UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of the earliest event reported): October 18, 2006

 

Alesco Financial Inc.

(formerly Sunset Financial Resources, Inc.)

(Exact name of Registrant as specified in its charter)

 

 

Maryland   001-32026   16-1685692

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

Cira Centre

2929 Arch Street, 17 th Floor

Philadelphia, PA 19104

(Address of principal executive offices) (Zip Code)

(215) 701-9555

(Registrant’s telephone number, including area code)

(Former name or address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Election of Directors

On October 18, 2006, at a meeting (the “ Board Meeting ”) of the Company’s board of directors (the “ Board ”), the Board elected and appointed Marc Chayette as a new director of the Company to fill the remaining vacancy on the board of directors. On October 18, 2006, the Company issued a press release (the “ Press Release ”) announcing, among other things, the appointment of Mr. Chayette to the Board. The Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Marc Chayette, age 56, is the President of Adelaide Productions, a film and television producer with twenty-five years of experience in production and distribution of French feature films. Mr. Chayette created Adelaide Productions in 1988 and has produced 8 feature films. He started producing for television at the request of TF1 and produced an award winning dramatic comedy about an illiterate woman’s determined quest to learn to read. Mr. Chayette has also been extremely active in co-producing documentary and feature films in African countries, helping African production companies to produce and distribute their cultural heritage. Before his career in production, Mr. Chayette created a chain of design furniture stores representing first Ligne Roset. The company still exists and is under contract with Roche Bobois.

The Company’s Board currently consists of the following nine directors: Rodney E. Bennett, Marc Chayette, Daniel G. Cohen, Thomas P. Costello, G. Steven Dawson, Jack Haraburda, James J. McEntee, III, Lance Ullom, and Charles W. Wolcott.

Appointment of Officers

At the Board Meeting, the Board appointed Daniel G. Cohen, the Company’s Chairman of the Board, as an executive officer. Additional information regarding Mr. Cohen was provided in the Company’s definitive merger proxy statement filed with the SEC on September 8, 2006 (the “ Proxy Statement ”), which is incorporated herein by reference.

The following persons are the Company’s current executive officers, holding the offices set out opposite their names:

 

Daniel G. Cohen

   Chairman

James J. McEntee, III

   President & Chief Executive Officer

John J. Longino

   Chief Financial Officer & Treasurer

Shami J. Patel

   Chief Operating Officer & Chief Investment Officer

Christian Carr

   Chief Accounting Officer

Item 5.05 Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

Indemnification Agreements

At the Board Meeting, the Company entered into standard indemnification agreements with each of its directors and officers listed under Item 5.02 above (the “ Indemnification Agreements ”). The Indemnification Agreements provide, among other things, that the Company will indemnify its directors and officers and grant them the right to advancement of expenses by the Company for their actions in their capacities as directors and/or officers of the Company, in each case to the fullest extent permitted by Maryland law. The Indemnification Agreements include standard exceptions for indemnification including, for example, where a director or officer’s act or omission was committed in bad faith or was the result of active and deliberate dishonesty. The form of the Indemnification Agreements is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Restatement of Code of Ethics

On October 18, 2006, the Company’s Code of Ethics for Senior Financial Officers and the Company’s Code of Business Conduct and Ethics were restated to consist of the Code of Business Conduct and Ethics (the “ Code ”). The Company restated the Code as part of its continuing evaluation of its corporate governance matters. The Code is attached hereto as Exhibit 14.1 and is posted on the Company’s website at www.alescofinancialtrust.com. The Code is incorporated herein by reference.

Item 8.01 Other Events.

Declaration of Dividend

At the Board Meeting, the Board declared a quarterly dividend of $0.28 per share of common stock. The dividend is payable on December 15, 2006 to the Company’s stockholders of record as of November 1, 2006. The Press Release announced the declaration of the dividend.

Appointment to Board Committees

At the Board Meeting, the Board appointed the following persons to the Board’s committees:

Audit Committee: Messrs. Costello (chairman), Ullom and Wolcott

Compensation Committee: Messrs. Bennett, Haraburda (chairman) and Ullom

Nominating & Corporate Governance Committee: Messrs. Chayette, Dawson (chair) and Haraburda

Item 9.01 Financial Statements and Exhibits.

 

10.1 Form of Indemnification Agreement
14.1 Code of Business Conduct and Ethics
99.1 Press Release dated October 18, 2006

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 20, 2006

 

ALESCO FINANCIAL INC.

