Exhibit 1.1
Fortress Investment Group
LLC
Class A
Shares
Underwriting
Agreement
May 14, 2009
Citigroup Global Markets
Inc.
J.P. Morgan Securities Inc.
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
Nomura Securities International, Inc.
As Representatives of the several
Underwriters
c/o Citigroup Global Markets
Inc.
388 Greenwich Street
New York, NY 10013
Ladies and Gentlemen:
Fortress Investment Group LLC, a
Delaware limited liability company (the “Company”),
proposes, subject to the terms and conditions stated herein, to
issue and sell to Citigroup Global Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Nomura Securities International, Inc. as
representatives (the “Representatives”) of the several
underwriters listed in Schedule I hereto (the
“Underwriters”), an aggregate of 40,000,000 shares,
consisting of 30,600,000 shares being sold to the public (the
“Public Shares”) and an aggregate of 9,400,000 shares
being sold to Peter L. Briger, Jr., Wesley R. Edens, Robert I.
Kauffman, Adam Levinson, Randal A. Nardone, Michael E. Novogratz
and Nomura Holdings, Inc. (the “Principal Shares”, and
together with the Public Shares the “Firm Shares”) and,
at the election of the Underwriters, up to 6,000,000 additional
shares (the “Optional Shares”) of Class A shares
representing Class A limited liability company interests
(“Class A Shares”) of the Company (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof being collectively called the
“Shares”).
The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. 333-153689), including
the related base prospectus, covering the registration of the offer
and sale of certain securities, including the Shares, under the
Securities Act of 1933, as amended (the “1933 Act”).
Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus supplement in accordance
with the provisions of
Rule 430B (“Rule 430B”) of
the rules and regulations of the Commission under the 1933 Act (the
“1933 Act Regulations”) and paragraph (b) of
Rule 424 (“Rule 424(b)”) of the 1933 Act
Regulations. Any information included in such prospectus supplement
that was omitted from such registration statement at the time it
originally became effective but that is deemed to be part of and
included in such registration statement pursuant to Rule 430B
is referred to as “Rule 430B Information.” Each
base prospectus and prospectus supplement used in connection with
the offering of the Shares that omitted Rule 430B Information
is herein collectively called a “preliminary
prospectus.” Such registration statement, at any given time,
including the amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
1933 Act at such time and the documents otherwise deemed to be a
part thereof or included therein by the 1933 Act Regulations, is
herein called the “Registration Statement”; provided,
however, that “Registration Statement” without
reference to a time means the Registration Statement as of the time
of the first contract of sale for the Shares, which time shall be
considered the “new effective date” of the Registration
Statement with respect to the Underwriters and the Shares (within
the meaning of Rule 430B(f)(2) of the 1933 Act Regulations
(“Rule 430B(f)(2)”)); and provided, further, that if
the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations relating to the
Shares (the “Rule 462(b) Registration Statement”),
then, after such filing, all references to “Registration
Statement” shall also be deemed to include the Rule 462(b)
Registration Statement. The Registration Statement at the time it
originally became effective is herein called the “Original
Registration Statement.” The base prospectus and the final
prospectus supplement, in the form first furnished to the
Underwriters for use in connection with the offering of the Shares,
including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act at the time of the
execution of this Agreement, is herein collectively called the
“Prospectus.” For purposes of this Agreement, all
references to the Registration Statement, any preliminary
prospectus or the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”).
All references in this Agreement to
financial statements and schedules and other information which is
“contained,” “included” or
“stated” in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import)
shall be deemed to include all such financial statements and
schedules and other information which is incorporated by reference
in or otherwise deemed by the 1933 Act Regulations to be a part of
or included in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be, at the time of
execution of this Agreement; and all references in this Agreement
to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to include
the filing of any document under the Securities Exchange Act of
1934, as amended (the “1934 Act”), which is
incorporated by reference in or otherwise deemed by the 1933 Act
Regulations to be a part of or included in the Registration
Statement, such preliminary prospectus or the Prospectus, as the
case may be, after the execution of this Agreement.
