Exhibit 10.11

 

 

 

 

 

 

 

 

 

WESTERN ASSET MORTGAGE CAPITAL CORPORATION

(a Delaware corporation)

 

 

12,000,000 Shares of Common Stock

 

 

UNDERWRITING AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

Dated: September 27, 2012

 

 

 

 

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WESTERN ASSET MORTGAGE CAPITAL CORPORATION
(a Delaware corporation)
12,000,000 Shares of Common Stock
(Par Value $0.01 Per Share)
UNDERWRITING AGREEMENT

 

 

September 27, 2012

 

DEUTSCHE BANK SECURITIES INC.
60 Wall Street
New York, New York 10005

 

CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, New York 10013

 

Ladies and Gentlemen:

 

Western Asset Mortgage Capital Corporation, a Delaware corporation (the
“Company”), and Western Asset Management Company, a California corporation (the
“Manager”), each confirms its agreement with Deutsche Bank Securities Inc.
(“Deutsche Bank”), Citigroup Global Markets Inc. and each of the other
Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Deutsche Bank and Citigroup Global Markets Inc. are
acting as representatives (in such capacity, the “Representatives”), with
respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of common stock, par value $0.01 per share, of the Company (“Common
Stock”) set forth in said Schedule A, representing 12,000,000 shares of Common
Stock in the aggregate, and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,800,000 additional shares
of Common Stock.  The aforesaid 12,000,000 shares of Common Stock (the “Initial
Securities”) to be purchased by the Underwriters and all or any part of the
1,800,000 shares of Common Stock subject to the option described in
Section 2(b) hereof (the “Option Securities”) are hereinafter called,
collectively, the “Securities.”

 

The Company understands that the Underwriters propose to make a public offering
of the Securities as soon as the Representatives deem advisable after this
Agreement has been executed and delivered.

 

The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-11 (No. 333-183840), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the 1933 Act.  Promptly after execution and delivery of
this Agreement, the Company will prepare and file a prospectus in accordance
with the provisions of Rule 430A (“Rule 430A”) of the rules and regulations of
the Commission under the 1933 Act (the “1933 Act Regulations”) and
paragraph (b) of Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations.  The
information included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as “Rule 430A Information.”  Each
prospectus used before such registration statement became effective, and any
prospectus that omitted the Rule 430A Information, that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a “preliminary prospectus.”

 

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Such registration statement, including the amendments thereto, the exhibits and
any schedules thereto, at the time it became effective, and including the
Rule 430A Information, is herein called the “Registration Statement.”  Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the “Rule 462(b) Registration Statement,” and after
such filing the term “Registration Statement” shall include the
Rule 462(b) Registration Statement.  The final prospectus in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities is herein called the “Prospectus.”  For purposes of this Agreement,
all references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval (“EDGAR”) system or such other system
designated by the Commission.

 

Section 1.            Representations and Warranties.

 

(a)          Representations and Warranties by the Company.  The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Applicable Time referred to in Section 1(a)(i) hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:

 

(i)                   Compliance with Registration Requirements.  Each of the
Registration Statement and any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement, any
Rule 462(b) Registration Statement or any post-effective amendment thereto has
been issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional
information has been complied with.

 

At the respective times, the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities are
purchased, at the applicable Date of Delivery), the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus, any preliminary prospectus and any supplement thereto or
prospectus wrapper prepared in connection therewith, at their respective times
of issuance and at the Closing Time, complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations. 
Neither the Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any such amendment or
supplement was issued or at the Closing Time (or, if any Option Securities are
purchased, at the applicable Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

As of the Applicable Time (as defined below), neither (x) the Issuer General Use
Free Writing Prospectus(es) (as defined below) issued at or prior to the
Applicable Time, the Statutory Prospectus (as defined below) as of the
Applicable Time and the information set forth on Schedule B hereto all
considered together (collectively, the “General Disclosure Package”), nor
(y) any individual Issuer Limited Use Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

 

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As used in this subsection and elsewhere in this Agreement:

 

“Applicable Time” means 8:15 a.m. (Eastern time) on September 28, 2012 or such
other time as agreed by the Company and the Representatives.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the
Securities that (i) is required to be filed with the Commission by the Company,
(ii) is a “road show that is a written communication” within the meaning of
Rule 433(d)(8)(i) whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not reflect the final
terms, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed in the form required to be retained
in the Company’s records pursuant to Rule 433(g).

 

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors
(other than a Bona Fide Electronic Road Show (as defined below)), as evidenced
by its being specified in Schedule D hereto.

 

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus.

 

“Statutory Prospectus” as of any time means the prospectus relating to the
Securities that is included in the Registration Statement immediately prior to
that time.

 

The Company has made available a “bona fide electronic road show,” as defined in
Rule 433, in compliance with Rule 433(d)(8)(ii) (the “Bona Fide Electronic Road
Show”) such that no filing of any “road show” (as defined in Rule 433(h)) is
required in connection with the offering of the Securities.

 

Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Securities or
until any earlier date that the issuer notified or notifies the Representatives
as described in Section 3(e), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, and any preliminary
or other prospectus deemed to be a part thereof that has not been superseded or
modified.

 

The representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement, the Prospectus or
any Issuer Free Writing Prospectus made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives expressly for use therein (that information being limited to
that described in the last sentence of Section 6(b) hereof).

 

Each preliminary prospectus delivered to the Underwriters for use in connection
with the sale of the Securities complied when so filed in all material respects
with the 1933 Act Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

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At the time of filing the Registration Statement, any 462(b) Registration
Statement and any post-effective amendments thereto and at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 of the
1933 Act Regulations.

 

(ii)                  Independent Accountants.  The accountants who certified
the financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act, the
1933 Act Regulations, the Public Accounting Oversight Board, the Securities
Exchange Act of 1934 Act, as amended (the “1934 Act”), and the rules and
regulations of the Commission under the 1934 Act (the “1934 Act Regulations”).

 

(iii)                 Financial Statements of the Company.  The financial
statements of the Company included in the Registration Statement, the General
Disclosure Package and the Prospectus, together with the related schedules and
notes, present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated; said financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved.  The supporting
schedules, if any, present fairly in accordance with GAAP the information
required to be stated therein.  The selected financial data and the summary
financial information of the Company included in the Registration Statement, the
General Disclosure Package and the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement.  No other
financial statements are required to be set forth in the Registration Statement,
the General Disclosure Package or the Prospectus under the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations.

 

(iv)                 Financial Information of the Manager.  The financial and
statistical information of the Manager included in the Registration Statement,
the General Disclosure Package and the Prospectus was prepared in conformity
with GAAP applied on a consistent basis through the periods covered thereby; and
such financial and statistical information included in the Registration
Statement, the General Disclosure Package and the Prospectus has been derived
from the accounting records of the Manager and presents fairly the information
shown thereby.

 

(v)                  No Material Adverse Change in Business.  Since the
respective dates as of which information is given in the Registration Statement,
the General Disclosure Package or the Prospectus, except as otherwise stated in
the Registration Statement, the General Disclosure Package or the Prospectus,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, properties, assets or business
prospects of the Company and its Subsidiaries (defined below) considered as one
enterprise, whether or not arising in the ordinary course of business (a
“Material Adverse Effect”), (B) there have been no transactions entered into by
the Company or any of its Subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its Subsidiaries
considered as one enterprise, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock.

