Resource Capital Corp. (Form: 10-Q, Received: 11/09/2009 06:04:17)

JUNIOR SUBORDINATED NOTE

THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT’), AND SUCH SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAYBE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.

THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (1) TO THE COMPANY OR (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE. INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH SECURITIES. OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.

THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4915 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION

3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.

RESOURCE CAPITAL CORP.

Junior Subordinated Note due 2036

No. _____

$25,774,000.00

Resource Capital Corp., a corporation organized and existing under the laws of Maryland (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Wells Fargo Bank, N.A. not in its individual capacity, but solely as Property Trustee of Resource Capital Trust I, a Delaware statutory trust, or registered assigns, the principal sum of Twenty Five Million Seven Hundred Seventy Four Thousand Dollars ($25,774,000) on June 30, 2036. The Company further promises to pay interest on said principal sum from May 25, 2006, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on March 30, June 30, September 30, and December 30 of each year, commencing June 30, 2006, or if any such day is not a Business Day, on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after such Interest Payment Date until such next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on the Interest Payment Date, at the Modified Rate during the Modification Period, and at all other times at a variable rate, reset quarterly, equal to LIBOR plus 3.95% per annum, together with Additional Tax Sums, if any, as provided in Section 10.5 of the Indenture, until the principal hereof is paid or duly provided for or made available for payment; provided, further, that any overdue principal, premium, if any, or Additional Tax Sums and any overdue installment of interest shall bear Additional Interest at the Modified Rate during the Modification Period, and at all other times at a variable rate, reset quarterly, equal to LIBOR plus 3.95% per annum (to the extent that the payment of such interest shall be legally enforceable), compounded quarterly, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. For purposes of this Security, the “ Modified Rate ” shall mean a variable rate, reset quarterly, equal to LIBOR plus 5.95% per annum, and the “ Modification Period ” shall mean the period commencing on September 30, 2009, and continuing through and including September 30, 2011.

The amount of interest payable shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to . be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the Place of Payment upon surrender of such Securities to the Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written wire transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Security is the Property Trustee, the payment of the principal of (and premium, if any) and interest (including any overdue installment of interest and Additional Tax Sums, if any) on this Security will be made at such place and to such account as may be designated by the Property Trustee.

The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

[REVERSE OF SECURITY]

This Security is one of a duly authorized issue of securities of the Company (the "Securities") issued under the Junior Subordinated Indenture, dated as of May 25, 2006 (as modified, amended or supplemented from time to time, the "Indenture"), between the Company and Wells Fargo Bank, N.A., as Trustee (in such capacity, the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt, the Holders of the Securities and the holders of the Preferred Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered.

All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of May 25, 2006 (as modified, amended or supplemented from time to time, the "Trust Agreement"), relating to the Resource Capital Trust I (the "Trust") by and among the Company, as Depositor, the Trustees named therein and the Holders from time to time of the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be.

The Company may, on any Interest Payment Date, at its option, upon not less than thirty (30) days' nor more than sixty (60) days' written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee) on or after the No Call Period, and subject to the terms and conditions of Article XI of the Indenture, redeem this Security in whole at any time or in part from time to time at a Redemption Price equal to one hundred percent (100%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date.

If a Significant Event occurs after the No Call Period, the Company shall, upon receipt of a Significant Event Election, redeem the Securities in whole within thirty (30) days of receipt of such Election under the Indenture, at a Redemption Price equal to one hundred (100%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date.

In addition, upon the occurrence and during the continuation of a Special Event or an Event of Default during the No Call Period, the Company may, at its option, upon not less than thirty (30) days' nor more than sixty (60) days' written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee), redeem this Security, in whole but not in part, subject to the terms and conditions of Article XI of the Indenture at a Redemption Price equal to one hundred seven and one half percent (107.5%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date.

In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the Trustee from the Outstanding Securities not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security.

If the Company and the Trustee shall have received within thirty (30) days from the holders of the Preferred Securities' receipt of a Significant Event Notice under the Indenture, written notice from at least 25% of the holders of the Preferred Securities electing to cause either the Defeasance (if during the No Call Period) or redemption (if after the expiration of the No Call Period), as applicable, of the Securities, then the Company shall (i) if such Significant Event occurs during the No Call Period, cause Article XIII of the Indenture to be applied to the Outstanding Securities, or (ii) if such Significant Event occurs after the expiration of the No Call Period, redeem the Securities pursuant to Section 11.2 of the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, if any, and interest, including any Additional Interest (to the extent legally enforceable), on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is restricted to transfers to "Qualified Purchasers" (as such term is defined in the Investment Company Act of 1940, as amended,) and is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar and duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, and thereupon one or more new Securities, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities are issuable only in registered form without coupons in minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities of like tenor in a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Company and, by its acceptance of this Security or a beneficial interest herein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that, for United States federal, state and local tax purposes, it is intended that this Security constitute indebtedness.

