Rithm Capital (RITM) 8-KRithm Capital Corp. Enters into Amended Definitive Merger Agreement to Acquire Sculptor Capital Management for $12.00 Per Sculptor Class A Share

As previously disclosed, on July 23, 2023, Rithm Capital Corp. (“Rithm”) entered into an Agreement and Plan of Merger (including the schedules and exhibits thereto, the “Merger Agreement”), by and among Rithm, Sculptor Capital Management, Inc., a Delaware corporation (“Sculptor”), Sculptor Capital LP, a Delaware limited partnership and subsidiary of Sculptor (“Capital LP”), Sculptor Capital Advisors LP, a Delaware limited partnership and subsidiary of Sculptor (“Advisors LP”), Sculptor Capital Advisors II LP, a Delaware limited partnership and subsidiary of Sculptor (“Advisors II LP” and, collectively with Capital LP and Advisors LP, the “Operating Partnerships” and each an “Operating Partnership”), Calder Sub, Inc., a Delaware corporation and subsidiary of Rithm (“Merger Sub Inc.”), Calder Sub I, LP, a Delaware limited partnership and subsidiary of Rithm (“Merger Sub I”), Calder Sub II, LP, a Delaware limited partnership and subsidiary of Rithm (“Merger Sub II”), and Calder Sub III, LP, a Delaware limited partnership and subsidiary of Rithm (“Merger Sub III” and, collectively with Merger Sub I, Merger Sub II and Merger Sub Inc., the “Merger Subs”). The Merger Agreement provides for, among other things, upon the terms and subject to the conditions set forth therein, (i) the merger of Merger Sub Inc. with and into Sculptor, with Sculptor surviving such merger as the surviving corporation (the “Public Merger”), (ii) the merger of Merger Sub I with and into Capital LP, with Capital LP surviving such merger as the surviving partnership (“LP Merger I”), (iii) the merger of Merger Sub II with and into Advisors LP, with Advisors LP surviving such merger as the surviving partnership (“LP Merger II”), and (iv) the merger of Merger Sub III with and into Advisors II LP, with Advisors II LP surviving such merger as the surviving partnership (“LP Merger III” and, collectively with LP Merger I and LP Merger II, the “LP Mergers,” and the LP Mergers, collectively with the Public Merger, the “Mergers” and collectively with the other transactions contemplated by the Merger Agreement, the “Transactions”).

On October 12, 2023, Rithm, Merger Subs, Sculptor and the Operating Partnerships entered into Amendment No. 1 to the Merger Agreement (the “Amendment”).

Under the terms of the Amendment, Rithm, the Merger Subs, Sculptor and the Operating Partnerships have agreed, on the terms and subject to the conditions set forth in the Merger Agreement (as amended by the Amendment), to increase the Public Merger Consideration (as defined below) to be paid by Rithm for the Class A Common Stock, $0.01 par value per share, of Sculptor (“Company Class A Common Stock”, and together with each share of Class B common stock, $0.01 par value per share, of Sculptor, the “Sculptor Common Stock”), from the dollar amount of $11.15 per share of Company Class A Common Stock, without interest, to the dollar amount of $12.00 per share of Company Class A Common Stock, without interest (the “Public Merger Consideration”).

Under the terms of the Amendment, Rithm, the Merger Subs, Sculptor and the Operating Partnerships have agreed, on the terms and subject to the conditions set forth in the Merger Agreement (as amended by the Amendment), to increase the LP Merger Consideration (as defined below) to provide that each holder of Operating Partnership units is entitled to receive an amount in cash equal to the applicable per-unit amount that a holder of such unit of the applicable Operating Partnership is entitled to receive in a liquidity event pursuant to the terms of each of the limited partnership agreements of the Operating Partnerships (where the aggregate amount payable by the Operating Partnerships is $173,104,681, instead of $167,367,690 in the original Merger Agreement), payable to the holder thereof, without interest (the “LP Merger Consideration”). The LP Merger Consideration equates to approximately $7.13, instead of approximately $6.90 in the original Merger Agreement, for each Class A common unit of the Operating Partnerships (the “LP Class A Units”) and Class A-1 common unit of the Operating Partnerships (the “LP Class A-1 Units”) and, consistent with the original Merger Agreement, $0 for each Class E common unit of the Operating Partnerships, Class P common unit of the Operating Partnerships and Class P-4 common unit of the Operating Partnerships.

Under the terms of the Amendment, the provisions of the original Merger Agreement relating to a potential opportunity for holders of LP Class A Units and LP Class A-1 Units to enter into a rollover agreement (the “Potential Rollover”) have been removed from the Merger Agreement. As a result, all holders of LP Class A Units and LP Class A-1 Units will receive the consideration described above under “Effect of LP Mergers on Operating Partnership Units” at the effective time of the LP Mergers. In connection with (i) the removal of the Potential Rollover and (ii) the other transactions contemplated by the Amendment, the Amendment amends the Merger Agreement to remove the condition relating to the approval of the Transactions by the affirmative vote of the holders representing at least a majority of the aggregate voting power of the outstanding shares of Company Class A Common Stock owned by the Non-Unitholder Stockholders (as defined in the Merger Agreement) and that are entitled to vote thereon. The Merger Agreement continues to be subject to the condition requiring approval of the Transactions by the requisite vote of Sculptor’s stockholders (the “Company Stockholder Approval”).