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1. The Company represents and
warrants to, and agrees with, each of the Underwriters at the date
hereof, the Applicable Time (as defined below) and each Time of
Delivery, as follows:
(a) The Company meets the
requirements for use of Form S-3 in connection with the issuance of
its securities, including the Shares. The Registration Statement
was declared effective by the Commission under the 1933 Act, and no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with.
At the respective times the Original
Registration Statement and any amendment thereto became effective,
at each deemed effective date with respect to the Underwriters and
the Shares pursuant to Rule 430B(f)(2) and at each Time of
Delivery, the Registration Statement complied, complies and will
comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations, and did not, does not and will
not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading.
The Prospectus (including any
Prospectus wrapper) and each amendment or supplement thereto, if
any, at the time the Prospectus or any such amendment or supplement
is issued and at each Time of Delivery, complied, complies and will
comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations, and neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued or at any Time of
Delivery, included, includes or will include an untrue statement of
a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
As of the Applicable Time, the
Statutory Prospectus (as defined below), any Issuer Free Writing
Prospectus (as defined below) identified on Schedule III
hereto and the information to be conveyed by the Underwriters to
purchasers of the Shares at the Applicable Time as set forth in
Schedule III(b) hereto, all considered together (collectively, the
“Disclosure Package”), did not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
The representations and warranties
in the preceding three paragraphs shall not apply to statements in
or omissions from the Registration Statement or any post-effective
amendment thereto, the Prospectus or any amendments or supplements
thereto or the Disclosure Package, in each case made in reliance
upon and in conformity with information relating to the
Underwriters furnished to the Company in writing by the
Representatives expressly for use in the Registration Statement or
any post-effective amendment thereto, the Prospectus or any
amendments or supplements
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thereto and the Disclosure Package, it being
understood and agreed that the only such information furnished by
the Representatives consists of the information described as such
in Section 5(k) hereof.
Each preliminary prospectus
(including the base prospectus or prospectuses filed as part of the
Original Registration Statement or any amendment thereto) complied
when so filed in all material respects with the 1933 Act
Regulations. Each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with the
offering of the Shares was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by
Regulation S-T.
As used in this subsection and
elsewhere in this Agreement:
“Applicable Time” means
5:00 p.m. (New York City time) on May 14, 2009 or such other
time as agreed by the Company and the Representatives.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“Rule 433”), relating to the Shares
that (i) is required to be filed with the Commission by the
Company, (ii) is a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission or
(iii) is exempt from filing with the Commission pursuant to
Rule 433(d)(5)(i) because it contains a description of the
Shares or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to
Rule 433(g).
“Statutory Prospectus”
as of any time means the base prospectus that is included in the
Registration Statement and the preliminary prospectus supplement
relating to the Shares immediately prior to that time, including
any document incorporated by reference therein at such
time.
(b) At the earliest time that the
Company or another offering participant made a
bona fide offer (within the meaning of
Rule 164(h)(2) of the 1933 Act Regulations) of the Shares and
at the date hereof, the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 of the
1933 Act Regulations (“Rule 405”).
(c) The documents incorporated or
deemed to be incorporated by reference in the Registration
Statement, any preliminary prospectus or the Prospectus, at the
time they were or hereafter are filed with the Commission,
complied, complies and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of
the Commission under the 1934 Act (the “1934 Act
Regulations”) and, when read together with the other
information in the Registration Statement, such preliminary
prospectus or the Prospectus, (a) at the time the Original
Registration Statement became effective, (b) at the earlier of
the time the Prospectus was first used and the date and time of the
first contract of sale of the Shares and (c) at each
Time of Delivery, did not and will not include an untrue statement
of a material fact
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or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(d) Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares
or until any earlier date of which the Company notified or notifies
the Representatives as described in Section 5(e), did not,
does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement, any preliminary prospectus or the
Prospectus, including any document incorporated by reference
therein and any preliminary or other prospectus deemed to be a part
thereof that has not been superseded or modified. The foregoing
sentence does not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with
written information furnished to the Company by the Representatives
specifically for use therein, it being understood and agreed that
the only such information furnished by the Representatives consists
of the information described as such in Section 5(k)
hereof.