This Security shall be construed and enforced in accordance with and governed by the laws of the State of New York, without reference to its conflict of laws provisions (other than Section 5-1401 of the General Obligations Law).

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on this ____ day of ________________, 2009.

	RESOURCE CAPITAL CORP.

	By:	/s/ David J. Bryant
		Name: David J. Bryant
		Title: Chief Financial Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within-mentioned Indenture.

	WELLS FARGO BANK, N.A. , not in its individual capacity, but solely as Trustee

Dated:	By:	/s/
		Name
		Title

JUNIOR SUBORDINATED NOTE

RESOURCE CAPITAL CORP.

Junior Subordinated Note due 2036

No. _____

$25,774,000.00

Resource Capital Corp., a corporation organized and existing under the laws of Maryland (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Wells Fargo Bank, N.A. not in its individual capacity, but solely as Property Trustee of RCC Trust II, a Delaware statutory trust, or registered assigns, the principal sum of Twenty Five Million Seven Hundred Seventy Four Thousand Dollars ($25,774,000) on October 30, 2036. The Company further promises to pay interest on said principal sum from September 29, 2006, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on January 30, April 30, July 30, and October 30 of each year, commencing October 30, 2006, or if any such day is not a Business Day, on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after such Interest Payment Date until such next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on the Interest Payment Date, at the Modified Rate during the Modification Period, and at all other times at a variable rate, reset quarterly, equal to LIBOR plus 3.95% per annum, together with Additional Tax Sums, if any, as provided in Section 10.5 of the Indenture, until the principal hereof is paid or duly provided for or made available for payment; provided, further, that any overdue principal, premium, if any, or Additional Tax Sums and any overdue installment of interest shall bear Additional Interest at the Modified Rate during the Modification Period, and at all other times at a variable rate, reset quarterly, equal to LIBOR plus 3.95% per annum (to the extent that the payment of such interest shall be legally enforceable), compounded quarterly, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. For purposes of this Security, the “ Modified Rate ” shall mean a variable rate, reset quarterly, equal to LIBOR plus 5.95% per annum, and the “ Modification Period ” shall mean the period commencing on September 30, 2009, and continuing through and including September 30, 2011.

[REVERSE OF SECURITY]

This Security is one of a duly authorized issue of securities of the Company (the "Securities") issued under the Junior Subordinated Indenture, dated as of September 29, 2006 (as modified, amended or supplemented from time to time, the "Indenture"), between the Company and Wells Fargo Bank, N.A., as Trustee (in such capacity, the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt, the Holders of the Securities and the holders of the Preferred Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered.

All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of September 29, 2006 (as modified, amended or supplemented from time to time, the "Trust Agreement"), relating to the RCC Trust II (the "Trust") by and among the Company, as Depositor, the Trustees named therein and the Holders from time to time of the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on this ____ day of ________________, 2009.

	RESOURCE CAPITAL CORP.

	By:	/s/ David J. Bryant
		Name: David J. Bryant
		Title: Chief Financial Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within-mentioned Indenture.

	WELLS FARGO BANK, N.A. , not in its individual capacity, but solely as Trustee

Dated:	By:	/s/
		Name
		Title

Maryland		20-2297134
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Large accelerated filer	o		Accelerated filer	x
Non-accelerated filer	o	(Do not check if a smaller reporting Company)	Smaller reporting company	o

		PAGE

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets – September 30, 2009 (unaudited) and December 31, 2008	3
	Consolidated Statements of Operations (unaudited) Three and Nine Months Ended September 30, 2009 and 2008	4
	Consolidated Statement of Changes in Stockholders’ Equity (unaudited) Nine Months Ended September 30, 2009	5
	Consolidated Statements of Cash Flows (unaudited) Nine Months Ended September 30, 2009 and 2008	6
	Notes to Consolidated Financial Statements – September 30, 2009 (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48

