Document:

exv10w11

EXHIBIT 10.11

STARWOOD PROPERTY TRUST, INC.

(a Maryland corporation)

40,500,000 Shares of Common Stock

PURCHASE AGREEMENT

Dated: August 11, 2009

 

 

 

STARWOOD PROPERTY TRUST, INC.

(a Maryland corporation)

40,500,000 Shares of Common Stock

(Par Value $0.01 Per Share)

PURCHASE AGREEMENT

August 11, 2009

Merrill Lynch, Pierce, Fenner & Smith

     Incorporated

4 World Financial Center

New York, New York 10080

Deutsche Bank Securities Inc.

60 Wall Street

New York, New York 10005

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

as Representatives of the several Underwriters

Ladies and Gentlemen:

Starwood Property Trust, Inc., a Maryland corporation (the “Company”) and SPT Management, LLC,
a Delaware limited liability company (the “Manager”) each confirms its agreement with Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), Deutsche Bank Securities Inc.
(“Deutsche Bank”) and Citigroup Global Markets Inc. (“Citigroup”) 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 11 hereof), for whom Merrill
Lynch, Deutsche Bank and Citigroup 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 40,500,000 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 6,075,000 additional shares of Common Stock to
cover overallotments, if any. The aforesaid 40,500,000 shares of Common Stock (the “Initial
Securities”) to be purchased by the Underwriters and all or any part of the 6,075,000 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 and the Underwriters agree that up to 405,000 shares of the Initial Securities to
be purchased by the Underwriters (the “Reserved Securities”) shall be reserved for sale by the
Underwriters to certain eligible employees and persons having business relationships with the
Company (the “Invitees”), as part of the distribution of the Securities by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and interpretations of
the Financial Industry Regulatory Authority (“FINRA”) and all other applicable laws, rules and
regulations. To the extent that such Reserved Securities are not orally confirmed for purchase by
Invitees by 9:00 a.m. Eastern Time on the
first business day after the date of this Agreement, such Reserved Securities may be offered
to the public as part of the public offering contemplated hereby.

 

 

 

The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-11 (No. 333-159754), including the related preliminary prospectus
or prospectuses, covering the registration of the Securities under the Securities Act of 1933, as
amended (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.” 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 Interactive Data Electronic Applications System (“IDEA”).

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, the Applicable Time referred to in Section 1(a)(i) hereof,
the Closing Time referred to in Section 2(c) hereof, and 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. 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.

 

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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 and the
Statutory Prospectus (as defined below) as of the Applicable Time and the information
included 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.

As used in this subsection and elsewhere in this Agreement:

“Applicable Time” means 7:00 A.M. (Eastern time) on August 12, 2009 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 E
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, including any
document incorporated by reference therein.

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.

 

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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 such 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 IDEA, except to the extent
permitted by Regulation S-T.

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 and the 1933 Act Regulations.

(iii) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus, together with
the related schedules and notes, are accurate in all material respects and 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. The supporting
schedules, if any, present fairly in accordance with GAAP the information required to be
stated therein. The selected financial and statistical data 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 financial
statements included therein. 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 and the 1933 Act Regulations.

(iv) 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 and the Prospectus, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs, business
prospects, management, assets or properties of the Company and its Subsidiaries 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, (C) there
has been no obligation, direct or contingent (including off-balance sheet obligations),
which is material to the Company and or any of its subsidiaries, incurred by the Company or
any of its subsidiaries, except obligations incurred in the ordinary course of business,
and (D) there has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.

(v) Good Standing of the Company. The Company has been duly organized and is
validly existing under and by virtue of the laws of the State of Maryland and is in good
standing with the State Department of Assessments and Taxation of Maryland and has
corporate power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement, the General Disclosure Package and the
Prospectus and to enter into and perform its obligations under this Agreement; 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. Complete and correct copies of the charter and of the bylaws of the Company and
all amendments thereto have been delivered to the Representatives
and, except as set forth in the exhibits to the Registration Statement, no changes
therein will be made subsequent to the date hereof and prior to the Closing Time or, if
applicable, each Date of Delivery.

 

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(vi) Good Standing of Subsidiaries. The only “subsidiaries” (as such term is
defined in Rule 1-02 of Regulation S-X) of the Company are SPT Real Estate Sub I, LLC and
SPT TALF Sub I, LLC (each, a “Subsidiary” and, collectively, the “Subsidiaries”). Each
Subsidiary has been duly organized and is validly existing as a corporation, partnership or
limited liability company in good standing under the laws of the jurisdiction of its
incorporation, formation or organization, has such entity power and authority to own, lease
and operate its properties and to conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus and is duly qualified as a
foreign corporation, partnership or limited liability company to transact business and is
in good standing in each 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; except as otherwise disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus all of the issued and outstanding capital stock or other equity
interests of each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through Subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity;
none of the outstanding shares of capital stock or other equity interest of any Subsidiary
was issued in violation of the preemptive or similar rights of any securityholder of such
Subsidiary. Except for the equity interests in 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.

(vii) Capitalization. The authorized, issued and outstanding capital stock of
the Company is as set forth in the Registration Statement, 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
Registration Statement, the General Disclosure Package and the Prospectus). The shares of
issued and outstanding capital stock of the Company 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.

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

(ix) Authorization and Description of Securities. The Securities have been
duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid and non-assessable,
free and clear of any pledge, lien, encumbrance, security interest or other claim, and will
be registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the “1934 Act”); the Common Stock conforms 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; the
certificates for the Securities, if any, are in due and proper form; no holder of the
Securities will be subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to any statutory or contractual preemptive
rights, resale rights, rights of first refusal or other similar rights of any
securityholder of the Company.

 

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(x) Absence of Defaults and Conflicts. Neither the Company nor any of its
Subsidiaries is in violation of its charter, partnership agreement, limited liability
company agreement, by-laws or other organizational documents 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 or any of its Subsidiaries 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; and the execution,
delivery and performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement, the General Disclosure Package and
the Prospectus (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described therein under the caption “Use of
Proceeds”) and compliance by the Company with its obligations hereunder 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 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 or any Subsidiary 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 charter, partnership agreement, limited liability
company agreement, by-laws or other organizational documents of the Company or any
Subsidiary 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 or any Subsidiary.

(xi) 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 or any Subsidiary, 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 this
Agreement or the performance by the Company of its obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any Subsidiary is a
party or of which any of their respective property or assets is the subject which are not
described in the Registration Statement, the General Disclosure Package and the Prospectus,
including ordinary routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.

(xii) Accuracy of Descriptions. 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 affiliate transactions, contracts or
other documents of a character required to be described in the Registration Statement, the
General Disclosure Package and the Prospectus, if any, 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 enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general equitable principles.

 

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(xiii) Possession of Intellectual Property. The Company and each of its
Subsidiaries owns or possesses, adequate patents, patent rights, licenses, inventions,
copyrights, software and design licenses, 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 conduct its business as described in
the Registration Statement, the General Disclosure Package and the Prospectus, and neither
the Company nor any of its Subsidiaries has 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 or any of its
Subsidiaries 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.

(xiv) 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 hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions contemplated by this
Agreement except (i) such as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws and (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the United States in which
the Reserved Securities are offered.

(xv) 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.

(xvi) Possession of Licenses and Permits. The Company and its Subsidiaries
possess 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 their 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 and its Subsidiaries are 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.

(xvii) Title to Property. The Company and its Subsidiaries have 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 Registration Statement, 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

 

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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 the
Subsidiaries is a party and are material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the Company or any of its
Subsidiaries holds properties described in the Registration Statement, 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.

(xix) Investment Company Act. The Company is not and, solely after giving
effect to the offering and sale of the Securities and the application of the proceeds
thereof as described in the Registration Statement, the General Disclosure Package and the
Prospectus will not be subject to registration and regulation as an “investment company” as
such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

(xx) 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)
neither the Company nor any of its Subsidiaries is 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, 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 and
its Subsidiaries have all permits, authorizations and approvals required under any
applicable Environmental Laws and are 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 or any of its Subsidiaries
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 or any of its
Subsidiaries relating to Hazardous Materials or any Environmental Laws.

