Item 1.01 Entry Into a Material Definitive Agreement.
Underwriting Agreement
On August 10,
2017, Resource Capital Corp. (the “Company”) and Resource Capital Manager, Inc. entered into an underwriting agreement (the “Underwriting Agreement”) with Credit Suisse Securities (USA) LLC, as representative of the underwriters
named therein (collectively, the “Underwriters”). Pursuant to the Underwriting Agreement, the Company agreed to sell to the Underwriters $110,000,000 aggregate principal amount of the Company’s 4.50% convertible senior notes due 2022
(the “Notes”). The Company also granted the Underwriters a
30-day
option to purchase up to an additional $11,589,000 aggregate principal amount of the Notes in connection with the Offering (as
defined below) solely to cover over-allotments. The Underwriting Agreement contains customary representations and warranties, indemnification provisions and closing conditions.
The foregoing description of the Underwriting Agreement is qualified in its entirety by reference to the agreement, a copy of which is filed
as Exhibit 1.1 to this report and incorporated herein by this reference.
Completion of Public Offering of Convertible Senior Notes
On August 11, 2017, the Underwriters exercised their over-allotment option in full, and on August 16, 2017, the Company completed the
registered underwritten public offering of $121,589,000 aggregate principal amount of the Notes pursuant to the Underwriting Agreement (the “Offering”).
The Notes (and the shares of the Company’s common stock (“Common Stock”) issuable upon conversion of the Notes) were registered
under the Securities Act of 1933, as amended, pursuant to the Registration Statement on Form
S-3
(Registration Statement
No. 333-217733)
(the “Registration
Statement”), which was filed on May 5, 2017, as amended June 15, 2017, and deemed effective on June 15, 2017. The Offering was made pursuant to the prospectus supplement dated August 10, 2017 (the “Prospectus
Supplement”), and the accompanying prospectus dated June 15, 2017, constituting a part of the Registration Statement.
The
aggregate net proceeds to the Company from the Offering were approximately $118,249,275, after deducting underwriting discounts and commissions and estimated expenses payable by the Company. The Company intends to use the net proceeds from the
Offering to repurchase a portion of its outstanding 6.00% convertible senior notes due 2018 (“6% Notes due 2018”) and its 8.00% convertible senior notes due 2020 (“8% Notes due 2020”). Any remaining net proceeds of the Offering
will be used for general corporate purposes.
Supplemental Indenture
In connection with the Offering, the Company entered into a third supplemental indenture (the “Supplemental Indenture”) between the
Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), to the base indenture dated as of October 21, 2013 (the “Base Indenture” and, together with the Supplemental Indenture, the
“Indenture”), with respect to the Notes, pursuant to which the Notes were issued. Interest on the Notes is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018. The Notes
will mature on August 15, 2022 unless earlier repurchased or converted. Upon conversion, holders of the Notes will receive shares of Common Stock, cash or a combination of cash and shares, at the Company’s election. If the Company
undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, holders of the Notes may require the Company to repurchase for cash all or part of such holders’ Notes. The fundamental change repurchase
price for the Notes will be 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the fundamental change repurchase date.
At any time prior to the close of business on the business day immediately preceding the maturity date, holders may convert any or all of
their Notes into shares of Common Stock at the applicable conversion rate.
Any conversion of Notes into shares of Common Stock will be
subject to certain ownership limitations (as more fully described in the Indenture). The initial conversion rate for each $1,000 aggregate principal amount of the Notes is 78.2473 shares of Common Stock, equivalent to an initial conversion price of
approximately $12.78 per share of Common Stock, which is an approximate 20% premium to the closing price of the Common Stock on
August 10, 2017. The conversion rate is subject to adjustment in certain circumstances. The Company may not redeem the Notes prior to the maturity date.
The foregoing description of the Indenture is qualified in its entirety by reference to the previously filed Base Indenture and the
Supplemental Indenture, a copy of which is filed as Exhibit 4.1 to this report and incorporated herein by this reference.
Completion of Private
Placement of Convertible Senior Notes
Concurrent with the closing of the Offering, the Company entered into an exchange agreement (the
“Exchange Agreement”) dated August 10, 2017 with Oaktree Real Estate Debt Holdings Ltd., a Cayman Islands exempted company (“Oaktree Real Estate”), INVESTIN PRO RED HOLDINGS, LLC, a Delaware limited liability company
(“Investin”) and Oaktree
TSE-16
Real Estate Debt, LLC, a Delaware limited liability company (“Oaktree
TSE-16”
and, together with Oaktree Real Estate
and Investin, “Oaktree”). Pursuant to the Exchange Agreement, the Company issued to Oaktree, each a “qualified institutional buyer” as defined in Rule 144A of the Securities Act, $22,161,000 aggregate principal amount of the
Notes in exchange for the same amount of the Company’s 6% Notes due 2018 and 8% Notes due 2020 collectively held by Oaktree. The Company has relied upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act in
connection with the issuance of the Notes as described above. The Company will receive no additional proceeds from the issuance of these Notes.
The foregoing description of the Exchange Agreement is qualified in its entirety by reference to the Exchange Agreement, a copy of which is
filed as Exhibit 10.1 to this report and incorporated herein by this reference.