EXHIBIT 10.19
PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") is made as of the 19th day of
January, 2005, by and among Arbor Realty Mortgage Securities Series 2004-1,
Ltd., an exempted company incorporated with limited liability under the laws of
the Cayman Islands (the "Issuer"), Arbor Realty Mortgage Securities Series
2004-1 LLC, a Delaware limited liability company (the "Co-Issuer" and, together
with the Issuer, the "Co- Issuers") and Wachovia Capital Markets, LLC ("WCM" or
the "Initial Purchaser").
W I T N E S S E T H:
WHEREAS, the Co-Issuers intend to issue (a) the U.S. $182,910,000 Class A
Senior Secured Floating Rate Term Notes, Due 2040 (the "Class A Notes"), (b) the
U.S. $51,590,000 Class B Second Priority Floating Rate Term Notes, Due 2040 (the
"Class B Notes"), (c) the U.S. $50,417,000 Class C Third Priority Floating Rate
Term Notes, Due 2040 (the "Class C Notes") and (d) the U.S. $20,402,000 Class D
Fourth Priority Floating Rate Term Notes, Due 2040 (the "Class D Notes" and
together with the Class A Notes, the Class B Notes and the Class C Notes, the
"Notes") pursuant to an indenture, dated as of January 19, 2005 (the
"Indenture"), by and among the Issuer, the Co-Issuer, LaSalle Bank National
Association, as trustee, paying agent, calculation agent, transfer agent,
custodial securities intermediary and notes registrar (together with any
successor trustee permitted under the Indenture, the "Trustee") and Arbor Realty
SR, Inc., as advancing agent;
WHEREAS, pursuant to its organizational documents, corporate resolutions
and a preferred shares paying agency agreement, the Issuer also intends to issue
the U.S. $163,707,380 aggregate notional amount preferred shares (the "Preferred
Shares");
WHEREAS, the Initial Purchaser is a securities firm engaged in the
business of selling securities directly to purchasers or through other
securities dealers;
WHEREAS, Arbor Realty Collateral Management, LLC ("ARCM") shall act as
collateral manager (the "Collateral Manager") of the Issuer's assets in
accordance with the terms of a collateral management agreement dated as of
January 19, 2005, between the Collateral Manager and the Issuer (the "Collateral
Management Agreement");
WHEREAS, the Initial Purchaser hereby acknowledges that it has received
good and valuable consideration from the Co-Issuers.
NOW, THEREFORE, the parties agree as follows:
1. Defined Terms. All capitalized terms used and not otherwise defined
herein shall have the same meanings ascribed to such terms in the Indenture.
2. Sale and Purchase of the Notes.
(a) Subject to the terms and conditions herein, each of the Issuer and the
Co-Issuer hereby agrees to sell on the Closing Date all of the Notes, as
applicable, to the Initial Purchaser as provided hereinafter, and the Initial
Purchaser agrees to purchase on the Closing Date from the Issuer and Co-Issuer,
as applicable, the Notes in the amount set forth opposite the Initial
Purchaser's name on Schedule A hereto at the price (the "Purchase Price") set
forth under the respective Notes on the Closing Date.
(b) The Purchase Price of the Notes shall be payable to the Issuer or the
Co- Issuer, as applicable, as they direct by wire transfer in United States
Dollars in immediately available funds on the Closing Date.
(c) Prior to or at the time that the Notes are first issued or delivered,
the conditions precedent in Section 7 herein shall have been satisfied.
3. Offer of the Notes. Each of the Issuer and the Co-Issuer understands
that the Initial Purchaser intends to offer the Notes as soon after this
Agreement has become effective as is advisable in the judgment of the Initial
Purchaser. The Issuer and Co-Issuer confirm that they have authorized the
Initial Purchaser, subject to the restrictions set forth below, to distribute
copies of the Offering Memorandum in connection with the offering of the Notes.
4. Representations, Warranties and Covenants of each of the Co-Issuers.
Each of the Issuer or the Co-Issuer, as applicable, represents and warrants
(with respect to itself only) to the Initial Purchaser as of the Closing Date,
and agrees with the Initial Purchaser that:
(a) it has not, directly or indirectly, solicited any offer to buy or
offered to sell, and shall not, directly or indirectly, solicit any offer to buy
or offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Notes in a manner that would require the Notes to be registered under the
Securities Act of 1933, as amended (the "Securities Act");
(b) the Notes are not of the same class as any notes of the Issuer or
Co-Issuer listed on a national securities exchange registered under Section 6 of
the United States Securities Exchange Act, as amended (the "Exchange Act"), or
quoted in a United States automated interdealer quotation system;
(c) the Offering Memorandum dated as of January 14, 2005 and the marketing
materials dated December 7, 2004 and the related asset summaries (together, the
"Offering Materials") have been prepared by the Issuer and the Co-Issuer, as
applicable, in connection with the offering of the Notes. The Offering Materials
and any amendments or supplements thereto did not and shall not, as of their
respective dates, and, as amended or supplemented through the Closing Date,
shall not as of the Closing Date, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading except that the representations and warranties set forth in this
Section 4(c) do not apply to statements or omissions that are made in reliance
upon and in conformity with information relating to the Initial Purchaser
furnished to the Issuer by the Initial Purchaser expressly for use in the
Offering Materials or any amendment or supplement thereto. It is hereby
acknowledged that the
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statements set forth in the second paragraph under the caption "Subscription and
Sale" constitute the only written information furnished to the Seller by the
Initial Purchasers expressly for use in the Offering Circular (or any amendment
or supplement thereto).