Item 4.	Controls and Procedures	48

PART II	OTHER INFORMATION

Item 6.	Exhibits	50

SIGNATURES		51

	September 30,			December 31,
	2009			2008
	(Unaudited)
ASSETS
Cash and cash equivalents	$	15,828		$	14,583
Restricted cash		66,997			60,394
Investment securities available-for-sale, pledged as collateral, at fair value		36,311			22,466
Investment securities available-for-sale, at fair value		4,288			6,794
Investment securities held-to-maturity, pledged as collateral		32,624			28,157
Loans, pledged as collateral and net of allowances of $59.4 million and $43.9 million		1,585,075			1,684,622
Loans held for sale		15,103			−
Direct financing leases and notes, pledged as collateral, net of allowance of $900,000 and $450,000 and net of unearned income		2,205			104,015
Investments in unconsolidated entities		1,548			1,548
Interest receivable		6,235			8,440
Other assets		2,901			5,012
Total assets	$	1,769,115		$	1,936,031
LIABILITIES
Borrowings	$	1,567,919		$	1,699,763
Distribution payable		7,509			9,942
Accrued interest expense		2,018			4,712
Derivatives, at fair value		15,658			31,589
Accounts payable and other liabilities		6,639			3,720
Total liabilities		1,599,743			1,749,726
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.001: 100,000,000 shares authorized; no shares issued and outstanding		−			−
Common stock, par value $0.001: 500,000,000 shares authorized; 24,895,409 and 25,344,867 shares issued and outstanding (including 464,136 and 452,310 unvested restricted shares)		25			26
Additional paid-in capital		355,103			356,103
Accumulated other comprehensive loss		(68,266	)		(80,707	)
Distributions in excess of earnings		(117,490	)		(89,117	)
Total stockholders’ equity		169,372			186,305
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,769,115		$	1,936,031

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
REVENUES
Net interest income:
Loans	$	20,207		$	28,578		$	64,333		$	88,885
Securities		1,906			1,387			4,674			4,544
Leases		11			1,995			4,337			5,946
Interest income − other		377			352			1,053			2,178
Total interest income		22,501			32,312			74,397			101,553
Interest expense		9,203			18,664			35,828			60,736
Net interest income		13,298			13,648			38,569			40,817

OPERATING EXPENSES
Management fees − related party		3,954			1,915			5,880			4,824
Equity compensation − related party		721			157			1,074			779
Professional services		739			773			2,792			2,229
Insurance expenses		220			171			609			469
General and administrative		410			421			1,256			1,119
Income tax expense (benefit)		6			(33	)		5			134
Total expenses		6,050			3,404			11,616			9,554

NET OPERATING INCOME		7,248			10,244			26,953			31,263

OTHER INCOME (EXPENSE)
Impairment losses on investment securities	$	(3,019	)	$	−		$	(19,372	)	$	−
Recognized in other comprehensive loss		(2,124	)		−			(12,812	)		−
Net impairment losses recognized in earnings		(895	)		−			(6,560	)		−
Net realized and unrealized (losses) gains on loans and investments		(1,517	)		242			(11,805	)		(1,651	)
Other (expense) income		(1,417	)		27			(1,375	)		86
Provision for loan and lease losses		(4,632	)		(10,999	)		(32,605	)		(27,828	)
Gain on the extinguishment of debt		12,741			−			19,641			1,750
Gain on the settlement of a loan		−			574			−			574
Total other income (expense)		4,280			(10,156	)		(32,704	)		(27,069	)

NET INCOME (LOSS)	$	11,528		$	88		$	(5,751	)	$	4,194

NET INCOME (LOSS) PER SHARE – BASIC	$	0.48		$	0.00		$	(0.24	)	$	0.17

NET INCOME (LOSS) PER SHARE – DILUTED	$	0.47		$	0.00		$	(0.24	)	$	0.17

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC		24,112,240			24,814,789			24,321,007			24,719,889

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – DILUTED		24,376,681			25,054,296			24,321,007			24,889,965

DIVIDENDS DECLARED PER SHARE	$	0.30		$	0.39		$	0.90		$	1.21

	Common Stock
	Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Distributions in Excess of Earnings			Total Stockholders’ Equity			Comprehensive Loss
Balance, January 1, 2009		25,344,867		$	26		$	356,103		$	(80,707	)	$	−		$	(89,117	)	$	186,305
Net proceeds from dividend reinvestment and stock purchase plan		682,504			−			2,866			−			−			−			2,866
Repurchase and retirement of treasury shares		(1,400,000	)		(1	)		(5,038	)		−			−			−			(5,039	)
Stock based compensation		276,229			−			98			−			−			−			98
Amortization of stock based compensation		−			−			1,074			−			−			−			1,074
Forfeiture of unvested stock		(8,191	)		−			−			−			−			−			−
Net loss		−			−			−			−			(5,751	)		−			(5,751	)	$	(5,751	)
Securities available-for-sale, fair value adjustment, net		−			−			−			(3,793	)		−			−			(3,793	)		(3,793	)
Designated derivatives, fair value adjustment		−			−			−			16,234			−			−			16,234			16,234
Distributions on common stock		−			−			−			−			5,751			(28,373	)		(22,622	)
Comprehensive loss		−			−			−			−			−			−			−		$	6,690
Balance, September 30, 2009		24,895,409		$	25			355,103			(68,266	)		−		$	(117,490	)	$	169,372

