Document:

Management Incentive Plan

 Exhibit 10.1 
 ZipRealty Inc. Management Incentive Plan – Fiscal Year 2010 
 General Purpose: This ZipRealty Inc. (“Company”) Management Incentive Plan – Fiscal Year 2010 (“Plan”) is designed to motivate and retain the Company’s Management (as defined herein) to achieve the
Company’s financial and operational goals for Fiscal Year 2010, as well as to retain such persons in the employ of the Company. Management as used in this Plan includes all employees of the Company holding the position of Vice President or
higher. “Management” specifically excludes all District Directors, Sales Management, as defined in the Sales Management 2010 Incentive Plan, and other employees not specifically identified in this paragraph. 
 Duration: This Plan will be in effect for the Company’s fiscal year ending December 31, 2010 (“Fiscal Year 2010”) except as set
forth below, meaning that the performance period determining whether bonuses will be paid upon satisfaction of performance objectives is Fiscal Year 2010 or the first half of Fiscal Year 2010 as set forth below (though some such payments, if earned,
will be made following the end of this Fiscal Year as set forth below). 
 Plan Administrator: The Compensation Committee
(the “Committee”) of the Board of Directors (the “Board”) shall administer this Plan with respect to “Eligible Persons” (as defined below) who are executive officers of the Company, and the Company’s Chief
Executive Officer, in consultation with the Committee, shall administer this Plan with respect to other Eligible Persons (as applicable, the “Administrator”).  
 Eligible Persons: Individuals eligible to earn an incentive payment under this plan (“Eligible Persons”) include Management who are employed by the Company during the applicable
Performance Period (Mid Year or Annual), without interruption (except as set forth in the “Proration” section of this Plan), and (ii) on the date following completion of the Performance Period when the Administrator completes its
review of performance, calculates and approves the payment of bonuses under this Plan. 
 Proration: In the sole discretion
of the Administrator, a prorated incentive may be paid under this Plan for any member of Management who became eligible to participate in the Plan after the beginning of Fiscal Year 2010, or who was away from work for some portion of fiscal year
2010 due to an approved leave of absence. Additionally, in the sole discretion of the Administrator, a modified incentive amount may be paid under this Plan to any Eligible Person who works a reduced work schedule. 
 Incentive Pool: 
 Mid Year Incentive:
The Committee, in consultation with the Company’s Chief Executive Officer will establish an incentive pool of funds available for payout of the Mid Year Incentive if the Company meets the Minimum revenue Target and a minimum Adjusted EBITDA of
($5.0m). For purposes of this Plan “Adjusted EBITDA” shall be defined as earnings before interest income or expense, income taxes, depreciation, amortization, and stock-based compensation. 
 Annual Incentive: The Committee, in consultation with the Company’s Chief Executive Officer will establish an incentive pool of funds available for
payout of the Annual Incentive if the Company meets either the Minimum Revenue Target or the Minimum Adjusted EBITDA Target for the Annual Incentive. 

 Incentive Amount: Subject to the terms and conditions of this Plan, Eligible Persons may earn payment
of “Incentive Amounts” determined as a percentage of annual base salary upon completion of the applicable performance period (June 30, 2010 or December 31, 2010) (“Base Salary”). 
 The Incentive Amounts will be determined as follows: 
 Eligible Persons may earn two incentives pursuant to this Plan, the first “Mid-Year Incentive” based on “Company Performance” (as defined below) and certain other business and performance metrics through June 30,
2010 and the second “Annual Incentive” based on Company Performance and certain other business and performance metrics for the full fiscal year 2010. Each of these Incentive Amounts shall be calculated as follows: 
 Mid Year Incentive 
 The Mid
Year Incentive shall include the “Base Incentive” (defined below) and if applicable, additional incentives or multipliers set forth below and shall total 30% of each Eligible Person’s incentive opportunity for fiscal year 2010.

 The Mid Year “Base Incentive” shall be measured based on Mid Year “Company Performance”, which for purposes of the Mid
Year Incentive shall be defined as a measurement of the Company’s achievement of revenue at Performance Targets as set forth below. Company Performance for the Mid Year Incentive shall be measured against Mid Year Performance Targets. The
Company must achieve a minimum Adjusted EBITDA of ($5.0m) as of June 30, 2010 for any eligible person to earn a Mid Year Incentive. 
 Base Incentive Calculation: 
 The Committee shall set forth Mid Year Performance Targets at “Minimum”
“Target” and “Stretch” levels for revenue, based on Company Performance from January 1, 2010 through June 30, 2010, in its sole discretion, in consultation with the Chief Executive Officer. The Committee may also, in
its sole discretion set forth any conditions that it deems appropriate, required for an incentive to be earned at each Target. Further, the Committee may, at any time, in its sole discretion modify any Performance Target(s) taking into account
various factors, including but not limited to, general business and market conditions. 
 Total possible Mid Year Incentive Amounts for Eligible
Persons shall be as follows: 
  

										
	 Position
	  	Minimum	 	 	Target	 	 	Stretch	 
	 CEO
	  	23	% 	 	30	% 	 	38	% 
	 CFO
	  	14	% 	 	18	% 	 	23	% 
	 Officer Vice President
	  	9	% 	 	12	% 	 	15	% 
	 Non-Officer Vice President
	  	7	% 	 	9	% 	 	11	% 

 Incentives for Company Performance falling between the Performance Targets for each applicable metric shall
be determined pursuant to a calculation approved by the Committee. 
 Multipliers: 
 The Base Incentive for Eligible Persons may be adjusted by application of multipliers based on the Company’s performance against Mid Year financial and
operational metrics as set forth by the Committee. Each multiplier shall potentially increase the Base Incentive amount if the Company meets or exceeds the specified metric and shall potentially decrease the Base Incentive amount if the Company
fails to achieve the specified metric. The ranges for these multipliers shall be as follows: 
 Multiplier 1: From .85 to 1.10
multiplied against the Base Incentive amount 
 Multiplier 2: From .90 to 1.05 multiplied against the Base Incentive amount

 Multiplier 3: From .90 to 1.05 multiplied against the Base Incentive amount 
 Collectively, these multipliers may increase the Base Incentive amount by up to 1.21% or decrease the Base Incentive amount by up to .69%. The Committee
may, in its sole discretion modify ranges for each multiplier taking into account various factors, including but not limited to, general business and market conditions. 
 Individual Performance Incentive: 
 In the event that the Committee establishes an incentive
pool for payment of the Mid Year Incentive, the Committee may also establish a pool for payment of an additional incentive amount based on each Eligible Person’s performance in relation to his or her Individual Goals and Objectives for the
first half of fiscal year 2010. The Committee shall determine in consultation with the Chief Executive Officer, which Eligible Persons if any, shall be entitled to such additional incentive and the amount of any applicable incentive. The Individual
Performance Incentive amount shall be added to the Mid Year Incentive after the multipliers set forth above are applied to the Base Incentive. The multipliers shall not apply to the Individual Performance Incentive amount. 
 Annual Incentive 
 The
Annual Incentive shall include the “Base Incentive” (defined below) and if applicable, additional incentives or multipliers set forth below and shall total 70% of each Eligible Person’s incentive opportunity for fiscal year 2010.

 The Annual “Base Incentive” shall be measured based on Annual “Company Performance”, which for purposes of the Annual
Incentive shall be defined as a measurement consisting of the following two metrics 1) the Company’s achievement of revenue Performance Targets (defined below), which shall make up 50% of the Base Incentive; and 2) the Company’s
achievement of Adjusted EBITDA Performance Targets, which shall make up 50% of the Base Incentive. Company Performance for the Mid Year Incentive shall be measured against Mid Year Performance Targets. 

