Exhibit 1.1
Form of Underwriting Agreement
7,000,000 Shares of Common Stock
NEWCASTLE INVESTMENT CORP.
UNDERWRITING AGREEMENT
September___, 2002
Bear, Xxxxxxx & Co. Inc.
Xxxxxx Brothers Inc.
Banc of America Securities LLC
as Representatives of the
several Underwriters named in
Schedule I attached hereto
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 7,000,000 shares (the
"Firm Shares") of its common stock, par value $.01 per share (the "Common
Stock") and, for the sole purpose of covering over-allotments in connection with
the sale of the Firm Shares, at the option of the Underwriters, up to an
additional 1,050,000 shares (the "Additional Shares") of Common Stock. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares." The Shares are more fully described in the Registration
Statement referred to below.
The Company, Newcastle Investment Holdings Corp., a corporation
organized and existing under the laws of Maryland and the parent of the Company
("NIH"), 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
Representatives and each of the other Underwriters named in Schedule I hereto.
As of July 12, 2002, NIH transferred to the Company certain of its
assets and related liabilities as described in the Prospectus (as hereinafter
defined) under the heading "Newcastle Investment Corp. - Our Targeted
Investments" (these transfers are referred to herein as the "Formation
Transactions.")
1. Representations and Warranties.
(a) Representations and Warranties of the Company and NIH. Each of the
Company and NIH 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.
333-90578), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Act"), of shares
of common stock, which registration statement, as so amended, has been declared
effective by the Commission and copies of which have heretofore been delivered
to the Underwriters. The registration statement, as amended at the time it
became effective, including the exhibits and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "Registration Statement."
If the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Act registering
additional shares of Common Stock (a "Rule 462(b) Registration Statement"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
Other than a Rule 462(b) Registration Statement, which became effective upon
filing, no other document with respect to the Registration Statement has
heretofore been filed with the Commission. No stop order suspending the
effectiveness of either the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by the
Commission. The Company, if required by the rules and regulations of the
Commission (the "Rules and Regulations"), proposes to file the Prospectus with
the Commission pursuant to Rule 424(b) of the Rules and Regulations. The
Prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, or, if the Prospectus is not to be
filed with the Commission pursuant to Rule 424(b), the Prospectus in the form
included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus or prospectus supplement shall be provided
to the Underwriters by the Company for use in connection with the offering and
sale of the Shares (the "Offering") which differs from the Prospectus (whether
or not such revised prospectus or prospectus supplement is required to be filed
by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to the
Underwriters for such use. Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission
pursuant to Rule 424 under the 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
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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 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
five, fourteen, sixteen and seventeen under the caption "Underwriting" in the
Prospectus.
(iii) Ernst & Young LLP, the accountants who have certified the
financial statements and supporting schedules 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, NIH, or any of
their respective 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 NIH and this Agreement has
been duly and validly executed and delivered by each of the Company and NIH.
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(vi) The management agreement (the "Management Agreement"), dated as
of , 2002, 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.
(vii) Each of the agreements listed on Schedule II hereto by and
between the Company or any of its subsidiaries, on the one hand, and NIH or any
of its subsidiaries, on the other hand, pursuant to which the Formation
Transactions were consummated (the "Transfer Agreements") have been duly
authorized, executed and delivered by each of the Company, NIH, and/or their
respective subsidiaries, as applicable, and each constitutes a valid and binding
agreement of each of the Company, NIH, and/or their respective subsidiaries, as
applicable, 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. This Agreement, the Management Agreement and the Transfer Agreements
are hereinafter collectively referred to as the Transaction Agreements.
(viii) The execution, delivery, and performance of each of the
Transaction Agreements and the consummation of the transactions contemplated
hereby and thereby 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 III 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,
NIH 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 III. 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, NIH or any of the Subsidiaries or any
of their respective properties or assets is required for the execution, delivery
and performance of the Transaction Agreements 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. All consents, approvals and
authorizations necessary for consummation of the
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Formation Transactions were obtained, except where the failure to obtain would
not in the aggregate have a Material Adverse Effect.
(ix) 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; the issuance and sale of
shares of Common Stock to NIH in connection with the Formation Transactions was
exempt from the registration requirements of the Act and applicable state
securities, real estate syndication and Blue Sky laws; and all of the issued
shares of capital stock of each Subsidiary have been duly and validly authorized
and issued and are fully paid and non-assessable and (except as set forth in the
Prospectus) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims; the Common Stock, the Firm Shares
and the Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(x) NIH, 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.
