Document:

Exhibit 10.1

Exhibit 10.1

 

 

EXCHANGE AGREEMENT

among

NEWCASTLE INVESTMENT CORP.

and

TABERNA PREFERRED FUNDING IV, LTD.,

TABERNA PREFERRED FUNDING V, LTD.,

TABERNA PREFERRED FUNDING VI, LTD.,

and

TABERNA PREFERRED FUNDING VII, LTD.

Dated as of April 30, 2009

 

 

 

 

 

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT, dated as of April 30, 2009 (this “Agreement”), is entered into by and
among NEWCASTLE INVESTMENT CORP., a Maryland corporation (the “Company”) and 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, collectively, “Taberna” and each a “Taberna
Entity”), each an exempted company incorporated and existing under applicable law of the Cayman
Islands.

RECITAL:

A. Reference is made to that certain Junior Subordinated Indenture dated as of March 29, 2006
(the “Existing Indenture”), by and between the Company and The Bank of New York Mellon Trust
Company, National Association (“BNYM”) (as successor to JPMorgan Chase Bank, National Association),
as trustee (the “Existing Indenture Trustee”).

B. Reference is made to that certain Amended and Restated Trust Agreement dated as of March
29, 2006 (the “Trust Agreement”) by and among the Company, as depositor, BNYM (successor to
JPMorgan Chase Bank, National Association, as property trustee)(the “Property Trustee”), BNY Mellon
Trust of Delaware (as successor to Chase Bank USA, National Association), as Delaware trustee (the
“Delaware Trustee”), and the respective administrative trustees named therein.

C. Newcastle Trust I (“Trust I”) is the holder of the Junior Subordinated Note due 2036 in the
original aggregate principal amount of $100,100,000 issued by the Company pursuant to the Existing
Indenture (the “Subordinated Note”).

D. Taberna IV, Taberna V, Taberna VI and Taberna VII are the holders of Preferred Securities
in the original aggregate Liquidation Amount of $100,000,000 issued by Trust I pursuant to the
Trust Agreement, copies of the definitive notes being attached hereto as Exhibit A (the
“Original Preferred Securities”).

E. Simultaneously herewith, the Company and BNYM, as trustee (the “New Indenture Trustee”)
have entered into that certain Junior Subordinated Indenture (the “New Indenture”) pursuant to
which Company proposes to issue One Hundred One Million Seven Hundred Thousand Dollars
($101,700,000) in aggregate principal amount (as the same may be increased from time to time in
accordance with the terms of the New Indenture) of the Junior Subordinated Notes due 2035 of the
Company, with such aggregate principal amount allocated to each Taberna Entity and the definitive
notes being issued as follows (collectively, the “Securities”):

(i) Junior Subordinated Note due 2035 in the original stated principal amount of
$24,789,000 (as the same may be increased from time to time in accordance with the
terms of the New Indenture) issued by the Company to Taberna IV, a copy of which is
attached hereto as Exhibit B-1 (“Note 1”);

 

  

 

(ii) Junior Subordinated Note due 2035 in the original stated principal amount of
$26,061,000 (as the same may be increased from time to time in accordance with the
terms of the New Indenture) issued by the Company to Taberna V, a copy of which is
attached hereto as Exhibit B-2 (“Note 2”);

(iii) Junior Subordinated Note due 2035 in the original stated principal amount of
$25,425,000 (as the same may be increased from time to time in accordance with the
terms of the New Indenture) issued by the Company to Taberna VI, a copy of which is
attached hereto as Exhibit B-3 (“Note 3”); and

(iv) Junior Subordinated Note due 2035 in the original stated principal amount of
$25,425,000 (as the same may be increased from time to time in accordance with the
terms of the New Indenture) issued by the Company to Taberna VII, a copy of which is
attached hereto as Exhibit B-4 (“Note 4”);

J. On the terms and subject to the conditions set forth in this Agreement, the Company and
Taberna have agreed to exchange the Original Preferred Securities for the Securities.

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. This Agreement, the New Indenture, the Securities, that certain Pledge
and Security Agreement from the Company in favor of the Trustee, and that certain Pledge, Security
Agreement and Account Control Agreement from NIC TP LLC in favor of the Trustee and acknowledged
and agreed to by the Company, each entered into as of the date hereof, are collectively referred to
herein as the “Operative Documents.” All other capitalized terms used but not defined in this
Agreement shall have the respective meanings ascribed thereto in the New Indenture.

“1934 Act Regulations” has the meaning set forth in Section 4(z).

“1934 Act Reports” has the meaning set forth in Section 4(z).

“Affiliate” of any specified person means any other Person directly or indirectly Controlled,
Controlling or Controlled by, or under direct or common Control with such specified Person.

“Arbitrator” has the meaning set forth in Section 4(l).

“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 the
assets of any such “employee benefit plan” or “plan” for purposes of Section 3(42) of ERISA and
U.S. Department of Labor Regulations promulgated thereunder at 29 C.F.R. Section 2510.3-101.

 

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“BNYM” has the meaning set forth in the Recitals.

“CDO Trustee” has the meaning set forth in Section 2(b)(i).

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated under it.

“Closing Date” has the meaning set forth in Section 2(b).

“Closing Room” has the meaning set forth in Section 2(b).

“Company” has the meaning set forth in the introductory paragraph hereof.

“Company Counsel” has the meaning set forth in Section 3(b).

“Commission” has the meaning set forth in Section 4(v).

“Control” when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

“Delaware Trustee” has the meaning set forth in the Recitals.

“Environmental Law” has the meaning set forth in Section 4(ll).

“Environmental Laws” shall have the correlative meaning.

“Equity Interests” means with respect to any Person (a) if such a Person is a partnership, the
partnership interests (general or limited) in a partnership, (b) if such Person is a limited
liability company, the membership interests in a limited liability company and (c) if such Person
is a corporation, the shares or stock interests (both common stock and preferred stock) in a
corporation.

“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(b).

“Exchange Act” has the meaning set forth in Section 4(j).

“Existing Indenture” has the meaning set forth in the Recitals.

“Existing Indenture Trustee” has the meaning set forth in the Recitals.

“Fee Agreement” means that certain Fee Agreement dated the date hereof between the Company and
BNYM.

“Financial Statements” has the meaning set forth in Section 4(w).

 

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“GAAP” has the meaning set forth in Section 4(w).

“Governmental Entities” has the meaning set forth in Section 4(o).

“Governmental Licenses” has the meaning set forth in Section 4(r).

“Hazardous Materials” has the meaning set forth in Section 4(kk).

“Holder” has the meaning set forth in the New Indenture.

“Impairment” means any claim, counterclaim, setoff, defense, action, demand, litigation
(including administrative proceedings or derivative actions), encumbrance, right (including
expungement, avoidance, reduction, contractual or equitable subordination, or otherwise) or defect.

“Indemnified Party” has the meaning set forth in Section 8(a). “Indemnified Parties” shall
have the correlative meaning.

“Investment Company Act” has the meaning set forth in Section 4(j).

“Lien” has the meaning set forth in Section 4(o).

“Material Adverse Effect” means a material adverse effect on or change in the condition
(financial or otherwise), earnings, business, liabilities or assets of the Company and its
subsidiaries taken as a whole.

“New Indenture” has the meaning set forth in the Recitals.

“New Indenture Trustee” has the meaning set forth in the Recitals.

“Note 1” has the meaning set forth in the Recitals.

“Note 2” has the meaning set forth in the Recitals.

“Note 3” has the meaning set forth in the Recitals.

“Note 4” has the meaning set forth in the Recitals.

“Original Preferred Securities” 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.

“Property” means the Trump International Hotel and Tower Chicago.

“Property Trustee” has the meaning set forth in the Recitals.

 

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“Regulation D” has the meaning set forth in Section 4(h).

“Repayment Event” has the meaning set forth in Section 4(o).

“Rule 144A(d)(3)” has the meaning set forth in Section 4(j).