(xxi) 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.

(xxii) 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) 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. Except as
described in the Registration Statement, the General Disclosure Package and the Prospectus,
since the date of the Company’s formation, there has been (1) no material weakness in the
Company’s internal control
over financial reporting (whether or not remediated) and (2) there has been no change
in the Company’s internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, the Company’s internal control over financial
reporting.

 

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(xxiii) Compliance with the Sarbanes-Oxley Act. The Company has taken all
necessary actions to ensure that, upon the effectiveness of the Registration Statement, it
will be in compliance in all material respects with all provisions of the Sarbanes-Oxley Act
of 2002 and all rules and regulations promulgated thereunder and implementing the provisions
thereof (the “Sarbanes-Oxley Act”) which the Company is required to comply with as of the
effectiveness of the Registration Statement.

(xxiv) Payment of Taxes. All United States federal income tax consolidated
returns of the Company required by law to be filed have been timely filed, if any such
returns were required to be filed, and all taxes shown by such returns or otherwise
assessed, which are due and payable, have been paid, except assessments against which
appeals have been or will be promptly taken and as to which adequate reserves have been
provided. The Company has timely filed all other consolidated tax returns that are required
to have been filed by them 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 pursuant to such returns or pursuant to any assessment received
by the Company or its Subsidiaries, except for such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company in respect of any income and corporation tax liability
for any years not finally determined are adequate to meet any assessments or re-assessments
for additional income tax for any years not finally determined, except to the extent of any
inadequacy that would not result in a Material Adverse Effect.

(xxv) Insurance. The Company carries or is entitled to the benefits of
insurance, with financially sound and reputable insurers, in such amounts and covering the
Company and its Subsidiaries against 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
Change.

(xxvi) 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.

(xxvii) Foreign Corrupt Practices Act. Neither the Company nor, to the
knowledge of the Company, any director or officer of the Company, any officer of the Manager
or any employee of Starwood Capital Group Global, L.P. (“Starwood L.P.) or one of its
subsidiaries (including without limitation, the Manager) (collectively, “Starwood Capital”)
acting on behalf of the Company or any of its Subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a violation by any of 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 and, to the knowledge of the Company, Starwood Capital, acting on behalf of the
Company or any of its Subsidiaries, intend to conduct their business in compliance with the
FCPA and have instituted and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued compliance therewith.

 

9

 

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

(xxix) OFAC. Neither the Company nor, to the knowledge of the Company, any
director or officer of the Company, any officer of the Manager, or any employee of Starwood
Capital, acting on behalf of the Company or any of its Subsidiaries, 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 Subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

(xxx) Real Estate Investment Trust Status. Upon the sale of the Securities,
the Company will be organized in conformity with the requirements for qualification and
taxation as a “real estate investment trust” (a “REIT”) under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended (the “Code”). The Company intends to make an
election to be taxed as a REIT under the Code beginning with the year ending December 31,
2009. The proposed method of operation of the Company as described in the Registration
Statement, the General Disclosure Package and the Prospectus will enable the Company to meet
the requirements for qualification and taxation as a REIT under the Code, and no actions
have been taken (or not taken which are required to be taken) which would cause such
qualification to be lost. The Company intends to operate in a manner which would permit it
to qualify as a REIT under the Code. The Company has no intention of changing its proposed
method of operations or engaging in activities which would cause it to fail to qualify as a
REIT.

(xxxi) Management Agreement. The management agreement (the “Management
Agreement”), to be entered into between the Company and the Manager, has been duly
authorized by the Company, and at the Closing Time will be duly executed and delivered by
the Company and will constitute a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except to the extent that enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general equitable principles.

(xxxii) Co-Investment and Allocation Agreement. The co-investment and
allocation agreement (the “Co-Investment Agreement”), to be entered into among the Company,
the Manager and Starwood L.P. has been duly authorized by the Company, and at the Closing
Time will be duly executed and delivered by the Company and will constitute a valid and
binding agreement of the Company enforceable against the Company in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally and by
general equitable principles.

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

 

10

 

(xxxiv) Authorization of Common Stock in Concurrent Offering. The 1,000,000
shares of Common Stock to be sold to SPT Investment, LLC, a Delaware limited liability
company (“SPT Investment”), in a private offering concurrent with the offering of the
Securities as described in the Registration Statement, the General Disclosure Package and
the Prospectus (the “Concurrent Offering”), pursuant to a private placement purchase
agreement (the “Concurrent Offering Private Placement Purchase Agreement”), dated as of the
date of this Agreement, between the Company and SPT Investment have been duly authorized
for issuance and sale, and when issued and delivered by the Company pursuant to the
Concurrent Offering Private Placement Purchase Agreement, will be validly issued and fully
paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest
or other claim.

(xxxv) Concurrent Offering Private Placement Purchase Agreement. The
Concurrent Offering Private Placement Purchase 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
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general equitable principles.

(xxxvi) Registration Rights Agreement. The registration rights agreement
(“Registration Rights Agreement”) to be entered into among the Company, the Manager and SPT
Investment has been duly authorized by the Company and at the Closing Time will be duly
executed and delivered by the Company and will constitute a valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general equitable principles.

(xxxvii) Reserved Securities Sales. The Company has not offered, or caused
the Representatives to offer, Reserved Securities to any person with the specific intent to
unlawfully influence (i) a customer or supplier of the Company or any of its affiliates to
alter the customer’s or supplier’s level or type of business with any such entity or (ii) a
trade journalist or publication to write or publish favorable information about the Company
or any of its affiliates, or their respective businesses or products.

(b) Representations and Warranties by the Manager. The Manager represents and warrants to
each Underwriter as of the date hereof, the Applicable Time referred to in Section 1(a)(i) hereof,
the Closing Time referred to in Section 2(c) hereof, and 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 provided by Starwood Capital set
forth under the headings “Prospectus Summary — Our Manager and Starwood Capital Group”,
“Prospectus Summary — Our Manager’s Competitive Strengths”, “Prospectus Summary —
Management Agreement”, “Prospectus Summary — Investment Advisory Agreement”, “Prospectus
Summary — Conflicts of Interest and Related Policies”, “Business — Our Manager’s
Competitive Strengths”, “Business — Conflicts of Interest and Related Policies”, “Our
Manager and the Management Agreement” and “Certain Relationships and Related Transactions”
in the Registration Statement, the General Disclosure Package and the Prospectus 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 capital investment policy or investment
allocation policy with respect to the Company as described in the Registration Statement,
the General Disclosure Package and the Prospectus.

 

11

 

(ii) Good Standing of the Manager. The Manager is a limited liability company
duly organized and validly existing and in good standing under the laws of the State of
Delaware and has limited liability company power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration Statement, the
General Disclosure Package and the Prospectus and to enter into and perform its obligations
under this Agreement, the Management Agreement, the Co-Investment Agreement and the
investment advisory agreement (the “Investment Advisory Agreement”), to be entered into
between the Manager and Starwood Capital Group Management, LLC; and the Manager is duly
qualified as a foreign limited liability company 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.

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

(iv) Authorization of Other Agreements. Each of the Management Agreement, the
Co-Investment Agreement and the Investment Advisory Agreement has been duly authorized by
the Manager and at the Closing Time will be duly executed and delivered by the Manager and
will constitute a valid and binding agreement of the Manager, enforceable against the
Manager in accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable principles.

(v) Absence of Defaults and Conflicts. The Manager is not in violation of its
limited liability company agreement or other organizational documents or in default in the
performance or observance of any obligation, agreement, covenant or condition contained in
Agreements or Instruments to which it is bound or by which it may be bound, or which any of
its property or assets is subject, except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of this Agreement, the
Management Agreement, the Co-Investment Agreement and/or the Investment Advisory Agreement,
as the case may be, and the consummation of the transactions contemplated herein and
therein and in the Registration Statement, the General Disclosure Package and the
Prospectus and compliance by the Manager with its obligations hereunder and thereunder have
been duly authorized by all necessary limited liability company 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 under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of the Manager
pursuant to its 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
limited liability company agreement or other organizational documents 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 respective assets, properties or operations.