(d) since the respective dates as of which information is given in the
Offering Materials, except as contemplated or set forth in the Offering
Memorandum, it has not carried on any business other than as described in the
Offering Materials relating to the issue of the Notes;
(e) the Issuer does not have any subsidiaries and the Co-Issuer does not
have any subsidiaries;
(f) the Issuer is an exempted company incorporated with limited liability
that has been duly and validly incorporated and is existing and in good standing
under the laws of the Cayman Islands; the Issuer is duly licensed and duly
qualified to do business as a foreign limited liability company and is in good
standing in all jurisdictions in which the ownership of its assets or in which
the conduct of its business requires or shall require such qualification; the
Issuer has full power and authority to own its assets and conduct its business
as described in the Offering Materials and to enter into and perform its
obligations under this Agreement, the Indenture, each Collateral Debt Securities
Purchase Agreement, each Hedge Agreement and the Collateral Management Agreement
and to enter into and consummate all the transactions in connection therewith as
contemplated by such agreements and in the Offering Materials;
(g) the Co-Issuer is a limited liability company that is in good-standing
under the laws of the State of Delaware and is duly licensed and duly qualified
to do business as a limited liability company and is in good standing in all
jurisdictions in which the ownership of its assets or in which the conduct of
its business requires or shall require such qualification; the Co-Issuer has
full power and authority to own its assets and conduct its business as described
in the Offering Materials and to enter into and perform its obligations under
this Agreement and the Indenture and to enter into and consummate all the
transactions in connection therewith as contemplated by such agreements and in
the Offering Materials;
(h) the Issuer has the authorized share capital as set
forth in the Offering Memorandum and all of the issued ordinary shares of the
Issuer have been duly and validly authorized and issued and are fully paid and
nonassessable and all of the issued ordinary shares of the Issuer shall be held
by ARMS 2004-1 Equity Holdings LLC, relating to such ordinary shares;
(i) the Co-Issuer has the authorized capitalization as set forth in the
Offering Memorandum and all of the membership interests of the Co-Issuer have
been duly and validly authorized and issued and all of the issued membership
interests of the Co-Issuer shall be held by Arbor Realty SR, Inc.;
(j) the Notes have been duly authorized by the Co-Issuer, and when issued
and delivered and when appropriate entries have been made in the Note Register
pursuant to this Agreement and the Indenture against payment therefor, shall
have been duly executed, authenticated, issued and delivered and shall
constitute valid and legally binding obligations of the Co-Issuer, enforceable
against the Co-Issuer in accordance with their terms and entitled to
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the benefits provided by the Indenture, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(k) the Notes have been duly authorized by the Issuer and, when issued and
delivered and when appropriate entries have been made in the Note Register
pursuant to this Agreement and the Indenture against payment therefor, shall
have been duly executed, authenticated, issued and delivered and shall
constitute valid and legally binding obligations of the Issuer, enforceable
against the Issuer in accordance with their terms and entitled to the benefits
provided by the Indenture, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(l) each of the Indenture and this Agreement have been duly authorized by
the Co-Issuer and, when executed and delivered by the parties thereto, shall
constitute a valid and legally binding instrument, enforceable in accordance
with their respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(m) each of the Indenture, the Collateral Management Agreement, this
Agreement, each Collateral Debt Securities Purchase Agreement and each Hedge
Agreement has been duly authorized by the Issuer and, when executed and
delivered by the parties thereto, shall constitute a valid and legally binding
instrument, enforceable in accordance with its terms under the laws of the State
of New York and all other relevant laws, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(n) except as may be required under state securities laws, no filing with,
or authorization, approval, consent, license, order, registration, qualification
or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Co-Issuer of its obligations hereunder, in
connection with the offering, issuance or sale of the Notes hereunder or the
consummation of the transactions contemplated by or for the due execution,
delivery or performance of this Agreement, the Indenture or any other agreement
or instrument entered into or issued or to be entered into or issued by the
Co-Issuer in connection with the consummation of the transactions contemplated
herein and in the Offering Materials (including the issuance and sale of the
Notes and the use of the proceeds from the sale of the Notes as described in the
Offering Memorandum under the caption "Use of Proceeds");
(o) except as may be required under state securities laws, no filing with,
or authorization, approval, consent, license, order, registration, qualification
or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Issuer of its obligations hereunder, in
connection with the offering, issuance or sale of the Notes hereunder or the
consummation of the transactions contemplated by or for the due execution,
delivery or performance of this Agreement, the Indenture, the Notes, each
Collateral Debt Securities Purchase Agreement, the Collateral Management
Agreement, each Hedge Agreement or any other agreement or instrument entered
into or issued or to be entered into or issued by the Issuer in connection with
the consummation of the transactions contemplated herein and in the Offering
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Materials (including the issuance and sale of the Notes and the use of the
proceeds from the sale of the Notes as described in the Offering Memorandum
under the caption "Use of Proceeds");
(p) the statements set forth in the Offering Memorandum under the
captions "Description of the Securities," "Security for the Notes," "The
Collateral Management Agreement," "Hedge Agreements," "The Issuer" and "The
Co-Issuer" insofar as they purport to constitute a description of the Issuer or
the Co-Issuer or a summary of the terms of the Notes, the Indenture, the Hedge
Agreements and the Collateral Management Agreement and under the captions
"Income Tax Considerations," "ERISA Considerations" and "Subscription and Sale,"
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are correct in all material respects;
(q) the issue and sale of the Notes and the compliance by the Issuer or
the Co-Issuer as applicable, with all of the provisions of the Indenture, each
Collateral Debt Securities Purchase Agreement, the Notes, each Hedge Agreement,
the Collateral Management Agreement and this Agreement and the consummation of