(e) Neither the Company nor any of
its direct or indirect subsidiaries, including, without limitation,
each of the Operating Group entities set forth on Schedule II
hereto (collectively, the “Fortress Operating Group”)
but not including funds managed by subsidiaries of the Company or
entities controlled by the funds of the Company (the
“Subsidiaries”) has sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Registration Statement, Disclosure Package and the
Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement, Disclosure Package and
the Prospectus; and since the respective dates as of which
information is given in the Registration Statement, the Disclosure
Package and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its
Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change in, or affect on,
the general affairs, management, current or future financial
position, members’ equity or results of operations, as
applicable, of the Company and its Subsidiaries, taken as a whole
(a “Material Adverse Effect”), otherwise than as set
forth or contemplated in the Registration Statement, the Disclosure
Package and the Prospectus;
(f) The Company and its Subsidiaries
have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Registration Statement,
the Disclosure Package and the Prospectus or such as do not
materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company and its Subsidiaries, respectively; and any real property
and buildings held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and enforceable leases,
except where the failure to do so would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect;
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(g) The Company has been duly
organized and is validly existing as a limited liability company in
good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and
conduct its business as described in the Registration Statement,
the Disclosure Package and the Prospectus, and has been duly
qualified as a foreign limited liability company for the
transaction of business and is in good standing as a foreign
limited liability company under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so
as to require such qualification, except to the extent that the
failure to be so qualified would not, individually or in the
aggregate, result in a Material Adverse Effect; each of the
Subsidiaries and the Fortress Funds has been duly organized and is
validly existing in good standing under the laws of its
jurisdiction of organization, with power and authority (corporate
and other) to own its properties and conduct its business as
described in the Registration Statement, the Disclosure Package and
the Prospectus, and has been duly qualified for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification except to the extent
that the failure to be so qualified would not, individually or in
the aggregate, result in a Material Adverse Effect. “Fortress
Funds” means, collectively, all Funds (i) sponsored or
promoted by any of the Company’s Subsidiaries, (ii) for
which any of the Company’s Subsidiaries acts as a general
partner or managing member (or in a similar capacity) or
(iii) for which any of the Company’s Subsidiaries acts
as an investment adviser or investment manager (other than
(x) any Fund that is sub-advised by the Company’s
Subsidiaries (or for which the Company’s Subsidiaries have
primary investment responsibility over only a minority of the
investment portfolio and/or are not primarily responsible for
periodic reporting and filings) and for which an unaffiliated
third-party acts as the promoter and sponsor, (y) any entity
which is a subsidiary of a Fortress Fund (other than the Fortress
Capital Finance Subsidiaries) and (z) any securitization
vehicle used by a Fortress Fund for financing purposes, such as a
collateralized debt obligation entity, for which a Company’s
Subsidiary acts in either of the capacities identified in clauses
(i) or (ii) above or this clause (iii)); and
“Fund” means any collective investment vehicle (whether
open-ended or closed-ended) including, without limitation, an
investment company, a general and limited partnership, a trust and
a company organized in any jurisdiction. “Fortress Capital
Finance Subsidiaries” means Fortress Capital Finance LLC,
Fortress Capital Finance II LLC, Fortress Capital Finance III
(A) LLC, Fortress Capital Finance III (B) LLC, Fortress
Capital Finance III (C) LLC, Fortress Capital Finance III
(D) LLC, Fortress Capital Finance III (E) LLC, Fortress
Capital Finance III (CIF-A) LLC, Fortress Capital Finance III
(CIF-B) LLC, Fortress Capital Finance III (CIF-C) LLC and Fortress
Capital Finance III (CIF-D) LLC;
(h) The Company has an authorized
capitalization as set forth in the Registration Statement, the
