Exhibit 10.26
ARBOR REALTY MORTGAGE SECURITIES SERIES 2006-1, LTD.,
as the Issuer,
ARBOR REALTY MORTGAGE SECURITIES SERIES 2006-1 LLC,
as the Co-Issuer,
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Class A-1AR Note Agent
and
THE CLASS A-1AR HOLDERS PARTY HERETO
CLASS A-1AR NOTE PURCHASE AGREEMENT
Dated as of December 14, 2006
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS.............................................................. 2
Section 1.01 Defined Terms.......................................... 2
Section 1.02 Terms Generally........................................ 5
ARTICLE 2
THE COMMITMENTS.......................................................... 5
Section 2.01 Commitments............................................ 5
Section 2.02 Advances and Class A-1AR Draws......................... 6
Section 2.03 Requests for Class A-1AR Draws......................... 6
Section 2.04 Funding of Class A-1AR Draws........................... 7
Section 2.05 Termination and Reduction of Class A-1AR Commitments... 7
Section 2.06 Advances; Prepayments.................................. 8
Section 2.07 [Reserved]............................................. 8
Section 2.08 Class A-1AR Commitment Fee............................. 8
Section 2.09 Breakage Costs......................................... 8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES; COLLATERAL............................... 9
Section 3.01 Representations and Warranties......................... 9
Section 3.02 Several Representations and Covenants of Each Holder
and Each Committed Liquidity Provider.................. 10
ARTICLE 4
CONDITIONS............................................................... 13
Section 4.01 Closing Date Conditions................................ 13
Section 4.02 Conditions to Advances................................. 14
Section 4.03 Obligations Unconditional.............................. 14
Section 4.04 Class A-1AR Draws on a Mandatory Class A-1AR
Draw Date.............................................. 14
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ARTICLE 5
THE CLASS A-1AR NOTE AGENT............................................... 15
Section 5.01 Appointment............................................ 15
Section 5.02 Certain Duties and Responsibilities.................... 15
Section 5.03 Compensation........................................... 16
Section 5.04 Resignation and Removal; Appointment of a Successor.... 17
Section 5.05 Acceptance of Appointment by Successor................. 18
ARTICLE 6
MISCELLANEOUS............................................................ 19
Section 6.01 Notices................................................ 19
Section 6.02 Waivers; Amendments.................................... 19
Section 6.03 Successors and Assigns................................. 20
Section 6.04 Survival............................................... 23
Section 6.05 Counterparts; Integration; Effectiveness............... 23
Section 6.06 Severability........................................... 23
Section 6.07 Governing Law; Jurisdiction; Consent to Service of
Process; Waiver of Jury Trial Right.................... 23
Section 6.08 Benefits of Indenture and this Agreement............... 24
Section 6.09 Headings............................................... 25
Section 6.10 No Proceedings......................................... 25
Section 6.11 Recourse Against Certain Parties....................... 25
Section 6.12 Non-Petition; Non-Recourse Obligations................. 26
Section 6.13 Term, Termination...................................... 26
Section 6.14 Disclosure............................................. 26
Schedule I Initial Holders
Schedule II Holder Representations
EXHIBIT A Form of Assignment and Acceptance
EXHIBIT B Form of Class A-1AR Draw Request
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CLASS A-1AR NOTE PURCHASE AGREEMENT (as amended, restated,
supplemented or modified from time to time, this "Agreement") dated as of
December 14, 2006 among:
ARBOR REALTY MORTGAGE SECURITIES SERIES 2006-1, LTD., a Cayman Islands
exempted company with limited liability (together with its successors and
assigns, the "Issuer");
ARBOR REALTY MORTGAGE SECURITIES SERIES 2006-1 LLC, a Delaware limited
liability company (together with its successors and assigns, the "Co-Issuer" and
together with the Issuer, the "Co-Issuers");
The HOLDERS (as such term is defined below) party hereto; and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as agent for the Holders from
time to time of the Class A-1AR Notes (together with its successors in such
capacity, the "Class A-1AR Note Agent").
WHEREAS, the Co-Issuers will issue the U.S.$230,000,000 Class A-1A
Senior Secured Floating Rate Term Notes, Due 2042 (the "Class A-1A Notes"), up
to U.S.$100,000,000 Class A-1AR Revolving Senior Secured Floating Rate Term
Notes, Due 2042 (the "Class A-1AR Notes" and, together with the Class A-1A
Notes, the "Class A-1 Notes"), the U.S.$72,900,000 Class A-2 Second Priority
Senior Secured Floating Rate Term Notes, Due 2042 (the "Class A-2 Notes" and,
together with the Class A-1 Notes, the "Class A Notes"), the U.S.$41,100,000
Class B Third Priority Floating Rate Term Notes, Due 2042 (the "Class B Notes"),
the U.S.$31,200,000 Class C Fourth Priority Floating Rate Capitalized Interest
Term Notes, Due 2042 (the "Class C Notes"), the U.S.$13,350,000 Class D Fifth
Priority Floating Rate Capitalized Interest Term Notes, Due 2042 (the "Class D
Notes"), the U.S.$14,250,000 Class E Sixth Priority Floating Rate Capitalized
Interest Term Notes, Due 2042 (the "Class E Notes"), the U.S.$13,650,000 Class F
Seventh Priority Floating Rate Capitalized Interest Term Notes, Due 2042 (the
"Class F Notes"), the U.S.$16,950,000 Class G Eighth Priority Floating Rate
Capitalized Interest Term Notes, Due 2042 (the "Class G Notes"), and the
U.S.$14,100,000 Class H Ninth Priority Floating Rate Capitalized Interest Term
Notes, Due 2042 (the "Class H Notes" and, together with the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes and the Class G Notes, the "Notes");
WHEREAS, the Issuer also will issue 52,500,000 Preferred Shares, par
value U.S.$0.0001 per share (the "Preferred Shares" and, together with the
Notes, the "Securities"), having a notional amount equal to U.S.$1.00 per share;
WHEREAS, the Notes will be issued pursuant to an Indenture to be dated
as of the date hereof (the "Indenture"), among the Issuer, the Co-Issuer, Arbor
Realty SR, Inc., as advancing agent, and Xxxxx Fargo Bank, National Association
("Xxxxx Fargo"), as trustee (together with any successor permitted under the
Indenture, the "Trustee"), paying agent, calculation agent, transfer agent,
custodial securities intermediary, backup advancing agent and
notes registrar, and the Preferred Shares will be issued pursuant to a preferred
shares paying agency agreement to be dated as of the date hereof (the "Preferred
Shares Paying Agency Agreement"), among the Issuer, Xxxxx Fargo, as paying agent
and transfer agent (together with any successor permitted under the Preferred
Shares Paying Agency Agreement, the "Preferred Shares Paying Agent"), and Xxxxxx
Finance Limited, as share registrar;
WHEREAS, the Co-Issuers, the Class A-1AR Note Agent and the Holders
from time to time of the Class A-1AR Notes issued under the Indenture wish to
evidence certain agreements relating to, among other things, the right of the
Issuer (at the direction of the Collateral Manager) to borrow, repay and
re-borrow amounts under the Class A-1AR Notes both during the Ramp-Up Period and
the Reinvestment Period, and the appointment of the Class A-1AR Note Agent as
agent for the Holders, all as provided in this Agreement and in the Indenture;
and
WHEREAS, the Co-Issuers have, under and in accordance with the terms
of the Indenture, Granted to the Trustee, for the benefit and security of the
Secured Parties, all of the Co-Issuers' right, title and interest in, to and
under this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Defined Terms.
Terms used but not defined herein have the respective meanings
ascribed to such terms in (or incorporated by reference in) the Indenture. In
addition, as used in this Agreement, the following terms have the meanings
specified below:
"Advances" means the advances made to the Issuer by the Holders or by
one or more Liquidity Providers hereunder, as the case may be, in respect of the
Class A-1AR Notes.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Holder and an assignee of such Holder substantially in the form of
Exhibit A or any other form reasonably approved by the Collateral Manager and
the Class A-1AR Note Agent.
"Break Funding Event" has the meaning specified in Section 2.09(a).
"Class A-1AR Breakage Amount" has the meaning specified in Section
2.09(a).
"Class A-1AR Commitment" means, in the case of any Holder, the
obligation of such Holder at any time to make Advances in an aggregate principal
amount not to exceed the
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initial Class A-1AR Commitment of each Holder as set forth on Schedule I (in the
case of an Initial Holder) or in the Assignment and Acceptance pursuant to which
such Holder shall have assumed its Class A-1AR Commitment, as applicable, as
such obligation may be reduced or increased from time to time pursuant to
Section 2.05 or pursuant to assignments by or to such Holder pursuant to Section
6.03.
"Class A-1AR Draw" has the meaning specified in Section 2.01.
"Class A-1AR Draw Request" has the meaning specified in Section 2.03.
"Class A-1AR Eligible Investments" has the meaning set forth in
Section 3.02(d).
"Class A-1AR Note Agent Fee" means U.S.$0.
"Class A-1AR Note Register" has the meaning specified in Section 2.06.
"Collateral Account Termination Date" means, with respect to any
Holder that (i) has deposited cash into the Holder Subaccount pursuant to
Section 3.02(c) or (ii) has had payments deposited into the Holder Subaccount
pursuant to the last sentence of Section 3.02(c), the earliest to occur of (a)
the assignment by such Holder of all of its rights and obligations pursuant to
Section 3.02(c), (b)(x) in the case of a Holder described in clause (i) above,
the delivery by such Holder, to the Co-Issuers, the Class A-1AR Note Agent, the
Collateral Manager, the Trustee and each Rating Agency, of a certification in
writing that such Holder satisfies the Class A-1AR Ratings Criteria, such
certification to include a letter from each Rating Agency establishing such
ratings upgrade or such other evidence as shall be reasonably satisfactory to
the Trustee, the Class A-1AR Note Agent, the Collateral Manager and the
Co-Issuers and (y) in the case of a Holder described in clause (ii) above, the
delivery by such Holder of a certification in writing that such Holder has
satisfied in full all previously defaulted obligations to make Advances under
Section 2.01 and (c) the end of the Revolving Period.
"Committed Liquidity Provider" has the meaning specified in Section
6.03(f).
"CP Conduit" means a limited-purpose entity established to issue
commercial paper notes, and any Holder which is a CP Conduit shall be identified
as such on the signature pages hereto, Schedule I hereto and/or any related
Assignment and Assumption Agreement, as applicable.
"Defaulting Holder" has the meaning specified in Section 3.02(c).
"Election Notice" has the meaning specified in Section 6.03(f).
"Excepted Persons" has the meaning specified in Section 6.14(a).
"Holder" means each Initial Holder and any other Person that shall
have become a Holder of a Class A-1AR Note pursuant to a transfer of Class A-1AR
Notes in accordance with Section 6.03 (including any Committed Liquidity
Provider) (other than any such Person that ceases to be a party hereto pursuant
to a transfer of all of its Class A-1AR Notes to another Person pursuant to
Section 6.03).
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"Indemnified Person" has the meaning specified in Section
5.03(a)(iii).
"Initial Holder" means each initial Holder of Class A-1AR Notes listed
on Schedule I under the caption "INITIAL HOLDERS."
"Losses" has the meaning specified in Section 5.03(a)(iii).
"Maximum Class A-1AR Commitment" means the maximum aggregate Class
A-1AR Commitments, which shall equal U.S.$100,000,000 on the Closing Date; as
such amount may be decreased as a result of Mandatory Redemptions, Special
Amortizations or redemptions in connection with Rating Confirmation Failures as
described in Section 18.1(e) of the Indenture.
"Notice of Prepayment" has the meaning set forth in Section 2.09(a).