(vi) 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
Manager of its obligations hereunder, in connection with the offering or the consummation
of the transactions contemplated by this Agreement, the Management Agreement, the
Co-Investment Agreement and/or the Investment Advisory Agreement, except (i) 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 Registration Statement, the General
Disclosure Package and the Prospectus
and (ii) such as have been obtained under the laws and regulations of jurisdictions
outside the United States in which the Reserved Securities are offered.

 

12

 

(vii) 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; 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; all of such
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
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.

(viii) 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 Manager, threatened, against or affecting
the Manager which might 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 this Agreement, the Management Agreement, the Co-Investment Agreement
and/or the Investment Advisory Agreement or the performance by the Manager of its
obligations hereunder and/or thereunder; the aggregate of all pending legal or governmental
proceedings to which the Manager is a party or of which any of its property or assets is
the subject, including ordinary routine litigation incidental to the business, could not
result in a Material Adverse Effect.

(ix) Access to Resources. Pursuant to the Investment Advisory Agreement, the
Manager will have access to the personnel and other resources of Starwood Capital necessary
for the performance of the duties of the Manager set forth in the Management Agreement and
as disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus and under this Agreement.

(x) Employment; Noncompetition; Nondisclosure. The Manager has not been
notified that any of its executive officers or key employees or a key or significant number
of Starwood Capital’s mortgage investment team plans to terminate his or her employment
with the Manager or Starwood Capital, as the case may be. None of the Manager, Starwood
Capital or any executive officer or key employee of the Manager or Starwood Capital’s
mortgage investment team 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.

(xi) Internal Controls. The Manager intends to operate a system of internal
controls sufficient to provide reasonable assurance that (A) 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
management’s general or specific authorization.

(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 the duties set forth in the Management Agreement and disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus.

 

13

 

(xiii) Reserved Securities Sales. The Company has not offered, or caused the
Representatives to offer, Reserved Securities to any person with the specific intent to
unlawfully influence (i) a customer or supplier of the Company or any of its affiliates to
alter the customer’s or supplier’s level or type of business with any such entity or (ii) a
trade journalist or publication to write or publish favorable information about the Company
or any of its affiliates, or their respective businesses or products.

(c) Officer’s Certificates. Any certificate signed by any officer of the Company or any of
its Subsidiaries delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to the matters covered
thereby. Any certificate signed by any officer or other designee of the Manager delivered to the
Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by
the Manager 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 the price per share set forth in Schedule C, 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 11 hereof. In addition, in connection with the sale of the Initial
Securities, the Manager agrees to pay Merrill Lynch for the account of the Underwriters, the amount
per Initial Security set forth on Schedule C for each Initial Security purchased buy such
Underwriter as set forth on Schedule C (the “Initial Securities Manager Offering Payment”).

(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 6,075,000
shares of Common Stock at the price per share set forth in Schedule C, 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. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time only for the
purpose of covering overallotments which may be made in connection with the offering and
distribution of the Initial Securities 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. In addition,
in connection with the sale of any Option Securities, the Manager agrees to pay to Merrill Lynch,
for the account of the Underwriters, the amount per Option Security set forth on Schedule C for
each Option Security purchased by such Underwriter (the “Option Securities Manager Offering
Payment,” and collectively with the Initial Securities Manager Offering Payment, the “Manager
Offering Payments”)

 

14

 

(c) Payment. Payment of the purchase price for, and delivery of the Initial Securities and
payment of the Initial Securities Manager Offering Payment shall be made at the offices of Sidley
Austin llp, 787 Seventh Avenue, 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 11), 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 and payment of the Option Securities Manager Offering Payment 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 the Securities to be purchased by them and payment of the Manager
Offering Payments shall be made to Merrill Lynch, for the account of the Underwriters, by wire
transfer of immediately available funds to a bank account designated by Merrill Lynch. 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 and has authorized Merrill Lynch,
for its account, to accept delivery of the Manager Offering Payments. Merrill Lynch, Deutsche Bank
and Citigroup, each individually and not as a representative 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) Conditional Payment to the Underwriters. In addition to the amounts required by Section
2(a) or 2(b), as the case may be, the Company agrees to pay to Merrill Lynch, for the account of
the Underwriters, an amount equal to the product of the amount per share set forth in Schedule C
multiplied by the number of Securities set forth on Schedule C (the “Conditional Payment”), if
during any full four calendar quarter period during the 24 full calendar quarters after the date of
the Closing Time (the “Conditional Payment Period”), the Company’s Core Earnings for such
four-quarter period exceeds the product of (1) the weighted average of the issue price per share of
all of the Company’s public offerings multiplied by the weighted average number of shares of Common
Stock outstanding (including any of the Company’s restricted stock units, restricted shares of
Common Stock and other shares of Common Stock underlying awards granted under the Company’s equity
incentive plans) in the four-quarter period and (2) 8.0% (such product of (1) and (2), the
“Performance Hurdle Rate”). Such Conditional Payment shall not exceed, on a per share basis, 2% of
the initial public offering price per share of Common Stock set forth in Schedule C. The Manager,
on behalf of the Company, shall compute the Company’s Core Earnings for each full four-quarter
period during the Conditional Payment Period within 30 days after the end of each calendar quarter
and shall promptly deliver such computations to the Underwriters (but in no event later than the
date that is 35 days after the end of each calendar quarter). In the event that the Performance
Hurdle Rate has been met, the Conditional Payment shall be payable by the Company to the
Underwriters by wire transfer of immediately available funds to a bank account designated by
Merrill Lynch no later than the date which is five (5) business days after the date of delivery of
the computations to the Underwriters. If the Performance Hurdle Rate is not met or exceeded for a
full four calendar quarter period during the Conditional Payment Period, the Company’s obligation
to make the Conditional Payment shall terminate.

For purposes of this Section and the Schedules attached to this Agreement:

 

15

 

(i) “Affiliate” means (i) any Person directly or indirectly controlling,
controlled by, or under common control with such other Person, (ii) any executive
officer, general partner or employee of such other Person, (iii) any member of the
board of directors or board of managers (or bodies performing similar functions) of
such Person, and (iv) any legal entity for which such Person acts as an executive
officer or general partner.

(ii) “Core Earnings” means

(A) GAAP net income (loss) excluding non-cash equity compensation
expense, any incentive fee that might be due to the Manager by the Company
pursuant to the Management Agreement, depreciation and amortization (to the
extent that the Company forecloses on any properties underlying its target
assets);

(B) excluding any unrealized gains, losses or other non-cash items
recorded in net income for the period, regardless of whether such items are
included in other comprehensive income or loss, or in net income; and

(C) adjusted to exclude one-time events pursuant to changes in GAAP and
certain other non-cash charges after discussions between the Manager and the
Independent Directors and after approval by a majority of the Independent
Directors.

(iii) “Independent Director” means a member of the Board of Directors of the
Company who is “independent” in accordance with the rules of the NYSE or such other
securities exchange on which the shares of Common Stock may be listed.

(iv) “Person” means any natural person, corporation, partnership, association,
limited liability company, estate, trust, joint venture, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof or any other legal entity and any fiduciary acting in such capacity
on behalf of the foregoing.

(e) 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.

SECTION 3. Covenants of the Company and the Manager. The Company and the Manager,
jointly and severally covenant, for as long as the manager remains Manager under the Management
Agreement, with each Underwriter as follows:

(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to
Section 3(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

 

16

 

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 Exchange 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
rules and regulations of the Commission under the 1934 Act (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 IDEA, except
to the extent permitted by Regulation S-T.

(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 IDEA, 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 opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement or amend or supplement the General Disclosure Package or the
Prospectus in order that the same will not include any untrue statements of a material fact or omit
to state a material fact

 

17

 

necessary in order to make the statements therein not misleading (solely in the case of the
General Disclosure Package and the Prospectus, 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 and 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.

