4,000,000SHARES CAPITALTRUST, INC. CLASSA COMMON STOCK, PAR VALUE $0.01 PER SHARE UNDERWRITINGAGREEMENT

 

 

 

 

March 24, 2008

 

 

 

 

 

 

 

March 24, 2008

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York  10036

Dear Ladies and Gentlemen:

 

Capital Trust, Inc., a Maryland corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the underwriter named in Schedule I attached hereto (the “Underwriter”), an aggregate of 4,000,000 shares (the “Shares”) of class A common stock, par value $0.01 per share, of the Company.  The shares of class A common stock, par value $0.01 per share, of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the “Class A Common Stock.”

 

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”) a shelf registration statement on Form S-3 (File No. 333-111261), including a prospectus, relating to the Shares, which registration statement has become effective.  Such registration statement covers the registration of the Shares under the Securities Act.  The registration statement as amended or supplemented to the date of this Agreement, including the exhibits and schedules thereto as of the date of this Agreement, the documents incorporated by reference therein or otherwise deemed a part thereof or included therein under the Securities Act as of the date of this Agreement and the information (if any) deemed to be part of the registration statement as of the date of this Agreement pursuant to Rule 430A or 430B under the Securities Act, is hereinafter referred to as the “Registration Statement,” and the related prospectus covering the Shares, dated December 29, 2003, is hereinafter referred to as the “Base Prospectus.”  The Base Prospectus, as supplemented by the final prospectus supplement specifically relating to the Shares in the form first used to confirm sales of the Shares (or in the form first made available to the Underwriter by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus,” and the term “preliminary prospectus” means any preliminary form of the Prospectus.  For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the Base Prospectus together with the free writing prospectus, term sheet and press release identified in Schedule I attached hereto,  and “broadly available road show” means a “bona fide electronic road show,” if any, as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person.  As used herein, the terms “Registration Statement,” “Base Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein.  The terms “supplement,” “amendment,” and “amend” as used herein with respect to the Registration Statement, the Base Prospectus, the Time of Sale Prospectus, any preliminary prospectus or free writing prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to

 

the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”), that are deemed to be incorporated by reference therein.

 

1.           Representations and Warranties.  The Company represents and warrants to and agrees with the Underwriter that:

 

(a)           The Registration Statement has become effective.  No notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company.  No order suspending the effectiveness of the Registration Statement has been issued by the Commission and is in effect and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering has been initiated or, to the knowledge of the Company, threatened by the Commission.

 

(b)           The documents incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained any untrue statement of a material fact or, taken together, omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Time of Sale Prospectus or the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and will not contain any untrue statement of a material fact or, taken together with all other documents incorporated by reference in the Registration Statement, Time of Sale Prospectus and the Prospectus, omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(c)           (i) The Company has satisfied the conditions for use of Form S-3, as set forth in the general instructions thereto, with respect to the Registration Statement, (ii) each part of the Registration Statement, when such part became effective, did not contain and each such part, as amended or supplemented, if applicable, will not on the date hereof or on the Closing Date (as defined below) contain any 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, (iii) the Registration Statement as of the date it became effective did not contain any 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, (iv) the Registration Statement, the Time of Sale Prospectus and the Prospectus, as amended or supplemented, if applicable, complied on the date of filing thereof and will comply on the Closing Date in all material respects with the Securities Act, (v) the Time of Sale Prospectus does not, and at the time of each sale of the Shares in connection with the offering when the Prospectus is not yet available to prospective purchasers, and at the Closing Date, the Time of Sale Prospectus, as then amended or supplemented by the Company in accordance with the terms of this Agreement, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary

 

to make the statements therein, in the light of the circumstances under which they were made, not misleading, (vi) each broadly available road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (vii) the Prospectus as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (viii) the Company has filed all reports required to be filed pursuant to the Securities Act, the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Financial Industry Regulatory Authority, Inc. (the “FINRA”) and the New York Stock Exchange (“NYSE”); provided, however, the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein, it being understood and agreed that the only such information furnished by the  Underwriter consists of the information described as such in Section 8(b) below.

 

(d)           The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act.  Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act.  Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder.  Except for the free writing prospectuses, if any, identified in Schedule I attached hereto forming part of the Time of Sale Prospectus, and electronic road shows, if any, each furnished to the Underwriter before first use, the Company has not prepared, used or referred to, and will not, without the Underwriter’s  prior written consent, prepare, use or refer to, any free writing prospectus.

 

(e)           The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Maryland, has the corporate power and authority to own its property and to conduct its business as described in the Registration Statement, Time of Sale Prospectus and Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(f)           Each subsidiary of the Company (including, as described below, CT Investment) has been duly incorporated or otherwise formed, is validly existing in good standing under the laws of the jurisdiction of its incorporation or formation, has the power and authority to own its property and to conduct its business as described in the Registration Statement, Time of Sale Prospectus and Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries,

 

taken as a whole; all of the issued shares of capital stock or other equity interests (whether membership, partnership or otherwise) of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly by the Company or indirectly through one of its wholly-owned subsidiaries, free and clear of all liens, encumbrances, equities or claims.

 

(g)           (i)           The Company owns 40,000 shares of common stock of CT Mezzanine Partners III, Inc. (the “Fund”).

 

(ii)           The Fund is solely managed by the Company’s wholly-owned subsidiary CT Investment Management Co., LLC (“CT Investment”) (for purposes of this Agreement, CT Investment shall be deemed a subsidiary of the Company), pursuant to that certain Management Agreement (the “Fund Management Agreement”), dated June 2, 2003, as amended, by and between CT Investment and the Fund.

 

(iii)           Neither the Fund nor CT Investment is in breach of, or default under (nor has any event occurred which, with notice, lapse of time or both, would constitute a breach of, or default under), the Fund Management Agreement, except for any breach or default that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; the Fund Management Agreement is in full force and effect, has not been amended except as described in the Registration Statement, Time of Sale Prospectus and Prospectus and constitutes a legal, valid and binding agreement of the parties thereto enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity.

