SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO 13D-2(A)
CAPSTEAD MORTGAGE CORPORATION
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(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(TITLE OF CLASS OF SECURITIES)
14067E 10 0
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(CUSIP NUMBER)
Randal A. Nardone
Chief Operating Officer and Secretary
Fortress Registered Investment Trust
1301 Avenue of the Americas
New York, New York 10019
(212) 798-6100
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
COPY TO:
J. Gregory Milmoe
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(212) 735-3000
January 12, 2000
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(e), 13d(f) or 13d-1(g),
check the following box | |.
CUSIP NO. 14067 10 0 13D PAGE 2 OF 14 PAGES
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<TABLE>
<CAPTION>
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<S> <C>
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FORTRESS CAP LLC (I.R.S. EMPLOYER IDENTIFICATION NUMBER [ ])
- ----------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
NOT APPLICABLE (b) |_|
- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_|
- ----------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER - 0 -
SHARES ---------------------------------------------------------------------------------------
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER - 10,756,000 -
EACH ---------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER - 0 -
PERSON WITH ---------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER - 10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.05% (BASED ON 45,719,023 SHARES OF COMMON STOCK OUTSTANDING AS
OF JANUARY 20, 2000 AND ASSUMING CONVERSION OF THE PREFERRED STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSON)
- ----------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
CUSIP NO. 14067 10 0 13D PAGE 3 OF 14 PAGES
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<TABLE>
<CAPTION>
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<S> <C>
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FORTRESS REGISTERED INVESTMENT TRUST (I.R.S. EMPLOYER IDENTIFICATION NUMBER [ ])
- ----------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
NOT APPLICABLE (b) |_|
- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- ----------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_|
- ----------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER - 0 -
SHARES
BENEFICIALLY ---------------------------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER - 10,756,000 -
EACH ---------------------------------------------------------------------------------------
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER - 0 -
10 SHARED DISPOSITIVE POWER - 10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.05% (BASED ON 45,719,023 SHARES OF COMMON STOCK OUTSTANDING AS
OF JANUARY 20, 2000 AND ASSUMING CONVERSION OF THE PREFERRED STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSON)
- ----------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
CUSIP NO. 14067 10 0 13D PAGE 4 OF 14 PAGES
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<TABLE>
<CAPTION>
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<S> <C>
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FORTRESS INVESTMENT FUND LLC (I.R.S. EMPLOYER IDENTIFICATION NUMBER [ ])
- ----------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
NOT APPLICABLE (b) |_|
- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_|
- ----------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER - 0 -
SHARES
BENEFICIALLY ---------------------------------------------------------------------------------------
OWNED BY
EACH 8 SHARED VOTING POWER - 10,756,000 -
REPORTING ---------------------------------------------------------------------------------------
PERSON WITH
9 SOLE DISPOSITIVE POWER - 0 -
10 SHARED DISPOSITIVE POWER - 10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.05% (BASED ON 45,719,023 SHARES OF COMMON STOCK OUTSTANDING AS
OF JANUARY 20, 2000 AND ASSUMING CONVERSION OF THE PREFERRED STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSON)
- ----------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
CUSIP NO. 14067 10 0 13D PAGE 5 OF 14 PAGES
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<TABLE>
<CAPTION>
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<S> <C>
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FORTRESS PRINCIPAL INVESTMENT HOLDINGS LLC (I.R.S. EMPLOYER IDENTIFICATION
NUMBER [ ])
- ----------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
NOT APPLICABLE (b) |_|
- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_|
- ----------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER - 0 -
SHARES
BENEFICIALLY ---------------------------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER - 10,756,000 -
EACH ---------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER - 0 -
PERSON WITH ---------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER - 10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-10,756,000 -
- ----------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.05% (BASED ON 45,719,023 SHARES OF COMMON STOCK OUTSTANDING AS
OF JANUARY 20, 2000 AND ASSUMING CONVERSION OF THE PREFERRED STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSON)
- ----------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of the common stock,
$0.01 par value per share ("Common Stock"), of Capstead Mortgage
Corporation, a Maryland corporation (the "Issuer"). The principal
executive offices of the Issuer are located
at: 8401 North Central Parkway, Dallas, TX 75225.
ITEM 2. IDENTITY AND BACKGROUND.
Fortress Cap LLC is a Delaware limited liability company
("Cap LLC") that is wholly owned by its sole member, Fortress
Registered Investment Trust, a Delaware business trust ("Fortress
Trust"). All issued and outstanding shares of beneficial interest
of Fortress Trust are owned by Fortress Investment Fund LLC, a
Delaware limited liability company ("Fortress Fund"), the managing
member of which is Fortress Fund MM LLC, a Delaware limited
liability company. Fortress Fund has no directors or executive
officers. The managing member of Fortress Fund MM, LLC is Fortress
Fund MM Inc., a Delaware corporation. Fortress Principal
Investment Group LLC, a Delaware limited liability company
("FPIG"), is the holder of all the issued and outstanding common
stock of Fortress Fund MM Inc. Fortress Principal Investment
Holdings LLC, a Delaware limited liability company ("FPIH"), is
the sole member of FPIG. The address of each of the
above-referenced entities in this Item 2 is 1301 Avenue of the
Americas, 42nd Floor, New York, New York 10019 and the principal
business of each such entity is real estate-related investments.
Set forth on Annex A to this Amendment to the Schedule
13D is a listing of the directors and executive officers of
Fortress Fund MM Inc. and the members of FPIH (collectively, the
"Covered Persons"), the present principal occupation or employment
of each of the Covered Persons and the business address of each of
the Covered Persons. Each of the Covered Persons is a United
States citizen. The trustees of Fortress Trust will be disclosed
promptly hereafter in an amendment hereto.
None of the above-referenced entities in this Item 2 or,
to the best of their knowledge, the Covered Persons has, during
the past five years, (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii)
been party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which any of them is
or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding a
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Cap LLC obtained the funds to purchase the Preferred
Stock (as defined in Item 4 hereof) from its working capital. In
addition, if necessary, Cap LLC will obtain the funds needed to
purchase shares of Common Stock, if any, in the open market as
described in Item 4, from its working capital.
ITEM 4. PURPOSE OF TRANSACTION.
On December 23, 1999, Fortress Investment Corp., a
Maryland corporation ("FIC") and Fortress Trust entered into an
Asset Purchase Agreement (as amended on January 5, 2000, the
"Asset Purchase Agreement"), pursuant to which Fortress Trust
agreed to purchase from FIC on or before January 31, 2000 (i)
5,378,000 shares of the Issuer's newly created $0.56 Cumulative
Convertible Preferred Stock, Series C (the "Series C Preferred
Stock") and 5,378,000 shares of the Issuer's newly created $0.40
Cumulative Convertible Preferred Stock, Series D (the "Series D
Preferred Stock") (together, the "Preferred Stock") and (ii) all
of FIC's rights and obligations in and to any agreements relating
to FIC's acquisition of the Preferred Stock, including, but not
limited to, the Supplemental Agreement (as defined below) (the
"Assets").
On January 12, 2000, FIC and Fortress Cap LLC, a newly
created and wholly-owned subsidiary of FIC, entered into an
Assignment Agreement pursuant to which FIC assigned all its right,
title and interest in the Assets to Cap LLC. The sale of the
Assets pursuant to the Asset Purchase Agreement was thereafter
consummated through the sale to Fortress Trust of all of FIC's
right, title and interest in Cap LLC for $51,200,000 (the amount
initially paid by FIC for the Preferred Stock) plus accrued
dividend and out-of-pocket expenses.