 

(vi)                 Good Standing of the Company.  The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
General Disclosure Package and the Prospectus and to enter into and perform its
obligations under this Agreement and the Management Agreement, dated May, 9,
2012, between the Company and the Manager (the “Management Agreement” and,
together with this Agreement, the “Transaction Agreements”); and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.

 

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(vii)               Good Standing of Subsidiaries.  The Company does not own or
control, directly or indirectly, any “subsidiaries” (as such term is defined in
Rule 1-02 of Regulation S-X) other than the Subsidiaries listed in Exhibit 21.1
to the Registration Statement (each, a “Subsidiary” and collectively, the
“Subsidiaries”).  The Company does not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association or
other entity.

 

(viii)              Capitalization.  The authorized, issued and outstanding
capital stock of the Company is as set forth in the General Disclosure Package
and the Prospectus in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to this
Agreement, or pursuant to separate offerings, reservations, agreements or
employee benefit plans referred to in the General Disclosure Package and the
Prospectus).  The shares of issued and outstanding capital stock of the Company
and the issued and outstanding warrants of the Company (the “Warrants”) have
been duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.

 

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

 

(x)                  Authorization and Enforceability of the Management
Agreement.  The Management Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting enforcement of creditors’ rights or by
general equitable principles.

 

(xi)                 Authorization and Description of the Securities.  The
Securities have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement; when the Securities have been issued and delivered
by the Company to the Underwriters pursuant to this Agreement against payment of
the consideration set forth herein, such Securities will be validly issued and
fully paid and non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and have been registered pursuant to the 1934
Act; the Common Stock and the Warrants conform to all statements relating
thereto contained in the Registration Statement, the General Disclosure Package
and the Prospectus and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject to
personal liability by reason of being a holder of the capital stock of the
Company; and the issuance of the Securities is not subject to the preemptive
rights, resale rights, rights of first refusal or other similar rights of any
securityholder of the Company.

 

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(xii)               Absence of Defaults and Conflicts.  The Company is not in
violation of its certificate of incorporation or by-laws (or its equivalent) or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to
which the Company is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary is subject
(collectively, “Agreements and Instruments”), except for such defaults that
would not result in a Material Adverse Effect, or in violation of any law,
statute, rule, regulation, judgment, order or decree, except for such violations
that would not result in a Material Adverse Effect; and the execution, delivery
and performance of the Transaction Agreements and the consummation of the
transactions contemplated therein (including the issuance and sale of the
Securities by the Company and the use of the proceeds from the sale of the
Securities as described in the General Disclosure Package and the Prospectus
under the caption “Use of Proceeds”) and compliance by the Company with its
obligations under the Transaction Agreements has been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, the Agreements and Instruments (except for
such conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the certificate of
incorporation or by-laws (or its equivalent) of the Company or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their assets,
properties or operations.  As used herein, a “Repayment Event” means any event
or condition which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company.

 

(xiii)              Absence of Labor Dispute.  No labor dispute exists between
any officers of the Company named in the General Disclosure Package and the
Prospectus in the section entitled “Management—Our directors and executive
officers” or any officers or key persons of the Manager named in the General
Disclosure Package and the Prospectus in the sections entitled “Our Manager and
the Management Agreement—Executive officers of our Manager” and “—Other key
personnel of our Manager,” including the Manager’s structured products team
(each, a “Company-Focused Professional”), on the one hand, and the employer of
each such individual on the other hand nor, to the knowledge of the Company, is
such a labor dispute imminent that could have a Material Adverse Effect.

 

(xiv)              Employment; Noncompetition; Nondisclosure.  Neither the
Company nor, to the best of the Company’s knowledge, any employer of any
Company-Focused Professional has been notified that any such Company-Focused
Professional plans to terminate his or her employment with his or her employer. 
Neither the Company nor, to the best of the Company’s knowledge, any
Company-Focused Professional is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Company or the
Manager as described in the Registration Statement, the General Disclosure
Package and the Prospectus.

 

(xv)               Absence of Proceedings.  There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which could reasonably be expected to result in a Material Adverse
Effect, or which might materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in the Transaction
Agreements, or the performance by the Company of its obligations thereunder; the
aggregate of all pending legal or governmental proceedings to which the Company
is a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.

 

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(xvi)              Accurate Disclosure.  The descriptions in the Registration
Statement, the General Disclosure Package and the Prospectus, if any, of
affiliate transactions, contracts required to be described therein and other
legal documents are true and correct in all material respects, and there are no
legal or governmental proceedings, affiliate transactions, contracts, leases, or
other documents of a character required to be described in the Registration
Statement, the General Disclosure Package or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or filed as
required.  All agreements between the Company and any other party expressly
referenced in the Registration Statement, the General Disclosure Package and the
Prospectus are legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting enforcement of creditors’ rights or by
general equitable principles.

 

(xvii)             No Finder’s Fee.  Except for the Underwriters’ discounts and
commissions payable by the Company to the Underwriters in connection with the
offering of the Securities contemplated herein or as otherwise disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus, the
Company has not incurred any liability for any brokerage commissions, finder’s
fees or similar payments in connection with the offering of the Securities
contemplated hereby.

 

(xviii)           No Prohibition on Subsidiaries from Paying Dividends or Making
Other Distributions.  No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary’s capital stock or other equity interests, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the
Company or any other Subsidiary.

 

(xix)              Possession of Intellectual Property.  The Company owns or
possesses, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual Property”) necessary to carry on the
business now operated by them, and the Company has not received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.

 

(xx)               Absence of Further Requirements.  No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations under this
Agreement, in connection with the offering, issuance or sale of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or state securities laws.

 

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(xxi)              Absence of Manipulation.  Neither the Company nor any
affiliate of the Company has taken, nor will the Company or any affiliate of the
Company take, directly or indirectly, any action which is designed to or which
has constituted or which would be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.

 

(xxii)             Possession of Licenses and Permits.  The Company possesses
such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure so to possess would not,
singly or in the aggregate, result in a Material Adverse Effect; the Company is
in compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material Adverse
Effect; and neither the Company nor any of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.

 

(xxiii)           Title to Property.  The Company has good and marketable title
to all real property owned by the Company and its Subsidiaries and good title to
all other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the General
Disclosure Package and the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
Subsidiaries; and all of the leases and subleases to which the Company or any of
its Subsidiaries is a party and that are material to the business of the Company
and its Subsidiaries, considered as one enterprise, or under which the Company
or any of its Subsidiaries holds properties described in the General Disclosure
Package and the Prospectus, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or sublease.

 

(xxiv)           Investment Company Act.  The Company is not required, and upon
the issuance and sale of the Securities, as herein contemplated and the
application of the net proceeds therefrom as described in the General Disclosure
Package and the Prospectus will not be required, to register as an “investment
company” under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

(xxv)             Environmental Laws.  Except as described in the Registration
Statement, and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) the Company is not in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,

 

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pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or mold
(collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, “Environmental Laws”), (B) the Company has
all permits, authorizations and approvals required under any applicable
Environmental Laws and is each in compliance with their requirements, (C) there
are no pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company and (D) there are no events or circumstances that would
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company relating to
Hazardous Materials or any Environmental Laws.