(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 the listing of the Common Stock
(including the Securities) on the New York Stock Exchange.

(j) Books and Records; Accounting Controls and Disclosure Controls. The Company and each of
its Subsidiaries will maintain and keep accurate books and records reflecting their assets and will
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.

The Company and its consolidated Subsidiaries will 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.

 

18

 

(k) Qualification as a REIT. The Company intends to operate in conformity with the
requirements for qualification and taxation of the Company as a REIT under the Code until such time
as the Company’s board of directors determines that operating in such manner is not in the best
interests of the Company and its stockholders.

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

(m) Restriction on Sale of Securities. During the period of 180 days from the date of the
Prospectus, the Company or its directors or executive officers, will not, without the prior written
consent of the Representatives, (i) directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position” or liquidate or
decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of or transfer (or enter into any transaction that is designed to, or might
reasonably be expected to, result in the disposition of), or announce the offering of, or file any
registration statement under the Securities Act in respect of, any shares of Common Stock, options
or warrants to acquire shares of the Common Stock or securities exchangeable or exercisable for or
convertible into shares of Common Stock or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the shares of Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise. The foregoing shall not apply to (A) any Common Stock issued by
the Company in the Concurrent Offering or (B) any awards based on Common Stock granted by the
Company to the Manager, the Company’s officers or directors or any persons employed by Starwood
Capital under any of the Company’s equity incentive plans, in each case, as described in the
Registration Statement, the General Disclosure Package and the Prospectus. Notwithstanding the
foregoing, if (1) during the last 17 days of the 180-day restricted period described above 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 180-day restricted period described above, the
Company announces that it will release earnings results during the 16-day period beginning on the
last day of the 180-day period, the restrictions imposed in this clause (m) shall continue to apply
until the expiration of the 18-day period beginning on the date of the issuance of the earnings
release or the occurrence of the material news or material event as applicable, unless the
Representatives waive, in writing, such restrictions. The Company will provide the Representatives
and each individual subject to the restricted periods pursuant to the lockup letters described in
section 6(j) with prior notice of any such announcement that gives rise to an extension of the
restricted periods.

(n) 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.

(o) 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.

 

19

 

SECTION 4. Covenants of the Manager. The Manager covenants with each Underwriter and
with the Company that, 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, it
shall notify you and the Company of the occurrence of any material events respecting Starwood
Capital’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 5. 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 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 the 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(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 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 50% of 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, (xi) the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange and (xii) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the Underwriters, in connection
with matters related to the Reserved Securities which are designated by the Company for sale to
Invitees.

(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 6 or Section 10(a)(i) 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.

SECTION 6. 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, the Manager, or any Subsidiary of the Company delivered pursuant to the provisions hereof,
to the performance by the Company and the Manager of their respective covenants and other obligations
hereunder, and to the following further conditions:

 

20

 

(a) Effectiveness of Registration Statement. The Registration Statement, including any Rule
462(b) Registration Statement, has become effective and at 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 the Company and the Manager. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the Closing Time, of each of
Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden Arps”), DLA Piper LLP (US) (“DLA Piper”) and
Rinaldi, Finkelstein & Franklin, L.L.C. (“RFF”), 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 A, Exhibit B and Exhibit C hereto, respectively, and to such further effect as counsel to
the Underwriters may reasonably request.

(c) Opinion of Counsel for the Underwriters. At the Closing Time, the Representatives shall
have received the favorable opinion, dated as of the Closing Time, of Sidley Austin llp,
counsel for the Underwriters, together with signed or reproduced copies of such letter for each of
the other Underwriters with respect to such matters as the Representatives may reasonably request.
In giving such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of the United States,
upon the opinions of DLA Piper rendered pursuant to Section 6(b), as to matters arising under
Maryland law, or other counsel satisfactory to the Representatives. Such counsel may also 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 and its Subsidiaries and certificates of
public officials.

(d) 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 General Disclosure Package or the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings, business affairs 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 the President of the Company and of 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.

(e) Manager’s Officers’ Certificate. The Representatives shall have received a certificate of
the President of the Manager and of a Vice President or the Treasurer of the Manager, dated as of
the Closing Time, to the effect that (i) the representations and warranties in Section 1(b) are
true and correct with the same force and effect as though expressly made at and as of Closing Time
and (ii) the Manager has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to Closing Time.

 

21

 

(f) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter dated the date of delivery
thereof, 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, the General Disclosure Package and the Prospectus.

(g) Bring-down Comfort Letter. At the Closing Time, the Representatives shall have received
from Deloitte & Touche 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 (f) 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.

(h) 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.

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

(j) Lockup 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, as reflected in,
and signed by the persons listed on, Schedule D hereto, and such letter agreements shall be in full
force and effect.

(k) No Amendments or Supplements. No amendment or supplement to the Registration Statement,
the Prospectus, any preliminary prospectus or any Issuer Free Writing Prospectus shall be filed to
which the Underwriters shall have objected in writing.

(l) Initial Securities Manager Offering Payment. The Manager has paid to Merrill Lynch for the
account of the Underwriters the Initial Securities Manager Offering Payment as set forth in Section
2(a) hereof.

(m) 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 in Section
1 hereof or in certificates of any officer of the Company, any of its Subsidiaries or the Manager
delivered pursuant to the provisions hereof 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 the President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company confirming that the certificate delivered at the
Closing Time pursuant to Section 6(d) hereof remains true and correct as of such Date of
Delivery.

(ii) Manager Officers’ Certificate. A certificate, dated such Date of
Delivery, of the President of the Manager and of a Vice President or the Treasurer of the
Manager confirming that the certificate delivered at the Closing Time pursuant to Section
6(e) hereof remains true and correct as of such Date of Delivery.

(iii) Opinion of Counsel for the Company and the Manager. The favorable
opinion of each of Skadden Arps, DLA Piper and RFF, counsel for the Company and the
Manager, each 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 opinions required by Section 6(b) hereof.

 

22

 

(iv) Opinion of Counsel for the Underwriters. The favorable opinion of Sidley
Austin 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 6(c) hereof.

(v) Bring-down Comfort Letter. A letter from Deloitte & Touche 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 6(g) 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.

(vi) Option Securities Manager Offering Payment. The Manager has paid to
Merrill Lynch for the account of the Underwriters the Option Securities Manager Offering
Payment as set forth in Section 2(b) hereof

(n) 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.

(o) 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 5 and except that Sections 1, 7, 8
and 9 shall survive any such termination and remain in full force and effect.

SECTION 7. 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 delivered to the Underwriters for use in connection with the sale of
the Securities, 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 7(e) below) any
such settlement is effected with the written consent of the Company;

 

23

 

(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, the General Disclosure Package
or the Prospectus (or any amendment or supplement thereto).

(b) Indemnification of Company, Directors and Officers. Each Underwriter severally 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 either 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 7,
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, the General
Disclosure Package 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. The Company hereby acknowledges that the only
information that the Underwriters have furnished to the Company 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, the General Disclosure Package or the
Prospectus (or any amendment or supplement thereto) are the statements set forth in the fifth
paragraph, the second sentence of the twentieth paragraph, the twenty-first paragraph,
twenty-second paragraph and the twenty-third paragraph under the caption “Underwriting” in the
Prospectus.

(c) 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 7(a) or 7(b) above, counsel to the indemnified parties shall be
selected by the Representatives, and, in the case of parties indemnified pursuant to Section 7(c)
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

 

24

 

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.

(d) 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 7(a) or Section 7(b) or settlement of any claim in connection with any
violation referred to in Section 7(f) 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.

(e) Indemnification for Reserved Securities. In connection with the offer and sale of the
Reserved Securities, the Company agrees to indemnify and hold harmless the Underwriters, their
Affiliates and selling agents and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all loss, liability, claim, damage and expense (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending, investigating or settling any such
action or claim), as incurred, (i) arising out of the violation of any applicable laws or
regulations of foreign jurisdictions where Reserved Securities have been offered; (ii) arising out
of any untrue statement or alleged untrue statement of a material fact contained in any prospectus
wrapper or other material prepared by or with the consent of the Company for distribution to
Invitees in connection with the offering of the Reserved Securities or caused by any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iii) caused by the failure of any Invitee to pay for
and accept delivery of Reserved Securities which have been orally confirmed for purchase by any
Invitee by 9:00 a.m. Eastern Time on the first business day after the date of the Agreement; or
(iv) related to, or arising out of or in connection with, the offering of the Reserved Securities.