"Qualified Securitization Pledge" means, with respect to any Holder of
a Class A-1AR Note that is a CP Conduit and indicates that it will make a
Qualified Securitization Pledge on Schedule I to this Agreement (in the case of
any Initial Holder) or in the Assignment and Acceptance delivered by it with
respect to the interests of a Holder of a Class A-1AR Note, a bona fide pledge
by such Holder of its right, title and interest in and to any Class A-1AR Note
pursuant to its program collateral or security agreement with a collateral agent
to secure obligations owing by such Holder to such Holder's Liquidity Providers,
debt holders or other creditors, but only:
(1) if such pledge would not (in the reasonable judgment of the
Holder; provided that the Co-Issuers do not reasonably object) (A) have the
effect of requiring the Issuer, the Co-Issuer or the pool of Assets to
register as an "investment company" under the Investment Company Act; (B)
adversely affect the Issuer's ability to use the exception provided for by
Section 3(c)(7) of the Investment Company Act; (C) subject the Issuer or
the Notes to the registration requirements of the Securities Act; (D)
result in a non-exempt prohibited transaction under ERISA or the Code, or a
violation of provisions of federal, state, local, non-U.S. or other laws or
regulations that are substantively similar thereto; or (E) cause the Issuer
to fail to maintain its status as a "qualified REIT subsidiary" (within the
meaning of Section 856(i)(2) of the Code), or otherwise subject the Issuer
to U.S. federal income tax on a net income basis; and
(2) if such Holder from time to time delivers to the Co-Issuers, the
Collateral Manager and the Trustee such information concerning such Holder,
such collateral agent and such Liquidity Providers, debt holders or other
creditors as the Co-Issuers or the Collateral Manager may reasonably
request in order for the Co-Issuers to determine whether they object to the
Holder's conclusion referred to in clause (1) above;
provided that, upon any foreclosure action in respect of any such pledge and any
related purported transfer of legal or beneficial ownership of such Class A-1AR
Note or any right, title or interest therein, any such purported transfer will
be considered to be a "transfer" of such Class A-1AR Note (or such right, title
or interest) for all purposes of the Indenture (including for purposes of
Section 2.5 of the Indenture).
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"Revolving Period" means the period from and including the Closing
Date to but excluding the Commitment Termination Time.
Section 1.02 Terms Generally.
The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The word "will" shall be construed to have
the same meaning and effect as the word "shall." Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein," "hereof" and "hereunder," and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof and (d) all references herein to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement.
ARTICLE 2
THE COMMITMENTS
Section 2.01 Commitments.
(a) Subject to the terms and conditions set forth herein, each Holder
agrees to make Advances (the aggregate of all contemporaneous Advances by the
Holders, a "Class A-1AR Draw") to the Issuer from time to time during the
Revolving Period in an aggregate principal amount at any one time outstanding up
to but not exceeding the amount of such Holder's Class A-1AR Commitment;
provided that (i) the aggregate principal amount of all Advances of the Holders
hereunder at any one time outstanding shall in no event exceed the Maximum Class
A-1AR Commitment and (ii) the aggregate principal amount of Advances of any one
Holder hereunder at any one time outstanding shall in no event exceed such
Holder's Class A-1AR Commitment.
(b) Notwithstanding the foregoing, but subject to the foregoing
provisos and to Section 6.03(f):
(i) no Holder that enters into a Liquidity Facility with one or more
Committed Liquidity Providers that is subject to Section 6.03(f) (other
than a Holder that is maintaining a Holder Subaccount as provided in
Section 3.02(d), and has delivered an Election Notice identifying the
Committed Liquidity Provider, who shall be so obligated to the extent of
funds then on deposit therein) shall be obligated to make any Advance to
the Issuer with respect to any Class A-1AR Note, except to the extent that
such Holder has received funds from its financing arrangements in place
with respect to the Class A-1AR Notes (including such Liquidity Facility
with one or more Committed Liquidity
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Providers) which may (consistent with such financing arrangements) be used
to make such Advance; and
(ii) any such Holder referred to in clause (i) above shall enforce all
of its material rights under such Liquidity Facility from time to time to
ensure that, to the fullest extent possible consistent with such Liquidity
Facility, such Holder shall have funds available to make Advances hereunder
in a timely manner.
Within the foregoing limits and subject to the terms and conditions
set forth herein and in the Indenture, the Issuer (at the direction of the
Collateral Manager) may borrow, repay and re-borrow Advances.
Section 2.02 Advances and Class A-1AR Draws.
(a) Each Advance shall be made as part of a Class A-1AR Draw
consisting of Advances made by the Holders ratably in accordance with the
unfunded amounts of their respective Class A-1AR Commitments. The failure of any
Holder to make any Advance required to be made by it shall not relieve any other
Holder of its obligations hereunder; provided that the Class A-1AR Commitments
are several and no Holder shall be responsible for any other Holder's failure to
make Advances as so required. No Advance may be made if, after giving effect
thereto and to any other Class A-1AR Draw Request given and pending, the
aggregate outstanding principal amount of all Advances shall exceed the Maximum
Class A-1AR Commitment; provided that aggregate partial Advances up to and
including the Maximum Class A-1AR Commitments shall be made.
(b) The aggregate principal amount of all Advances required to be made
in respect of any requested Class A-1AR Draw shall be at least U.S.$500,000 (and
integral multiples of U.S.$500 in excess thereof) or, if the aggregate undrawn
amount is less than such required threshold, such lesser amount.
(c) In the case of any Class A-1AR Draw, the proceeds of such Class
A-1AR Draw shall be deposited solely (i) into the Delayed Funding Obligations
Account, to fund Delayed Funding Amounts relating to Delayed Draw Term Loans,
(ii) into the Principal Collection Account, to acquire additional Collateral
Debt Securities in accordance with the relevant provisions of the Indenture or
otherwise distributed pursuant to and in accordance with the Priority of
Payments or (iii) into the Principal Collection Account to be used in connection
with a Special Amortization. None of the proceeds of such Class A-1AR Draw shall
be used by the Issuer, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any Margin Stock. No
Advance will be secured, directly or indirectly, by Margin Stock and the pool of
Assets will not include any Margin Stock.
Section 2.03 Requests for Class A-1AR Draws.
To request a Class A-1AR Draw on any date other than the Closing Date,
the Issuer (or the Collateral Manager on behalf of the Issuer) shall notify the
Class A-1AR Note Agent (with a copy to the Trustee) (each such notice, a "Class
A-1AR Draw Request") of such request by facsimile or electronic messaging system
not later than 11:00 a.m. (New York City time), at least three Business Days
prior to the date of the proposed Class A-1AR Draw. Each
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such facsimile or electronic Class A-1AR Draw Request shall be irrevocable and
shall be confirmed promptly by certified mail, return receipt requested, hand
delivered or sent by overnight courier service guaranteeing next day delivery to
the Class A-1AR Note Agent (with a copy to the Trustee) of a written Class A-1AR
Draw Request in the form of Exhibit B hereto and signed by the Issuer (or the
Collateral Manager on behalf of the Issuer). Each such Class A-1AR Draw Request
shall specify the following information in compliance with Section 2.02 of this
Agreement and Section 18.1 of the Indenture:
(a) the aggregate amount of the requested Class A-1AR Draw;
(b) the date of such Class A-1AR Draw, which shall be a Business Day;
and
(c) wire instructions and account information for the Class A-1AR
Draw.
Promptly following receipt of a Class A-1AR Draw Request, on the date
of receipt of a Class A-1AR Draw Request for a Class A-1AR Draw, the Class A-1AR
Note Agent shall forward (by facsimile or electronic messaging system) to each
Holder (with a copy to the Trustee) a copy of such Class A-1AR Draw Request
substantially in the form of Exhibit B hereto and of the amount of such Holder's
pro rata Advance to be made as part of the requested Class A-1AR Draw. Any Class
A-1AR Draw Request received after 11:00 a.m. (New York City time) on any
Business Day or on a day which is not a Business Day shall be deemed to be a
Class A-1AR Draw Request received at 9:00 a.m. on the next Business Day and to
be funded on the second next Business Day by the Holders of Class A-1AR Notes.
Section 2.04 Funding of Class A-1AR Draws.
Subject to Sections 2.01, 3.02(d), 4.02 and 4.03, each Holder shall
make each Advance to be made by it hereunder by initiating a wire transfer in
immediately available funds by 1:00 p.m. (New York City time) on the Business
Day specified in the Class A-1AR Draw Request to the account designated by the
Issuer (or the Collateral Manager on behalf of the Issuer) for such purpose by
notice to the Holders and the Trustee.
Section 2.05 Termination and Reduction of Class A-1AR Commitments.
(a) The Class A-1AR Commitments shall terminate at the close of
business (New York City time) on the last day of the Revolving Period.
(b) The aggregate amount of the Class A-1AR Commitments shall be
subject to reduction from time to time as provided in Section 11.1 and Section
18.1 of the Indenture.
(c) Each reduction of the Class A-1AR Commitments shall be made
ratably among the Holders in accordance with the amounts of their respective
Class A-1AR Commitments. No termination or reduction of the Class A-1AR
Commitments shall be effected except as provided in Section 2.05(b) hereof, and
Section 11.1 and Section 18.1 of the Indenture.
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Section 2.06 Advances; Prepayments.
(a) All Advances made by a Holder shall be evidenced by the Class
A-1AR Note of such Holder and shall be governed by and subject to this Agreement
and the Indenture. Advances may be prepaid from time to time to the extent
payments are either required or permitted to be made under the Indenture;
provided that any Class A-1AR Prepayment on a Payment Date, under Section 18.3
of the Indenture, shall be made upon not less than two Business Days notice to
the Class A-1AR Note Agent (with a copy to the Trustee and the Holders of the
Class A-1AR Notes) by Issuer Order (or by the Collateral Manager on behalf of
the Issuer) specifying the amount and date of such Class A-1AR Prepayment, and
the Class A-1AR Note Agent shall promptly notify each Holder of the contents of
such notice from the Issuer (or from the Collateral Manager). Each such notice
of a Class A-1AR Prepayment shall be irrevocable.
(b) The Class A-1AR Note Agent hereby agrees that it shall keep a
register (the "Class A-1AR Note Register") at the office of the Class A-1AR Note
Agent and in which the Class A-1AR Note Agent shall maintain records of the
Class A-1AR Commitment of each Holder, the aggregate principal amount of
Advances from time to time outstanding in respect of each Class A-1AR Note, a
copy of each Assignment and Acceptance delivered to the Class A-1AR Note Agent
pursuant to Section 6.03(b) and a copy of each Election Notice and of each
Assignment and Acceptance delivered to the Class A-1AR Note Agent pursuant to
Section 6.03(f). On each Determination Date and at any time promptly following a
request therefor by the Collateral Manager or the Trustee, the Class A-1AR Note
Agent shall provide the Collateral Manager and the Trustee with a report
specifying the aggregate principal amount of all Advances outstanding in respect
of each Class A-1AR Note, the Class A-1AR Commitment of the related Holder (as
of such Determination Date) and the ratings of each Holder (as reported by the
Collateral Manager to the Class A-1AR Note Agent) and any related Committed
Liquidity Provider.
(c) The aggregate principal amount of any partial voluntary Class
A-1AR Prepayment, in respect of the Class A-1AR Notes (taken as a whole), will
be at least U.S.$500,000 (and integral multiples of U.S.$500 in excess thereof)
or, if the Aggregate Outstanding Amount under the Class A-1AR Notes is less than
U.S.$500,000, such lesser amount.
Section 2.07 [Reserved].
Section 2.08 Class A-1AR Commitment Fee.
The Class A-1AR Commitment Fee shall accrue and be payable by the
Issuer as provided in the Indenture.
Section 2.09 Breakage Costs.
(a) If the Issuer prepays any principal of any Advance other than on a
Payment Date (including as a result of an Event of Default) (each such
prepayment, a "Break Funding Event"), the Issuer, or the Collateral Manager on
behalf of the Issuer, shall give each of the Class A-1AR Note Agent and the
Trustee notice (each, a "Notice of Prepayment") of a Class
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A-1AR Prepayment, no later than 10:00 a.m. (New York City time) at least four
Business Days before the date of such Class A-1AR Prepayment and the Class A-1AR
Note Agent, no later than 4:00 p.m. (New York City time) on the Business Day
following the date on which it receives such Notice of Prepayment (so long as
the Class A-1AR Note Agent has received such Notice of Prepayment by 10:00
a.m.), shall provide a copy of such Notice of Prepayment to each Holder and
notify each Holder of such Holder's pro rata share (calculated on the basis of
such Holder's purchase percentage) of such Class A-1AR Prepayment.
