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