Each share of Series C Preferred Stock is convertible
into one share of Common Stock and has a liquidation preference of
$6.89 per share. Each share of Series D Preferred Stock is
convertible into one share of Common Stock and has a liquidation
preference of $4.76 per share. The Preferred Stock held by Cap LLC
represents an ownership interest in the Issuer of 19.05 percent,
based on 45,719,023 shares of Common Stock outstanding as of
January 20, 2000 and assuming full conversion of the Preferred
Stock. The Articles Supplementary to the Issuer's Charter with
respect to the Preferred Stock contain certain anti-dilution
provisions which will cause the number of shares of Common Stock
into which the Preferred Stock will be convertible to be adjusted
upon the occurrence of dilutive events.
In connection with FIC's initial investment in the
Preferred Stock, the Issuer's Board of Directors (the "Board") (i)
approved an immediate increase in the number of Directors serving
on its Board from six to eight and appointed Mr. Wesley R. Edens,
Chief Executive Officer and Chairman of FIC, and Mr. Robert I.
Kauffman, President of FIC, to fill the newly created vacancies on
the Board and (ii) authorized the Issuer to enter into a
Supplemental Agreement to the Stock Purchase Agreement (as amended
on January 21, 2000, the "Supplemental Agreement"'). The
Supplemental Agreement contemplates that, at the Issuer's
next annual meeting of stockholders to be held no later than May
31, 2000 (the "Annual Meeting"), the Issuer's stockholders will
vote upon the election to the Board of the following individuals
(the "Proposal"): Wesley R. Edens, Robert I. Kauffman and two
nominees of Messrs. Edens and Kauffman, who shall be independent
directors.
The Supplemental Agreement (as assigned to Cap LLC) also
provides that if, among other things, Capstead's stockholders
approve the Proposal at the Annual Meeting, Cap LLC or an
affiliate of Cap LLC will, within the six-month period following
the date of the Annual Meeting, acquire no less than five million
shares of Common Stock through, at Cap LLC's option (i)
open-market purchases, (ii) the conversion of Preferred Stock or
(iii) a combination thereof. Purchases by Cap LLC and/or its
affiliates of Common Stock through the date of the Annual Meeting
shall be considered as part of such five million shares. If the
obligation to acquire Common Stock pursuant to the Supplemental
Agreement were fulfilled by Cap LLC solely through open-market
purchases, then Cap LLC's ownership interest in Capstead would be
approximately 27.9 percent, based on 45,719,023 shares of Common
Stock outstanding as of January 20, 2000 and assuming full
conversion of the Preferred Stock.
The Supplemental Agreement also provides as follows:
o Until the earlier to occur of (i) the approval of the Proposal
at the Annual Meeting and the consummation of the actions
contemplated thereby, (ii) Cap LLC's receipt of the Put/Call
Payment (defined below), (iii) the expiration of the 30 day period
following the date of the Annual Meeting and (iv) April 30, 2000
(the "Transition Period"), the Issuer shall conduct its business
only in the ordinary course, in accordance with prudent practice
and consistent with past practice established in 1999.
o Cap LLC has the right to cause the Issuer to purchase from Cap
LLC all, but not less than all, of the outstanding Preferred Stock
(the "Fortress Put"), for a price equal to 103% of the purchase
price of the Preferred Stock plus accrued and unpaid dividends
thereon (the "Put/Call Payment") if:
(a) the Proposal, as discussed above, is not approved by
the Issuer's stockholders at the Annual Meeting on
or before May 31, 2000; or
(b) during the Transition Period, the Issuer shall
not have conducted its business in the ordinary
course (other than actions taken outside such
scope at the request or with the approval of Cap
LLC) or there shall have been a material adverse
change in the condition, financial or otherwise,
or in the earnings, business affairs or business
prospects of the Issuer, whether or not arising
in the ordinary course of business (except a
material adverse change directly resulting from
any action taken at the request or
with the approval of Cap LLC or a material
adverse change resulting from adverse economic
conditions in the industry in which the Issuer
operates).
o The Issuer can cause Cap LLC to sell to it all, but not less
than all, of the Preferred Stock (the "Capstead Call") for the
Put/Call Payment if the Proposal is not approved at the Annual
Meeting.
o The Fortress Put and the Capstead Call shall expire upon the
expiration of the 30 day period following the Annual Meeting.
o In the event of a change in control of the Issuer (as defined in
the Supplemental Agreement) after the Annual Meeting and prior to
December 9, 2004, except for certain business combinations
approved by Cap LLC, Cap LLC can cause the Issuer to purchase from
Cap LLC all, but not less than all, of the Preferred Stock
outstanding at such time (the "Change in Control Put") for the
original per share purchase price of the Preferred Stock plus
accrued and unpaid dividends thereon.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
See numbers 7-11 of the cover pages to this Schedule 13D
for the information required by Item 5.
None of Fortress Fund MM LLC, Fortress Fund MM Inc.,
FPIG, FPIH or the Covered Persons directly owns any securities of
the Issuer. However, by reason of their status as directors and/or
officers Fortress Fund MM Inc., members of FPIG or managing
members of the entities set forth in Item 2, such entities and the
Covered Persons may be deemed to be the beneficial owners of the
Preferred Stock and shares of the Common Stock owned directly or
beneficially by Cap LLC, Fortress Trust and Fortress Fund. Cap
LLC, Fortress Trust and Fortress Fund have been advised that each
of Fortress Fund MM LLC, Fortress Fund MM Inc., FPIG, FPIH and the
Covered Persons disclaims beneficial ownership of the Preferred
Stock and any shares of the Common Stock from time to time owned
directly or beneficially by Cap LLC, Fortress Trust and Fortress
Fund.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
See Item 4 to this Schedule 13D for the information
required by Item 6.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Asset Purchase Agreement, dated as of December 23, 1999, by
and between Fortress Investment Corp. and Fortress
Registered Investment Trust.
Exhibit 2 Amendment No. 1 to the Asset Purchase Agreement, dated as of
January 5, 2000, by and between Fortress Investment
Corp. and Fortress Registered Investment Trust.
Exhibit 3 Supplemental Agreement to the Stock Purchase Agreement, dated
as of December 9, 1999, by and between Fortress
Investment Corp. and Capstead Mortgage Corporation
Exhibit 4 Amendment No. 1 to the Supplemental Agreement to the Stock
Purchase Agreement, dated as of January [ ], 2000 by
and between Fortress Cap LLC and Capstead Mortgage
Corporation
Exhibit 5 Joint Filing Agreement, dated as of January 21, 2000, by and
between Fortress Cap LLC, Fortress Registered
Investment Trust and Fortress Investment Fund LLC.
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is
true, complete and correct.
January 21, 2000
FORTRESS REGISTERED
INVESTMENT TRUST
By: /s/ Randal A. Nardone
----------------------------------------
Randal A. Nardone
as Secretary and Chief Operating Officer
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
January 21, 2000
FORTRESS CAP LLC
By: /s/ Randal A. Nardone
----------------------------------------------
Randal A. Nardone
as Secretary and Chief Operating Officer
of Fortress Registered Investment Trust,
sole member of Fortress Cap LLC
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
January 21, 2000
FORTRESS INVESTMENT FUND, LLC
By: /s/ Randal A. Nardone
------------------------------------------------
Randal A. Nardone
as Chief Operating Officer and Secretary of
Fortress Fund MM, LLC, managing member
of Fortress Investment Fund, LLC
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is
true, complete and correct.