By:  

/s/ John J. Longino

  John J. Longino
  Chief Financial Officer

Exhibit 10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT is made and entered into this 18 th day of October, 2006 (“ Agreement ”), by and between Alesco Financial Inc., a Maryland corporation (the “ Company ”), and ____________________ (“ Indemnitee ”).

WHEREAS, at the request of the Company, Indemnitee currently serves as an officer or director (or both) of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his/her service; and

WHEREAS, as an inducement to Indemnitee to continue to serve as such member, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Definitions . For purposes of this Agreement:

(a) “ Change of Control ” means a change of control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “ Act ”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change of Control shall be deemed to have occurred if after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power in the election of directors of the Company’s then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors.

(b) “ Corporate Status ” means the status of a person who is or was a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which such person is or was serving at the request of the Company.

(c) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d) “ Effective Date ” means the date set forth in the first paragraph of this Agreement.

(e) “ Expenses ” shall include all reasonable and out-of-pocket attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(f) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of Maryland corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld.

(g) “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee.

Section 2. Services by Indemnitee . Indemnitee will serve as an officer or director (or both) of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

Section 3. Indemnification—General . The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (“ MGCL ”).

Section 4. Proceedings Other Than Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he/she is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him/her or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or

 

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(b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.

Section 5. Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he/she is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him/her or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.

Section 6. Court-Ordered Indemnification . Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:

(a) if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or

(b) if it determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and reasonably incurred by him/her or on his behalf in connection with a Proceeding.

Section 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he/she shall be indemnified for all Expenses actually and reasonably incurred by him/her or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him/her or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 8. Advance of Expenses . The Company shall advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Company’s articles of incorporation or by-laws, each as amended, any agreement or a resolution of the shareholders entitled to vote generally in the election of directors or of the Board of Directors) to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether

 

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prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 9. Procedure for Determination of Entitlement to Indemnification .

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change of Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Directors, by the shareholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

Section 10. Presumptions and Effect of Certain Proceedings .

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in

 

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accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

(b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

Section 11. Remedies of Indemnitee .

(a) If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 45 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

(b) In any judicial proceeding or arbitration commenced pursuant to this Section 11, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.

(d) In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him/her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 12. Defense of the Underlying Proceeding .

(a) Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document

 

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relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b) Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

(c) Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he/she may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

Section 13. Non-Exclusivity; Survival of Rights; Subrogation; Insurance .

(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s articles of incorporation or by-laws, each as amended, any agreement or a resolution of the shareholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

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(c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 14. Insurance . The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence.

Section 15. Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to testify, he/she shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him/her or on his behalf in connection therewith.

Section 16. Duration of Agreement; Binding Effect .

(a) This Agreement shall continue until and terminate ten years after the date that Indemnitee’s Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the

 

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fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 18. Exception to Right of Indemnification or Advance of Expenses . Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement, or (b) the Company’s articles of incorporation or by-laws, each as amended, a resolution of the shareholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

Section 19. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 20. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 21. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 22. Notices . All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

 

  (a) If to Indemnitee, to: The address set forth on the signature page hereto.

 

  (b) If to the Company to:

Alesco Financial Inc.

Cira Centre

2929 Arch Street, 17th Floor

Philadelphia, PA 19104

Attn: John J. Longino

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 23. Governing Law . The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

 

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Section 24. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

 

ALESCO FINANCIAL INC.
By:     
 

Name: John J. Longino

Title: Chief Financial Officer

INDEMNITEE
       

Name:

Address:

 

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EXHIBIT A

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

The Board of Directors of Alesco Financial Inc.

Re: Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

This undertaking is being provided pursuant to that certain Indemnification Agreement dated the ___ day of ______________, 200__, by and between Alesco Financial Inc. (the “ Company ”) and the undersigned Indemnitee (the “ Indemnification Agreement ”), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the “ Proceeding ”).

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as [a director] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2)   did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related expenses incurred by me in connection with the Proceeding (the “ Advanced Expenses ”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___ day of ____________________, 200__.

 

WITNESS:      
            (SEAL)
     

Exhibit 14.1

ALESCO FINANCIAL INC.