 Base Incentive Calculation: 
 The Committee shall set forth Annual Performance Targets at “Minimum” “Target” and “Stretch” levels for revenue and Adjusted EBITDA in its sole discretion, in consultation
with the Chief Executive Officer. The Committee may also, in its sole discretion set forth any conditions that it deems appropriate, required for an incentive to be earned at each Target. Further, the Committee may, at any time, in its sole
discretion modify any Performance Target(s) taking into account various factors, including but not limited to, general business and market conditions. Eligible Persons shall only be eligible to earn up to 50% of the Base Incentive for achievement of
revenue at any of the Performance Targets below if the Company does not achieve positive Adjusted EBITDA for fiscal year 2010. 
 Total Possible
Annual Base Incentive Amounts for Eligible Person shall be as follows: 
  

										
	 Position
	  	Minimum	 	 	Target	 	 	Stretch	 
	 CEO
	  	53	% 	 	70	% 	 	88	% 
	 CFO
	  	32	% 	 	42	% 	 	53	% 
	 Officer Vice President
	  	21	% 	 	28	% 	 	35	% 
	 Non-Officer Vice President
	  	16	% 	 	21	% 	 	26	% 

 Incentives for Company Performance falling between the Performance Targets for each applicable metric
shall be determined pursuant to a calculation approved by the Committee. 
 Multipliers: 
 The Base Incentive for Eligible Persons may be adjusted by application of multipliers based on the Company’s performance against financial and
operational metrics as set forth by the Committee. Each multiplier shall potentially increase the Base Incentive amount if the Company meets or exceeds the specified metric and shall potentially decrease the Base Incentive amount if the Company
fails to achieve the specified metric. The ranges for these multipliers shall be as follows: 
 Multiplier 1: From .85 to 1.10
multiplied against the Base Incentive amount 
 Multiplier 2: From .90 to 1.05 multiplied against the Base Incentive amount

 Multiplier 3: From .90 to 1.05 multiplied against the Base Incentive amount 
 Collectively, these multipliers may increase the Base Incentive amount by up to 1.21% or decrease the Base Incentive amount by up to .69%. The Committee
may, in its sole discretion modify ranges for each multiplier taking into account various factors, including but not limited to, general business and market conditions. 
 Individual Performance Incentive: 
 In the event that the Committee establishes an incentive
pool for payment of the Annual Incentive, the Committee may also establish a pool for payment of an additional incentive amount based on each Eligible Person’s performance in relation to his or her Individual Goals and Objectives for fiscal
year 2010. The Committee shall determine in consultation with the Chief Executive Officer, which Eligible Persons if any, shall be entitled to such additional

 
incentive and the amount of any applicable incentive. The Individual Performance Incentive amount shall be added to the Annual Incentive after the multipliers set forth above are applied to the
Base Incentive. The multipliers shall not apply to the Individual Performance Incentive amount. 
 Payment: 
 Earned incentives under this Plan shall be paid separately as set forth below: 
 Mid Year Incentive: 
 The Company will pay any Mid-Year Incentive through an award of
restricted common stock of the Company (“Restricted Stock”) under the Company’s 2004 Equity Incentive Plan (the “Stock Plan”); provided that if the applicable share limits of the Plan have been exceeded the Company may
settle Mid-Year Incentive payments in cash. The number of shares of Restricted Stock subject to a particular Eligible Person’s Restricted Stock award will equal that Eligible Person’s Mid-Year Incentive (expressed as a cash amount) divided
by the Fair Market Value (as such term is defined in the Stock Plan) of a share of the Company’s common stock as of the date the Committee meets to determine the extent (if any) to which the Mid-Year Performance Targets have been achieved and
to evaluate performance other business and personal performance metrics, and grant any corresponding awards of Restricted Stock, rounded down to the nearest whole share. The Restricted Stock will be granted no later than August 30, 2010. Of the
total number of shares subject to a particular Eligible Person’s award, fifty percent 50% of the Restricted Stock will vest on January 1, 2011, subject to the Eligible Person’s continued employment by the Company or one of its
Subsidiaries (as such term is defined in the Stock Plan) through that date, and the remainder of Restricted Stock will vest on July 1, 2011, subject to the Eligible Person’s continued employment by the Company or one of its Subsidiaries
(as such term is defined in the Stock Plan) through that date. In the event the Eligible Person’s employment with the Company or one of its Subsidiaries terminates (regardless of the reason) before that vesting date, the Eligible Person’s
Restricted Stock shall automatically be forfeited to the Company and the Company will have no obligation to make any payment to the Eligible Person in respect thereof or with respect thereto. At or promptly following the grant of shares of
Restricted Stock in accordance with the foregoing, the Company will deliver an award agreement to each recipient of such a grant. The award agreement will set forth the number of shares awarded to the recipient and the detailed terms and conditions
of the award. The grant will be subject to the terms and conditions of the Stock Plan (including, without limitation, the transfer limitations of Sections 7(c) and 12 of the Stock Plan, as applicable, the adjustment provisions of Section 13 of
the Stock Plan, and the withholding provisions of Section 14 of the Stock Plan) and the applicable award agreement. The Company’s obligation to pay (in the form of a stock award or otherwise) any portion of a Mid-Year Incentive otherwise
due to an Eligible Person is subject to the condition precedent that the Eligible Person agree to be bound by, execute and return to the Company (promptly after the Company delivers the applicable award agreement to the Eligible Person) the award
agreement relating to the award of Company common stock to the Eligible Person and such escrow agreement or escrow instructions (in the form provided by the Company) that may relate to the Restricted Stock (each in substantially the customary form
used by the Company in connection with its award of Restricted Stock under the Stock Plan). In addition, and notwithstanding any other provision of this Plan to the contrary, if the Company pays any Mid-Year Incentive in the form of Restricted
Stock, in no event shall any portion of the related incentive under this Plan be considered to have been “earned” unless and until the vesting conditions applicable to such Restricted Stock have been satisfied. 

 Annual Incentive: 
 The Company will pay 15% of the Annual Incentive, through an award of restricted common stock of the Company (“Restricted Stock”) under the Company’s 2004 Equity Incentive Plan (the
“Stock Plan”); provided that if the applicable share limits of the Plan have been exceeded the Company may settle Annual Incentive payments in cash. The number of shares of Restricted Stock subject to a particular Eligible Person’s
Restricted Stock award will equal 15% of that Eligible Person’s Annual Incentive (expressed as a cash amount) divided by the Fair Market Value (as such term is defined in the Stock Plan) of a share of the Company’s common stock as of the
date the Committee meets to determine the extent (if any) to which the Annual Performance Targets and applicable business and personal performance metrics have been achieved and grant any corresponding awards of Restricted Stock, rounded down to the
nearest whole share. The Restricted Stock will be granted no later than February 28, 2011. All of the Restricted Stock subject to this portion of the Annual Incentive will vest on July 1, 2011, subject to the Eligible Person’s
continued employment by the Company or one of its Subsidiaries (as such term is defined in the Stock Plan) through that date. In the event the Eligible Person’s employment with the Company or one of its Subsidiaries terminates (regardless of
the reason) before that vesting date, the Eligible Person’s Restricted Stock shall automatically be forfeited to the Company and the Company will have no obligation to make any payment to the Eligible Person in respect thereof or with respect
thereto. At or promptly following the grant of shares of Restricted Stock in accordance with the foregoing, the Company will deliver an award agreement to each recipient of such a grant. The award agreement will set forth the number of shares
awarded to the recipient and the detailed terms and conditions of the award. The grant will be subject to the terms and conditions of the Stock Plan (including, without limitation, the transfer limitations of Sections 7(c) and 12 of the Stock Plan,
as applicable, the adjustment provisions of Section 13 of the Stock Plan, and the withholding provisions of Section 14 of the Stock Plan) and the applicable award agreement. The Company’s obligation to pay (in the form of a stock
award or otherwise) any portion of an Incentive otherwise due to an Eligible Person is subject to the condition precedent that the Eligible Person agree to be bound by, execute and return to the Company (promptly after the Company delivers the
applicable award agreement to the Eligible Person) the award agreement relating to the award of Company common stock to the Eligible Person and such escrow agreement or escrow instructions (in the form provided by the Company) that may relate to the
Restricted Stock (each in substantially the customary form used by the Company in connection with its award of Restricted Stock under the Stock Plan). In addition, and notwithstanding any other provision of this Plan to the contrary, if the Company
pays any Annual Incentive in the form of Restricted Stock, in no event shall any portion of the related incentive under this Plan be considered to have been “earned” unless and until the vesting conditions applicable to such Restricted
Stock have been satisfied. 
 The remaining portion of the Annual Incentive shall be a non-stock payment paid in a reasonable amount of time and
in accordance with applicable law after the date when the Committee meets to determine the extent to which (if any) the Annual Performance Targets and applicable business and personal performance metrics were achieved. Earned Annual Incentives will
be paid in accordance with the Company’s standard payroll procedures. 