	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
September 30, 2009:
Commercial MBS private placement	$	91,257	$	3,352	$	(54,010	)	$	40,599
Total	$	91,257	$	3,352	$	(54,010	)	$	40,599

December 31, 2008:
Commercial MBS private placement	$	70,458	$	−	$	(41,243	)	$	29,215
Other ABS		5,665		−		(5,620	)		45
Total	$	76,123	$	−	$	(46,863	)	$	29,260

Weighted Average Life	Fair Value			Amortized Cost		Weighted Average Coupon
September 30, 2009:
Less than one year	$	11,712	(1)	$	32,063		1.72%
Greater than five years		28,887			59,194		5.81%
Total	$	40,599		$	91,257		4.37%

December 31, 2008:
Less than one year	$	5,088		$	10,465		3.17%
Greater than one year and less than five years		9,954			21,596		3.75%
Greater than five years		14,218			44,062		5.05%
Total	$	29,260		$	76,123		4.36%

	Less than 12 Months					More than 12 Months					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
September 30, 2009:
Commercial MBS private placement	$	2,500	$	(303	)	$	17,081	$	(53,707	)	$	19,581	$	(54,010	)
Total temporarily impaired securities	$	2,500	$	(303	)	$	17,081	$	(53,707	)	$	19,581	$	(54,010	)

December 31, 2008:
Commercial MBS private placement	$	−	$	−		$	29,215	$	(41,243	)	$	29,215	$	(41,243	)
Other ABS		−		−			45		(5,620	)		45		(5,620	)
Total temporarily impaired securities	$	−	$	−		$	29,260	$	(46,863	)	$	29,260	$	(46,863	)

Contractual Life	Fair Value		Amortized Cost
September 30, 2009:
Greater than five years and less than ten years	$	12,439	$	20,533
Greater than ten years		4,405		12,091
Total	$	16,844	$	32,624

December 31, 2008:
Greater than five years and less than ten years	$	3,093	$	12,487
Greater than ten years		1,725		15,670
Total	$	4,818	$	28,157

Loan Description	Principal			Unamortized (Discount) Premium			Carrying Value (1)
September 30, 2009:
Bank loans, including $15.1 million in loans held for sale	$	899,864		$	(21,921	)	$	877,943
Commercial real estate loans:
Whole loans		490,088			(481	)		489,607
B notes		81,586			36			81,622
Mezzanine loans		214,914			(4,474	)		210,440
Total commercial real estate loans		786,588			(4,919	)		781,669
Subtotal loans before allowances		1,686,452			(26,840	)		1,659,612
Allowance for loan loss		(59,434	)		−			(59,434	)
Total	$	1,627,018		$	(26,840	)	$	1,600,178

December 31, 2008:
Bank loans, including $9.0 million in loans held for sale .	$	916,966		$	(7,616	)	$	909,350
Commercial real estate loans:
Whole loans		521,015			(1,678	)		519,337
B notes		89,005			64			89,069
Mezzanine loans		215,255			(4,522	)		210,733
Total commercial real estate loans		825,275			(6,136	)		819,139
Subtotal loans before allowances		1,742,241			(13,752	)		1,728,489
Allowance for loan loss		(43,867	)		−			(43,867	)
Total	$	1,698,374		$	(13,752	)	$	1,684,622

Allowance for loan loss at January 1, 2008	$	5,918
Provision for loan loss		45,259
Loans charged-off		(7,310	)
Recoveries		−
Allowance for loan loss at December 31, 2008		43,867
Provision for loan loss		31,183
Loans charged-off		(15,616	)
Recoveries		−
Allowance for loan loss at September 30, 2009	$	59,434