(b) If the Issuer, or the Collateral Manager on behalf of the Issuer,
gives a Notice of Prepayment, the Issuer shall compensate each Holder, in
accordance with the Priority of Payments, for funding losses in an amount (the
"Class A-1AR Breakage Amount") equal to the excess, if any, of (i) the amount of
interest that such Holder would earn on the principal amount of such prepayment
for the period (the "Remaining Period") from (and including) the date of such
Break Funding Event to but excluding the next Payment Date if the interest rate
payable on such principal prepayment were equal to LIBOR for the then current
Interest Accrual Period for such Advance, over (ii) the amount of interest that
such Holder would have earned on such principal amount of such prepayment for
the Remaining Period if such Holder were to invest such prepayment for the
Remaining Period at LIBOR determined with respect to the Remaining Period
(assuming LIBOR is determined in accordance with the Indenture). The Class A-1AR
Note Agent shall calculate each such Class A-1AR Breakage Amount in accordance
with the foregoing provisions and such calculation shall be conclusive absent
manifest error. The Issuer shall pay, in accordance with the Priority of
Payments, such Holder the Class A-1AR Breakage Amount on the next succeeding
Payment Date.
(c) The Issuer shall not be obligated to pay any additional amounts to
the Holder of any Class A-1AR Note or any beneficial owner of an interest in a
Class A-1AR Note as a result of any deduction for, or on account of, any present
or future taxes, duties, assessments or governmental charges with respect to
such Class A-1AR Note.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES; COLLATERAL
Section 3.01 Representations and Warranties.
Each of the Issuer and the Co-Issuer represents and warrants, as to
itself only, to the Holders, the Class A-1AR Note Agent and the Trustee that, as
of the date hereof:
(a) The Issuer has been duly incorporated and is validly existing
under the laws of the Cayman Islands. The Co-Issuer has been duly formed and is
validly existing under the laws of the State of Delaware.
(b) It has the power to execute and deliver this Agreement and the
Indenture and to perform its obligations under this Agreement and the Indenture
and has taken all necessary action to authorize such execution, delivery and
performance.
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(c) Such execution, delivery and performance do not violate or
conflict with any law applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual restriction binding on
or affecting it or any of its assets.
(d) All governmental and other consents that are required to have been
obtained by it with respect to the execution, delivery and performance of this
Agreement and the Indenture have been obtained and are in full force and effect
and all conditions of any such consents have been complied with.
(e) Its obligations under this Agreement, the Class A-1AR Notes and
the Indenture constitute its legal, valid and binding obligations, enforceable
against it in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether enforcement is sought
in a proceeding in equity or at law)).
(f) There is not pending or, to its knowledge, threatened against it,
or against any of its Affiliates, any action, suit or proceeding at law or in
equity or before any court, tribunal, government body, agency or official or any
arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or the Indenture or its ability (as a matter of
law) to perform its obligations under this Agreement or the Indenture.
(g) It is not required to register as an "investment company" under
the Investment Company Act.
(h) It has timely filed or caused to be filed all tax returns and
reports required to have been filed and has timely paid or caused to be paid all
taxes required to have been paid by it where the failure to do so could
reasonably be expected to result, singularly or in the aggregate, in a material
adverse effect.
(i) No Event of Default has occurred and is continuing.
Section 3.02 Several Representations and Covenants of Each Holder and
Each Committed Liquidity Provider.
Each Holder and each Committed Liquidity Provider severally represents
and warrants as of each date it shall acquire any interest in, or fund any
Advance (including the date that such Person shall become a party hereto
pursuant to an Assignment and Acceptance) and covenants (as to itself only and
as to no other Holder or Committed Liquidity Provider) to the Co-Issuers and the
Class A-1AR Note Agent that:
(a) it is an entity duly organized and validly existing and (if
applicable) in good standing under the laws of the jurisdiction of its
organization; it has the organizational power to execute and deliver this
Agreement and to perform its obligations under this Agreement and has taken all
necessary organizational action to authorize such execution, delivery and
performance; such execution, delivery and performance do not violate or conflict
with any law applicable to it, any provision of its constitutional documents,
any order or judgment of any court
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or other agency of government applicable to it or any of its assets and do not
violate or conflict with in any material respect any material contractual
restriction binding on or affecting it or any of its assets; all governmental
and other consents that are required to have been obtained by it with respect to
the execution, delivery and performance of this Agreement have been obtained and
are in full force and effect and all conditions of any such consents have been
complied with; there is not pending or, to its knowledge, threatened against it,
or against any of its Affiliates, any action, suit or proceeding at law or in
equity or before any court, tribunal, government body, agency or official or any
arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or the Indenture or its ability to perform its
obligations under this Agreement or the Indenture; it has duly executed and
delivered this Agreement and its obligations under this Agreement constitute its
legal, valid and binding obligations, enforceable against it in accordance with
their respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity or at
law));
(b) each of the representations and warranties set forth on Schedule
II is true, correct and complete;
(c) except in the case of any Committed Liquidity Provider which has
funded the related Holder Subaccount in an amount equal to its unfunded Class
A-1AR Commitment, it satisfies the Class A-1AR Ratings Criteria, and
acknowledges and agrees that, if it shall at any time fail to comply with the
Class A-1AR Ratings Criteria, it shall promptly (but in no event later than 5:00
p.m. on the Business Day such Holder or such Committed Liquidity Provider, as
applicable, receives notice or otherwise becomes aware thereof, or, if such
notice is received or such Holder or such Committed Liquidity Provider, as
applicable, becomes aware thereof after 5:00 p.m. (New York City time) on a
Business Day or on any day which is not a Business Day, 9:00 a.m. (New York City
time) on the Business Day following the date such Holder or such Committed
Liquidity Provider, as applicable, receives notice or otherwise becomes aware
thereof) notify the Co-Issuers, the Collateral Manager, the Rating Agencies, the
Class A-1AR Note Agent and the Trustee thereof. Each Holder or Committed
Liquidity Provider, as applicable, agrees that if it fails at any time to comply
with or satisfy the Class A-1AR Ratings Criteria, such Holder or Committed
Liquidity Provider, as applicable, shall, within five Business Days thereafter,
deposit or cause to be deposited cash in immediately available funds in an
amount equal to the undrawn amount of the related Holder's Class A-1AR
Commitment in a Holder Subaccount. Each Holder or Committed Liquidity Provider,
as applicable, acknowledges that if such Holder or Committed Liquidity Provider,
as applicable, fails to fund such Holder Subaccount in accordance with the terms
of this Section 3.02(c), (i) the Issuer (or the Collateral Manager on behalf of
the Issuer) has the right hereunder, and is required under Section 18.4 of the
Indenture, to promptly use reasonable efforts to replace such Holder and any
Committed Liquidity Provider with respect thereto (at the cost of such Holder or
Committed Liquidity Provider, as applicable) with another entity that meets the
Class A-1AR Ratings Criteria by requiring the replaced Holder and any Committed
Liquidity Provider with respect thereto to transfer all of its rights and
obligations in respect of the Class A-1AR Notes to the transferee entity in
accordance with the provisions specified in Section 6.03 and the replaced Holder
and any Committed Liquidity Provider with respect thereto agrees to cooperate
with all reasonable requests of the Issuer (or the Collateral Manager on behalf
of the Issuer) for the purpose of
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effecting such transfer and (ii) any payments of principal of or interest on any
Class A-1AR Note held by such Holder and any payments of a Class A-1AR
Commitment Fee, that would otherwise be payable to such Holder under this
Agreement and the Indenture shall, until such Holder is replaced by another
entity that meets the Class A-1AR Ratings Criteria, be deposited into a Holder
Subaccount with respect to such Holder and such Holder Subaccount shall be
governed by the terms of the Indenture. Each Holder or Committed Liquidity
Provider, as applicable, agrees to notify the Class A-1AR Note Agent promptly
after any deposit of funds by such Holder or Committed Liquidity Provider, as
applicable, into a Holder Subaccount. Each Holder or Committed Liquidity
Provider, as applicable, further acknowledges and agrees that if at any time it
fails to fund any portion of a Class A-1AR Draw as required under Article 2 of
this Agreement (taking into account the terms of Section 6.03(f)) (any such
Holder or Committed Liquidity Provider, as applicable, a "Defaulting Holder"),
that (i) any payments of principal of or interest on any Class A-1AR Note held
by such Holder and any payments of a Class A-1AR Commitment Fee, that would
otherwise be payable to such Defaulting Holder under this Agreement and the
Indenture shall, for so long as such Defaulting Holder continues to fail to
satisfy such requirement or until such Defaulting Holder is replaced by another
entity that meets the Class A-1AR Ratings Criteria and satisfies such Defaulting
Holder's failed funding obligation, be deposited into a Holder Subaccount with
respect to such Holder as provided in Section 3.02(d)(ii) of this Agreement and
Section 18.5 of the Indenture and such Holder Subaccount shall be governed by
the terms of the Indenture and (ii) the Issuer (or the Collateral Manager on
behalf of the Issuer) has the right hereunder, and is required under Section
18.4 of the Indenture, to promptly use reasonable efforts to replace such
Defaulting Holder with another entity that meets the Class A-1AR Ratings
Criteria;
(d) the deposit of cash to a Holder Subaccount by any Holder or
Committed Liquidity Provider, as applicable, shall not constitute a Class A-1AR
Draw by the Issuer and shall not constitute a utilization of the Class A-1AR
Commitment of such Holder, and the funds on deposit in a Holder Subaccount shall
not constitute principal outstanding under a Class A-1AR Note. Each Holder or
Committed Liquidity Provider, as applicable, that deposits cash into a Holder
Subaccount as contemplated by Section 3.02(c) or that has had payments deposited
into a Holder Subaccount pursuant to the last sentence of Section 3.02(c) agrees
that from and after the date of such deposit and until the related Collateral
Account Termination Date, (i) the obligation of such Holder or Committed
Liquidity Provider, as applicable, to fund any Class A-1AR Draw shall be
satisfied by the Collateral Manager instructing the Trustee to withdraw funds
(and the Trustee will provide prior or contemporaneous notice of any such
withdrawal to the Class A-1AR Note Agent and the Holders of the Class A-1AR
Notes) from such Holder Subaccount (provided that such Holder or Committed
Liquidity Provider, as applicable, shall remain obligated in respect of such
Class A-1AR Draw to the extent the portion of the Class A-1AR Draw applicable to
such Holder exceeds the amount on deposit in such Holder Subaccount), (ii) all
payments of principal (and, if such Holder or such Committed Liquidity Provider,
as applicable, is a Defaulting Holder, interest) with respect to such Class
A-1AR Draw (and, if such Holder or such Committed Liquidity Provider, as
applicable, is a Defaulting Holder, any Class A-1AR Commitment Fees payable to
such Holder or such Committed Liquidity Provider, as applicable) shall be made
by depositing the related funds into such Holder Subaccount and (iii) the
Collateral Manager shall have full authority to instruct the Trustee to withdraw
funds (and the Trustee will provide prior notice of any such withdrawal to the
Class A-1AR Note Agent) from such Holder Subaccount at the time of, and in
connection with, the
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making of any such Class A-1AR Draw or any payment described in the foregoing
clauses of this Section 3.02(d) and to deposit funds (with prior or
contemporaneous notice of any such deposit to the Class A-1AR Note Agent) into
such Holder Subaccount, all in accordance with the terms of and for the purposes
set forth in this Agreement and in the Indenture. After the Collateral Account
Termination Date for any Holder and any Committed Liquidity Provider with
respect thereto (subject to the terms of Section 18.5 of the Indenture), all
funds then held in the related Holder Subaccount shall be withdrawn from such
Holder Subaccount and applied in accordance with Section 18.5 of the Indenture,
and thereafter all payments of principal and interest with respect to Advances
made by such Holder or such Committed Liquidity Provider, as applicable, shall
be paid directly to such Holder or such Committed Liquidity Provider, as
applicable, in accordance with the Indenture. The Trustee shall promptly (at the
direction of such Holder or such Committed Liquidity Provider, as applicable)
invest any amounts on deposit in any Holder Subaccount in securities which
satisfy the definition of Eligible Investments maturing on the day following the
date of acquisition thereof (collectively, the "Class A-1AR Eligible
Investments"). Investment earnings received during each Due Period in respect of
Class A-1AR Eligible Investments in a Holder Subaccount will be paid to the
applicable Holder or Committed Liquidity Provider, as applicable, on the related
Payment Date so long as it is not a Defaulting Holder at such time, and
otherwise shall be deposited into such Holder Subaccount; and
(e) it agrees to treat each of the Co-Issuers as a disregarded entity
for U.S. Federal, state and local income tax purposes, to report all income (or
loss) in accordance with such treatment and not take any action inconsistent
with such treatment.