 Performance Adjustment: The Administrator shall have discretion to adjust any Eligible Person’s
Incentive Amount based on his or her job performance for Fiscal Year 2010 (the “Adjusted Incentive Amount”) by reducing or increasing the Incentive Amount as the Administrator, in its sole discretion deems appropriate, including
elimination of the Incentive Award. The Administrator shall also have the discretion to determine that no Mid-Year Incentive Pool and/or Annual Incentive Pool will be funded. 
 Calculation and Approval: An Eligible Person’s Incentive Amount or Adjusted Incentive Amount, as determined in the manner set forth above, is that Eligible Person’s “Actual
Incentive” with respect to Fiscal Year 2010. All calculations of each Actual Incentive must be approved by the Administrator with respect to such participant and the total amount of the aggregate incentive pool to be paid hereunder to all
Eligible Persons must be approved by the Committee after such consultation with the Board as it deems appropriate. 
 Payouts: All
amounts, if any, to be paid out hereunder shall be paid within a reasonable amount of time and in accordance with applicable law following determination by the Committee that there shall be a pool from which to make such payments with respect to Mid
Year and Fiscal Year 2010 and calculation of applicable incentives. In all cases, amounts, if any, to be paid out hereunder shall be paid no later than March 15 of the year following the year in which the applicable amount is earned.

 Future Incentive Periods: This Plan is in effect only with respect to Fiscal Year 2010. Nothing in this Plan provides for or implies
the establishment or payment of any bonuses with respect to future periods. 
 Merger or Acquisition: The Board of Directors may modify
this Plan, including terminate it without making payments hereunder, with respect to Fiscal Year 2010 in its sole discretion in the event of a merger or acquisition of the Company. 
 Administration: The Committee has sole and exclusive discretionary authority to interpret this Plan and adopt such rules and regulations for carrying out this Plan as it deems appropriate. The
Committee may, in its discretion modify or terminate this Plan. Decisions by the Committee are final and binding on all parties to the maximum extent allowed by law. 
 Employment is Terminable At Will: Nothing in this Plan or in any award of Restricted Stock will interfere with or limit in any way the right of the Company or the right of any individual to alter
or terminate the employment relationship at any time, with or without cause. 
 General Terms and Conditions: Amounts to be paid under
this Plan in cash (as opposed to the grant of Restricted Stock) will be paid from the general funds of the Company. Nothing in this Plan will be construed to create a trust or establish any evidence of any individual’s claim of any right to
payment other than as an unsecured general creditor of the Company. All payments to be made in cash (as opposed to the grant of Restricted Stock) will be made in the currency in which the individual is regularly paid. 
 Tax Withholding: All payments will be subject to the satisfaction of applicable federal, state, local or similar income withholding requirements and
to any employment tax withholding requirements. The Company shall withhold all applicable amounts required by law from any payments hereunder. In the case of any delivery of Company common stock (including, without limitation, Restricted Stock) to
an Eligible Person under this Plan, the Company may, in its discretion, withhold and reacquire the appropriate number of whole shares of Company common

 
stock, valued at their then Fair Market Value (as defined in the Plan), from the portion of the stock award granted to the Eligible Person that is fully vested at grant to satisfy any withholding
obligations of the Company or its subsidiaries with respect to such award (including the portion of such withholding obligations that relate to the Eligible Person’s Restricted Stock or making of an election under Section 83(b) of the
Internal Revenue Code with respect thereto), with such withholding at the minimum applicable withholding rates. In the event that the Company cannot for any reason, or elects not to, satisfy all such withholding obligations arising in connection
with the delivery of Company common stock (including, without limitation, Restricted Stock) in such fashion, the Company shall be entitled to require a cash payment by or on behalf of the Eligible Person of the amount to be withhold as a condition
precedent to any obligation of the Company to deliver the related shares. To the extent an Eligible Person does not make an election under Section 83(b) of the Internal Revenue Code with respect to the grant of Restricted Stock, the Restricted
Stock will be subject to the tax withholding provisions of the related award agreement. 
 Section 409A: All cash and Restricted
Stock payable under this Plan is intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations and guidance thereunder (together, Section 409A) so that none
of the payments and benefits to be provided under this Plan will be subject to the additional tax imposed under Section 409A, and any ambiguities herein shall be interpreted to so comply or be exempt. Each payment and benefit payable under this
Plan is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. The Company may, in good faith and without the consent any Eligible Participant, make any amendments to this Plan and take
such reasonable actions which it deems necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to an Eligible Participant. 
 Governing Law; Severability: This Plan will be construed, administered and governed in all respects in accordance with the internal laws of the State
of California. In the event that any provision of this Plan is held illegal or invalid for any reason, such holding will not affect the remaining provisions of this Plan, and this Plan will be construed and enforced as if the illegal and invalid
provision had not been included. 
 Entire Agreement: This Plan including Addendum 1, which is incorporated herein by reference, and any
resolutions of the Compensation Committee amending the Plan, is the entire understanding between the Company and any participant regarding the subject matter of this Plan and supersedes all prior bonus or commission incentive plans, or employment
contracts whether with any subsidiary or affiliate, or any written or verbal representations regarding the subject matter of this Plan. Participation in this Plan during the Fiscal Year 2010 will not convey any entitlement to participate in this or
future plans or to the same or similar bonus benefits. Payments under this Plan (including, without imitation, the grant and payment of Restricted Stock) are an extraordinary item of compensation that is outside the normal or expected compensation
for the purpose of calculating any extra benefits, termination, severance, redundancy, end-of-service premiums, bonuses, long-service awards, overtime premiums, pension or retirement benefits or other similar payment. 

 ZipRealty Inc. 2010 Management Incentive Plan: Addendum 1 
 Senior Vice President of Sales Supplemental Incentive 
 The Senior Vice President of Sales (“Participant”) shall be eligible to earn an annual “Supplemental Incentive”, in addition to the Incentive set forth in this Plan based on
achievement of certain levels of average Agent productivity. This Incentive shall be calculated as a percentage of Participant’s base salary as of December 31, 2010, in accordance with average Agent productivity as follows: 
  

			
	 Agent Productivity
 (total average Closed Transactions per month)
	  	 Incentive
 (percentage of base salary)

	.98	  	29%
	1.19	  	72%
	1.31	  	100%

 This annual Supplemental Incentive
shall be calculated as of December 31, 2010 and shall not be earned until it has been calculated. Participant will only be eligible to earn the incentive levels set forth expressly herein. Incentives shall not be calculated linearly and thus,
Participant must achieve the next level of Agent Productivity in order to earn an increased incentive payment. 
 This Supplemental Incentive
shall be subject to all terms and conditions set forth in this Plan.Exchange Agreement, dated as of January 29, 2010

 Exhibit 10.1 
 EXECUTION COPY 
  
  
  
 EXCHANGE AGREEMENT 
 among 
 NEWCASTLE INVESTMENT CORP., 
 NIC TRS LLC, 
 TABERNA CAPITAL MANAGEMENT, LLC, 
 TABERNA PREFERRED FUNDING IV, LTD., 
 TABERNA PREFERRED FUNDING V, LTD., 
 TABERNA PREFERRED FUNDING VI, LTD. 