“Securities” has the meaning set forth in the Recitals.

“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.

“Significant Subsidiary” means any significant subsidiary of the Company within the definition
of such term in Regulation S-X. “Significant Subsidiaries” means, collectively, each and every
Significant Subsidiary.

“Subordinated Note” has the meaning set forth in the Recitals.

“Taberna” has the meaning set forth in the introductory paragraph hereof.

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

“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.

“Taberna Transferred Rights” means any and all of Taberna’s right, title, and interest in, to
and under the Original Preferred Securities, together with the following:

(i) the Existing Indenture and Trust Agreement;

(ii) all amounts payable to Taberna under the Original Preferred Securities, the
Existing Indenture and/or the Trust Agreement, excluding, however, amounts payable on
account of interest for the period from January 30, 2009 through April 29, 2009;

(iii) all claims (including “claims” as defined in Bankruptcy Code §101(5)), suits,
causes of action, and any other right of Taberna, whether known or unknown, against the
Company or any of its Affiliates (including the Trusts), 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 against
any attorney, accountant, financial advisor, or other entity arising under or in connection
with the Original Preferred Securities, the Existing Indenture, the Trust
Agreement or the transactions related thereto or contemplated thereby (but excluding
the transactions contemplated under this Agreement);

 

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(iv) all guarantees and all collateral and security of any kind for or in respect of
the foregoing;

(v) all cash, securities, or other property, and all setoffs and recoupments, to be
received, applied, or effected by or for the account of Taberna under the Original Preferred
Securities, other than fees, costs and expenses payable to Taberna 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; and

(vi) all proceeds of the foregoing.

“Tax Returns” has the meaning set forth in Section 4(ee).

“Trust I” has the meaning set forth in the Recitals.

“Trust Agreement” has the meaning set forth in the Recitals.

2. Exchange of Original Preferred Securities for Securities.

(a) The Company agrees to issue the Securities in accordance with the New Indenture and has
requested that Taberna accept such Securities in exchange for the Original Preferred Securities,
and Taberna hereby accepts such Securities in exchange for the Original Preferred Securities upon
the terms and conditions set forth herein.

(b) The closing of the exchange contemplated herein shall occur at the offices of Nixon
Peabody, LLP in New York, New York (the “Closing Room”), or such other place as the parties hereto
and BNYM shall agree, at 11:00 a.m. New York time, on April 30, 2009 or such later date as the
parties may agree (such date and time of delivery the “Closing Date”). The Company and Taberna
hereby agree that the exchange (the “Exchange”) will occur in accordance with the following
requirements:

(i) Taberna Capital Management, LLC (as collateral manager for each of the Taberna
entities) 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 holders of the Original Preferred Securities to exchange the
Original Preferred Securities for the Securities and to deliver the Original Preferred
Securities to the Property Trustee for cancellation.

(ii) The Original Preferred Securities and the Securities shall have been delivered to
the Closing Room, copies of which shall have previously been made available for inspection,
if so requested.

(iii) Company shall have directed the New Indenture Trustee to authenticate the
Securities and deliver them to the applicable CDO Trustee, as follows:
(i) Note 1 to Taberna IV, (ii) Note 2 to Taberna V, (iii) Note 3 to Taberna VI, and
(iv) Note 4 to Taberna VII.

 

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(iv) New Indenture Trustee shall have authenticated the Securities in accordance with
the terms of the New Indenture and delivered them as provided above.

(v) Property Trustee shall have obtained the Original Preferred Securities and shall
promptly thereafter, if requested by the Company, cancel them.

(vi) Simultaneously with the occurrence of the events described in subsections (iv) and
(v) hereof, (A) each Taberna Entity holding the applicable Original Preferred Securities
irrevocably transfers, assigns, grants and conveys the related Taberna Transferred Rights to
the Company and the Company assumes all rights and obligations of Taberna with respect to
the Original Preferred Securities and the Taberna Transferred Rights and (B) each Holder
shall be entitled to all of the rights, title and interest of a Holder of the Securities
under the terms of the Securities, the New Indenture and any other Operative Documents.

(vii) the Company shall have paid to the BNYM all of such party’s legal fees, costs and
other expenses in connection with the Exchange as specified in the Fee Agreement, as well as
all other accrued and unpaid fees, costs and expenses under the Existing Indenture and the
Trust Agreement, if any.

(viii) The Company shall have paid to the Trustee, for application upon the Original
Preferred Securities and for distribution to the applicable Taberna entities holding such
Original Preferred Securities pursuant to the terms of the Existing Indenture, all accrued
interest for the period commencing on the most recent interest payment date under the
Original Preferred Securities and continuing through and including April 29, 2009 at an
effective interest rate equal to one percent (1%) per annum on a principal balance of
$101,700,000.00; provided, that interest accruing and payable solely for the period from
January 30, 2009 through and including April 29, 2009 which are in excess of such amount
shall be waived.

(ix) The Operative Documents and the Joint Direction and Release by and among the
Company, Taberna and the Trustee shall have been fully executed and originals thereof
delivered to the Closing Room for release upon the Closing Date.

3. Conditions Precedent. The obligations of the parties under this Agreement are
subject to the following conditions precedent:

(a) The representations and warranties contained herein shall be accurate as of the date of
delivery of the Securities and the parties shall be prepared to complete all actions and consummate
the Exchange as set forth in Section 2(b).

 

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(b) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company and DLA Piper LLP (US),
special Maryland counsel for the Company (collectively, the “Company Counsel”), shall have
delivered one or more opinions, dated the Closing Date, addressed to each Taberna Entity and its
successors and assigns and to the New Indenture
Trustee, in substantially the form set out in Annex A 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 Company and by government officials; provided,
however, that copies of any such certificates or documents are delivered to Taberna and by and upon
such other documents as such counsel may, in its reasonable opinion, deem appropriate as a basis
for Company Counsel’s opinion or opinions. Company Counsel may specify the relevant jurisdiction
or 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 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).

(c) Taberna shall have been furnished the opinion of Company Counsel, dated as of the Closing
Date, addressed to the Taberna entities, the New Indenture Trustee and their respective successors
and assigns (excluding the Company, its subsidiaries and/or its Affiliates), in substantially the
form set out in Annex B hereto.

(d) Taberna shall have received the opinion of Gardere Wynne Sewell LLP, special counsel for
the New Indenture Trustee, dated as of the Closing Date, addressed to the Taberna, in substantially
the form set out in Annex C hereto.

(e) The Company shall have furnished to the Holders of the Securities a certificate of the
Company, signed by the Chief Executive Officer, President or an Executive Vice President, and Chief
Financial Officer, Treasurer or Assistant Treasurer of the Company, dated as of the Closing Date,
as to (i) and (ii) below:

(i) the representations and warranties in this Agreement and the New Indenture are true
and correct on and as of the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and

(ii) since the date of the Financial Statements, there has been no Material Adverse
Effect.

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 Taberna or its counsel, this Agreement and any obligations of Taberna hereunder,
whether as holders of the Original Preferred Securities or as prospective Holders of the
Securities, may be canceled at, or at any time prior to, the Closing Date by Taberna. Notice of
such cancellation shall be given to the Company in writing or by e-mail or facsimile.

Each certificate signed by any officer of the Company and delivered in connection with the
Operative Documents and the transactions contemplated hereby and thereby shall be deemed to be a
representation and warranty of the Company and not by such officer in any individual capacity.

 

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4. Representations and Warranties of the Company. The Company represents and
warrants, as of the date hereof, and agrees with Taberna, as holders of the Original Preferred
Securities and with the Holders of the Securities, as follows:

(a) It (i) is duly incorporated and validly existing under the laws of the State of Maryland,
(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 and the other Operative Documents.

(b) It is an “accredited investor” as defined in Rule 501 under the Securities Act. Without
characterizing the Original Preferred Securities or any of the Taberna Transferred Rights as a
“security” within the meaning of applicable securities laws, it is not acquiring the Original
Preferred Securities or the Taberna Transferred Rights with a view towards the sale or distribution
thereof in violation of the Securities Act.

