Exhibit 1.1
EXECUTION COPY
6,000,000 shares
RESOURCE CAPITAL
CORP.
Common Stock
UNDERWRITING
AGREEMENT
December 14, 2006
Citigroup Global Markets
Inc.
Credit Suisse Securities (USA) LLC
Friedman, Billings, Ramsey & Co.,
Inc.
J.P. Morgan Securities Inc.,
c/o Citigroup Global Markets
Inc.,
388 Greenwich Street
New York, N.Y. 10013
Dear Sirs:
1. Introductory . Resource
Capital Corp., a Maryland corporation (“ Company
”) proposes to issue and sell 6,000,000 shares (the “
Firm Securities ”) of its common stock, par value
$0.001 per share (the “ Securities ”) to
Citigroup Global Markets Inc. (“ Citigroup ”),
Credit Suisse Securities (USA) LLC (“ CSS ”),
Friedman, Billings, Ramsey & Co., Inc. (“ FBR
”), and J.P. Morgan Securities Inc. (“ J.P.
Morgan ”) (collectively, the “ Underwriters
”). The Company also proposes to sell to the Underwriters, at
the option of the Underwriters, an aggregate of not more than
900,000 additional shares of its Securities, as set forth below
(such 900,000 additional shares being hereinafter referred to as
the “ Optional Securities ” and, together with
the Firm Securities, the “ Offered Securities
”). To the extent there are no additional Underwriters listed
on Schedule A other than you, the term Representatives as used
herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or
plural as the context requires. The Company and Resource Capital
Manager, Inc. (the “ Manager ”) hereby agree
with the Underwriters as follows:
2. Representations and Warranties
of the Company and the Manager
(a) The Company represents and
warrants to, and agrees with, the several Underwriters
that:
(i) A registration statement
(No. 333-138990) relating to the Offered Securities,
including a form of prospectus, has been filed with the Securities
and Exchange Commission (the “ Commission ”) and
either (A) has been declared effective under the Securities
Act of 1933, as amended (the “ Act ”) and
is not proposed to be amended or (B) is proposed to be amended
by amendment or post-effective amendment. If such registration
statement (the “ initial registration statement
”) has been declared effective, either (A) an additional
registration statement (the “ additional registration
statement ”) relating to the Offered Securities may have
been filed with the Commission
pursuant to Rule
462(b) (“ Rule 462(b) ”) under the Act and,
if so filed, has become effective upon filing pursuant to such Rule
and the Offered Securities all have been duly registered under the
Act pursuant to the initial registration statement and, if
applicable, the additional registration statement or (B) such
an additional registration statement is proposed to be filed with
the Commission pursuant to Rule 462(b) and will become
effective upon filing pursuant to such Rule and upon such filing
the Offered Securities will all have been duly registered under the
Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose
to amend the initial registration statement or if an additional
registration statement has been filed and the Company does not
propose to amend it, and if any post-effective amendment to either
such registration statement has been filed with the Commission
prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has
been declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c) (“ Rule
462(c) ” ) under the Act or, in the case of the
additional registration statement, Rule 462(b). For purposes of
this Agreement, “ Effective Time ” with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional
registration statement means (A) if the Company has advised
the Representatives that it does not propose to amend such
registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of
this Agreement, was declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c), or
(B) if the Company has advised the Representatives that it
proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such
registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective
by the Commission. If an additional registration statement has not
been filed prior to the execution and delivery of this Agreement
but the Company has advised the Representatives that it proposes to
file one, “ Effective Time ” with respect to
such additional registration statement means the date and time as
of which such registration statement is filed and becomes effective
pursuant to Rule 462(b). “ Effective Date ” with
respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective
Time thereof. The initial registration statement, as amended at its
Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part
of the initial registration statement as of the Effective Time of
the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial
registration statement as of its Effective Time pursuant to
Rule 430A(b) (“ Rule 430A(b) ”)
under the Act, is hereinafter referred to as the “ Initial
Registration Statement. ” The additional registration
statement, as amended at its Effective Time, including the contents
of the Initial Registration Statement incorporated by reference
therein and including all information (if any) deemed to be a part
of the additional registration statement as of its Effective Time
pursuant to Rule 430A(b), is hereinafter referred to as the “
Additional Registration Statement. ” The Initial
Registration Statement and the Additional Registration Statement
are hereinafter referred to collectively as the “
Registration Statements ” and individually as a
“ Registration Statement. ” “
Registration Statement ” without reference to a time
means the Registration Statement as of its Effective Time. “
Registration Statement ” as of any time means the
initial registration statement and any additional registration
statement in the form then filed with the Commission, including any
amendment thereto and any prospectus deemed or retroactively deemed
to be a part thereof that has not been superseded or modified.
