xxxxxxxx and the
two persons recommended to the nominating committee of the Board by them shall
be referred to herein collectively as the "Fortress Nominees" and the election
of all of the Fortress Nominees at the Annual Meeting by a vote of a majority of
the shares represented at the meeting and entitled to vote shall be referred to
herein as the Proposal.
3. Section 1(ii) of the Agreement is hereby amended by replacing the reference
to subsection 2(c) with 2(d).
4. Section 2 of the Agreement is hereby amended as follows:
(a) Section 2(a)(ii) is hereby amended and restated in full as follows"
"The Proposal shall have been approved at the Annual Meeting, which
Annual Meeting shall be held no later than May 31, 2000."
(b) Section 2(a)(iii) of the Agreement is hereby amended and restated in
full as follows:
"As of the date of or before the Annual Meeting, the Board shall have
adopted resolutions (a) reducing the number of Board members from eight
to seven and (b) appointing Xxxxxx X. Xxxxx Chairman of the Board and
Chief Executive Officer and Xxxx X. Xxxxx Vice Chairman of the Board;
and".
(c) Section 2(d) of the Agreement is hereby amended and restated in full as
follows:
"The rights and obligations, if any, of Capstead and Fortress under
this Section 2 shall terminate and be of no further force and effect
upon the expiration of the 30 day period following the date of the
Annual Meeting."
(d) A new subsection (e) is hereby added:
"e. If each of the Fortress Nominees are not elected at the Annual
Meeting, then none of them will qualify to serve as director and
Xxxxx Xxxxxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and Xxxx X.
Xxxxxxxx will remain on the Board until their successors are duly
elected and qualified. If all of the Fortress Nominees are
elected and Fortress shall then exercise the Fortress Put, each
Fortress Nominee, if any, elected to the Board by the
stockholders at the Annual Meeting shall resign from their
position as director on the Board, effective upon receipt by
Fortress of the Put/Call Payment."
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5. Section 4 of the Agreement is deleted in its entirety and replaced with the
following:
"Fortress agrees that it shall not, and shall cause its executive officers,
directors, Affiliates, Subsidiaries and the executive officers and directors
of its Affiliates and Subsidiaries not to, (i) enter into any material
transaction with Capstead in which such entity or person has an interest
unless such transaction has been approved by a majority of the disinterested
directors of Capstead or (ii) enter into any other transaction with Capstead,
unless such transaction is fair and reasonable to Capstead. As of the date
hereof, the only Fortress interested directors are Xxxxxx X. Xxxxx and Xxxxxx
X. Xxxxxxxx."
6. All other terms and provisions of the Agreement shall remain in full force
and effect without any amendment or supplement thereto or restatement thereof.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first written above.
CAPSTEAD MORTGAGE CORPORATION
By:
-------------------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President - Finance
FORTRESS CAP LLC
By:
-------------------------------------------
Xxxxxx X. Xxxxxxx
as Secretary and Chief Operating Officer
of Fortress Registered Investment Trust,
sole member of Fortress Cap LLC
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EXHIBIT A
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement"), dated as of January 12,
2000, is entered by and between FORTRESS INVESTMENT CORP., a Maryland
corporation ("Fortress"), and FORTRESS CAP LLC, a Delaware limited liability
company and wholly-owned subsidiary of Fortress ("Cap").
WHEREAS, Fortress and Capstead Mortgage Corporation ("Capstead") are
parties to a Series C and Series D Convertible Preferred Stock Purchase
Agreement, dated as of December 9, 1999 (the " Purchase Agreement"), pursuant to
which Fortress purchased 5,378,000 shares of Capstead's Series C Convertible
Preferred Stock, $.10 par value per share, and 5,378,000 shares of Capstead's
Series D Convertible Preferred Stock, $.10 par value per share (collectively,
the "Preferred Stock");
WHEREAS, Fortress and Capstead are parties to a Supplemental Agreement
to the Stock Purchase Agreement, dated as of December 9, 1999, as amended (the
"Supplemental Agreement") which sets forth certain rights and obligations in
connection with the ongoing management of Capstead;
WHEREAS, Fortress and Capstead are parties to a Registration Rights
Agreement, dated as of December 9, 1999 (the "Registration Rights Agreement"),
which which sets forth certain rights and obligations of Fortress and Capstead
with regard to the Preferred Stock and the shares of Capstead's common stock
into which it is convertible;
WHEREAS, Fortress desires to assign, transfer and convey to Cap and Cap
desires to accept the assignment, transfer and conveyance of all of Fortress's
right, title, interest and obligation in and to the Preferred Stock, the
Purchase Agreement, the Supplemental Agreement and the Registration Rights
Agreement; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used but not defined herein
shall have the respective meanings assigned to them in the Purchase Agreement.
SECTION 2. ASSIGNMENT OF AGREEMENTS. Fortress hereby assigns,
transfers, conveys and delivers to Cap and its successors and permitted assigns
forever, as of the date hereof, all of Fortress' right, title and interest in
and to the Purchase Agreement, the Supplemental Agreement and the Registration
Rights Agreement free and clear of any Liens.
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SECTION 3. ACCEPTANCE OF ASSIGNMENT AND ASSUMPTION OF OBLIGATIONS AND
LIABILITIES. Cap hereby accepts the assignment, transfer, conveyance and
delivery of the Purchase Agreement, the Supplemental Agreement and the
Registration Rights Agreement and hereby assumes, undertakes and agrees to pay,
perform and discharge in full all of Fortress' obligations thereunder as though
it were a party thereto and releases and discharges Fortress and its successors
and assigns, completely, unconditionally and forever from all liabilities and
obligations arising out of, or required to be performed thereunder from, any
events relating to performance after the date hereof or for any periods
allocable to dates after the date hereof, whether known or unknown and whether
absolute, accrued or contingent.
SECTION 4. ASSIGNMENT OF PREFERRED STOCK TO CAP. Fortress hereby
assigns, transfers, conveys and delivers to Cap and its successors and permitted
assigns forever, as of the date hereof, all of Fortress' right, title and
interest in the Preferred Stock, free and clear of any Liens.
SECTION 5. NO ADDITIONAL REPRESENTATIONS AND WARRANTIES. Except as set
forth in Section 2, Section 3 and Section 4 hereof, Fortress does not make any
additional representation or warranty, whether express or implied, hereunder or
otherwise with respect to the Preferred Stock and the Purchase Agreement.
SECTION 6. NO THIRD PARTY BENEFICIARIES. This Agreement is for the
sole and exclusive benefit of Fortress, Cap and their respective successors and
permitted assigns and nothing herein is intended or shall be construed to confer
upon any Person other than Fortress, Cap and their respective successors and
permitted assigns any right, remedy or claim under or by reason of this
Agreement or any term, covenant or condition hereof.
SECTION 7. AMENDMENT. This Agreement may only be amended or modified
by a written instrument executed by the parties hereto.
SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 9. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, permitted assigns and legal representatives. Neither this Agreement,
nor any right or obligation hereunder, may be directly or indirectly assigned or
transferred by any party, in whole or in part, to any third party, including,
without limitation, any bankruptcy trustee, by operation of law or otherwise,
whether voluntary or involuntary, without the prior written consent of the other
party hereto;
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed on its behalf as of the date first above written.
FORTRESS INVESTMENT CORP.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------
Secretary and Chief Operating
Officer
FORTRESS CAP LLC
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
as Secretary and Chief Operating Officer
of Fortress Investment Corp., sole
member of Fortress Cap LLC