 

(iv)           The Fund has been duly incorporated and formed, is validly existing in good standing under the laws of the jurisdiction of its formation, has the power and authority to own its property and to conduct its business as described in the Registration Statement, Time of Sale Prospectus and Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; the capital stock and other equity interests of the Fund have been duly and validly authorized and issued and the shares of common stock of the Fund owned by the Company are free and clear of all liens, encumbrances, equities or claims.

 

(v)           The Company indirectly owns all of the equity interests listed in Schedule II attached hereto (the “CDO Subs”) (for purposes of this Agreement, each CDO Sub shall be deemed a subsidiary of the Company.

 

(vi)           CT Investment is not in breach of, or default under (nor has any event occurred which, with notice, lapse of time or both would constitute a breach of, or default under), any management agreement for which CT Investment is acting as a manager, except for any breach or default that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; each of the management agreements is in full force and effect, has not been amended and constitutes the legal, valid and binding agreement of the parties thereto

 

enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity.

 

(vii)           Except for (i) the subsidiaries listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and (ii) CT Bracor Holding LLC, the Company does not own or control, directly or indirectly, any corporation, limited partnership, limited liability company, trust, association or other entity that would be required to be listed in Exhibit 21.2 of Form 10-K.

 

(h)           The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement, Time of Sale Prospectus and Prospectus (other than for subsequent issuances, including restricted stock grants, if any, pursuant to employee benefit plans described in the Registration Statement, Time of Sale Prospectus and Prospectus or upon the exercise of outstanding options or warrants described in the Registration Statement, Time of Sale Prospectus and Prospectus).  The Class A Common Stock, including the Shares, conforms in all material respects to the description contained, or incorporated by reference, in the Registration Statement, Time of Sale Prospectus and Prospectus.  All of the issued and outstanding shares of Class A Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and have been issued in compliance with federal and state securities laws.  None of the outstanding securities of the Company were issued in violation of the percentage limitations (without the benefit of any transfer in trust provisions) contained in the Company’s organizational documents, including, without limitation, the provisions of Article VII of the Company’s articles of amendment and restatement, as amended by the Company’s certificate of notice, dated February 27, 2007.  None of the outstanding shares of Class A Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company.  There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into, exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately described in the Registration Statement, Time of Sale Prospectus and Prospectus or subsequently issued pursuant to the Company’s stock option, stock bonus and other stock plans or arrangements described in the Registration Statement, Time of Sale Prospectus and Prospectus.  The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Registration Statement, Time of Sale Prospectus and Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights.

 

(i)           This Agreement has been duly authorized, executed and delivered by the Company.

 

(j)           The Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights.  None of the Shares will be issued, sold or purchased (including any shares purchased by Samuel Zell or any of his affiliates or W. R. Berkley Corporation or any of its affiliates) in violation of the percentage limitations (without the benefit of any transfer in trust provisions)

 

contained in the Company’s organizational documents, including, without limitation, the provisions of Article II, Section 10 of the Company’s second amended and restated bylaws and Article VII of the Company’s articles of amendment and restatement, as amended by the Company’s certificate of notice, dated February 27, 2007.

 

(k)           The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement will not contravene (i) any provision of applicable law; (ii) the charter or the second amended and restated bylaws of the Company; (iii) any agreement or other instrument binding upon (a) the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or (b) the Fund; or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company, any subsidiary or the Fund, except in the case of clauses (i), (iii) or (iv) for such contraventions as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, except such as may be required by the securities or Blue Sky laws of the various states or FINRA in connection with the offer and sale of the Shares.

 

(l)           There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of (i) the Company and its subsidiaries, taken as a whole, or (ii) the Fund, from that set forth in the Time of Sale Prospectus.

 

(m)           There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened, to which the Company, any of its subsidiaries or the Fund is a party or to which any of the properties of the Company, any of its subsidiaries or the Fund is subject that are required to be described in the Registration Statement, Time of Sale Prospectus or Prospectus and are not so described and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement, the Time of Sale Prospectus or Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.

 

(n)           Each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder.

 

(o)           The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Time of Sale Prospectus, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(p)           The Company, its subsidiaries and the Fund (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their

 

respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except in the case of clauses (i), (ii) or (iii) where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(q)           There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole, or on the Fund.

 

(r)           Except as have been waived in writing and provided to the Underwriter and counsel to the Underwriter, 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 Securities Act with respect to any securities of the Company or to require the Company to include such securities with the Shares registered pursuant to the Registration Statement.

 

(s)           Ernst & Young LLP, which has expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) and supporting schedules filed with the Commission as a part of (or incorporated by reference in) the Registration Statement and included or incorporated by reference in the Time of Sale Prospectus and Prospectus, are independent registered public accountants with respect to the Company and its subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board and as required by the Securities Act.  The statements included in the Registration Statement with respect to Ernst & Young LLP pursuant to Rule 509 of Regulation S-K of the Securities Act are true and correct in all material respects.