For
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purposes of the previous sentence,
information contained in a form of prospectus or prospectus
supplement that is deemed retroactively to be a part of the
Registration Statement pursuant to Rule 430A shall be considered to
be included in the Registration Statement as of the time specified
in Rule 430A. “ Statutory Prospectus ” as of any
time means the prospectus included in the Registration Statement
immediately prior to that time, including any prospectus deemed to
be a part thereof that has not been superseded or modified. For
purposes of the preceding sentence, information contained in a form
of prospectus that is deemed retroactively to be a part of the
Registration Statement pursuant to Rule 430A shall be considered to
be included in the Statutory Prospectus as of the actual time that
form of prospectus is filed with the Commission pursuant to Rule
424(b) (“ Rule 424(b) ”) under
the Act. “ Prospectus ” means the Statutory
Prospectus that discloses the public offering price and other final
terms of the Offered Securities and otherwise satisfies
Section 10(a) of the Act. “ Issuer Free Writing
Prospectus ” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the
Offered Securities 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).
“ General Use Issuer Free Writing Prospectus ”
means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its
being specified in a schedule to this Agreement. “ Limited
Use Issuer Free Writing Prospectus ” means any Issuer
Free Writing Prospectus that is not a General Use Issuer Free
Writing Prospectus. “ Applicable Time ” means
4:15pm (Eastern time) on the date of this
Agreement.
(ii) If the Effective Time of the
Initial Registration Statement is prior to the execution and
delivery of this Agreement: (A) on the Effective Date of the
Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission (“ Rules and
Regulations ”) and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein (with respect to the Prospectus only, in light of the
circumstances under which they were made) not misleading,
(B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed or will
conform, in all material respects to the requirements of the Act
and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit,
or will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to
Rule 424(b) or (if no such filing is required) at
the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement and
the Prospectus will conform, in all material respects to the
requirements of the Act and the Rules and Regulations, and neither
of such documents includes, or will include, any untrue statement
of a material fact or omits, or will omit, to state any material
fact required to be stated therein or necessary to make the
statements therein (with respect to the Prospectus only, in light
of the circumstances under which they were made) not
misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus
will conform in all respects to the requirements of the Act and the
Rules and Regulations, neither of such documents will include any
untrue statement of a material fact or will omit to state any
material fact
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required to be stated therein or
necessary to make the statements therein (with respect to the
Prospectus only, in light of the circumstances under which they
were made) not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do
not apply to statements in or omissions from a Registration
Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information is that described as such
in Section 8(b) hereof.
(iii)(a) At the time of filing
the Registration Statement and (b) at the date of this
Agreement, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405, including (x) the
Company or any other subsidiary in the preceding three years not
having been convicted of a felony or misdemeanor or having been
made the subject of a judicial or administrative decree or order as
described in Rule 405 and (y) the Company in the
preceding three years not having been the subject of a bankruptcy
petition or insolvency or similar proceeding, not having had a
registration statement be the subject of a proceeding under
Section 8 of the Act and not being the subject of a proceeding
under Section 8A of the Act in connection with the offering of
the Offered Securities, all as described in
Rule 405.
(iv) As of the Applicable Time,
neither (a) the General Use Issuer Free Writing
Prospectus(es) issued at or prior to the Applicable Time and
the Statutory Prospectus dated December 8, 2006, the documents
attached to this Agreement, the price to the public and
underwriting discount on the cover page of the Prospectus and the
statements under the caption “Description of Capital Stock
and Warrants” in the Prospectus, all considered together
(collectively, the “ General Disclosure Package
”), nor (b) any individual Limited Use Issuer Free
Writing Prospectus, when considered together with the General
Disclosure Package, included any untrue statement of a material
fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence
does not apply to statements in or omissions from any prospectus
included in the Registration Statement or any Issuer Free Writing
Prospectus in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any
Underwriter consists of the information described as such in
Section 8(b) hereof.