Disclosure Package and the Prospectus and all of the issued shares
of the Company, including the Shares, have been or will have been
duly and validly authorized and issued and upon payment in full of
the consideration payable with respect to such shares,
as determined by the Board of Directors of the
Company,
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the holders of such shares shall not be liable
to the Company to make any additional capital contributions with
respect to such shares (except as otherwise required by Sections
18-607 and 18-804 of the Delaware Limited Liability Company Act);
upon issuance, the Shares will conform to the description of the
Shares contained in the Registration Statement, the Disclosure
Package and the Prospectus; all of the issued capital stock or
other equity interest of each of the Company’s subsidiaries
that is a “significant subsidiary” (as defined in Rule
405 of the Securities Act) (collectively, the “Significant
Subsidiaries”) have been duly and validly authorized and
issued and, in the case of any entities that are organized as
corporations, are fully paid and non-assessable and, in the case of
any entities that are organized as limited liability companies, the
Company is not liable to such entity to make any additional capital
contributions with respect to its equity interest in such entity
(except as otherwise required by Sections 18-607 and 18-804 of the
Delaware Limited Liability Company Act), and except for interests
held by employees and former employees in entities which function
as investment managers or general partners of particular Fortress
Funds and which, with respect to the percentage of such interests
held by employees and former employees as of the date of any
historical balance sheet contained in the financial statements
included or incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus, are reflected
in non-controlling interests in consolidated subsidiaries on such
balance sheets, are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims
(other than those disclosed in the Registration Statement, the
Disclosure Package and the Prospectus); and all of the interests in
each Significant Subsidiary organized as a partnership have been
duly and validly created and except for interests held by employees
and former employees in entities which function as investment
managers or general partners of particular Fortress Funds and
which, with respect to the percentage of such interests held by
employees and former employees as of the date of any historical
balance sheet contained in the financial statements included or
incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus, are reflected in
non-controlling interests in consolidated subsidiaries on such
balance sheets, are owned directly or indirectly by the
Company;
(i) The issue and sale of the Shares
and the compliance by the Company with this Agreement and the
consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, (x) any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
Subsidiaries or any of the Fortress Funds is a party or by which
the Company or any of its Subsidiaries or any of the Fortress Funds
is bound or to which any of the property or assets of the Company
or any of its Subsidiaries or any of the Fortress Funds is subject,
nor will such action result in any violation of the provisions of
(y) the Certificate of Formation, as amended
(“Certificate of Formation”) or the Third Amended and
Restated Limited Liability Company Agreement (“LLC
Agreement”) of the Company or the organizational documents of
any of its Subsidiaries or (z) any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or its Subsidiaries or any of their
properties, except in the case of clauses (x) and (z) for
such conflicts, breaches, defaults or violations that would not,
individually or
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in the aggregate, result in a Material Adverse
Effect; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
1933 Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the
Underwriters;
(j) None of the Company, the
Subsidiaries or the Fortress Funds is (x) in violation of its
certificate of incorporation, bylaws, limited liability company
agreement or partnership agreement, as applicable, or (y) in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it or any of its
properties may be bound, except in the case of clause (y) for
such violations or defaults that would not, individually or in the
aggregate, result in a Material Adverse Effect;
(k) The statements set forth in the
Registration Statement, the Disclosure Package and the Prospectus
under the caption “Description of Shares”, insofar as
they purport to constitute a summary of the terms of the
Class A Shares and under the captions “Certain U.S.