 

(t)           None of the Company, any of its subsidiaries or the Fund is in violation or default of, and none of the Company, any of its subsidiaries or the Fund has received notice of, or has knowledge of any occurrence or circumstance which, with notice or passage of time or both, would give rise to, a violation or default of, (i) any provision of its charter or bylaws or other organizational documents, as applicable, including the Company’s second amended and restated bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement, credit facility, repurchase agreement, management agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, including, without limitation, (1) that certain Master Repurchase Agreement, dated as of July 30, 2007, by and among the Company, Citigroup Global Markets, Inc. and Citigroup Financial Products Inc., as such agreement may be amended from time to time, (2) that certain Amendment No. 1 to Master Repurchase Agreement, dated as of March 22, 2007, by and between the Company and JPMorgan Chase Bank, N.A., as such agreement may be amended from time to time, (3) that certain First Amendment to Credit Agreement, dated as of June 1, 2007, by and among the Company, the lenders named therein and WestLB AG, as

 

administrative agent, as such agreement may be amended from time to time, (4) that certain Junior Subordinated Indenture dated as of March 29, 2007, by and between the Company and The Bank of New York Trust Company, National Association, as trustee, as such may be amended from time to time, (5) the Amended and Restated Master Repurchase Agreement, dated as of February 15, 2006, as amended, among the Company and CT BSI Funding Corp. and Bear, Stearns Funding, Inc., and (6) the Amended and Restated Master Repurchase Agreement, dated as of February 15, 2006, as amended, among the Company and CT BSI Funding Corp. and Bear, Stearns International Limited, or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company, such subsidiary or Fund or any of its respective properties, as applicable, including, without limitation, the provisions of the Securities Act, Exchange Act, Sarbanes-Oxley Act and the rules and regulations of FINRA and the NYSE, except in the case of clauses (ii) or (iii) for such violations or defaults as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(u)           The Company has delivered to the Underwriter or will deliver one (1) complete photocopy of a manually signed copy of the Registration Statement and of each consent and certificate of experts filed as a part thereof and conformed copies of the Registration Statement (without exhibits), preliminary prospectuses, free writing prospectuses, the Time of Sale Prospectus and the Prospectus, as amended or supplemented, in such quantities and at such places as the Underwriter has requested.

 

(v)           The Company has not distributed and will not distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares other than the Time of Sale Prospectus, the Prospectus or the Registration Statement.

 

(w)           (i) The financial statements filed with the Commission as a part of (or incorporated by reference in) the Registration Statement and included or incorporated by reference in the Time of Sale Prospectus and Prospectus present fairly the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified and comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable; (ii) the supporting schedules included or incorporated by reference in the Registration Statement present fairly the information required to be stated therein; and (iii) the other financial information included or incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus has been derived from the accounting records of the Company and its subsidiaries and presents fairly the information shown thereby.  The financial statements and supporting schedules have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis (except in the case of unaudited financials for normal year-end adjustments) throughout the periods involved, except as may be expressly stated in the related notes thereto.  No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, Time of Sale Prospectus or Prospectus.  The financial data set forth in the Time of Sale Prospectus and Prospectus under the caption “Prospectus Summary--Summary Financial Data” fairly presents the information set forth therein and have been compiled on a basis consistent with that of the audited financial statements contained or incorporated by reference in the Registration Statement.

 

 

(x)           The Class A Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Class A Common Stock under the Exchange Act or delisting the Class A Common Stock from the NYSE nor has the Company received any notification that the Commission or the NYSE is contemplating terminating such registration or listing.

 

(y)           The Company, its subsidiaries and the Fund own, possess or have a right to acquire on commercially reasonable terms sufficient trademarks, trade names, patent rights, patents, know-how, collaborative research agreements, inventions, servicemarks, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) necessary to conduct their businesses as now conducted, as described in the Registration Statement, the Time of Sale Prospectus, the Prospectus and any respective amendments or supplements thereto.  The expiration of any of such Intellectual Property Rights would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.  None of the Company, any of its subsidiaries or the Fund has received any notice of any infringement of or conflict with asserted rights of the Company, any of its subsidiaries or the Fund by others with respect to any Intellectual Property Rights necessary to conduct the business of the Company, any of its subsidiaries or the Fund as now conducted, except as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.  The Company, its subsidiaries and the Fund do not, in the conduct of their business as now conducted, infringe or conflict with any right or patent of any third party or, to the knowledge of the Company, its subsidiaries or the Fund, any discovery, invention, product or process which is the subject of a patent application filed by any third party, which such infringement or conflict is reasonably likely to have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(z)           The Company, each subsidiary and the Fund possesses such valid and current certificates, authorizations, permits or licenses issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses as now conducted, and none of the Company, any subsidiary or the Fund has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit, except in each case as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(aa)           The Company, each of its subsidiaries and the Fund have good and marketable title to all the real properties reflected as owned in the financial statements referred to in Section 1(w) above or elsewhere in the Registration Statement, Time of Sale Prospectus and Prospectus, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, with such exceptions as are described in the Registration Statement, Time of Sale Prospectus and Prospectus or are not material and do not materially interfere with the use made or proposed to be made of such property or assets by the Company, such subsidiary or the Fund.  The real property, improvements, equipment and personal property held under lease by the Company, any subsidiary or the Fund are held under valid and enforceable leases, with such exceptions as are described in the Registration Statement, Time of Sale Prospectus and Prospectus or are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company, such subsidiary or the Fund.  Each of the mortgages, deeds of trust or other security agreements executed and/or delivered by or to the Company, any subsidiary or the

 

Fund, as applicable, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, are enforceable in accordance with their terms, subject to principles of equity and bankruptcy, insolvency, moratorium and other laws generally applicable to creditors’ rights and the enforcement of debtors’ obligations.  There are no facts that would impair the validity or value of any of such mortgages, deeds of trust or other security agreements and such mortgages, deeds of trust or other security agreements are not the subject of any breach, default or event that, with the passage of time or the giving of notice or both, would result in such a breach or default except as described in the Registration Statement, Time of Sale Prospectus or Prospectus or for such facts, breaches, defaults or events as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(bb)           Except for (i) CT Investment with respect to sales tax for the period from September 1, 2001 to September 1, 2007, which is currently being audited, and (ii) CT MP II, LLC, an entity 50% owned by CT Investment, with respect to unincorporated business taxes owed by CT MP II, LLC which is currently being audited, the Company, its subsidiaries and the Fund have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them.  The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(w) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company, any of its subsidiaries or the Fund has not been finally determined.  The Company, its subsidiaries and the Fund are not aware of any tax deficiency that has been or might be asserted or threatened against the Company, its subsidiaries or the Fund.