Description	Quantity		Amortized Cost		Contracted Interest Rates	Range of Maturity Dates
September 30, 2009:
Whole loans, floating rate (1)		31	$	410,107	LIBOR plus 1.50% to LIBOR plus 4.40%	February 2010 (3) to December 2016
Whole loans, fixed rate (1)		6		79,500	6.98% to 10.00%	February 2010 to August 2012
B notes, floating rate		3		26,500	LIBOR plus 2.50% to LIBOR plus 3.01%	July 2010 to October 2010
B notes, fixed rate		3		55,122	7.00% to 8.68%	July 2011 to July 2016
Mezzanine loans, floating rate		10		129,107	LIBOR plus 2.15% to LIBOR plus 3.45%	December 2009 to October 2010
Mezzanine loans, fixed rate		7		81,333	5.78% to 11.00%	November 2009 to September 2016
Total (2)		60	$	781,669
December 31, 2008:
Whole loans, floating rate (1)		29	$	431,985	LIBOR plus 1.50% to LIBOR plus 4.40%	April 2009 to August 2011
Whole loans, fixed rates (1)		7		87,352	6.98% to 10.00%	May 2009 to August 2012
B notes, floating rate		4		33,535	LIBOR plus 2.50% to LIBOR plus 3.01%	March 2009 to October 2009
B notes, fixed rate		3		55,534	7.00% to 8.68%	July 2011 to July 2016
Mezzanine loans, floating rate		10		129,459	LIBOR plus 2.15% to LIBOR plus 3.45%	May 2009 to February 2010
Mezzanine loans, fixed rate		7		81,274	5.78% to 11.00%	November 2009 to September 2016
Total (2)		60	$	819,139

Allowance for lease loss at January 1, 2008	$	−
Provision for lease loss		901
Leases charged-off		(451	)
Recoveries		−
Allowance for lease loss at December 31, 2008		450
Provision for lease loss		1,428
Leases charged-off		(978	)
Recoveries		−
Allowance for lease loss at September 30, 2009	$	900

	Outstanding Borrowings		Weighted Average Borrowing Rate		Weighted Average Remaining Maturity	Fair Value of Collateral
September 30, 2009:
Repurchase Agreements (1)	$	54		3.50%	25.0 days	$	3,894
RREF CDO 2006-1 Senior Notes (2)		240,052		1.12%	36.9 years		293,992
RREF CDO 2007-1 Senior Notes (3)		378,649		0.88%	37.0 years		442,927
Apidos CDO I Senior Notes (4)		318,942		1.08%	7.8 years		292,408
Apidos CDO III Senior Notes (5)		260,028		0.75%	10.7 years		229,183
Apidos Cinco CDO Senior Notes (6)		318,646		0.96%	10.6 years		291,607
Unsecured Junior Subordinated Debentures (7)		51,548		4.49%	26.9 years		−
Total	$	1,567,919		1.07%	21.0 years	$	1,554,011
December 31, 2008:
Repurchase Agreements (1)	$	17,112		3.50%	18.0 days	$	39,703
RREF CDO 2006-1 Senior Notes (2)		261,198		1.38%	37.6 years		322,269
RREF CDO 2007-1 Senior Notes (3)		377,851		1.15%	37.8 years		467,310
Apidos CDO I Senior Notes (4)		318,469		4.03%	8.6 years		206,799
Apidos CDO III Senior Notes (5)		259,648		2.55%	11.5 years		167,933
Apidos Cinco CDO Senior Notes (6)		318,223		2.64%	11.4 years		207,684
Secured Term Facility		95,714		4.14%	1.3 years		104,015
Unsecured Junior Subordinated Debentures (7)		51,548		6.42%	27.7 years		−
Total	$	1,699,763		2.57%	20.6 years	$	1,515,713

	Amount at Risk (1)		Weighted Average Maturity in Days		Weighted Average Interest Rate
September 30, 2009:
Credit Suisse Securities (USA) LLC	$	3,842		25		3.50%

December 31, 2008:
Natixis Real Estate Capital Inc.	$	18,992		18		3.50%
Credit Suisse Securities (USA) LLC	$	3,793		23		4.50%

	Non-Employee Directors			Non-Employees			Total
Unvested shares as of January 1, 2009		17,261			435,049			452,310
Issued		52,632			197,500			250,132
Vested		(17,261	)		(212,854	)		(230,115	)
Forfeited		−			(8,191	)		(8,191	)
Unvested shares as of September 30, 2009		52,632			411,504			464,136

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of January 1, 2009		624,166	$	14.99
Granted		−		−
Exercised		−		−
Forfeited		−		−
Outstanding as of September 30, 2009		624,166	$	14.99		6	$	588
Exercisable at September 30, 2009		602,500	$	14.99		6	$	567