 

(xxvi)           Registration Rights.  There are no persons with registration
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 1933
Act, other than as described in the Registration Statement, the General
Disclosure Package and the Prospectus.

 

(xxvii)          Accounting Controls and Disclosure Controls.  The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (C) receipts and expenditures are
being made only in accordance with management’s general or specific
authorization; (D) access to assets is permitted only in accordance with
management’s general or specific authorization; and (E) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. 
Except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, since the date of the Company’s incorporation, there
has been (1) no material weakness in the Company’s internal control over
financial reporting (whether or not remediated) and (2) 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.  The Company and its Subsidiaries maintain an
effective system of “disclosure controls and procedures” (as defined in
Rule 13a-15 under the 1934 Act) that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act or the 1934 Act Regulations is recorded, processed,
summarized and reported, within the time period specified in the Commission’s
rules and forms, and is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and principal
financial officer or officers, as appropriate, to allow timely decisions
regarding disclosure.

 

(xxviii)         Compliance with the Sarbanes-Oxley Act.  The Company has been
and is in compliance in all material respects with all provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related
to loans and Section 302 and Section 906 related to certifications.

 

(xxix)           Payment of Taxes.  All United States federal income tax returns
of each of the Company required by law to be filed have been timely and properly
filed, if any such returns were required to be filed, and all taxes shown by
such returns or otherwise due and payable have been paid, including any
assessments, fines and penalties, except amounts against which appeals have been
or will be promptly taken and as to which adequate reserves have been provided.

 

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The Company has timely and properly filed all other tax returns that are
required to have been filed by it pursuant to applicable foreign, state, local
or other law except insofar as the failure to file such returns would not result
in a Material Adverse Effect, and has paid all taxes due, including any
assessments, fines and penalties, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided.

 

(xxx)             Insurance.  The Company carries or is entitled to the benefits
of insurance, with financially sound and reputable insurers, in such amounts and
covering such risks as is generally maintained by companies of established
repute engaged in the same or similar business, and all such insurance is in
full force and effect.  The Company has no reason to believe that it will not be
able (A) to renew its existing insurance coverage as and when such policies
expire or (B) to obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Effect.

 

(xxxi)           Statistical and Market-Related Data.  Any statistical and
market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources that
the Company believes to be reliable and accurate.

 

(xxxii)          Foreign Corrupt Practices Act.  Neither the Company nor, to the
knowledge of the Company, any director, officer or employee of the Company, or
any officer, employee or other person of the Manager or its affiliates acting on
behalf of the Company, is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and the Company intends
to conduct its businesses in compliance with the FCPA and has instituted and
maintains policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.

 

(xxxiii)         Money Laundering Laws.  The operations of the Company 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 with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.

 

(xxxiv)         OFAC.  Neither the Company nor, to the knowledge of the Company,
any director, officer or employee of the Company, or any officer, employee or
other person of the Manager or its affiliates acting on behalf of the Company,
is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any 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.

 

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(xxxv)          No Integration.  The Company has not sold or issued any
securities that would be integrated with the offering of the Securities
contemplated by this Agreement pursuant to the 1933 Act, the 1933 Act
Regulations or the interpretations thereof by the Commission.

 

(xxxvi)         Prior Sales of Common Stock.  Except as disclosed in the General
Disclosure Package and the Prospectus, the Company has not sold, issued or
distributed any shares of Common Stock.

 

(xxxvii)       Real Estate Investment Trust.  The Company will make a timely
election to be subject to tax as a real estate investment trust (“REIT”)
pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the “Code”) for its taxable year ending December 31, 2012.  Commencing
with its taxable year ending December 31, 2012, the Company has been organized
in conformity with the requirements for qualification and taxation as a REIT
under the Code, and the Company’s actual and proposed method of operation as set
forth in the Registration Statement, the General Disclosure Package and the
Prospectus does and will enable it to meet the requirements for qualification
and taxation as a REIT under the Code.  All statements regarding the Company’s
qualification and taxation as a REIT and descriptions of the Company’s
organization and actual and proposed method of operation set forth in the
Registration Statement, the General Disclosure Package and the Prospectus are
true, complete and correct in all material respects.

 

(xxxviii)      Independent Directors.  Each of the independent directors named
in the General Disclosure Package and the Prospectus satisfies the independence
standards established by the Commission and the New York Stock Exchange.

 

(xxxix)         FINRA Matters.  Neither the Company nor any of its affiliates is
required to register as a “broker” or “dealer” in accordance with the provisions
of the 1934 Act and, to the Company’s knowledge, there are no affiliations or
associations between any member of the Financial Industry Regulatory
Authority, Inc. (“FINRA”) and the Company or any of the Company’s officers,
directors or 5% or greater securityholders or any beneficial owner of the
Company’s unregistered equity securities that were acquired at any time on or
after the 180th day preceding the date the Registration Statement was initially
filed with the Commission, except as disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus.

 

(xl)                 Certain Relationships.  No relationship, direct or
indirect, exists between the Company, on the one hand, and the directors,
officers, employees or stockholders of the Company, on the other hand, which is
required by the rules of the FINRA to be described in the Registration
Statement, the General Disclosure Package or the Prospectus which is not so
described.

 

(xli)               Emerging Growth Company.  Since the enactment of the
Jumpstart Our Business Startups Act on April 5, 2012 through the date hereof,
the Company has been and is an “emerging growth company,” as defined in
Section 2(a) of the 1933 Act (an “Emerging Growth Company”).

 

(xlii)              Testing-the-Waters.  The Company (a) has not engaged in any
Testing-the-Waters Communication and (b) has not authorized anyone to engage in
Testing-the-Waters Communications.  The Company has not distributed any Written
Testing-the-Waters Communications.

 

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“Testing-the-Waters Communication” means any oral or written communication with
potential investors undertaken in reliance on Section 5(d) of the 1933 Act. 
“Written Testing-the-Waters Communications” means any Testing-the-Waters
Communication that is a written communication within the meaning of Rule 405
under the 1933 Act.

 

(b)          Representations and Warranties by the Manager.  The Manager
represents and warrants to each Underwriter, as of the date hereof, as of the
Applicable Time, as of the Closing Time referred to in Section 2(c) hereof, and
as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:

 

(i)                   Certain Information.  The information regarding the
Manager set forth in Exhibit A (collectively, the “Manager Package”) is true and
correct in all material respects.  As of the date of this Agreement, the Manager
has no plan or intention to materially alter its investment policy or investment
allocation policy with respect to the Company as described in the Registration
Statement, the General Disclosure Package or the Prospectus.

 

(ii)                  No Material Adverse Change in Business.  Since the
respective dates as of which information is given in the Registration Statement,
the General Disclosure Package or the Prospectus, except as otherwise stated in
the Registration Statement, the General Disclosure Package or the Prospectus,
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, properties, assets or business
prospects of the Manager and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, that is material and
adverse to the Manager or that would otherwise prevent the Manager from carrying
out its obligations under this Agreement or the Management Agreement (a “Manager
Material Adverse Effect”).

 

(iii)                 Good Standing of the Manager.  The Manager has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of California and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
General Disclosure Package and the Prospectus and to enter into and perform its
obligations under this Agreement; and the Manager is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Manager
Material Adverse Effect.