(v) 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 Offered
Securities or until any earlier date that the Company notified or
notifies the Underwriters as described in the next sentence, did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information then contained in
the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information then
contained in the Registration Statement or included or would
include an untrue statement of a material fact or omitted or would
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances prevailing at
that subsequent time, not misleading, (i) the Company has
promptly notified or will promptly notify the Underwriters and
(ii) the Company has promptly amended or will promptly amend
or supplement such Issuer Free Writing Prospectus to eliminate or
correct such conflict,
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untrue statement or omission. The
foregoing two sentences do not apply to statements in or omissions
from any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the information described as such in
Section 8(b) hereof.
(vi) The Company is a corporation
duly organized and validly existing and in good standing under the
laws of the State of Maryland with full power and authority to own,
lease or operate its assets and to conduct its business as
described in the General Disclosure Package and the Prospectus and
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby (including the issuance, sale and
delivery of the Offered Securities) and thereby.
(vii) Each subsidiary of the Company
(the “ Subsidiaries ”) has been duly
incorporated or formed and is an existing corporation or limited
liability company in good standing under the laws of the
jurisdiction of its incorporation or formation, with power and
authority (corporate and other) to own, lease or operate its
assets and conduct its business as described in the General
Disclosure Package and the Prospectus; all of the issued and
outstanding capital stock or membership interests, as applicable,
of each Subsidiary has been duly authorized and validly issued and
is fully paid and nonassessable; and except as disclosed in the
General Disclosure Package and the Prospectus, the capital stock or
membership interests, as applicable, of each Subsidiary is owned
entirely by the Company, directly or through subsidiaries, and is
free from liens, encumbrances and defects. Except as disclosed in
the General Disclosure Package and the Prospectus, the Company does
not own any capital stock of or other equity interest in any other
corporation, limited liability company, partnership, joint venture,
trust or other entity or association.
(viii) The Company had, as of the
date of the Prospectus, the duly authorized and outstanding
capitalization, as set forth in the General Disclosure Package and
the Prospectus under the caption “Capitalization;” all
of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are
fully paid and non-assessable and have been issued in compliance
with all federal and state securities laws and, except as disclosed
in the General Disclosure Package and the Prospectus, free of
preemptive rights and other rights to subscribe for or purchase
securities; except as disclosed in the General Disclosure Package
and the Prospectus, there are no outstanding (i) securities or
obligations of the Company or the Subsidiaries convertible into or
exchangeable for any capital stock of the Company or the
Subsidiaries, (ii) warrants, rights or options to subscribe
for or purchase from the Company or the Subsidiaries any such
capital stock or any such convertible or exchangeable securities or
obligations or (iii) obligations of the Company or the
Subsidiaries to issue or sell any shares of capital stock,
partnership interests or membership interests, as applicable, any
such convertible or exchangeable securities or obligation, or any
such warrants, rights or options.
(ix) The Offered Securities have
been duly authorized for issuance and sale and, when issued by the
Company and delivered against payment therefor in accordance with
the terms of this Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and the issuance, sale and
delivery of the Offered Securities by the Company is not subject to
any preemptive right, co-sale right, registration right, resale
right, right of first refusal or other
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similar rights arising by operation
of law, under the Company Charter Documents, as such term is
defined in Section 2(xvi), (other than as set forth
therein) or under any agreement to which the Company is a
party or otherwise, other than as provided for in the Lock-Up
Agreements (as defined below).
(x) Each of the Company and the
Subsidiaries is duly qualified or licensed by, and is in good
standing in, each jurisdiction in which it currently conducts its
business or in which it owns or leases property or maintains an
office and in which such qualification or licensing is necessary
and in which the failure, individually or in the aggregate, to be
so qualified or licensed could have, individually or in the
aggregate, a material adverse effect on the condition (financial or
other), business, earnings, management, properties, results of
operations (as described in the General Disclosure Package and the
Prospectus), assets or prospects of the Company and the
Subsidiaries taken as a whole (a “ Material Adverse
Effect ”).