Unvested Options	Options			Weighted Average Grant Date Fair Value
Unvested at January 1, 2009		43,333		$	14.88
Granted		−			−
Vested		(21,667	)	$	14.88
Forfeited		−			−
Unvested at September 30, 2009		21,666		$	14.88

Vested Options	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Vested as of January 1, 2009		580,833	$	15.00
Vested		21,667	$	14.88
Exercised		−		−
Forfeited		−	$	−
Vested as of September 30, 2009		602,500	$	14.99	6	$ 567

	As of September 30,		As of December 31,
	2009		2008
Expected life	8 years		8 years
Discount rate		3.48%		2.94%
Volatility		172.44%		127.20%
Dividend yield		22.06%		33.94%

Assets and liabilities measured on a recurring basis
	Level 1		Level 2		Level 3		Total
Assets :
Securities available-for-sale	$	−	$	−	$	40,599	$	40,599
Total assets at fair value	$	−	$	−	$	40,599	$	40,599
Liabilities :
Derivatives (net)	$	−	$	15,658	$	−	$	15,658
Total liabilities at fair value	$	−	$	15,658	$	−	$	15,658

	Level 3
Beginning balance, January 1, 2009	$	29,260
Total gains or losses (realized/unrealized):
Included in earnings		(4,999	)
Purchases, sales, issuances, and settlements (net)		20,132
Included in other comprehensive income		(3,794	)
Ending balance, September 30, 2009	$	40,599

Assets and liabilities measured on a nonrecurring basis
	Level 1		Level 2		Level 3		Total
Assets :
Loans held for sale	$	−	$	15,103	$	−	$	15,103
Securities held-to-maturity		−		1,208		−		1,208
Impaired loans		−		9,114		71,304		80,418
Total assets at fair value	$	−	$	25,425	$	71,304	$	96,729

	Fair Value of Financial Instruments
	(in thousands)
	September 30, 2009				December 31, 2008
	Carrying value		Fair value		Carrying value		Fair value
Securities held to maturity	$	32,624	$	16,844	$	28,157	$	4,818
Loans held-for-investment	$	1,585,075	$	1,535,994	$	1,684,622	$	1,033,109
CDOs	$	1,516,317	$	808,689	$	1,535,389	$	690,926
Junior subordinated notes	$	51,548	$	20,619	$	51,548	$	10,310

Fair Value of Derivative Instruments as of September 30, 2009 (in thousands)
	Liability Derivatives
	Notional Amount		Balance Sheet Location	Fair Value
Derivatives not designated as hedging instruments under SFAS 133
Interest rate cap agreement	$	14,841	Derivatives, at fair value	$	70

Derivatives designated as hedging instruments under SFAS 133
Interest rate swap contracts	$	228,106	Derivatives, at fair value	$	(15,728	)
			Accumulated other comprehensive loss	$	15,728

The Effect of Derivative Instruments on the Statement of Operations for the Nine Months Ended September 30, 2009 (in thousands)
	Liability Derivatives
	Notional Amount		Statement of Operations Location	Unrealized Loss (1)
Derivatives not designated as hedging instruments under SFAS 133
Interest rate cap agreement	$	14,841	Interest expense	$	65