(c) None of the Securities, the New Indenture, or the Exchange is or may be subject to any
Impairment. The Company has no current intention to initiate any bankruptcy or insolvency
proceedings. The Company (i) has not entered into the Exchange or any Operative Documents with the
actual intent to hinder, delay, or defraud any creditor and (ii) received reasonably equivalent
value in exchange for its obligations under the Operative Documents.

(d) Reserved.

(e) 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, Taberna Capital Management, LLC or BNYM 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 Taberna’s express representations, warranties, covenants
and agreements in this Agreement. The Company acknowledges that none of Taberna, Taberna Capital
Management, LLC or Trustee or any of their respective Affiliates has given it any investment
advice, credit information or opinion on whether the Exchange is prudent.

(f) 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, BNYM or any of their affiliates could be
responsible.

(g) 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.

(h) Neither the Company nor any of its “Affiliates” (as defined in Rule 501(b) of Regulation D
(“Regulation D”) under the Securities Act (as defined below)), 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
Securities under the Securities Act.

 

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(i) Intentionally omitted.

(j) The Securities (i) are not and have not been listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or quoted on a U.S. automated inter-dealer quotation system and (ii) are not of an open-end
investment company, unit investment trust or face-amount certificate company that are, or are
required to be, registered under Section 8 of the Investment Company Act of 1940, as amended (the
“Investment Company Act”), and the Securities otherwise satisfy the eligibility requirements of
Rule 144A(d)(3) promulgated pursuant to the Securities Act (“Rule 144A(d)(3)”).

(k) Neither the Company 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 Securities.

(l) The Company 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.

(m) Each of this Agreement, the New Indenture and that certain Pledge and Security Agreement
entered into in connection herewith and therewith and the consummation of the transactions
contemplated herein and therein have been duly authorized by the Company and, on the Closing Date,
will have been duly executed and delivered by the Company, and, assuming due authorization,
execution and delivery by Taberna and/or the New Indenture Trustee, as applicable, will be a legal,
valid and binding obligations of the Company 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.

(n) The Securities have been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered to the New Indenture Trustee for authentication in accordance
with the New Indenture and, when authenticated in the manner provided for in the New Indenture and
delivered to the Holders, will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the New Indenture, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally and to general principles of equity.

 

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(o) Neither the issue of the Securities and exchange of the Securities for the Original
Preferred Securities, nor the execution and delivery of and compliance with the Operative Documents
by 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 the Company or any Significant Subsidiary of the Company 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 the Company 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 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 the Company or any if its Significant
Subsidiaries pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which (A) the Company or any of its Significant Subsidiaries 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 Governmental Entity or arbitrator having
jurisdiction over the Company or any of its subsidiaries or their respective properties or assets
(an “Arbitrator”), except for Liens contemplated by the Operative Documents, or (iii) will require
the consent, approval, authorization or order of any court or Governmental Entity, except, in the
case of clause (i)(y), (ii), or (iii) 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 the Operative Documents and
(Y) would not, singly or in the aggregate, have a Material Adverse Effect. 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 the Company or
any of its Significant Subsidiaries prior to its scheduled maturity.

(p) The Company has all requisite power and authority to own, lease and operate its properties
and assets and conduct the business it transacts and proposes to transact, and is duly qualified to
transact business and is in good standing in each jurisdiction where the nature of its activities
requires such qualification, except where the failure of the Company to have such power and
authority or be so qualified would not, singly or in the aggregate, have a Material Adverse Effect.

(q) Each Significant Subsidiary of the Company is listed on Schedule 1 attached hereto, which
the Company represents is true, complete and correct. Each Significant Subsidiary is a
corporation, partnership or limited liability company duly and properly incorporated or organized
or formed, as the case may be, validly existing and, with respect to any such corporation, in good
standing under the laws of the jurisdiction in which it is chartered or organized or formed, with
all requisite power and authority to own, lease and operate its properties and conduct the business
it transacts. Each Significant Subsidiary is duly qualified to transact business in each
jurisdiction where the nature of its activities requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect.
No Significant Subsidiary of the Company (other than a taxable REIT subsidiary, if any,) is
currently prohibited, directly or indirectly, under any agreement or other instrument to which it
is a party or to which it or its assets is subject, other than as required by applicable law, from
paying any dividends to the Company, from making any other distribution on such Significant
Subsidiary’s capital stock or other Equity Interests, from repaying to the Company any loans or
advances to such Significant Subsidiary from the Company or from transferring any of such
Significant Subsidiary’s wholly owned properties or assets to the Company or any other subsidiary
of the Company except (i) as disclosed to Taberna in writing or in the Company’s public filings or
(ii) with respect to limitations on payments to the Company currently in effect on the Company’s
collateralized bond obligations, residential mortgage backed securities and manufactured housing
loans as set forth on Schedule 2.

 

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(r) The Company and each of the Company’s subsidiaries hold all necessary approvals,
authorizations, orders, licenses, consents, registrations, qualifications, certificates and permits
(collectively, the “Governmental Licenses”) of and from Governmental Entities necessary to conduct
their respective businesses as now being conducted, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation or modification of
any such Government License, except where the failure to be so licensed or approved or the receipt
of an unfavorable decision, ruling or finding, would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity or the failure of such Governmental Licenses to be in full force and
effect, would not, singly or in the aggregate, have a Material Adverse Effect; and the Company and
its subsidiaries are in compliance with all applicable laws, rules, regulations, judgments, orders,
decrees and consents, except where the failure to be in compliance would not, singly or in the
aggregate, have a Material Adverse Effect.

(s) All of the issued and outstanding Equity Interests of the Company and each of its
Significant Subsidiaries are validly issued, fully paid and non-assessable; all of the issued and
outstanding Equity Interests of each subsidiary of the Company that are owned by the Company,
directly or through subsidiaries, are free and clear of any Lien or claim; and none of the issued
and outstanding Equity Interests of the Company or any subsidiary was issued in violation of any
preemptive or similar rights arising by operation of law, under the charter or by-laws of such
entity or under any agreement to which the Company or any of its subsidiaries is a party.

(t) Neither the Company nor any of its subsidiaries is (i) in violation of its respective
charter or by-laws or similar organizational documents or (ii) in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the
Company or any such Significant Subsidiary is a party or by which it or any of them may be bound or
to which any of the property or assets of any of them is subject, except, in the case of clause
(ii), where such violation or default would not, singly or in the aggregate, have a Material
Adverse Effect.

(u) There is no action, suit or proceeding before or by any Governmental Entity or Arbitrator,
now pending or, to the knowledge of the Company after due inquiry, threatened against or affecting
the Company or any of its subsidiaries, except for such actions, suits or proceedings as disclosed
in the Company’s reports filed with the Commission pursuant to the Exchange Act or in Schedule II
of that certain Pledge and Security Agreement entered into in connection herewith, or that, if
adversely determined, would not, singly or in the aggregate, adversely affect the consummation of
the transactions contemplated by the Operative Documents or have a Material Adverse Effect; and,
except as disclosed in the Company’s Exchange Act filings, the aggregate of all pending legal or
governmental proceedings to which the Company 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.

 

- 12 -

 

(v) The accountants of the Company who certified the Financial Statements(defined below) are
independent public accountants of the Company and its
subsidiaries within the meaning of the Securities Act, and the rules and regulations of the
Securities and Exchange Commission (the “Commission”) thereunder.

(w) The audited consolidated financial statements (including the notes thereto) and schedules
of the Company and its consolidated subsidiaries for the fiscal year ended December 31, 2008, (the
“Financial Statements”) filed by the Company in its Annual Report on Form 10-K on March 16, 2009
are the most recent available audited consolidated financial statements of the Company and its
consolidated subsidiaries, respectively, and fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles (“GAAP”), the financial position of the Company
and its consolidated subsidiaries, and the results of operations and changes in financial condition
as of the dates and for the periods therein specified. Such consolidated financial statements and
schedules have been prepared in accordance with GAAP consistently applied throughout the periods
involved (except as otherwise noted therein).