CODE OF BUSINESS CONDUCT AND ETHICS

Purpose and Scope

It is the policy of Alesco Financial Inc. and its subsidiaries (collectively, the “Company”) that all of its officers and directors and future employees, if any, maintain the highest level of integrity in their dealings on behalf of the Company, in their dealings with the Company, and in all matters affecting the Company’s relationships with its banks, security holders and others with whom the Company does business. The Company believes the high level of integrity with which it conducts its affairs will be a major factor in the Company’s success. As of the date of adoption of this Code of Business Conduct and Ethics (the “Code”), the Company has no employees. References herein to “employees” refer to future employees that may be hired by the Company.

This Code sets forth basic principles of conduct and ethics to guide all employees, officers and directors. No code of business conduct and ethics can, however, effectively substitute for the thoughtful behavior of an ethical employee, officer or director. This Code is presented to serve as a guide for general decision making in a variety of circumstances that might be encountered in conducting the Company’s business. Its purpose is to:

 

  •   Promote honest and ethical conduct, including fair dealing and the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

 

  •   Promote avoidance of conflicts of interest, including disclosure to an appropriate person or committee of any material transaction or relationship that reasonably could be expected to give rise to such a conflict;

 

  •   Promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;

 

  •   Promote compliance with applicable governmental laws, rules and regulations;

 

  •   Promote the prompt internal reporting to an appropriate person or committee of violations of this Code;

 

  •   Promote accountability for adherence to this Code;

 

  •   Provide guidance to employees, officers and directors to help them recognize and deal with ethical issues;

 

  •   Provide mechanisms to report unethical conduct; and

 

  •   Help foster the Company’s long-standing culture of honesty and accountability.

The Company will expect all its employees, officers and directors to comply at all times with the principles in this Code. Violations of this Code by an employee, officer or director are grounds for disciplinary action up to and including immediate termination of employment and possible legal prosecution.

Fair Dealing

 

  •   Each employee, officer and director should endeavor at all times to deal fairly with the Company’s customers, lenders, service providers, competitors and other third parties. While we expect our employees to try hard to advance the interests of the Company, we expect them to do so in a manner that is consistent with the highest standards of integrity and ethical dealing.

 

  •   No employee, officer or director is to take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice.

Compliance with Laws, Rules and Regulations

 

  •   Employees, officers and directors are expected to comply at all times with all applicable governmental, state and local laws, rules and regulations, including any rules promulgated by any securities exchange or securities quotation system on which the Company’s shares are listed or quoted.

 

  •   Employees, officers and directors are required to comply with all policies applicable to them that are adopted by the Company from time to time.

 

  •   Employees, officers and directors must cooperate fully with those individuals responsible for preparing reports, including reports to be filed with the Securities and Exchange Commission, and all other materials that are made available to the investing public to make sure those people are aware in a timely manner of all information that might have to be disclosed in those reports or other materials or that might affect the way in which information is disclosed in them.

 

  •   Any violation of applicable laws, rules and regulations by any employee, officer or director should be reported to the Company. Employees, officers and directors should seek guidance whenever they are in doubt as to the applicability of any law, rule or regulation or regarding any contemplated course of action.

Conflicts of Interest

 

  •   A “conflict of interest” occurs when an individual’s private interest interferes in any way, or even appears to interfere, with the interests of the Company as a whole. Conflict situations include:

 

  (1) Action or Inaction : When an employee, officer or director, or a member of his or her family, will benefit personally from something the employee, officer or director does or fails to do that is not in the best interests of the Company.

 

  (2) Objectivity : When an employee, officer or director takes actions or has interests that may make it difficult to perform his or her work objectively and effectively.

 

  (3)

Personal Benefits : When an employee, officer or director, or a member of his or her family, receives personal benefits from somebody other than the Company as a result of

 

2

 

his or her position in the Company which are not generally available to all of the Company’s employees, or at least to all employees in the same area of work or the same geographic area. Loans to, or guarantees of obligations of, employees, officers or directors by persons with whom the Company does business are of special concern.

 

  (4) Competing Activities : When an employee, officer or director engages in any activity that is competitive with the business activities and operations conducted from time to time by the Company.

 

  •   Specific Situations : The following rules apply to specific situations that involve, or may involve, conflicts of interest, unless approved in advance by a majority of the directors not having an interest in the transaction:

 

  (1) Transactions with the Company : No (a) employee, officer or director, (b) member of the immediate family (defined below in paragraph 5) of any employee, officer or director, (c) entity in which an employee, officer or director has an economic interest of more than 5% or a controlling interest or (d) affiliate of any of the foregoing may (i) enter into any transaction with the Company or any of its subsidiaries involving the acquisition or sale of any of the Company’s or any of its subsidiaries’ assets or other property; (ii) enter into any transaction involving a loan to or from the Company or any of its subsidiaries; or (iii) enter into any other transaction with the Company or any of its subsidiaries.