(xi) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Company, NIH or any of their respective
subsidiaries is a party, or any property of the Company or any of its
subsidiaries is the subject which, singularly or in the
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aggregate, if determined adversely to the Company, NIH or any of their
respective subsidiaries, are reasonably likely to have a Material Adverse
Effect, and to the best of the Company's and NIH's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened or contemplated by others.
(xii) Neither the Company nor any of its affiliates have taken nor
will take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(xiii) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly the financial position of NIH 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.
(xiv) The pro forma financial statements included in each of 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 financial position of NIH 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.
(xv) The assumptions used in calculating the estimated Cash
Available for Distribution included under the caption "Distribution Policy" in
the Registration Statement and the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma information therein reflects the
proper application of those adjustments to the corresponding historical
financial statement amounts.
(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 will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(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
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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
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 none of the Company, NIH or any of their respective 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) none of the Company,
NIH or any of their respective 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, NIH or any of their
respective subsidiaries holds the Properties, are in full force and effect, and
none of the Company, NIH or any of their respective 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, NIH or any of their respective
subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company, NIH or any of their respective
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) none of the
Company, NIH or any of their respective 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, NIH or any of their
respective subsidiaries adjacent to, any Property that could result in the
incurrence of material liabilities or any material violations of any
Environmental Law
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applicable to such Property, or give rise to the imposition of any Lien (as
hereinafter defined) under any Environmental Law; (C) neither NIH nor any of its
subsidiaries is engaged in, and neither the Company nor any of its subsidiaries
intends to engage in, any manufacturing at the Properties that (1) requires the
use, handling, transportation, storage, treatment or disposal of any Hazardous
Substance (other than cleaning solvents and similar materials and other than
insecticides and herbicides that are used in the ordinary course of operating
the Properties and in compliance with all applicable Environmental Laws) or (2)
requires permits or is otherwise regulated pursuant to any Environmental Law;
(D) none of the Company, NIH or any of their respective 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) none of the Company, NIH or any of
their respective 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, NIH or any of their respective
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, NIH
or any of their respective subsidiaries, proposed for inclusion on, any similar
list of potentially contaminated sites pursuant to any other applicable
Environmental Law nor has the Company, NIH or any of their respective
subsidiaries received any written notice from the EPA or any other Governmental
Authority proposing the inclusion of any Property on such list; and (G) there
are no underground storage tanks located on or in any Property which have not
been disclosed to the Representatives.
As used herein, the term "Hazardous Substance" shall include, without
limitation, any hazardous substance, hazardous waste, toxic or dangerous
substance, pollutant, solid waste or similarly designated materials, including,
without limitation, oil, petroleum or any petroleum-derived substance or waste,
asbestos or asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation or any constituent
of any such substance, pollutant or 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;
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"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.
(xx) The Company, NIH and each of their respective 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 or NIH 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, NIH's or any of their respective
subsidiaries' federal, state, or other taxes is pending or, to the best of the
Company's and NIH'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, NIH or any of their
respective subsidiaries.
(xxi) The Shares are registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (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
9
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 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 and NIH
believe to be reliable and accurate.
(xxviii) With respect to each taxable year ended December 31, 1998,
1999, 2000 and 2001, NIH has operated and currently intends to continue to
operate in such a manner as to qualify to be taxed as a real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code");
NIH qualified as a REIT for its taxable years ended December 31, 1998, 1999,
2000 and 2001; the Company's proposed method of operation as described in the
Prospectus will enable it to meet the requirements for qualification and
taxation as a REIT with respect to the year ending December 31, 2002.
(xxix) There are no business relationships or related-party
transactions involving the Company, NIH, the Manager or any other person
required to be described in the Prospectus which have not been so described as
required.
(b) Representations and Warranties of the Manager. The Manager
represents and warrants to each of the Underwriters that:
(i) The information in the sections "Fortress Investment Group LLC"
and "Officers of Our Manager" under the caption "Our Manager and the Management
Agreement" in the Prospectus is true and correct in all material respects.
10
(ii) The Manager has been duly organized and is validly existing as
a limited liability company and is in good standing under the laws of Delaware.