	Amortized cost (3)		Dollar price		Net carrying amount		Dollar price		Net carrying amount less amortized cost			Dollar price
September 30, 2009
Floating rate
CMBS-private placement	$	32,063		100.00%	$	11,712		36.53%	$	(20,351	)		-63.47 %
B notes (1)		26,500		100.00%		26,314		99.30%		(186	)		-0.70%
Mezzanine loans (1)		129,107		100.00%		128,091		99.21%		(1,016	)		-0.79%
Whole loans (1)		410,107		99.94%		396,863		96.71%		(13,244	)		-3.23%
Bank loans (2)		862,840		97.52%		781,251		88.30%		(81,589	)		-9.22%
Bank loans held for sale (3)		15,103		87.06%		15,103		87.06%		−			−%
Asset-backed securities held-to-maturity (4)		32,624		91.23%		16,844		47.10%		(15,780	)		-44.13%
Total floating rate		1,508,344		98.21%		1,376,178		89.60%		(132,166	)		-8.61%
Fixed rate
CMBS – private placement		59,194		77.34%		28,887		37.74%		(30,307	)		-39.60%
B notes (1)		55,122		100.07%		54,736		99.36%		(386	)		-0.71%
Mezzanine loans (1)		81,333		94.78%		68,275		79.57%		(13,058	)		-15.21%
Whole loans (1)		79,500		99.71%		78,940		99.00%		(560	)		-0.71%
Equipment leases and loans (5)		3,105		100.03%		2,205		71.04%		(900	)		-28.99%
Total fixed rate		278,254		92.67%		233,043		77.61%		(45,211	)		-15.06%
Grand total	$	1,786,598		97.30%	$	1,609,221		87.64%	$	(177,377	)		-9.66%
December 31, 2008
Floating rate
CMBS-private placement	$	32,061		99.99%	$	15,042		46.91%	$	(17,019	)		-53.08%
Other ABS		5,665		94.42%		45		0.75%		(5,620	)		-93.67%
B notes (1)		33,535		100.00%		33,434		99.70%		(101	)		-0.30%
Mezzanine loans (1)		129,459		100.01%		129,071		99.71%		(388	)		-0.30%
Whole loans (1)		431,985		99.71%		430,690		99.41%		(1,295	)		-0.30%
Bank loans (2)		909,350		99.17%		577,598		62.99%		(331,752	)		-36.18%
Asset-backed securities held-to-maturity (4)		28,157		97.09%		4,818		16.61%		(23,339	)		-80.48%
Total floating rate		1,570,212		99.36%		1,190,698		75.35%		(379,514	)		-24.01%
Fixed rate
CMBS – private placement		38,397		91.26%		14,173		33.69%		(24,224	)		-57.57%
B notes (1)		55,534		100.11%		55,367		99.81%		(167	)		-0.30%
Mezzanine loans (1)		81,274		94.72%		68,378		79.69%		(12,896	)		-15.03%
Whole loans (1)		87,352		99.52%		87,090		99.23%		(262	)		-0.29%
Equipment leases and notes (4)		104,465		99.38%		104,015		98.95%		(450	)		-0.43%
Total fixed rate		367,022		97.55%		329,023		87.45%		(37,999	)		-10.10%
Grand total	$	1,937,234		99.02%	$	1,519,721		77.68%	$	(417,513	)		-21.34%

	Benchmark rate	Notional value		Pay rate		Effective date	Maturity date	Fair value
Interest rate swap	1 month LIBOR	$	12,750		5.27%	07/25/07	08/06/12	$	(1,302	)
Interest rate swap	1 month LIBOR		12,965		4.63%	12/04/06	07/01/11		(823	)
Interest rate swap	1 month LIBOR		28,000		5.10%	05/24/07	06/05/10		(909	)
Interest rate swap	1 month LIBOR		1,880		5.68%	07/13/07	03/12/17		(331	)
Interest rate swap	1 month LIBOR		15,235		5.34%	06/08/07	02/25/10		(315	)
Interest rate swap	1 month LIBOR		12,150		5.44%	06/08/07	03/25/12		(1,198	)
Interest rate swap	1 month LIBOR		7,000		5.34%	06/08/07	02/25/10		(145	)
Interest rate swap	1 month LIBOR		44,593		4.13%	01/10/08	05/25/16		(1,719	)
Interest rate swap	1 month LIBOR		82,253		5.58%	06/08/07	04/25/17		(7,935	)
Interest rate swap	1 month LIBOR		1,726		5.65%	06/28/07	07/15/17		(166	)
Interest rate swap	1 month LIBOR		1,681		5.72%	07/09/07	10/01/16		(167	)
Interest rate swap	1 month LIBOR		3,850		5.65%	07/19/07	07/15/17		(370	)
Interest rate swap	1 month LIBOR		4,023		5.41%	08/07/07	07/25/17		(348	)
Total		$	228,106		5.14%			$	(15,728	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008
Net income (loss) − GAAP	$	11,528		$	88		$	(5,751	)	$	4,194
Taxable REIT subsidiary’s loss		653			−			1,853			−
Adjusted net income (loss)		12,181			88			(3,898	)		4,194
Adjustments:
Share-based compensation to related parties		631			(190	)		660			(729	)
Capital loss carryover (utilization)/losses from the sale of securities		−			−			4,978			2,000
Provision for loan and lease losses unrealized		4,240			2,761			13,340			14,446
Asset impairments		895			−			6,560			−
Deferral of extinguishment of debt income		(12,741	)		−			(12,741	)		−
Net book to tax adjustments for the Company’s taxable foreign REIT subsidiaries		(3,134	)		7,034			4,601			11,271
Subpart F income limitation (1)		5,406			−			6,871			−
Other net book to tax adjustments		1,419			(281	)		1,387			(272	)
Estimated REIT taxable income	$	8,897		$	9,412		$	21,758		$	30,910
Amounts per share – diluted	$	0.36		$	0.38		$	0.89		$	1.24