the transactions herein and therein contemplated shall not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any other agreement or instrument to which the
Issuer or the Co-Issuer is a party or by which the Issuer or the Co-Issuer is
bound, nor shall such action result in any violation of the provisions of the
Governing Documents of each of the Issuer or the Co-Issuer or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Issuer or the Co-Issuer or each of their assets; and, no
consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the issue and sale
of the Notes or the consummation of the transactions by the Issuer and the
Co-Issuer contemplated by this Agreement, the Indenture, each Collateral Debt
Securities Purchase Agreement, each Hedge Agreement or the Collateral Management
Agreement, (other than any governmental or other consents that have already been
obtained by either the Issuer or the Co-Issuer and that were in full force and
effect);
(r) the Trustee shall have a perfected security interest in the Pledged
Obligations and the Issuer's rights under the Collateral Management Agreement,
each Hedge Agreement and each Collateral Debt Securities Purchase Agreement for
the benefit and security of the holders of the Notes subject to the priorities
set forth in the Indenture;
(s) there are no legal or governmental proceedings, inquiries or
investigations pending to which the Issuer or the Co-Issuer is a party or of
which any property of the Issuer or Co-Issuer is the subject; and, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(t) on the Closing Date, there shall not exist any default by any of the
Issuer or the Co-Issuer or any condition, event or act, which, with notice or
lapse of time or both, would constitute an Event of Default by the Issuer or the
Co-Issuer under the Indenture;
(u) none of the Issuer, the Co-Issuer or any persons acting on their
behalf (other than the Initial Purchaser as to whom the Co-Issuers make no
representation) has engaged or shall engage in any directed selling efforts as
defined in Rule 902 of Regulation S under the
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Securities Act with respect to the Notes, and none of the foregoing persons has
offered or sold any of the Notes except to the Initial Purchaser pursuant to
this Agreement,
(v) neither the Issuer nor the Co-Issuer has entered into contractual
arrangements (other than this Agreement) with any Person other than the Initial
Purchaser with respect to the distribution of the Notes;
(w) no stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes are payable by or on behalf of the
Initial Purchaser to the government of the Cayman Islands or any political
subdivision or taxing authority thereof or therein in connection with the
issuance, sale and delivery by the Issuer and the Co-Issuer or the sale and
delivery by the Initial Purchaser outside the Cayman Islands of the Notes to the
investors thereof; provided, that Cayman Islands stamp duty will be payable if
any of the Notes or Transaction Agreements are executed in, or after execution,
brought into the Cayman Islands;
(x) none of the Issuer or the Co-Issuer has offered or sold the Notes by
means of any form of general solicitation or general advertising and none of the
foregoing persons shall offer to sell, offer for sale or sell the Notes by means
of any advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising;
(y) assuming compliance by the Initial Purchaser with the offer and sale
restrictions set forth herein and compliance by the purchaser with the
Subscription Agreement, neither the Issuer nor the Co-Issuer is required to be
registered as an "investment company" and neither the Issuer nor the Co-Issuer
shall be required to register as an investment company under the Investment
Company Act as a result of the conduct of its business in the manner
contemplated by the Offering Memorandum;
(z) assuming compliance by the Initial Purchaser with the offer and sale
restrictions set forth herein and compliance by the purchaser with the
Subscription Agreement, no registration of the Notes under the Securities Act is
required for the offer and sale of the Notes in the manner contemplated by this
Agreement and the Offering Memorandum and no qualification of an indenture under
the Trust Indenture Act of 1939, as amended, is required for the offer and sale
of the Notes in the manner contemplated by this Agreement and the Offering
Memorandum;
(aa) each of the Issuer and the Co-Issuer shall make available to the
Initial Purchaser such number of copies of the Offering Memorandum and any
amendment or supplement thereto as the Initial Purchaser shall reasonably
request;
(bb) neither the Issuer nor the Co-Issuer has offered and neither the
Issuer nor the Co-Issuer shall offer the Notes except pursuant to this
Agreement;
(cc) each of the Issuer and the Co-Issuer shall immediately notify the
Initial Purchaser, and confirm such notice in writing, of (A) any filing made by
the Co-Issuers of information relating to the offering of the Notes with any
securities exchange or any other regulatory body in the United States or any
other jurisdiction, and (B) prior to the completion of
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the purchase of the Notes by the Initial Purchaser, any material changes in or
affecting the earnings, business affairs or business prospects of either the
Issuer or the Co-Issuer which (i) make any statement in the Offering Materials
false or misleading in any material respect or (ii) are not disclosed in the
Offering Memorandum. In such event or if during such time any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of
any of the Issuer, the Co-Issuer, their counsel, the Initial Purchaser or its
counsel, to amend or supplement the Offering Materials in order that the final
Offering Materials not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, each of the Issuer
and the Co-Issuer shall forthwith amend or supplement the final Offering
Materials by preparing and furnishing to the Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the final Offering Materials
(in form and in substance satisfactory in the opinion of counsel for the Initial
Purchaser) so that, as so amended or supplemented, the final Offering Materials
shall not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time it is delivered to an investor, not
misleading;
(dd) each of the Issuer and the Co-Issuer shall advise the Initial
Purchaser promptly of any proposal to amend or supplement the Offering Materials
and shall not effect such amendment or supplement without the consent of the
Initial Purchaser, which shall not be unreasonably withheld or delayed. Neither
the consent of the Initial Purchaser to, nor the Initial Purchaser's delivery
of, any such amendment or supplement, shall constitute a waiver of any of the
conditions set forth in Section 7 hereof;
(ee) each of the Issuer and the Co-Issuer agrees that it shall not make
any offer or sale of Notes of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 promulgated under the Securities Act, such
offer or sale would render invalid (for the purpose of (i) the sale of the Notes
to the Initial Purchaser or (ii) the resale of the Notes by the initial
investors to others) the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof or by Rule 144A or by Regulation
S thereunder;
(ff) each of the Issuer and the Co-Issuer agrees that, in order to render
