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                                                                    Exhibit 10.1


                              AMENDED AND RESTATED
                        MANAGEMENT AND ADVISORY AGREEMENT

         THIS AMENDED AND RESTATED MANAGEMENT AND ADVISORY AGREEMENT, is made as
of January __, 2002 (the "Agreement") by and among NEWCASTLE INVESTMENT CORP., a
Maryland corporation formerly known as Fortress Investment Corp. (the
"Company"), FORTRESS PARTNERS, L.P., a Delaware limited partnership ("Fortress
Partners") and FORTRESS INVESTMENT GROUP LLC, a Delaware limited liability
company (together with its permitted assignees, the "Manager").

                              W I T N E S S E T H :

                  WHEREAS, the Company, Fortress Partners, and the Manager
entered into that certain Management and Advisory Agreement, dated as of June
10, 1998, and that certain First Amendment to Management and Advisory Agreement,
dated as of November 23, 1999 (collectively, the "Original Management
Agreement"); and

                  WHEREAS, the Company, Fortress Partners and the Manager desire
to amend and restate the Original Management Agreement in its entirety on the
terms and conditions hereinafter set forth.

                  NOW THEREFORE, in consideration of the mutual agreements
herein set forth, the parties hereto agree as follows:

                  I. The Original Management Agreement is hereby modified so
that all of the terms and conditions of the aforesaid Original Management
Agreement shall be restated in their entirety as set forth herein.

                  II. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, and
shall be deemed to be effective as of the date hereof.

                  III. Any reference in any other document executed in
connection with the Original Management Agreement or this Agreement to the
Original Management Agreement shall be deemed to refer to this Agreement.
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         SECTION 1. DEFINITIONS. The following terms have the meanings assigned
them:

                  (1) "Agreement" means this Management and Advisory Agreement,
as amended from time to time.

                  (2) "Board of Directors" means the Board of Directors of the
Company.

                  (3) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (4) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                  (5) "Fund" means Fortress Investment Fund LLC, a real estate
private equity fund sponsored by the Company and formed as a Delaware limited
liability company in November 1999.

                  (6) "Governing Instruments" means, with regard to any entity,
the articles of incorporation and bylaws in the case of a corporation,
certificate of limited partnership (if applicable) and the partnership agreement
in the case of a general or limited partnership or the articles of formation and
the operating agreement in the case of a limited liability company.

                  (7) "Independent Directors" means the members of the Board of
Directors who are not officers or employees of the Manager.

                  (8) "Investments" means the investments of the Company.

                  (9) "Partnership Agreement" means the Agreement of Limited
Partnership of the Fortress Partners, dated as of June 10, 1998, as amended from
time to time.

                  (10) "Prospectus" means the prospectus of the Company relating
to the Company's initial public offering of common stock.

                  (11) "real estate securities" and "credit sensitive real
estate-related securities" have the respective meanings ascribed to such terms
in the Prospectus.


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                  (12) "Special Limited Partner" has the meaning ascribed
thereto in the Partnership Agreement.

                  (13) "Subsidiary" means any subsidiary of the Company and any
partnership, the general partner of which is the Company or any subsidiary of
the Company and any limited liability company, the managing member of which is
the Company or any subsidiary of the Company.

         SECTION 2.  APPOINTMENT AND DUTIES OF THE MANAGER.

                  (14) The Company hereby appoints the Manager to manage the
assets of the Company subject to the further terms and conditions set forth in
this Agreement and the Manager hereby agrees to use its commercially reasonable
efforts to perform each of the duties set forth herein. The appointment of the
Manager shall be exclusive to the Manager except to the extent that the Manager
otherwise agrees, in its sole and absolute discretion, and except to the extent
that the Manager elects, pursuant to the terms of this Agreement, to cause the
duties of the Manager hereunder to be provided by third parties.

                  (15) The Manager, in its capacity as manager of the assets and
the day-to-day operations of the Company, at all times will be subject to the
supervision of the Company's Board of Directors and will have only such
functions and authority as the Company may delegate to it including, without
limitation, the functions and authority identified herein and delegated to the
Manager hereby. The Manager will be responsible for the day-to-day operations of
the Company and will perform (or cause to be performed) such services and
activities relating to the assets and operations of the Company as may be
appropriate, including, without limitation:

                           (1) serving as the Company's consultant with respect
         to the periodic review of the investment criteria and parameters for
         Investments, borrowings and operations, any modifications to which
         shall be approved by a majority of the independent members of the Board
         of Directors (such policy guidelines as are in effect on the date
         hereof, as the same may be modified with such approval, the
         "Guidelines") and other policies for approval by the Board of
         Directors;

                           (2) investigation, analysis and selection of
         investment opportunities;


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                           (3) with respect to prospective investments by the
         Company and dispositions of Investments, conducting negotiations with
         real estate brokers, sellers and purchasers and their respective agents
         and representatives, investment bankers and owners of privately and
         publicly held real estate companies;

                           (4) engaging and supervising, on behalf of the
         Company and at the Company's expense, independent contractors which
         provide real estate brokerage, investment banking and leasing services,
         mortgage brokerage, securities brokerage and other financial services
         and such other services as may be required relating to the Investments;

                           (5) negotiating on behalf of the Company for the
         sale, exchange or other disposition of any Investments;

                           (6) coordinating and managing operations of any joint
         venture or co-investment interests held by the Company and conducting
         all matters with the joint venture or co-investment partners;