 

(cc)           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 and sale by the Company of the Shares.

 

(dd)           Each of the Company, its subsidiaries and the Fund are insured in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses, including, but not limited to, policies covering real and personal property owned or leased by the Company, its subsidiaries and the Fund against theft, damage, destruction, acts of vandalism, general liability and directors’ and officers’ liability.  None of the Company, any of its subsidiaries nor the Fund has received notice that it will not be able to or has reason to believe that it will not be able to (i) renew their existing insurance coverage as and when such policies expire, or (ii) obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct their business as now conducted and at a cost that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(ee)           Neither the Company nor any of its directors, officers or controlling persons has taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Class A Common Stock to facilitate the sale or resale of the Shares or which would otherwise be in contravention of applicable law.

 

 

(ff)           There are no business relationships or related-party transactions involving the Company, any subsidiary, the Fund or any other person required to be described in the Registration Statement, Time of Sale Prospectus or Prospectus which have not been described as required.

 

(gg)           The documents incorporated or deemed to be incorporated by reference in the Registration Statement, Time of Sale Prospectus and Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act and, at the time the Registration Statement and any amendments thereto became effective and at the Closing Date, will not contain an untrue statement of a material fact or, taken as a whole, 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.

 

(hh)           The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and are 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 GAAP 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; the chief executive officer and principal financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act and any related rules and regulations promulgated by the Commission thereunder; and the Company is otherwise in compliance with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations issued thereunder by the Commission currently in effect and requiring compliance as of the date hereof and as of the Closing Date.  Since the end of the Company’s fiscal year for 2007, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.  Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company is not aware of any material weaknesses in the Company’s internal controls.

 

(ii)           The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including, but not limited to, controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.  The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

 

 

(kk)           Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Registration Statement, Time of Sale Prospectus or Prospectus; (ii) made any payment of funds of the Company or any subsidiary or received or retained any funds in violation of any law, rule or regulation or of a character required to be disclosed in the Registration Statement, Time of Sale Prospectus or Prospectus which has not been so disclosed; (iii) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (iv) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (v) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (vi) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

(ll)           The operations of the Company, its subsidiaries and the Fund 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, 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, any of its subsidiaries or the Fund with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, its subsidiaries and the Fund, threatened.

 

(mm)         None of the Company, any of its subsidiaries, the Fund or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company, any of its subsidiaries or the Fund is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, 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.

 

(nn)           There is no transaction, arrangement or other relationship among the Company, any of its subsidiaries, the Fund and/or any unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in its filings with the Commission and is not so disclosed.

 

(oo)           The statistical and market-related data included in the Registration Statement, the Time of Sale Prospectus and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.

 

(pp)           The Company, its subsidiaries and the Fund are as of the date hereof, and will be as of the Closing Date, in compliance with their respective investment, underwriting and

 

risk-adjusted capital guidelines, policies and procedures, except where any noncompliance would not result in a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(qq)           The Company is organized and beginning with its 2003 taxable year has operated and thereafter has and expects to continue to operate in a manner so as to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (collectively, the “Code”), and intends to elect to, and to remain qualified to, be taxed as a REIT under the Code and pursuant to any applicable state tax laws.  The Company does not know of any event which would cause, or is likely to cause, the Company to fail to qualify as a REIT for any taxable year since 2003.

 

(rr)           Except with respect to the Company’s securitizations involving collateralized debt obligations, none of the Company, any of its other subsidiaries nor any of their assets are expected to be treated as a taxable mortgage pool.

 

(ss)           The entities listed on Schedule III hereto are wholly-owned subsidiaries of the Company and are “qualified REIT subsidiaries” within the meaning of Section 856(i) of the Code.  The Company has no other “qualified REIT subsidiaries.”

 

(tt)           CT Investment Management Co., LLC, VIC, Inc., VCG Montreal, Inc. and CT-F2-GP, LLC are wholly-owned subsidiaries of the Company and are “taxable REIT subsidiaries” within the meaning of Section 856(l) of the Code.  The Company owns 25% of Morgan Stanley 2007-XLC1, LTO and 40% of CTX CDO I, LTO, both of which are “taxable REIT subsidiaries” within the meaning of Section 856(1) of the Code.  The Company has no other “taxable REIT subsidiaries.”

 

(uu)           Neither the Company nor any of its subsidiaries has been asked to replace or substitute collateral in any of its collateralized debt obligations or to indemnify any party under any collateralized debt obligations except for with respect to the indemnification of certain parties such as underwriters, trustees and hedge counterparties in connection with collateralized debt obligation issuances.

 

(vv)           The sale of the Shares as contemplated in this Agreement will not result in an antidilution or other adjustment of the exercise price or number of securities issuable upon exercise of any options, warrants or other convertible securities outstanding on the date hereof, and on the Closing Date.

 

(ww)          Subsequent to the respective dates as of which information is given in the Registration Statement, the Time of Sale Prospectus and the Prospectus, except as otherwise disclosed in the Registration Statement, Time of Sale Prospectus and Prospectus, (i) the Company and its subsidiaries, taken as a whole, have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary course of business; (ii) the Company and its subsidiaries have not purchased any of the Company’s outstanding capital stock, and the Company has not declared, paid or otherwise made any dividend or distribution of any kind on its capital stock; and (iii) there has not been any material change in the capital stock or material increase in long-term debt of the Company and

 

its subsidiaries, taken as a whole, except in each case as reflected in the Registration Statement, Time of Sale Prospectus and Prospectus.  Except as disclosed in the Registration Statement, Time of Sale Prospectus and Prospectus, as of the date hereof, none of the loans of the Company, the subsidiaries or the Fund are in default and none of the Company, the subsidiaries or the Fund has received notice from any borrower under any loan that a default is imminent and all of the investments of the Company, the subsidiaries and the Fund are making payments in accordance with their contractual terms.