the Notes eligible for resale pursuant to Rule 144A under the Securities Act,
while any of the Notes remain outstanding, they shall make available, upon
request, to any holder of the Notes or prospective purchasers of the Notes
designated by any Holder the information specified in Rule 144A(d)(4), unless
each of the Issuer and the Co-Issuer furnishes information to the United States
Securities and Exchange Commission (the "Commission") pursuant to Section 13 or
15(d) of the Exchange Act (such information, whether made available to holders
or prospective purchasers or furnished to the Commission, is hereinafter
referred to as "Additional Information");
(gg) until the expiration of two years after the original issuance of the
Notes, each of the Issuer and the Co-Issuer shall not resell any Notes which are
"restricted securities" (as such term is defined under Rule 144(a)(3) under the
Securities Act) that have been re-acquired by any of them and shall immediately
upon any purchase of any such Notes submit such Notes to the Trustee for
cancellation;
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(hh) each of the Issuer and the Co-Issuer shall use the net proceeds
received by them from the sale of the Notes in the manner specified in the
Offering Memorandum under "Use of Proceeds";
(ii) during a period of 180 days from the date of the Offering
Memorandum, neither the Issuer nor the Co-Issuer shall, directly or indirectly,
issue, sell, offer to sell grant any option for the sale of, or otherwise
dispose of, any debt securities or guarantees of debt securities of the Issuer
or the Co-Issuer, as applicable, or any securities convertible or exchangeable
into or exercisable for any debt securities or guarantees of debt securities of
the Issuer or the Co-Issuer, as applicable, or any securities convertible or
exchangeable into or exercisable for any debt security or guarantee of debt
securities of the Issuer or Co-Issuer, except as described in the Offering
Memorandum;
(jj) the Co-Issuers shall use all reasonable efforts in cooperation with
the Initial Purchaser to permit the Notes to be eligible for clearance and
settlement through DTC;
(kk) each certificate representing a Note shall bear the legend contained
in the Offering Memorandum for the time period and upon the other terms stated
in the Offering Memorandum;
(ll) the Co-Issuers shall have no debt other than as indicated in or
contemplated by the Offering Memorandum (including, without limitation, expenses
incurred in connection with the offering of the Notes);
(mm) the application of the proceeds of the sale of the Notes shall not
be in violation of Regulations T, U or X of the Board of Governors of the
Federal Reserve System, as amended and in effect on the Closing Date;
(nn) The Issuers have taken all necessary steps to ensure that any
Bloomberg screen containing information about the Notes represented by Rule 144A
Global Notes includes the following (or similar) language:
(i) the "Note Box" on the bottom of the "Security Display" page
describing the Rule 144A Global Notes shall state: "Iss'd Under 144A/3c7";
(ii) the "Security Display" page shall have flashing red indicator "See
Other Available Information"; and
(iii) the indicator shall link to the "Additional Security Information"
page, which shall state that the securities "are being offered in reliance on
the exemption from registration under Rule 144A of the Securities Act to
persons who are both (i) qualified institutional buyers (as defined in Rule
144A under the Securities Act) and (ii) qualified purchasers (as defined
under Section 3(c)(7) under the 1940 Act)."
(oo) The Issuers shall instruct The Depository Trust Company ("DTC") to
take these or similar steps with respect to the Notes represented by Rule 144A
Global Notes:
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(i) the DTC 20-character security descriptor and 48-character additional
descriptor shall indicate with marker "3c7" that sales are limited to
Qualified Institutional Buyers/Qualified Purchasers;
(ii) where the DTC deliver order ticket sent to purchasers by DTC after
settlement is physical, it shall have the 20-character security descriptor
printed on it. Where the DTC deliver order ticket is electronic, it shall
have a "3c7" indicator and a related user manual for participants, which
shall contain a description of the relevant restriction;
(iii) DTC shall send an "Important Notice" outlining the 3(c)(7)
restrictions applicable to the Rule 144A Global Notes to all DTC participants
in connection with the initial offering; and
(iv) DTC shall include the Co-Issuers in the Reference Directory which is
distributed by DTC to its participants on the list of all issuers who have
advised DTC that they are 3(c)(7) issuers.
(pp) The Co-Issuers, have confirmed that CUSIP has established a "fixed
field" attached to the CUSIP numbers for the Notes represented by Rule 144A
Global Notes containing "3c7" and "144A" indicators.
5. Representations, Warranties and Covenants of the Initial Purchaser. The
Initial Purchaser hereby represents and warrants to the Issuer and the Co-Issuer
as of the Closing Date and agrees with the Issuer and the Co-Issuer that:
(a) The Initial Purchaser is a QIB and a Qualified Purchaser, with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the Notes.
(b) The Initial Purchaser understands that (i) the Notes have not been and
shall not be registered under the Securities Act, and (ii) the Issuer and the
Co-Issuer are not, and shall not be, registered as investment companies under
the Investment Company Act.
(c) The Initial Purchaser shall offer and sell the Notes only to persons
(i) who are "qualified purchasers" as defined in Section 2(a)(51) of the
Investment Company Act ("Qualified Purchasers") that such Initial Purchaser
reasonably believes are "qualified institutional buyers" as defined in Rule 144A
under the Securities Act ("Rule 144A") and whom the seller has informed that the
reoffer, resale, pledge or other transfer is being made in reliance on Rule 144A
or (ii) such Initial Purchaser reasonably believes are not U.S. Persons or U.S.
residents for purposes of the Investment Company Act and that the sale, reoffer,
resale, pledge or other transfer is being made in compliance with Regulation S
under the Securities Act; terms used in this paragraph have the meanings given
to them by Regulation S or Rule 144A, as applicable.
(d) The Initial Purchaser shall not invite the public in the Cayman
Islands to subscribe for the Notes.
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(e) The Initial Purchaser acknowledges that purchases and resales of the
Notes are restricted as described under "Transfer Restrictions" in the Offering
Memorandum.
(f) (i) The Initial Purchaser has not offered or sold and will not offer
or sell any Notes to persons in the United Kingdom prior to the expiry of the
period of six months from the Closing Date except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 (as amended); (ii) the Initial Purchaser
has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets
Act 2000 (the "FSMA") received by it in connection with the issue or sale of any
Notes in circumstances in which section 21(1) of the FSMA does not apply to the
Issuer; and (iii) the Initial Purchaser has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom.