January 21, 2000
FORTRESS PRINCIPAL INVESTMENT HOLDINGS LLC
By: /s/ Randal A. Nardone
----------------------------------------
Randal A. Nardone
as Secretary
ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS
OF FORTRESS FUND MM, INC.
The name and principal occupation of each of the executive
officers and directors of Fortress Fund MM, Inc. are listed below. Except
as set forth below, the principal business address of each of the executive
officers and directors of Fortress Fund MM, Inc. is 1301 Avenue of the
Americas, 42nd Floor, New York, NY 10019.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
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<S> <C>
Wesley R. Edens Chief Executive Officer and Chairman of the Board of Directors of
Fortress Investment Corp.
Robert I. Kauffman President and Director of Fortress Investment Corp.
Randal A. Nardone Chief Operating Officer and Secretary of Fortress Investment Corp.
Erik P. Nygaard Chief Information Officer and Treasurer of Fortress Investment Corp.
</TABLE>
MEMBERS OF FORTRESS PRINCIPAL
INVESTMENT HOLDINGS, LLC
The name and principal occupation of each of the members of
Fortress Principal Investment Holdings, LLC are listed below. Except as set
forth below, the principal business address of each of the members of
Fortress Principal Investment Holdings, LLC, Inc. is 1301 Avenue of the
Americas, 42nd Floor, New York, NY 10019.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
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<S> <C>
Wesley R. Edens Chief Executive Officer and Chairman of the Board of Directors of
Fortress Investment Corp.
Robert I. Kauffman President and Director of Fortress Investment Corp.
Randal A. Nardone Chief Operating Officer and Secretary of Fortress Investment Corp.
Erik P. Nygaard Chief Information Officer and Treasurer of Fortress Investment Corp.
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</TABLE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), is
dated as of 9:00 a.m. Eastern Standard Time, December 23, 1999, and is by
and between Fortress Investment Corp., a Maryland corporation (the
"Seller"), and Fortress Registered Investment Trust, a trust organized
under the laws of the State of Delaware (the "Buyer").
RECITALS
A. The Seller is the owner of the assets (the "Assets")
listed on Schedule 1 attached hereto.
B. The Seller desires to sell the Assets to the Buyer,
and the Buyer desires to purchase the Assets from the Seller, on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, and of
the representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:
1. Sale of the Assets. On the terms and subject to the
conditions of this Agreement, the Seller shall sell, transfer and deliver
the Assets to the Buyer, and the Buyer shall purchase the Assets (together
with any and all liabilities of the Seller associated with such Assets)
from the Seller, for a purchase price equal to Fifty One Million Two
Hundred Thousand Dollars ($51,200,000) plus accrued dividend and out-of
pocket expenses (collectively, the "Purchase Price").
2. Conditions.
(a) The obligations of the Buyer to purchase and pay for
the Assets is subject to the condition (which may be waived by the Buyer in
the Buyer's sole discretion) that at the time of the Closing (as
hereinafter defined) each of the representations of the Seller made in this
Agreement shall be true and correct as though made as of such time.
(b) The obligation of the Seller to sell the Assets to
the Buyer is subject to the condition (which may be waived by the Seller in
the Seller's sole discretion) that at the time of the Closing each of the
representations of the Buyer made in this Agreement shall be true and
correct as though made as of such time.
3. Closing. The closing (the "Closing") of the purchase
and sale of the Assets shall be held, at such time and place as the parties
may mutually agree upon, on or before January 31, 2000. The Seller shall
deliver to the Buyer at the Closing: (i) an assignment, substantially in
the form of Exhibit A (the "Assignment and Assumption"), executed by the
Seller; (ii) for all Assets, copies of all documents listed on the index
attached hereto as Exhibit B previously delivered to the Seller; (iii) if
requested by the Buyer (a) a letter (prepared by and in form satisfactory
to the Buyer and the Seller) executed by the Seller that directs a document
custodian to either confirm that it holds all Asset files for the benefit
of the Buyer as successor to the Seller under the applicable agreement for
the custody thereof or to ship all Asset files held by it to the Buyer and
(b) a letter or other document (prepared by and in form satisfactory to the
Buyer and the Seller) executed by the Seller as necessary to effect the
recognition of the Buyer as the owner of the Assets under any one or more
agreements that relate to the administration of the Assets; and (iv) such
other instruments of transfer executed by the Seller as the Buyer shall
reasonably request, including, without limitation, (a) a stock power,
substantially in the form of Exhibit C and (b) written notice to the
transfer agent of the Assets of the assignment and assumption of the
ownership of the Assets to the Buyer; provided that the Buyer shall prepare
any such instruments and deliver the same to the Seller at least one (1)
business day prior to Closing; and the Buyer shall deliver to the Seller:
(i) the Assignment and Assumption executed by the Buyer; and (ii) the
Purchase Price by wire transfer of immediately available funds to an
account designated by the Seller.
4. Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Buyer as follows:
(a) Authority. The Seller has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by the Seller and the consummation by the Seller of
the transactions contemplated hereby have been duly authorized by
all necessary corporate (or its equivalent) action on the part of
the Seller. This Agreement has been duly executed and delivered by
the Seller and constitutes a valid and binding obligation of the
Seller enforceable in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency, and other
similar laws affecting the enforcement of creditors' rights
generally. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not conflict with, or result
in any violation of, or default under, any provision of the
Seller's organizational documents or of any agreement applicable
to the Seller or to the Seller's property or assets. No consent,
approval, order or authorization of, or registration, declaration
or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, or any other
person or entity, is required by or with respect to the Seller in
connection with the execution and delivery of this Agreement or
the consummation by the Seller of the transactions contemplated
hereby.
(b) Ownership of the Assets. The Seller has, and the
transfer by the Seller of the Assets will pass to the Buyer, good
title to the Assets, free and clear of any claims, liens,
encumbrances and security interests whatsoever.
(c) Asset Information. The information pertaining to the
Assets set forth on Schedule 1 attached hereto is, to the best of
the Seller's knowledge, true and correct in all material respects.
5. Representations and Warranties of the Buyer. The Buyer
hereby represents and warrants to the Seller that the Buyer has all
requisite trust power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Buyer and the consummation by the Buyer of the
transactions contemplated hereby have been duly authorized by all necessary
trust action on the part of the Buyer. This Agreement has been duly
executed and delivered by the Buyer and constitutes a valid and binding
obligation of the Buyer enforceable in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally,
6. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
the Closing.
7. Specific Performance. The Seller and the Buyer
acknowledge that damages would be an inadequate remedy for any breach of
the provisions of this Agreement and agree that the obligations of the
parties hereunder shall be specifically enforceable.
8. Expenses. Whether or not the Closing occurs, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Seller.
9. Further Assurances. From time to time following the
Closing, the Seller shall execute and deliver, or cause to be executed and
delivered, to the Buyer such other bills of sale, deeds, endorsements,
assignments and other documents or instruments of conveyance and transfer
as the Buyer may reasonably request or as may be otherwise necessary to
more effectively convey and transfer to, and vest in, the Buyer, the
Assets, or in order to fully effectuate and to implement the purposes,
terms and provisions of this Agreement. To the extent that hereafter the
Seller receives any payments in respect of the Assets on or after the date
of the Closing, the Seller shall forward the same to the Buyer within five
(5) business days.
10. Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall together constitute
the same agreement.
11. Governing Law. This Agreement shall be deemed to be
made in and in all respects shall be interpreted, construed and governed by
and in accordance with the law of the State of New York without regard to
the conflict of law principles thereof.
12. Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in
writing and delivered personally or sent by registered or certified mail,
postage prepaid, or by facsimile:
if to the Buyer:
Fortress Registered Investment Trust
c/o Fortress Investment Group LLC
1301 Avenue of the Americas, 42nd Floor
New York, New York 10019
Attention: Randal A. Nardone
Facsimile: (212) 798-6120
Confirmation: (212) 798-6110
if to the Seller:
Fortress Investment Corp.
c/o Fortress Investment Group LLC
1301 Avenue of the Americas, 42nd Floor
New York, New York 10019
Attention: Randal A. Nardone
Facsimile: (212) 798-6120
Confirmation: (212) 798-6110
or to such other persons or addresses as may be designated in writing by
the party to receive such notice as provided above.
13. Entire Agreement; No Other Representations. Except as
expressly agreed in a separate writing signed by the parties hereto on or
after the date of this Agreement, this Agreement constitutes the entire
agreement, and supersedes all other prior agreements and understandings,
both written and oral, between the parties, with respect to the subject
matter hereof. Except as set forth herein, the Seller makes no
representation, express or implied, with respect to the Assets or the
enforceability, collectability, suitability or value thereof.
14. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof to
any person or entity or any circumstance, is invalid or unenforceable (a) a
suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose
of such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other persons or
entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof,
in any other jurisdiction.
15. Interpretation. The section references and headings
herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof.
16. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any person or entity other
than the parties and their successors and assigns any right, remedy or
claim under or by reason of this Agreement.
\
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the Buyer and the Seller has
caused this Agreement to be duly executed and attested to by its officer
hereunto duly authorized as of the day and year first above written.
BUYER:
FORTRESS REGISTERED INVESTMENT
TRUST, a trust organized under the laws of the
State of Delaware
By: /s/ Randal A. Nardone
-------------------------------------------
Name: Randal A. Nardone
Title:
SELLER:
FORTRESS INVESTMENT CORP., a Maryland
corporation
By: /s/ Randal A. Nardone
-------------------------------------------
Name: Randal A. Nardone
Title: Secretary
SCHEDULE 1
ASSET SCHEDULE
<TABLE>
<CAPTION>
NUMBER
OF SHARES PURCHASE PRICE
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Series C Convertible Preferred Stock, %.10 par value 5,378,000 $25,600,000
Series D Convertible Preferred Stock, %.10 par value 5,378,000 $25,600,000
- ----------------------------------------------------------------------------------------
$51,200,000
</TABLE>
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Assignment and Assumption Agreement"), is dated as of January ___, 2000,
and is executed and delivered pursuant to that certain Asset Purchase
Agreement dated as of 9.00 a.m. Eastern Standard Time, December 23, 1999
(the "Asset Purchase Agreement"), by and between Fortress Investment Corp.,
a Maryland corporation (the "Seller"), and Fortress Registered Investment
Trust, a trust organized under the laws of the State of Delaware (the
"Buyer").
RECITAL
Pursuant to the Asset Purchase Agreement, the Buyer has agreed
to purchase from the Seller, and the Seller has agreed to sell to the
Buyer, upon the terms and conditions specified in the Asset Purchase
Agreement, the Assets (as defined in the Asset Purchase Agreement) listed
on Schedule 1 hereto.
NOW, THEREFORE, in consideration of the promises contained in
the Asset Purchase Agreement and for other good and valuable consideration,
the Buyer and the Seller agree as follows:
1. The Seller does hereby sell, transfer, convey, assign and
deliver to the Buyer, and the Buyer hereby accepts from the Seller, all of
the right, title and interest of the Seller in, to and under (a) the Assets
listed on Schedule 1 hereto (including all promissory notes, security
agreements, guarantees and other agreements that evidence or secure such
Assets) and (b) any and all of the following: (i) any purchase agreement
that was executed by the Seller, and/or in which rights were assigned to
the Seller, in connection with the Seller's acquisition of the Assets (in
either case including any rights in respect of breaches of representations
and warranties); (ii) any agreement for the custody of documents pertaining
to the Assets; and (iii) any agreement for the administration of the
Assets, in each case to have and hold unto the Buyer, its successors and
assigns forever.
2. The Buyer hereby assumes all of the liabilities and agrees to
perform any and all duties and obligations of the Seller under the
documents that evidence or otherwise govern the rights and obligations of
the Seller and the obligor(s) with respect to such Assets and under any
agreement referred to in clause (b) of the preceding paragraph 1.
The terms and provisions of this Assignment and Assumption
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns.
This Assignment and Assumption Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to principles of conflicts of laws.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the Buyer and the Seller has caused
this Assignment and Assumption Agreement to be duly executed and attested
to by its officer hereunto duly authorized as of the day and year first
above written.
BUYER:
FORTRESS REGISTERED INVESTMENT
TRUST, a trust organized under the laws of the
State of Delaware
By: __________________________________________
Name: Randal A. Nardone
Title:
SELLER:
FORTRESS INVESTMENT CORP., a Maryland
corporation
By:___________________________________________
Name: Randal A. Nardone
Title: Secretary
SCHEDULE 1
<TABLE>
<CAPTION>
ASSETS
NUMBER
OF SHARES PURCHASE PRICE
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Series C Convertible Preferred Stock, %.10 par value 5,378,000 $25,600,000
Series D Convertible Preferred Stock, %.10 par value 5,378,000 $25,600,000
- ------------------------------------------------------------------------------------------
$51,200,000
</TABLE>
EXHIBIT B
INDEX
None.
EXHIBIT C
STOCK POWER
FOR VALUE RECEIVED, Fortress Investment Corp., hereby sells, assigns and
transfers unto Fortress Registered Investment Trust, its successors and
assigns, Five Million Three Hundred Seventy-Eight Thousand (5,378,000)
Shares of the Convertible Preferred Stock, Series C and Five Million Three
Hundred Seventy-Eight Thousand (5,378,000) Shares of the Convertible
Preferred Stock, Series D of Capstead Mortgage Corporation, a Maryland
corporation (the "Corporation"), standing in the name of Fortress
Investment Corp. on the books of the Corporation, represented by
Certificates No. C-1 and No. D-1 herewith, and does hereby irrevocably
constitute and appoint Fortress Registered Investment Trust, its successors
and assigns, as attorney to transfer the said stock on the books of the
within named Corporation with full power of substitution in the premises.
Dated: ________, ____
FORTRESS INVESTMENT CORP., a
Maryland corporation
By: ______________________________
Name: Randal A. Nardone
Title: Secretary
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this
"Amendment"), made as of the 5th day of January, 2000, by and between
FORTRESS INVESTMENT CORP., a Maryland corporation (the "Seller"), and
FORTRESS REGISTERED INVESTMENT TRUST, a trust organized under the laws of
the State of Delaware (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller and the Buyer are parties to the Asset
Purchase Agreement, dated as of 9:00 a.m. Eastern Standard Time, December
23, 1999 (the "Purchase Agreement");
WHEREAS, all capitalized terms used and not otherwise defined
herein shall have the respective meanings ascribed thereto in the Purchase
Agreement; and
WHEREAS, the Seller and the Buyer desire to amend the Purchase
Agreement as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. All capitalized terms used but not otherwise defined
in this Amendment have the meanings ascribed thereto in the Purchase
Agreement.