	Contractual commitments (dollars in thousands)
	Payments due by period
	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Repurchase agreements	$	54	$	54	$	−	$	−	$	−
CDOs		1,516,317		−		−		−		1,516,317	(1)
Unsecured junior subordinated debentures		51,548		−		−		−		51,548	(2)
Base management fees (3)		3,565		3,565		−		−		−
Total	$	1,571,484	$	3,619	$	−	$	−	$	1,567,865

	September 30, 2009
	Interest rates fall 100 basis points			Unchanged			Interest rates rise 100 basis points
CMBS – private placement (1)
Fair value	$	30,244		$	28,887		$	27,611
Change in fair value	$	1,357					$	(1,276	)
Change as a percent of fair value		4.70%						4.42%


Hedging instruments
Fair value	$	(32,707	)	$	(15,728	)	$	(14,037	)
Change in fair value	$	(16,979	)				$	1,691
Change as a percent of fair value		107.95%						10.15%

Exhibit No.		Description
3.1		Restated Certificate of Incorporation of Resource Capital Corp. (1)
3.2		Amended and Restated Bylaws of Resource Capital Corp. (1)
4.1		Form of Certificate for Common Stock for Resource Capital Corp. (1)
4.2(a)		Junior Subordinated Indenture between Resource Capital Corp. and Wells Fargo Bank, N.A., dated May 25, 2006. (2)
4.2(b)		Amendment to Junior Subordinated Indenture and Junior Subordinated Note due 2036 between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October 26, 2009 and effective September 30, 2009.
4.3(a)		Amended and Restated Trust Agreement among Resource Capital Corp., Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative Trustees named therein, dated May 25, 2006. (2)
4.3(b)		Amendment to Amended and Restated Trust Agreement and Preferred Securities Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the Administrative Trustees named therein, dated October 26, 2009 and effective September 30, 2009.
4.4		Amended Junior Subordinated Note due 2036 in the principal amount of $25,774,000, dated October 26, 2009.
4.5(a)		Junior Subordinated Indenture between Resource Capital Corp. and Wells Fargo Bank, N.A., dated September 29, 2006. (3)
4.5(b)		Amendment to Junior Subordinated Indenture and Junior Subordinated Note due 2036 between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October 26, 2009 and effective September 30, 2009.
4.6(a)		Amended and Restated Trust Agreement among Resource Capital Corp., Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative Trustees named therein, dated September 29, 2006. (3)
4.6(b)		Amendment to Amended and Restated Trust Agreement and Preferred Securities Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the Administrative Trustees named therein, dated October 26, 2009 and effective September 30, 2009.
4.7		Amended Junior Subordinated Note due 2036 in the principal amount of $25,774,000, dated October 26, 2009.
10.1(a)		Master Repurchase Agreement between RCC Real Estate SPE 3, LLC and Natixis Real Estate Capital. (4)
10.1(b)		First Amendment to Master Repurchase Agreement between RCC Real Estate SPE 3, LLC and Natixis Real Estate Capital, dated September 25, 2008. (5)
10.1(c)		Second Amendment to Master Repurchase Agreement between RCC Real Estate SPE 3, LLC and Natixis Real Estate Capital, dated November 25, 2008. (6)
10.1(d)		Letter Agreement with respect to master Repurchase Agreement between Natixis Real Estate Capital, Inc. and RCC Real Estate SPE 3, LLC, dated as of March 13, 2009. (7)
10.1(e)		Letter Agreement with respect to Master Repurchase Agreement between Natixis Real Estate Capital and RCC Real Estate SPE 3, LLC, dated June 29, 2009. (8)
10.3(a)		Amended and Restated Management Agreement between Resource Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc. dated as of June 30, 2008. (9)
10.3(b)		First Amendment to Amended and Restated Management Agreement between Resource Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc. dated as of June 30, 2008. (10)
31.1		Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Executive Officer.
31.2		Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Financial Officer.
32.1		Certification Pursuant to 18 U.S.C. Section 1350.
32.2		Certification Pursuant to 18 U.S.C. Section 1350.

	RESOURCE CAPITAL CORP.
	(Registrant)

Date: November 6, 2009	By: /s/ Jonathan Z. Cohen
	Jonathan Z. Cohen
	Chief Executive Officer and President

Date: November 6, 2009	By: /s/ David J. Bryant
	David J. Bryant
	Chief Financial Officer and Chief Accounting Officer