SECTION 8. Contribution. If the indemnification provided for in Section 7 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 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 on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions, or in connection with any violation of the nature
referred to in Section 7(f) hereof, 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 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 initial public offering price of the Securities as set forth
on the cover of the Prospectus.

 

25

 

The relative fault of the Company 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 by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission
or any violation of the nature referred to in Section 7(f) hereof.

The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 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 8. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 8 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.

Notwithstanding the provisions of this Section 8, 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 8, 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 8 are several in
proportion to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.

SECTION 9. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company, any of its Subsidiaries 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 and (ii) delivery of
and payment for the Securities.

SECTION 10. 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, in the sole judgment of the
Representatives, there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package or the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise or Starwood Capital, 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

 

26

 

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 New York
Stock Exchange or in the Nasdaq Global Select 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, the 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.

(b) Liabilities. If this Agreement is terminated pursuant to this Section 10, such
termination shall be without liability of any party to any other party except as provided in
Section 5 hereof, and provided further that Sections 1, 7, 8 and 9 shall survive such termination
and remain in full force and effect.

SECTION 11. 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 11.

SECTION 12. 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 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.

 

27

 

SECTION 13. 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 Merrill Lynch, Pierce,
Fenner & Smith Incorporated at One Bryant Park, New York, New York 10036, Facsimile: (646)
855-3073, attention of Syndicate Department, with a copy to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, One Bryant Park, New York, New York 10036, Facsimile: (212) 230-8730, attention of
ECM Legal, to Deutsche Bank Securities Inc. at 60 Wall Street, New York, NY 10005, attention of ECM
Syndicate and to Citigroup Global Markets, Inc., at 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 591 West Putnam Avenue, Greenwich, Connecticut 06830, attention of the General Counsel.

SECTION 14. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters, the Manager and the Company 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 Manager and the Company and their
respective successors and the controlling persons and officers and directors referred to in
Sections 7 and 8 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 and 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 15. 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
Manager, 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 the Company, and the Manager have each
consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

SECTION 16. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company, the Manager and the Underwriters, or
any of them, with respect to the subject matter hereof.

SECTION 17. Trial by Jury. Each of the Company and the Manager (on its behalf and,
to the extent permitted by applicable law, on behalf of its stockholders and affiliates) 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 18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

28

 

SECTION 19. 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.

SECTION 20. 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 21. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.

 

29

 

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 between the Underwriters and the Company and the
Manager in accordance with its terms.

	 	 	 	 	 
	 	

Very truly yours,

STARWOOD PROPERTY TRUST, INC.

 	 
	 	By:  	/s/ Ellis F. Rinaldi
 	 
	 	 	Name:  	Ellis F. Rinaldi 	 
	 	 	Title:  	General Counsel, Secretary and Executive Vice
President 	 
	 
	 	SPT MANAGEMENT, LLC

 	 
	 	By:  	/s/ Jerome C. Silvey
 	 
	 	 	Name:  	Jerome C. Silvey 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	CONFIRMED AND ACCEPTED,

as of the date first above written:

 	 	 
	By:  	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
 	 	 
	 
	By  	
/s/ Anne Walker
 	 	 
	 	Authorized Signatory 	 	 
	 	 	 
	By:  	                DEUTSCHE BANK SECURITIES INC.
 	 	 
	 
	By  	
/s/ Jeremy Fox
 	 	 
	 	Authorized Signatory 	 	 
	 	 	 
	By  	
/s/ Frank Windels
 	 	 
	 	Authorized Signatory 	 	 
	 	 	 
	By:  	                CITIGROUP GLOBAL MARKETS INC.
 	 	 
	 	 	 
	By  	
/s/ Julian Allen
 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 

For themselves and as Representatives of the other Underwriters named in Schedule A hereto.

 

30

 

SCHEDULE A

	 	 	 	 	 
	 	 	Number of	 
	Name of Underwriter	 	Initial Securities	 
	 
	 	 	 	 
	Merrill Lynch, Pierce, Fenner & Smith
Incorporated
	 	 	14,175,000	 
	Deutsche Bank Securities Inc.
	 	 	12,150,000	 
	Citigroup Global Markets Inc.
	 	 	6,075,000	 
	Barclays Capital Inc.
	 	 	2,701,350	 
	Wells Fargo Securities, LLC
	 	 	2,701,350	 
	Calyon Securities (USA) Inc.
	 	 	1,081,350	 
	Cantor Fitzgerald & Co.
	 	 	538,650	 
	Piper Jaffray & Co.
	 	 	538,650	 
	Scotia Capital (USA) Inc.
	 	 	538,650	 
	 
	 	 	 
	 
	 	 	 	 
	Total
	 	 	40,500,000	 
	 
	 	 	 

 

Sch A-1

 

SCHEDULE B

1. The initial public offering price per share for the Securities is $20.00.

2. The number of shares of the Securities purchased by the Underwriters is 40,500,000.

 

Sch B-1

 

SCHEDULE C

STARWOOD PROPERTY TRUST, INC.

40,500,000 Shares of Common Stock

(Par Value $0.01 Per Share)

1. The initial public offering price per share for the Securities, determined as
provided in said Section 2, shall be $20.00.

2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be $19.50 for 1,250,000 of the Initial Securities purchased, being an
amount equal to the initial public offering price set forth above less $0.50 per share, and
shall be $19.40 for the remaining 39,250,000 Initial Securities purchased, plus any Option
Securities, being an amount equal to the initial public offering price set forth above less
$0.60 per share; provided that the purchase price per share for any Option Securities
purchased upon the exercise of the overallotment option described in Section 2(b) shall be
reduced by 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.

3. The Manager Offering Payments as described in Sections 2(a) and 2(b) shall be $0.20
per share for 39,250,000 of the Initial Securities purchased plus any Option Securities.

4. The Conditional Payment to be made by the Company to Merrill Lynch, for the account
of the Underwriters, in the event that the Performance Hurdle Rate described in Section 2(d)
is met or exceeded, shall be $0.40 per share for 39,250,000 of the Initial Securities
purchased plus any Option Securities.

 

Sch C-1

 

SCHEDULE D

List of persons and entities subject to lockup

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

	 
	 	 	SPT Management, LLC

Barry S. Sternlicht

Jeffrey G. Dishner

Jerome C. Silvey

Ellis Rinaldi

Barbara J. Anderson

Richard D. Bronson

Jeffrey F. DiModica

Lynn Forester de Rothschild

Straus S. Zelnick

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

	 
	 	 	SPT Investment, LLC

 

Sch D-1

 

SCHEDULE E

Issuer General Use Free Writing Prospectuses

None.

 

Sch E-1

 

Exhibit A

FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

TO BE DELIVERED PURSUANT TO

SECTION 6(b)

[Intentionally
omitted.]

 

A-1

 

Exhibit B

FORM OF OPINION OF DLA PIPER LLP (US)

TO BE DELIVERED PURSUANT TO

SECTION 6(b)

[Intentionally
omitted.]

 

B-1

 

Exhibit C

FORM OF OPINION OF RINALDI, FINKELSTEIN & FRANKLIN, L.L.C.

TO BE DELIVERED PURSUANT TO

SECTION 6(b)

[Intentionally
omitted.]

 

C-1

 

Exhibit D

Form of lockup from the Manager and the Company’s directors and officers pursuant to

Section 6(j)

August 11, 2009

Merrill Lynch, Pierce, Fenner & Smith

          Incorporated,

Deutsche Bank Securities Inc.

     as Representatives of the several

     Underwriters to be named in the

     within-mentioned Purchase Agreement

c/o Merrill Lynch & Co.

