Rithm Capital Corp.

Current report

Risks Related to the Paramount Acquisition and the Crestline Acquisition

Current report

The Paramount Acquisition and the Crestline Acquisition are subject to conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete either the Paramount Acquisition or the Crestline Acquisition could have material adverse effects on us.

Current report

We cannot assure you that either the Paramount Acquisition or the Crestline Acquisition will be consummated on the terms or in the timeframe previously disclosed, if at all.

Current report

Consummation of the Paramount Acquisition is subject to certain customary conditions, including (i) the absence of a Company Material Adverse Effect (as defined in the Paramount Merger Agreement) on the Paramount Acquisition, (ii) approval of the Paramount Acquisition by the requisite vote of Paramount’s stockholders (the “Paramount Company Stockholder Approval”), (iii) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers) and (iv) each party’s compliance with its covenants and agreements contained in the Paramount Merger Agreement in all material respects, subject to certain exceptions, during the period between the execution of the Paramount Merger Agreement and the consummation of the Paramount Acquisition.

Current report

There can be no assurance that the conditions to closing of the Paramount Acquisition will be satisfied or waived or that other events will not intervene, delay or result in the failure to close the Paramount Acquisition. Certain of these conditions are not within our control, and we cannot predict when, or if these conditions will be satisfied. The transaction is not contingent on our ability to obtain financing. Our intention is to explore co-investments and/or financing from third parties but there can be no assurance that we will reach any agreement for such co-investments and/or financing, in which case we may be required to obtain financing on less attractive terms or to fund the Paramount Acquisition with cash on hand. Under the terms of the Paramount Merger Agreement, the Paramount Acquisition may be terminated (i) if the closing has not occurred on or before March 17, 2026; (ii) by mutual written consent of the parties; (iii) if any governmental authority of competent jurisdiction has issued a final, non-appealable order permanently restraining or otherwise prohibiting the Paramount Acquisition; (iv) the Paramount Company Stockholder Approval has not been obtained upon a vote taken at the stockholders’ meeting or any adjournment or postponement thereof; (v) if, prior to obtaining the Paramount Company Stockholder Approval and after following certain procedures and adhering to certain restrictions, the board of directors of Paramount authorizes, adopts, approves, recommends or deems advisable, or publicly proposes to authorize, adopt, approve, recommend or deem advisable to the stockholders of Paramount a competing proposal or an acquisition agreement; or (vi) upon a material uncured breach by the other party that would result in a failure of the conditions to the closing to be satisfied.

Current report

The Crestline Acquisition is also subject to customary closing conditions. In addition, government regulators may impose conditions, terms, obligations or restrictions in connection with their approval of or consent to the Crestline Acquisition, and such conditions, terms, obligations or restrictions may delay completion of the Crestline Acquisition, require us to take actions that materially alter our existing business or the proposed combined business, including divestitures or similar transactions, or impose additional material costs on, or materially limit the revenues of, the combined company following the completion of the Crestline Acquisition.

Current report

If either the Paramount Acquisition or the Crestline Acquisition is not completed, our ongoing business may be materially adversely affected and, without realizing any of the benefits of having completed either the Paramount Acquisition or the Crestline Acquisition, we would be subject to a number of risks, including the following:

Current report

•the market price of our common stock could decline;

Current report

•time and resources committed by our management to matters relating to the Paramount Acquisition and the Crestline Acquisition could otherwise have been devoted to pursuing other beneficial opportunities;

Current report

•we may experience negative reactions from the financial markets or from our customers, employees, suppliers and regulators; and

Current report

•we will be required to pay certain costs relating to the Paramount Acquisition and the Crestline Acquisition, such as legal, accounting and financial advisory fees, whether or not the Paramount Acquisition and the Crestline Acquisition are completed.

Current report

The materialization of any of these risks could materially and adversely impact our ongoing business. Similarly, delays in the completion of the Paramount Acquisition or the Crestline Acquisition could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about completion of the Paramount Acquisition or the Crestline Acquisition, as applicable.

Current report

We may be unable to successfully integrate the businesses and realize the anticipated benefits of either or both of the Paramount Acquisition and the Crestline Acquisition in the anticipated manner or at all. Additionally, the completion of the Crestline Acquisition and/or the Paramount Acquisition may expose us to additional risks.

Current report

The success of each of the Paramount Acquisition and the Crestline Acquisition will depend, in part, on our ability to successfully integrate Paramount, which currently operates as an independent public company, and Crestline, which currently operates as a private company, with our business and realize the anticipated benefits, including synergies, cost savings, innovation and operational efficiencies, from each of the combinations. If we are unable to achieve these objectives within the anticipated timeframe, or at all, the anticipated benefits may not be realized fully, or at all, or may take longer to realize than expected and the value of our common stock may be harmed.