and 
 TABERNA
PREFERRED FUNDING VII, LTD. 
 Dated as of January 29, 2010 
  
  
  

 EXCHANGE AGREEMENT 
 THIS EXCHANGE AGREEMENT, dated as of January 29, 2010 (this “Agreement”), is entered into by and among
NEWCASTLE INVESTMENT CORP., a Maryland corporation (the “Parent”), NIC TRS LLC, a Delaware limited liability company (the “Company”), TABERNA CAPITAL MANAGEMENT, LLC (“Taberna”), TABERNA PREFERRED
FUNDING IV, LTD. (“Taberna IV”), TABERNA PREFERRED FUNDING V, LTD. (“Taberna V”), TABERNA PREFERRED FUNDING VI, LTD. (“Taberna VI”) and TABERNA PREFERRED FUNDING VII, LTD.
(“Taberna VII”, and together with Taberna IV, Taberna V and Taberna VI, the “Holders” and each a “Holder”). 
 RECITALS: 
 A. Reference is made to that certain Junior Subordinated
Indenture (the “Indenture”), dated as of April 30, 2009, between the Parent and The Bank of New York Mellon Trust Company, National Association, as Trustee (the “Trustee”), pursuant to which the Parent issued
the following junior subordinated notes (together, the “Performing CDO Notes”): 
 (i) Junior Subordinated Note
due 2035 in the original principal amount of $26,266,000 issued by the Parent to Taberna V. 
 (ii) Junior Subordinated Note due
2035 in the original principal amount of $25,625,000 issued by the Parent to Taberna VII. 
 B. In addition to the Performing
CDO Notes, the Parent also issued the following junior subordinated notes pursuant to the Indenture (together, the “Defaulted CDO Notes”, and, together with the Performing CDO Notes, the “Junior Subordinated
Notes”): 
 (i) Junior Subordinated Note due 2035 in the original principal amount of $24,984,000 issued by the Parent
to Taberna IV. 
 (ii) Junior Subordinated Note due 2035 in the original principal amount of $25,625,000 issued by the Parent to
Taberna VI. 
 C. The Company is a wholly-owned taxable REIT subsidiary of the Parent. The Company is the owner of
(i) certain CDO notes from Newcastle CDO IX 1, Limited transaction and Newcastle CDO VIII 1, Limited and Newcastle CDO VIII 2, Limited transaction set forth on Schedule I hereto (the “Replacement Securities”) and
(ii) $9,715,000 in cash (the “Cash”, and collectively with the Replacement Securities, the “Replacement Collateral”). 
 D. On the terms and subject to the conditions set forth in this Agreement, the Parent, the Company and the Holders, to the extent the same are eligible to participate in the Exchange, have agreed to
exchange a total of $51,891,000 Junior Subordinated Notes (which may consist of all of the Performing CDO Notes or a portion of the Performing CDO Notes and a portion of the Defaulted CDO Notes) for the Replacement Collateral on two separate dates
(each a “Closing Date”) as further described in Section 2(a) hereof. 

 E. Taberna has also solicited the consent of the noteholders of Taberna IV and Taberna VI to
exchange a portion of the Defaulted CDO Notes for their respective share of the Replacement Collateral as further described in Section 7 hereof. 
 NOW, THEREFORE, in consideration of the mutual agreements and subject to the terms and conditions herein set forth, the parties hereto agree as follows: 
 1. Definitions. 
 “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C. §§101 et seq., as amended. 
 “Benefit Plan” means an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code or any entity whose assets include (for
purposes of U.S. Department of Labor Regulations Section 2510.3-101 or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan.” 
 “Cash” has the meaning set forth in the Recitals. 
 “CDO Trustee” has the meaning set forth in Section 2(e)(i). 
 “Closing Date” has the meaning set forth in the Recitals. 
 “Closing Room” has the meaning set forth in Section 2(e). 
 “Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated under it. 

“Company” has the meaning set forth in the introductory paragraph hereof. 
 “Company Counsel” has the meaning set forth in Section 3(b). 
 “Defaulted CDO Notes” has the meaning set forth in the Recitals. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated
under it. 
 “Exchange” has the meaning set forth in Section 2(e). 
 “First Closing Date” has the meaning set forth in Section 2(a). 
 “Governmental Entities” has the meaning set forth in Section 4(l). 
 “Holders” has the meaning set forth in the introductory paragraph hereof. 
 “Indemnified Party” has the meaning set forth in Section 9(a). 
 “Indemnified Parties” shall have the correlative meaning. 
  

 2 

 “Indenture” has the meaning set forth in the Recitals. 
 “Investment Company Act” has the meaning set forth in Section 4(i). 
 “Junior Subordinated Notes” has the meaning set forth in the Recitals. 
 “Lien” has the meaning set forth in Section 4(l). 
 “Material Adverse Effect” means a material adverse effect on the condition (financial or otherwise), earnings, business,
liabilities or assets of the Parent or any of its subsidiaries taken as a whole. 
 “Parent” has the meaning
set forth in the introductory paragraph hereof. 
 “Parent Local Counsel” has the meaning set forth in
Section 3(c). 
 “Performing CDO Notes” has the meaning set forth in the Recitals. 
 “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association,
joint stock company, company, limited liability company, trust, unincorporated association or government, or any agency or political subdivision thereof, or any other entity of whatever nature. 
 “Regulation D” has the meaning set forth in Section 4(f). 
 “Repayment Event” has the meaning set forth in Section 4(l). 
 “Replacement Collateral” has the meaning set forth in the Recitals. 
 “Replacement Securities” has the meaning set forth in the Recitals. 
 “Second Closing Date” has the meaning set forth in Section 2(a). 
 “Securities Act” means the Securities Act of 1933, 15 U.S.C. §§77a et seq., as amended, and the rules and
regulations promulgated under it. 
 “Taberna” has the meaning set forth in the introductory paragraph hereof.

 “Taberna IV” has the meaning set forth in the introductory paragraph. 
 “Taberna V” has the meaning set forth in the introductory paragraph hereof. 
 “Taberna VI” has the meaning set forth in the introductory paragraph hereof. 
 “Taberna VII” has the meaning set forth in the introductory paragraph hereof. 
  

 3 

 “Taberna Transferred Rights” means, with respect to each Closing Date, any
and all of the applicable Holder’s, title, and interest in, to and under the Junior Subordinated Notes being exchanged on such Closing Date, together with the following: 
 (i) the Indenture; 
 (ii) all amounts payable to the applicable Holder under the Junior Subordinated Notes or the Indenture, excluding, however, amounts payable on account of interest for the period commencing on the most
recent interest payment date under the Junior Subordinated Notes and continuing through and including the First Closing Date or the Second Closing Date, as applicable; 
 (iii) all cash, securities, or other property, and all setoffs and recoupments, to be received, applied, or effected by or
for the account of the applicable Holder under the Junior Subordinated Notes, other than fees, costs and expenses payable to Taberna or the applicable Holder hereunder and all cash, securities, interest, dividends, and other property that may be
exchanged for, or distributed or collected with respect to, any of the foregoing; 
 (iv) after the Second
Closing Date and only to the extent a Holder transfers all of the Junior Subordinated Notes held by it, all claims (including “claims” as defined in Bankruptcy Code §101(5)), suits, causes of action, and any other right of Taberna or
any Holder, whether known or unknown, against the Company or any of its affiliates, or their respective agents, representatives, contractors, advisors, directors, officers and trustees, or any other entity or individual that in any way is based
upon, arises out of or is related to any of the foregoing, including all claims (including contract claims, tort claims, malpractice claims, and claims under any law governing the exchange of, purchase and sale of, or indentures for, securities),
suits, causes of action, and any other right of Taberna or any Holder against any attorney, accountant, financial advisor, or other entity arising under or in connection with the Junior Subordinated Notes or the transactions related thereto or
contemplated thereby (but excluding the transactions contemplated under this Agreement); and 
 (v) all proceeds
of the foregoing. 
 “Trustee” has the meaning set forth in the Recitals. 
 2. Exchange of the Junior Subordinated Notes for the Replacement Collateral. 
 (a) The Company and each applicable Holder shall exchange all or a portion of the Performing CDO Notes and, to the extent eligible, a portion
of the Defaulted CDO Notes, for the Replacement Collateral in two separate closings, the first of which shall occur on January 29, 2010 (the “First Closing Date”) and the second of which shall occur on February 11, 2010
(the “Second Closing Date”). 
 (b) As further set forth on Schedule II hereto, on the First Closing
Date, each of Taberna V and Taberna VII shall exchange one half of the Performing CDO Notes held by it for its applicable share of the Replacement Collateral as set forth on Schedule II hereto. 
  