Merrill Lynch, Pierce, Fenner & Smith

          Incorporated

4 World Financial Center

New York, New York 10080

	 	Re:	 	Proposed Public Offering by Starwood Property Trust, Inc.

Dear Sirs:

The undersigned, [an officer and/or director] [SPT Management, LLC, the manager] of Starwood
Property Trust, Inc., a Maryland corporation (the “Company”), understands that Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and Deutsche Bank Securities Inc. (“Deutsche
Bank” and, together with Merrill Lynch, the “Representatives”) propose to enter into a Purchase
Agreement (the “Purchase Agreement”) with the Company providing for the public offering of shares
(the “Securities”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”).
In recognition of the benefit that such an offering will confer upon the undersigned and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Purchase Agreement that, during a
period of 180 days from the date of the Purchase Agreement, the undersigned will not, without the
prior written consent of the Representatives (i) directly or indirectly, offer, sell, contract to
sell, or otherwise dispose of or hedge, or enter into any transaction that is designed to, or could
be expected to result in the disposition of any shares of the Company’s Common Stock or any other
securities convertible into or exchangeable or exercisable for shares of the Company’s Common Stock
or derivatives on shares of the Company’s Common Stock, whether now owned or hereafter acquired by
the undersigned or with respect to which the undersigned has or hereafter acquires the power of
disposition (collectively, the “Lockup Securities”) or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lockup Securities, whether any such swap or transaction is
to be settled by delivery of Common Stock or other securities, in cash or otherwise. Clause (ii)
above shall apply to shares of Common Stock and to securities convertible into or exchangeable or
exercisable for or repayable with shares of Common Stock and shall apply for a period of 180 days
from the date of the Purchase Agreement to shares acquired later by the person executing the
agreement or for which the person executing the agreement later acquires the power of disposition.

 

D-1

 

Notwithstanding the foregoing, and subject to the conditions below, the undersigned may
transfer the Lockup Securities without the prior written consent of the Representatives
provided that (1) the Representatives receive a signed lockup agreement for the balance of
the lockup period from each donee, trustee, distributee, or transferee, as the case may be,
(2) any such transfer shall not involve a disposition for value, (3) such transfers are not
required to be reported in any public report or filing with the Securities and Exchange
Commission, or otherwise and (4) the undersigned does not otherwise voluntarily effect any
public filing or report regarding such transfers:

(i) as a bona fide gift or gifts; or

(ii) to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned (for purposes of this lockup agreement, “immediate
family” shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin.

Notwithstanding the foregoing, if:

(1) during the last 17 days of the 180-day lockup period, the Company issues an earnings
release or material news or a material event relating to the Company and its subsidiaries
considered as one enterprise occurs; or

(2) prior to the expiration of the 180-day lockup period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the 180-day lockup
period,

the restrictions imposed by this lockup agreement shall continue to apply until the expiration of
the 18-day period beginning on the date of the release of the earnings results or the occurrence of
the material news or material event, as applicable, unless the Representatives waive, in writing,
such extension.

The undersigned hereby acknowledges and agrees that written notice of any extension of the
180-day lockup period pursuant to the previous paragraph will be delivered by the Representatives
to the Company (in accordance with Section 13 of the Purchase Agreement) and that any such notice
properly delivered will be deemed to have been given to, and received by, the undersigned. The
undersigned further agrees that, prior to engaging in any transaction or taking any other action
that is subject to the terms of this lockup agreement during the period from the date of this
lockup agreement to and including the 34th day following the expiration of the initial 180-day
lockup period, it will give notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation from the Company that the
180-day lockup period (as may have been extended pursuant to the previous paragraph) has expired.

 

D-2

 

The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lockup Securities except in
compliance with the foregoing restrictions.

	 	 	 	 	 
	 	

Very truly yours,

[Entity]

 	 
	 	Signature:  	

 	 
	 	 	Print Name:  	 	 
	 	 	[Title:  	 	] 
	 

 

D-3

 

Exhibit E

Form of lockup from SPT Investment, LLC pursuant to Section 6(j)

August 11, 2009

Merrill Lynch, Pierce, Fenner & Smith

          Incorporated,

Deutsche Bank Securities Inc.

     as Representatives of the several

     Underwriters to be named in the

     within-mentioned Purchase Agreement

c/o Merrill Lynch & Co.

Merrill Lynch, Pierce, Fenner & Smith

          Incorporated

4 World Financial Center

New York, New York 10080

	 	Re:	 	Proposed Public Offering by Starwood Property Trust, Inc.

Dear Sirs:

The undersigned, SPT Investment, LLC (“SPT Investment”) understands that Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and Deutsche Bank Securities Inc. (“Deutsche
Bank” and, together with Merrill Lynch, the “Representatives”) propose to enter into a Purchase
Agreement (the “Purchase Agreement”) with Starwood Property Trust, Inc., a Maryland corporation
(the “Company”) providing for the public offering of shares (the “Securities”) of the Company’s
common stock, par value $0.01 per share (the “Common Stock”). In recognition of the benefit that
such an offering will confer upon the undersigned and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the SPT Investment agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 365 days from the date
of the Purchase Agreement, the undersigned will not, without the prior written consent of the
Representatives (i) directly or indirectly, offer, sell, contract to sell, or otherwise dispose of
or hedge, or enter into any transaction that is designed to, or could be expected to result in the
disposition of any shares of the Company’s Common Stock or any other securities convertible into or
exchangeable or exercisable for shares of the Company’s Common Stock or derivatives on shares of
the Company’s Common Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of disposition (collectively,
the “Lockup Securities”) or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of
the Lockup Securities, whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise. Clause (ii) above shall apply to shares of Common
Stock and to securities convertible into or exchangeable or exercisable for or repayable with
shares of Common Stock and shall apply for a period of 365 days from the date of the Purchase
Agreement to shares acquired later by the person executing the agreement or for which the person
executing the agreement later acquires the power of disposition.

Concurrently with the public offering, SPT Investment will purchase the Company’s common stock
in a private offering, pursuant to a private placement purchase agreement (the “Concurrent
Shares”). In recognition of the benefit that such private offering will confer upon SPT Investment
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SPT Investment further agrees with each underwriter to be named in the Purchase
Agreement that, during a
period of 365 days from the date of the Purchase Agreement, SPT Investment will not, without the
prior written consent of the Representatives, directly or indirectly, offer, sell, contract to
sell, or otherwise dispose of or hedge, or enter into any transaction that is designed to, or
could be expected to result in the disposition of any shares of the “Concurrent Shares.”

 

E-1

 

Notwithstanding the foregoing, and subject to the conditions below, SPT Investment may
transfer the Lockup Securities and the Concurrent Shares without the prior written consent of the
Representatives provided that (1) the Representatives receive a signed lockup agreement for the
balance of the lockup period from each donee or trustee, as the case may be, (2) any such transfer
shall not involve a disposition for value, (3) such transfers are not required to be reported in
any public report or filing with the Securities and Exchange Commission, or otherwise and (4) SPT
Investment does not otherwise voluntarily effect any public filing or report regarding such
transfers:

(i) as a bona fide gift or gifts; or

(ii) to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned (for purposes of this lockup agreement, “immediate
family” shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin.

Notwithstanding the foregoing, if:

(1) during the last 17 days of the 365-day lockup 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 365-day lockup period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the 365-day lockup
period,

the restrictions imposed by this lockup agreement shall continue to apply until the expiration of
the 18-day period beginning on the date of the release of the earnings results or the occurrence of
the material news or material event, as applicable, unless the Representatives waive, in writing,
such extension.

SPT Investment hereby acknowledges and agrees that written notice of any extension of the
365-day lockup period pursuant to the previous paragraph will be delivered by the Representatives
to the Company (in accordance with Section 13 of the Purchase Agreement) and that any such notice
properly delivered will be deemed to have been given to, and received by SPT Investment. SPT
Investment further agrees that, prior to engaging in any transaction or taking any other action
that is subject to the terms of this lockup agreement during the period from the date of this
lockup agreement to and including the 34th day following the expiration of the initial 365-day
lockup period, it will give notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation from the Company that the
365-day lockup period (as may have been extended pursuant to the previous paragraph) has expired.