                           (7) coordinating and supervising, on behalf of the
         Company and at the Company's expense, all property managers, leasing
         agents and developers for the administration, leasing, management
         and/or development of any of the Investments;

                           (8) providing executive and administrative personnel,
         office space and office services required in rendering services to the
         Company;

                           (9) administering the day-to-day operations of the
         Company and performing and supervising the performance of such other
         administrative functions necessary in the management of the Company as
         may be agreed upon by the Manager and the Board of Directors,
         including, without limitation, the collection of revenues and the
         payment of the Company's debts and obligations and maintenance of
         appropriate computer services to perform such administrative functions;


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                           (10) communicating on behalf of the Company with the
         holders of any equity or debt securities of the Company as required to
         satisfy the reporting and other requirements of any governmental bodies
         or agencies or trading markets and to maintain effective relations with
         such holders;

                           (11) counseling the Company in connection with policy
         decisions to be made by the Board of Directors;

                           (12) evaluating and recommending to the Board of
         Directors modifications to the hedging strategies in effect on the date
         hereof and engaging in hedging activities on behalf of the Company,
         consistent with such strategies, as so modified from time to time, with
         the Company's status as a real estate investment trust, and with the
         Guidelines;

                           (13) counseling the Company regarding the maintenance
         of its status as a real estate investment trust and monitoring
         compliance with the various real estate investment trust qualification
         tests and other rules set out in the Code and Treasury Regulations
         thereunder;

                           (14) counseling the Company regarding the maintenance
         of its exemption from the Investment Company Act and monitoring
         compliance with the requirements for maintaining an exemption from that
         Act;

                           (15) assisting the Company in developing criteria for
         asset purchase commitments that are specifically tailored to the
         Company's investment objectives and making available to the Company its
         knowledge and experience with respect to mortgage loans, real estate,
         real estate securities and other real estate-related assets;

                           (16) representing and making recommendations to the
         Company in connection with the purchase and finance, and commitment to
         purchase and finance, of mortgage loans (including on a portfolio
         basis), real estate, real estate securities and


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         other real estate-related assets, and in connection with the sale and
         commitment to sell such assets;

                           (17) monitoring the operating performance of the
         Investments and providing periodic reports with respect thereto to the
         Board of Directors, including comparative information with respect to
         such operating and performance and budgeted or projected operating
         results;

                           (18) investing and re-investing any moneys and
         securities of the Company (including investing in short-term
         Investments pending investment in Investments, payment of fees, costs
         and expenses, or payments of dividends or distributions to stockholders
         and partners of the Company) and advising the Company as to its capital
         structure and capital raising;

                           (19) causing the Company to retain qualified
         accountants and legal counsel, as applicable, to assist in developing
         appropriate accounting procedures, compliance procedures and testing
         systems with respect to financial reporting obligations and compliance
         with the provisions of the Code applicable to real estate investment
         trusts and to conduct quarterly compliance reviews with respect
         thereto;

                           (20) causing the Company to qualify to do business in
         all applicable jurisdictions and to obtain and maintain all appropriate
         licenses;

                           (21) assisting the Company in complying with all
         regulatory requirements applicable to the Company in respect of its
         business activities, including preparing or causing to be prepared all
         financial statements required under applicable regulations and
         contractual undertakings and all reports and documents required under
         the Exchange Act;

                           (22) taking all necessary actions to enable the
         Company to make required tax filings and reports, including soliciting
         stockholders for required information to the extent provided by the
         provisions of the Code applicable to real estate investment trusts;


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                           (23) handling and resolving all claims, disputes or
         controversies (including all litigation, arbitration, settlement or
         other proceedings or negotiations) in which the Company may be involved
         or to which the Company may be subject arising out of the Company's
         day-to-day operations, subject to such limitations or parameters as may
         be imposed from time to time by the Board of Directors;

                           (24) using commercially reasonable efforts to cause
         expenses incurred by or on behalf of the Company to be reasonable or
         customary and within any budgeted parameters or expense guidelines set
         by the Board of Directors from time to time;

                           (25) performing such other services as may be
         required from time to time for management and other activities relating
         to the assets of the Company as the Board of Directors shall reasonably
         request or the Manager shall deem appropriate under the particular
         circumstances; and

                           (26) using commercially reasonable efforts to cause
         the Company to comply with all applicable laws.

Without limiting the foregoing, the Manager will perform portfolio management
services (the "Portfolio Management Services") on behalf of the Company with
respect to the Investments. Such services will include, but not be limited to,
consulting with the Company on the purchase and sale of, and other investment
opportunities in connection with, the Company's portfolio of assets; the
collection of information and the submission of reports pertaining to the
Company's assets, interest rates and general economic conditions; periodic
review and evaluation of the performance of the Company's portfolio of assets;
acting as liaison between the Company and banking, mortgage banking, investment
banking and other parties with respect to the purchase, financing and
disposition of assets; and other customary functions related to portfolio
management. Additionally, the Manager will perform monitoring services (the
"Monitoring Services") on behalf of the Company with respect to any loan
servicing activities provided by third parties. Such Monitoring Services will
include, but not be limited to, negotiating servicing agreements; acting as a
liaison between the servicers of the assets and the Company; review of
servicers' delinquency, foreclosure and other reports on assets; supervising
claims filed under any insurance policies; and enforcing the obligation of any
servicer to repurchase assets.