ARTICLE 4
CONDITIONS
Section 4.01 Closing Date Conditions.
The obligations of the Holders to make Advances shall not become
effective until the date on which the Indenture is executed and delivered and
the Notes are duly authorized, issued, authenticated and delivered thereunder.
The purchase of any Class A-1AR Note on the Closing Date and the
obligation of the related Holder to make an Advance on the occasion of the
initial Class A-1AR Draw pursuant to Article 2 is subject to the satisfaction of
the following conditions (in addition to the conditions specified in Section
4.02):
(a) All of the conditions precedent in Article III of the Indenture
shall have been satisfied or waived in accordance with the terms thereof.
(b) Each of the statements referred to in Sections 4.02(b) and (c)
hereof shall be true (as if a Class A-1AR Draw shall occur on the Closing Date),
and the Class A-1AR Note Agent (with a copy to the Holders of the Class A-1AR
Notes) and the Collateral Manager shall be deemed to have certified, as of the
Closing Date, to such effect.
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(c) The Class A-1AR Notes shall have been duly executed by the
Co-Issuers and delivered to the Class A-1AR Note Agent for the benefit of the
Initial Holders.
Section 4.02 Conditions to Advances.
The obligation of each Holder to make an Advance on the occasion of
any Class A-1AR Draw pursuant to Article 2 is subject to the satisfaction or
waiver of the following conditions:
(a) In the case of any Class A-1AR Draw (other than a Class A-1AR Draw
on the Closing Date), the Class A-1AR Note Agent, or, pending the appointment of
a successor Class A-1AR Note Agent pursuant to Section 5.04(e), the Collateral
Manager, shall have received a Class A-1AR Draw Request given in accordance with
Section 2.03.
(b) Each of this Agreement, the Indenture and each Class A-1AR Note is
in full force and effect.
(c) All other conditions precedent to such Class A-1AR Draw set forth
in this Agreement and the Indenture have been satisfied in all material respects
(or waived pursuant to the terms hereof or thereof).
Except for a Class A-1AR Draw made as contemplated under Section 4.03,
each Class A-1AR Draw shall be deemed to constitute a representation and
warranty by each of the Issuer and the Co-Issuer on the date thereof as to the
applicable matters specified in Sections 4.02 (b) and (c).
Section 4.03 Obligations Unconditional.
Notwithstanding the failure to satisfy any of the conditions in the
foregoing Section 4.02(c), the Holders (or, if an Election Notice has been
delivered pursuant to Section 6.03(f), the Committed Liquidity Provider) shall,
subject to Section 2.01, be obligated to make Advances to the Issuer in
connection with Class A-1AR Draws to fund Delayed Funding Amounts relating to
Delayed Draw Term Loans. However, the obligation of each Holder under this
Section 4.03 shall terminate on the Commitment Termination Time following the
occurrence of any Class A-1AR Draw required at such time.
Section 4.04 Class A-1AR Draws on a Mandatory Class A-1AR Draw Date.
(a) Notwithstanding anything herein to the contrary, on the Mandatory
Class A-1AR Draw Date, the Issuer (or the Collateral Manager on behalf of the
Issuer) shall make a Class A-1AR Draw Request in accordance with Section 2.03
hereof in an amount equal to the Aggregate Class A-1AR Undrawn Amount as of such
date. The Trustee shall (at the direction of the Collateral Manager and on
behalf of the Issuer) upon receipt of such Class A-1AR Draw, out of the proceeds
of such Class A-1AR Draw, deposit into the Delayed Funding Obligations Account
an amount equal to the Total Unfunded Delayed Funding Amount and shall deposit
the remaining proceeds of such Class A-1AR Draw into the Principal Collection
Account where such amounts shall be applied in accordance with the Priority of
Payments as Principal Proceeds on the following Payment Date (or, if such amount
is received on a Payment Date, on such
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Payment Date). The Class A-1AR Commitments will terminate immediately after such
Class A-1AR Draw is made and such funds are transferred to the Trustee.
(b) No Class A-1AR Draw Request may be made after the Mandatory Class
A-1AR Draw Date.
Section 4.05 Liquidity Facility Term; Class A-1AR Draws on Liquidity
Facility Extension Failure.
(a) Notwithstanding anything to the contrary herein, no Holder may
enter into a Liquidity Facility for a term of less than 364-days, subject to
one-year extensions up to the Stated Maturity of the Class A-1AR Notes.
(b) Upon any failure of the Holder to extend any related Liquidity
Facility, if any, the Issuer (or the Collateral Manager on behalf of the Issuer)
shall make a Class A-1AR Draw Request to each Holder in accordance with Section
2.03 hereof in an amount equal to such Holder's pro rata share of the Aggregate
Class A-1AR Undrawn Amount as of such date. The Trustee shall (at the direction
of the Collateral Manager and on behalf of the Issuer) deposit the proceeds of
such Class A-1AR Draw into the Delayed Funding Obligations Account.
ARTICLE 5
THE CLASS A-1AR NOTE AGENT
Section 5.01 Appointment.
Each of the Holders hereby irrevocably appoints the Class A-1AR Note
Agent as its agent and authorizes the Class A-1AR Note Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Class
A-1AR Note Agent by the terms hereof and of the Indenture, together with such
actions and powers as are reasonably incidental thereto.
Section 5.02 Certain Duties and Responsibilities.
(a) The Class A-1AR Note Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Class
A-1AR Note Agent.
(b) Upon receipt of certificates and other notices furnished to the
Class A-1AR Note Agent and conforming to the requirements of this Agreement, the
Class A-1AR Note Agent may, in the absence of gross negligence, willful
misconduct or bad faith on its part, conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein. Neither the
Class A-1AR Note Agent nor any of its affiliates, directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) in the absence of its own gross negligence, willful misconduct or
bad faith with the consent or at the request of the Holders representing at
least a majority of the Class A-1AR Commitments (and to the extent required
under the Transaction Documents, the Issuer or the Collateral Manager on behalf
of the Issuer) or (ii) in the absence of its own gross negligence, willful
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misconduct or bad faith. Neither the Class A-1AR Note Agent nor any of its
affiliates, directors, officers, agents or employees shall be responsible or
have any duty to ascertain, inquire or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any of the other
Transaction Documents or any Class A-1AR Draw hereunder, (ii) the performance or
observation of any of the covenants or agreements of the Issuer or (iii) the
validity, effectiveness or genuineness of this Agreement, the Indenture or any
instrument or writing furnished in connection herewith. The Class A-1AR Note
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
facsimile, electronic messaging or similar writing) reasonably believed by it to
be genuine or signed by the proper party or parties.
(c) No provision of this Agreement shall be construed to relieve the
Class A-1AR Note Agent from liability for its own grossly negligent action, its
own grossly negligent failure to act, or its own willful misconduct, except
that:
(i) this subsection shall not be construed to limit the effect of
subsections (a) and (b) of this Section 5.02;
(ii) the Class A-1AR Note Agent shall not be liable for any error of
judgment made in good faith by an officer, director, agent or employee
unless it shall be proven that the Class A-1AR Note Agent was grossly
negligent in ascertaining the pertinent facts; and
(iii) no provision of this Agreement shall require the Class A-1AR
Note Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers contemplated hereunder, if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it, unless such risk or liability relates to performance of its ordinary
services under this Agreement.
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Class A-1AR Note Agent shall be subject to the
provisions of this Section 5.02. Each Holder shall, ratably, in accordance with
its Class A-1AR Commitment (or, if the Class A-1AR Commitments have been
terminated or permanently reduced to zero, the unpaid principal amount of its
Advances) indemnify each Indemnified Person for all Losses not reimbursed by the
Issuer pursuant to Section 5.03(a)(iii); provided that no Holder shall have such
indemnity or reimbursement obligation to the extent that such Loss incurred by
the applicable Indemnified Person arises out of, or in connection with any act
or omission of any Indemnified Person constituting (x) negligence or (y) a
breach of this Agreement.
Section 5.03 Compensation.
(a) Subject to Section 6.12 the Issuer agrees:
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(i) to pay the Class A-1AR Note Agent on each Payment Date a Class
A-1AR Note Agent Fee as a Company Administrative Expense for all services
rendered by it hereunder;
(ii) except as otherwise expressly provided herein, to reimburse the
Class A-1AR Note Agent (subject to any written agreement between the Issuer
and the Class A-1AR Note Agent) forthwith upon its request for all
reasonable fees and expenses (including attorneys' fees) incurred or made
by the Class A-1AR Note Agent in accordance with any provision of this
Agreement; and
(iii) to indemnify the Class A-1AR Note Agent and its affiliates,
officers, directors, employees and agents (collectively, "Indemnified
Persons"), and to hold them harmless against, any loss, liability or
expense incurred without gross negligence, willful misconduct or bad faith
on their part, arising out of or in connection with the exercise or
performance of any of the Class A-1AR Note Agent's obligations or duties
under this Agreement, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection therewith
(collectively "Losses");
provided that (x) such amounts described in clauses (i), (ii) and (iii) above
shall be payable on each Payment Date as Company Administrative Expenses only to
the extent that funds are available for such purpose in accordance with the
Priority of Payments and (y) any such amounts that are not paid in full on any
Payment Date shall be deferred and shall be payable on a subsequent Payment Date
to the extent funds are available for such purpose in accordance with the
Priority of Payments.
(b) The Class A-1AR Note Agent shall, subject to Section 6.12 and the
Priority of Payments, receive amounts pursuant to this Section 5.03 only to the
extent that the payment thereof will not result in an Event of Default, and the
failure to pay such amounts to the Class A-1AR Note Agent shall not, by itself,
constitute an Event of Default. The Class A-1AR Note Agent hereby agrees not to
file, cause the filing of, or join in any petition in bankruptcy against the
Issuer for the non-payment to the Class A-1AR Note Agent of any amounts provided
by this Section 5.03 until at least one year and one day, or if longer the
applicable preference period then in effect, after the payment in full of all
the Notes issued under the Indenture. The provisions of this Section 5.03(b)
shall survive any termination of this Agreement.
Section 5.04 Resignation and Removal; Appointment of a Successor.
(a) No resignation or removal of the Class A-1AR Note Agent and no
appointment of a successor Class A-1AR Note Agent pursuant to this Article 5
shall become effective until the appointment by the successor Class A-1AR Note
Agent under Section 5.05 becomes effective.
(b) Subject to Section 5.04(a), the Class A-1AR Note Agent may resign
at any time by giving written notice thereof to the Co-Issuers, the Collateral
Manager, the Holders, the Trustee and each Rating Agency.
(c) The Class A-1AR Note Agent may be removed at any time by Holders
representing at least a majority of the Class A-1AR Commitments with 60 days
prior written
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notice delivered to the Class A-1AR Note Agent, the Trustee, the Collateral
Manager and to the Co-Issuers.
(d) If at any time the Class A-1AR Note Agent shall become incapable
of acting or shall be adjudged as bankrupt or insolvent or a receiver or
liquidator of the Class A-1AR Note Agent or of its property shall be appointed
or any public officer shall take charge or control of the Class A-1AR Note Agent
or of all or a substantial part of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case (subject to
Section 5.04(e)), (i) the Issuer (at the direction of the Collateral Manager and
on behalf of the Issuer), by Issuer Order, shall remove the Class A-1AR Note
Agent, or (ii) any Holder may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Class A-1AR Note Agent and the appointment of a successor Class A-1AR Note
Agent.