(x) Neither the Company nor any of its subsidiaries has any material liability, whether
asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due, including any liability for taxes,
except for (i) liabilities set forth in the Financial Statements or the Interim Financial
Statements and (ii) normal fluctuations in the amount of the liabilities referred to in clause (i)
above occurring in the ordinary course of business of the Company and all of its subsidiaries since
the date of the most recent balance sheet included in such Financial Statements and (iii)
liabilities that would not, singly or in the aggregate, have a Material Adverse Effect.

(y) Since the date of the Financial Statements, there has not been (A) any Material Adverse
Effect or (B) any dividend or distribution of any kind declared, paid or made by the Company on any
class of its Equity Interests.

(z) The documents of the Company filed with the Commission in accordance with the Exchange
Act, from and including the commencement of the fiscal year covered by the Company’s most recent
Annual Report on Form 10-K, at the time they were filed by the Company with the Commission
(collectively, the “1934 Act Reports”), complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission thereunder (the “1934 Act
Regulations”), and, did not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The Company is in
compliance in all material respects with all currently applicable requirements of the Exchange Act
that were added by the Sarbanes-Oxley Act of 2002.

(aa) No labor dispute with the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is imminent, except those which would not, singly or in the
aggregate, have a Material Adverse Effect.

 

- 13 -

 

(bb) 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 the Company of its obligations
under the Operative Documents, as applicable, or the consummation by the Company of the
transactions contemplated by the Operative Documents.

(cc) The Company and each of its Significant Subsidiaries has good and valid title to all of
its respective real and personal property, in each case free and clear of all Liens and defects,
except for Liens for Taxes not yet due or payable and those Liens securing debt in the ordinary
course of its business and that would not, singly or in the aggregate, have a Material Adverse
Effect; and all of the leases and subleases under which the Company or any of its Significant
Subsidiaries holds properties are in full force and effect, except where the failure of such leases
and subleases to be in full force and effect would not, singly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any of its Significant Subsidiaries has any notice of
any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any
Significant Subsidiary under any such leases or subleases, or affecting or questioning the rights
of such entity to the continued possession of the leased or subleased premises under any such lease
or sublease, except for such claims that would not, singly or in the aggregate, have a Material
Adverse Effect.

(dd) Commencing with its taxable year ended December 31, 2002, the Company has been, and upon
the completion of the transactions contemplated hereby, the Company will continue to be, organized
and operated in conformity with the requirements for qualification and taxation as a real estate
investment trust (a “REIT’) under Sections 856 through 860 of the Code for so long as the judgment
of the Company’s board of directors is that the Company should maintain its status as a REIT, and
the Company’s organizational structure and proposed method of operation will enable it to continue
to meet the requirements for qualification and taxation as a REIT under the Code for so long as the
judgment of the Company’s Board of Directors is that the Company should maintain its status as a
REIT, and no actions have been taken (or not taken which are required to be taken) which would
cause such qualification to be lost. The Company expects to continue to be organized and to
operate in a manner so as to qualify as a REIT in the taxable year ending December 31, 2008 and
succeeding taxable years for so long as the judgment of the Company’s Board of Directors is that
the Company should maintain its status as a REIT.

(ee) The Company and each Significant Subsidiary has timely and duly filed (or filed
extensions thereof (and which extensions are presently in effect)) all material Tax Returns (as
defined below) required to be filed by them, and all such Tax Returns are true, correct and
complete in all material respects. The Company and each Significant Subsidiary has timely and duly
paid in full all material Taxes (as defined below) required to be paid by them (whether or not such
amounts are shown as due on any Tax Return). There are no federal, state, or other Tax audits or
deficiency assessments proposed in writing or pending with respect to the Company or any
Significant Subsidiary, and no such audits or assessments are threatened in writing to the Company.
As used herein, the terms “Tax” or “Taxes” mean (i) all federal, state, local, and foreign taxes,
and other assessments of a similar nature (whether imposed directly or through withholding),
including any interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising as a result of
being a member of any affiliated, consolidated, combined, unitary or similar group, as a successor
to another person or by contract. As used herein, the term “Tax Returns” means all federal, state,
local, and foreign Tax returns, declarations, statements, reports, schedules, forms,
and information returns and any amendments thereto filed or required to be filed with any
Governmental Entity.

 

- 14 -

 

(ff) To the knowledge of the Company, interest payable by the Company on the Securities is
deductible by the Company for United Stated Federal income Tax purposes and there are no
rulemaking or similar proceedings before the U.S. Internal Revenue Service or comparable federal,
state, local or foreign government bodies which involve or, to the knowledge of the Company, affect
the Company or any subsidiary, which, if the subject of an action unfavorable to the Company or any
subsidiary, could result in a Material Adverse Effect.

(gg) The books, records and accounts of the Company and its Significant Subsidiaries
accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions of, the
assets of, and the results of operations of, the Company and its subsidiaries. The Company and
each of its subsidiaries maintains a system of internal accounting controls sufficient to provide
reasonable assurance regarding the Company and each of its consolidated subsidiaries that (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in accordance
with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

(hh) The Company and its Significant Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts in all material respects
as are customary in the businesses in which they are engaged (the ownership of real estate related
loans and securities) after giving effect to the transactions contemplated hereby. All policies of
insurance insuring the Company or any of its Significant Subsidiaries’ respective businesses,
assets, employees, officers and directors are in full force and effect. The Company and each of
the Significant Subsidiaries are in compliance with the terms of such policies and instruments in
all material respects. Neither the Company nor any Significant Subsidiary has reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be available and necessary to continue
its business at a cost that would not have a Material Adverse Effect, except for such failures to
renew or obtain such insurance coverage due to conditions then applicable to the insurance industry
or the REIT industry in general. Within the past twelve months, neither the Company nor any
Significant Subsidiary has been denied any insurance coverage it has sought or for which it has
applied.

(ii) Neither the Company and its Significant Subsidiaries, nor, to the knowledge of the
Company, any person acting on behalf of the Company and/or its Significant Subsidiaries including,
without limitation, any director, officer, manager, agent or employee of the Company or its
Significant Subsidiaries has, directly or indirectly, while acting on behalf of the Company and/or
its Significant Subsidiaries (i) used any corporate, partnership or company funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii)
made any unlawful payment to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate, partnership or
company funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any other unlawful payment.

 

- 15 -

 

(jj) The information provided by the Company pursuant to the Operative Documents does not, as
of the date hereof, and will not as of the Closing Date, contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

(kk) (i) the Company and its subsidiaries have been and are in material compliance with
Environmental Laws (as defined below) applicable to the Trump Property, (ii) none of the Company,
any of its subsidiaries or, to the best of the Company’s knowledge, any other owners of any of the
Trump Property at any time released (as such term is defined in CERCLA (as defined below)) or
otherwise disposed of Hazardous Materials (as defined below) on, to, in, under or from the Trump
Property other than in compliance with all applicable Environmental Laws, (iii) neither the Company
nor any of its subsidiaries has used nor intends to use the Trump Property other than in compliance
with applicable Environmental Laws, (iv) neither the Company nor any of its subsidiaries has
received any notice of, or have any knowledge of any occurrence or circumstance which, with notice
or passage of time or both, would give rise to a claim under or pursuant to any Environmental Law
with respect to the Trump Property, (v) the Trump Property is not included or, to the best
knowledge of the Company, proposed for inclusion on the National Priorities List issued pursuant to
CERCLA by the United States Environmental Protection Agency or, to the best of the Company’s
knowledge, proposed for inclusion on any similar list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Entity, (vi)intentionally omitted, (vii) no
lien has been imposed on the Trump Property by any Governmental Entity in connection with the
presence on or off such property of any Hazardous Material or with respect to an Environmental Law,
and (viii) none of the Company, any of its Significant Subsidiaries or, to the best knowledge of
the Company, any other person or entity for whose conduct any of them is or may be held
responsible, has entered into or been subject to any consent decree, compliance order, or
administrative order in connection with an Environmental Law with respect to the Trump Property.