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                  (16) The Manager may enter into agreements with other parties,
including its affiliates, for the purpose of engaging one or more property
and/or asset managers for and on behalf, and at the sole cost and expense, of
the Company to provide property management, asset management, leasing,
development and/or similar services to the Company (including, without
limitation, Portfolio Management Services and Monitoring Services) with respect
to the Investments, pursuant to property management agreement(s) and/or asset
management agreement(s) with terms which are then customary for agreements
regarding the management of assets similar in type, quality and value to the
assets of the Company; provided, that (i) any such agreements entered into with
affiliates of the Manager shall be (A) on terms no more favorable to such
affiliate then would be obtained from a third party on an arms'-length basis and
(B) to the extent the same do not fall within the provisions of the Guidelines,
approved by a majority of the independent members of the Board of Directors,
(ii) with respect to Portfolio Management Services, (A) any such agreements
shall be subject to the Company's prior written approval and (B) the Manager
shall remain liable for the performance of such Portfolio Management Services,
and (iii) with respect to Monitoring Services, any such agreements shall be
subject to the Company's prior written approval.

                  (17) The Manager may retain, for and on behalf, and at the
sole cost and expense, of the Company, such services of accountants, legal
counsel, appraisers, insurers, brokers, transfer agents, registrars, developers,
investment banks, financial advisors, banks and other lenders and others as the
Manager deems necessary or advisable in connection with the management and
operations of the Company. Notwithstanding anything contained herein to the
contrary, the Manager shall have the right to cause any such services to be
rendered by its employees or affiliates. The Company shall pay or reimburse the
Manager or its affiliates performing such services for the cost thereof;
provided, that such costs and reimbursements are no greater than those which
would be payable to outside professionals or consultants engaged to perform such
services pursuant to agreements negotiated on an arm's-length basis; and
provided, further, that such costs shall not be reimbursed in excess of $500,000
per annum.

                  (18) As frequently as the Manager may deem necessary or
advisable, or at the direction of the Board of Directors, the Manager shall, at
the sole cost and expense of the Company, prepare, or cause to be prepared, with
respect to any Investment (i) an appraisal prepared by an independent real
estate appraiser, (ii) reports and information on the Company's operations and
asset performance and (iii) other information reasonably requested by the
Company.


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                  (19) The Manager shall prepare, or cause to be prepared, at
the sole cost and expense of the Company, all reports, financial or otherwise,
with respect to the Company reasonably required by the Board of Directors in
order for the Company to comply with its Governing Instruments or any other
materials required to be filed with any governmental body or agency, and shall
prepare, or cause to be prepared, all materials and data necessary to complete
such reports and other materials including, without limitation, an annual audit
of the Company's books of account by a nationally recognized independent
accounting firm.

                  (20) The Manager shall prepare regular reports for the Board
of Directors to enable the Board of Directors to review the Company's
acquisitions, portfolio composition and characteristics, credit quality,
performance and compliance with the Guidelines and policies approved by the
Board of Directors.

                  (21) Notwithstanding anything contained in this Agreement to
the contrary, except to the extent that the payment of additional moneys is
proven by the Company to have been required as a direct result of the Manager's
acts or omissions which result in the right of the Company to terminate this
Agreement pursuant to Section 15 of this Agreement, the Manager shall not be
required to expend money ("Excess Funds") in excess of that contained in any
applicable Company Account (as herein defined) or otherwise made available by
the Company to be expended by the Manager hereunder. Failure of the Manager to
expend Excess Funds out-of-pocket shall not give rise or be a contributing
factor to the right of the Company under Section 13(a) of this Agreement to
terminate this Agreement due to the Manager's unsatisfactory performance.

                  (22) In performing its duties under this Section 2, the
Manager shall be entitled to rely reasonably on qualified experts hired by the
Manager.

         SECTION 3.  DEVOTION OF TIME; ADDITIONAL ACTIVITIES.

                  (23) The Manager will provide a dedicated management team,
including a President, a Chief Financial Officer and a Chief Operating Officer
of the Company, to provide the management services to be provided by the Manager
to the Company hereunder, the members of which team shall have as their primary
responsibility the management of the Company and shall devote such of their time
to the management of the Company as the Board of Directors reasonably deems
necessary and appropriate, commensurate with the level of activity of the
Company from time to time.


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                  (24) The Manager hereby agrees that neither the Manager nor
any entity controlled by or under common control with the Manager shall raise or
sponsor any new investment fund, company or vehicle whose investment policies,
guidelines or plan targets as its primary investment category investment in
credit sensitive real estate-related securities; it being understood that no
such fund, company or vehicle shall be prohibited from investing in credit
sensitive real estate-related securities. The Company shall have the benefit of
Manager's best judgement and effort in rendering services and, in furtherance of
the foregoing, the Manager shall not undertake activities which, in its
judgement, will substantially adversely affect the performance of its
obligations under this Agreement.

                  (25) Except to the extent set forth in clauses (a) and (b)
above, nothing herein shall prevent the Manager or any of its affiliates or any
of the officers and employees of any of the foregoing from engaging in other
businesses or from rendering services of any kind to any other person or entity,
including investment in, or advisory service to others investing in, any type of
real estate or real estate-related investment, including investments which meet
the principal investment objectives of the Company.

                  (26) Managers, members, partners, officers, employees and
agents of the Manager or affiliates of the Manager may serve as directors,
officers, employees, agents, nominees or signatories for the Company or any
Subsidiary, to the extent permitted by their Governing Instruments, as from time
to time amended, or by any resolutions duly adopted by the Board of Directors
pursuant to the Company's Governing Instruments. When executing documents or
otherwise acting in such capacities for the Company, such persons shall use
their respective titles in the Company.