 

(xx)           As of January 1, 2008, the Company had no accumulated earnings or profits from any tax years in which it was taxed as a regular corporation.

 

(yy)         Neither the issuance, sale and delivery of the Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

(zz)           No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(aaa)        There are no contracts, agreements or documents of a character required under the Securities Act to be described in the Registration Statement, the Time of Sale Prospectus or the Prospectus or to be filed as exhibits to the Registration Statement that are not so described in the Registration Statement, the Time of Sale Prospectus and the Prospectus or filed as exhibits to the Registration Statement.

 

Any certificate signed by an officer of the Company and delivered to the Underwriter or to counsel for the Underwriter shall be deemed to be a representation and warranty by the Company to the Underwriter as to the matters set forth therein.

 

2.           Agreements to Sell and Purchase.  The Company hereby agrees with the Underwriter to issue and sell to the Underwriter, and the Underwriter, upon the basis of the representations, warranties and agreements herein contained, but subject to the conditions set forth herein, agrees, to purchase from the Company at $28.20 a share (the “Purchase Price”) the number of Shares to be sold by the Company set forth in Schedule I attached hereto opposite the name of the Underwriter; provided, however, that the Purchase Price shall be equal to the initial public reoffer price per share for any Shares placed with EGI-Properties Fund (08-10), L.L.C., Berkley Insurance Company, Berkley Regional Insurance Company and Nautilus Insurance Company; provided, however, that the Purchase Price shall in no event be less than $28.20.

 

The Company hereby agrees that, without the prior written consent of the Underwriter, it will not, during the period ending 45 days after the date of the Prospectus (the “restricted period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for shares of Class A Common Stock

 

or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the shares of Class A Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of Class A Common Stock or such other securities, in cash or otherwise.

 

The restrictions contained in the preceding paragraph shall not apply to (A) the Shares to be sold hereunder, (B) the issuance by the Company of shares of Class A Common Stock upon the exercise, conversion or exchange of options, warrants or other convertible or exchangeable securities outstanding on the date hereof, (C) the grant of options or warrants pursuant to the terms of a plan in effect on the date hereof, provided that any option or warrant so issued shall not be exercised during the period ending 45 days after the date of the Prospectus, (D) the grant of shares or restricted shares of Class A Common Stock pursuant to the terms of a plan or agreement in effect on the date hereof, provided that any such stock so issued shall not vest during the period ending 45 days after the date of the Prospectus or the recipient of such stock agrees not to transfer such stock during such period, or (E) the issuance of shares of Class A Common Stock pursuant to a dividend reinvestment plan in effect on the date hereof.

 

If (1) during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, the restrictions imposed shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event unless the Underwriter waives, in writing, such extension.

 

3.           Public Offering.  The Company is advised by the Underwriter that the Underwriter proposes to make a public offering of the Shares as soon after this Agreement has been executed as in the Underwriter’s judgment is advisable.  The Company is further advised by the Underwriter that the Shares are to be offered to the public upon the terms set forth in the Prospectus.  At the request of the Company on the date hereof, the Underwriter shall offer to sell up to 248,400 Shares to EGI-Properties Fund (08-10), L.L.C., 350,000 Shares to Berkley Regional Insurance Company, 200,000 Shares to Berkley Insurance Company and 160,113 Shares to Nautilus Insurance Company.

 

4.           Payment and Delivery.  Payment for the Shares shall be made to the Company by wire transfer in federal or other funds immediately available in New York City against delivery of such Shares for the account of the Underwriter at 10:00 a.m., New York City time, on March 28, 2008, or at such other time on the same or such other date, not later than March 31, 2008, as shall be designated in writing by the Underwriter.  The time and date of such payment for the Shares is referred to herein as the “Closing Date.”

 

The Shares shall be registered in such names and in such denominations as the Underwriter shall request in writing not later than one full business day prior to the Closing Date for the account of the Underwriter against payment of the Purchase Price therefor, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriter duly paid, against payment of the Purchase Price therefor.

 

 

 

5.           Conditions to the Obligations of the Underwriter.  The obligations of the Underwriter are subject to the condition that the Registration Statement shall remain effective on the date hereof and the Closing Date and no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Securities Act nor any proceedings initiated under Sections 8(d) or 8(e) of the Securities Act, and to the following additional conditions.

 

(a)           Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:

 

(i)           there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and

 

(ii)           there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, and the Fund from that set forth in the Time of Sale Prospectus and Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement) that, in the Underwriter’s judgment, is material and adverse and that makes it, in the Underwriter’s judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus and Prospectus.

 

(b)           The Underwriter shall have received on the Closing Date a certificate dated the Closing Date and signed by the chief executive officer and chief financial officer of the Company, (i) that such officers have carefully reviewed the Registration Statement, the Time of Sale Prospectus and the Prospectus and, to the best knowledge of such officers, the representations set forth in Sections 1(a)-(d) hereof are true and correct, (ii) to the effect set forth in Section 5(a) above, (iii) that no stop order with respect to the effectiveness of the Registration Statement has been issued under the Securities Act nor any proceedings have been initiated under Sections 8(d) or 8(e) of the Securities Act and (iv) that the representations and warranties of the Company contained in this Agreement are true, correct and complete as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

 

The officers signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.

 

(c)           The Underwriter shall have received on the Closing Date, an opinion of Venable LLP, Maryland counsel for the Company, dated the Closing Date in the form attached hereto as Exhibit B.

 

(d)           The Underwriter shall have received on the Closing Date, an opinion and letter of Paul, Hastings, Janofsky & Walker LLP, outside counsel to the Company, dated the Closing Date in the form attached hereto as Exhibit C.

 

(e)           The Underwriter shall have received on the Closing Date, an opinion and letter of O’Melveny & Myers LLP, counsel for the Underwriter, dated the Closing Date, in form and substance satisfactory to the Underwriter.

 

(f)           The Underwriter shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof, and the Closing Date in form and substance reasonably satisfactory to the Underwriter, from Ernst & Young LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.