2. Transfer of Assets to Fortress CAP LLC. Notwithstanding anything to
the contrary in the Purchase Agreement, the parties hereto hereby
agree that the Seller shall effect the transfer of the Assets to the
Buyer by transferring the Assets to Fortress CAP LLC, a Delaware
limited liability company ("Fortress CAP") to be formed and wholly-
owned by the Seller for the purposes of the transactions contemplated
hereby and by the Purchase Agreement, and thereafter transferring and
delivering to the Buyer all membership interests in Fortress CAP. All
references in the Purchase Agreement to the transfer or delivery of
the Assets to the Buyer shall be deemed to mean the transfer or
delivery of the Assets in the manner hereinbefore described.
3. Purchase Agreement Amendments. The Purchase Agreement is hereby
amended by:
(a) deleting the words "the Buyer" in the eighteenth line of Section
3 and inserting the following in lieu thereof: "Fortress CAP; and (v)
an assignment and assumption of membership interests substantially in
the form of Exhibit D, executed by each of the Seller, the Buyer and
Fortress CAP";
(b) deleting the words "; and the Buyer shall deliver to the Seller:
(i) the Assignment and Assumption executed by the Buyer; and (ii) the
Purchase Price by wire transfer of immediately available funds to an
account designated by the Seller" in the last three lines of Section
3; and
(c) deleting Exhibits A, B and C and inserting in lieu thereof
Exhibits A, B, C and D attached hereto.
4. No Other Modifications.
The parties hereto agree that except as modified by this Amendment,
the terms and provisions of the Purchase Agreement shall remain in
full force and effect, and are hereby ratified and reaffirmed.
5. Miscellaneous.
(i) In the event of a conflict or inconsistency between this
Amendment and the Purchase Agreement, the terms hereof shall supersede
and govern.
(ii) This Amendment may be executed in any number of
counterparts, each of which shall be an original, but such
counterparts together shall constitute one and the same instrument.
(iii) All captions in this Amendment are included herein for
convenience of reference only and shall not constitute part of this
Amendment for any other purpose.
(iv) This Amendment shall be binding upon, and shall inure to the
benefit of, the respective successors and assigns of the parties
hereto (subject to applicable transfer restrictions set forth in the
Purchase Agreement).
(v) This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the
laws of the State of New York (without giving effect to the principles
thereof relating to conflicts of law).
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed by their respective authorized officers as of the day
and year first above written.
SELLER:
FORTRESS INVESTMENT CORP.,
a Maryland corporation
By: /s/ Randal A. Nardone
----------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
BUYER:
FORTRESS REGISTERED INVESTMENT TRUST,
a trust organized under the laws of
the State of Delaware
By: /s/ Randal A. Nardone
----------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
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 6. DEFINITIONS. Capitalized terms used but not
defined herein shall have the respective meanings assigned to them in the
Purchase Agreement.
Section 7. ASSIGNMENT OF AGREEMENTS. Fortress hereby
assigns, transfers, conveys and delivers to Cap and its successors and
permitted assigns forever, as of the date hereof, all of Fortress' right,
title and interest in and to the Purchase Agreement, the Supplemental
Agreement and the Registration Rights Agreement free and clear of any
Liens.
Section 8. ACCEPTANCE OF ASSIGNMENT AND ASSUMPTION OF
OBLIGATIONS AND LIABILITIES. Cap hereby accepts the assignment, transfer,
conveyance and delivery of the Purchase Agreement, the Supplemental
Agreement and the Registration Rights Agreement and hereby assumes,
undertakes and agrees to pay, perform and discharge in full all of
Fortress' obligations thereunder as though it were a party thereto and
releases and discharges Fortress and its successors and assigns,
completely, unconditionally and forever from all liabilities and
obligations arising out of, or required to be performed thereunder from,
any events relating to performance after the date hereof or for any periods
allocable to dates after the date hereof, whether known or unknown and
whether absolute, accrued or contingent.
Section 9. 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 10. NO ADDITIONAL REPRESENTATIONS AND WARRANTIES.
Except as set forth in Section 2, Section 3 and Section 4 hereof, Fortress
does not make any additional representation or warranty, whether express or
implied, hereunder or otherwise with respect to the Preferred Stock and the
Purchase Agreement.
Section 11. NO THIRD PARTY BENEFICIARIES. This Agreement is
for the sole and exclusive benefit of Fortress, Cap and their respective
successors and permitted assigns and nothing herein is intended or shall be
construed to confer upon any Person other than Fortress, Cap and their
respective successors and permitted assigns any right, remedy or claim
under or by reason of this Agreement or any term, covenant or condition
hereof.
Section 12. AMENDMENT. This Agreement may only be amended or
modified by a written instrument executed by the parties hereto.
Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
Section 14. BINDING EFFECT; ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, permitted assigns and legal representatives.
Neither this Agreement, nor any right or obligation hereunder, may be
directly or indirectly assigned or transferred by any party, in whole or in
part, to any third party, including, without limitation, any bankruptcy
trustee, by operation of law or otherwise, whether voluntary or
involuntary, without the prior written consent of the other party hereto.
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/ Randal A. Nardone
-------------------------------------
Randal A. Nardone
Secretary and Chief Operating Officer
FORTRESS CAP LLC
By: /s/ Randal A. Nardone
------------------------------------
Randal A. Nardone
as Secretary and Chief Operating
Officer of Fortress Investment Corp.,
sole member of Fortress Cap LLC
EXHIBIT B
INDEX
1. Series C and Series D Convertible Preferred Stock Purchase Agreement
(the "Capstead Purchase Agreement"), dated as of December 9, 1999, by
and between the Seller and Capstead Mortgage Corporation ("Capstead").
2. Supplemental Agreement to the Capstead Purchase Agreement, dated as of
December 9, 1999, by and between the Seller and Capstead.
3. Registration Rights Agreement, dated as of December 9, 1999, by and
between the Seller and Capstead.
EXHIBIT C
STOCK POWER
FOR VALUE RECEIVED, Fortress Investment Corp., hereby sells, assigns and
transfers unto Fortress CAP LLC, its successors and assigns, Five Million
Three Hundred Seventy-Eight Thousand (5,378,000) Shares of the Convertible
Preferred Stock, Series C and Five Million Three Hundred Seventy-Eight
Thousand (5,378,000) Shares of the Convertible Preferred Stock, Series D of
Capstead Mortgage Corporation, a Maryland corporation (the "Corporation"),
standing in the name of Fortress Investment Corp. on the books of the
Corporation, represented by Certificates No. C-1 and No. D-1 herewith, and
does hereby irrevocably constitute and appoint Fortress CAP LLC, its
successors and assigns, as attorney to transfer the said stock on the books
of the within named Corporation with full power of substitution in the
premises.
Dated: January 12, 2000
FORTRESS INVESTMENT CORP.,
a Maryland corporation
By: /s/ Randal A. Nardone
------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
OF MEMBERSHIP INTERESTS
FORTRESS CAP LLC
ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTEREST, dated as of
January 12, 2000 (this "Assignment"), by and between FORTRESS INVESTMENT
CORP., a Maryland corporation ("Assignor"), and FORTRESS REGISTERED
INVESTMENT TRUST, a trust operating under the laws of Delaware
("Assignee").