         SECTION 4. AGENCY. The Manager shall act as agent of the Company in
making, acquiring, financing and disposing of Investments, disbursing and
collecting the Company's funds, paying the debts and fulfilling the obligations
of the Company, supervising the performance of professionals engaged by or on
behalf of the Company and handling, prosecuting and settling any claims of or
against the Company, the Board of Directors, holders of the Company's securities
or the Company's representatives or properties.

         SECTION 5. BANK ACCOUNTS. At the direction of the Board of Directors,
the Manager may establish and maintain one or more bank accounts in the name of


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the Company or any Subsidiary (any such account, a "Company Account"), and may
collect and deposit funds into any such Company Account or Company Accounts, and
disburse funds from any such Company Account or Company Accounts, under such
terms and conditions as the Board of Directors may approve; and the Manager
shall from time to time render appropriate accountings of such collections and
payments to the Board of Directors and, upon request, to the auditors of the
Company or any Subsidiary.

         SECTION 6. RECORDS; CONFIDENTIALITY. The Manager shall maintain
appropriate books of accounts and records relating to services performed under
this Agreement, and such books of account and records shall be accessible for
inspection by representatives of the Company or any Subsidiary at any time
during normal business hours upon one (1) business day's advance written notice.
The Manager shall keep confidential any and all information obtained in
connection with the services rendered under this Agreement and shall not
disclose any such information to nonaffiliated third parties except with the
prior written consent of the Board of Directors.

         SECTION 7. OBLIGATIONS OF MANAGER; RESTRICTIONS.

                  (27) The Manager shall require each seller or transferor of
investment assets to the Company to make such representations and warranties
regarding such assets as may, in the judgment of the Manager, be necessary and
appropriate. In addition, the Manager shall take such other action as it deems
necessary or appropriate with regard to the protection of the Investments.

                  (28) The Manager shall refrain from any action that, in its
sole judgment made in good faith, (i) is not in compliance with the Guidelines
or (ii) would adversely affect the status of the Company as a real estate
investment trust under the Code or that, in its sole judgment made in good
faith, would violate any law, rule or regulation of any governmental body or
agency having jurisdiction over the Company or any Subsidiary or that would
otherwise not be permitted by such entity's Governing Instruments. If the
Manager is ordered to take any such action by the Board of Directors, the
Manager shall promptly notify the Board of Directors of the Manager's judgment
that such action would adversely affect such status or violate any such law,
rule or regulation or the Governing Instruments. Notwithstanding the foregoing,
the Manager, its directors, officers, stockholders and employees shall not be
liable to the Company or any Subsidiary, the Board of Directors, or the
Company's or any Subsidiary's stockholders or partners for any act or omission
by the Manager,


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its directors, officers, stockholders or employees except as provided in Section
11 of this Agreement.

                  (29) The Manager shall not consummate any transaction which
would involve the acquisition by the Company of property in which the Manager or
any affiliate thereof has an ownership interest or the sale by the Company of
property to the Manager or any affiliate thereof, unless such transaction is
approved by a majority of the Independent Directors.

                  (30) The Company shall not invest in joint ventures with the
Manager or any affiliate thereof, unless (i) such Investment is made in
accordance with the Guidelines and (ii) such Investment is approved in advance
by a majority of the Independent Directors.

                  (31) The Board of Directors periodically reviews the
Guidelines and the Company's portfolio of Investments. If a majority of the
Independent Directors determine in their periodic review of transactions that a
particular transaction does not comply with the Guidelines, then a majority of
the Independent Directors will consider what corrective action, if any, can be
taken. If the transaction involved the acquisition of an asset from the Manager
or an affiliate of the Manager that was not approved in advance by a majority of
the Independent Directors, then the Manager may be required to repurchase the
asset at the purchase price (plus closing costs) to the Company.

                  (32) The Manager shall at all times during the term of this
Agreement (including the Initial Term and any renewal term) maintain a tangible
net worth equal to or greater than $1,000,000. Additionally, during such period
the Manager shall maintain "errors and omissions" insurance coverage and other
insurance coverage which is customarily carried by property and asset and
investment managers performing functions similar to those of the Manager under
this Agreement with respect to assets similar to the assets of the Company, in
an amount which is comparable to that customarily maintained by other managers
or servicers of similar assets.


         SECTION 8.  COMPENSATION.

                  (33) During the term of this Agreement, as the same may be
extended from time to time, the Manager will receive an annual management fee
(the "Management Fee") equal to 1.50% of the Company's "Gross Equity." Subject
to


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Section 8(d), the Management Fee shall be calculated and paid monthly in arrears
based upon the weighted daily average of the Gross Equity of the Company for
such month. The term "Gross Equity" for any period means (A) the sum of (i) the
"Total Equity," plus (ii) the value of contributions made by partners other than
the Company, from time to time, to the capital of any Subsidiary (reduced
proportionately in the case of a Subsidiary to the extent that Fortress Partners
owns, directly or indirectly, less than 100% of the equity interests in such
Subsidiary), less (B) any capital dividends or capital distributions made by the
Company to its stockholders or, without duplication, by any Subsidiary to its
stockholders, partners or other equity holders. As used herein, the term "Total
Equity" shall mean the total net proceeds to the Company from any common equity
capital heretofore or hereafter raised by the Company or any Subsidiary of the
Company (exclusive, with respect to any Subsidiary, of capital of such
Subsidiary consisting of a capital contribution or other form of capital
investment made by the Company or another Subsidiary of the Company). In
furtherance and not in limitation of the foregoing, the "anti-double counting"
provision contained in the parenthetical in the immediately foregoing sentence
shall be specifically applicable to the Investment in the Fund, implemented
through appropriate charges and credits.