(xi) Each of the Company and the
Subsidiaries has good and marketable title in fee simple to all
real property and good title to all personal property owned by it,
in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such
as are disclosed in the General Disclosure Package and the
Prospectus or such as would not reasonably be expected to
materially and adversely affect the value of such property or
interfere with the use made or proposed to be made of such property
by the Company; any real property or personal property held under
lease by the Company is held under a lease which is valid, binding
and enforceable against the Company and, to the Company’s
knowledge, the other party thereto, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally, and by general
principles of equity, or as otherwise disclosed in the General
Disclosure Package and the Prospectus or exceptions that are not,
individually or in the aggregate, material to the Company and would
not reasonably be expected to interfere with the use made or
proposed to be made of such property by the Company.
(xii) Each of the Company and the
Subsidiaries is in compliance with all applicable federal, state,
local and foreign laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates
except where the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
(xiii) Neither the Company nor any
of the Subsidiaries has any employees.
(xiv) Except as otherwise disclosed
in the General Disclosure Package and the Prospectus, there are no
outstanding loans or advances or guarantees of indebtedness by the
Company to or for the benefit of any of the officers, directors,
affiliates or representatives of the Company or any of the members
of the families of any of them.
(xv) Except for the
Underwriter’s discount and any other compensation payable by
the Company to the Underwriters in connection with the transactions
contemplated herein or as otherwise disclosed in the General
Disclosure Package and the Prospectus, the Company has not incurred
any liability for any brokerage commissions, finder’s fees or
similar payments in connection with the transactions herein
contemplated.
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(xvi) Each of the Company and the
Subsidiaries is not (a) in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its articles of
incorporation, by-laws, certificate of formation, operating
agreement or similar organizational documents, as applicable
(collectively, the “ Company Charter Documents
”) or (b) in breach or default (nor has any event
occurred which with notice, lapse of time or both would constitute
a breach or default) in the performance or observance of any
of its obligations, agreements, covenants or conditions contained
in any license, indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument to which the
Company or the Subsidiaries is a party or by which it or its assets
may be bound or affected except, in the case of
clause (b) only, for breaches or defaults that could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; the execution, delivery and performance of
this Agreement, the issuance, sale and delivery of the Offered
Securities by the Company, the consummation by the Company of the
transactions contemplated hereby and compliance by the parties
thereto (other than the Underwriters) with the terms and
provisions hereunder will not conflict with, or result in any
breach of or constitute a default under (nor constitute any event
which with notice, lapse of time, or both would constitute a breach
of, or default under), (A) any provision of the Company
Charter Documents, (B) any of the Company’s and the
Subsidiaries’ and any of their respective affiliates’
obligations under any provision of any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which any such party is a party or by
which it or its assets may be bound or affected, or (C) under
any federal, state, local or foreign law, regulation or rule or any
decree, judgment, permit or order applicable to the Company or the
Subsidiaries except, in the case of clauses (B) and
(C) only, for such conflicts, breaches or defaults that could
not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(xvii) This Agreement has been duly
authorized, executed and delivered by the Company, assuming due
authorization, execution and delivery of this Agreement by the
Underwriters, is a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally, and by
general principles of equity, and except to the extent that the
indemnification provisions hereof may be limited by federal or
state securities laws and public policy considerations in respect
thereof; the Management Agreement (“ Management
Agreement ”), dated March 8, 2005, by and among the
Company, the Manager and Resource America, Inc. (“
Resource America ”), has been duly authorized,
executed and delivered by the Company and Resource America, and
constitutes legal, valid and binding agreements of the Company and
Resource America, enforceable against the Company and Resource
America in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally, and by general
principles of equity, and except to the extent that the
indemnification provisions thereof may be limited by federal or
state securities laws and public policy considerations in respect
thereof.
(xviii) The capital stock of the
Company, including the Offered Securities, conforms in all material
respects to the descriptions thereof contained in the General
Disclosure Package and the Prospectus; the form of certificates
used to evidence the Offered Securities complies in all material
respects with all applicable statutory requirements and any
requirements of the New York Stock Exchange (the “
NYSE ”) and with any applicable requirements of
the Company Charter Documents and has been duly authorized and
approved by the directors of the Company.
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(xix) Except for the Registration
Rights Agreement (“ Registration Rights Agreement
”), dated March 8, 2005, among the Company on one hand,
and CSS for the benefit of the Holders, on the other hand, the
Management Agreement or as disclosed in the General Disclosure
Package, there are no contracts, agreements or understandings
between the Company and any person granting such person the right
to require the Company to file a registration statement under the
Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to a registration
statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the
Act.