(e) If the Class A-1AR Note Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Class
A-1AR Note Agent for any reason, the Issuer (at the direction of the Collateral
Manager and on behalf of the Issuer), by Issuer Order, shall promptly appoint a
successor Class A-1AR Note Agent. If the Issuer shall fail to appoint a
successor Class A-1AR Note Agent within 60 days after such resignation, removal
or incapability or the occurrence of such vacancy, a successor Class A-1AR Note
Agent may be appointed by Holders representing a majority of the Class A-1AR
Commitments at such time delivered to the Issuer and the retiring Class A-1AR
Note Agent. The successor Class A-1AR Note Agent so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Class A-1AR Note
Agent and supersede any successor Class A-1AR Note Agent proposed by the Issuer.
If no successor Class A-1AR Note Agent shall have been so appointed by the
Issuer or such Holders and shall have accepted appointment in the manner
hereinafter provided, any Holder may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Class A-1AR Note Agent.
(f) The Issuer shall give prompt notice of each resignation and each
removal of the Class A-1AR Note Agent and each appointment of a successor Class
A-1AR Note Agent by mailing written notice of such event by first class mail,
postage prepaid, to the Trustee, each Rating Agency, the Collateral Manager and
to the Holders as their names and addresses appear in the Class A-1AR Note
Register. Each notice shall include the name and address of the successor Class
A-1AR Note Agent. If the Issuer fails to mail such notice within 10 days after
acceptance of appointment by the successor Class A-1AR Note Agent, the successor
Class A-1AR Note Agent shall cause such notice to be given at the expense of the
Issuer.
Section 5.05 Acceptance of Appointment by Successor.
Every successor Class A-1AR Note Agent appointed hereunder shall
execute, acknowledge and deliver to the Co-Issuers and the retiring Class A-1AR
Note Agent an instrument accepting such appointment with immediate effect. Upon
delivery of the required instrument, the resignation or removal of the retiring
Class A-1AR Note Agent shall become effective and such successor Class A-1AR
Note Agent, without any other act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of the retiring Class A-1AR Note
Agent; save that, upon request of the Issuer or Holders representing a
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majority of the Class A-1AR Commitments or the successor Class A-1AR Note Agent,
such retiring Class A-1AR Note Agent shall, upon payment of its fees and
expenses then unpaid, execute and deliver an instrument transferring to such
successor Class A-1AR Note Agent all the rights, powers and trusts of the
retiring Class A-1AR Note Agent.
ARTICLE 6
MISCELLANEOUS
Section 6.01 Notices.
Except in the case of notices and other communications expressly
permitted to be given by facsimile or electronic messaging system, all notices
and other communications provided for herein (including each consent, notice,
direction or request) shall be in writing and shall be delivered by hand or
overnight courier service or sent by facsimile, as follows:
(a) if to the Co-Issuers, the Rating Agencies, the Collateral Manager
or the Trustee, at its address or facsimile number set forth in the Indenture;
(b) if to the Class A-1AR Note Agent, at its address or facsimile
number set forth on Schedule I or at such other address as shall be designated
by the Class A-1AR Note Agent in a notice to the Co-Issuers, each Holder, the
Trustee and the Collateral Manager; and
(c) if to any Holder, at its address or facsimile number set forth on
Schedule I (in the case of any Initial Holder) or in the Assignment and
Acceptance delivered by it; or at such other address as shall be designated by a
Holder in a notice to the Co-Issuers, the Class A-1AR Note Agent, the Trustee
and the Collateral Manager.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
Section 6.02 Waivers; Amendments.
(a) No waiver of any provision of this Agreement or consent to any
departure by the Issuer herefrom shall in any event be effective unless the same
shall be permitted by Section 6.02(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Manager on behalf of the Issuer and the Class
A-1AR Note Agent with the consent of Holders representing at least a majority of
the Class A-1AR Commitments except as otherwise expressly provided in Section
6.02(c); provided that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Trustee or of the Collateral Manager, as applicable,
hereunder or in respect hereof without the prior written consent of the Trustee
or of the Collateral Manager, as applicable. Prior to entering into any
amendment, waiver or modification to this Agreement, the Rating Agency Condition
shall be satisfied with respect thereto. Subject to the
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foregoing, the Collateral Manager, on behalf of the Issuer, shall give prior
written notice to each Rating Agency and the Trustee of any waiver, amendment or
modification of any provision of this Agreement.
(c) No waiver, amendment or modification of the Indenture or any other
agreement referred to herein or therein to which the Issuer is a party (other
than this Agreement) shall affect any of the rights or obligations under this
Agreement of the parties hereto unless such waiver, amendment or modification is
effected in accordance with the applicable provisions of this Agreement and the
Indenture; provided that no such waiver, amendment or modification shall
increase the Maximum Class A-1AR Commitment, modify the interest payable
thereon, materially change the provisions of Article 18 of the Indenture, modify
the calculation of the Class A-1AR Commitment Fee or extend the term of any of
the Class A-1AR Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Class A-1AR Commitments, without the
consent of each of the Holders.
(d) A failure or delay in exercising any right, power or privilege in
respect of this Agreement shall not be presumed to operate as a waiver, and a
single or partial exercise of any right, power or privilege shall not be
presumed to preclude any subsequent or further exercise, of that right, power or
privilege or the exercise of any other right, power or privilege.
Section 6.03 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
transferees.
(b) The Issuer may not assign or delegate any of its rights or
obligations under this Agreement without the prior consent of each Holder, the
Class A-1AR Note Agent, the Trustee and the Collateral Manager; provided that it
is understood and agreed that the Issuer is Granting all of its right, title and
interest in, to and under this Agreement to the Trustee for the benefit and
security of the Secured Parties. No Holder may assign or delegate any of its
rights or obligations under this Agreement or under any Class A-1AR Notes,
except that (i) any Holder may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Class A-1AR Commitment and the Advances at the time owing to it);
provided that, in either such case, (A) any assignment by a Holder of less than
all of a Class A-1AR Note or the related Class A-1AR Commitment shall be of the
same ratable portion of such Class A-1AR Note and the related Class A-1AR
Commitment, (B) no such assignment shall be effected unless all conditions
precedent to the transfer of the relevant Class A-1AR Note specified in the
Indenture (including such assignee's satisfaction of the Class A-1AR Ratings
Criteria) have been satisfied and such Holder shall have received the prior
written consent of the Issuer and the Collateral Manager to such assignment, and
(C) no such assignment shall be effected unless the parties to such assignment
shall have executed and delivered to the Class A-1AR Note Agent (with a copy to
the Trustee, the Collateral Manager and the Holders of the Class A-1AR Notes) a
duly completed Assignment and Acceptance and (ii) any Holder that is entitled
under a Liquidity Facility to borrow loans from, or sell all or a portion of
Class A-1AR Notes or interests therein to, Liquidity Providers may assign its
rights hereunder and under the Class A-1AR Notes and/or delegate to the related
Liquidity Providers, and such Liquidity Providers may severally agree to each
perform their ratable share (determined in accordance with
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their respective Class A-1AR Commitments under the relevant Liquidity Facility)
of, all of the Holder's obligations hereunder or under the Class A-1AR Notes;
provided that each related Liquidity Provider which is a Committed Liquidity
Provider either executes and delivers a signature page hereto or enters into an
Assignment and Acceptance agreeing to be a Committed Liquidity Provider
hereunder. Upon acceptance and recording pursuant to Section 6.03(c), from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Holder or of a Committed Liquidity Provider, as applicable, under this
Agreement, and the assigning Holder thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Holder's rights and obligations under
this Agreement and in respect of Class A-1AR Notes, such Holder shall cease to
be a party hereto).
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Holder and an assignee and/or delegee, the Class A-1AR
Note Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Class A-1AR Note Register. No such
assignment or delegation shall be effective for purposes of this Agreement
unless it has been recorded in the Class A-1AR Note Register as provided in this
paragraph.
(d) Any Holder may at any time Grant a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Holder,
including any such Grant to a Federal Reserve Bank, and this Section 6.03 shall
not apply to any such Grant of a security interest; provided that no such Grant
of a security interest shall release a Holder from any of its obligations
hereunder or substitute any such assignee for such Holder as a party hereto.
(e) Notwithstanding anything in Section 6.03(b) to the contrary, any
Holder may delegate its obligations hereunder in respect of any Class A-1AR Note
held by such Holder to its Liquidity Providers; provided that (i) each such
Liquidity Provider which is a Committed Liquidity Provider complies with the
Class A-1AR Ratings Criteria and either executes and delivers a signature page
hereto or enters into an Assignment and Acceptance Agreement pursuant to which
it agrees to be a Committed Liquidity Provider hereunder, (ii) such delegation
shall be effected ratably according to the respective Class A-1AR Commitments
under the Liquidity Facility of the Liquidity Providers, (iii) notwithstanding
such delegation, such Holder may, in its sole discretion, continue to perform
the obligations so delegated (and the Liquidity Providers shall have no right to
perform such obligations in the event such Holder performs such obligations) and
(iv) subject to the immediately preceding clause (iii), the rights and
obligations of the parties hereto in respect of any Advances made by such Holder
hereunder shall not be affected by such delegation. Any such delegation shall
also be subject to the several agreement of the Liquidity Providers (for the
express benefit of such Holder, the Issuer, the Class A-1AR Note Agent, the
Collateral Manager and the Trustee) to be included in their respective
Assignment and Acceptance Agreements to perform all of the obligations of such
Holder hereunder delegated to the Liquidity Providers as provided in the
foregoing sentence, with each Liquidity Provider agreeing to perform only its
ratable share of such obligations as so provided. With respect to Advances made
by the Liquidity Providers in accordance with the delegation provided above, the
Liquidity Providers shall be subrogated, severally and ratably in accordance
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with their respective Class A-1AR Commitments under the Liquidity Facility, to
the rights of the relevant Holder against the Issuer in respect of the related
Class A-1AR Note and under the Indenture.
(f) Notwithstanding anything in Section 2.01 or Section 6.03(b) to the
contrary, if any Holder party hereto elects to be subject to this Section
6.03(f), then such Holder (unless it is maintaining a Class A-1AR Holder
Collateral Account as provided in Section 3.02(d)) shall not be obligated to
make Advances hereunder except as provided in Section 2.01(b)(i); provided that
such Holder shall have in effect at all times (unless it is maintaining a Class
A-1AR Holder Collateral Account as provided in Section 3.02(d) for the full
amount of its unfunded Class A-1AR Commitment) a Liquidity Facility with one or
more Liquidity Providers pursuant to which such Liquidity Providers are
obligated (ratably according to their respective Class A-1AR Commitments under
the Liquidity Facility), to make loans to, or acquire interests in assets of,
such Holder in an aggregate principal amount up to the aggregate stated
principal amount at such time Outstanding of Class A-1AR Notes held by such
Holder (such a Liquidity Provider, a "Committed Liquidity Provider") and each
such Committed Liquidity Provider complies with the Class A-1AR Ratings Criteria
and has agreed (for the express benefit of such Holder, the Issuer, the Class
A-1AR Note Agent, the Collateral Manager and the Trustee) to be a Committed
Liquidity Provider and to be liable hereunder by either executing and delivering
a signature page hereto or by entering into an Assignment and Acceptance
Agreement. Notwithstanding the foregoing, such Holder may, in its sole
discretion, elect, from time to time, to fund any Advance requested by the
Issuer in respect of any Class A-1AR Note held by such Holder. With respect to
Advances made by the Liquidity Providers under the Liquidity Facility as
contemplated by this Section 6.03(f) at the request of the Issuer on behalf of
such Holder, the Liquidity Providers for such Holder shall be subrogated,
severally and ratably in accordance with their respective Class A-1AR
Commitments under the Liquidity Facility, to the rights of such Holder against
the Issuer in respect of the related Class A-1AR Notes and under the Indenture.
Any such Holder that elects to enter into a Liquidity Facility as contemplated
by and to be subject to this Section 6.03(f) shall indicate such Holder's
election by providing an original executed signature page to this Agreement (in
the case of a Committed Liquidity Provider that becomes a party hereto on the
Closing Date) or an original executed copy of each Assignment and Acceptance
Agreement, in each case, executed by its Committed Liquidity Providers to the
Issuer and the Trustee with a copy thereof to the Class A-1AR Note Agent and the
Collateral Manager (an "Election Notice").