Additionally, the Amendment increases the termination fee payable by Sculptor to Rithm in certain circumstances pursuant to the Merger Agreement (the “Company Termination Fee”). Under the terms of the Amendment, the Company Termination Fee has been increased from the dollar amount of $16,576,819 to the dollar amount of $20,307,196 (net any payment of Rithm expenses). The Amendment also increases the cap on the amount of Rithm expenses that Sculptor is required to reimburse in certain circumstances from the dollar amount of $5,100,560 to the dollar amount of $5,415,252.

Other than as expressly modified pursuant to the Amendment, the Merger Agreement, which was previously filed as Exhibit 2.1 to the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) by Rithm on July 24, 2023 (the “Previous 8-K”), remains in full force and effect as originally executed on July 23, 2023. The foregoing description of the Merger Agreement, the Amendment, the Mergers and the other Transactions is not complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Previous 8-K and is incorporated herein by reference, and the full text of the Amendment, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The Amendment has been attached to provide investors with information regarding its terms. Further, the Amendment should not be read alone but instead in conjunction with the Merger Agreement which it amends and with the other information regarding the Merger Agreement, the Transactions, Rithm, Sculptor, their respective affiliates and their respective businesses that is contained in, or incorporated by reference into, the proxy statement that has been filed with the SEC by Sculptor in connection with the Transactions, as amended or supplemented from time to time, as well as in the definitive proxy statement, Forms 10-K, Forms 10-Q and other filings that Rithm or Sculptor files or furnishes with the SEC.

References to the Merger Agreement from and after the entry into the Amendment on October 12, 2023 refer to the Merger Agreement as amended by the Amendment.

On October 12, 2023, Rithm and Sculptor issued a joint press release in connection with the Amendment. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and the information contained therein is incorporated by reference into this Item 7.01.

The information contained in the press release is being furnished, not filed, pursuant to this Item 7.01. Accordingly, such information will not be incorporated by reference into any filing filed by Rithm under the Securities Act of 1933 or the Securities Exchange Act of 1934, unless specifically identified therein as being incorporated by reference therein. The furnishing of the information in this Current Report on Form 8-K with respect to the press release is not intended to, and does not, constitute a determination or admission by Rithm that such information is material or complete, or that investors should consider this information before making an investment decision with respect to any security of Rithm.

On October 12, 2023, Rithm entered into a purchase agreement (the “Warrant Purchase Agreement”) with Delaware Life Insurance Company (the “Warrant Holder”), as the holder of Sculptor’s outstanding warrants to purchase an aggregate of 4,338,015 shares of Company Class A Common Stock (the “Company Warrants”), pursuant to which Rithm agreed to purchase the Company Warrants from the Warrant Holder (the “Warrant Purchase”). Each of the parties have agreed to cover their own expenses in connection with the Warrant Purchase. The Warrant Purchase is expected to close on October 12, 2023. Pursuant to the Warrant Purchase Agreement, Rithm also agreed to pay certain additional amounts to the Warrant Holder in the event that Sculptor is acquired within 270 days of the closing of the Warrant Purchase.

Rithm expects to deliver to Sculptor an exercise notice pursuant to the terms of the Company Warrants for the full 4,338,015 shares of Company Class A Common Stock thereunder following the closing of the Warrant Purchase.

Certain information in this Current Report on Form 8-K and the exhibits hereto may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the Transactions and the closing of the Warrant Purchase and related exercise of the Company Warrants. All statements, other than statements of current or historical fact, contained in this Current Report on Form 8-K may be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “may,” “should,” “could,” “estimate,” “intend” (or the negative of these terms) and other similar expressions are intended to identify forward-looking statements. These statements are not historical facts. They represent management’s current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond Rithm’s control, which could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this Current Report on Form 8-K. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Cautionary Statements Regarding Forward Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Rithm’s and Sculptor’s most recent annual and quarterly reports and other filings filed with the SEC, which are available on both companies’ websites (www.rithmcap.com and www.sculptor.com).

Factors which could have a material adverse effect on Rithm’s and Sculptor’s operations and future prospects include, but are not limited to, the following risks relating to the Transactions, including in respect of the satisfaction of closing conditions to the Transactions on a timely basis or at all, including the ability to obtain the Company Stockholder Approval; unanticipated difficulties and/or expenditures relating to the Transactions and any related financing; uncertainties as to the timing of the Transactions; litigation related to, or other challenges to, the Transactions; the impact of the Transactions on each company’s business operations (including the threatened or actual loss of employees, clients or suppliers); the inability to obtain, or delays in obtaining cost savings and synergies from the Transactions; incurrence of unexpected costs and expenses in connection with the Transactions; risks related to changes in the financial, equity and debt markets; and risks related to political, economic and market conditions. In addition, the risks to which Sculptor’s business is subject, including those risks described in Sculptor’s periodic reports filed with the SEC, could adversely affect the Transactions and, following the completion of the Transactions, our operations and future prospects.

New risks and uncertainties emerge from time to time, and it is not possible for Rithm to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Forward-looking statements contained herein speak only as of the date of this Current Report on Form 8-K, and Rithm expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Rithm’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.