(xx) The Securities have been
approved for listing subject to notice of issuance on the
NYSE.
(xxi) No approval, authorization,
consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency is required for the execution, delivery and
performance by the Company of this Agreement, the consummation by
the Company of the transactions contemplated hereby, or the
issuance, sale and delivery of the Offered Securities as
contemplated hereby, except such as have been obtained and made, or
as may be required, under the Act, under the listing requirements
of the NYSE, under the rules and regulations of the National
Association of Securities Dealers (the “ NASD
”), and such as may be required under state or foreign
securities laws.
(xxii) Each of the Company and the
Subsidiaries has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has
obtained all necessary licenses, authorizations, consents and
approvals from other persons, required in order to conduct its
business as it is being conducted at this time, and will obtain all
necessary licenses, authorizations, consents and approvals and make
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and will obtain all necessary
licenses, authorizations, consents and approvals from other
persons, required in order to conduct its business as it is
proposed to be conducted as described in the General Disclosure
Package and the Prospectus except, in each case, where the failure
to obtain any such license, authorization, consent or approval
could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; each of the Company and the
Subsidiaries is not in violation of, or in default under, any of
its obligations under any such license, authorization, consent or
approval of any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to the Company and
the Subsidiaries except where such violation or default could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(xxiii) The Company and the
Subsidiaries own, possess or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, “ intellectual
property rights ”) necessary to conduct the business
now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights
that, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
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(xxiv) The General Disclosure
Package and the Prospectus contains summaries, which are complete
and accurate in all material respects, of all material contracts,
agreements, instruments and other documents, if any, of the Company
that would be required to be described in a prospectus included in
a registration statement on Form S-11 under the Act, and the copies
of all such contracts, agreements, instruments and other documents
(including all amendments or waivers relating to any of the
foregoing) that have been previously furnished to the
Underwriters or their counsel are complete and genuine and include
all material collateral and supplemental agreements
thereto.
(xxv) There are no actions, suits,
proceedings, inquiries or investigations pending or, to the
knowledge of the Company, threatened against the Company or the
Subsidiaries, or any of their respective assets, and to the
knowledge of the Company, its respective directors, officers or
employees at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board,
body, arbitration panel, authority or agency the adverse outcome of
which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(xxvi) Since the date of the
Prospectus, except as disclosed therein, there has not been
(a) any event, circumstance or change that could reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect, (b) any transaction, other than in the
ordinary course of business, which is material to the Company
contemplated or entered into by or on behalf of the Company or the
Subsidiaries, (c) any liability or obligation, contingent or
otherwise, directly or indirectly incurred by the Company or the
Subsidiaries, other than liabilities and obligations incurred in
the ordinary course of business, (d) any dividend or
distribution of any kind declared, paid or made by the Company on
any class of its capital stock, (e) any purchase or pledge by
the Company or the Subsidiaries of any of the Company’s or
the Subsidiaries’ outstanding capital stock or (f) any
change in the capital stock, long-term debt (including off-balance
sheet activities or transactions) or, outside the ordinary
course of business, short-term debt of the Company or the
Subsidiaries.
(xxvii) The Company is not, and the
sale of the Offered Securities as herein contemplated and the
receipt of the net proceeds therefrom will not cause the Company to
become, an “investment company” or an entity
“controlled” by an “investment company” as
such terms are defined in the Investment Company Act of 1940, as
amended.
(xxviii) Neither the Company nor any
of its directors, officers, representatives or affiliates has
taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result in, or which has
constituted, any unlawful stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Offered Securities; and the Company acknowledges that
the Underwriters may engage in passive market making transactions
in the Offered Securities on the NYSE in accordance with Regulation
M under the Securities Exchange Act of 1934, as amended (the
“ Exchange Act ”).
(xxix) Grant Thornton LLP is an
independent registered public accounting firm with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder, and the rules and regulations of
the Public Company Accounting Oversight Board (“ PCAOB
”) of the United States.
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(xxx) There are no transfer taxes or
other similar fees or charges under federal law or the laws of any
state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Offered
Securities.
(xxxi) The Company has not taken any
action, nor have any other steps been taken or have any legal
proceedings been commenced, nor to the knowledge of the Company,
threatened, against the Company, for the winding up, liquidation or
dissolution of the Company.