                  (34) The Manager shall compute each installment of the
Management Fee within 15 days after the end of the calendar month with respect
to which such installment is payable. A copy of the computations made by the
Manager to calculate such installment shall thereafter, for informational
purposes only and subject in any event to Section 13(a) of this Agreement,
promptly be delivered to the Board of Directors and, upon such delivery, payment
of such installment of the Management Fee shown therein shall be due and payable
no later than the earlier to occur of (i) the date which is 20 days after the
end of the calendar month with respect to which such installment is payable and
(ii) the date which is two (2) business days after the date of delivery to the
Board of Directors of such computations.

                  (35) The Management Fee is subject to adjustment pursuant to
and in accordance with the provisions of Section 13(a) of this Agreement.

                  (36) The Manager agrees that, effective as of January 1, 2002,
the Preferred Incentive Return (as hereinafter defined) shall be paid on an
annual basis and otherwise in accordance with the provisions of Section 5.7 of
the Partnership Agreement, it being understood for such purposes that references
in said section to periods of fiscal quarters shall be deemed to be references
to periods of fiscal years.


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                  (37) The Board of Directors may, by written notice to the
Special Limited Partner delivered ten (10) days prior to the date on which any
payment of the Preferred Incentive Return is payable, request that the Special
Limited Partner accept all or a portion of such payment in the form of issued
shares of common stock in Newcastle Investment Corp., which notice shall specify
the amount of the payment of the Preferred Incentive Return, the amount thereof
which the Company intends to pay in cash, if any, and the amount thereof which
the Company intends to pay in the form of such shares of common stock of
Newcastle Investment Corp. in the number of such shares as determined by the
Board of Directors. Within five (5) days following receipt of said notice, the
Special Limited Partner shall notify the Company in writing, such election to be
made by the Special Limited Partner in its sole discretion, whether it will
accept such portion of such payment in the form of such shares and in such
number of such shares.

         SECTION 9. EXPENSES OF THE COMPANY. The Company shall pay all of its
expenses and shall reimburse the Manager for documented expenses of the Manager
incurred on its behalf (collectively, the "Expenses"). Expenses include all
costs and expenses which are expressly designated elsewhere in this Agreement as
the Company's, together with the following:

                  (38) expenses in connection with the issuance and transaction
costs incident to the acquisitions, disposition and financing of Investments;

                  (39) travel and other out-of-pocket expenses incurred by
managers, officers, employees and agents of the Manager in connection with the
purchase, financing, refinancing, sale or other disposition of an Investment;

                  (40) costs of legal, accounting, tax, auditing, administrative
and other similar services rendered for the Company by providers retained by the
Manager or, if provided by the Manager's employees, in amounts which are no
greater than those which would be payable to outside professionals or
consultants engaged to perform such services pursuant to agreements negotiated
on an arm's-length basis;

                  (41) the compensation and expenses of the Independent
Directors and the cost of liability insurance to indemnify the Company's
directors and officers;

                  (42) compensation and expenses of the Company's custodian and
transfer agent, if any;


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                  (43) costs associated with the establishment and maintenance
of any credit facilities and other indebtedness of the Company (including
commitment fees, legal fees, closing and other costs) or any securities
offerings of the Company;

                  (44) costs associated with any computer software or hardware
that is used solely for the Company;

                  (45) costs and expenses incurred in contracting with third
parties, including affiliates of the Manager, for the servicing and special
servicing of assets of the Company;

                  (46) all other costs and expenses relating to the Company's
business and investment operations, including, without limitation, the costs and
expenses of acquiring, owning, protecting, maintaining, developing and disposing
of Investments, including appraisal, reporting, audit and legal fees;

                  (47) all insurance costs incurred in connection with the
operation of the Company's business except for the costs attributable to the
insurance that the Manager elects to carry for itself and its employees;

                  (48) expenses relating to any office or office facilities
maintained for the Company or Investments separate from the office or offices of
the Manager;

                  (49) expenses connected with the payments of interest,
dividends or distributions in cash or any other form made or caused to be made
by the Board of Directors to or on account of the holders of securities of the
Company or its Subsidiaries, including, without limitation, in connection with
any dividend reinvestment plan;

                  (50) expenses connected with communications to holders of
securities of the Company or its Subsidiaries and other bookkeeping and clerical
work necessary in maintaining relations with holders of such securities and in
complying with the continuous reporting and other requirements of governmental
bodies or agencies, including, without limitation, all costs of preparing and
filing required reports with the Securities and Exchange Commission, the costs
payable by the Company to any transfer agent and registrar in connection with
the listing and/or trading of the Company's stock on any exchange, the fees
payable by the Company to


                                       15
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any such exchange in connection with its listing, costs of preparing, printing
and mailing the Company's annual report to its shareholders and proxy materials
with respect to any meeting of the shareholders of the Company; and

                  (51) all other expenses actually incurred by the Manager which
are reasonably necessary for the performance by the Manager of its duties and
functions under this Agreement.

         Without regard to the amount of compensation received under this
Agreement by the Manager, the Manager shall bear the following expenses: (i)
wages and salaries of the Manager's officers and employees; (ii) rent
attributable to the space occupied by the Manager; and (iii) all other
"overhead" expenses of the Manager.