WHEREAS, Assignor and Capstead Mortgage Corporation ("Capstead")
are parties to (i) a Series C and Series D Convertible Preferred Stock
Purchase Agreement, dated as of December 9, 1999 (as amended, the "Capstead
Purchase Agreement"), pursuant to which Assignor 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"),
(ii) a Supplemental Agreement to the Capstead Purchase Agreement, dated as
of December 9, 1999 (as amended, the "Capstead Supplemental Agreement"),
and (iii) a Registration Rights Agreement, dated as of December 9, 1999 (as
amended, the "Capstead Registration Rights Agreement" and, collectively
with the Capstead Purchase Agreement and the Capstead Supplemental
Agreement, the "Capstead Agreements");
WHEREAS, Assignor transferred the Preferred Stock and all of its
rights, title, interests and obligations in, to and under the Capstead
Agreements to Fortress CAP LLC, a Delaware limited liability company (the
"Company"), pursuant to that certain Asset Purchase Agreement (as amended,
the "Asset Purchase Agreement"), dated as of 9:00 a.m., Eastern Standard
Time, December 23, 1999, by and between Assignor, as seller, and Assignee,
as buyer;
WHEREAS, Assignor is the owner of 100% of the membership
interests (the "Membership Interests") of the Company;
WHEREAS, Assignor desires to assign the Membership Interests to
Assignee;
WHEREAS, Assignor and Assignee are entering into this Assignment
pursuant to the Asset Purchase Agreement; and
WHEREAS, Assignee desires to accept such assignment.
NOW THEREFORE, in consideration of the foregoing and the
covenants of the parties set forth herein and for other good and valuable
consideration, the receipt and sufficiently of which are hereby
acknowledged, subject to the terms and conditions set forth herein, the
parties hereby agree as follows:
1. Assignor hereby unconditionally and irrevocably transfers,
assigns, contributes and sets over to Assignee all of Assignor's right,
title and interest in and to the Membership Interests.
2. Assignee hereby accepts the Membership Interests.
3. Assignee hereby assumes all of Assignor's obligations with
respect to the Membership Interests.
4. Assignor, as sole member of the Company prior to the
occurrence of the transfer pursuant to this Assignment, and Assignee, as
sole member of the Company after the occurrence of the transfer pursuant to
this Assignment, acknowledge that Assignor withdraws from and is no longer
a member of the Company and that Assignee is admitted as the managing
member of the Company.
5. This Assignment shall take effect as of the date hereof.
6. Assignor hereby indemnifies and agrees to hold Assignee
harmless from and after the date hereof from and against any and all
losses, expenses, costs, claims and liabilities (including reasonable
attorneys' fees) arising prior to the date hereof in connection with the
Membership Interests. Assignee indemnifies and agrees to hold Assignor
harmless from and after the date hereof from and against any and all
losses, expenses, costs, claims and liabilities (including reasonable
attorneys' fees) arising on or after the date hereof in connection with the
Membership Interests.
7. This Assignment shall inure to the benefit of and be binding
upon the Assignor and the Assignee and their respective successors and
assigns.
8. This Assignment shall be construed and enforced in
accordance with the laws of the State of New York, without regard to its
principles of conflict of laws.
9. This Assignment may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which shall
together constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment as of the day and year first written above.
ASSIGNOR:
FORTRESS INVESTMENT CORP.,
a Maryland corporation
By: /s/ Randal A. Nardone
---------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
ASSIGNEE:
FORTRESS REGISTERED INVESTMENT TRUST,
a trust operating under the laws of
the State of Delaware
By: /s/ Randal A. Nardone
---------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
SUPPLEMENTAL AGREEMENT
TO
THE STOCK PURCHASE AGREEMENT
THIS SUPPLEMENTAL AGREEMENT TO THE STOCK PURCHASE AGREEMENT (this
"Agreement"), dated as of December 9, 1999, is by and among FORTRESS
INVESTMENT CORP., a Maryland corporation ("Fortress"), and CAPSTEAD
MORTGAGE CORPORATION, a Maryland corporation ("Capstead").
WHEREAS, Fortress and Capstead are entering into a Series C and Series
D Convertible Preferred Stock Purchase Agreement, dated as of the date
hereof (the "Purchase Agreement"), pursuant to which Fortress is purchasing
from Capstead 5,378,000 shares of a series of Capstead's preferred stock to
be designated as Series C Convertible Preferred Stock, $0.10 par value per
share (the "Series C Preferred Stock"), and 5,378,000 shares of a series of
Capstead's preferred stock to be designated as Series D Convertible
Preferred Stock, $0.10 par value per share (the "Series D Preferred Stock,"
and, together with the Series C Preferred Stock, the "Preferred Stock") for
total consideration of $51,200,000 (the "Purchase Price");
WHEREAS, the execution and delivery of this Agreement by Capstead and
Fortress is a condition to closing under the Preferred Stock Purchase
Agreement;
WHEREAS, the board of directors of Capstead (the "Board") has
determined to hold a special meeting (the "Special Meeting") of the holders
of Capstead's common stock, par value $0.01 per share (the "Common Stock"),
at which such holders will vote upon certain matters that may require their
approval (collectively, the "Proposal") and a reverse stock split of the
Common Stock; and
WHEREAS, Fortress and Capstead deem it in their best interests to
enter into this Agreement in order to set forth certain rights and
obligations in connection with the ongoing management of Capstead;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, representations, warranties, covenants and conditions herein
set forth, 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. Conduct of Capstead's Business. From the date hereof until the
earlier to occur of (i) the approval of the Proposal at the Special Meeting
and the consummation of the actions contemplated thereby and (ii) Fortress'
receipt of the Put/Call Payment (defined below) or the termination of the
rights and obligations of Capstead and Fortress under Section 2 hereof as
set forth in subsection 2(c) (the "Transition Period"), except as
otherwise expressly set forth in this Agreement, and except for costs and
expenses reasonably incurred in connection with the transactions
contemplated by this Agreement, Capstead shall conduct the business,
operations, activities and practices of Capstead and its Subsidiaries only
in the ordinary course, in accordance with prudent practice and consistent
with past practice established in 1999; provided that (a) Capstead shall
not enter into any new agreements or arrangements with Persons that are
Affiliates (other than its consolidated subsidiaries) or, as of the date
hereof, are executive officers or directors of Capstead or its Subsidiaries
and (b) Capstead may, in conjunction with Fortress, design and implement
certain policies with respect to mitigating interest rate risk and
repositioning Capstead's current portfolio.
2. Fortress Put/Capstead Call.
a. Fortress Put. In the event that one or more of the
following shall not have occurred as of the respective dates set forth
below:
i. Prior to or concurrently with the execution of this
Agreement, the Board shall have passed resolutions pursuant
to which the Board shall have (a) increased the number of
directors comprising the Board from six to eight and
appointed Wesley Edens and Robert Kauffman to fill the
vacancies created thereby to serve on the Board until the
next annual meeting of stockholders and until their
successors are elected and qualified and (b) exempted
Fortress' purchase of the Preferred Stock and subsequent
acquisition of Common Stock pursuant to Section 6 hereof
from (i) the application of Article VIII of Capstead's
Articles of Incorporation, (ii) Section 3-602 of the
Maryland General Corporation Law ("MGCL") prohibiting
business combinations with Interested Stockholders (as such
term is defined in Section 3-601 of the MGCL) and (iii)
Section 3-701 et. seq. of the MGCL; and
ii. The Proposal shall have been approved by Capstead's
stockholders at the Special Meeting, which Special Meeting
shall be held as soon as practicable, but in no event later
than April 30, 2000;
iii. Effective as of the date of the Special Meeting, Bevis
Longstreth, Harriet E. Miers, William R. Smith, and John C.