SPT Investment also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lockup Securities and the
Concurrent Shares except in compliance with the foregoing restrictions.

	 	 	 	 	 
	 	Very truly yours,

SPT INVESTMENT, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

E-2exv10w1

Exhibit 10.1

EMERSON RADIO CORP. 9 Entin Road, P.O. Box 430, Parsippany, New Jersey 07054-0430 (973) 884-5800

October 1,
2009

Mr. Duncan Hon

Present

Re: Offer of Employment

Dear Duncan:

On behalf of Emerson Radio Corp. (the “Company”), I am pleased to extend to you an offer of
employment with the Company. The purpose of this letter is to confirm the terms and conditions of
your employment.

1. Period of Employment. Subject to Paragraph 4, below, the Company shall employ you, and
you shall serve the Company during the period commencing on October 1, 2009, and continuing through
and including September 30, 2010 (the “Term”). After expiration of the Term, this Agreement may
be terminated by the Company upon ninety (90) days advance written notice of intent to terminate
the Agreement. After expiration of the Term, and prior to and during any such ninety (90) day
notice period (all such periods after expiration of the Term shall be referred to hereinafter,
individually and collectively, as the “Term Extension”), this Agreement shall remain in full force
and effect. You shall have the right to terminate this Agreement on or prior to September 30,
2010 with 90 days notice and at any time thereafter with 90 days notice.

     2. Position, Duties and Responsibilities.

(a) During the Term and Term Extension, you shall be employed by the Company as, and shall have the
title of, Deputy Chief Executive Officer. As such, you shall be responsible for the management of
the Company and shall have such other duties and responsibilities as are normal and customary for a
chief executive officer of a public United States company. You also will have such other duties
and responsibilities as may from time to time be assigned to or vested in you by the Company’s
Board of Directors or any duly-constituted Committee of the Company’s Board of Directors, or by the
Chairman of the Company’s Board of Directors, or by the Chief Executive Officer. You will report
to the Chairman of the Company’s Board of Directors and the Chief Executive Officer. Further,
you will serve as a member of the Company’s Board of Directors.

(b) You will devote the portion of your business time, attention, skill and efforts to the business
and affairs of the Company and the promotion of its interests as is necessary to the performance of
your duties and obligations hereunder. During the Term and

 

 

Term Extension you will be permitted to be employed on a part-time basis by Grande Holdings or any
of its subsidiaries and engage in other business activities approved in advance by the Chairman of
the Company’s Board of Directors, provided that, in each such instance, you comply at all times
with Section 5 of this Agreement and such other business activities do not (i) conflict with the
interests of the Company, (ii) inhibit, conflict with, or limit your ability to perform your duties
to the Company, or (iii) otherwise violate your obligations under the Company’s Code of Ethics for
Senior Financial Officers or the Company’s Code of Conduct for Officers, Directors, and Employees.
You shall, except during periods of vacation, sick leave, or other duly authorized leave of
absence and except as otherwise permitted in the preceding sentence, devote your time, attention,
skill, and ability during usual business hours (and outside those hours when reasonably necessary
to your duties hereunder) to the faithful and diligent performance of the duties and
responsibilities described in this Paragraph 2.

(c) It shall not be a violation of this Agreement for you to serve as an officer or director of
a cooperative housing corporation or condominium, or civic or charitable organization or committee,
to perform speaking engagements, or to manage personal passive investments, so long as such
activities (individually or collectively) do not conflict or interfere with the performance of your
duties under this Agreement. With the exception of the Company, you may serve as a director of a
corporation only with the prior written approval of the Company’s Board of Directors.

     3. Compensation.

(a) During the Term and Term Extension, as compensation for services rendered hereunder and in
consideration of this Agreement, the Company shall pay you a salary, in accordance with the
Company’s then-prevailing payroll practices, at the annual rate of Three Hundred Thousand United
States Dollars $300,000.00 or such greater amount as the Company may from time to time and in its
sole discretion determine.

(b) During the Term and Term Extension, as additional compensation, you shall be entitled (i) to
four (4) weeks of paid vacation per calendar year (which vacation shall accrue, and may be used, in
accordance with the Company’s vacation policies and procedures in place from time to time), and
(ii) to participate in and receive all benefits under any welfare benefit plan or program, any
retirement savings plan or program, and such other benefits or perquisites of office (including,
without limitation, paid holidays) as the Company may, from time to time and in its sole
discretion, make available generally to executive employees of the Company. Such participation
shall be subject to the terms and conditions of such plans or programs, including, but not limited
to, such generally applicable eligibility provisions as may be in effect from time to time.

(c) The Company shall reimburse you for all reasonable business expenses incurred in the
performance of your duties hereunder in accordance with and subject to the terms and conditions of
the Company’s then-prevailing expense policy. As a condition precedent to obtaining such
reimbursement, you shall provide to the Company any and all statements, bills, or receipts
evidencing the expenses for which you seek reimbursement, and such other related information or
materials as the Company may from time to time reasonably require. In no event

 

 

shall a reimbursement be made later than December 31 of the year following the year in which the
expense was incurred.

(d) The Company’s Board of Directors shall grant you a discretionary bonus at the end of
the Company’s fiscal year.

(e) To the extent that you incur income taxes in the United States for a taxable year as a
result of the compensation you receive from the Company while working in the United States, the
Company will pay you a “Tax Equalization Amount” equal to the excess, if any, of (i) the income
taxes that you actually incur for such taxable year, over (ii) the sum of (x) the income taxes that
you would have incurred for such taxable year had you received such compensation solely for
services rendered in Hong Kong, and (y) the income taxes, if any, that you would have incurred in
the United States even if you had not performed services for the Company in the United States.
Each such Tax Equalization Amount, if any, shall be paid to you in one single payment within sixty
(60) days after you file your United States federal and, if applicable, state income return(s) for
such taxable year, subject to the Company’s verification of the amount payable; provided that you
must file such income tax returns by no later than October 15 of the year following such taxable
year. In addition to such Tax Equalization Amount, the Company shall at the same time calculate and
pay you an amount (a “Tax Gross-Up Payment”) such that, after payment of any and all United States
income taxes on such Tax Equalization Amount and the Tax Gross-Up Payment, the net amount received
by you shall be equal to the Tax Equalization Amount.

4. Termination. Unless your employment is terminated pursuant to Paragraph 1 of this
Agreement or this Paragraph 4, the Company shall continue to employ you and you shall continue to
serve the Company throughout the Term and Term Extension.

(a) This Agreement and your employment shall terminate automatically if (i) you do not obtain your
L-1A visa and enter the United States in L-l visa status on or before
November 30, 2009, (ii) your
L-1A visa or visa status expires and has not been extended, or (iii) your L-l A visa or visa status
otherwise terminates. In such event, the Company shall have no further obligation hereunder except
with respect to payment to you of any and all salary, benefits, and expense reimbursements
applicable to the period of your employment, under this Agreement. Such payments shall be made in
accordance with then-prevailing Company policy and practice.

(b) This Agreement and your employment shall terminate automatically upon your death. In such
event, the Company shall have no further obligation hereunder except with respect to payment to
your estate of any and all salary, benefits, and expense reimbursements applicable to the period of
your employment, under this Agreement. Such payments shall be made in accordance with
then-prevailing Company policy and practice.

(c) Upon your “Disability”, the payment of benefits under the Company’s short-term and long-term
disability insurance programs, if any, shall satisfy the Company’s obligations under Paragraph 3(a)
above. For purposes of this Agreement, you shall be deemed to be under a Disability if you shall
be unable, by virtue of illness or physical or mental incapacity

 

 

or disability (from any cause or causes whatsoever), to perform your essential job functions
hereunder, whether with or without reasonable accommodation, in substantially the manner and to the
extent required hereunder prior to the commencement of such disability, for a period exceeding
ninety (90) days. In light of the unique nature of your services, and the undue burden on the
Company that would result from your long term absence, the Company shall have the right to
terminate this Agreement and your employment in the event you shall remain under a Disability for a
period exceeding ninety (90) days, such action to be taken only upon at least ten (10) days prior
written notice to you. In such event, the Company shall have no further obligation hereunder
except with respect to payment to you of any and all benefits, and expense reimbursements
applicable to the period of your employment hereunder until the date on which the Term would have
expired but for the termination of your employment by reason of Disability. Such payments shall
be made in accordance with then-prevailing Company policy and practice.