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 (c) As further set forth on Schedule III hereto, on the Second Closing Date, either
(i) each of Taberna V and Taberna VII shall exchange the remaining balance of the Performing CDO Notes held by it for its respective pro rata share of the remaining Replacement Collateral (as illustrated on Schedule III, Section A) or
(ii) in the event Taberna receives the requisite consent of the noteholders of either or both of Taberna IV and Taberna VI as further described in Section 7, the applicable portion of the Performing CDO Notes and/or the Defaulted CDO Notes
shall be exchanged for a pro-rata share of the remaining Replacement Collateral (rounded to the nearest thousand) by each Holder that is eligible to participate in the Exchange (as defined below) on the Second Closing Date, as illustrated on
Schedule III, Sections B, C, or D, as applicable. Following the Second Closing Date, the Holders will have exchanged a total of $51,891,000 Junior Subordinated Notes, collectively, with the precise amount to be exchanged by each participating
Holder on the Second Closing Date to be determined as set forth on Schedule III hereof and provided in writing to the Parent in advance of (but in any event, not less than two (2) calendar days prior to) the Second Closing Date.

 (d) In connection with the Junior Subordinated Notes to be transferred on each Closing Date, the Company agrees to deliver or
cause to be delivered the applicable portion of Replacement Collateral to each participating Holder and has requested that each participating Holder accept its applicable portion of the Replacement Collateral in exchange for the portion of the
Junior Subordinated Notes being exchanged upon the terms and conditions set forth herein. 
 (e) The closing of the transactions
contemplated herein shall occur at the offices of Dechert LLP in Philadelphia, Pennsylvania (the “Closing Room”), or such other place as the parties hereto shall agree, at 11:00 a.m. Eastern time on each Closing Date. With respect
to each Closing Date, the parties hereto hereby agree that the exchange (the “Exchange”) will occur in accordance with the following requirements: 
 (i) On each Closing Date, Taberna (as collateral manager for each participating Holder) shall have delivered an issuer order
instructing each trustee (in each such capacity, a “CDO Trustee”) under the applicable indenture pursuant to which such CDO Trustee serves as trustee for the Holder of the Junior Subordinated Notes to (a) exchange the
applicable portion of Junior Subordinated Notes for the applicable portion of the Replacement Collateral as set forth on Schedule II and Schedule III, respectively, and (b) to deliver the Junior Subordinated Notes being exchanged
on such Closing Date to the Trustee for reissuance in the names of NIC TRS LLC and the applicable Holders. 
 (ii) On each Closing Date, the applicable portion of the Junior Subordinated Notes shall have been delivered to the Closing Room, copies of which shall have previously been made available for inspection, if so requested. 
 (iii) On each Closing Date, the Company shall have transferred the applicable portion of the Replacement Securities to each
CDO Trustee via the Depository Trust Company to hold for the benefit of each participating Holder. 
 (iv) On
each Closing Date, the Company shall transfer the applicable portion of the Cash to each participating Holder via a wire transfer in immediately available funds. 
  

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 (v) Simultaneously with the occurrence of the events described in
subsections (i) through (iv) hereof on each Closing Date, and solely with respect to the portion of the Junior Subordinated Notes transferred on the First Closing Date or the Second Closing Date, as applicable, (A) each Holder of the
Junior Subordinated Notes irrevocably transfers, assigns, grants and conveys the related Taberna Transferred Rights to the Company and the Company accepts the Junior Subordinated Notes and assumes the Taberna Transferred Rights and (B) each
Holder shall be entitled to all of the rights, title and interest of a holder of the Replacement Securities, in accordance with their respective ownership interests, under the terms of the Replacement Securities and any other Operative Document.

 (vii) On each Closing Date, Taberna shall have paid to the Trustee and each CDO Trustee all of such
party’s legal fees, costs and other expenses in connection with the Exchange, and the Company shall have paid, or the Parent shall have paid on behalf of the Company, all other accrued and unpaid fees, costs and expenses under the Indenture, if
any. 
 (viii) On each Closing Date, the Company shall have paid, or the Parent shall have paid on behalf of the
Company, to the Trustee for application upon the applicable portion of the Junior Subordinated Notes and for distribution to the applicable Holders holding such Junior Subordinated Notes pursuant to the terms of the Indenture, all accrued interest
for the period commencing on the most recent interest payment date under the Junior Subordinated Notes and continuing through and including the applicable Closing Date. 
 3. Conditions Precedent. The obligations of the parties under this Agreement are subject to the following conditions precedent with respect to each Closing Date: 
 (a) The representations and warranties contained herein shall be accurate as of the date of delivery of the Replacement Collateral.

 (b) Sonnenschein, Nath & Rosenthal LLP, as counsel for the Parent and the Company and as Delaware counsel for the
Company (the “Company Counsel”), shall have delivered an opinion, dated as of the applicable Closing Date, addressed to each participating Holder and Taberna, in substantially the form set forth in Exhibit A-1 hereto. In
rendering its opinion, the Company Counsel may rely as to factual matters upon certificates or other documents furnished by officers, directors and trustees of the Parent and the Company and by government officials and by and upon such other
documents as such counsel may, in its reasonable opinion, deem appropriate as a basis for the Company Counsel’s opinion. The Company Counsel may specify the jurisdictions in which it is admitted to practice and that it is not admitted to
practice in any other jurisdiction and is not an expert in the law of any other jurisdiction; provided, however, that Company Counsel must be admitted to practice in the State of New York. Such Company Counsel opinion shall not state that it is to
be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).

  

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 (c) DLA Piper LLP (US), local counsel for the Parent (the “Parent Local
Counsel”), shall have delivered an opinion, dated as of the applicable Closing Date, addressed to each participating Holder and Taberna, in substantially the form set forth in Exhibit A-2 hereto. In rendering its opinion, the Local
Counsel may rely as to factual matters upon certificates or other documents furnished by officers, directors and trustees of the Parent and by government officials and by and upon such other documents as such counsel may, in its reasonable opinion,
deem appropriate as a basis for the Local Counsel’s opinion; provided, however, that copies of any such certificates or documents are delivered to each participating Holder. The Local Counsel may specify the jurisdictions in which it is
admitted to practice and that it is not admitted to practice in any other jurisdiction and is not an expert in the law of any other jurisdiction. Such Local Counsel opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). 
 (d) Prior to each Closing Date, each party hereto shall furnish such further information, certificates and documents to each other party as
such other party or its counsel may reasonably request. 
 If any of the conditions specified in this Section 3 shall not
have been fulfilled when and as provided in this Agreement, or if any of the opinions, certificates and documents mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to each participating Holder,
Taberna, the Parent or their respective counsel, this Agreement and any obligations of Taberna and each participating Holder hereunder, whether as a holder of the Junior Subordinated Notes or as a prospective Holders of the Replacement Collateral,
may be canceled at, or at any time prior to, the Closing Date by Taberna, any participating Holder or the Parent, as the case may be. Notice of such cancellation shall be given to the other party in writing or by telephone and confirmed in writing,
or by e-mail or facsimile. 
 Each certificate signed by any officer of the Parent or the Company and delivered to each
participating Holder or their counsel in connection with the Exchange and the transactions contemplated hereby and thereby shall be deemed to be a representation and warranty of the Parent or the Company, as the case may be, and not by such officer
in any individual capacity. 
 4. Representations and Warranties of the Parent and the Company. As of each Closing
Date, each of the Parent and the Company, on a joint and several basis, represents and warrants to, and agrees with Taberna and each Holder participating in an exchange on such Closing Date as follows: 
 (a) It (i) is duly organized and validly existing under the laws of its jurisdiction of organization or incorporation, (ii) is in
good standing under such laws and (iii) has full power and authority to execute, deliver and perform its obligations under this Agreement. 
 (b) Neither the Replacement Collateral nor the Exchange is or reasonably could be expected to be void or voidable as an actual or constructive fraudulent transfer or as a preferential transfer.