(xxxii) Each of the independent
directors named in the Prospectus satisfies the independence
standards established by the Commission and the NYSE.
(xxxiii) The Company’s
investment guidelines and operating policies described in the
General Disclosure Package and the Prospectus accurately reflect
the current intentions of the Company and the Manager with respect
to the operation of the Company’s business, and no material
deviation from such guidelines or policies is
contemplated.
(xxxiv) The Company has not
authorized anyone to make any representations regarding the offer
and sale of the Offered Securities, or regarding the Company in
connection therewith, except as set forth in the General Disclosure
Package and the Prospectus or any related marketing materials
developed jointly and approved by the Company and the Underwriters;
the Company has not received notice of any stop order or other
similar order or decree preventing the use of any Issuer Free
Writing Prospectus or the Prospectus or any amendment or supplement
thereto, and no proceeding for that purpose has commenced or is
pending or, to the Company’s knowledge, is
contemplated.
(xxxv) The Company has made a timely
election to be subject to tax as a real estate investment trust (a
“ REIT ”) pursuant to Sections 856 through
860 of the Internal Revenue Code of 1986, as amended (the “
Code ”), for its taxable year ended
December 31, 2005 and, commencing with its initial taxable
year ended December 31, 2005, the Company has been organized
and operated in conformity with the requirements for qualification
and taxation as a REIT under the Code, and the Company’s
current and proposed method of operation will enable it to continue
to meet the requirements for qualification and taxation as a REIT
under the Code; and all statements regarding the Company’s
qualification and taxation as a REIT and descriptions of the
Company’s organization and current and proposed method of
operation set forth in the General Disclosure Package and the
Prospectus are true, complete and correct in all material
respects.
(xxxvi) The Company and each of the
Subsidiaries have filed on a timely basis all federal, state, local
and foreign income and franchise tax returns, if any such returns
were required to be filed, through the date hereof, any such
returns are correct and complete, and the Company has paid all
taxes shown as due thereon; and no tax deficiency has been asserted
against the Company or any of the Subsidiaries, nor does the
Company or any of the Subsidiaries know of any tax deficiency which
could reasonably be expected to be asserted against it; all tax
liabilities, if any, are adequately provided for on the
consolidated books of the Company.
10
(xxxvii) The Company and the
Subsidiaries, in the aggregate, carry, or are covered by, insurance
(issued by insurers of recognized financial responsibility to the
best knowledge of the Company and the Manager) against such
losses and risks and in such amounts as are generally deemed
adequate for the respective businesses in which they are engaged;
neither the Company nor any of the Subsidiaries has been refused
any insurance coverage sought or applied for; and neither the
Company nor any of the Subsidiaries has any reason to believe that
the Company or the Subsidiaries would 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 necessary
to continue its business at a cost that would not, individually or
in the aggregate have a Material Adverse Effect, except as
described in or contemplated by the General Disclosure Package and
the Prospectus. All such insurance is fully in force on the date
hereof and will be fully in force at the First Closing Date and any
Optional Closing Date.
(xxxviii) The Company and each of
the Subsidiaries are in compliance in all material respects with
all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ ERISA
”), and the employee benefits provisions of the Code with
which compliance is intended; 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 the Subsidiaries have or would reasonably be
expected to have any liability; the Company and the Subsidiaries
have not incurred and do not expect to incur liability under
(x) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or
(y) Sections 412 or 4971 of the Code; and each “pension
plan” for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code
has received a determination letter from the Internal Revenue
Service to the effect that it is so qualified in all material
respects and nothing has occurred, whether by action or by failure
to act, which would cause the plan to not be adversely affected by
such determination.
(xxxix) Except as set forth in the
General Disclosure Package and the Prospectus, (a) no person
has any preemptive rights, co-sale rights, registration rights,
resale rights, rights of first refusal or other similar rights
arising by operation of law to purchase any shares of common stock
or shares of any other capital stock or other equity interests of
the Company or the Subsidiaries, and (b) no person has the
right to act as an underwriter or as a financial advisor to the
Company or the Subsidiaries in connection with the offer and sale
of the Offered Securities or capital stock or other equity
interests of the Subsidiaries.