 

(iv)                 Absence of Defaults and Conflicts.  The Manager is not in
violation of its certificate of incorporation or by-laws (or its equivalent) or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to
which the Manager is a party or by which it may be bound, or to which any of the
property or assets of the Manager is subject (collectively, “Manager’s
Agreements and Instruments”), except for such defaults that would not result in
a Manager Material Adverse Effect, or in violation of any law, statute, rule,
regulation, judgment, order or decree, except for such violations that would not
result in a Manager Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the Management Agreement by the Manager and
the consummation of the transactions in this Agreement and the Management
Agreement and the compliance by the Manager with its obligations hereunder and
the Management Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon

 

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any property or assets of the Manager pursuant to, the Manager’s Agreements and
Instruments (except for such conflicts, breaches, defaults or liens, charges or
encumbrances that would not result in a Manager Material Adverse Effect), nor
will such action result in any violation of the provisions of the certificate of
incorporation or by-laws (or its equivalent) of the Manager or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Manager or any of its assets, properties or operations.

 

(v)                   Authorization of Agreement.  This Agreement has been duly
authorized, executed and delivered by the Manager.

 

(vi)                 Authorization and Enforceability of Management Agreement. 
The Management Agreement has been duly authorized, executed and delivered by the
Manager and constitutes a valid and binding agreement of the Manager,
enforceable against the Manager in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting enforcement of creditors’ rights or by
general equitable principles.

 

(vii)               Absence of Further Requirements.  (A) No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
(B) no authorization, approval, vote or other consent of any stockholder or
creditor of the Manager, (C) no waiver or consent under any Manager Agreements
and Instruments and (D) no authorization, approval, vote or other consent of any
other person or entity is necessary or required for the performance by the
Manager of its obligations under this Agreement or the Management Agreement,
except such as have been already obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws or as are described in
the General Disclosure Package and the Prospectus.

 

(viii)              Possession of Licenses and Permits.  The Manager possesses
such Governmental Licenses issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary for the Manager to perform its
duties set forth in the Management Agreement, except where the failure so to
possess would not, singly or in the aggregate, result in a Material Adverse
Effect or a Manager Material Adverse Effect; the Manager is in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, result in a Material
Adverse Effect or a Manager Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not, singly or in the aggregate, result in a
Material Adverse Effect or a Manager Material Adverse Effect; and the Manager
has not received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect or a Manager Material Adverse Effect.

 

(ix)                 Employment; Noncompetition; Nondisclosure.  The Manager has
not been notified that any of its Company-Focused Professionals plans to
terminate his or her employment with the Manager or any of its affiliates. 
Neither the Manager nor, to the knowledge of the Manager, any of its
Company-Focused Professionals is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Company or the
Manager as described in the Management Agreement, the Registration Statement,
the General Disclosure Package and the Prospectus.

 

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(x)                  Absence of Manipulation.  Neither the Manager nor any
affiliate of the Manager has taken, nor will the Manager or any affiliate of the
Manager take, directly or indirectly, any action which is designed to or which
has constituted or which would be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.

 

(xi)                 Absence of Proceedings.  There are no pending actions,
suits or proceedings (including any inquiries or investigations by any court or
governmental agency or body, domestic or foreign) against or affecting the
Manager or any of its subsidiaries or any of their respective properties that,
if determined adversely to the Manager or any of its subsidiaries, would,
individually or in the aggregate, have a Manager Material Adverse Effect and, to
the Manager’s knowledge, no such actions, suits or proceedings (including any
inquiries or investigations by any court or governmental agency or body,
domestic or foreign) are threatened or contemplated.

 

(xii)               Investment Advisers Act.  The Manager is not prohibited by
the Investment Advisers Act of 1940, as amended, or the rules and regulations
thereunder, from performing its obligations under the Management Agreement as
described in the General Disclosure Package and the Prospectus.

 

(xiii)              Internal Controls.  The Manager maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(A) the transactions that may be effectuated by it on behalf of the Company
pursuant to its duties set forth in the Management Agreement will be executed in
accordance with management’s general or specific authorization; and (B) access
to the Company’s assets is permitted only in accordance with its management’s
general or specific authorization.

 

(xiv)              Compliance.  The Manager is in compliance with all applicable
federal, state, local and foreign laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates, except
where the failure to so comply would not have a Manager Material Adverse Effect.

 

(c)          Officer’s Certificates.  Any certificate signed by any officer of
the Company or the Manager that is delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company or the Manager, as applicable, to each Underwriter as to the matters
covered thereby.

 

Section 2.           Sale and Delivery to Underwriters; Closing.

 

(a)          Initial Securities.  On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at a price per share of $21.85, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.

 

(b)          Option Securities.  In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
1,800,000 shares of Common Stock at a price per share of $21.85, less an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.

 

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The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part at any time and from time to time upon notice by
the Representatives to the Company setting forth the number of Option Securities
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities.  Any such time and
date of delivery (a “Date of Delivery”) shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined.  If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.

 

(c)          Payment.  Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019, or at
such other place as shall be agreed upon by the Representatives and the Company,
at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called “Closing Time”).

 

In addition, in the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price for, and delivery of
certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.

 

Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them.  It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase.  Each of the Representatives, individually and not as representatives
of the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.

 

(d)          Denominations; Registration.  Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be.  The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.

 

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Section 3.           Covenants of the Company and the Manager.

 

(i)                   The Company covenants with each Underwriter as follows:

 

(a)          Compliance with Securities Regulations and Commission Requests. 
The Company, subject to Section 3(i)(b), will comply with the requirements of
Rule 430A and will notify the Representatives immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject
of a proceeding under Section 8A of the 1933 Act in connection with the offering
of the Securities.  The Company will effect the filings required under
Rule 424(b), in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus.  The Company
will make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.

 

(b)          Filing of Amendments and 1934 Act Documents.  The Company will give
the Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus, and
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.  The Company has given the Representatives
notice of any filings made pursuant to the 1934 Act or the 1934 Act Regulations
within 48 hours prior to the execution of this Agreement; the Company will give
the Representatives notice of its intention to make any such filing from the
execution of this Agreement to the Closing Time and will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Underwriters shall
object.

 

(c)          Delivery of Registration Statements.  The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith) and signed copies of
all consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters.  The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.

 

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(d)          Delivery of Prospectuses.  The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act.  The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered (or but for the exception afforded by
Rule 172 would be required to be delivered) under the 1933 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request.  The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.

 

(e)          Continued Compliance with Securities Laws.  The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus.  If at any time when a prospectus is required (or but for the
exception afforded by Rule 172 would be required) by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.  If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances, prevailing at that subsequent time, not misleading, the Company
will promptly notify the Representatives and will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.

 

(f)           Blue Sky Qualifications.  The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.

 

(g)          Rule 158.  The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide to the Underwriters the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.

 

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(h)          Use of Proceeds.  The Company will use the net proceeds received by
it from the sale of the Securities in the manner contemplated in the Prospectus
under “Use of Proceeds.”

 

(i)           Listing.  The Company will use its best efforts to effect and
maintain the listing of the Common Stock (including the Securities) on the New
York Stock Exchange.