(g) The Initial Purchaser represents and agrees that the Notes offered and
sold in reliance on Regulation S have been and will be offered and sold only in
offshore transactions. In connection therewith, the Initial Purchaser agrees
that it has not offered or sold and will not offer or sell the Notes in the
United States or to, or for the benefit or account of, a U.S. Person (other than
a distributor), in each case, as defined in Rule 902 under the Securities Act
(i) as part of its distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Notes pursuant hereto
and the Closing Date, other than in accordance with Regulation S of the
Securities Act or another exemption from the registration requirements of the
Securities Act.
(h) No form of general solicitation or general advertising has been or
will be used by the Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Notes, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
Terms used in this Section 5 that have meanings assigned to them in Regulation S
are used herein as so defined.
6. Fees and Expenses. The proceeds of the offering of the Notes shall be
used to pay all expenses incurred in connection with the offering of the Notes,
including the preparation and printing of the preliminary and final offering
memorandum, the preparation, issuance and delivery of the Notes to the Initial
Purchaser, any fees charged by the Rating Agencies in rating the Notes and the
fees of counsel to the Issuer and Co-Issuer, the Initial Purchaser, the fees of
the Collateral Manager, the Trustee and all reasonable out-of-pocket expenses of
the Initial Purchaser.
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7. Conditions Precedent to the Purchase of the Notes. The obligations of
the Initial Purchaser hereunder are subject to the accuracy of the
representations and warranties of each of either the Issuer or the Co-Issuer
contained in Section 4 hereof or in certificates of any of the respective
officers of the Issuer or Co-Issuer delivered pursuant to the provisions hereof,
to the performance by the Issuer and the Co-Issuer of their covenants and other
obligations hereunder, and to the following further conditions precedent:
(a) On the Closing Date, the Initial Purchaser shall have received the
opinions, dated as of the Closing Date specified in Sections 3.1(d), (e), (f),
(l), (m), (n) and (o) of the Indenture.
(b) On the Closing Date, (i) the Offering Materials, as amended or
supplemented, shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) there shall not have been, since the date hereof or since
the respective dates as of which information is given in the Offering Materials,
any material adverse change or prospective material adverse change with respect
to the Issuer, the Co-Issuer or the Collateral; (iii) each of the Issuer and the
Co-Issuer shall have complied with all agreements and satisfied all conditions
on their part to be performed or satisfied pursuant to this Agreement on or
prior to Closing Date; and (iv) the representations and warranties of the Issuer
and Co-Issuer in Section 4 shall be accurate and true and correct as though
expressly made on and as of the Closing Date except as specifically set forth
therein.
(c) On the Closing Date, the Initial Purchaser shall have received a
certificate of an authorized officer of ARCM, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit A.
(d) On the Closing Date, the Initial Purchaser shall have received from
KPMG LLP a letter, dated as of the Closing Date in form and substance
satisfactory to the Initial Purchaser, with respect to certain financial,
statistical and other information contained in the Offering Memorandum.
(e) The Co-Issuer shall have duly authorized, executed and delivered the
Indenture and this Agreement.
(f) The Issuer shall have duly authorized, executed and delivered the
Indenture, the Collateral Management Agreement, each Collateral Debt Securities
Purchase Agreement, and each Hedge Agreement.
(g) ARCM shall have duly authorized, executed and delivered the Collateral
Management Agreement.
(h) Each Seller shall have duly authorized, executed and delivered the
applicable Collateral Debt Securities Purchase Agreement;
(i) Each Hedge Counterparty shall have duly authorized, executed and
delivered the applicable Hedge Agreement;
- 11 -
(j) The Notes shall have been executed by the Issuer and Co-Issuer, as
applicable, and authenticated by the Trustee and the conditions precedent
thereto, as set forth in the Indenture, shall have been satisfied.
(k) Prior to the initial purchase of the Notes hereunder, the Issuer and
Co-Issuer, as applicable, shall have obtained letters from Xxxxx'x Investors
Service, Inc. ("Moody's"), Fitch, Inc. ("Fitch") and Standard & Poor's Rating
Services, a division of The XxXxxx-Xxxx Companies ("S&P") that the Class A Notes
have been rated "Aaa" by Moody's and "AAA" by S&P and Fitch, that the Class B
Notes have been rated at least "Aa2" by Moody's and "AA" by S&P and Fitch, that
the Class C Notes have been rated at least "A3" by Moody's and "A-" by S&P and
Fitch, that the Class D Notes have been rated at least "Baa2" by Moody's and
"BBB" by S&P and Fitch and shall deliver copies of such letters to the Initial
Purchaser. The ratings assigned by the Rating Agencies to the Class A Notes, the
Class B Notes, the Class C Notes, and the Class D Notes address the ultimate
payment of interest and principal as provided under the Indenture. The ratings
assigned by Moody's are based on the risk of loss posed to the holders of each
Class of the Notes relative to the timing of the payments of principal of and
interest on each such Class of Notes.
(l) The Initial Purchaser shall have received such further information,
certificates, documents and opinions as the Initial Purchaser may have
reasonably requested.
(m) All of the Preferred Shares shall have been purchased by ARMS 2004-1
Equity Holdings LLC on the Closing Date.