(xl) Each of the Company and the
Subsidiaries are in compliance, in all material respects, with
applicable Environmental Laws (as defined below) and is in
compliance, in all material respects, with the material terms of
any required permits, licenses, authorizations and approvals
required under, applicable Environmental Laws, except to the extent
that failure to so comply or to hold such permits, authorizations
or approvals would not reasonably be expected to have a Material
Adverse Effect; there are no past or present or, to the
Company’s knowledge, reasonably anticipated material future
events, conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise
to any material costs or liabilities to the
11
Company or the Subsidiaries under,
or to interfere with or prevent compliance by the Company or the
Subsidiaries with, applicable Environmental Laws; except as would
not reasonably be expected to have a Material Adverse Effect, and
except that no representation is made with respect to any property
underlying loans originated or held by the Company or any of the
Subsidiaries, other than properties on which the Company or any
Subsidiary has foreclosed and currently holds as an asset (“
Foreclosure Property ”), neither the Company nor any
of the Subsidiaries (a) is the subject of any investigation,
(b) has received any notice or claim, (c) is a party to
or affected by any pending or threatened action, suit or
proceeding, (d) is bound by any judgment, decree or order or
(e) has entered into any agreement, in each case relating to
any alleged violation of any applicable Environmental Law or any
actual or alleged release or, to the knowledge of the Company,
threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, “
Environmental Law ” means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, including
those relating to the distribution, processing, generation,
treatment, storage, disposal, transportation, other handling or
release or threatened release of Hazardous Materials, and “
Hazardous Materials ” means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic
substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law).
(xli) The assets of the Company and
the Subsidiaries do not constitute “plan assets” of an
ERISA regulated employee benefit plan.
(xlii) The financial statements
included in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods
shown, and, except as otherwise disclosed in the General Disclosure
Package and the Prospectus, such financial statements have been
prepared in conformity with the generally accepted accounting
principles (“ GAAP ”) in the United States
applied on a consistent basis. The “As Adjusted” column
and the related notes thereto under the caption
“Capitalization” in each of the Registration Statement
and Prospectus has been prepared in accordance with the
Commission’s rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the Company believes that the assumptions
used in the preparation thereof are reasonable and the adjustments
used therein have been properly applied to the historical amounts
in the compilation of the information.
(xliii) The Company has been subject
to the reporting requirements of either Section 13 or
Section 15(d) of the Exchange Act, and has timely filed
all reports with the Commission on the Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system. At the time such
reports were filed, they complied in all material respects with the
requirements of the Act and the Exchange Act and the Rules and
Regulations, as applicable, and did not contain any untrue
statement of material fact 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.
(xliv) To the Company’s or any
of the Subsidiaries’ knowledge, except for Chadwick
Securities, Inc., there are no affiliations or associations between
any member of the NASD and any of the Company’s or any of the
Subsidiaries’ officers, directors or 5% or greater
securityholders, except as set forth in the Prospectus.
12
(xlv) Each of the Company and the
Subsidiaries (i) makes and keeps accurate books and records in
all material respects and (ii) maintains internal accounting
controls which provide reasonable assurance that
(A) transactions are executed in accordance with
management’s authorization, (B) transactions are
recorded as necessary to permit preparation of its and the
Subsidiaries’ financial statements in conformity with GAAP
and to maintain accountability for its and the Subsidiaries’
assets, (C) access to its assets is permitted only in
accordance with management’s authorization, (D) the
reported accountability for its and the Subsidiaries’ assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences and
(E) management is made aware of all material transactions
concerning the Company and the Subsidiaries and their respective
properties; the Company and the Subsidiaries’ internal
controls over financial reporting are effective and the Company and
the Subsidiaries are not aware of any material weakness in their
internal controls over financial reporting.
(xlvi) The Company has established
and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 under the Exchange Act), which (i) are
designed to ensure that material information relating to the
Company, including the Subsidiaries, is made known to each of the
Company’s principal executive officer and principal financial
officer by others within those entities, particularly during the
preparation of the Registration Statement and the Prospectus;
(ii) have been evaluated for effectiveness as of the date of
the filing of the Registration Statement and the Prospectus with
the Commission; and (iii) are effective in all material
respects to perform the functions for which they were
established.