 

(j)           Restriction on Sale of Securities.  For a period of 60 days after
the date of the Prospectus, the Company will not (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, or
otherwise transfer or dispose of, directly or indirectly, or file with the
Commission a registration statement under the 1933 Act relating to, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or publicly disclose the intention to make any
offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Stock or any such other securities, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, without the
prior written consent of the Representatives, other than (A) the Securities to
be sold hereunder or (B) any shares of restricted Common Stock granted by the
Company to the Manager, employees of the Manager, the Company’s directors or the
Company’s chief financial officer, in each case pursuant to the Company’s equity
incentive plans referred to in the Registration Statement, the General
Disclosure Package and the Prospectus.  Notwithstanding the foregoing, if
(1) during the last 17 days of the 60-day 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 60-day restricted period, the
Company announces that it will release earnings results or material news or a
material event relating to the Company occurs during the 16-day period beginning
on the last day of the 60-day restricted period, the restrictions imposed by
this clause (j) 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.

 

(k)          Reporting Requirements.  The Company, during the period when a
prospectus is required (or but for the exception in Rule 172 would be required)
to be delivered under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.

 

(l)           Issuer Free Writing Prospectuses.  The Company represents and
agrees that, unless it obtains the prior consent of the Representatives, and
each Underwriter represents and agrees that, unless it obtains the prior consent
of the Company and the Representatives, it has not made and will not make any
offer relating to the Securities that would constitute an “issuer free writing
prospectus,” as defined in Rule 433, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405, required to be filed with the
Commission.  Any such free writing prospectus consented to by the
Representatives or by the Company and the Representatives, as the case may be,
is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The
Company represents that it has treated or agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433, and has complied and will comply with the requirements of
Rule 433 applicable to any Permitted Free Writing Prospectus, including timely
filing with the Commission where required, legending and record keeping.

 

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(m)         Absence of Manipulation.  The Company will not, and will cause its
Subsidiaries and affiliates not to take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to
cause or result in, stabilization or manipulation of the price of any securities
of the Company to facilitate the sale or resale of the Securities.

 

(n)          Qualification and Taxation as a REIT.  The Company will use its
best efforts to continue to meet the requirements for qualification and taxation
as a REIT under the Code for its taxable year ending December 31, 2012, and the
Company will use its best efforts to continue to qualify for taxation as a REIT
under the Code unless the Company’s board of directors determines that it is no
longer in the best interests of the Company and its stockholders to be so
qualified.

 

(o)          Exemption under the 1940 Act.  The Company shall not invest or
otherwise use the proceeds received by the Company from its sale of the
Securities in such a manner as would require the Company or any of its
Subsidiaries to register as an investment company under the 1940 Act.

 

(p)          Transfer Agent and Registrar.  The Company will continue to
maintain a transfer agent and, if necessary under the jurisdiction of formation,
a registrar for its Common Stock.

 

(q)          Sarbanes-Oxley.  The Company will continue to take all necessary
actions to ensure that it is in compliance in all material respects with all
applicable provisions of the Sarbanes-Oxley Act.

 

(r)           Books and Records; Accounting Controls and Disclosure Controls.
The Company and each of its Subsidiaries will continue to maintain and keep
accurate books and records reflecting their assets and will continue to maintain
a system of internal accounting controls sufficient to provide reasonable
assurances that: (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

 

(s)           Emerging Growth Company.  The Company will promptly notify the
Representatives if the Company ceases to be an Emerging Growth Company at any
time prior to the later of (a) completion of the distribution of the Securities
within the meaning of the 1933 Act and (b) completion of the Company’ s 60-day
restricted period referred to in Section 5(l) hereof.

 

(t)           Controls.  The Company and its consolidated Subsidiaries will
continue to employ disclosure controls and procedures that are effective to
perform the functions for which they were established and designed to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the 1934 Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms,
and is accumulated and communicated to the Company’s management, including its
principal executive officer or officers and principal financial officer or
officers, as appropriate, to allow timely decisions regarding disclosure.

 

(ii)                  The Manager covenants with each Underwriter as follows:

 

(a)          Absence of Manipulation.  The Manager will not, and will cause its
subsidiaries and affiliates over which the Manager exercises control not to
take, directly or indirectly, any actions designed to or that would constitute
or that might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any securities of the Company to facilitate the
sale or resale of the Securities.

 

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(b)          Delivery of Prospectuses.  During the period when a prospectus is
required (or but for the exception afforded by Rule 172 would be required) to be
delivered under the 1933 Act or the 1934 Act, the Manager shall notify the
Representatives and the Company of the occurrence of any material events
respecting the Manager’s activities, affairs or condition, financial or
otherwise, and the Manager will forthwith supply such information to the Company
as shall be necessary in the opinion of counsel to the Company and the
Underwriters for the Company to prepare any necessary amendment or supplement to
the Prospectus so that, as so amended or supplemented, the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading.

 

Section 4.           Payment of Expenses.

 

(a)          Expenses.  The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any agreement among the Underwriters and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of
certificates for the Securities, if any, to the Underwriters, including any
stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company’s counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(i)(f) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus, any Permitted Free Writing Prospectus and the
Prospectus and any amendments or supplements thereto and any costs associated
with electronic delivery of any of the foregoing by the Underwriters to
investors, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent, warrant agent or registrar for the Securities,
(ix) the costs and expenses of the Company relating to investor presentations on
any “road show” undertaken in connection with the marketing of the Securities,
including without limitation 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, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of aircraft and other transportation chartered in connection with the road
show, (x) the filing fees incident to, and the reasonable fees and disbursements
of counsel to the Underwriters in connection with, the review by FINRA of the
terms of the sale of the Securities and (xi) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange.

 

(b)          Termination of Agreement.  If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.

 

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Section 5.           Conditions of Underwriters’ Obligations.  The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Manager contained in
Section 1 hereof or in certificates of any officer of the Company or the Manager
delivered pursuant to the provisions hereof, to the performance by the Company
and the Manager of their covenants and other obligations hereunder, and to the
following further conditions:

 

(a)          Effectiveness of Registration Statement.  The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time, no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters.  A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in the manner and within the time frame required by
Rule 424(b) without reliance on Rule 424(b)(8) or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A.

 

(b)          Opinion of Counsel for Company and Manager.  At the Closing Time,
the Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Company and the Manager, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters substantially in the form set forth in Exhibit B-1
hereto and to such further effect as counsel to the Underwriters may reasonably
request.

 

(c)          Tax Opinion.  At the Closing Time, the Representatives shall have
received the favorable tax opinion, dated as of the Closing Time, of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Company and the Manager, in
form and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit B-2 hereto and to such further effect as counsel
to the Underwriters may reasonably request.

 

(d)          Opinion of Counsel for Underwriters.  At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Clifford Chance US LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters.  Such counsel may state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, the Manager and their subsidiaries and
certificates of public officials.

 

(e)          Company Officers’ Certificate.  At the Closing Time, there shall
not have been, since the date hereof, since the Applicable Time or since the
respective dates as of which information is given in the Registration Statement,
the Prospectus or the General Disclosure Package, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs,
properties, assets or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of any
senior executive officer of the Company and the chief financial officer of the
Company, dated as of the Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to their
knowledge, contemplated by the Commission.