As used herein, “Hazardous Materials” shall include, without limitation, any flammable
materials, explosives, radioactive materials, hazardous materials, hazardous substances, hazardous
wastes, toxic substances or related materials, asbestos, petroleum, petroleum products and any
hazardous material as defined by any federal, state or local environmental law, statute, ordinance,
rule or regulation, including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5127, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. §§ 6901-6992k, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15
U.S.C. §§ 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y,
the Clean Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26, and the
Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, and any analogous state laws, as any of
the above may be amended from
time to time and in the regulations promulgated pursuant to each of the foregoing (including
environmental statutes and laws not specifically defined herein) (individually, an “Environmental
Law” and collectively, the “Environmental Laws”) or by any Governmental Entity.

 

- 16 -

 

Except as expressly stated in the Operative Documents or any of the other documents delivered
by the company in connection herewith, the Company makes no representations or warranties, express
or implied, with respect to the Exchange, the Taberna Transferred Rights, the Original Preferred
Securities, the Existing Indenture or any other matter.

5. Representations and Warranties of Taberna. Each Taberna Entity, for itself,
represents and warrants to, and agrees with, 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 (i) power and authority to execute,
deliver and perform under Operative Documents to which it is a party, to make the representations
and warranties specified herein and therein and to consummate the transactions contemplated in the
Operative Documents.

(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 Company and Trustee of the Operative
Documents to which each is a party, will be a legal, valid and binding obligation of such Taberna
Entity, enforceable against such Taberna 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 Taberna Entity of its
obligations under this Agreement or to consummate the transactions contemplated herein. Neither
the execution and delivery of this Agreement, nor the transactions contemplated herein, will
conflict with or result in any violation of (i) any provision of the organizational documents of
any Taberna Entity or (ii) any statute, law, rule or regulation applicable to any Taberna Entity.

(d) It is the legal and beneficial owner of its respective Original Preferred Securities and
the related Taberna Transferred Rights and shall deliver such Original Preferred Securities free
and clear of any Lien created by such Taberna Entity.

(e) 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
Operative Documents.

(f) The outstanding principal amount of its respective Original Preferred Securities is the
face amount as set forth in such Original Preferred Securities.

 

- 17 -

 

(g) It is aware that the 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 is an “accredited investor,” as such term is defined in Rule 501(a) of Regulation D
under the Securities Act and was not organized for the purpose of acquiring any of the Securities.
Without characterizing the Original Preferred Securities 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 Original Preferred Securities or
Taberna Transferred Rights in violation of any applicable securities laws.

(i) Neither it nor any of its Affiliates, nor any person acting on its or its Affiliates’
behalf has engaged, or will engage, any form of “general solicitation or general advertising”
(within the meaning of Regulation D under the Securities Act) in connection with any offer or sale
of the Securities.

(j) It understands and acknowledges that (i) no public market exists for any of the Securities
and that it is unlikely that a public market will ever exist for the Securities, (ii) such Holder
is purchasing the 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 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 Securities contained in the
New Indenture, and (iii) it has had the opportunity to ask questions of, and receive answers and
request additional information from, the Company and is aware that it may be required to bear the
economic risk of an investment in the Securities. It has not received and is not relying on any
representations of the Company other than as set forth in the Operative Documents, or in any public
filings. It has not entered into any contract to sell, transfer or pledge to any person the
Securities that it is acquiring.

(k) 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 and the New Indenture for which the
Company could be responsible.

(l) 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 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
Company’s express representations, warranties, covenants and agreements in the Operative Documents
and the other documents delivered by the Company in connection
therewith. It acknowledges that the Company has not given it any investment advice or opinion
on whether the Exchange is prudent.

 

- 18 -

 

(m) 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, Taberna make no representations or warranties,
express or implied, with respect to the Exchange, the Taberna Transferred Rights, the Original
Preferred Securities, the Existing Indenture, or any other matter.

6. Covenants and Agreements of the Company. The Company agrees with the Taberna and
the Holders as follows:

(a) The Company has taken all action reasonably necessary or appropriate to cause its
representations and warranties contained in Section 4 hereof to be true as of the Closing
Date and giving effect to the Exchange.

(b) The Company will use commercially reasonable efforts to arrange for the qualification of
the Securities for sale under the laws of such jurisdictions as the Holders of the Securities may
designate and will maintain such qualifications in effect so long as required for the sale of the
Securities; provided that the Company shall not be required to qualify as a foreign corporation or
take any action that would subject it to general service of process in any jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign corporation. The
Company will promptly advise the Holders of the Securities of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose.

(c) Reserved.

(d) The Company will use its reasonable best efforts to continue to meet the requirements to
qualify as a REIT under sections 856 through 8560 of the Code, effective for the taxable year
ending December 31, 2008 (and each fiscal quarter of such year) and succeeding taxable years for so
long as the judgment of the Company’s Board of Directors is that the Company should maintain its
status as a REIT.

(e) The Company 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
Securities under the Securities Act.

(f) The Company 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 the any of the
Securities.

 

- 19 -

 

(g) So long as any of the Securities are outstanding, (i) the Securities shall not be listed
on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a
U.S. automated inter-dealer quotation system and (ii) the Company shall not be an open-end
investment company, unit investment trust or face-amount certificate company that is, or is
required to be, registered under Section 8 of the Investment Company Act, and, the Securities shall
otherwise satisfy the eligibility requirements of Rule 144A(d)(3).

(h) Intentionally omitted.

(i) The Company 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 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 Securities, upon the request of such Holder, any information required to be provided by
Rule 144A(d)(4) under the Securities Act. This covenant is intended to be for the benefit of the
Holders of the Securities.

(j) The Company will not, until one hundred eighty (180) days following the Closing Date,
without the Holders’ prior written consent, offer, sell, contract to sell, grant any option to
purchase or otherwise dispose of, directly or indirectly, in any offering registered with the
Commission (i) any Securities or other securities substantially similar to the Securities other
than as expressly contemplated by the New Indenture, if at all, or (ii) any other securities
convertible into, or exercisable or exchangeable for, any of the Securities or other securities
substantially similar to the Securities unless the Company, either on its own or upon the request
of the Holders provides the Holders with an opinion of counsel (such counsel to have experience and
sophistication in the matters addressed in such opinion) addressed to the Holders stating that any
such offer, sale, contract, option or other disposition will not result in the Securities being
required to be registered under the Securities Act.

(k) The Company 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,
unless such identification is required by law.

7. Payment of Expenses. In addition to the obligations agreed to by the Company under
Section 2(b)(vii) herein, the Company agrees to pay all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated, including all costs and
expenses incident to (i) the authorization, issuance, sale and delivery of the Securities and any
taxes payable in connection therewith; (ii) the fees and expenses of counsel, accountants and any
other experts or advisors retained by the Company; and (iv) the fees and all reasonable expenses of
the New Indenture Trustee and any other trustee or paying agent appointed under the Operative
Documents, including the fees and disbursements of counsel for such trustees as set forth in that
certain Fee Agreement dated as of the date hereof between the Company and The Bank of New York
Mellon Trust, National Association, executed in connection with this Agreement and the New
Indenture.

 

- 20 -

 

8. Indemnification. (a) The Company agrees to indemnify and hold harmless the
Holders, Taberna, Taberna Capital Management, LLC, Taberna Securities, LLC, and their
respective affiliates (collectively, the “Indemnified Parties”) and 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) the breach or alleged
breach of any representation, warranty, or agreement of the Company contained in the Operative
Documents, or (ii) the execution and delivery by the Company of the Operative Documents and the
consummation of the transactions contemplated herein and therein, 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 except to the extent any such loss, claim, damage, liability or action is the
direct result of any bad faith, fraudulent misrepresentation, willful misconduct or breach of the
representations and warranties and agreements, by such Indemnified Party. This indemnity agreement
will be in addition to any liability that the Company may otherwise have.