  

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 (c) It (i) is a sophisticated entity with respect to the Exchange, (ii) has such
knowledge and experience, and has made investments of a similar nature, so as to be aware of the risks and uncertainties inherent in the Exchange and (iii) has independently and without reliance upon Taberna, any Holder or the Trustee or any of
their respective affiliates, and based on such information as it has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that it has relied upon Taberna’s and the participating Holders’ express
representations, warranties, covenants and agreements in this Agreement. It acknowledges that none of Taberna, any participating Holder or the Trustee or any of their respective affiliates has given it any investment advice, credit information or
opinion on whether the Exchange is prudent. 
 (d) It has not engaged any broker, finder or other entity acting under the
authority of it or any of its affiliates that is entitled to any broker’s commission or other fee in connection with the transaction for which Taberna, any Holder, Trustee or any of their affiliates could be responsible. 
 (e) No interest in the Taberna Transferred Rights is being acquired by or on behalf of an entity that is, or at any time while the Taberna
Transferred Rights are held thereby will be, one or more Benefit Plans. 
 (f) Neither it nor any of its “Affiliates”
(as defined in Rule 501 (b) of Regulation D (“Regulation D”) under the Securities Act), nor any person acting on its or their behalf, has, directly or indirectly, made offers or sales of any security, or solicited offers to buy
any security, under circumstances that would require the registration of any of the Replacement Securities under the Securities Act; provided that it does not make any representations as to any action taken by an Indemnified Party. 
 (g) Neither it nor any of its Affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any offer or sale of any of the Replacement Securities provided, that it does not make any representations as to any action taken by an Indemnified Party. 
 (h) Neither it nor any of its Affiliates, nor any person acting on its or their behalf, has engaged, or will engage, in any “directed
selling efforts” within the meaning of Regulation S under the Securities Act with respect to the Replacement Securities. 
 (i) It is not, and immediately following consummation of the transactions contemplated hereby, will not be, an “investment company” or an entity “controlled” by an “investment company,” in each case within the
meaning of Section 3(a) of the Investment Company Act of 1940, as amended (the “Investment Company Act”). 
 (j) This Agreement and the consummation of the transactions contemplated herein have been duly authorized by it and, on each Closing Date, will have been duly executed and delivered by it, and, assuming due authorization, execution and
delivery by Taberna and the participating Holders will be a legal, valid and binding obligation of it enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity. 
  

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 (k) The Company is the owner of the Replacement Collateral free and clear of any pledge,
mortgage, hypothecation, lien, charge, encumbrance or any security interest therein, or adverse claims of title (in accordance with Section 9-330(d) of the UCC); it has not assigned or otherwise transferred the Replacement Collateral; and it
has the power and authority to transfer the Replacement Collateral. 
 (l) Neither the exchange of the Replacement Collateral
for the Junior Subordinated Notes, nor the execution and delivery of and compliance with this Agreement by the Parent or the Company, nor the consummation of the transactions contemplated herein or therein, (i) will conflict with or constitute
a violation or breach of (x) the charter or bylaws or similar organizational documents of it or any of its subsidiaries or (y) any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental
authority, agency or instrumentality or court, domestic or foreign, having jurisdiction over it or any of its subsidiaries or their respective properties or assets (collectively, the “Governmental Entities”), (ii) will conflict
with or constitute a violation or breach of, or a default or Repayment Event (as defined below) under, or result in the creation or imposition of any pledge, security interest, claim, lien or other encumbrance of any kind (each, a
“Lien”) upon any property or assets of it or any of its subsidiaries pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which (A) it or any subsidiary is a party or by
which it or any of them may be bound, or (B) to which any of the property or assets of any of them is subject, or any judgment, order or decree of any court, Governmental Entity or arbitrator, except, in the case of clause (i)(y) or this clause
(ii), for such conflicts, breaches, violations, defaults, Repayment Events (as defined below) or Liens which (X) would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by this Agreement and
(Y) would not, singly or in the aggregate, have a Material Adverse Effect or (iii) will require the consent, approval, authorization or order of any court or Governmental Entity. As used herein, a “Repayment Event” means
any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by it or any of its subsidiaries prior to its scheduled maturity. Notwithstanding the foregoing, solely for purposes of subclause (ii) above, no conflict, breach, violation, default, Repayment Event, Lien or Material Adverse Effect
will be deemed to have occurred unless (a) acknowledged by it or (b) adjudicated by a court of competent jurisdiction. 
 (m) All of the information provided in writing by the Company or the Parent to Taberna, the Holders or the Trustee, as the case may be, in connection with the Exchange is true, complete and accurate in all material respects. 
 (n) There is no action, suit or proceeding before or by any Governmental Entity, arbitrator or court, domestic or foreign, now pending or,
to the knowledge of it after due inquiry, threatened against or affecting it or any of its subsidiaries, except for such actions, suits or proceedings that, if adversely determined, would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by this Agreement or have a Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which it or any of its subsidiaries is a party or of which any of their
respective properties or assets is subject, including ordinary routine litigation incidental to the business, are not expected to result in a Material Adverse Effect. 
  

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 (o) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Governmental Entity, other than those that have been made or obtained, is necessary or required for the performance by it of its obligations under this Agreement, or the consummation by it of the transactions
contemplated by this Agreement. 
 (p) It understands that the Exchange contemplated herein will be made in reliance upon an
exemption from registration under the Securities Act pursuant to Section 4(2) thereof. 
 Except as expressly stated in
this Agreement or any of the other documents delivered by the Parent or the Company, as the case may be, in connection herewith, neither the Parent nor the Company makes any representations or warranties, express or implied, with respect to the
Exchange, the Taberna Transferred Rights, the Junior Subordinated Notes, the Indenture or any other matter. 
 5.
Representations and Warranties of the Holders. As of each Closing Date, each Holder participating in an exchange on such Closing Date, for itself, and Taberna (in the case of clause (d) below) represents and warrants to, and agrees with,
the Parent and the Company as follows: 
 (a) It is a company duly formed, validly existing and in good standing under the laws
of the jurisdiction in which it is organized with all requisite power and authority to execute, deliver and perform this Agreement, to make the representations and warranties specified herein and therein and to consummate the transactions
contemplated in this Agreement. 
 (b) This Agreement and the consummation of the transactions contemplated herein has been duly
authorized by it and, on the Closing Date, will have been duly executed and delivered by it and, assuming due authorization, execution and delivery by the Parent, the Company and Taberna of this Agreement, will be a legal, valid and binding
obligation of such Holder, enforceable against such Holder in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity. 
 (c) No filing with, or authorization, approval, consent, license, order registration, qualification or decree of, any Governmental Entity or
any other Person, other than those that have been made or obtained, is necessary or required for the performance by such Holder of its obligations under this Agreement or to consummate the transactions contemplated herein. 
 (d) Neither the exchange of the Replacement Collateral for the Junior Subordinated Notes, nor the execution and delivery of and compliance
with this Agreement by Taberna or any participating Holder, nor the consummation of the transactions contemplated herein or therein, conflict with, or will result in a violation or breach of or constitute a default (or an event which, with or
without notice or lapse of time or both, would constitute a default) under, (i) the terms, conditions or provisions of any organizational document of any Holder, (ii) any statute, law, rule or regulation applicable to any Holder or
(iii) any contract or other instrument of any kind to which Taberna or any participating Holder is now a party or by which Taberna or any participating Holder may be bound or affected. 
  