 

  (2) Confidential Information and Trade Secrets : During the period of an employee’s, officer’s or director’s employment or affiliation with the Company and at all times subsequent thereto, the current or former employee, officer or director will refrain from publishing or disclosing, or authorizing anyone else to publish or disclose, any confidential information or trade secrets relating to the business of the Company or any of its subsidiaries or affiliates obtained by the employee, officer or director while employed by or associated with the Company. All records, papers and documents kept or made by an employee, officer or director relating to the business of the Company or any of its subsidiaries or affiliates shall be and remain the property of the Company and, at the request of the Company, shall be surrendered to the Company upon termination of the employee’s, officer’s or director’s employment or affiliation.

 

  (3) Other Business Activities : No full-time employee will engage in any part-time employment, business consulting arrangements or other business activities which could interfere with the employee’s duties and obligations to the Company without written approval from the chief financial officer or chief legal officer of the Company.

 

  (4) Competing Activities : Subject to the terms of the Company’s Investment Guidelines and Conflicts of Interests Policies, if applicable, no employee, officer or director will engage in any activity that is competitive with the business activities and operations conducted from time to time by the Company.

 

  (5) Transactions with Family Members : Where a member of the immediate family (parents, mothers or fathers-in-law, spouses, children, sons or daughters-in-law, brothers or sisters-in-law, siblings or anyone living in the same household) of any employee, officer or director is involved in a transaction with the Company, all payments, commissions, fees, or other remuneration to such family member must be disclosed to and approved in advance by the chief financial officer or chief legal officer of the Company.

 

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  (6) Exchange of Benefits : No employee, officer or director may solicit or accept any money, gift, favor, service, or other tangible or intangible benefit or service from any employee of the Company or any subcontractor, vendor or other person with which the Company does business, even if it is otherwise permitted by this Code, in exchange for anything involving the performance of the person’s responsibilities on behalf of the Company, or under circumstances that might impair the employee’s, officer’s or director’s independent judgment as to what is in the best interests of the Company.

 

  •   Avoidance : Employees, officers and directors must do everything they reasonably can to avoid conflicts of interest or actions or relationships that give the appearance of conflicts of interest.

 

  •   Reporting : If a situation that creates a conflict of interest or the appearance of a conflict of interest arises, the person involved must promptly report it (1) if the person involved is a director or an executive officer of the Company, to the Nominating and Corporate Governance Committee of the Company’s Board of Directors (the “Nominating and Corporate Governance Committee”) and (2) if the person involved is someone other than a director or an executive officer of the Company, to the chief financial officer or chief legal officer of the Company. If a director, officer or employee becomes aware of a situation that he or she believes involves a conflict of interest involving another director, officer or employee, the person who becomes aware of the situation must promptly report it to (a) the chief financial officer of the Company, (b) the chief legal officer of the Company, or (c) the head of the division within which the particular employee or officer works. Any report of a situation that is made to the chief financial officer or chief legal officer of the Company or to the head of a division will be passed on to the Nominating and Corporate Governance Committee or to the chief financial officer or chief legal officer of the Company, as applicable. When there is any question of whether a conflict of interest is present and should be disclosed, all employees, officers and directors should resolve any doubt in favor of full disclosure.

 

  •   Exceptions : The Company recognizes that the foregoing procedures may not give due respect to the specifics of a particular situation. In the event a situation arises in which an employee, officer or director believes the foregoing procedures should not be applied, the employee, officer or director should seek the advice, in writing, of the chief financial officer or chief legal officer of the Company.

 

  •   Remedial Actions : In any instance in which an employee, officer or director becomes involved in a situation that involves a conflict or interest, or an appearance of one, he or she must work with the Nominating and Corporate Governance Committee or the chief financial officer or chief legal officer of the Company, as applicable, to devise an arrangement by which (1) that committee (or its designee) will monitor the situation which creates, or gives the appearance of creating, a conflict of interest, (2) the employee, officer or director who has a conflict of interest will, to the fullest extent possible, be kept out of any decisions that might be affected by the conflict of interest, (3) it is ensured that the employee, officer or director who has a conflict of interest will not profit personally from the situation that causes the conflict of interest and (4) every reasonable effort will be made to eliminate the conflict of interest as promptly as possible.