         SECTION 10. CALCULATIONS OF EXPENSES. The Manager shall prepare a
statement documenting the Expenses of the Company and the Expenses incurred by
the Manager on behalf of the Company during each calendar month, and shall
deliver such statement to the Company within 20 days after the end of each
calendar month. Expenses incurred by the Manager on behalf of the Company shall
be reimbursed monthly to the Manager on the first business day of the month
immediately following the date of delivery of such statement.

         SECTION 11. LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION. (a) The
Manager assumes no responsibility under this Agreement other than to render the
services called for under this Agreement in good faith and shall not be
responsible for any action of the Board of Directors in following or declining
to follow any advice or recommendations of the Manager, including as set forth
in Section 7(b) of this Agreement. The Manager, its members, managers, officers
and employees will not be liable to the Company or any Subsidiary, to the Board
of Directors, or the Company's or any Subsidiary's stockholders or partners for
any acts or omissions by the Manager, its members, managers, officers or
employees, pursuant to or in accordance with this Agreement, except by reason of
acts constituting bad faith, willful misconduct, gross negligence or reckless
disregard of the Manager's duties under this Agreement. The Company shall, to
the full extent lawful, reimburse, indemnify and hold the Manager, its members,
managers, officers and employees and each other Person, if any, controlling the
Manager (each, an "Indemnified Party"), harmless of and from any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever (including attorneys' fees) in respect of or arising from any
acts or omissions of such Indemnified Party made in good faith in the
performance of the Manager's duties under this Agreement and not constituting


                                       16
<PAGE>
such Indemnified Party's bad faith, willful misconduct, gross negligence or
reckless disregard of the Manager's duties under this Agreement.

                  (b) The Manager shall, to the full extent lawful, reimburse,
indemnify and hold the Company, its shareholders, directors, officers and
employees and each other Person, if any, controlling the Company (each, a
"Company Indemnified Party"), harmless of and from any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever
(including attorneys' fees) in respect of or arising from the Manager's bad
faith, willful misconduct, gross negligence or reckless disregard of its duties
under this Agreement.

         SECTION 12. NO JOINT VENTURE. Nothing in this Agreement shall be
construed to make the Company and the Manager partners or joint venturers or
impose any liability as such on either of them.

         SECTION 13. TERM; TERMINATION.

                  (52) Until this Agreement is terminated in accordance with its
terms, this Agreement shall be in effect until the date that is one (1) year
after the date hereof, and thereafter on each anniversary of such date deemed
renewed automatically each year for an additional one-year period unless (i) a
majority consisting of at least two-thirds of the Independent Directors or a
simple majority of the holders of outstanding shares of Common Stock of the
Company, agree that there has been unsatisfactory performance that is materially
detrimental to the Company or (ii) a simple majority of the Independent
Directors agree that the Management Fee payable to the Manager is unfair;
provided, that the Company shall not have the right to terminate this Agreement
under clause (ii) foregoing if the Manager agrees to continue to provide the
services under this Agreement at a fee that the Independent Directors have
determined to be fair. If the Company elects not to renew this Agreement at the
expiration of any such one-year (or partial-year term in the case of the initial
term hereof) term as set forth above, the Company shall deliver to the Manager
prior written notice (the "Termination Notice") of the Company's intention not
to renew this Agreement based upon the terms set forth in this Section 13(a) of
this Agreement not less than 60 days prior to the expiration of the then
existing term. If the Company so elects not to renew this Agreement, the Company
shall designate the date (the "Effective Termination Date"), not less than 60
days from the date of the notice, on which the Manager shall cease to provide
services under this Agreement and this Agreement shall terminate on such date;
provided, however, that in the event that such Termination Notice is given in
connection with a determination that the compensation payable to the Manager is
unfair, the Manager shall have the right to


                                       17
<PAGE>
renegotiate the Management Fee by delivering to the Company, no fewer than
forty-five (45) days prior to the prospective Effective Termination Date,
written notice (any such notice, a "Notice of Proposal to Negotiate") of its
intention to renegotiate its compensation under this Agreement. Thereupon, the
Company and the Manager shall endeavor to negotiate in good faith the revised
compensation payable to the Manager under this Agreement. Provided that the
Manager and the Company agree to a revised Management Fee (or other compensation
structure) within 45 days following the receipt of the Notice of Proposal to
Negotiate, the Termination Notice shall be deemed of no force and effect and
this Agreement shall continue in full force and effect on the terms stated in
this Agreement, except that the Management Fee shall be the revised Management
Fee (or other compensation structure) then agreed upon by the parties to this
Agreement. The Company and the Manager agree to execute and deliver an amendment
to this Agreement setting forth such revised Management Fee promptly upon
reaching an agreement regarding same. In the event that the Company and the
Manager are unable to agree to a revised Management Fee during such 30 day
period, this Agreement shall terminate, such termination to be effective on the
date which is the later of (A) ten (10) days following the end of such 30 day
period and (B) the Effective Termination Date originally set forth in the
Termination Notice.

                  (53) In the event that this Agreement is terminated in
accordance with the provisions of Section 13(a) of this Agreement, the Company
shall pay to the Manager, on the date on which such termination is effective, a
termination fee (the "Termination Fee") equal to the amount of the Management
Fee earned by the Manager during the period consisting of the twelve (12) full,
consecutive calendar months immediately preceding such termination. The
obligation of the Company to pay the Termination Fee shall survive the
termination of this Agreement.