8. Indemnification and Contribution.
(a) Subject to the Priority of Payments set forth in Section 11.1 of the
Indenture, the Co-Issuers shall indemnify and hold harmless the Initial
Purchaser and each of its affiliates, respective officers, directors and each
person who controls such Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, an "Initial
Purchaser Indemnified Person") against any losses, claims, damages, liabilities
or expenses, joint or several, as the same are incurred, to which such Initial
Purchaser Indemnified Person may become subject insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) (1) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Offering Materials or any amendment or supplement
thereto or arise out of or are based upon the omission or alleged omission to
state in the Offering Materials a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, other than the Initial Purchaser Information (as defined below) or
(2) are based upon any breach by the Co-Issuers of any of its representations,
warranties or agreements contained in this Agreement, and shall periodically
reimburse the Initial Purchaser for any and all legal or other expenses
reasonably incurred by the Initial Purchaser and each other Initial Purchaser
Indemnified Person in connection with investigating or defending, settling,
compromising or paying any such losses, claims, damages, liabilities, expenses
or actions as such expenses are incurred; provided, however, that the foregoing
indemnity with respect to any untrue statement contained in or any statement
omitted from any Offering Materials (as the same may be amended or supplemented)
shall not inure to the benefit of the Initial Purchaser (or any Person
controlling the Initial Purchaser), if (x) such
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loss, liability, claim, damage or expense resulted from the fact that the
Initial Purchaser sold Notes to a Person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Offering
Memorandum, as then amended or supplemented, (y) the Issuer shall have
previously and timely furnished sufficient copies of the Offering Memorandum, as
so amended or supplemented, to the Initial Purchaser in accordance with this
Agreement and (z) the Offering Memorandum, as so amended or supplemented, would
have corrected such untrue statement or omission.
(b) The Initial Purchaser shall indemnify and hold harmless the Issuer and
the Co-Issuer, each of their respective affiliates, their respective officers,
directors, managers and each person controlling the Issuer and Co-Issuer within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any losses, claims, damages, liabilities or expenses, joint or
several, as the same are incurred, to which the Issuer or the Co-Issuer may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
statements set forth in the Initial Purchaser Information with respect to such
Initial Purchaser or acts or omissions thereof or arise out of or are based upon
the omission or alleged omission to state in such paragraphs a material fact
necessary with respect to such Initial Purchaser or acts or omissions thereof to
make the statements in such paragraphs, in the light of the circumstances under
which they are made, not misleading. The parties acknowledge that the only
information provided by the Initial Purchaser is in the Offering Memorandum on
the cover page in the first sentence of the fourth paragraph and in the Section
entitled "Subscription and Sale" in the first sentence of the first paragraph,
third and fifth paragraphs, second sentence of the sixth paragraph, seventh and
eighth paragraphs and twelfth paragraphs (collectively, the "Initial Purchaser
Information");
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise under such subsection except to the extent it has been materially
prejudiced by such failure. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it may elect, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval of
counsel by the indemnified party, the indemnifying party shall not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed
- 13 -
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) for
the indemnified party), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party at the expense of the indemnifying
party to represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii).
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as
incurred as a result of such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Co-Issuers and the Initial Purchaser from
the offering of the Notes. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Co-Issuers on the one hand
and the Initial Purchaser on the other in connection with the statements or
omissions or breaches of representations, warranties or agreements which
resulted in such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Co-Issuers and WCM shall be in the same
proportion as the total proceeds to the Co-Issuers from the sale of Notes and
the discounts and commissions received by WCM bear to each other. The relative
fault shall be determined by reference to, among other things, whether the
indemnified party failed to give the notice required under subsection (c) above,
including the consequences of such failure, and whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Co-Issuers on the
one hand or by the Initial Purchaser on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement, omission or breach. The Co-Issuers and the Initial Purchaser
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim (which shall be limited as provided in subsection (c) above if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof). Notwithstanding the provisions of this subsection (d),
the Initial Purchaser shall not be required to contribute any amount in excess
of the amount by which the amount of the discounts and commissions received by
such Initial Purchaser exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
- 14 -
fraudulent misrepresentation shall be entitled to a contribution from any person
who was not guilty of such fraudulent misrepresentation.
9. Duration, Termination and Assignment of this Agreement.
(a) This Agreement shall become effective as of the date first written
above and shall remain in force until terminated as provided in this Section 9.
(b) This Agreement may be terminated by WCM at any time without the
payment of any penalty by the Initial Purchaser, if there is a breach of any of
the representations, warranties, covenants or agreements of the Issuer or the
Co-Issuer hereunder or if any of the conditions set forth in Section 7 have not
been satisfied.
(c) This Agreement may be terminated by WCM in the event that on or after
the date hereof, there shall have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or in trading of the securities of the Collateral Manager or
any affiliate of the Collateral Manager on any exchange or over-the-counter
market; (ii) a general moratorium on commercial banking activities declared by
either federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, or other calamity or crisis, if
the effect of any such event specified in this clause (iii) in the judgment of
WCM makes it impracticable or inadvisable to proceed with the offering or
delivery of the Notes on the terms and in the manner contemplated by this
Agreement and in the Offering Memorandum.
(d) The Issuer shall pay all fees and expenses in connection with the
offering and sale of the Notes from amounts standing to the credit of the
Expense Account immediately following the termination of this Agreement pursuant
to Section 9(c) hereof.
(e) This Agreement is not assignable by any party hereto; provided,
however, that the Initial Purchaser may assign this Agreement, or any of its
rights or obligations hereunder, in writing to any of its affiliates, provided,
that the rights of the Issuer or Co-Issuer shall not be affected by such
assignment. Upon an assignment by the Initial Purchaser pursuant to this Section
9(e), such Initial Purchaser shall cause the assignee to assume in writing all
of the obligations and liabilities of the Initial Purchaser hereunder and shall
notify the Issuer and the Co-Issuer of such assignment.
10. Notices. All communications hereunder shall be in writing and shall be
mailed, hand delivered or faxed and confirmed to the parties as follows:
If to Wachovia Capital Markets, LLC:
Wachovia Capital Markets, LLC
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxx Xxx
- 15 -
If to the Issuer:
Arbor Realty Mortgage Securities Series 2004-1, Ltd.
c/o Maples Finance Limited
Xxxxxx Xxxxx
X.X. Xxx 0000 XX
Xxxxxxxxxx House, South Church Street
Xxxxxx Town, Grand Cayman, Cayman Islands
Attention: The Directors
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to the Collateral Manager:
Arbor Realty Collateral Management, LLC
000 Xxxxx Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Executive Vice President, Structured Securitization
If to the Co-Issuer:
Arbor Realty Mortgage Securities Series 2004-1 LLC
c/o Puglisi & Associates
000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to the Collateral Manager (as addressed above).