(b) Promptly after receipt by an Indemnified Party under this Section 8 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 8, promptly notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the indemnifying party 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. The Indemnified Parties shall be entitled to appoint 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 any local counsel) 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.

9. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company and/or its officers
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 7 and 8 shall survive the termination or
cancellation of this Agreement.

 

- 21 -

 

10. 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.

11. 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 in Exhibit D.

12. 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 8 hereof and their successors, assigns, heirs and legal
representatives, any right or obligation hereunder. None of the rights or obligations of the
Company under this Agreement may be assigned, whether by operation of law or otherwise, without
Taberna’s prior written consent.

13. 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 SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

14. 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 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.

15. 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.

16. Entire Agreement. This Agreement constitutes the entire agreement of the parties
to this Agreement and supercedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.

[Signature Pages Follow]

 

- 22 -

 

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

	 	 	 	 	 
	 	NEWCASTLE INVESTMENT CORP.

 	 
	 	By:  	/s/ Brian Sigman
 	 
	 	 	Name:  	Brian Sigman 	 
	 	 	Title:  	Chief Financial Officer 	 

(Signatures continue on the next page)

 

- 23 -

 

TABERNA, AS HOLDERS OF THE ORIGINAL PREFERRED SECURITIES AND AS

HOLDERS (AS DEFINED IN THE NEW INDENTURE):

	 	 	 	 	 
	 	TABERNA PREFERRED FUNDING IV LTD.

 	 
	 	By:  	/s/ Alasdair Foster
 	 
	 	 	Name:  	Alasdair Foster 	 
	 	 	Title:  	Director 	 
	 
	 	TABERNA PREFERRED FUNDING V, LTD.

 	 
	 	By:  	/s/ Alasdair Foster
 	 
	 	 	Name:  	Alasdair Foster 	 
	 	 	Title:  	Director 	 
	 
	 	TABERNA PREFERRED FUNDING VI, LTD.

 	 
	 	By:  	/s/ Alasdair Foster
 	 
	 	 	Name:  	Alasdair Foster 	 
	 	 	Title:  	Director 	 
	 
	 	TABERNA PREFERRED FUNDING VII, LTD.

 	 
	 	By:  	/s/ Alasdair Foster
 	 
	 	 	Name:  	Alasdair Foster 	 
	 	 	Title:  	Director 	 

 

- 24 -

 

EXHIBIT A

Copy of Original Preferred Securities

 

A-1

 

EXHIBIT B-1

Copy of Note 1

 

B-1-1

 

EXHIBIT B-2

Copy of Note 2

 

B-2-1

 

EXHIBIT B-3

Copy of Note 3

 

B-3-1

 

EXHIBIT B-4

Copy of Note 4

 

B-4-1

 

EXHIBIT C

Notice Information

Taberna:

c/o Taberna Capital Management, LLC

450 Park Avenue, 11th Floor

New York, NY 10022

Attention: Mr. Raphael Licht

Facsimile: (212) 243-9039

e-mail: rlicht@raitft.com

Company:

Newcastle Investment Corp.

1345 Avenue of the Americas

New York, New York 10105

Attention: Mr. Jason Corn

Facsimile: (917) 591-8634

e-mail: jcorn@fortress.com

 

C-1

 

SCHEDULE 1

List of Significant Subsidiaries

Newcastle CDO VII, Limited

Newcastle CDO VIII 1, Limited

Newcastle CDO IX 1, Limited

Newcastle CDO X, Limited

 

 

 

Schedule 2

Limitations on Subsidiary Payments to the Company

	1.	 	Limitations on distributions on junior debt securities and equity interests issued by
Newcastle CDO VII, Limited, and the payment of certain collateral administration fees to
Newcastle Investment Corp. or its Affiliates, pursuant to the failure of such CDO to meet
certain over-collateralization covenants.

 

 

 

ANNEX A

Pursuant to Section 3(b) of the Agreement, Skadden, Arps, Slate, Meagher & Flom LLP, counsel
for the Company, shall deliver an opinion to the effect that:

1. NIC TP LLC is validly existing in good standing under the laws of the State of Delaware.

2. The Exchange Agreement, the Indenture and the Pledge Agreements are valid and binding
agreements of the Company, enforceable against the Company in accordance with their terms.

3. The PSAACA is a valid and binding agreement of NIC TP LLC, enforceable against NIC TP LLC
in accordance with its terms.

4. The execution and delivery by the Company of each of the Transaction Documents, and by NIC
TP LLC of the PSAACA, and the consummation by the Company and NIC TP LLC of the transactions
contemplated thereby, including the issuance and sale of the Notes by the Company, will not (i)
constitute a violation of, or a breach or default under, the terms of any Applicable Contract, or
(ii) violate or conflict with, or result in any contravention of, any Applicable Law. We do not
express any opinion, however, as to whether the execution or delivery by the Company of each of the
Transaction Documents, or by NIC TP LLC of the PSAACA, or the consummation by the Company or NIC TP
LLC of the transactions contemplated thereby, will constitute a violation of, or a default under,
any covenant, restriction or provision with respect to financial ratios or tests or any aspect of
the financial condition or results of operations of the Company or any of its subsidiaries.

5. No Governmental Approval, which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required for, the execution or delivery of each of the
Transaction Documents by the Company or the PSAACA by NIC TP LLC or the consummation by the Company
or NIC TP LLC of the transactions contemplated thereby.

6. When the Notes have been duly executed, authenticated, issued and delivered by the Company
in exchange for the TRUPs in accordance with terms of the Exchange Agreement, the Notes will
constitute valid and binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms.

7. Assuming (i) the accuracy of the representations and warranties of the Company set forth in
Section 4 of the Exchange Agreement, (ii) the accuracy of the representations and warranties of
Taberna set forth in Section 5 of the Exchange Agreement, and (iii) the due performance by the
Company of the covenants and agreements set forth in Section 6 of the Exchange Agreement, the sale
and delivery of the Notes to Taberna in the manner contemplated by the Exchange Agreement does not
require registration under the Securities Act of 1933, as amended, or qualification of the
Indenture under the Trust Indenture Act of 1939, as
amended, it being understood that we do not express any opinion as to any subsequent reoffer,
resale or other transfer of any Note.

 

Annex B-1

 

8. To our knowledge, no action, suit or proceeding at law or in equity is pending or
threatened to which the Company, NIC TP LLC or the Significant Subsidiaries (as defined in the
Exchange Agreement) are or may be a party and, to our knowledge, no action, suit or proceeding is
pending or threatened against or affecting the Company, NIC TP LLC or the Significant Subsidiaries
or any of their properties or assets before or by any court or governmental official, commission,
board or other administrative agency, authority or body, or any arbitrator, wherein an unfavorable
decision, ruling or finding could reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated by the Exchange Agreement, the Indenture and/or the
Pledge Agreements, or the issuance and sale of the Notes as contemplated therein, or the condition,
earnings, affairs, business or results of operations of the Company, NIC TP LLC and the Significant
Subsidiaries on a consolidated basis (except as set forth on Schedule II hereto).

 

Annex B-2

 

ANNEX B

Pursuant to Section 3(c) of the Agreement, Company Counsel shall deliver an opinion to the
effect that for U.S. federal income tax purposes, the Securities will constitute indebtedness of
the Company.

In rendering such opinion, such counsel may (A) state that its opinion is limited to the
federal laws of the United States and (B) rely as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials.