 

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(f)           Manager Officers’ Certificate.  At the Closing Time, the
Representatives shall have received a certificate of any senior executive
officer of the Manager and the chief financial officer of the Manager, dated as
of the Closing Time, to the effect that (i) since the date hereof, since the
Applicable Time or since the respective dates as of which information is given
in the Registration Statement, the Prospectus or the General Disclosure Package,
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, properties, assets or business
prospects of the Manager and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the
representations and warranties in Section 1(b) hereof are true and correct with
the same force and effect as though expressly made at and as of the Closing Time
and (iii) the Manager has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Time.

 

(g)          Certificate of Chief Financial Officer of the Company.  On each of
the date hereof and at the Closing Time, the Representatives shall have received
a certificate of the chief financial officer of the Company substantially in the
form of Exhibit C hereto.

 

(h)          Certificate of Officer of the Manager.  On each of the date hereof
and at the Closing Time, the Representatives shall have received a certificate
of James Flick, Director of Client Service and Marketing of the Manager,
substantially in the form of Exhibit C hereto.

 

(i)           Accountant’s Comfort Letter.  At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters 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 the Registration Statement and the Prospectus.

 

(j)           Bring-down Comfort Letter.  At the Closing Time, the
Representatives shall have received from PricewaterhouseCoopers LLP a letter,
dated as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (h) of this Section, except
that the specified date referred to shall be a date not more than three business
days prior to the Closing Time.

 

(k)          Approval of Listing.  At the Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.

 

(l)           No Objection.  FINRA has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.

 

(m)         Lock-up Agreements.  At the date of this Agreement, the
Representatives shall have received agreements substantially in the form of
Exhibit D or E hereto, as the case may be, signed by the persons and entities
listed on Schedule C hereto, and such agreements shall be in full force and
effect.

 

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(n)          Conditions to Purchase of Option Securities.  In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Manager contained herein and the statements in any
certificates furnished by the Company or the Manager hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:

 

(i)           Company Officers’ Certificate.  A certificate, dated such Date of
Delivery, of any senior executive officer of the Company and the chief financial
officer of the Company confirming that the certificate delivered at the Closing
Time pursuant to Section 5(e) hereof remains true and correct as of such Date of
Delivery.

 

(ii)          Manager Officers’ Certificate.  A certificate, dated such Date of
Delivery, of any senior executive officer of the Manager and the chief financial
officer of the Manager confirming that the certificate delivered at the Closing
Time pursuant to Section 5(f) hereof remains true and correct as of such Date of
Delivery.

 

(iii)         Opinion of Counsel for Company and Manager.  The favorable opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company and the
Manager, in form and substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.

 

(iv)         Tax Opinion.  The favorable tax opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel for the Company and the Manager, in form and
substance satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.

 

(v)          Opinion of Counsel for Underwriters.  The favorable opinion of
Clifford Chance US LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.

 

(vi)         Certificate of Chief Financial Officer of the Company.  A
certificate of the chief financial officer of the Company, substantially in the
same form and substance as the certificate furnished to the Representatives
pursuant to Section 5(g) hereof.

 

(vii)       Certificate of Chief Financial Officer of the Manager.  A
certificate of James Flick, Director of Client Service and Marketing of the
Manager, substantially in the same form and substance as the certificate
furnished to the Representatives pursuant to Section 5(h) hereof.

 

(viii)      Bring-down Comfort Letter.  A letter from PricewaterhouseCoopers
LLP, in form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(h) hereof, except that
the “specified date” in the letter furnished pursuant to this paragraph shall be
a date not more than five days prior to such Date of Delivery.

 

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(o)          Additional Documents.  At the Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Manager in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.

 

(p)          Termination of Agreement.  If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.

 

Section 6.            Indemnification.

 

(a)          Indemnification of Underwriters.  The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, as such term is defined in
Rule 501(b) under the 1933 Act (each, an “Affiliate”), its selling agents and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

(i)           against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 430A Information or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus, any Issuer Free Writing Prospectus, the General
Disclosure Package or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;

 

(ii)          against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;

 

(iii)         against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Representatives), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above; provided, however, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information or any preliminary
prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto).

 

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(b)          Indemnification of the Underwriters by the Manager.  The Manager
agrees to indemnify and hold harmless each Underwriter, its Affiliates, its
selling agents and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the
extent and in the manner set forth in clauses (a)(i), (ii) and (iii) above;
provided, however, that in the case of the Manager this indemnity agreement
shall only apply to any loss, liability, claim, damage or expense if such loss,
liability, claim, damage or expense arises out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with the Manager Package.

 

(c)          Indemnification of Company, Directors and Officers.  Each
Underwriter severally and not jointly, agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information or any preliminary prospectus, any Issuer Free Writing Prospectus or
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the concession and reallowance figures appearing in the third paragraph and the
information in the twelfth, thirteenth and fourteenth paragraphs under the
caption “Underwriting.”

 

(d)          Actions against Parties; Notification.  Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement.  In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by the
Representatives, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company.  An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party.  In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances. 
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

 

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(e)          Settlement without Consent if Failure to Reimburse.  If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

 

Section 7.           Contribution.  If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and with respect to Section 6(b) above, the Manager, on the one hand and
the Underwriters on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and with respect to Section 6(b) above, the Manager, on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.

 

The relative benefits received by the Company and with respect to
Section 6(b) above, the Manager, on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus, bear to the aggregate public offering price of the Securities as
set forth on the cover of the Prospectus.

 

The relative fault of the Company and with respect to Section 6(b) above, the
Manager, on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Manager or by the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

 

The Company, the Manager and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7.  The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

 

- 26 -

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Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 7, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each Underwriter’s Affiliates and selling agents shall have the same rights
to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company.  The Underwriters’ respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial Securities set
forth opposite their respective names in Schedule A hereto and not joint.

 

Section 8.            Representations, Warranties and Agreements to Survive. 
All representations, warranties and agreements contained in this Agreement, or
in certificates of officers of the Company or the Manager submitted pursuant
hereto, shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or its Affiliates
or selling agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company or the Manager and (ii) delivery
of and payment for the Securities.

 

Section 9.            Termination of Agreement.

 

(a)          Termination; General.  The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto) or General Disclosure Package, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, properties, assets or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the New York Stock Exchange, or if trading
generally on the NYSE Amex LLC or the New York Stock Exchange or in the Nasdaq
Global Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, FINRA or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.

 

- 27 -

--------------------------------------------------------------------------------

 

(b)          Liabilities.  If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.

 

Section 10.         Default by One or More of the Underwriters.  If one or more
of the Underwriters shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the “Defaulted Securities”), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:

 

(i)           if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or

 

(ii)          if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.

 

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.

 

In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Underwriters to
purchase and the Company to sell the relevant Option Securities, as the case may
be, either the Representatives or the Company shall have the right to postpone
the Closing Time or the relevant Date of Delivery, as the case may be, for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements. 
As used herein, the term “Underwriter” includes any person substituted for an
Underwriter under this Section 10.

 

Section 11.         Tax Disclosure.  Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.