Payments and Gifts

Employees, officers and directors who deal with the Company’s customers, lenders, service providers or other third parties are placed in a special position of trust and must exercise great care to preserve their independence. No gift or entertainment should ever be offered, given, provided or accepted by any employee, officer or director in connection with the Company’s business unless it (1) is not a cash

 

4

gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe, payoff or kickback and (5) does not violate any laws or regulations.

Records Retention

Employees, officers and directors shall honestly and accurately report all business transactions. The Company expects each employee, officer and director to maintain the Company’s books, accounts and financial statements in reasonable detail, and to appropriately reflect the Company’s transactions in conformity with applicable legal requirements and the Company’s system of internal controls.

Records of Conflicts of Interest

The chief legal officer of the Company shall keep written records of all findings and matters brought before him, the chief financial officer or the Nominating and Corporate Governance Committee regarding conflicts of interest.

Corporate Opportunities

 

  •   No employee, officer or director will:

 

  (1) take for himself or herself personally any opportunity of which he or she becomes aware, or to which he or she obtains access, through the use of corporate property, information or position;

 

  (2) make it possible for somebody other than the Company to take advantage of an opportunity in any of the Company’s areas of business of which the employee, officer or director becomes aware in the course of his or her activities on behalf of the Company, unless the Company has expressly decided not to attempt to take advantage of the opportunity;

 

  (3) otherwise use corporate property, information, or position for personal gain; or

 

  (4) compete with the Company generally or with regard to specific transactions or opportunities.

 

  •   Employees, officers and directors owe a duty to the Company to advance the Company’s legitimate interests whenever the opportunity to do so arises.

Confidentiality

 

  •   Employees, officers and directors must maintain the confidentiality of all information entrusted to them by the Company or its customers that is treated by the Company or its customers as confidential, except when disclosure is authorized by the Company or is legally mandated.

 

  •   Confidential information includes all information that may be of use to the Company’s competitors, or that could be harmful to the Company or its customers, if disclosed.

 

  •   Employees, officers and directors must comply with all confidentiality policies adopted by the Company from time to time and with confidentiality provisions in agreements to which they or the Company are parties.

 

5

Protection and Proper Use of Company Assets

 

  •   Employees, officers and directors must take all reasonable actions in their power to protect the Company’s assets and ensure their efficient use by the Company.

 

  •   Employees, officers and directors will use the Company’s assets only for the Company’s legitimate business purposes.

Health and Safety

The Company strives to provide employees, officers and directors with a safe and healthy work environment. The Company complies with all applicable laws and regulations relating to safety and health in the workplace. Each employee, officer and director has a responsibility for maintaining a safe and healthy workplace for all other employees, officers and directors by consulting and complying with all Company rules regarding workplace conduct and safety, and reporting accidents, injuries and unsafe equipment, practices and conditions to the chief financial officer or chief legal officer of the Company.

Change in or Waiver of the Code

 

  •   Any waiver of any provision of this Code must be approved:

 

  — With regard to any executive officer or director, by the Board of Directors (but without the involvement of any director who will be personally affected by the waiver) or by a committee consisting entirely of directors, none of whom will be personally affected by the waiver. Any waivers of this Code for executive officers or directors must be promptly disclosed to the Company’s shareholders as required by applicable law.

 

  — With regard to any other officer or employee, by the chief financial officer or chief legal officer of the Company, but only upon such employee making full disclosure in advance of the transaction in question.

 

  •   No waiver of any provision of this Code with regard to an officer or director will be effective until that waiver has been reported to the person responsible for the preparation and filing of the Company’s reports on Form 8-K (or any successor to that form) in sufficient detail to enable that person to prepare a report on Form 8-K containing any required disclosure with regard to the waiver.

 

  •   The Company will disclose any change in this Code or any waiver of this Code in a filing with the Securities and Exchange Commission, or in another manner that complies with applicable Securities and Exchange Commission rules, and the Company will make any other disclosures of changes in, or waivers of, this Code, that are required by law or by the rules of any securities exchange or securities quotation system on which the Company’s securities are listed or quoted.

 

  •   This Code may be amended or modified at any time by the Board of Directors.