The Manager is duly qualified to do business and is in good standing as a
foreign limited liability company in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
Material Adverse Effect. The Manager has all requisite power and authority, and
all necessary Governmental Licenses, to own, lease and operate its properties
and conduct its business as it is now being conducted, except where the failure
to possess such Governmental Licenses will not in the aggregate have a Material
Adverse Effect, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
(iii) This Agreement and the Management Agreement have each been
duly and validly authorized, executed and delivered by the Manager. The
Management Agreement constitutes a valid and binding agreement of the Manager,
enforceable in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other laws
affecting enforcement of creditors' rights or by general equitable principles.
(iv) The Manager is not (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.
11
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_______, the number of Firm Shares set forth opposite the
respective names of the Underwriters on Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Sidley 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 1,050,000 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.
12
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 & Co. Inc. in its sole discretion shall make.
Payment for the Additional Shares shall be made to or upon the order of
the Company of the purchase price by wire transfer in Federal (same day) funds
to the Company at the offices of Underwriters' Counsel, or such other location
as may be mutually acceptable, upon delivery of the certificates for the
Additional Shares to you for the respective accounts of the Underwriters.
3. Offering.
(a) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
(b) The Company and the Underwriters hereby agree that up to 100,000 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 & Co. Inc. 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
13
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 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
14
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 180 days from the date of the Prospectus,
the Company will not, directly or indirectly, without your prior written
consent, issue, sell, offer or agree to sell, grant any option for the sale of,
pledge, make any short sale or maintain any short position, establish or
maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h) under
the Exchange Act), enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock (whether any such transaction is
to be settled by delivery of Common Stock, other securities, cash or other
consideration) or otherwise dispose of, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock) or interest
therein of the Company or of any of its subsidiaries, other than the Company's
sale of Shares hereunder and the Company's issuance of Common Stock (i) upon the
exercise of presently outstanding options; (ii) in connection with acquisitions
by the Company or a subsidiary, and (iii) the grant and exercise of options
under, or the issuance and sale of shares pursuant to, employee stock option
plans in effect on the date hereof, including the Company's grant of an option
to purchase 700,000 shares of Common Stock to the Manager in connection with
this offering.
(vii) 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 listed; and
(ii) such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(viii) The Company will apply the net proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(ix) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the NYSE.
(x) The Company will use its best efforts to 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
15
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 Representatives 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.
16
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, NIH and the Manager herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date"
shall refer to the Closing Date for the Firm Shares and any Additional Closing
Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company, NIH and the Manager 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, NIH 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 and NIH, 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)
17
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company and its subsidiaries have
not sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse change, or
any development involving a material adverse change, in the business prospects,
properties, operations, condition (financial or otherwise), or results of
operations of the Company and its subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus.
(f) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of 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(a) 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.
(g) 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.
(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) You shall have received a lock-up agreement from NIH, the Manager,
Fleet National Bank and each director or officer of the Company designated by
you and listed on Schedule IV substantially in the form attached hereto as Annex
III.
18
(k) At the Closing Date, the Shares shall have been approved for
listing on the NYSE upon notice of issuance.
(l) The Company shall have complied with the provisions of Section
4(a)(iii) hereof with respect to the furnishing of prospectuses.
(m) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(n) The Company shall have furnished the Underwriters and Underwriters'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing or by
telephone. Any such telephone notice shall be confirmed promptly thereafter in
writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i) 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
19
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through you expressly for use
therein. The foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter who failed to
deliver the Prospectus (as then amended or supplemented, provided to the several
Underwriters in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured, as determined by a court of
competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person. This indemnity agreement
will be in addition to any liability which the Company may otherwise have
including under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. This indemnity
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
20
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate at its own expense in the
defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided, however, that such counsel to
the indemnifying party shall not (except with the written consent of the
indemnified party) also be counsel to the indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or reasonably could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
and unconditional release of the indemnified party from all liability on claims
that are or reasonably could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of the indemnified party.
(d) In connection with the offer and sale of Directed Shares, the
Company agrees, promptly upon written notice, to indemnify and hold harmless the
Underwriters from and against any and all losses, liabilities, claims, damages
and expenses incurred by them as a result of the failure of any Directed Shares
Purchaser, who makes an oral agreement, properly confirmed by the Underwriters,
to purchase Directed Shares within twenty-four hours of establishing the public
offer price, to pay for and accept delivery of the Directed Shares.