 

(g)           The Lock-up Agreements between the Underwriter and the parties set forth on Schedule IV relating to sales and certain other dispositions of shares of Class A Common Stock or certain other securities, delivered to the Underwriter on or before the date hereof, shall be in full force and effect on the Closing Date.

 

(h)           On or before the Closing Date, the Underwriter and counsel for the Underwriter shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Shares as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties or the satisfaction of any of the conditions or agreements herein contained.

 

(i)           The Shares shall have been approved for listing on the NYSE, subject to official notice of issuance.

 

6.           Covenants.

 

The Company covenants with the Underwriter as follows:

 

(a)           To furnish to the Underwriter, without charge, one (1) photocopy of the manually signed Registration Statement (including exhibits thereto and documents incorporated by reference therein) and for delivery to the Underwriter a conformed copy of the Registration Statement (without exhibits thereto but including documents incorporated by reference therein) and to deliver to the Underwriter, during the period mentioned in Section 6(e) or 6(f) below, as many copies of the Registration Statement, the Time of Sale Prospectus, the Prospectus, any free writing prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as the Underwriter may reasonably request.

 

(b)           Before amending or supplementing the Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to the Underwriter a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Underwriter reasonably objects, and to file with the Commission within the applicable period

 

specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.

 

(c)           To furnish to the Underwriter a copy of each proposed free writing prospectus relating to the offering and sale of the Shares to be prepared by or on behalf of, used by or referred to by the Company and not to use or refer to any proposed free writing prospectus to which the Underwriter reasonably objects.

 

(d)           Not to take any action that would result in the Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

 

(e)           If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances when delivered to a prospective purchaser, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriter, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriter and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.

 

(f)           If, during such period after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriter the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriter, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriter and to the dealers (whose names and addresses the Underwriter will furnish to the Company) to which Shares may have been sold by the Underwriter and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law.

 

(g)           To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Underwriter shall reasonably request, provided that nothing in this Section 6(g) shall require the Company to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or require the Company to file a general consent to service of process in any such jurisdiction.

 

(h)           To make generally available to the Company’s security holders and to the Underwriter as soon as reasonably practicable an earning statement covering the twelve-month period ending December 31, 2008 that satisfies the provisions of Section 11(a) of the Securities Act.

 

(i)           To cause the Shares to be approved for listing on the NYSE, subject to official notice of issuance.

 

The Underwriter, may, in its sole discretion, waive in writing the performance by the Company of the foregoing covenants or extend the time for the Company’s performance.

 

7.           Expenses.  Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all expenses incident to the performance of the obligations of the Company under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by or referred to by the Company and amendments and supplements to any of the foregoing, including the filing fees payable to the Commission relating to the Shares (within the time required by Rule 456(b)(1), if applicable), all printing costs associated therewith and the mailing and delivering of copies thereof to the Underwriter and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Shares to the Underwriter, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Shares under state securities laws and all expenses in connection with the qualification of the Shares for offer and sale under state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriter in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriter incurred in connection with the review and qualification of the offering of the Shares by FINRA, (v) all costs and expenses incident to listing the Shares on the NYSE, (vi) the cost of printing certificates representing the Shares, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and

 

officers of the Company and any such consultants and the cost of any aircraft chartered in connection with the road show, (ix) the document production charges and expenses associated with printing this Agreement and (x) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section 7.  It is understood, however, that except as provided in this Section 7, Section 8 entitled “Indemnity and Contribution” and the last paragraph of Section 10 below, the Underwriter will pay all of its costs and expenses, including fees and disbursements of its counsel, stock transfer taxes payable on resale of any of the Shares by them and any advertising expenses connected with any offers they may make.

 

8.           Indemnity and Contribution.

 

(a)           The Company agrees to indemnify and hold harmless the Underwriter, each person, if any, who controls the Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of the Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any broadly available road show or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, in the light of the circumstances under which they were made) not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein, it being understood and agreed that the only such information furnished by the Underwriter consists of the information described as such in Section 8(b) below; provided, however, that the foregoing indemnity agreement with respect to the Time of Sale Prospectus shall not inure to the benefit of the Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased Shares, or any person controlling the Underwriter or affiliate of the Underwriter, if a copy of the Time of Sale Prospectus was not sent or given by or on behalf of the Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Shares to such person, and if the Time of Sale Prospectus would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company with Section 6(a) hereof.

 

(b)           The Underwriter agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to the Underwriter but only with reference to information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use in the Registration Statement, any

 

preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus or the Prospectus or any amendment or supplement thereto, it being understood and agreed upon that the only such information furnished by the Underwriter consists of the information in the Prospectus furnished on behalf of the Underwriter as set forth in Exhibit 8.A attached hereto.

 

(c)           In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) above, such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Underwriter and all persons, if any, who control the Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of the Underwriter within the meaning of Rule 405 under the Securities Act, or (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section and directors, officers and control persons of the Company.  The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement.  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and such settlement does not include a statement as to the admission of fault, culpability or any failure to act by or on behalf of the indemnified party.

 

(d)           To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Shares or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company on the one hand and of the Underwriter on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Underwriter on the other hand in connection with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriter bear to the aggregate initial public offering price of the Shares.  The relative fault of the Company on the one hand and the Underwriter on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriter and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(e)           The Company and the Underwriter agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriter was treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 8, the Underwriter shall not be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by the Underwriter with respect to the offering of the Shares exceeds the amount of any damages that the Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

(f)           The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Underwriter, any person controlling the Underwriter or any affiliate of the Underwriter or by or on behalf of the

 

Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Shares.

 

9.           Termination.  The Underwriter may terminate this Agreement by notice to the Company, in the event, after the execution and delivery of this Agreement and prior to the Closing Date, (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the NYSE, the American Stock Exchange, the NASDAQ Global Market or the Nasdaq National Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in the Underwriter’s judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in the Underwriter’s judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.