(g) Without limiting the effect of Section 6.03(f), for so long as a
Holder is a CP Conduit, and notwithstanding any provisions contained herein or
in the Indenture, such Holder shall not, and shall not be obligated to, make any
payments hereunder or under the Indenture (except with respect to funding Class
A-1AR Draws in full as, when and to the extent required under this Agreement
which shall not be conditioned upon this Section 6.03(g), but which shall remain
subject to any conditions precedent specified herein), unless such Holder has
received funds which may be used to make such payment and which funds are not
required to repay its commercial paper notes when due and, after giving effect
to such payment, either (i) the Holder could issue commercial paper notes to
refinance all of such Holder's outstanding commercial paper notes (assuming such
outstanding commercial paper notes matured at such time) in accordance with the
governing documents governing such Holder's commercial paper program or (ii) all
of such Holder's commercial paper notes are paid in full. Any amount which
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the Holder does not fund pursuant to the operation of this paragraph shall not
constitute a claim (as defined in Section 101 of the Bankruptcy Code) against or
obligation of such Holder for any such insufficiency.
Section 6.04 Survival.
All covenants, agreements, representations and warranties made by the
Co-Issuers herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Advances, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Trustee, the Collateral Manager, the Class A-1AR Note Agent or any
Holder may have had notice or knowledge of any incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as any Class A-1AR Note or any amount payable
under this Agreement or the Indenture in respect of any Class A-1AR Note is
outstanding and unpaid and so long as the Class A-1AR Commitments have not
expired or terminated.
Section 6.05 Counterparts; Integration; Effectiveness.
This Agreement may be executed in any number of counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement, any Liquidity Facility and the Indenture
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
the Co-Issuers, the Initial Holders party hereto and the Class A-1AR Note Agent
and when the Co-Issuers shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or by electronic messaging
shall be effective as delivery of a manually executed counterpart of this
Agreement.
Section 6.06 Severability.
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 6.07 Governing Law; Jurisdiction; Consent to Service of
Process; Waiver of Jury Trial Right.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS
AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER TO
THIS AGREEMENT (WHETHER IN CONTRACT,
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TORT OR OTHERWISE) SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Subject to Section 6.12, nothing in this Agreement shall affect any right that
the Class A-1AR Note Agent or any Holder may otherwise have to bring any action
or proceeding relating to this Agreement against the Issuer or their properties
in the courts of any jurisdiction.
(c) Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in the first sentence of Section 6.07(b). Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Except as otherwise expressly provided in this Section 6.07(d),
each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 6.01. Nothing in this Agreement shall
affect the right of any party to this Agreement to serve process in any other
manner permitted by law. The Co-Issuers hereby irrevocably appoint and designate
CT Corporation System, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or any other Person having and maintaining a place of business in the State of
New York whom the Co-Issuers may from time to time hereafter designate as the
true and lawful attorney and duly authorized agent for acceptance of service of
legal process of the Co-Issuers. The Co-Issuers agree that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(e) EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 6.08 Benefits of Indenture and this Agreement.
The Co-Issuers hereby acknowledge and confirm that each
representation, warranty, covenant and agreement made pursuant to the Indenture
by it also is made herein to the
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Trustee, all for the benefit and security of the Securityholders (including the
Holders of the Class A-1AR Notes) as provided in the Indenture.
Nothing in this Agreement, express or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns and the Holders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
Section 6.09 Headings.
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
Section 6.10 No Proceedings.
Each of the parties hereto hereby agrees (which agreement shall,
pursuant to the terms of this Agreement, be binding upon their respective
successors and assigns) that they shall not institute against, or join any other
Person in instituting against, any Holder which is a CP Conduit any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day (or, if longer, the applicable preference period then in effect) after
the latest maturing commercial paper note or other debt obligation issued by
such Holder is paid in full; provided that the foregoing shall not limit the
rights of the Issuer to take any such action with respect to any Liquidity
Provider to which the obligations of such Holder have been delegated in
accordance with Sections 6.03(e) and 6.03(f). The provisions of this Section
6.10 shall survive the termination of this Agreement.
Section 6.11 Recourse Against Certain Parties.
No recourse under or with respect to any obligation, covenant or
agreement of any Holder shall be had against any incorporator, stockholder,
affiliate, officer, member, manager, partner, employee or director of such
Holder, as such, by the enforcement of any assessment, by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that the agreements of such Holder contained in this Agreement and
all of the other agreements, instruments and documents entered into by it
pursuant hereto or in connection herewith are, in each case, solely the
corporate or limited liability company, as applicable, obligations of such
Holder, and that no personal liability whatsoever shall attach to or be incurred
by any incorporator, stockholder, affiliate, officer, member, agent,
administrative agent, manager, partner, employee or director of such Holder, as
such, or any of them, under or by reason of any of the obligations, covenants or
agreements of such Holder contained in this Agreement or in any other such
instrument, document or agreement, or which are implied therefrom, and that any
and all personal liability of every such incorporator, stockholder, affiliate,
officer, employee, member, agent, administrative agent, manager, partner or
director of such Holder for breaches by such Holder of any such obligations,
covenants or agreements, which liability may arise either at common law or at
equity, by statute or constitution, or otherwise, is hereby expressly waived as
a condition of and in consideration for the execution of
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this Agreement. The provisions of this Section 6.11 shall survive the
termination of this Agreement.
Section 6.12 Non-Petition; Non-Recourse Obligations.
Each Holder, Committed Liquidity Provider and the Class A-1AR Note
Agent agrees that it shall not file, cause the filing of or join any Person in a
petition in bankruptcy against the Issuer in any jurisdiction for any amounts
due hereunder until at least one year and one day, or if longer the applicable
preference period then in effect, after the payment in full of all the Notes
issued under the Indenture. The Class A-1AR Notes and all obligations of the
Issuer under this Agreement are non-recourse obligations of the Issuer. The
Class A-1AR Notes and all of the other obligations of the Issuer under this
Agreement are payable solely from the Collateral Granted by the Issuer to secure
the Notes subject to the availability of funds for such purpose in accordance
with the Priority of Payments established under the Indenture and, following
realization of the Collateral and application of the proceeds thereof in
accordance with the Indenture, any claims against the Issuer and the obligations
of the Issuer hereunder and under the Class A-1AR Notes shall be extinguished
and shall not thereafter revive. None of the security holders, stockholders,
beneficial owners, members, managers, officers, directors, employees, partners
or incorporators of the Issuer, the Collateral Manager, the Placement Agent, the
Trustee, any of their respective affiliates and any other person or entity shall
be obligated to make payments on the Notes. Consequently, the Holders of the
Notes, the Class A-1AR Note Agent and any other party to this Agreement must
rely solely on amounts received in respect of the Collateral Granted to secure
the Notes for the payment of principal thereof and interest, the Class A-1AR
Commitment Fee and all other amounts owing thereon or hereunder. The Holders and
the Class A-1AR Note Agent hereby acknowledge and agree that the Issuer's
obligations hereunder will be solely the corporate obligations of the Issuer,
and neither a Holder nor the Class A-1AR Note Agent will have recourse to any of
the directors, officers, employees, shareholders or affiliates of the Issuer
with respect to any claims, losses, damages, liabilities, indemnities or other
obligations in connection with any transaction contemplated hereby. The
provisions of this Section 6.12 shall survive the termination of this Agreement.
Section 6.13 Term, Termination.
This Agreement shall commence as of the date first set forth above and
shall continue in force until the earliest of (i) the Commitment Termination
Time or (ii) the termination of the Indenture in accordance with its terms.
Section 6.14 Disclosure.
(a) Each of the Class A-1AR Note Agent and each Holder shall maintain
and shall cause each of its employees and officers to maintain the
confidentiality of this Agreement and all information with respect to the other
parties, including all information regarding the business of the Issuer and the
Co-Issuer and their respective businesses obtained by it or them in connection
with the structuring, negotiating and execution of the transactions contemplated
herein, except that each such party and its directors, officers and employees
may (i) disclose such information to its external accountants, attorneys,
investors, potential investors, credit enhancers and the agents or advisors of
such Persons ("Excepted Persons"); provided, however, that each
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Excepted Person shall, as a condition to any such disclosure, agree for the
benefit of the Class A-1AR Note Agent and each Holder that such information
shall be used solely in connection with such Excepted Person's evaluation of, or
relationship with, the Issuer and the Co-Issuer and its affiliates, (ii)
disclose the existence of this Agreement, but not the financial terms thereof,
(iii) disclose such information as is required by Applicable Law and (iv)
disclose this Agreement and such information in any suit, action, proceeding or
investigation (whether in law or in equity or pursuant to arbitration) involving
any of the Transaction Documents for the purpose of defending itself, reducing
its liability, or protecting or exercising any of its claims, rights, remedies,
or interests under or in connection with any of the Transaction Documents. It is
understood that the financial terms that may not be disclosed except in
compliance with this Section 6.14(a) including, without limitation, all fees and
other pricing terms, and all Events of Default and priority of payment
provisions.
(b) Anything herein to the contrary notwithstanding, the Issuer and
the Co-Issuer hereby consent to the disclosure of any nonpublic information with
respect to it (i) to the Class A-1AR Note Agent and each Holder, (ii) by the
Holder to any prospective or actual assignee or participant of any of them or
(iii) by the Liquidity Provider or the Holder to any Rating Agency, commercial
paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to a Holder and to any officers, directors, employees, outside
accountants, advisors, and attorneys of any of the foregoing, provided each such
Person is informed of the confidential nature of such information. In addition,
the Class A-1AR Note Agent and each Holder may disclose any such nonpublic
information as required pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
(c) Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation, (B)
to any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Issuer's or the Co-Issuer's business or
that of their respective affiliates, (C) pursuant to any subpoena, civil
investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Issuer, the Co-Issuer, the
Collateral Manager or an affiliate or an officer, director, employer or
shareholder thereof is a party, (D) in any preliminary or final offering
circular, registration statement or contract or other document pertaining to the
transactions contemplated herein approved in advance by the Issuer or (E) to any
affiliate, independent or internal auditor, agent, employee or attorney of the
Issuer having a need to know the same, provided that the Issuer advises such
recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by the Issuer.
(d) Each of the parties hereby covenants and agrees that so long as
any Holder that is a CP Conduit is a registered owner of Class A-1AR Notes:
(i) except with respect to the Class A-1AR Holder Collateral Account
and any relevant Holder Subaccount, it waives any right to set-off and to
appropriate and apply any and all deposits and any other indebtedness at
any time held or owing thereby
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to or for the credit or the account of such Holder against and on account
of the obligations and liabilities of such Holder to such party under this
Agreement; and
(ii) notwithstanding anything to the contrary herein no provision of
this Agreement adversely affecting the rights or duties of such Holder or a
related Liquidity Provider for such Holder may be amended or waived without
the written consent of such Holder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective Authorized Officers as of the day and year
first above written.
ARBOR REALTY MORTGAGE SECURITIES SERIES
2006-1, LTD., as the Issuer
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
----------------------------------
Title: Director
---------------------------------
ARBOR REALTY MORTGAGE SECURITIES SERIES
2006-1 LLC, as the Co-Issuer
By: /s/ Xxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxx X. Xxxxxx, Xx.