 

Section 12.         Notices.  All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication.  Notices to the
Underwriters shall be directed to (i) Deutsche Bank Securities Inc., 60 Wall
Street, New York 10005 (fax: (212) 797-9344), Attention: ECM Syndicate Desk,
with a copy to the General Counsel (fax: (212) 797-4564) and (ii) Citigroup
Global Markets Inc., 388 Greenwich Street, New York, New York 10013, attention
of the General Counsel; and notices to the Company or the Manager shall be
directed to it at 385 East Colorado Blvd., Pasadena, CA 91101, attention of the
General Counsel.

 

- 28 -

--------------------------------------------------------------------------------

 

Section 13.         Parties.  This Agreement shall both inure to the benefit of
and be binding upon the Underwriters, the Company, the Manager and their
respective successors.  Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company, the Manager and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained.  This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Company, the
Manager and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation.  No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.

 

Section 14.         No Advisory or Fiduciary Relationship.  The Company and the
Manager acknowledge and agree that (a) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the public offering
price of the Securities and any related discounts and commissions, is an
arm’s-length commercial transaction between the Company and the Manger, on the
one hand, and the several Underwriters, on the other hand, (b) in connection
with the offering contemplated hereby and the process leading to such
transaction, each Underwriter is and has been acting solely as a principal and
is not the agent or fiduciary of the Company or the Manager, or their respective
stockholders, creditors, employees or any other party, (c) no Underwriter has
assumed or will assume an advisory or fiduciary responsibility in favor of the
Company or the Manager with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or
is currently advising the Company or the Manager on other matters) and no
Underwriter has any obligation to the Company or the Manager with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Underwriters and their respective Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of each of the Company or the Manager, and (e) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and each of the Company and the Manager has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.

 

Section 15.         Integration.  This Agreement supersedes all prior agreements
and understandings (whether written or oral) by and among the Company, the
Manager and Underwriters, or any of them, with respect to the subject matter
hereof.

 

Section 16.         Trial by Jury.  The Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates), the Manager and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

 

Section 17.         GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 18.         TIME.  TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. 
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.

 

- 29 -

--------------------------------------------------------------------------------

 

Section 19.         Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

 

Section 20.         Effect of Headings.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

- 30 -

--------------------------------------------------------------------------------

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Manager a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement by and among the Underwriters, the Company and the Manager in
accordance with its terms.

 

 

Very truly yours,

 

 

 

 

 

WESTERN ASSET MORTGAGE CAPITAL CORPORATION

 

 

 

 

 

By:

 /s/ Gavin James

 

 

Name: Gavin James

 

 

Title:  President and Chief Executive Officer

 

 

 

 

 

 

 

WESTERN ASSET MANAGEMENT COMPANY

 

 

 

 

 

By:

 /s/ W. Stephen Venable Jr.

 

 

Name: W. Stephen Venable Jr.

 

 

Title:   Authorized Signatory

 

[Signature Page to Underwriting Agreement]

 

--------------------------------------------------------------------------------

 

CONFIRMED AND ACCEPTED,

 

as of the date first above written:

 

 

 

 

 

DEUTSCHE BANK SECURITIES INC.

 

 

 

 

 

By:

 /s/ Neil Abromavage

 

 

Authorized Signatory

 

 

 

 

 

 

 

By:

 /s/ Frank Windels

 

 

Authorized Signatory

 

 

 

 

 

CITIGROUP GLOBAL MARKETS INC.

 

 

 

 

 

By:

 /s/ Kevin Deignan

 

 

Authorized Signatory

 

 

 

 

 

For themselves and as Representatives of the

 

other Underwriters named in Schedule A hereto.

 

 

[Signature Page to Underwriting Agreement]

 

--------------------------------------------------------------------------------

 

SCHEDULE A

 

Name of Underwriter

 

Number of
Initial Securities

 

Deutsche Bank Securities Inc.

 

5,100,000

 

Citigroup Global Markets Inc.

 

3,900,000

 

J.P. Morgan Securities LLC

 

1,500,000

 

Jefferies & Company, Inc.

 

1,500,000

 

 

 

 

 

 

 

 

 

Total

 

12,000,000

 

 

Sch. A-1

--------------------------------------------------------------------------------

 

SCHEDULE B

 

1.            The public offering price per share for the Securities is $22.20.

 

Sch. B-1

--------------------------------------------------------------------------------

 

SCHEDULE C

 

1.            Required to deliver a letter in the form of Exhibit D.

 

James W. Hirschmann III
James J. Flick

M. Christian Mitchell

Edward D. Fox
Bruce D. Alberts

Brett B. Canon

Gavin L. James

Charles A. Ruys de Perez
Stephen P. Fulton

Richard W. Roll

Travis Carr

Steven M. Sherwyn

 

2.            Required to deliver a letter in the form of Exhibit E.

 

Western Asset Management Company

 

Sch. C-1

--------------------------------------------------------------------------------

 

SCHEDULE D

 

None.

 

Sch. D-1

--------------------------------------------------------------------------------

 

Exhibit A

 

 

The Manager Package consists of the information under the following headings set
forth in the Registration Statement, the General Disclosure Package and the
Prospectus.

 

·                 “Summary—Our Manager”: first, second and third paragraphs

 

·                 “Summary—Our competitive advantages—Significant experience of
our manager”: first, second, third, fourth, fifth and sixth sentences

 

·                 “Business—Our Manager”: first, second and third paragraphs

 

·                 “Business—Our competitive advantages—Significant experience of
our manager”: first, second, third, fourth, fifth and sixth sentences”

 

·                 “Summary—Conflicts of Interest—Other clients of our Manager”

 

·                 “Management—Conflicts of Interest—Other clients of our
Manager”

 

Exh. A-1

--------------------------------------------------------------------------------

 

Exhibit B-1

 

FORM OF OPINION OF COMPANY’S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)

 

[Intentionally Omitted]

 

Exh. B-1-1

--------------------------------------------------------------------------------

 

Exhibit B-2

 

TAX OPINION TO BE DELIVERED PURSUANT TO
SECTION 5(c)

 

[Intentionally Omitted]

 

Exh. B-2-1

--------------------------------------------------------------------------------

 

Exhibit C

Certificate

 

 

The undersigned, ______________, is the _________________ of
___________________, a ___________ corporation, and as such, the undersigned is
authorized to execute and deliver this Certificate in the name of and on behalf
of the __________.  The undersigned hereby executes this Certificate in
connection with the execution and delivery of that certain Underwriting
Agreement, dated September 27, 2012 (the “Underwriting Agreement”), among the
Western Asset Mortgage Capital Corporation, a Delaware corporation, and Western
Asset Management Company, on the one hand, and Deutsche Bank Securities Inc. and
Citigroup Global Markets Inc., as representatives of the several underwriters
(the “Underwriters”), on the other.  Capitalized terms used herein without
definition shall have the meanings given to such terms in the Underwriting
Agreement.  The undersigned hereby further certifies on behalf of the __________
to the Underwriters that:

 

I have read the amounts marked on the attached copies of certain pages of the
Registration Statement, the General Disclosure Package and the Prospectus
(attached hereto as Exhibit A) representing certain information and financial
data of the _________.  With regard to these amounts, based on my knowledge of
the ________ financial accounting matters, these amounts are true, accurate and
complete.

 

 

 

 

 

 

Exh. C-1

--------------------------------------------------------------------------------

 

Exhibit D

 

__________, 2012

 

DEUTSCHE BANK SECURITIES INC.

CITIGROUP GLOBAL MARKETS INC.