Federal Tax Considerations” and “Underwriting”,
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in
all material respects;
(l) Other than as set forth in the
Registration Statement, the Disclosure Package and the Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries or any of the Fortress Funds is
a party or of which any property of the Company or any of the
Subsidiaries or any of the Fortress Funds is the subject which, if
determined adversely to the Company or any of the Subsidiaries or
any of the Fortress Funds, would individually or in the aggregate,
have a Material Adverse Effect; and, to the knowledge of the
Company, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(m) The Company is not and, after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof, will not be an
“investment company”, as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment
Company Act”);
(n) Ernst & Young LLP, who
have certified certain financial statements and supporting
schedules incorporated by reference in the Registration Statement,
the Disclosure Package and the Prospectus of the Company and its
subsidiaries, is an independent registered public accounting firm
with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the
Public Accounting Oversight Board (United States) and as required
by the 1933 Act;
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(o) Except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus,
the Company (individually and on a consolidated basis) and its
subsidiaries maintain systems of “internal control over
financial reporting” (as such term is defined in Rule
13a-15(f) under the 1934 Act) sufficient to provide reasonable
assurance 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 conformity with U.S.
generally accepted accounting principles 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.
(p) Since the date of the latest
audited financial statements included or incorporated by reference
in the Registration Statement, Disclosure Package and the
Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially adversely affect
the Company’s internal control over financial
reporting;
(q) All tax returns required to be
filed by the Company, the Subsidiaries and the Fortress Funds in
all jurisdictions have been timely and duly filed, other than those
filings being contested in good faith and except where the failure
to file would not, individually or in the aggregate, have a
Material Adverse Effect. There are no tax returns of the Company,
the Subsidiaries and the Fortress Funds that are currently being
audited by state, local or federal taxing authorities or agencies
(and with respect to which the Company, the Subsidiaries or the
Fortress Funds has received notice), where the findings of such
audit would not reasonably be expected to result in a Material
Adverse Effect. All taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to
be due from such entities, have been paid, other than those being
contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest or
those that would not reasonably be expected to result in a Material
Adverse Effect;
(r) Except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus,
each of the Company and its Subsidiaries maintains insurance
covering its properties, operations, personnel and businesses which
insures against such losses and risks as are adequate in accordance
with its reasonable business judgment to protect the Company and
its Subsidiaries and their businesses;
(s) Except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus,
there are no material business relationships or related party
transactions which would be required to be disclosed therein by
Item 404 of Regulation S-K of the Commission and such business
relationship or related party transaction described therein is a
fair and accurate description in all material respects of the
relationships and transactions so described;
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(t) Each employee benefit plan,
within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that
is maintained, administered or contributed to by the Company or any
of its affiliates, that together with the Company would be deemed a
“single employer” within the meaning of
Section 4001(b)(1) of ERISA (“ERISA Affiliates”)
for employees or former employees of the Company and its ERISA
Affiliates has been maintained in compliance in all material
respects with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited
to ERISA and the Internal Revenue Code of 1986, as amended (the
“Code”); no prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, for
which the Company or any of its ERISA Affiliates would have any
material liability has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption; for each such plan that is subject to the
funding rules of Section 412 of the Code or Section 302
of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code has been incurred, whether
or not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial assumptions;
no “reportable event” (as defined in ERISA) has
occurred with respect to any “pension plan” (as defined
in ERISA) for which the Company or any of its ERISA Affiliates
would have any material liability; and neither the Company nor any
of its ERISA Affiliates has incurred or reasonably expects to incur
any material liability under Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension
plan”;
(u) The Company is not required to
be registered, licensed or qualified as an investment adviser or a
broker-dealer or as a commodity trading advisor, a commodity pool
operator or a futures commission merchant or any or all of the
foregoing, as applicable; each of the Subsidiaries that is required
to be registered, licensed or qualified as an investment adviser or
a broker-dealer or as a commodity trading advisor, a commodity pool