 

Annex B-3

 

ANNEX C

Pursuant to Section 3(d) of the Agreement, Gardere Wynne Sewell LLP, special counsel for the
Trustee, shall deliver an opinion to the effect that:

(i) The Bank of New York Mellon Trust Company, National Association (the “Bank”) is a
national banking association with trust powers, duly and validly existing under the laws of
the United States of America, with corporate power and authority to execute, deliver and
perform its obligations under the New Indenture and to authenticate and deliver the
Securities, and is duly eligible and qualified to act as Trustee under the New Indenture
pursuant to Section 6.1 thereof.

(ii) The New Indenture has been duly authorized, executed and delivered by the Bank and
constitutes the valid and binding obligation of the Bank, enforceable against it in
accordance with its terms except (A) as may be limited by bankruptcy, fraudulent conveyance,
fraudulent transfer, insolvency, reorganization, liquidation, receivership, moratorium or
other similar laws now or hereafter in effect relating to creditors’ rights generally, and
by general equitable principles, regardless of whether considered in a proceeding in equity
or at law and (B) that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.

(iii) Neither the execution or delivery by the Bank of the New Indenture, the
authentication and delivery of the Securities pursuant to the terms of the New Indenture,
nor the performance by the Bank of its obligations under the New Indenture (A) requires the
consent or approval of, the giving of notice to or the registration or filing with, any
governmental authority or agency under any existing law of the United States of America
governing the banking or trust powers of the Bank or (B) violates or conflicts with the
Articles of Association or By-laws of the Bank or any law or regulation of the State of New
York or the United States of America governing the banking or trust powers of the Bank.

(iv) The Securities have been authenticated and delivered by a duly authorized officer
of the Bank.

In rendering such opinion, such counsel may (A) state that its opinion is limited to the laws
of the State of New York and the laws of the United States of America, (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of the Bank, the Company
and public officials, and (C) make customary assumptions and exceptions as to enforceability and
other matters.

 

Annex C-1Exhibit 10.1

EXHIBIT 10.1

AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE, dated as of February 11, 2009, by and
among USG CORPORATION, a corporation duly organized and existing under the laws of State of
Delaware and having its principal office at 550 West Adams Street, Chicago, Illinois 60661 (the
“Company”), HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association duly organized and
existing under the laws of the United States of America and having a corporate trust office at 452
Fifth Avenue, New York, New York 10018 (“Successor Trustee”) and WELLS FARGO BANK, N.A., a national
banking association duly organized and existing under the laws of the United States of America and
having a corporate trust office at 230 W. Monroe Street, Suite 2900, Chicago, Illinois 60606
(“Resigning Trustee”).

RECITALS:

WHEREAS, there are currently outstanding $500,000,000 aggregate principal amount of the
Company’s 6.30% Senior Notes due 2016 (the “2016 Securities”) and $500,000,000 aggregate principal
amount of the Company’s 7.75% Senior Notes due 2018 (the “2018 Securities”), the 2016 and 2018
Securities issued under a Trust Indenture, dated as of November 1, 2006, between the Company and
the Resigning Trustee (the “2006 Indenture”), and $400,000,000 aggregate principal amount of the
Company’s 10% Contingent Convertible Senior Notes due 2018 (the “Convertible Securities” and,
collectively with the 2016 Securities and the 2018 Securities, the “Securities”) issued under a
Trust Indenture, dated as of November 1, 2008, between the Company and the Resigning Trustee (the
“2008 Indenture” and, collectively with the 2006 Indenture, the “Indentures”);

WHEREAS, the Company appointed Resigning Trustee as the Trustee, Registrar and Paying Agent
under the Indentures;

WHEREAS, Section 6.10 of the Indentures provides that the Trustee may at any time resign with
respect to the applicable Securities by giving written notice of such resignation to the Company,
effective upon the acceptance by a successor Trustee of its appointment as a successor Trustee;

WHEREAS, Section 6.10 of the Indentures provides that, if the Trustee shall resign, the
Company shall promptly appoint a successor Trustee;

 

 

 

WHEREAS, Section 6.11 of the Indentures provides that any successor Trustee appointed in
accordance with the Indentures shall execute, acknowledge and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment under the Indentures, and thereupon
the resignation of the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all rights, powers, duties
and obligations of the predecessor Trustee;

WHEREAS, the Resigning Trustee has given the aforementioned required written notice that it is
resigning as Trustee, Registrar and Paying Agent under the Indentures;

WHEREAS, the Company desires to appoint Successor Trustee as successor Trustee, Registrar and
Paying Agent to succeed Resigning Trustee in such capacities under the Indentures; and

WHEREAS, Successor Trustee is willing to accept such appointment as successor Trustee,
Registrar and Paying Agent under the Indentures;

NOW, THEREFORE, the Company, the Resigning Trustee and Successor Trustee, for and in
consideration of the premises and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby consent and agree as follows:

1.

THE RESIGNING TRUSTEE

1.1 Pursuant to Section 6.10 of the Indentures, Resigning Trustee has by letter notified the
Company that Resigning Trustee is resigning as Trustee, Registrar and Paying Agent under the
Indentures.

1.2 Resigning Trustee hereby represents and warrants to Successor Trustee that:

	 	(a)	 	To the best knowledge of responsible officers of Resigning
Trustee’s corporate trust department, no covenant or condition contained in the
Indentures has been waived by Resigning Trustee or, to the best knowledge of
responsible officers of Resigning Trustee’s corporate trust department, by the
Securityholders (as defined in this Indentures) of the percentage in aggregate
principal amount of the Securities required by the Indentures to effect any
such waiver.

 

 

 

	 	(b)	 	To the best knowledge of responsible officers of Resigning
Trustee’s corporate trust department, there is no action, suit or proceeding
pending or threatened against Resigning Trustee before any court or any
governmental authority arising out of any act or omission of Resigning Trustee
as Trustee under the Indentures.

	 	(c)	 	As of the effective date of this Agreement, Resigning Trustee
will hold no moneys or property under the Indentures.

	 	(d)	 	This Agreement has been duly authorized, executed and delivered
on behalf of Resigning Trustee and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.

	 	(e)	 	To the best knowledge of responsible officers of the Resigning
Trustee’s corporate trust department, no event has occurred and is continuing
which is, or after notice or lapse of time would become, an Event of Default
under Section 5.1 of the Indentures.

1.3 Resigning Trustee hereby assigns, transfers, delivers and confirms to Successor Trustee
all right, title and interest of Resigning Trustee in and to the trust under the Indentures and all
the rights, powers and trusts of the Trustee under the Indentures. Resigning Trustee shall execute
and deliver such further instruments and shall do such other things as Successor Trustee may
reasonably require so as to more fully and certainly vest and confirm in Successor Trustee all the
rights, powers and trusts hereby assigned, transferred, delivered and confirmed to Successor
Trustee as Trustee, Registrar and Paying Agent.

1.4 Resigning Trustee shall deliver to Successor Trustee, as of or promptly after the
effective date hereof, all of the documents listed on Exhibit A hereto, in its possession.

2.

THE COMPANY

2.1 Pursuant to Section 6.10 of the Indentures, the Company hereby accepts the resignation of
Resigning Trustee as Trustee, Registrar and Paying Agent under the Indentures.

 

 

 

2.2 The Company hereby certifies that the Company is duly authorized to: (a) accept Resigning
Trustee’s resignation as Trustee, Registrar and Paying Agent under the Indentures; (b)
appoint the Successor Trustee as Trustee, Registrar and Paying Agent under the Indentures; and
(c) execute and deliver such agreements and other instruments as may be necessary or desirable to
effectuate the succession of Successor Trustee as Trustee, Registrar and Paying Agent under the
Indentures.

2.3 The Company hereby appoints Successor Trustee as Trustee, Registrar and Paying Agent under
the Indentures to succeed to, and hereby vests Successor Trustee with, all the rights, powers,
duties and obligations of Resigning Trustee under the Indentures with like effect as if originally
named as Trustee, Registrar and Paying Agent in the Indentures.

2.4 Promptly after the effective date of this Agreement, the Company shall cause the Successor
Trustee to send a notice, substantially in the form of Exhibit B annexed hereto, to each
Securityholder of the Securities in accordance with the provisions of Section 6.11 of the
Indentures.