Tolleson shall have resigned their positions as directors on
the Board and the Board shall have adopted resolutions to
(a) reduce the number of Board members from eight to seven,
(b) appoint Wesley Edens Chairman of the Board and Chief
Executive Officer and Ronn Lytle Vice Chairman of the Board;
(c) appoint three individuals to fill the vacancies on the
Board created by such resignations, provided, that (x) one
of such individuals shall have been nominated by Ronn Lytle
and Paul Low and (y) two of such individuals shall have
been nominated by Wesley Edens and Robert Kaufman, provided,
that such two individuals shall be "independent directors"
for purposes of the Securities Exchange Act of 1934, as
amended, Section 3-802 of the MGCL, Section 162(m) of the
Internal Revenue Code of 1986, and the rules of the New York
Stock Exchange; and
iv. During the Transition Period, Capstead shall have conducted
the business, operations, activities and practices of
Capstead and its Subsidiaries in accordance with Section 1
hereof (except actions taken outside such scope at the
request or with the approval of Fortress) and there shall
not have been a Material Adverse Change (other than a
Material Adverse Change directly resulting from any action
taken at the request or with the approval of Fortress).
"Material Adverse Change" means, with respect to Capstead,
any direct or indirect change, occurrence or effect (other
than as a result of changes in general conditions, including
economical or political developments, applicable to the
industry in which Capstead operates) on the business,
operations, properties (including tangible properties),
condition (financial or otherwise), assets, obligations or
liabilities (whether absolute, contingent or otherwise and
whether due or to become due) of Capstead and its
subsidiaries taken as a whole that reasonably could be
expected to be materially adverse to Capstead;
then Fortress shall have the right to cause Capstead to purchase from
Fortress all, but not less than all, of the Preferred Stock (the
"Fortress Put"), for a price equal to 103% of the Purchase Price plus
any and all accrued and unpaid dividends on the Preferred Stock (the
"Put/Call Payment").
b. Capstead Call. In the event that the Proposal is not
approved at the Special Meeting, then Capstead shall have the right to
cause Fortress to sell to Capstead all, but not less than all, of the
Preferred Stock (the "Capstead Call") for the Put/Call Payment.
c. The sale or purchase of Preferred Stock pursuant to this
Section 2 (the "Put/Call Closing") shall occur on such date as the
parties hereto may agree, which date shall be within one month after
delivery by the party exercising its rights under this Section 2 of
written notice to the other party hereto to the effect that it is
exercising its rights pursuant to this Section 2. Payment of the
Put/Call Payment shall be made by wire transfer in immediately
available funds unless some other form of consideration is agreed to
by the parties hereto. On or prior to the Put/Call Closing, Fortress
shall deliver to Capstead and Capstead shall deliver to Fortress all
documents reasonably required to be executed in connection with the
sale or purchase of Preferred Stock pursuant to this Section 2.
d. 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 later to occur of (i) the expiration of the
30 day period following the date of the Special Meeting and (ii) May
31, 2000.
3. Fortress Put Upon a Change in Control of Capstead.
a. At any time after the approval of the Proposal at the
Special Meeting and prior to the 5th anniversary of the date hereof,
in the event of a Change in Control of Capstead, Fortress shall have
the right to cause Capstead to purchase from Fortress all, but not
less than all, of the Preferred Stock then outstanding (the "Change in
Control Put") for the Purchase Price multiplied by a fraction, the
numerator of which shall be the number of shares of Preferred Stock
then outstanding and the denominator of which shall be 10,756,000,
plus any and all accrued and unpaid dividends on such Preferred Stock.
For purposes hereof, a "Change in Control" of Capstead shall be deemed
to have occurred upon any of the following events:
i. any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (other than Fortress and its
affiliates) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of Capstead representing 25 percent or more of
the voting power of Capstead's then outstanding securities;
ii. at any time subsequent to the date the Board is
reconstituted in accordance with the provisions of
subsection 2(a)(iii) hereof and during any period of two
consecutive years thereafter, individuals (a) who were
elected to the Board by a vote of at least two-thirds (2/3)
of the Board at the beginning of such period or (b) whose
nomination for election by Capstead's stockholders was
approved by a vote of at least two-thirds (2/3) of the Board
at the beginning of such period or (c) whose election or
nomination for election was previously so approved, cease
for any reason to constitute at least a majority of the
Board of Directors of Capstead; or
iii. Capstead shall be party to a merger, consolidation, share
exchange, tender offer or similar transaction or a purchase
or other acquisition of all or a significant portion of the
assets of Capstead (a "Business Combination"), except a
Business Combination approved by Wesley Edens and Robert
Kauffman or their Fortress-approved successors.
b. The purchase of Preferred Stock pursuant to this Section 3
shall occur on such date as the parties hereto may agree, which date
shall be within one month after delivery by Fortress of written notice
to Capstead to the effect that it is exercising its rights pursuant to
this Section 3. Payment shall be made to Fortress by wire transfer in
immediately available funds unless some other form of consideration is
agreed to by the parties hereto. On or prior to the purchase of
Preferred Stock pursuant to this Section 3, Fortress shall deliver to
Capstead and Capstead shall deliver to Fortress all documents
reasonably required to be executed in connection with the purchase of
Preferred Stock pursuant to this Section 3.
4. Services Agreement. If (i) the Proposal is approved at the
Special Meeting and the actions contemplated thereby are consummated, (ii)
the merger (the "Merger") of Impac Commercial Holdings, Inc., a Maryland
corporation, with and into AMRESCO Capital Trust, a Texas real estate
investment trust ("AMRESCO"), is consummated and (iii) Fortress has not
exercised either the Fortress Put or the Change in Control Put and Capstead
has not exercised the Capstead Call, then Fortress (or its designated
Affiliate), the surviving entity of the Merger and Capstead (or a
subsidiary thereof) shall promptly enter into a Services Agreement mutually
satisfactory to the parties thereto for the provision of services at fair
market prices by Capstead to the surviving entity of the Merger, including,
but not limited, to (a) office space in Capstead's existing offices at
Lincoln Park, 8401North Central Expressway, Dallas, Texas; (b) office
management, including payroll; (c) stockholder relations; (d) financial
reporting; (e) accounting and tax services; (f) mail room services; and (g)
receptionist services.