operator or a futures commission merchant or any or all of the
foregoing, as applicable, is so registered, licensed or qualified
in each jurisdiction where the conduct of its business requires
such registration, license or qualification (and such registration,
license or qualification is in full force and effect), and is in
compliance with all applicable laws requiring any such
registration, licensing or qualification, except as set forth in or
contemplated in the Registration Statement, the Disclosure Package
and the Prospectus and where the failure to be so registered,
licensed or qualified would not, individually or in the aggregate,
result in a Material Adverse Effect; each of the Subsidiaries that
is required to be registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the “Advisers
Act”) has adopted a written compliance program reasonably
designed to ensure compliance with the Advisers Act and has
appointed a chief compliance officer, except where the failure to
do so would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect;
(v) The Company is not a party to
any investment advisory agreement; each investment advisory
agreement to which any of the Subsidiaries is a party is a valid
and legally binding obligation of the Subsidiaries and in
compliance with the
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applicable provisions of the Advisers Act,
except as have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect,
and none of the Subsidiaries is in breach or violation of or in
default under any such agreement which breach, violation, default
or invalidity has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect,
except as set forth in or contemplated in the Registration
Statement, the Disclosure Package and the Prospectus;
(w) The Company does not advise any
of the Fortress Funds; (i) each of the Fortress Funds which is
required to be registered with the Commission as an investment
company under the Investment Company Act is duly registered with
the Commission as an investment company under the Investment
Company Act, and (ii) each such Fortress Fund has adopted a
written compliance program reasonably designed to ensure compliance
with Federal Securities Laws (as defined below), including policies
and procedures that provide for the oversight of compliance by each
investment adviser, principal underwriter, administrator and
transfer agent of the Fortress Fund, and has appointed a chief
compliance officer except, with respect to each of (i) and
(ii), for such failure to be so registered or to have adopted such
programs as would not have, individually or in the aggregate, a
Material Adverse Effect. “Federal Securities Laws”
shall mean the Investment Company Act, the Advisers Act, the 1933
Act, the 1934 Act, the Sarbanes-Oxley Act of 2002, Title V of the
Gramm-Leach Bliley Act and the rules adopted by the Commission
thereunder, as well as certain applicable provisions under the Bank
Secrecy Act and any rules adopted thereunder by the Commission or
the Department of the Treasury;
(x) Consummation of the transactions
contemplated by this Agreement will not constitute an
“assignment” within the meaning of such term under the
Investment Company Act (and the rules and regulations thereunder)
or the Advisers Act (and the rules and regulations thereunder) of
any of the investment advisory contracts to which any of the
Subsidiaries is a party; nor will consummation of such transactions
adversely affect in any material respect the ability of the Company
and its Subsidiaries to conduct their respective businesses in
compliance with applicable law as described in the Registration
Statement, the Disclosure Package and the Prospectus, including,
but not limited to, providing investment advisory services to
clients and funds, whether or not such funds are registered under
the Investment Company Act;
(y) None of the Company, any of its
Subsidiaries or the Fortress Funds, or, to the knowledge of the
Company, no director, officer, agent, employee or other person
associated with or acting on behalf of the Company, any of its
Subsidiaries or the Fortress Funds, has violated or is in violation
of any provision of the U.S. Foreign Corrupt Practices Act of 1977;
or made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment;
(z) The operations of the Company,
the Subsidiaries and the Fortress Funds are and have been conducted
at all times in compliance with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions,
11
the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company, the Subsidiaries
or the Fortress Funds with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened, except as
would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect;
(aa) To the Company’s
knowledge, none of the Company, the Subsidiaries, the Fortress
Funds or any of their respective affiliates does business with any
court, administrative agency, regulatory body, commission or other
governmental authority, board, bureau or instrumentality, domestic
or foreign and any subdivision thereof, or with any individual,
corporation, firm, partnership, joint venture, limited liability
company, estate, trust, business association, organization or other
entity located in, any country targeted by any of the economic
sanctions, programs or similar sanctions-related measures of the
United States as administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds to the Subsidiaries, the Fortress Funds or any joint
venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC;
(bb) None of the Subsidiaries which
act as a general partner or managing member (or in a similar
capacity) or as an investment adviser or investment manager of any
Fortress Fund has performed any act or otherwise engaged in any
conduct that would prevent such Subsidiary