 

10.           Effectiveness.  This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

 

If this Agreement shall be terminated by the Underwriter because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company shall reimburse the Underwriter for all out-of-pocket expenses (including the fees and disbursements of its counsel) reasonably incurred by the Underwriter in connection with this Agreement or the offering contemplated hereunder.

 

11.           Entire Agreement.  (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Shares, represents the entire agreement between the Company and the Underwriter with respect to the preparation of any preliminary prospectus, any free writing prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering and the purchase and sale of Shares.

 

                                                                   (b) The Company acknowledges that in connection with the offering of the Shares: (i) the Underwriter has acted at arms length, is not an agent of, and owes no fiduciary duties to, the Company or any other persons; (ii) the Underwriter owes the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any; and (iii) the Underwriter may have interests that differ from those of the Company.  The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriter arising from an alleged breach of fiduciary duty in connection with the offering of the Shares.

 

12.           Counterparts.  This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

13.           Applicable Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

14.           Notices.  All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriter shall be delivered, mailed or sent to you at the address set forth in Schedule I hereto; and if to the Company shall be delivered, mailed or sent to the address set forth in Schedule I hereto.

 

15.           Headings.  The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

 

16.           Parties. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accepted as of the date first above written

MORGAN STANLEY & CO. INCORPORATED

By: /s/ Kenneth G. Pott

Name: Kenneth G. Pott

Title: Managing Director

 

[Signature page to Underwriting Agreement]

 

Underwriter		Number of Shares to Be Purchased
Morgan Stanley & Co. Incorporated		4,000,000
Total:		4,000,000

Free Writing Prospectuses

Issuer Free Writing Prospectus filed pursuant to Rule 433 on March 24, 2008.

Term Sheet

Term Sheet dated March 24, 2008.

Press Release

Press Release entitled “Capital Trust Announces Public Offering of 4,000,000 Shares of Class A Common Stock” dated March 24, 2008.

Address for Notices to the Underwriter

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

 

 

 

Address for Notices to the Company

Capital Trust, Inc. 410 Park Avenue, 14th Floor New York, New York  10022 Attention: Chief Financial Officer

 

                                                                           

 

 

 

 

 

 

Capital Trust RE CDO 2004-1 Ltd.

 

Capital Trust RE CDO 2005-1 Ltd.

 

CT CDO III Ltd.

 

CT CDO IV Ltd.

 

CT CDO V Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholly-owned “qualified REIT subsidiaries”

 

CTAMPI MS, Ltd.

 

Capital Trust RE CDO Depositor, Corp.

 

CT LF Funding Corp.

 

CT BSI Funding Corp.

 

Capital Trust RE CDO 2004-1 LTD.

 

Capital Trust RE CDO 2005-1 LTD.

 

CT CDO III LTD.

 

CT CDO IV LTD.

 

CT CDO V LTD.

 

Capital Trust RE CDO 2004-1 Corp.

 

Capital Trust RE CDO 2005-1 Corp.

 

CT CDO III Corp.

 

CT CDO IV Corp.

 

CT CDO V Corp.

 

 

 

 

1.         Thomas E. Dobrowski

2.         Martin L. Edelman

3.         Craig M. Hatkoff

4.         Edward S. Hyman

5.         Geoffrey J. Jervis

6.         John R. Klopp

7.         Henry N. Nassau

8.         Stephen D. Plavin

9.         Joshua A. Polan

10.         Thomas C. Ruffing

11.         Lynne B. Sagalyn

12.         Samuel Zell

13.         Veqtor Finance Company, L.L.C.

14.         Samstock, L.L.C.

15.         W. R. Berkley Corporation

16.         Berkley Insurance Company

17.         Berkley Regional Insurance Company

18.         Admiral Insurance Company

19.         Nautilus Insurance Company

20.         EGI- Properties Fund (08-10), L.L.C.

 

 

 

 

 

 

 

 

March __, 2008

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Dear Sirs and Mesdames:

 

The undersigned understands that Morgan Stanley & Co. Incorporated (the “Underwriter”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Capital Trust, Inc., a Maryland corporation (the “Company”), providing for the public offering (the “Public Offering”) by the Underwriter, of 4,000,000 shares (the “Shares”) of the class A common stock, par value $0.01 per share, of the Company (the “Common Stock”).

 

To induce the Underwriter to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Underwriter, it will not, during the period commencing on the date hereof and ending 45 days after the date of the final prospectus relating to the Public Offering (the “restricted period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including, for the avoidance of doubt, any shares held by an affiliate of the undersigned) or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.  The foregoing sentence shall not apply to (a) transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering, (b) in connection with the receipt of securities issued to the undersigned by the Company pursuant to long-term incentive plans existing on the date hereof, the withholding of any shares (“Withheld Shares”) by the Company in respect of tax liabilities with respect to such issuance or any deemed disposition or sale with respect to such Withheld Shares, (c) transfers to any parent, grandparent, stepparent, mother-in-law, father-in-law, spouse, former spouse, sibling, sister-in-law, brother-in-law, son-in-law, daughter-in-law, child, stepchild, grandchild, niece or nephew of the undersigned, including adoptive relationships (each, a “Family Member”), or (d) transfers solely for estate planning purposes to any trust for the direct or indirect benefit of the undersigned or any Family Member or to any corporation, limited liability company, partnership or other entity beneficially owned, directly or indirectly, solely by such trusts, the undersigned or

 

any Family Member; provided, however, that in the case of any transfer pursuant to clause (c) or (d) hereunder (i) the transferee agrees to be bound in writing by the restrictions set forth herein and (ii) no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period.  In addition, the undersigned agrees that, without the prior written consent of the Underwriter, it will not, during the restricted period, make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for shares of Common Stock.  The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock unless such transfer is in compliance with the foregoing.

 

If (1) during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, the restrictions imposed by this Lock-up Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event unless the Underwriter waives, in writing, such extension.