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
21
one or more of the Underwriters may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the Shares
or, if such allocation is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, shall be deemed to be in the same proportion as
(x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y) the
underwriting discount received by the Underwriters, respectively, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company, on the one hand, and of the Underwriters, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that 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.
22
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the Firm
Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) 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
23
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, NIH or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company or NIH by notifying
you or by you notifying the Company. Notwithstanding the foregoing, the
provisions of this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all
times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if (A) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; or
(B) if trading on the NYSE shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, by the NYSE or by order of the Commission
or any other governmental authority having jurisdiction; or (C) if a banking
moratorium has been declared by any state or federal authority or if any new
restriction materially adversely affecting the distribution of the Firm Shares
or the Additional Shares, as the case may be, shall have become effective or if
a material disruption in commercial banking or securities settlement or
clearance services shall have occurred; or (D) (i) there has occurred any
outbreak or escalation of hostilities or acts of terrorism involving the United
States or there is a declaration of a national emergency or war by the United
States or (ii) there shall have been any other such calamity or crisis or any
change in political, financial or economic conditions, if the effect of any such
event in (i) or (ii) as in your judgment makes it impracticable or inadvisable
to proceed with the offering, sale and delivery of the Firm Shares or the
Additional Shares, as the case may be, on the terms and in the manner
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company, NIH or the Manager to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by you, reimburse the
Underwriters for all out-of-pocket expenses (including the fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
24
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, 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]
25
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.
By:
--------------------------------------------
Name:
Title:
FORTRESS INVESTMENT GROUP LLC
By:
--------------------------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
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 Shares Purchased if Maximum Option
Name of Underwriter to be Purchased Exercised
------------------- --------------------------- ---------------------------
Bear, Xxxxxxx & Co. Inc.......................
Xxxxxx Brothers Inc. .........................
Banc of America Securities LLC................
Total................................
SCHEDULE II
[Formation Agreements]
SCHEDULE III
[Subsidiaries]
SCHEDULE IV
Xxxxxx X. Xxxxx
Xxxxx X. Grain
Xxxxxx X. XxXxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
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 IV 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. Each of the Transfer Agreements has been duly executed and delivered
by the Company, NIH and/or their respective subsidiaries, as applicable, to the
extent such execution and delivery are governed by the laws of the State of New
York. Each of the Transfer Agreements is a valid and binding agreement of each
of the Company, NIH and/or their respective subsidiaries, as applicable,
enforceable in accordance with its terms.
10. The execution and delivery by the Company and NIH of the
Underwriting Agreement and each of the Transfer Agreements, and the consummation
by the Company and NIH of the transactions contemplated thereby, including the
issuance and sale of the Securities and the Formation Transactions, 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.
11. 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 and NIH of the transactions
contemplated thereby.
12. 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, NIH or any of their
respective 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.
13. The form of certificate used to evidence the Common Stock complies
in all material respects with the applicable requirements of the New York Stock
Exchange, Inc.
14. 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.
15. 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.
16. The statements set forth in the Prospectus under the caption "ERISA
Considerations" and "Federal Income Tax Considerations" insofar as such
statements purport to summarize certain provisions of the laws referred to
therein, fairly summarize such provisions in all material respects.
17. The Company is not, and solely after giving effect to the offering
and sale of the Securities 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. NIH has qualified as a REIT for its taxable years ended December
31, 1998, 1999, 2000 and 2001 and the Company and NIH are organized and operate
in a manner that will enable each to qualify to be taxed as a REIT under the
Internal revenue Code of 1986, as amended (the "Code"), for the taxable year
ended December 31, 2002 provided each continues to meet the asset composition,
source of income, shareholder diversification, distribution, record keeping, and
other requirements of the Code which are necessary for the Company and NIH to
qualify as a REIT.
2
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 15 and 16, 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, NIH 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 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).
3
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. The Outstanding Shares 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 Common 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 Underwriting Agreement has been duly authorized, executed and,
so far as is known to us, delivered by each of the Company and NIH.
9. The Management Agreement has been duly authorized, executed and, so
far as is known to us, delivered by the Company.
10. Each of the Transfer Agreements been duly authorized, executed and,
so far as is known to us, delivered by each of the Company and NIH.
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 or 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 and 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" and "Description of Capital 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.
2
ANNEX III
Form of Lock-Up Agreement for NIH, Manager and Executive Officers and Directors