                  (54) No later than sixty (60) days prior to the anniversary
date of this Agreement of any year during the Term, the Manager may deliver
written notice to the Company informing it of the Manager's intention not to
renew the Term, whereupon the Term of this Agreement shall not be renewed and
extended and this Agreement shall terminate effective on the anniversary of the
Closing Date next following the delivery of such notice.

                  (55) If this Agreement is terminated pursuant to this Section
13, such termination shall be without any further liability or obligation of
either party to the other, except as provided in Section 13(b) and Section 16 of
this Agreement.


                                       18
<PAGE>
In addition, Section 11 of this Agreement shall survive termination of this
Agreement.

         SECTION 14. ASSIGNMENT.

                  (a) Except as set forth in Section 14(b) of this Agreement,
this Agreement shall terminate automatically in the event of its assignment, in
whole or in part, by the Manager, unless such assignment is consented to in
writing by the Company with the consent of a majority of the Independent
Directors; provided, however, that no such consent shall be required in the case
of an assignment by the Manager to an entity whose day-to-day business and
operations are managed and supervised by any two (2) or more of the Messrs.
Wesley R. Edens, Robert I. Kauffman, Randal A. Nardone, Gregory F. Hughes and
Erik P. Nygaard (collectively, the "Principals"), one of whom must be Mr. Edens.
Any such permitted assignment shall bind the assignee under this Agreement in
the same manner as the Manager is bound, and the Manager shall be liable to the
Company for all errors or omissions of the assignee under any such assignment.
In addition, the assignee shall execute and deliver to the Company a counterpart
of this Agreement naming such assignee as Manager. This Agreement shall not be
assigned by the Company without the prior written consent of the Manager, except
in the case of assignment by the Company to another real estate investment trust
or other organization which is a successor (by merger, consolidation or purchase
of assets) to the Company, in which case such successor organization shall be
bound under this Agreement and by the terms of such assignment in the same
manner as the Company is bound under this Agreement.

                  (b) Notwithstanding any provision of this Agreement, the
Manager may subcontract and assign any or all of its responsibilities under
Sections 2(b), 2(c) and 2(d) of this Agreement to any of its affiliates in
accordance with the terms of this Agreement applicable to any such subcontract
or assignment, and the Company hereby consents to any such assignment and
subcontracting. In addition, provided that the Manager provides prior written
notice to the Company for informational purposes only, nothing contained in this
Agreement shall preclude any pledge, hypothecation or other transfer of any
amounts payable to the Manager under this Agreement.

         SECTION 15. TERMINATION FOR CAUSE.

                  (56) The Company may terminate this Agreement effective upon
sixty (60) days prior written notice of termination from the Company to the


                                       19
<PAGE>
Manager, without payment of any Termination Fee, if any act of fraud,
misappropriation of funds, or embezzlement against the Company or other willful
violation of this Agreement by the Manager in its corporate capacity (as
distinguished from the acts of any employees of the Manager which are taken
without the complicity of any of the Principals) under this Agreement or in the
event of any gross negligence on the part of the Manager in the performance of
its duties under this Agreement.

                  (57) The Manager may terminate this Agreement effective upon
sixty (60) days prior written notice of termination to the Company in the event
that the Company shall default in the performance or observance of any material
term, condition or covenant contained in this Agreement and such default shall
continue for a period of 30 days after written notice thereof specifying such
default and requesting that the same be remedied in such 30 day period.

         SECTION 16. ACTION UPON TERMINATION. (a) From and after the effective
date of termination of this Agreement, pursuant to Sections 13, 14, or 15 of
this Agreement, the Manager shall not be entitled to compensation for further
services under this Agreement, but shall be paid all compensation accruing to
the date of termination and, if terminated pursuant to Section 13, the
applicable Termination Fee. Upon such termination, the Manager shall forthwith:

                           (i) after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled, pay over to the
Company or a Subsidiary all money collected and held for the account of the
Company or a Subsidiary pursuant to this Agreement;

                           (ii) deliver to the Board of Directors a full
accounting, including a statement showing all payments collected by it and a
statement of all money held by it, covering the period following the date of the
last accounting furnished to the Board of Directors with respect to the Company
or a Subsidiary; and

                           (iii) deliver to the Board of Directors all property
and documents of the Company or any Subsidiary then in the custody of the
Manager.

                  (b) In the event that this Agreement is terminated, the
Company shall have the option, to be exercised by written notice to the Manager
within ten (10) days following such termination, to purchase from the Special
Limited Partner the right of the Special Limited Partner under the Partnership
Agreement, to receive certain preferred distributions (the "Preferred Incentive
Return") pursuant to Section 5.7 of the Partnership Agreement. In exchange
therefor the Company will be obligated to


