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Charles Frischer Calls For Newcastle Buyback

Mr. Wesley Edens
Co-Chairman
Fortress Investment Group LLC (NYSE:FIG) Group
1345 Avenue of the Americas
46th Floor
New York, NY 10105

Dear Mr. Edens:

I recently filed a 13-D form on Newcastle Investment, disclosing my ownership of 3,442,000 shares or 5.2% of the outstanding shares. I have been a long-term investor in the company and recently purchased additional shares because they are trading at a significant discount to the net asset value of the company.

Last week Newcastle reported great earnings. Newcastle has two major assets: a real estate loan portfolio, which has just over 12 months of duration, and a portfolio of golf assets. The corporate actions taken by management in both buying back the company's golf debt at a 10% discount and collapsing two of its main CDO portfolios were terrific. Buying the golf debt back at a discount created 25 cents per share of additional value, and collapsing the CDO portfolio further simplified the investment and removed considerable risk.

In the aftermath of a great earnings report, NCT shares were down 6.5% for the week. At the current stock price of $4.60, the market clearly is not giving the company credit for the value of the golf assets. Management has a responsibility to the Newcastle shareholders to immediately address this situation.

Therefore, I request that management immediately initiate a $100 million share buyback, with a ceiling price of $5.00 per share. If the company is not willing to implement this buyback, I request that it immediately begin a sale/liquidation of Newcastle Investment with the expectation that proceeds will exceed $6.65 per share, a 45% premium to the current stock price. ($6.65 is the midpoint of the sum of the parts valuation from page 7 of the second quarter 2015 investor supplement presentation.) There would also be a large number of both private equity firms and other investment companies who would love to take control of Newcastle at a $6.65 price.

The market price of Newcastle is also depressed because it is being grouped in with other mortgage REITs. Investors are assuming the company will be subject to significant asset deterioration due to future...


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