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 (e) It is the legal and beneficial owner of its respective Junior Subordinated Notes and the
related Taberna Transferred Rights free and clear of any pledge, mortgage, hypothecation, lien, charge, encumbrance or any security interest therein, or adverse claims of title (in accordance with Section 9-330(d) of the UCC); it has not
assigned or otherwise transferred the Junior Subordinated Notes and the related Taberna Transferred Rights; it has the power and authority to transfer the Junior Subordinated Notes and the related Taberna Transferred Rights; and it shall deliver
such Junior Subordinated Notes free and the related Taberna Transferred Rights and clear of any Lien created by such Holder. 
 (f) There is no action, suit or proceeding before or by any Governmental Entity, arbitrator or court, domestic or foreign, now pending or, to its knowledge, threatened against or affecting it, except for such actions, suits or proceedings
that, if adversely determined, would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Agreement. 
 (g) It is aware that the Replacement Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to “U.S. persons” (as
defined in Regulation S under the Securities Act) unless registered with the Commission, except in accordance with Rule 903 of Regulation S under the Securities Act or pursuant to an exemption from the registration requirements of the Securities
Act. 
 (h) It understands and acknowledges that (i) no public market exists for any of the Replacement Securities and that
it is unlikely that a public market will ever exist for the Replacement Securities, (ii) such Holder is purchasing the Replacement Securities for its own account, for investment and not with a view to, or for offer or sale in connection with,
any fractionalization, division or distribution thereof in violation of the Securities Act or other applicable securities laws, subject to any requirement of law that the disposition of its property be at all times within its control and subject to
its ability to resell such Replacement Securities pursuant to an effective registration statement under the Securities Act or pursuant to an exemption therefrom or in a transaction not subject thereto, and it agrees to the legends and transfer
restrictions applicable to the Replacement Securities contained in this Agreement, and (iii) it has had the opportunity to ask questions of, and receive answers and request additional information from, the Parent and the Company and is aware
that it may be required to bear the economic risk of an investment in the Replacement Securities. It has not received and is not relying on any representations of the Parent or the Company other than as set forth in this Agreement, or in any public
filings. It has not entered into any contract to sell, transfer or pledge to any person the Replacement Securities that it is acquiring. 
 (i) It has independently and without reliance upon the Parent, the Company or any of their affiliates, and based on such information as it has deemed appropriate, made its own analysis and decision to
enter into this Agreement, except that it has relied upon the Parent’s and the Company’s express representations, warranties, covenants and agreements in the Agreement and the other documents delivered by the Parent or the Company in
connection therewith. It acknowledges that neither the Parent nor the Company has given it any investment advice or opinion on whether the Exchange is prudent. 
  

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 (j) It understands that the Exchange contemplated herein will be made in reliance upon an
exemption from registration under the Securities Act pursuant to Section 4(2) thereof. 
 (k) It is not, and immediately
following consummation of the transactions contemplated hereby, will not be, an “investment company” or an entity “controlled” by an “investment company,” in each case within the meaning of Section 3(a) of the
Investment Company Act. 
 (l) It is an “accredited investor,” as such term is defined in Rule 501 (a) of
Regulation D under the Securities Act and has such knowledge and experience in financial and business matters as to be capable of evaluating the risks and merits of exchanging the Junior Subordinated Notes for the Replacement Collateral. Without
characterizing the Junior Subordinated Notes or the Taberna Transferred Rights as a “security” within the meaning of applicable securities laws, it has not made any offers to sell, or solicitations of any offers to buy, all or any portion
of the Junior Subordinated Notes or Taberna Transferred Rights in violation of any applicable securities laws. 
 (m) It has not
engaged any broker, finder or other entity acting under its authority that is entitled to any broker’s commission or other fee in connection with this Agreement and the consummation of transactions contemplated in this Agreement for which the
Parent or the Company could be responsible. 
 Except as expressly stated in this Agreement, each participating Holder makes no
representations or warranties, express or implied, with respect to the Exchange, the Taberna Transferred Rights, the Junior Subordinated Notes, the Indenture, or any other matter. 
 6. Covenants and Agreements of the Parent and the Company. As of each Closing Date, each of the Parent and the Company, on a
joint and several basis, agrees with Taberna and each participating Holder as follows: 
 (a) It has taken all action reasonably
necessary or appropriate to cause its representations and warranties contained in Section 4 hereof to be true as of each Closing Date. 
 (b) It will not, and will not permit any of its Affiliates or any person acting on its or their behalf to, directly or indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of any of the Replacement Securities under the Securities Act. 
 (c) It will not, and will not permit any of its Affiliates or any person acting on its or their behalf to, engage in (i) any form of “general solicitation or general advertising” (within the meaning of Regulation D), or
(ii) any “directed selling efforts” within the meaning of Regulation S under the Securities Act, in connection with any offer or sale of any of the Replacement Securities. 
  

 12 

 (d) It will, during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, or it or its general partner is not exempt from such reporting requirements pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each Holder of the Replacement Securities,
upon the request of such Holder, any information required to be provided by Rule 144A(d)(4) under the Securities Act. 
 (e) It
will not identify any of the Indemnified Parties (as defined below) in a press release or any other public statement without the prior written consent of such Indemnified Party, which consent will not be unreasonably withheld or delayed; provided
that each Indemnified Party acknowledges that the Parent will file a current report on Form 8-K concurrently with the First Closing Date, which document the Indemnified Parties may review and comment on prior to issuance by the Parent. 

7. Future Exchanges. 
 (a) The parties hereto acknowledge and agree that Taberna has solicited the consent of 100% of the noteholders of Taberna IV and Taberna VI to exchange a portion of the Defaulted CDO Notes for their
respective share of the Replacement Collateral on the Second Closing Date as further set forth on Schedule III hereof. Notwithstanding anything to the contrary herein, in the event the requisite consent is received at least two
(2) business days prior to the Second Closing Date with respect to Taberna IV and/or Taberna VI, (i) on the Second Closing Date, Taberna IV and/or Taberna VI, as applicable, shall exchange a portion of the Defaulted CDO Notes for their
respective share of the Replacement Collateral hereunder and (ii) the Replacement Collateral that will be available to Taberna V and Taberna VII on the Second Closing Date may be reduced by the amount of such Replacement Collateral delivered to
Taberna IV and/or Taberna VI, as applicable, in connection with an Exchange described on Schedule III hereof. 
 (b) It
is expressly understood and agreed by the parties hereto that, notwithstanding anything to the contrary contained herein, and notwithstanding the execution and delivery of this Agreement by Taberna IV and Taberna VI, respectively, in no event shall
either Taberna IV or Taberna VI be deemed to have consented to an Exchange or have the authority to effect an Exchange absent receipt by Taberna of the consent of 100% of the noteholders of each of Taberna IV and Taberna VI, respectively,
provided, however, that if (i) all defaults and their consequences in relation to either Taberna IV and/or Taberna VI, as the case may be, have been cured or waived, (ii) any acceleration of the notes issued by either Taberna IV
and/or Taberna VI, as the case may be, has been rescinded and annulled, (iii) as a result of the actions described in clauses (i) and (ii) above, consent of the noteholders of Taberna IV and/or Taberna VI, as the case may be, is no
longer required to effect an Exchange, and (iv) either or both of Taberna IV and/or VI, as the case may be, are otherwise authorized and permitted to effect an Exchange, then either or both of Taberna IV and/or Taberna VI, as the case may be,
may participate in an Exchange as described on Schedule III hereof. For the avoidance of doubt, it is understood and agreed that neither the Company nor the Parent shall have any role in determining whether either or both of Taberna IV and/or
Taberna VI are authorized or permitted to participate in an Exchange, or any liability (by indemnification or otherwise) in connection with either or both of Taberna IV and/or Taberna VI participating in an Exchange as a result of a determination
that the conditions specified in provisos (i) through (iv) above have been satisfied. 
  