As Representatives of
the several Underwriters listed in
Schedule A to the Underwriting
Agreement referred to below

 

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005

 

c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013

 

Re:         Western Asset Mortgage Capital Corporation – Public Offering

 

Ladies and Gentlemen:

 

The undersigned, an officer and/or director of Western Asset Mortgage Capital
Corporation, a Delaware corporation (the “Company”), and/or an executive officer
of Western Asset Management Company, a California corporation (the “Manager”),
understands that Deutsche Bank Securities Inc., Citigroup Global Markets Inc.
and each of the other Underwriters named in Schedule A of the Underwriting
Agreement (collectively, the “Underwriters”), for whom Deutsche Bank Securities
Inc. and Citigroup Global Markets Inc. are acting as representatives (in such
capacity, the “Representatives”), propose to enter into a Underwriting Agreement
(the “Underwriting Agreement”) with the Company and the Manager providing for
the public offering (the “Public Offering”) of shares (the “Securities”) of the
Company’s common stock, par value $0.01 per share (the “Common Stock”). 
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Underwriting Agreement.

 

In consideration of the Underwriters’ agreement to purchase and make the Public
Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of Deutsche Bank Securities Inc. and Citigroup
Global Markets Inc., on behalf of the Underwriters, the undersigned will not,
during the period ending 60 days after the date of the prospectus relating to
the Public Offering (the “Prospectus”), (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, 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 without limitation, Common Stock or such other securities which may
be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and securities
which may be issued upon exercise of a stock option or warrant), or publicly
disclose the intention to make any offer, sale, pledge or disposition, (2) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock or such other securities,
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 or (3) make any demand for or exercise any right with respect to the

 

Exh. D-1

--------------------------------------------------------------------------------

 

registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock, in each case other than
(A) transfers of shares of Common Stock as a bona fide gift or gifts, and
(B) distributions of shares of Common Stock to members or stockholders of the
undersigned; provided that in the case of any transfer or distribution pursuant
to clause (A) or (B), each donee or distributee shall execute and deliver to the
Representatives a lock-up letter in the form of this paragraph; and provided,
further, that in the case of any transfer or distribution pursuant to clause
(A) or (B), no filing by any party (donor, donee, transferor or transferee)
under the Securities Exchange Act of 1934, as amended, or other public
announcement shall be required or shall be made voluntarily in connection with
such transfer or distribution (other than a filing on a Form 5 made after the
expiration of the 60-day period referred to above).  If the undersigned is an
officer or director of the Company, the undersigned further agrees that the
foregoing provisions shall be equally applicable to any Company-directed
Securities the undersigned may purchase in the Public Offering.

 

Notwithstanding the foregoing, if (1) during the last 17 days of the 60-day
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 60-day restricted period, the Company announces that it will release
earnings results or material news or a material event relating to the Company
occurs during the 16-day period beginning on the last day of the 60-day period,
the restrictions imposed by this Letter 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.

 

In furtherance of the foregoing, the duly appointed transfer agent for the
registration or transfer of the securities described herein is hereby authorized
to decline to make any transfer of securities if such transfer would constitute
a violation or breach of this Letter Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Letter Agreement.  All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall
be binding upon the successors, assigns, heirs or personal representatives of
the undersigned.

 

The undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Common Stock to be sold thereunder, the undersigned shall be
released from all obligations under this Letter Agreement.  The undersigned
understands that the Underwriters are entering into the Underwriting Agreement
and proceeding with the Public Offering in reliance upon this Letter Agreement.

 

This Letter Agreement and any claim, controversy or dispute arising under or
related to this Letter Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.

 

 

Very truly yours,

 

 

 

 

 

[NAME]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

Exh. D-2

--------------------------------------------------------------------------------

 

Exhibit E

 

__________, 2012

 

DEUTSCHE BANK SECURITIES INC.

CITIGROUP GLOBAL MARKETS INC.

As Representatives of
the several Underwriters listed in
Schedule A to the Underwriting
Agreement referred to below

 

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005

 

c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013

 

Re:         Western Asset Mortgage Capital Corporation – Public Offering

 

Ladies and Gentlemen:

 

The undersigned understands that Deutsche Bank Securities Inc., Citigroup Global
Markets Inc. and each of the other Underwriters named in Schedule A of the
Underwriting Agreement (collectively, the “Underwriters”), for whom Deutsche
Bank Securities Inc. and Citigroup Global Markets Inc. are acting as
representatives (in such capacity, the “Representatives”), propose to enter into
a Underwriting Agreement (the “Underwriting Agreement”) with Western Asset
Mortgage Capital Corporation (the “Company”) and the undersigned providing for
the public offering (the “Public Offering”) of shares (the “Securities”) of the
Company’s common stock, par value $0.01 per share (the “Common Stock”). 
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Underwriting Agreement.

 

In consideration of the Underwriters’ agreement to purchase and make the Public
Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of Deutsche Bank Securities Inc. and Citigroup
Global Markets Inc., on behalf of the Underwriters, the undersigned will not,
during the period ending 60 days after the date of the prospectus relating to
the Public Offering (the “Prospectus”), (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, 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 without limitation, Common Stock or such other securities which may
be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and securities
which may be issued upon exercise of a stock option or warrant), or publicly
disclose the intention to make any offer, sale, pledge or disposition, (2) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock or such other securities,
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 or (3) 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, in each case other than
(A) transfers of shares of Common Stock as a

 

Exh. E-1

--------------------------------------------------------------------------------

 

bona fide gift or gifts, and (B) distributions of shares of Common Stock to
members or stockholders of the undersigned; provided that in the case of any
transfer or distribution pursuant to clause (A) or (B), each donee or
distributee shall execute and deliver to the Representatives a lock-up letter in
the form of this paragraph; and provided, further, that in the case of any
transfer or distribution pursuant to clause (A) or (B), no filing by any party
(donor, donee, transferor or transferee) under the Securities Exchange Act of
1934, as amended, or other public announcement shall be required or shall be
made voluntarily in connection with such transfer or distribution (other than a
filing on a Form 5 made after the expiration of the 60 day period referred to
above).

 

Notwithstanding the foregoing, if (1) during the last 17 days of the 60-day
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 60-day restricted period, the Company announces that it will release
earnings results or material news or a material event relating to the Company
occurs during the 16-day period beginning on the last day of the 60-day
restricted period, the restrictions imposed by this Letter 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.

 

In furtherance of the foregoing, the duly appointed transfer agent for the
registration or transfer of the securities described herein is hereby authorized
to decline to make any transfer of securities if such transfer would constitute
a violation or breach of this Letter Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Letter Agreement.  All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall
be binding upon the successors, assigns, heirs or personal representatives of
the undersigned.

 

The undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Common Stock to be sold thereunder, the undersigned shall be
released from all obligations under this Letter Agreement.  The undersigned
understands that the Underwriters are entering into the Underwriting Agreement
and proceeding with the Public Offering in reliance upon this Letter Agreement.

 

This Letter Agreement and any claim, controversy or dispute arising under or
related to this Letter Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.

 

Exh. E-2

--------------------------------------------------------------------------------

 

 

Very truly yours,

 

 

 

 

 

WESTERN ASSET MANAGEMENT COMPANY

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

Exh. E-3

--------------------------------------------------------------------------------