Current report

The Paramount Acquisition and the Crestline Acquisition and the integration of Paramount and Crestline into our business may result in material challenges, including, without limitation:

Current report

•the diversion of management’s attention from our ongoing business as a result of the devotion of time and resources to the Paramount Acquisition and the Crestline Acquisition;

Current report

•the fact that we have not entered into any employment agreements with executives from Paramount, and there can be no assurance that we will successfully identify and retain key personnel for the business;

Current report

•the possibility of faulty assumptions underlying expectations regarding the Paramount Acquisition and the Crestline Acquisition;

Current report

•retaining existing business relationships, including Paramount’s current tenants and Crestline’s current fund investors, and attracting new business relationships;

Current report

•unanticipated issues and costs in integrating information technology, communications and other systems;

Current report

•unanticipated changes in federal or state laws or regulations; and

Current report

•unforeseen liabilities, expenses or delays associated with the Paramount Acquisition and the Crestline Acquisition.

Current report

Many of these factors will be outside of our control and any one of them could result in delays, increased costs, failures in achieving anticipated benefits, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially affect our financial position, results of operations and cash flows.

Current report

Additionally, Paramount’s business is subject to certain of the same risks as our businesses, as well as additional risks relating to the commercial real estate business, including those described in “—The Paramount Acquisition provides greater exposure to risks in the commercial real estate industry.” If the Paramount Acquisition is completed, our exposure to the risks involved in such businesses will be increased. Crestline’s business is subject to certain of the same risks as our businesses, as well as additional risks relating to the asset management business, including competitive pressures relating to fund performance, the ability to attract and retain fund investors, additional regulation of asset managers and other risks related to the management of funds. If the Crestline Acquisition is completed, our exposure to the risks involved in such businesses will be increased.

Current report

The Paramount Acquisition provides greater exposure to risks in the commercial real estate industry.

Current report

The Paramount Acquisition represents a significant increase in the Company’s commercial real estate portfolio. As we continue to expand into this business segment, our exposure to its risks and uncertainties will be increased. If we are unable to successfully manage these risks, our business, financial condition and results of operations could be materially and adversely affected. These risks include:

Current report

•declines in the financial condition of Paramount’s tenants, many of which are financial, legal and other professional firms, which may result in tenant defaults under leases due to bankruptcy, lack of liquidity, operational failures or other reasons;

Current report

•the inability or unwillingness of Paramount’s tenants to pay rent increases;

Current report

•significant job losses in the financial services, professional services and technology and media industries, which may decrease demand for Paramount’s office space, causing market rental rates and property values to be negatively impacted;

Current report

•an oversupply of, or a reduced demand for, Class A office space;

Current report

•changes in market rental rates and changes in space utilization by tenants due to technology, economic conditions and business cultures;

Current report

•increases in property taxes; and

Current report

•other risks inherent in the commercial real estate business.

Current report

Stockholder or other litigation could result in the payment of damages and/or may materially and adversely affect our business, financial condition results of operations and liquidity.

Current report

Transactions such as the Paramount Acquisition often give rise to securities class action and derivative lawsuits and other legal proceedings by stockholders or other third parties. Even if such legal proceedings are without merit, the defense or settlement of any lawsuit or claim that remains unresolved regarding the Paramount Acquisition may materially and adversely affect our business, financial condition, results of operations and liquidity. Further, such litigation or settlement of any lawsuit or claim could be costly and could divert management’s time and attention from the operation of the business. Finally, if a plaintiff was successful in obtaining an injunction prohibiting completion of the Paramount Acquisition, such injunction may delay or prevent completion of the Paramount Acquisition, which may adversely affect our business, financial condition, results of operations and liquidity.

Current report

We may not have discovered undisclosed liabilities of each of Paramount or Crestline during our due diligence process.

Current report

In the course of the due diligence review of each of Paramount and Crestline that we conducted prior to the execution of the respective transaction documents for the Paramount Acquisition and the Crestline Acquisition, we may not have discovered, or may have been unable to quantify, undisclosed liabilities or other issues of Paramount and its subsidiaries or of Crestline and its subsidiaries, respectively. We do not have rights of indemnification against Paramount and have certain specified rights to indemnification against the Crestline sellers for any such liabilities. Examples of such undisclosed liabilities or other issues may include, but are not limited to, unpaid taxes, pending or threatened litigation or regulatory matters. Any such undisclosed liabilities could have an adverse effect on our business, results of operations, financial condition and cash flows following the completion of the Paramount Acquisition and the Crestline Acquisition.

Current report

Our, Paramount’s and/or Crestline’s relationships may be subject to disruption due to uncertainty associated with the Paramount Acquisition or the Crestline Acquisition, as applicable, which could have an adverse effect on us and the business and operations of the combined company.

Current report

Parties with which we, Paramount and/or Crestline do business with may experience uncertainty associated with the proposed acquisitions, including with respect to current or future business relationships with us, Paramount, Crestline, or the combined Company following the completion of the Paramount Acquisition and/or the Crestline Acquisition. Our, Paramount’s and/or Crestline’s relationships may be subject to disruption as customers, current and prospective fund investors, suppliers and other persons with whom we, Paramount and/or Crestline have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with us, Paramount or Crestline, as applicable.

Current report

Such risks could have an adverse effect on the results of operations, cash flows and financial position of us or the combined company following the completion of the Paramount Acquisition and/or the Crestline Acquisition, including an adverse effect on our ability to realize the expected synergies and other benefits of the applicable transaction. The risk, and adverse effect, of any disruption could be exacerbated by a delay in the completion of or failure to complete the applicable transactions.