----------------------------------
Title: Authorized Signatory
---------------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Class A-1AR Note Agent
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President
---------------------------------
BNP PARIBAS LONDON BRANCH,
as a Class A-1AR Note Holder
By: /s/ Xxxxx Xxxx, Xxxxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxx Xxxx, Xxxxxxxxx Xxxxxxxxx
----------------------------------
Title: Authorized Signatory,
Authorized Signatory
---------------------------------
SCHEDULE I
INITIAL HOLDERS
NAME OF HOLDER/CP CONDUIT INITIAL CLASS A-1AR COMMITMENT ADDRESS FOR NOTICES
------------------------- ------------------------------ -------------------------------
BNP Paribus London Branch U.S.$100,000,000 BNP Paribas Brokerage Services
Attn: Xxx Xxxxx or Xxxxxx Xxxxx
610-491-1741
000 Xxxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
The Initial Holder shall not make a Qualified Securitization Pledge
Payment Instructions:
JPMorgan Chase Bank New York (chasus33 swift)
A/C BNP Paribas London (bnpag22 swift)
A/C: 000000000
Tax ID#: 00-0000000
CLASS A-1AR NOTE AGENT
Address for Notices
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: CDO Trust Services Group -
Arbor Realty Mortgage Securities Series 2006-1
Facsimile No.: (000) 000-0000
Schedule I-1
SCHEDULE II
Pursuant to Section 3.02 of the Class A-1AR Note Purchase Agreement to
which this Schedule II is attached, each Holder (including each Assignee
thereof) and each Committed Liquidity Provider, if any (as if it were deemed to
be a Holder hereunder) hereby makes the acknowledgments, covenants,
representations and agreements set forth below solely with respect to itself:
(i) The Holder is one of the following:
(1) (A) a Qualified Purchaser; (B) a QIB; (C) is aware that the sale
of the Definitive Class A-1AR Notes to it is being made in reliance on the
exemption from registration provided by Rule 144A; (D) is acquiring the
Definitive Class A-1AR Notes for its own account or for one or more accounts,
each of which is a QIB who is a Qualified Purchaser, and as to each of which the
Holder exercises sole investment discretion and (E) is acquiring the Definitive
Class A-1AR Notes in a minimum principal amount of not less than U.S.$500,000
for each such account; or
(2) (A) is not a U.S. Person; (B) is aware that the sale of the
Definitive Class A-1AR Notes to it is being made in reliance on the exemption
from registration provided by Regulation S and (C) understands that the
Definitive Class A-1AR Notes offered in reliance on Regulation S under the
Securities Act will bear the additional legend in substantially the following
form:
THIS NOTE MAY NOT BE HELD BY A PERSON THAT IS A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) AT ANYTIME.
and in each case the owner has such knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of its
investment in the Definitive Class A-1AR Notes and the owner and any accounts
for which it is acting are each able to bear the economic risk of the
investment; and
(ii) Before any interest in a Definitive Class A-1AR Note may be
offered, resold, pledged or otherwise transferred, the transferee and transferor
shall be required to provide the Trustee, with a written certification
substantially in the form of Exhibits D-1 and D-2 to the Indenture as to
compliance with the transfer restrictions and the Holder must inform a
prospective transferee of the transfer restrictions.
(iii) The Holder understands that the Class A-1AR Notes are being
offered only in a transaction not involving any public offering in the United
States within the meaning of the Securities Act, the Class A-1AR Notes have not
been and will not be registered under the Securities Act, and, if in the future
the Holder decides to offer, resell, pledge or otherwise transfer the Class
A-1AR Notes, such Class A-1AR Notes may only be offered, resold, pledged or
otherwise transferred only in accordance with the Indenture and the applicable
legend on such Class A-1AR Notes set forth below. The Holder acknowledges that
no representation is made by the Issuer, the Co-Issuer, the Dealers or the
Placement Agent, as the case may be, as to the
Schedule II-1
availability of any exemption under the Securities Act or any State securities
laws for resale of the Class A-1AR Notes.
(iv) The Holder understands that the Class A-1AR Notes have not been
approved or disapproved by the SEC or any other governmental authority or agency
or any jurisdiction and that neither the SEC nor any other governmental
authority or agency has passed upon the accuracy of the final offering
memorandum relating to the Class A-1AR Notes. The Holder further understands
that any representation to the contrary is a criminal offense.
(v) The Holder is not purchasing the Class A-1AR Notes with a view to
the resale, distribution or other disposition thereof in violation of the
Securities Act. The Holder understands that an investment in the Class A-1AR
Notes involves certain risks, including the risk of loss of all or a substantial
part of its investment under certain circumstances. The Holder has had access to
such financial and other information concerning the Issuer, the Co-Issuer and
the Class A-1AR Notes as it deemed necessary or appropriate in order to make an
informed investment decision with respect to its purchase of the Class A-1AR
Notes, including, without limitation, an opportunity to ask questions of and
request information from the Collateral Manager, the Initial Purchaser, the
Issuer and the Co-Issuer, including without limitation, an opportunity to
request and review the Moody's Matrix, the S&P Matrix and the Fitch Matrix
incorporated by reference in the Offering Memorandum and access to such legal
and tax representation as the Holder deemed necessary or appropriate.
(vi) In connection with the purchase of the Class A-1AR Notes (A) none
of the Issuer, the Co-Issuer, the Placement Agent, the Dealers, the Collateral
Manager or the Trustee is acting as a fiduciary or financial or investment
adviser for the Holder; (B) the Holder is not relying (for purposes of making
any investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the Issuer, the Co-Issuer, the
Dealers, the Placement Agent, the Collateral Manager or the Trustee other than
in a current offering memorandum for such Class A-1AR Notes and any
representations expressly set forth in a written agreement with such party; (C)
none of the Issuer, the Co-Issuer, the Dealers, the Placement Agent, the
Collateral Manager or the Trustee has given to the Holder (directly or
indirectly through any other person) any assurance, guarantee, or representation
whatsoever as to the expected or projected success, profitability, return,
performance, result, effect, consequence, or benefit (including legal,
regulatory, tax, financial, accounting, or otherwise) of its purchase; (D) the
Holder has consulted with its own legal, regulatory, tax, business, investment,
financial, accounting and other advisers to the extent it has deemed necessary,
and it has made its own investment decisions (including decisions regarding the
suitability of any transaction pursuant to the Indenture) based upon its own
judgment and upon any advice from such advisers as it has deemed necessary and
not upon any view expressed by the Issuer, the Co-Issuer, the Dealers, the
Placement Agent, the Collateral Manager or the Trustee; (E) the Holder is
purchasing the Class A-1AR Notes with a full understanding of all of the terms,
conditions and risks thereof (economic and otherwise), and is capable of
assuming and willing to assume (financially and otherwise) these risks; (F) the
Holder is a sophisticated investor familiar with transactions similar to its
investment in the Class A-1AR Notes; and (G) the purchase of such Class A-1AR
Notes by the Holder is within its powers and authority, is permissible under
applicable laws governing such purchase, has been duly authorized by it and
otherwise complies with applicable laws.
Schedule II-2
(vii) The Holder understands that the Class A-1AR Notes will bear the
applicable legend set forth below. The Holder will provide notice to each Person
to whom it proposes to transfer any interest in the Class A-1AR Notes of the
transfer restrictions set forth in Section 2.5 of the Indenture, including the
Exhibits referenced in Section 2.5 of the Indenture.
(viii) The Class A-1AR Notes will bear a legend to the following
effect unless the Issuer and the Co-Issuer determine otherwise in compliance
with applicable law:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND NEITHER THE ISSUER NOR THE CO-ISSUER
HAS BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "INVESTMENT COMPANY ACT"). THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A "QIB") WHO IS
A QUALIFIED PURCHASER AS DEFINED IN SECTION 2(A)(51) OF THE INVESTMENT COMPANY
ACT (A "QUALIFIED PURCHASER") AND IS EITHER PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER WHO IS A QUALIFIED PURCHASER,
IN A PRINCIPAL AMOUNT OF NOT LESS THAN U.S.$500,000 (AND INTEGRAL MULTIPLES OF
U.S.$500 IN EXCESS THEREOF) FOR THE PURCHASER AND FOR EACH SUCH ACCOUNT, IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT SO
LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN
THE INDENTURE, OR (2) TO A NON U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT IN A PRINCIPAL AMOUNT OF NOT LESS THAN U.S.$500,000 (AND INTEGRAL
MULTIPLES OF U.S.$500 IN EXCESS THEREOF), SUBJECT TO THE SATISFACTION OF CERTAIN
CONDITIONS SPECIFIED IN THE INDENTURE, AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. EACH PURCHASER OF A NOTE WILL BE REQUIRED TO MAKE THE
REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTION 2.5 OF THE INDENTURE. ANY
TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE
VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE CO-ISSUER,
AS APPLICABLE, THE TRUSTEE OR ANY INTERMEDIARY. IF AT ANY TIME, THE ISSUER AND
THE CO-ISSUER, AS APPLICABLE, DETERMINE OR ARE NOTIFIED THAT THE HOLDER OF SUCH
BENEFICIAL INTEREST IN SUCH NOTE WAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE
REPRESENTATIONS SET FORTH IN THE INDENTURE, THE TRUSTEE MAY CONSIDER THE
ACQUISITION OF THIS NOTE VOID AND REQUIRE THAT THIS NOTE BE TRANSFERRED TO A
PERSON DESIGNATED BY THE ISSUER AND THE CO-ISSUER, AS APPLICABLE.
Schedule II-3
(ix) Unless a prospective Holder of a Class A-1AR Note has provided
another representation acceptable to the Trustee, the Collateral Manager, the
Issuer and the Co-Issuer, the Holder represents that either (a) it is not and is
not investing on behalf of an "employee benefit plan" (as defined in Section
3(3) of ERISA) or "plan" (as defined in Section 4975(e)(1) of the Code) that is
subject to Title I of ERISA or Section 4975 of the Code, or any other employee
benefit plan or plan which is subject to any federal, state or local law
("Similar Law") that is substantially similar to Section 406 of ERISA or Section
4975 of the Code (each a "Benefit Plan"), or an entity whose underlying assets
include plan assets of any such Benefit Plan or (B) its purchase and holding of
the Class A-1AR Notes will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, or, in the
case of a Benefit Plan subject to Similar Law, do not result in a non-exempt
violation of Similar Law.
(x) The Holder will not, at any time, offer to buy or offer to sell
the Class A-1AR Notes by any form of general solicitation or advertising,
including, but not limited to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio or at a seminar or meeting whose attendees
have been invited by general solicitations or advertising.
(xi) The Holder is not a member of the public in the Cayman Islands,
within the meaning of Section 194 of the Cayman Islands Companies Law (2004
Revision).
(xii) The Holder understands that the Issuer, the Co-Issuer, the
Trustee or the Paying Agent shall require certification acceptable to it (A) as
a condition to the payment of principal of and interest on (and commitment fees
in respect of) any Notes without, or at a reduced rate of, U.S. withholding or
backup withholding tax, and (B) to enable the Issuer, the Co-Issuer, the Trustee
and the Paying Agent to determine their duties and liabilities with respect to
any taxes or other charges that they may be required to pay, deduct or withhold
from payments in respect of such Notes or the Holder of such Class A-1AR Notes
under any present or future law or regulation of the Cayman Islands or the
United States or any present or future law or regulation of any political
subdivision thereof or taxing authority therein or to comply with any reporting
or other requirements under any such law or regulation. Such certification may
include U.S. federal income tax forms (such as IRS Form W-8BEN (Certification of
Foreign Status of Beneficial Owner), IRS Form W-8IMY (Certification of Foreign
Intermediary Status), IRS Form W-9 (Request for Taxpayer Identification Number
and Certification), or IRS Form W-8ECI (Certification of Foreign Person's Claim
for Exemption from Withholding on Income Effectively Connected with Conduct of a
U.S. Trade or Business) or any successors to such IRS forms). In addition, the
Issuer, the Co-Issuer, the Trustee or the Paying Agent may require certification
acceptable to it to enable the Issuer to qualify for a reduced rate of
withholding in any jurisdiction from or through which the Issuer receives
payments on its assets. Each Holder agrees to provide any certification
requested pursuant to this paragraph and to update or replace such form or
certification in accordance with its terms or its subsequent amendments.
(xiii) The Holder acknowledges that it is its intent and that it
understands it is the intent of the Issuer that, for purposes of U.S. federal
income, state and local income and franchise tax and any other income taxes, for
so long as ARMS Equity or a direct or indirect wholly owned subsidiary of Arbor
Parent owns 100% of the Preferred Shares, the Issuer will be
Schedule II-4
treated as a Qualified REIT Subsidiary and the Notes will be treated as
indebtedness solely of the Arbor Parent and the Preferred Shares will be treated
as equity of the Arbor Parent; the Holder agrees to such treatment and agrees to
take no action inconsistent with such treatment.