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
11. Consent to Jurisdiction. Each of the Issuer and the Co-Issuer (i)
agrees that any legal suit, action or proceeding brought by any party to enforce
any rights under or with respect to this Agreement or any other document or the
transactions contemplated hereby or thereby may be instituted in any federal
court in The City of New York, State of New York, U.S.A.; provided, however,
that if a federal court in the City of New York declines jurisdiction for any
reason, any legal suit, action or proceeding brought by any party to enforce any
rights under or with respect to this Agreement or any other document or the
transactions contemplated hereby or thereby may be instituted in any state court
in the City of New York, State of New York, U.S.A., (ii) irrevocably waives to
the fullest extent permitted by law any objection which it may now or hereafter
have to the laying of venue of any such suit, action or proceeding instituted in
the City of New York, State of New York, U.S.A., (iii) irrevocably waives to the
fullest extent permitted by law any claim that and agrees not to claim or plead
in any court that any such
- 16 -
action, suit or proceeding brought in a court in the City of New York, State of
New York, U.S.A. has been brought in an inconvenient forum and (iv) irrevocably
submits to the non-exclusive jurisdiction of any such court in any such suit,
action or proceeding or for recognition and enforcement of any judgment in
respect thereof.
Each of the Issuer and the Co-Issuer hereby irrevocably and
unconditionally designates and appoints CT Corporation System, 111 8th Avenue,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. (and any successor entity), as its
authorized agent to receive and forward on its behalf service of any and all
process which may be served in any such suit, action or proceeding in any such
court and agrees that service of process upon CT Corporation shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding and shall be taken and held to be valid personal service upon it.
Said designation and appointment shall be irrevocable. Nothing in this Section
11 shall affect the rights of the Initial Purchaser, its affiliates or any
indemnified party to serve process in any manner permitted by law. Each of the
Issuer and the Co-Issuer further agrees to take any and all action, including
the execution and filing of any and all such documents and instruments, as may
be necessary to continue such designation and appointment of CT Corporation in
full force and effect so long as the Notes are outstanding but in no event for a
period longer than five years from the date of this Agreement. Each of the
Issuer and the Co-Issuer hereby irrevocably and unconditionally authorizes and
directs CT Corporation to accept such service on their behalf. If for any reason
CT Corporation ceases to be available to act as such, each of the Issuer and the
Co-Issuer agrees to designate a new agent in New York City on the terms and for
the purposes of this provision reasonably satisfactory to the Initial Purchaser.
To the extent that either the Issuer or the Co-Issuer has or hereafter may
acquire any immunity from jurisdiction of any court (including, without
limitation, any court in the United States, the State of New York, Cayman
Islands or any political subdivision thereof) or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property or
assets, this Agreement, or any other documents or actions to enforce judgments
in respect of any thereof, it hereby irrevocably waives such immunity, and any
defense based on such immunity, in respect of its obligations under the
above-referenced documents and the transactions contemplated thereby, to the
extent permitted by law.
12. Judgment Currency. If pursuant to a judgment or order being made or
registered against the either the Issuer or the Co-Issuer, any payment under or
in connection with this Agreement to the Initial Purchaser is made or satisfied
in a currency (the "Judgment Currency") other than in United States Dollars
then, to the extent that the payment (when converted into United States Dollars
at the rate of exchange on the date of payment or, if it is not practicable for
such Initial Purchaser to purchase United States Dollars with the Judgment
Currency on the date of payment, at the rate of exchange as soon thereafter as
it is practicable to do so) actually received by such Initial Purchaser falls
short of the amount due under the terms of this Agreement, the Issuer or the
Co-Issuer, as applicable, shall, to the extent permitted by law, as a separate
and independent obligation, indemnify and hold harmless the Initial Purchaser
against the amount of such short fall and such indemnity shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. For
the purpose of this Section, "rate of exchange" means the rate at which such
Initial Purchaser is able on the relevant date to
- 17 -
purchase United States Dollars with the Judgment Currency and shall take into
account any premium and other costs of exchange.
13. Amendments to this Agreement. This Agreement may be amended by the
parties hereto only if such amendment is specifically approved in writing by the
Issuer, the Co-Issuer and by the Initial Purchaser. The Co-Issuers must provide
notice of any amendment or modification of this Agreement to each Rating Agency
rating the Notes at the time of any such amendment or modification.
14. Parties. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchaser, the Co-Issuers and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Initial
Purchaser, the Co-Issuers and their respective successors and the controlling
persons and officers and directors referred to in Section 8, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provisions herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Initial
Purchaser, the Co-Issuers, each of their respective affiliates and their
respective successors, and said controlling persons and officers, directors and
managers and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
15. Governing Law. This Agreement shall be construed in accordance with
the internal laws of the State of New York, without giving effect to the choice
of law principles thereof.
16. Counterparts. This Agreement may be simultaneously executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall together constitute but one and the same agreement.
17. Representations, Warranties and Indemnities to Survive Delivery. The
respective representations, warranties and indemnities of the Issuer, the
Co-Issuer, of their respective officers and of the Initial Purchaser set forth
in or made pursuant to, this Agreement, including any warranty relating to the
payment of expenses owed to the Initial Purchaser hereunder shall remain in full
force and effect and shall survive delivery of and payment for the Notes and any
termination of this Agreement.
18. No Petition Agreement. The Initial Purchaser agrees that, so long as
any Note is outstanding and for a period of one year plus one day or, if longer,
the applicable preference period then in effect after payment in full of all
amounts payable under or in respect of the transaction documents, it shall not
institute against or join or assist any other Person in instituting against, any
of the Issuer or the Co-Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal or
state bankruptcy or similar law. This Section shall survive any termination of
this Agreement.