 

The undersigned understands that the Company and the Underwriter are relying upon this Lock-up Agreement in proceeding toward consummation of the Public Offering.  The undersigned further understands that this Lock-up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.

 

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions.  Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriter.  The Lock-up Agreement shall terminate if, prior to April 30, 2008, the Public Offering does not occur or the Underwriting Agreement is terminated.

 

 

Very truly yours,                                                                                       (Name)                                                                                  (Address)

 

 

 

 

March __, 2008

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Dear Sirs and Mesdames:

 

The undersigned understands that Morgan Stanley & Co. Incorporated (the “Underwriter”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Capital Trust, Inc., a Maryland corporation (the “Company”), providing for the public offering (the “Public Offering”) by the Underwriter, of 4,000,000 shares (the “Shares”) of the class A common stock, par value $0.01 per share, of the Company (the “Common Stock”).

 

To induce the Underwriter to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Underwriter, it will not, during the period commencing on the date hereof and ending 45 days after the date of the final prospectus relating to the Public Offering (the “restricted period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including, for the avoidance of doubt, any shares held by an affiliate of the undersigned) or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.  The foregoing sentence shall not apply to (a) transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering, (b) transfers to any affiliate controlled by the undersigned (for purposes of this Lock-up Agreement, “affiliate” means, with respect to any person or entity, any other person or entity that directly or indirectly controls or is controlled by or is under common control with such person or entity; and “control” means, when used with respect to any person or entity, possession, whether direct or indirect, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting securities, by contract or otherwise), (c) transfers, sales or other dispositions of shares of Common Stock and other voting stock such that after such transfers, sales or other dispositions, the undersigned shall beneficially own shares of Common Stock representing less than 20% of the outstanding Common Stock and other voting stock of the Company, provided that in such case during the term of this Lock-up Agreement the undersigned shall only transfer, sell or dispose such amount as is necessary to

 

ensure that it does not beneficially own 20% or more of the Common Stock and other voting stock of the Company, (d) transfers to any parent, grandparent, stepparent, mother-in-law, father-in-law, spouse, former spouse, sibling, sister-in-law, brother-in-law, son-in-law, daughter-in-law, child, stepchild, grandchild, niece or nephew of the undersigned, including adoptive relationships (each, a “Family Member”), or (e) transfers solely for estate planning purposes to any trust, corporation, limited liability company or partnership related solely thereto for the direct or indirect benefit of the undersigned or any of its Family Members; provided, however, that in the case of any transfer pursuant to clause (d) or (e) hereunder (i) the transferee agrees to be bound in writing by the restrictions set forth herein and (ii) no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period.  In addition, the undersigned agrees that, without the prior written consent of the Underwriter, it will not, during the restricted period, make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.  The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock unless such transfer is in compliance with the foregoing.

 

If (1) during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, the restrictions imposed by this Lock-up Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event unless the Underwriter waives, in writing, such extension.

 

The undersigned understands that the Company and the Underwriter are relying upon this Lock-up Agreement in proceeding toward consummation of the Public Offering.  The undersigned further understands that this Lock-up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.

 

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions.  Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriter.  The Lock-up Agreement shall terminate if, prior to April 30, 2008, the Public Offering does not occur or the Underwriting Agreement is terminated.

 

Very truly yours,                                                                                       (Name)                                                                                  (Address)

 

 

 

 

 

 

 

March __, 2008

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Dear Sirs and Mesdames:

 

The undersigned understands that Morgan Stanley & Co. Incorporated (the “Underwriter”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Capital Trust, Inc., a Maryland corporation (the “Company”), providing for the public offering (the “Public Offering”) by the Underwriter, of 4,000,000 shares (the “Shares”) of the class A common stock, par value $0.01 per share, of the Company (the “Common Stock”).

 

To induce the Underwriter to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Underwriter, it will not, during the period commencing on the date hereof and ending 45 days after the date of the final prospectus relating to the Public Offering (the “restricted period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including, for the avoidance of doubt, any shares held by an affiliate of the undersigned) or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.  The foregoing sentence shall not apply to (a) transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering, (b) transfers to any parent, grandparent, stepparent, mother-in-law, father-in-law, spouse, former spouse, sibling, sister-in-law, brother-in-law, son-in-law, daughter-in-law, child, stepchild, grandchild, niece or nephew of the undersigned, including adoptive relationships (each, a “Family Member”), (c) transfers solely for estate planning purposes to any trust for the direct or indirect benefit of the undersigned or any Family Member or to any corporation, limited liability company, partnership or other entity beneficially owned, directly or indirectly, solely by such trusts, the undersigned or any Family Member or (d) pledges of Common Stock to secure loans with broker-dealers and other financial institutions (and such broker-dealers and other financial institutions shall be entitled to foreclose on such pledges in accordance with the terms thereof); provided, however, that in the case of any transfer pursuant to clause (b) or (c) hereunder (i) the transferee agrees to be bound in writing by the restrictions set forth herein and (ii) no filing under

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period.  In addition, the undersigned agrees that, without the prior written consent of the Underwriter, it will not, during the restricted period, make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.  The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock unless such transfer is in compliance with the foregoing.

 

If (1) during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, the restrictions imposed by this Lock-up Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event unless the Underwriter waives, in writing, such extension.

 

The undersigned understands that the Company and the Underwriter are relying upon this Lock-up Agreement in proceeding toward consummation of the Public Offering.  The undersigned further understands that this Lock-up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.

 

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions.  Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriter.  The Lock-up Agreement shall terminate if, prior to April 30, 2008, the Public Offering does not occur or the Underwriting Agreement is terminated.

 

Very truly yours,                                                                                       (Name)                                                                                  (Address)

 

 

 

 

 

 

 

 

 

[attached hereto]

 

 

 

[attached hereto]

 

 

NONE

 

Exhibit 8.A-1