(xiv) The Holder, if not a "United States person" (as defined in
Section 7701(a)(30) of the Code), either: (A) is not a bank (within the meaning
of Section 881(c)(3)(A) of the Code) (and see (C) below); (B) is a bank that has
provided an IRS Form W-8ECI representing that all payments received or to be
received by it from the Issuer are effectively connected with the conduct of a
trade or business in the United States; or (C) is a bank and is, or is not a
bank (within the meaning of Section 881(c)(3)(A) of the Code) but with respect
to commitment fees is, eligible for benefits under an income tax treaty with the
United States that eliminates U.S. federal income taxation of U.S. source
interest and commitment fees not attributable to a permanent establishment in
the United States and the Issuer is treated as a fiscally transparent entity (as
defined in Treasury Regulations section 1.894-1(d)(3)(iii)) under the laws of
Holder's jurisdiction with respect to payments made on the Collateral Debt
Securities held by the Issuer.
(xv) The Holder will, prior to any sale, pledge or other transfer by
such Holder of any Class A-1AR Note (or interest therein), obtain from the
prospective transferee, and deliver to the Trustee, a duly executed transferee
certificate addressed to each of the Trustee, the Issuer and the Collateral
Manager in the form of the relevant exhibit attached to the Indenture, and such
other certificates and other information as the Issuer, the Collateral Manager
or the Trustee may reasonably require to confirm that the proposed transfer
complies with the transfer restrictions contained in the Indenture.
(xvi) The Holder agrees that no Class A-1AR Note may be purchased,
sold, pledged or otherwise transferred in an amount less than the minimum
denomination set forth in the Indenture. In addition, the Holder understands
that the Class A-1AR Notes will be transferable only upon registration of the
transferee in the Note Register of the Issuer following delivery to the Note
Registrar of a duly executed transfer certificate and the Definitive Class A-1AR
Note to be transferred, and any other certificates and other information
required by the Indenture.
(xvii) The Holder is aware and agrees that no Class A-1AR Note may be
offered or sold, pledged or otherwise transferred except (i)(A) to a transferee
that the Holder reasonably believes is a QIB, purchasing for its account, to
which notice is given that the resale, pledge or other transfer is being made in
reliance on the exemption from the registration requirements of the Securities
Act provided by Rule 144A or another person the sale to which is exempt under
the Securities Act, (B) to a transferee that is a Qualified Purchaser, and (C)
if such transfer is made in accordance with any applicable securities laws of
any state of the United States and any other relevant jurisdiction, (ii)(A) to a
transferee that is acquiring such interest in an offshore transaction in
accordance with Rule 904 of Regulation S, (B) to a transferee that is not a U.S.
resident (within the meaning of the Investment Company Act) unless such
transferee is a Qualified Purchaser, (C) such transfer is made in compliance
with the other requirements set forth in the Indenture and (D) if such transfer
is made in accordance with any applicable securities laws of any state of the
United States and any other jurisdiction or (iii) if such transfer
Schedule II-5
would have the effect of requiring the Issuer or the Collateral to register as
an "investment company" under the Investment Company Act.
(xviii)The Holder understands that there is no market for the Class
A-1AR Notes and that no assurances can be given as to the liquidity of any
trading market for the Class A-1AR Notes and that it is unlikely that a trading
market for the Class A-1AR Notes will develop. The Holder further understands
that, although the Dealers may from time to time make a market in the Class
A-1AR Notes, the Dealers are not under any obligation to do so and, following
the commencement of any market-making, may discontinue the same at any time.
Accordingly, the Holder must be prepared to hold the Class A-1AR Notes until the
Stated Maturity.
(ix) The Holder agrees that (i) any sale, pledge or other transfer of
a Class A-1AR Note made in violation of the transfer restrictions contained in
the Indenture, or made based upon any false or inaccurate representation made by
the Holder or a transferee to the Issuer, the Trustee or the Note Registrar,
will be void and of no force or effect and (ii) none of the Issuer, the Trustee
and the Note Registrar has any obligation to recognize any sale, pledge or other
transfer of a Class A-1AR Note made in violation of any such transfer
restriction or made based upon any such false or inaccurate representation.
(xx) The Holder approves and consents to any direct trades between the
Issuer and the Collateral Manager and/or its affiliates that is permitted under
the terms of the Indenture and the Collateral Management Agreement.
(xxi) The Holder acknowledges that the Issuer, the Trustee, the Note
Registrar, the Collateral Manager, the Dealers and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and
agreements and agrees that, if any of the acknowledgments, representations or
warranties made or deemed to have been made by it in connection with its
purchase of the Class A-1AR Notes are no longer accurate, the Holder will
promptly notify the Issuer, the Trustee, Note Registrar, the Collateral Manager
and the Dealers.
(xxii) The Holder is a Qualified Purchaser for purposes of Section
3(c)(7) of the Investment Company Act and is not a Flow-Through Investment
Vehicle (other than a Qualifying Investment Vehicle). The Holder, to the extent
it is a private investment company formed before April 30, 1996, has received
the necessary consent from its beneficial owners and the Holder agrees that it
will not hold such Class A-1AR Notes for the benefit of any other person and
will be the sole beneficial owner thereof for all purposes and that it will not
sell participation interests in the Class A-1AR Notes or enter into any other
arrangement pursuant to which any other person will be entitled to a beneficial
interest in the distributions on the Class A-1AR Notes. The Holder understands
and agrees that any purported transfer of the Class A-1AR Notes to a Holder that
does not comply with the requirements of this paragraph will be null and void ab
initio.
(xxiii) The Holder understands that the Indenture permits the Issuer
and the Co-Issuer to require any Holder a Class A-1AR Note who is determined not
to have been a Qualified Purchaser at the time of acquisition of such Class
A-1AR Note to sell such interest to a person
Schedule II-6
that is both a Qualified Institutional Buyer and Qualified Purchaser in a
transaction meeting the requirements of Rule 144A.
Schedule II-7
EXHIBIT A
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Class A-1AR Note Purchase Agreement, dated as
of December 14, 2006 (as modified and supplemented and in effect from time to
time, the "Class A-1AR Note Purchase Agreement"), among ARBOR REALTY MORTGAGE
SECURITIES SERIES 2006-1, LTD., a Cayman Islands exempted company with limited
liability (the "Issuer"), ARBOR REALTY MORTGAGE SECURITIES SERIES 2006-1 LLC, a
Delaware limited liability company (the "Co-Issuer" and together with the
Issuer, the "Co-Issuers"), the Holders party thereto and XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Class A-1AR Note Agent (the "Class A-1AR Note Agent"),
relating to the Class A-1AR Notes issued under the Indenture, dated as of
December 14, 2006 (as modified and supplemented and in effect from time to time,
the "Indenture"), entered into by the Co-Issuers, Arbor Realty SR, Inc., as
advancing agent and Xxxxx Fargo Bank, National Association, as trustee ("Xxxxx
Fargo"), as trustee (together with any successor permitted under the Indenture,
the "Trustee"), paying agent, calculation agent, transfer agent, custodial
securities intermediary, backup advancing agent and notes registrar. Terms used
but not defined herein have the respective meanings given to such terms in (or
incorporated by reference in) the Class A-1AR Note Purchase Agreement and in the
Indenture.
The Assignor named on the signature pages hereof (the "Assignor")
hereby sells and assigns to the Assignee named on the signature pages hereof
(the "Assignee"), and the Assignee hereby purchases and assumes from the
Assignor, effective as of the Assignment Date set forth below, the interests set
forth below (the "Assigned Interest") in the Assignor's rights and obligations
under the Class A-1AR Note Purchase Agreement, including, without limitation,
the interests set forth below in the Class A-1AR Notes held by (and the related
Class A-1AR Commitment of and outstanding principal amount of Advances held by)
the Assignor on the Assignment Date. The Assignee hereby acknowledges receipt of
a copy of the Class A-1AR Note Purchase Agreement and the Indenture. From and
after the Assignment Date (A) the Assignee shall be a party to and be bound by
the provisions of the Class A-1AR Note Purchase Agreement and, to the extent of
the Assigned Interest, have the rights and obligations of a Holder thereunder
and (B) the Assignor shall, to the extent of the Assigned Interest, relinquish
its rights and be released from its obligations under the Class A-1AR Note
Purchase Agreement. The Assignor hereby represents and warrants to the Assignee
that, as of the Assignment Date, the Assignor (1) owns the Assigned Interest
free and clear of any lien or other encumbrance and (2) is not aware of any
Default or Event of Default under the Indenture. The Assignee hereby makes to
the Assignor, the Co-Issuers, the Collateral Manager, the Trustee and the Class
A-1AR Note Agent all of the representations and warranties set forth in Section
3.02 of the Class A-1AR Note Purchase Agreement (including those made by
reference to Schedule II thereof).
Each of the parties hereby covenants and agrees that so long as [_] is
the registered owner of the Class A-1AR Notes:
(1) except with respect to the Class A-1AR Holder Account, it waives
any right to set-off and to appropriate and apply any and all deposits and
any other
indebtedness at any time held or owing thereby to or for the credit or the
account of [_] against and on account of the obligations and liabilities of
[_] to such party under this Agreement; and
(2) notwithstanding anything to the contrary herein no provision of
this Agreement adversely affecting the rights or duties of [_] or a
Liquidity Provider for [_] may be amended or waived without the written
consent of [_].
This Assignment and Acceptance shall be governed by and construed in
accordance with the law of the State of [_].
Legal Name of Assignor: _____________________
Legal Name of Assignee: _____________________
Assignee's Address for Notices: _____________________
Fax No.: _____________________
Details of electronic messaging system: _____________________
Payment Instructions: _____________________
Federal Taxpayer ID No. of Assignee: _____________________
Effective Date of Assignment ("Assignment Date"): _____________________
AMOUNT ASSIGNED AMOUNT RETAINED
--------------- ---------------
Class A-1AR Commitment: U.S.$[_] U.S.$[_]
Outstanding Principal
Amount of Advances: U.S.$[_] U.S.$[_]
The Assignee [shall/shall not] make a Qualified Securitization Pledge
[[Name of Holder] elects to be subject to Section 6.03(f) of the Note Purchase
Agreement]
The terms set forth above are hereby agreed to:
[Name of Assignor], as Assignor
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit A-2
[Name of Assignee], as Assignee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[_], as Committed Liquidity Provider with regard to
[_], as Class A-1AR Note Holder
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit A-3
EXHIBIT B
FORM OF CLASS A-1AR DRAW REQUEST
(Advances)
[Date]
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: CDO Trust Services, Arbor Realty Mortgage Securities Series 2006-1
Re: Class A-1AR Note Purchase Agreement dated as of December 14, 2006.
Ladies and Gentlemen:
This Class A-1AR Draw Request is delivered to you pursuant to Sections
2.03 of that certain Class A-1AR Note Purchase Agreement, dated as of December
14, 2006 (as modified and supplemented and in effect from time to time, the
"Class A-1AR Note Purchase Agreement"), among ARBOR REALTY MORTGAGE SECURITIES
SERIES 2006-1, LTD., a Cayman Islands exempted company with limited liability
(the "Issuer"), ARBOR REALTY MORTGAGE SECURITIES SERIES 2006-1 LLC, a Delaware
limited liability company (the "Co-Issuer" and together with the Issuer, the
"Co-Issuers"), the Holders party thereto and XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Class A-1AR Note Agent (the "Class A-1AR Note Agent").
Capitalized terms used but not defined herein shall have the respective meanings
given to such terms in (or incorporated by reference in) the Class A-1AR Note
Purchase Agreement and the Indenture.
1. The Issuer hereby requests a Class A-1AR Draw in the principal amount of
$_____________.
2. The Issuer hereby requests that the Advances be made on and as of
_____________.
3. The amount of the Class A-1AR Draw shall be wired to the following account:
_____________.
4. All of the conditions applicable to the Advance requested herein as set
forth in the Class A-1AR Note Purchase Agreement have been satisfied as of
the date hereof.
IN WITNESS WHEREOF, the undersigned have executed this Class A-1AR
Draw Request this ___ day of [_], 20[__].
ARBOR REALTY MORTGAGE SECURITIES SERIES
2006-1, LTD., as the Issuer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