19. Non Recourse Agreement. Notwithstanding any other provision of this
Agreement, all obligations of the Issuer or the Co-Issuer arising hereunder or
in connection herewith are limited in recourse to the Pledged Obligations and to
the extent the proceeds of the
- 18 -
Pledged Obligations, when applied in accordance with the Priority of Payments,
are insufficient to meet the obligations of the Issuer or the Co-Issuer
hereunder in full, the Issuer or the Co-Issuer, as applicable, shall have no
further liability in respect of any such outstanding obligations and any claims
against the Issuer or the Co-Issuer, as applicable, shall be extinguished and
shall not thereafter revive. This Section shall survive any termination of this
Agreement.
- 19 -
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Purchase Agreement as of the day and year first above written.
ARBOR REALTY MORTGAGE SECURITIES
SERIES 2004-1, LTD., as Issuer
By: /s/ Xxx X. Xxxxxx, Xx.
-------------------------
Name: Xxx X. Xxxxxx, Xx.
Title: Authorized Signatory
ARBOR REALTY MORTGAGE SECURITIES
SERIES 2004-1 LLC, as Co-Issuer
By: /s/ Xxx X. Xxxxxx, Xx.
-------------------------
Name: Xxx X. Xxxxxx, Xx.
Title: Authorized Signatory
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ Xxxxxxxx Xxx
-------------------------
Name: Xxxxxxxx Xxx
Title: VP
EXHIBIT A
ARBOR REALTY COLLATERAL MANAGEMENT, LLC
Officer's Certificate
The undersigned, ____________________, pursuant to Section 7(c) of that
certain Purchase Agreement dated as of January 19, 2005, by and among Arbor
Realty Mortgage Securities Series 2004-1, Ltd., Arbor Realty Mortgage Securities
Series 2004-1 LLC and Wachovia Capital Markets, LLC (the "Purchase Agreement")
does HEREBY CERTIFY that:
(a) The Collateral Manager (i) has been duly organized, is validly
existing and is in good standing under the laws of the State of Delaware, (ii)
has full power and authority to own the Collateral Manager's assets and to
transact the business in which it is currently engaged, and (iii) is duly
qualified and in good standing under the laws of each jurisdiction where the
Collateral Manager's ownership or lease of property or the conduct of the
Collateral Manager's business requires, or the performance of the Collateral
Management Agreement and the Indenture would require, such qualification, except
for failures to be so qualified that would not in the aggregate have a material
adverse effect on the business, operations, assets or financial condition of the
Collateral Manager or the ability of the Collateral Manager to perform its
obligations under, or on the validity or enforceability of, the Collateral
Management Agreement and the provisions of the Indenture applicable to the
Collateral Manager; the Collateral Manager has full power and authority to
execute, deliver and perform the Collateral Management Agreement and the
Collateral Manager's obligations thereunder and the provisions of the Indenture
applicable to the Collateral Manager; the Collateral Management Agreement has
been duly authorized, executed and delivered by the Collateral Manager and
constitutes a legal, valid and binding agreement of the Collateral Manager,
enforceable against it in accordance with the terms thereof, except that the
enforceability thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (ii) general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at law);
(b) Neither the Collateral Manager nor any of its Affiliates is in
violation of any Federal or state securities law or regulation promulgated
thereunder that would have a material adverse effect upon the ability of the
Collateral Manager to perform its duties under the Collateral Management
Agreement or the Indenture, and there is no charge, investigation, action, suit
or proceeding before or by any court or regulatory agency pending or, to the
best knowledge of the Collateral Manager, threatened which could reasonably be
expected to have a material adverse effect upon the ability of the Collateral
Manager to perform its duties under the Collateral Management Agreement or the
Indenture;
(c) Neither the execution and delivery of the Collateral Management
Agreement nor the performance by the Collateral Manager of its duties thereunder
or under the Indenture conflicts with or will violate or result in a breach or
violation of any of the terms or provisions of, or constitutes a default under:
(i) the limited liability company agreement of the Collateral Manager, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement or other evidence of indebtedness or other agreement, obligation,
condition, covenant or instrument to which the Collateral Manager is a party or
is bound, (iii) any law, decree, order, rule or regulation applicable to the
Collateral Manager of any court or regulatory, administrative or governmental
agency, body or authority or arbitrator having jurisdiction over the Collateral
Manager or its properties, and which would have, in the case of any of (i), (ii)
or (iii) of this subsection (c), either individually or in the aggregate, a
material adverse effect on the business, operations, assets or financial
condition of the Collateral Manager or the ability of the Collateral Manager to
perform its obligations under the Collateral Management Agreement or the
Indenture;
(d) No consent, approval, authorization or order of or declaration or
filing with any government, governmental instrumentality or court or other
person is required for the performance by the Collateral Manager of its duties
under the Collateral Management Agreement and under the Indenture, except such
as have been duly made or obtained;
(e) The Offering Memorandum, as of the date thereof (including as of the
date of any supplement thereto) and as of the Closing Date does not contain any
untrue statement of a material fact and does not omit to state any material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(f) On the Closing Date, there shall not have been, since the respective
dates as of which information is given in the Offering Materials, any material
adverse change or prospective material adverse change with respect to the
Issuer, the Co-Issuer or the Collateral; and
(g) The Collateral Manager is subject to a valid exemption from
registration as a registered investment adviser under the Advisers Act.
Capitalized terms not set forth herein shall have the meaning ascribed thereto
in the Indenture.
- 2 -
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 19th
day of January, 2005.
ARBOR REALTY COLLATERAL
MANAGEMENT, LLC
By: _____________________________
Name:
Title:
SCHEDULE A
CLASS PURCHASE PRICE
----- --------------
Class A Notes
Class B Notes
Class C Notes
Class D Notes
