EXHIBIT 3.2
NEWCASTLE INVESTMENT CORP.
8.05% Series C Cumulative Redeemable Preferred Stock
Liquidation Preference $25.00 Per Share
TERMS AGREEMENT
Dated: October 20, 2005
To: Newcastle Investment Corp.
1251 Avenue of the Americas
New York, New York 10020
Attention: Wesley R. Edens
Ladies and Gentlemen:
We understand that Newcastle Investment Corp., a corporation organized
and existing under the laws of Maryland (the "Company"), proposes to issue and
sell 1,600,000 shares of its 8.05% Series C Cumulative Redeemable Preferred
Stock, liquidation preference $25.00 per share, set forth below (the
"Underwritten Securities"). Subject to the terms and conditions set forth or
incorporated by reference herein, the underwriters named below (the
"Underwriters") offer to purchase, severally and not jointly, the respective
numbers of Initial Underwritten Securities and Option Securities, if any (as
such terms are defined in the Underwriting Agreement referred to below), set
forth below opposite their respective names, at the purchase price set forth
below.
NUMBER
OF SHARES OF
INITIAL UNDERWRITTEN
UNDERWRITERS SECURITIES
------------ --------------------
Bear, Stearns & Co. Inc. 1,280,000
Stifel, Nicolaus & Company, Incorporated 320,000
--------------------
Total.................................................... 1,600,000
====================
The Underwritten Securities shall have the following terms:
Title of Securities: 8.05% Series C Cumulative Redeemable Preferred Stock
Number of Shares: 1,600,000
Dividend Rate: 8.05% per annum; however, during any period of time that both (i)
the Series C Preferred Stock is not listed on the New York Stock Exchange (NYSE)
or the American Stock Exchange (AMEX), or quoted on the NASDAQ Stock Market
(NASDAQ), and (ii) the Company is not subject to the reporting requirements of
the 1934 Act, but shares of Series C Preferred Stock are outstanding, the
Company will increase the cumulative cash distributions payable on the Series C
Preferred Stock to a rate of 9.05% per annum.
Payable: Quarterly in arrears on January 31, April 30, July 31 and October 31 of
each year or, if not a business day, the next succeeding business day,
commencing January 31, 2006
Stated Value: $40,000,000
Liquidation Preference: $25.00 per share
Ranking: The Series C Preferred Stock will rank (i) senior to all classes or
series of the Company's common stock and all equity securities the
terms of which specifically provide that such equity securities rank
junior to the Series C Preferred Stock, (ii) pari passu with the
Company's Series B Preferred Stock and all other equity securities
issued by the Company other than those referred to in clauses (i) and
(iii), and (iii) junior to all equity securities issued by the
Company the terms of which provide that such equity securities rank
senior to such Series C Preferred Stock.
Public offering price per share: $25.00
Purchase price per share: $24.2125
Conversion provisions: None
Redemption provisions: The Series C Preferred Stock are not redeemable prior
to October 25, 2010, except as set forth under
"Special redemption provisions" below and in limited
circumstances to preserve the Company's REIT status.
On or after October 25, 2010, the Series C Preferred
Stock will be redeemable, in whole or in part, for
cash at the option of the Company at $25.00 per share,
plus accumulated and unpaid distributions, if any, to
the redemption date.
Special redemption provisions: If at any time both (i) the Series C Preferred
Stock ceases to be listed on the NYSE or the
AMEX, or quoted on the NASDAQ, and (ii) the
Company ceases to be subject to the reporting
requirements of the 1934 Act, but shares of
Series C Preferred Stock are outstanding, the
Company will have the option to redeem the
Series C Preferred Stock, in whole but not in
part, within 90 days of the date upon which the
Series C Preferred Stock ceases to be listed and
the Company ceases to be subject to such
reporting requirements, for cash at $25.00 per
share, plus accumulated and unpaid
distributions, if any, to the redemption date.
Sinking fund requirements: None
Number of Option Securities, if any, that may be purchased by the Underwriters: 160,000
Purchase price of Option Securities: $24.2125
Delayed Delivery Contracts: not authorized
Book-running manager: Bear, Stearns & Co. Inc.
Additional co-managers, if any: Stifel, Nicolaus & Company, Incorporated
Terms of Lock-up: None.
Information Rights: During any period in which the Company is not
subject to the reporting requirements of the 1934 Act but
shares of Series C Preferred Stock are outstanding, the
Company will mail to all holders of Series C Preferred
Stock copies of the annual reports and quarterly reports
that the Company would have been required to file with the
Commission if the Company were so subject (other than any
exhibits that would have been required). The Company will
mail within 15 days after the respective dates by which
the Company would have been required to file the reports
with the Commission if the Company was subject to the
reporting requirements of the 1934 Act. In addition,
during the same period, the Company will, promptly upon
request, supply copies of such reports to any prospective
holder of Series C Preferred Stock.
Closing date and location: October 25, 2005, at the offices
of Sidley Austin Brown & Wood LLP, 787 Seventh
Avenue, New York, New York 10019.
2
All of the provisions contained in the Underwriting Agreement attached as Annex
A hereto are hereby incorporated by reference in their entirety herein and shall
be deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document are
used herein as therein defined.
3
Please accept this offer no later than 7:00 P.M. (New York City time)
on October 20, 2005 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
Bear, Stearns & Co. Inc.
By:
---------------------------
Name:
Title:
Accepted:
NEWCASTLE INVESTMENT CORP.
By:
-----------------------
Name:
Title:
FORTRESS INVESTMENT GROUP LLC
By:
----------------------
Name:
Title:
4