                                       20
<PAGE>
pay the Special Limited Partner a cash purchase price (the "Cash Price") equal
to the amount of the Preferred Incentive Return that would be distributed to the
Special Limited Partner under the Partnership Agreement if all of the Company's
assets were sold for cash at their then current fair market value (taking into
account, among other things, expected future performance of the underlying
investments, the "Fair Market Value"). In the event that the Company does not
elect to exercise such option to purchase the Preferred Incentive Return, the
Special Limited Partner shall have the right to require the Company to do so at
the Cash Price by delivering to the Company written notice within twenty (20)
days following such termination. The Fair Market Value shall be determined by
independent appraisal to be conducted by a nationally recognized appraisal firm
mutually agreed upon by the Company and the Special Limited Partner. If the
Company and the Special Limited Partner are unable to agree upon an appraisal
firm, then each of the Company and the Special Limited Partner shall choose an
independent appraisal firm to conduct an appraisal. In such event, (i) if the
appraisals prepared by the two appraisers so selected are the same or differ by
an amount that does not exceed 20% of the higher of the two appraisals, the Fair
Market Value will be deemed to be the average of such appraisals, and (ii) if
the two appraisals differ by more than 20% of the higher of the two appraisals,
the two appraisers together shall select a third nationally recognized appraisal
firm to conduct an appraisal. If the two appraisers are unable to agree as to
the identity of such third appraiser, either of the Special Limited Partner and
the Company may request that the American Arbitration Association ("AAA") select
the third appraiser, which shall then be selected by the AAA. The Fair Market
Value will then be deemed to be the amount determined by such third appraiser,
but in no event less than the lower or more than the higher of the first two
appraisals made under this Section 16(b).

         SECTION 17. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST.
The Manager agrees that any money or other property of the Company or Subsidiary
held by the Manager under this Agreement shall be held by the Manager as
custodian for the Company or Subsidiary, and the Manager's records shall be
appropriately marked clearly to reflect the ownership of such money or other
property by the Company or such Subsidiary. Upon the receipt by the Manager of a
written request signed by a duly authorized officer of the Company requesting
the Manager to release to the Company or any Subsidiary any money or other
property then held by the Manager for the account of the Company or any
Subsidiary under this Agreement, the Manager shall release such money or other
property to the Company or any Subsidiary within a reasonable period of time,
but in no event later than sixty (60) days following such request. The Manager
shall not be liable to the Company, any Subsidiary, the Independent Directors,
or the Company's or a Subsid-


                                       21
<PAGE>
iary's stockholders or partners for any acts performed or omissions to act by
the Company or any Subsidiary in connection with the money or other property
released to the Company or any Subsidiary in accordance with the first sentence
of this Section 17. The Company and any Subsidiary shall indemnify the Manager
and its members, managers, officers and employees against any and all expenses,
losses, damages, liabilities, demands, charges and claims of any nature
whatsoever, which arise in connection with the Manager's release of such money
or other property to the Company or any Subsidiary in accordance with the terms
of this Section 17. Indemnification pursuant to this provision shall be in
addition to any right of the Manager to indemnification under Section 11 of this
Agreement.

         SECTION 18. NOTICES. Unless expressly provided otherwise in this
Agreement, all notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given, made and received when delivered against receipt or upon actual
receipt of (i) personal delivery, (ii) delivery by reputable overnight courier,
(iii) delivery by facsimile transmission against answerback, (iv) delivery by
registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:

         (a) If to the Company:

                      Newcastle Investment Corp.
                      c/o Fortress Investment Group LLC
                      1301 Avenue of the Americas
                      42nd Floor
                      New York, New York  10019
                      Attention: Mr. Randal A. Nardone

         (b) If to the Manager:

                      Fortress Investment Group, LLC
                      1301 Avenue of the Americas
                      42nd Floor
                      New York, New York  10019
                      Attention: Mr. Randal A. Nardone

         Either party may alter the address to which communications or copies
are to be sent by giving notice of such change of address in conformity with the
provisions of this Section 18 for the giving of notice.


                                       22
<PAGE>
         SECTION 19. BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and permitted
assigns as provided in this Agreement.

         SECTION 20. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter of this Agreement, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied, oral
or written, of any nature whatsoever with respect to the subject matter of this
Agreement. The express terms of this Agreement control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms of
this Agreement. This Agreement may not be modified or amended other than by an
agreement in writing.

         SECTION 21. CONTROLLING LAW. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of New York, notwithstanding any New York or other conflict-of-law
provisions to the contrary.

         SECTION 22. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

         SECTION 23. TITLES NOT TO AFFECT INTERPRETATION. The titles of
paragraphs and subparagraphs contained in this Agreement are for convenience
only, and they neither form a part of this Agreement nor are they to be used in
the construction or interpretation of this Agreement.

         SECTION 24. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts of this Agreement, individually or taken


                                       23
<PAGE>
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.

         SECTION 25. PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

         SECTION 26. GENDER. Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.


                                       24
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                 COMPANY:

                                 NEWCASTLE INVESTMENT CORP., a Maryland
                                 corporation, formerly known as
                                 Fortress Investment Corp.


                                 By:_____________________________
                                      Name:  Randal A. Nardone
                                      Its:  Secretary

                                 FORTRESS PARTNERS:

                                 FORTRESS PARTNERS, L.P., Delaware
                                 limited partnership

                                 By: Newcastle Investment Corp., its
                                 general partner


                                 By:_____________________________
                                       Name:  Randal A. Nardone
                                       Its:  Chief Operating Officer
                                               and Secretary

                                 MANAGER:

                                 FORTRESS INVESTMENT GROUP LLC, a
                                 Delaware limited liability company


                                 By:_____________________________
                                       Name:  Randal A. Nardone
                                       Its:  Chief Operating Officer
                                               and Secretary


                                       25
<PAGE>
For the purposes of Section 16(b)
of this Agreement:

                                 SPECIAL LIMITED PARTNER:

                                 FORTRESS PRINCIPAL INVESTMENT GROUP LLC,
                                 a Delaware limited liability company


                                 By:______________________________
                                       Name:  Randal A. Nardone
                                       Its:  Chief Operating Officer
                                               and Secretary


                                       26