(xlvii) Neither the Company nor the
Subsidiaries, or, to the knowledge of the Company and the Manager,
any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or the Subsidiaries has:
(i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee, or other
person charged with similar public or quasi-public duties from
corporate funds; (iii) violated or is in violation of any
provision or the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder; or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment; and the Company, the Subsidiaries and, to the
knowledge of the Company, its affiliates have conducted their
businesses in compliance in all material respects with the Foreign
Corrupt Practices Act of 1977 and have instituted and maintain
policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance
therewith.
(xlviii) The operations of the
Company and the Subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements and the money laundering statues and 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 or any of the Subsidiaries with
respect to the Money Laundering Laws is pending, or to the best
knowledge of the Company, threatened.
13
(xlix) Neither the Company nor any
of the Subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or
any of the Subsidiaries is currently subject to any sanctions
administered by the Office of Foreign Asset 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
any Subsidiary, joint venture partner or other person or entity,
for the purpose of financial the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(l) To the knowledge of the Company,
neither it nor any of the Subsidiaries nor any of its properties or
assets has any immunity from the jurisdiction of any court or from
any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution or
otherwise) under the laws of New York.
(li) No Subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on
such Subsidiary’s capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary’s property or assets to
the Company or any other Subsidiary of the Company, except as
described in or contemplated by the General Disclosure Package and
the Prospectus.
(lii) There is and has been no
failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply in
all material respects with any provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith (the “ Sarbanes-Oxley Act ”),
including Section 402 related to loans and Sections 302
and 906 related to certifications.
(liii) Any industry, statistical and
market-related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or
derived from sources that the Company believes to be reliable and
accurate, and the Company has obtained the written consent to the
use of such data from such sources to the extent
required.
(liv) Except as described in the
General Disclosure Package and the Prospectus, with respect to
stock options or other equity incentive grants granted subsequent
to the adoption of the Sarbanes-Oxley Act pursuant to the
equity-based compensation plans of either of the Company or the
Subsidiaries (the “ Equity Plans ”), (i) no
stock options have been granted with an exercise price based upon a
price of the common stock of the Company on a date occurring prior
to the date of approval of such grant, (ii) each such grant
was made in accordance with the material terms of the Equity Plans,
the Exchange Act and all other applicable laws and regulatory rules
or requirements, and (iii) each such grant has been properly
accounted for in accordance with generally accepted accounting
principles in the financial statements (including the related
notes) of the Company and disclosed in the Company’s filings
with the Commission.
14
(lv) Accompanied by delivery of a
Statutory Prospectus, any advertising, sales literature or other
promotional material (including “prospectus wrappers”,
“broker kits,” “road show slides” and
“road show scripts” and “electronic road show
presentations”) authorized in writing by or prepared by
the Company and used in connection with the public offering of the
Offered Securities (collectively, “sales
material”) does not contain 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 not
misleading. Moreover, accompanied by delivery of a Statutory
Prospectus, all sales material complied and will comply in all
material respects with the applicable requirements of the Act and
the rules and interpretations of the NASD.
(lvi) Any certificate signed by any
officer of the Company or any of the Subsidiaries delivered
pursuant to this Agreement to the Representatives or to counsel for
the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered
thereby.
(b) The Manager represents and
warrants to, and agrees with, the several Underwriters
that:
(i) The Manager is a corporation
duly organized and validly existing and in good standing under the
laws of the State of Delaware with full power and authority to own,
lease or operate its assets and to conduct its business as
described in the General Disclosure Package and the Prospectus and
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby.
(ii) The Manager is duly qualified
or licensed by, and is in good standing in, each jurisdiction in
which it currently conducts its business or in which it owns or
leases property or maintains an office and in which such
qualification or licensing is necessary and in which the failure,
individually or in the aggregate, to be so qualified or licensed
could have, individually or in the aggregate, a Material Adverse
Effect.
(iii) The Manager is in compliance
with all applicable federal, state, local and foreign laws, rules,
regulations, orders, decrees and judgments, including those
relating to transactions with affiliates, except where the failure
to so comply could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(iv) The Manager is not (a) in
breach of, or in default under (nor has any event occurred which
with notice, lapse of time, or both would constitute a breach of,
or default under), its articles of incorporation or by-laws
(collectively, the “ Manager Charter Documents
”) or (b) in breach or default (nor has any event
occurred which with notice, lapse of time or both would constitute
a breach or default) in the performance or observance of any
of its obligations, agreements, covenants or conditions contained
in any license, indenture, mortgag