5. Employment Matters.
a. Subject to approval of the Proposal at the Special Meeting,
Capstead shall take all necessary action as soon as practicable
thereafter to:
i. Have an individual designated by Fortress appointed to the
position of Chief Investment Officer of Capstead;
ii. Have Andrew F. Jacobs appointed to the positions of
Executive Vice President and Chief Financial Officer of
Capstead; and
b. Subject to approval of the Proposal at the Special Meeting,
Capstead will take all necessary action to, and Fortress will not take
any action to prevent Capstead from taking any action to:
i. For at least three years after the date of the Special
Meeting, maintain all of Capstead's obligations,
arrangements, policies or practices to provide benefits,
including officer grade, salary, bonus and incentive
compensation, as compensation for services rendered by
employees of Capstead at levels that are no less favorable
than those in place as of the date hereof and set forth on a
side letter delivered to Fortress concurrently herewith,
provided, that this obligation shall cease to exist upon a
Change in Control of Capstead;
ii. For at least three years after the date of the Special
Meeting, provide coverage of medical, dental, life insurance
accidental death and disability insurance, long term
disability, Flexible Spending Account, 401k, deferred
compensation plan and travel accident insurance at levels
that are no less favorable than those in place as of the
date hereof and set forth on a side letter delivered to
Fortress concurrently herewith, provided, that this
obligation shall cease to exist upon a Change in Control of
Capstead.
6. Common Stock Acquisition. Subject to approval of the Proposal at
the Special Meeting, Fortress or its designated Affiliate will, within the
six-month period following the date of the Special Meeting, acquire no less
than five million shares of Common Stock through, at Fortress' option, (i)
open-market purchases, (ii) the conversion of Preferred Stock or (iii) any
combination thereof; provided, that purchases by Fortress and/or its
Affiliates of Common Stock from and after the date hereof and to and
including the date of the Special Meeting (which shall not exceed 3,300,000
shares) shall be considered as part of such five million shares of Common
Stock; and provided, further, that this Section 6 and Fortress' obligation
hereunder shall terminate and be of no further force and effect upon
exercise of the Fortress Put, Change in Control Put or Capstead Call.
7. Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and mailed
or facsimiled or delivered by hand or courier service:
If to Fortress, to: Fortress Investment Corp.
1301 Avenue of the Americas, 42nd Street
New York, New York 10019
Attn: Randal Nardone
Facsimile No. (212) 798-6120
With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: J. Gregory Milmoe, Esq.
Facsimile No. (212) 735-2000
If to Capstead, to: Capstead Mortgage Corporation
8401 North Central Expressway, Suite 800
Dallas, TX 75225-4410
Attn: Andrew F. Jacobs
Facsimile No. (214) 874-2398
With a copy to: Andrews & Kurth L.L.P.
1717 Main Street, Suite 3700
Dallas, Texas 75201
Attn: David Barbour
Facsimile No. (214) 659-4401
8. Entire Agreement. This Agreement (including the attachments
hereto) constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all other prior or contemporary
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
9. Termination. This Agreement will automatically terminate and be
of no further force and effect at such time that (i) Fortress has received
payment of the applicable payment pursuant to exercise of the Fortress
Put, Capstead Call or Change in Control Put or (ii) Fortress no longer
owns Preferred Stock or Common Stock acquired pursuant to the Preferred
Stock Purchase Agreement.
10. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
11. Assignment. This Agreement and the rights hereunder shall not be
assignable or transferable by either party (except (i) by Fortress to any
of its Affiliates and (ii) by operation of law in connection with a merger,
consolidation, or sale of all or substantially all the assets of either
party) without the prior written consent of the other party. This
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
12. Amendment and Modification. This Agreement may be amended,
modified, or supplemented at any time only by an instrument in writing
signed on behalf of the parties hereto.
13. Specific Performance. The parties hereto agree that if any of
the provisions of this Agreement were not performed in accordance with its
specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist, and damages would be difficult to
determine, and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or equity.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
15. Descriptive Headings. The descriptive 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.
16. Certain Definitions.
a. An "Affiliate" of any Person means another Person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first Person;
b. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
18. Third-Party Beneficiaries. Nothing contained in this Agreement
shall be construed to give any person other than Fortress and Capstead, and
their successors and assigns, any legal or equitable right, remedy, or
claim under or with respect to this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
CAPSTEAD MORTGAGE CORPORATION
By:________________________
Andrew F. Jacobs
Executive Vice President-Finance
FORTRESS INVESTMENT CORP.
By: _______________________
Randal A. Nardone
Chief Operating Officer
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 Wesley R. Edens, Robert I. Kauffman, Ronn K. Lytle, Paul M. Low,
two persons recommended to the nominating committee of the Board by Messrs.
Edens and Kauffman (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. Lytle and Low (who shall also be an
Independent Director). Messrs. Edens and Kauffman 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 Wesley R. Edens Chairman
of the Board and Chief Executive Officer and Ronn K. Lytle 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 Bevis Longstreth,
Harriet E. Miers, William R. Smith and John C.
Tolleson 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 Wesley Edens and Robert
Kauffman."
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/ Andrew F. Jacobs
-----------------------------
Andrew F. Jacobs
Executive Vice President- Finance
FORTRESS CAP LLC
By: /s/ Randal A. Nardone
------------------------------
Randal A. Nardone
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/ Randal A. Nardone
--------------------------
Secretary and Chief Operating
Officer
FORTRESS CAP LLC
By: /s/ Randal A. Nardone
---------------------------
Randal A. Nardone
as Secretary and Chief Operating Officer
of Fortress Investment Corp., sole member
of Fortress Cap LLC
EXHIBIT 5
JOINT FILING AGREEMENT
This JOINT FILING AGREEMENT, dated as of January 21,
2000, is made by and between Fortress Cap LLC, a Delaware limited liability
company ("Fortress Cap") Fortress Registered Investment Trust, a Delaware
business trust and the sole member of Fortress Cap LLC ("Fortress Trust"),
Fortress Investment Fund LLC, a Delaware limited liability company
("Fortress Fund") and Fortress Principal Investment Holdings LLC ("FPIH").
Fortress Cap, Fortress Trust and Fortress Fund are collectively referred to
herein as the "Parties" and each individually as a "Party." Pursuant to
Rule 13d- 1(k)(1)(iii) promulgated under the Securities Exchange Act of
1934, as amended, the Parties hereby acknowledge and agree that the
foregoing Amendment No.1 to Statement on Schedule 13D is filed on behalf of
each such Party and that all subsequent amendments to the Statement on
Schedule 13D shall be filed on behalf of each of the Parties without the
necessity of filing additional joint acquisition statements. The Parties
hereby acknowledge that each Party shall be responsible for timely filing
of such amendments, and for the completeness and accuracy of the
information concerning such Party contained therein, but shall not be
responsible for the completeness and accuracy of the information concerning
the other Party, except to the extent that such Party knows or has reason
to believe that such information is inaccurate.
IN WITNESS WHEREOF, the Parties hereto have executed this
Joint Filing Agreement as of the day and year first above written.
FORTRESS CAP LLC
By: /s/ Randal A. Nardone
--------------------------------------------------
Randal A. Nardone
as Secretary and Chief Operating Officer
of Fortress Registered Investment Trust,
sole member of Fortress Cap LLC
FORTRESS REGISTERED
INVESTMENT TRUST
By: /s/ Randal A. Nardone
---------------------------------------------
Randal A. Nardone
as Secretary and Chief Operating Officer
FORTRESS INVESTMENT FUND LLC
By: /s/ Randal A. Nardone
---------------------------------------------
Randal A. Nardone
as Secretary and Chief Operating Officer of
Fortress Fund MM, LLC, managing member
of Fortress Investment Fund, LLC
FORTRESS PRINCIPAL INVESTMENT HOLDINGS LLC
By: /s/ Randal A. Nardone
--------------------------------------------
Randal A. Nardone
as Secretary