2.5 The Company hereby represents and warrants to Resigning Trustee and Successor Trustee
that:

	 	(a)	 	The Company is a corporation duly validly organized and
existing pursuant to the laws of the State of Delaware.

	 	(b)	 	The Company has performed or fulfilled prior to the date
hereof, and will continue to perform and fulfill after the date hereof, each
covenant, agreement, condition, obligation and responsibility under the
Indentures.

	 	(c)	 	The Company has no knowledge that an event has occurred and is
continuing which is, or after notice or lapse of time would become, an Event of
Default under Section 5.1 of the Indentures.

	 	(d)	 	No covenant or condition contained in the Indentures has been
waived by the Company or, to the best of the Company’s knowledge, by
Securityholders of the percentage in aggregate principal amount of the
Securities required to effect any such waiver.

	 	(e)	 	There is no action, suit or proceeding pending or, to the best
of the Company’s knowledge, threatened against the Company before any court
or any governmental authority arising out of any act or omission of the
Company under the Indentures.

 

 

 

	 	(f)	 	This Agreement has been duly authorized, executed and delivered
on behalf of the Company and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.

	 	(g)	 	All conditions precedent relating to the appointment of HSBC
Bank USA, National Association as successor Trustee under the Indentures have
been complied with by the Company.

3.

THE SUCCESSOR TRUSTEE

3.1 Successor Trustee hereby represents and warrants to Resigning Trustee and to the Company
that:

	 	(a)	 	Successor Trustee is eligible under the provisions of Section
6.9 of the 2006 Indenture and the 2008 Indenture to act as Trustee under the
Indentures.

	 	(b)	 	This Agreement has been duly authorized, executed and delivered
on behalf of Successor Trustee and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.

3.2 Successor Trustee hereby accepts its appointment as successor Trustee, Registrar and
Paying Agent under the Indentures and accepts the rights, powers, duties and obligations of
Resigning Trustee as Trustee, Registrar and Paying Agent under the Indentures, upon the terms and
conditions set forth therein, with like effect as if originally named as Trustee, Registrar and
Paying Agent under the Indentures.

3.3 References in the Indentures to “Corporate Trust Office” or other similar terms shall be
deemed to refer to the principal corporate trust office of Successor Trustee, which is presently
located at 452 Fifth Avenue, New York, New York 10018.

4.

MISCELLANEOUS

4.1 Except as otherwise expressly provided herein or unless the context otherwise requires,
all terms used herein which are defined in the Indentures shall have the meanings assigned to them
in the Indentures.

 

 

 

4.2 This Agreement and the resignation, appointment and acceptance effected hereby shall be
effective as of the opening of business on February 23, 2009.

4.3 Resigning Trustee hereby acknowledges payment or provision for payment in full by the
Company of compensation for all services rendered by Resigning Trustee in its capacity as Trustee,
Registrar and Paying Agent under Section 6.6 of the Indentures and reimbursement in full by the
Company of the expenses, disbursements and advances incurred or made by Resigning Trustee in its
capacity as Trustee, Registrar and Paying Agent in accordance with the provisions of the
Indentures. Resigning Trustee acknowledges that it relinquishes any lien it may have upon all
property or funds held or collected by it to secure any amounts due it pursuant to the provisions
of the Indentures. This Agreement does not constitute a waiver or assignment by the Resigning
Trustee of any compensation, reimbursement, expenses or indemnity to which it is or may be entitled
pursuant to the Indentures. The Company acknowledges its obligation set forth in Section 6.6 of
the Indentures to indemnify Resigning Trustee for, and to hold Resigning Trustee harmless against,
any loss, liability or expense incurred without negligence or bad faith on the part of Resigning
Trustee and arising out of or in connection with the acceptance or administration of the trust
evidenced by the Indentures (which obligation shall survive the execution hereof).

4.4 This Agreement shall be governed by and construed in accordance with the laws of the State
of New York.

4.5 This Agreement may be executed in any number of counterparts each of which shall be an
original, but such counterparts shall together constitute but one and the same instrument.

4.6 The Company, Resigning Trustee and Successor Trustee hereby acknowledge receipt of an
executed counterpart of this Agreement and the effectiveness thereof.

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Resignation, Appointment
and Acceptance to be duly executed, all as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.
	 	 	as Resigning Trustee
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Gregory S. Clarke
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Gregory S. Clarke
	 

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION
	 	 	as Successor Trustee
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Vivian Ly
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Vivian Ly
	 

	 	 	 	Title:
	 	Assistant Vice President
	 
	 	 	 	 	 	 
	 	 	USG CORPORATION
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Karen L. Leets
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Karen L. Leets
	 

	 	 	 	Title:
	 	VP & Treasurer

 

 

 

EXHIBIT A

Documents to be delivered to Successor Trustee

	1.	 	Executed copies of Indentures.

	 
	2.	 	File of closing documents from initial issuances.

	 
	3.	 	Certified list of Securityholders, including certificate detail and all “stop transfers” and
the reason for such “stop transfers” (or, alternatively, if there are a substantial number of
registered Securityholders, the computer tape reflecting the identity of such
Securityholders).

	 
	4.	 	Copies of any official notices sent by the Trustee to all the Securityholders of the
Securities pursuant to the terms of the Indentures during the past twelve months.

	 
	5.	 	List of any documents which, to the knowledge of Resigning Trustee, are required to be
furnished but have not been furnished to Resigning Trustee.

	 
	6.	 	Securities debt service records and conversion records.

	 
	7.	 	Trust account statements for a one-year period preceding the date of this Agreement.

	 
	8.	 	All unissued Security inventory or DTC FAST held global certificates.

	 
	9.	 	Copies of the most recent of each of the SEC reports delivered by the Co Issuers pursuant to the Indentures.

	 
	10.	 	A copy of the most recent compliance certificate delivered pursuant to the Indentures.

 

 

 

EXHIBIT B

USG CORPORATION

NOTICE

To the Securityholders of:

			
	 	 	 
	USG 6.30% Senior Notes due 2016 (the “2016
Securities”)
	 	CUSIP # 903293AQ1 (144A) &

903293AR9 (Regs)
	 	 	 
	USG 7.75% Senior Notes due 2018 (the “2018
Securities”)
	 	CUSIP # 903293AS7
	 	 	 
	USC 10% Contingent Convertible Notes due 2018
(the “Convertible Securities”)
	 	CUSIP # 903293AT5

of

USG CORPORATION

NOTICE IS HEREBY GIVEN, pursuant to Section 6.10 of the Trust Indenture, dated as of November
1, 2006, between USG Corporation (the “Issuer”) and Wells Fargo Bank, N.A., relating to the
Issuer’s 2016 Securities and the 2018 Securities (the “2006 Indenture”) and Section 6.10 of the
Trust Indenture, dated as of November 1, 2008, between the Issuer and Wells Fargo Bank, N.A.,
relating to the Convertible Securities (the “2008 Indenture”) (the “2006 Indenture” and,
collectively with the 2008 Indenture, the “Indentures”), that WELLS FARGO BANK, N.A. has resigned
as Trustee, Registrar and Paying Agent under the Indentures.

Pursuant to Section 6.10 of the Indentures, HSBC BANK USA, NATIONAL ASSOCIATION, a national
banking association duly organized and existing under the laws of the United States of America, has
accepted appointment as Trustee, Registrar and Paying Agent under the Indentures. The address of
the corporate trust office of the successor Trustee is 452 Fifth Avenue, New York, New York 10018.

WELLS FARGO BANK, N.A.’s resignation as Trustee, Registrar and Paying Agent and HSBC BANK USA,
NATIONAL ASSOCIATION’s appointment as successor Trustee, Registrar and Paying Agent were effective
as of the opening of business on February 23, 2009.

	 	 	 
	Dated:_______ ___, 2009

	 	USG CORPORATION

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