(d) The Company shall have the right to terminate this Agreement and your employment for Cause at
any time and without prior notice. For purposes of this Agreement, Cause shall include: (i)
material default or other material breach by you of your obligations hereunder; (ii) willful
failure by you to perform material duties hereunder that are reasonably assigned to you by the
Company; (iii) gross negligence or willful misconduct in the performance of your duties hereunder;
or (iv) dishonesty, insubordination, or other willful act by you detrimental to the Company or its
good will or damaging to its relationships with its customers, investors, suppliers, or employees,
including, without limitation, (A) use of alcohol or illegal drugs such as to interfere with the
performance of your obligations hereunder, (B) conviction of or plea of guilty or no contest to a
felony or any crime involving moral turpitude, dishonesty, or theft, and (C) material failure by
you to comply with applicable laws or governmental regulations with respect to Company operations
or the performance of your duties. In the event that the Company seeks to terminate your
employment pursuant to Paragraph 4(d) (i), (ii), or (iii), the Company shall give you reasonably
detailed written notice stating the reasons for the proposed termination for Cause and the act(s)
or failure(s) to act which give rise to the Cause in reasonable detail, and you shall have thirty
(30) days from the giving of such notice to cure the default, defect, or other for Cause for
termination, to the Company’s reasonable satisfaction. In the event of a termination for Cause, the
Company shall have no further obligation hereunder except with respect to payment to you of any and
all salary, benefits, and expense reimbursements applicable to the period of your employment
hereunder, in accordance with then-prevailing Company policy and practice.

(e) In
the event of termination of this Agreement for any reason specified in this Paragraph 4, the
payments (if any) required to be provided to you pursuant to this Paragraph 4 shall be in full and
complete satisfaction of any and all obligations owing to you pursuant to this Agreement.

5. Confidential Information. Both during and after the Term and Term Extension, you shall
not, directly or indirectly, divulge, publish, communicate, or make available to any person,
corporation, governmental agency, or other entity (except in performing your duties hereunder), or
use for your own or any other person or entity’s purposes or benefit, any trade secret,
confidential business information, or any other information, know how, designs,

 

 

specifications, techniques, methods, concepts, inventions, developments, discoveries, improvements,
knowledge, or data of the Company or any affiliate which is not generally known to the public
(separately and collectively, “Information”) (including, but not limited to, Information relating
to research, product development or design, manufacturing or manufacturing processes, maintenance
or repair processes, purchasing, product or material costs, sales or sales strategies or prospects,
pricing or pricing strategies, advertising or promotional programs, product information, or mailing
or customer lists, finances (including prices, costs, and revenues), and other business
arrangements, plans, procedures and strategies), and shall use your best efforts to prevent the
publication or disclosure by any other person or entity of any such Information. The Company
shall not be under any obligation to identify specifically by any notice or other action any
Information to which this Paragraph 5 shall apply. While you are employed by the Company, all
documents and Information compiled, received, held, or used by you in connection with the business
of the Company shall remain the Company’s property, and shall be delivered by you to the Company
upon the termination of your employment, for whatever reason, or at any earlier time requested by
the Company. Information does not include information in the public domain through no fault of
yours. Notwithstanding this paragraph you may disclose Information as required by law or pursuant
to any court order.

6. Additional Obligations. Both during and after the Term and Term Extension, you shall, upon
reasonable notice, furnish the Company with such information as may be in your possession, and
cooperate with the Company, as may reasonably be requested by the Company (and, if you are no
longer employed by the Company, with due consideration for your obligations with respect to any new
employment or business activity) in connection with any litigation in which the Company or any
affiliate is or may become a party. The Company shall reimburse you for all reasonable expenses,
including but not limited to reasonable counsel fees, incurred by you
in ful filling your
obligations under this Paragraph 6.

7. Notice. Any notice or other communication required or permitted under this Agreement by either
party hereto to the other shall be in writing, and shall be deemed effective upon (a) personal
delivery, if delivered by hand, (b) three days after the date of deposit in the mails, postage
prepaid, if mailed by certified or registered United States mail, or (c) the next business day, if
sent by a prepaid overnight courier service, and in each case addressed as follows:

If to you:

Mr. Duncan Hon 
456
Alexandra Road

#12-01 NOL Building

Singapore 119962

If to the Company:

Emerson Radio Corp.

9 Entin Road

Parsippany, New Jersey 07054

 

 

Attn: Mr. Greenfield Pitts

With a copy to:

John D. Schupper, Esq.

Lowenstein Sandler PC

65 Livingston Avenue

Roseland, New Jersey 07068

Either party may change the address or addresses to which notices are to be sent by giving notice
of such change of address in the manner provided by this Paragraph 7.

8. Entire Agreement. This Agreement represents the entire agreement between the Company and you
with respect to your employment with the Company, and supersedes and is in full substitution for
any and all prior agreements or understandings, whether oral or written, relating to your
employment.

9. Amendment. This Agreement may not be canceled, changed, modified, or amended orally, and no
cancellation, change, modification or amendment hereof shall be effective or binding unless in a
written instrument signed by the Company and you. A provision of this Agreement may be waived
only by a written instrument signed by the party against whom or which enforcement of such waiver
is sought.

10. No Waiver. The failure at any time either of the Company or you to require the performance by
the other of any provision of this Agreement shall in no way affect the full right of such party to
require such performance at any time thereafter, nor shall the waiver by either the Company or you
of any breach of any provision of this Agreement be taken or held to constitute a waiver of any
succeeding breach of such or any other provision of this Agreement.

11. Assignment. This Agreement is binding on and for the benefit of the Company and you and the
Company’s and your respective successors, heirs, administrators, and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may be sold, transferred, assigned, or
pledged by the Company (except to an affiliate) or by you without the prior written consent of the
other. However, nothing in this Agreement shall preclude the Company from consolidating or
merging into or with, or transferring all or substantially all of its assets to, another entity
which assumes this Agreement and all obligations and undertakings of the Company hereunder.

12. Interpretation and Severability. In the event any provision of this Agreement, or any portion
thereof, is determined by any court of competent jurisdiction to be unenforceable as written, such
provision or portion thereof shall be interpreted so as to be enforceable. In the event any
provision of this Agreement, or any portion thereof, is determined by any court of competent
jurisdiction to be void, the remaining provisions of this Agreement

 

 

shall nevertheless be binding upon the Company and you with the same effect as though the void
provision or portion thereof had been severed and deleted.

13. Governing Law. This Agreement shall be governed by, construed and applied, and all
disputes relating to or arising from this Agreement shall be resolved, in accordance with the
substantive laws of the State of New Jersey, without application of its conflict or choice of
law provisions.

14. Execution. This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.

15. Survival. Your obligations as set forth in Paragraphs 5 and 6 above, represent independent
covenants by which you are and shall remain bound notwithstanding any breach or claim of breach by
the Company, and shall survive the termination or expiration of this Agreement for two years.

16. Headings. The headings contained in this Agreement are for reference purposes only, and
shall not affect the meaning or interpretation of this Agreement.

	 	 	 	 	 
	Very truly yours,

EMERSON RADIO CORP.

 	 	 
	By:  	/s/
Adrian Ma
 	 	 
	 	Adrian Ma
 	 	 
	 

Offer Of Employment Accepted:

	 	 	 	 	 	 
	I accept employment with
 Emerson
Radio Corp. on the terms and
 conditions
stated above.

 	 	 	 
	/s/ Duncan Hon
 	 	 	 
	Duncan Hon  	 	Date

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