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 8. Payment of Expenses. In addition to the obligations agreed to by the Company,
Parent and Taberna under Section 2(e)(vii) herein, each of the parties hereto agree to pay all costs and expenses incident to the performance of their respective obligations under this Agreement, including, without limitation, the fees and
expenses of their respective counsel, accountants and any other experts or advisors retained by them, whether or not the transactions contemplated herein are consummated or this Agreement is terminated. Notwithstanding the foregoing, the Parent
agrees to cause the Company to pay a maximum of $512,500 to Taberna to cover such third party costs and will make the foregoing payment in three (3) installments to cover such third party costs. The first installment of $256,250 was paid to
Taberna on January 15, 2010, to the extent an Exchange occurs on the First Closing Date, a second installment of $128,125 shall be paid on the First Closing Date and, to the extent an Exchange occurs on the Second Closing Date, the third
installment of $128,125 shall be paid on the Second Closing Date. In addition, the Parent agrees to cause the Company to pay all reasonable costs and expenses incident to the transfer and delivery of the Replacement Collateral and any taxes payable
in connection therewith. 
 9. Indemnification. 
 (a) Each of the Parent and the Company agrees, on a joint and several basis, to indemnify and hold harmless the Holders, Taberna, Taberna
Securities, LLC, and their respective affiliates (collectively, the “Indemnified Parties”), each person, if any, who controls any of the Indemnified Parties within the meaning of the Securities Act or the Exchange Act, and the
Indemnified Parties’ respective directors, officers, employees and agents against any and all losses, claims, damages or liabilities, joint or several, to which the Indemnified Parties may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based on (i) any untrue statement or alleged
untrue statement of a material fact contained in any information or documents provided by it in writing in connection with the Exchange, (ii) any omission or alleged omission to state a material fact required to be stated or necessary to make
the statements contained in any information provided by it in writing in connection with the Exchange, in light of the circumstances under which they were made, not misleading, or (iii) the breach or alleged breach of any representation,
warranty, or agreement of it contained herein, or (iv) the execution and delivery by it of this Agreement and actions taken by it to consummate the transactions contemplated herein, and agrees to reimburse each such Indemnified Party, as
incurred, for any legal or other expenses reasonably incurred by the Indemnified Parties in connection with investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability
that it may otherwise have. For avoidance of doubt, neither the Parent nor the Company shall be obligated to indemnify or hold harmless any of the Indemnified Parties for any losses, claims, damages or liabilities (or actions in respect thereof)
arising out of or based on (i) the execution and delivery of this Agreement by any of the Indemnified Parties and actions taken by them to consummate the transactions contemplated herein, or (ii) bad faith, fraudulent misrepresentation,
willful misconduct or the breach or alleged breach of any representation, warranty, or agreement contained herein by any of the Indemnified Parties. 
  

 14 

 (b) Promptly after receipt by an Indemnified Party under this Section 9 of notice of
the commencement of any action, such Indemnified Party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, promptly notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve the indemnifying party from liability under paragraph (a) above unless and to the extent that such failure results in the forfeiture by the indemnifying party of material
rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any Indemnified Party other than the indemnification obligation provided in paragraph (a) above. The Indemnified Parties shall be
entitled to appoint one counsel to represent the Indemnified Parties in any action for which indemnification is sought. An indemnifying party may participate at its own expense in the defense of any such action; provided that counsel to the
indemnifying party shall not (except with the consent of the Indemnified Party) also be counsel to the Indemnified Party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to one local
counsel in each jurisdiction) separate from their own counsel for all Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances, unless an Indemnified Party elects to engage separate counsel because such Indemnified Party believes that its interests are not aligned with the interests of another Indemnified Party or that a conflict of interest might result. An
indemnifying party will not, without the prior written consent of the Indemnified Parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Indemnified Parties are actual or potential parties to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of each
Indemnified Party from all liability arising out of such claim, action, suit or proceeding. 
 10. Representations and
Indemnities to Survive. The respective agreements, representations, warranties, covenants and indemnities of the Parent and the Company set forth in or made pursuant to this Agreement will remain in full force and effect and will survive the
Exchange. The provisions of Sections 8 and 9 shall survive the termination or cancellation of this Agreement. 
 11.
Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement by each of the parties hereto. 
 12. Notices. All communications hereunder will be in writing and effective only on receipt, and will be mailed, delivered by hand or
courier or sent by facsimile and confirmed or by any other reasonable means of communication, including by electronic mail, to the relevant party at its address specified below. 
 If to Taberna or any Holder: 
 Taberna Capital Management, LLC 
 450 Park Avenue,
11th Floor 
 New York, New York 10022 
 Attention: Raphael Licht 
 Facsimile: (215) 243-9039 
 Email: rlicht@raitft.com 
  

 15 

 With a copy (which shall not constitute notice) to: 
 Dechert LLP 
 Cira Centre 
 2929 Arch Street 
 Philadelphia, Pennsylvania 19014 
 Attention: Ralph R. Mazzeo, Esq. 
 Facsimile: (215) 655-2417 
 Email: ralph.mazzeo@dechert.com 
 If to the Parent or the Company: 
 Newcastle Investment Corp. 
 1345 Avenue of the Americas, 46th Floor 
 New York, New York 10105 
 Attention: Chief Financial Officer 
 Email: bsigman@fortress.com 
 With a copy (which shall not constitute notice) to:

 Sonnenschein Nath & Rosenthal LLP 
 Two World Financial Center 
 New York, New York 10281 
 Attention: Walter Van Dorn 
 Facsimile: (212) 768-6800 
 Email: wvandorn@sonnenschein.com 
 13. Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person other than the parties hereto and the affiliates, directors, officers, employees, agents and controlling persons
referred to in Section 9 hereof and their successors, assigns, heirs and legal representatives, any right or obligation hereunder. None of the rights or obligations of the Parent or the Company under this Agreement may be assigned, whether by
operation of law or otherwise, without Taberna’s prior written consent. The rights and obligations of each participating Holder and Taberna under this Agreement may be assigned by any Holder or Taberna without the Parent’s or the
Company’s consent; provided that the assignee assumes the obligations of any such Holder or Taberna under this Agreement. 
 14. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW). 
 15. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR
WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE

  

 16 

 
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. 
 16. Counterparts and Facsimile. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. This Agreement may be executed by any one or more of the parties hereto by facsimile. 
 17. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the matters
and transactions contemplated by this Agreement and supersedes any prior agreement or understanding of the parties hereto. 
 [Signature Page Follows] 
  

 17 

 IN WITNESS WHEREOF, this Agreement has been entered into as of the date first written
above. 
  

					
	TABERNA PREFERRED FUNDING IV, LTD.
	TABERNA PREFERRED FUNDING V, LTD.
	TABERNA PREFERRED FUNDING VI, LTD.
	TABERNA PREFERRED FUNDING VII, LTD.
		
	By:	 	Taberna Capital Management, LLC,
		 	as Collateral Manager
			
		 	By:	 	 /s/    Michael A. Fralin

		 	Name:	 	Michael A. Fralin
		 	Title:	 	Managing Director
	
	TABERNA CAPITAL MANAGEMENT, LLC
		
	By:	 	 /s/    Michael A. Fralin

	Name:	 	Michael A. Fralin
	Title:	 	Managing Director
	
	NEWCASTLE INVESTMENT CORP.
		
	By:	 	 /s/    Kenneth M. Riis

	Name:	 	Kenneth M. Riis
	Title:	 	President and Chief Executive Officer
	
	NIC TRS LLC
		
	By:	 	 /s/    Kenneth M. Riis

	Name:	 	Kenneth M. Riis
	Title:	 	President

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