Accounting and Financial Reporting Concerns

The Company seeks to comply with all applicable financial reporting and accounting regulations applicable to the Company. Employees, officers or directors who have concerns or complaints regarding questionable accounting or auditing matters or procedures involving the Company are encouraged to submit those concerns to the Audit Committee of the Company’s Board of Directors (the “Audit

 

6

Committee”) which will, subject to its duties arising under applicable law, regulations and legal proceedings, treat such submissions confidentially. These submissions may be directed to the attention of the chairman of the Audit Committee, or any director who is a member of the Audit Committee, at the principal executive office of the Company.

Compliance with this Code and Reporting of Any Illegal or Unethical Behavior

 

  •   Employees, officers and directors must report promptly any violations of this Code of which they become aware (including any violations of the requirement of compliance with law) to the person to whom conflicts of interest involving the person who violated this Code would be reported as described under “Conflicts of Interest — Reporting.” In addition, any violation of this Code shall be reported to the Nominating and Corporate Governance Committee. Failure to report a violation can lead to disciplinary action against the person who failed to report the violation which may be as severe as the disciplinary action against the person who committed the violation.

 

  •   The identity of the employee who reports a possible violation of this Code by another employee will be kept confidential, except to the extent the employee who reports the possible violation consents to be identified or the identification of that employee is required by law.

 

  •   Possible violations of this Code may be reported orally or in writing and may be reported anonymously.

 

  •   The Company will not allow retaliation for reports of possible violations of this Code made in good faith.

Terms Used in this Code

 

  •   Any reference in this Code to the Company or to an employee of the Company is to Alesco Financial Inc. and all of its subsidiaries or to an employee employed by Alesco Financial Inc. or any of its subsidiaries.

 

  •   Any reference in this Code to an officer or director of the Company is to an officer or director of Alesco Financial Inc. It does not refer to a person who is an officer or director of a subsidiary unless the person is regularly involved in setting policy for Alesco Financial Inc. and its subsidiaries and, therefore, in fact functions as an officer or director of Alesco Financial Inc. For the purposes of this Code, a person who is employed by the Company and serves as an officer or director of a subsidiary will be treated as an employee, but not an officer or director, of the Company.

No Rights Created

This Code is a statement of the fundamental principles and key policies and procedures that govern the conduct of the Company’s business. It is not intended to and does not constitute an employment contract or an assurance of continued employment or create any rights in any employee, officer, director, client, supplier, competitor, shareholder or any other person or entity.

Adopted: October 18, 2006.

 

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Exhibit 99.1

LOGO

 

Company Contact:   
John Longino    Investors:
Chief Financial Officer    KCSA Worldwide
215-701-9687    Jeffrey Goldberger
jlongino@cohenandcompany.com    212.896.1249
   jgoldberger@kcsa.com

ALESCO FINANCIAL INC. ELECTS MARC CHAYETTE TO BOARD OF DIRECTORS

DECLARES $0.28 PER SHARE DIVIDEND

Philadelphia, Pennsylvania, October 18, 2006 – Alesco Financial Inc. (NYSE: AFN) announced today that its board of directors has elected Marc Chayette as a director of Alesco.

Mr. Chayette is President of Adelaide Productions. He is a film and television producer with 25 years of experience in the production and distribution of French feature films as well as prestigious movies of the week and television series for TF1, the highest rated TV channel in France.

Alesco also announced that its board of directors has declared a $0.28 per share dividend, payable on December 15, 2006 to the stockholders of record on November 1, 2006.

About Alesco Financial Inc.

Alesco Financial Inc. is a specialty finance REIT headquartered in Philadelphia, Pennsylvania and trades on the New York Stock Exchange under the symbol “AFN”. Alesco is externally managed by Cohen & Company Management, LLC.

Forward-Looking Statements

Information set forth in this release contains forward-looking statements, which involve a number of risks and uncertainties. Alesco cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained or implied in the forward-looking information.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the failure of Alesco to successfully execute its business plans or gain access to additional financing, the availability of additional loan portfolios for future acquisition, continued qualification as a REIT and the cost of capital. Additional factors that may affect future results are contained in Alesco’s filings with the SEC, which are available at the SEC’s web site www.sec.gov and Alesco’s web site www.alescofinancialtrust.com. Alesco disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.

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2929 Arch Street    17 th Floor    Philadelphia, Pennsylvania    215-701-9687