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EXHIBIT 10.19
PURCHASE AGREEMENT
This
Purchase Agreement (the "Agreement") is made as of the 19th day
of
January, 2005, by and among Arbor Realty
Mortgage Securities Series 2004-1,
Ltd., an exempted company incorporated with
limited liability under the laws of
the Cayman Islands (the "Issuer"), Arbor
Realty Mortgage Securities Series
2004-1 LLC, a Delaware limited liability
company (the "Co-Issuer" and, together
with the Issuer, the "Co- Issuers") and
Wachovia Capital Markets, LLC ("WCM" or
the "Initial Purchaser").
W I T N E S S E T H:
WHEREAS,
the Co-Issuers intend to issue (a) the U.S. $182,910,000 Class
A
Senior Secured Floating Rate Term Notes,
Due 2040 (the "Class A Notes"), (b) the
U.S. $51,590,000 Class B Second Priority
Floating Rate Term Notes, Due 2040 (the
"Class B Notes"), (c) the U.S. $50,417,000
Class C Third Priority Floating Rate
Term Notes, Due 2040 (the "Class C Notes")
and (d) the U.S. $20,402,000 Class D
Fourth Priority Floating Rate Term Notes,
Due 2040 (the "Class D Notes" and
together with the Class A Notes, the Class
B Notes and the Class C Notes, the
"Notes") pursuant to an indenture, dated as
of January 19, 2005 (the
"Indenture"), by and among the Issuer, the
Co-Issuer, LaSalle Bank National
Association, as trustee, paying agent,
calculation agent, transfer agent,
custodial securities intermediary and notes
registrar (together with any
successor trustee permitted under the
Indenture, the "Trustee") and Arbor Realty
SR, Inc., as advancing agent;
WHEREAS,
pursuant to its organizational documents, corporate resolutions
and a preferred shares paying agency
agreement, the Issuer also intends to issue
the U.S. $163,707,380 aggregate notional
amount preferred shares (the "Preferred
Shares");
WHEREAS,
the Initial Purchaser is a securities firm engaged in the
business of selling securities directly to
purchasers or through other
securities dealers;
WHEREAS,
Arbor Realty Collateral Management, LLC ("ARCM") shall act as
collateral manager (the "Collateral
Manager") of the Issuer's assets in
accordance with the terms of a collateral
management agreement dated as of
January 19, 2005, between the Collateral
Manager and the Issuer (the "Collateral
Management Agreement");
WHEREAS,
the Initial Purchaser hereby acknowledges that it has received
good and valuable consideration from the
Co-Issuers.
NOW,
THEREFORE, the parties agree as follows:
1. Defined
Terms. All capitalized terms used and not otherwise defined
herein shall have the same meanings
ascribed to such terms in the Indenture.
2. Sale
and Purchase of the Notes.
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(a)
Subject to the terms and conditions herein, each of the Issuer and
the
Co-Issuer hereby agrees to sell on the
Closing Date all of the Notes, as
applicable, to the Initial Purchaser as
provided hereinafter, and the Initial
Purchaser agrees to purchase on the Closing
Date from the Issuer and Co-Issuer,
as applicable, the Notes in the amount set
forth opposite the Initial
Purchaser's name on Schedule A hereto at
the price (the "Purchase Price") set
forth under the respective Notes on the
Closing Date.
(b) The
Purchase Price of the Notes shall be payable to the Issuer or
the
Co- Issuer, as applicable, as they direct
by wire transfer in United States
Dollars in immediately available funds on
the Closing Date.
(c) Prior
to or at the time that the Notes are first issued or delivered,
the conditions precedent in Section 7
herein shall have been satisfied.
3. Offer
of the Notes. Each of the Issuer and the Co-Issuer understands
that the Initial Purchaser intends to offer
the Notes as soon after this
Agreement has become effective as is
advisable in the judgment of the Initial
Purchaser. The Issuer and Co-Issuer confirm
that they have authorized the
Initial Purchaser, subject to the
restrictions set forth below, to distribute
copies of the Offering Memorandum in
connection with the offering of the Notes.
4.
Representations, Warranties and Covenants of each of the
Co-Issuers.
Each of the Issuer or the Co-Issuer, as
applicable, represents and warrants
(with respect to itself only) to the
Initial Purchaser as of the Closing Date,
and agrees with the Initial Purchaser
that:
(a) it has
not, directly or indirectly, solicited any offer to buy or
offered to sell, and shall not, directly or
indirectly, solicit any offer to buy
or offer to sell, in the United States or
to any United States citizen or
resident, any security which is or would be
integrated with the sale of the
Notes in a manner that would require the
Notes to be registered under the
Securities Act of 1933, as amended (the
"Securities Act");
(b) the
Notes are not of the same class as any notes of the Issuer or
Co-Issuer listed on a national securities
exchange registered under Section 6 of
the United States Securities Exchange Act,
as amended (the "Exchange Act"), or
quoted in a United States automated
interdealer quotation system;
(c) the
Offering Memorandum dated as of January 14, 2005 and the
marketing
materials dated December 7, 2004 and the
related asset summaries (together, the
"Offering Materials") have been prepared by
the Issuer and the Co-Issuer, as
applicable, in connection with the offering
of the Notes. The Offering Materials
and any amendments or supplements thereto
did not and shall not, as of their
respective dates, and, as amended or
supplemented through the Closing Date,
shall not as of the Closing Date, contain
an untrue statement of a material fact
or omit to state a material fact necessary
in order to make the statements
therein, in light of the circumstances
under which they were made, not
misleading except that the representations
and warranties set forth in this
Section 4(c) do not apply to statements or
omissions that are made in reliance
upon and in conformity with information
relating to the Initial Purchaser
furnished to the Issuer by the Initial
Purchaser expressly for use in the
Offering Materials or any amendment or
supplement thereto. It is hereby
acknowledged that the
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statements set forth in the second
paragraph under the caption "Subscription and
Sale" constitute the only written
information furnished to the Seller by the
Initial Purchasers expressly for use in the
Offering Circular (or any amendment
or supplement thereto).
(d) since
the respective dates as of which information is given in the
Offering Materials, except as contemplated
or set forth in the Offering
Memorandum, it has not carried on any
business other than as described in the
Offering Materials relating to the issue of
the Notes;
(e) the
Issuer does not have any subsidiaries and the Co-Issuer does
not
have any subsidiaries;
(f) the
Issuer is an exempted company incorporated with limited
liability
that has been duly and validly incorporated
and is existing and in good standing
under the laws of the Cayman Islands; the
Issuer is duly licensed and duly
qualified to do business as a foreign
limited liability company and is in good
standing in all jurisdictions in which the
ownership of its assets or in which
the conduct of its business requires or
shall require such qualification; the
Issuer has full power and authority to own
its assets and conduct its business
as described in the Offering Materials and
to enter into and perform its
obligations under this Agreement, the
Indenture, each Collateral Debt Securities
Purchase Agreement, each Hedge Agreement
and the Collateral Management Agreement
and to enter into and consummate all the
transactions in connection therewith as
contemplated by such agreements and in the
Offering Materials;
(g) the
Co-Issuer is a limited liability company that is in
good-standing
under the laws of the State of Delaware and
is duly licensed and duly qualified
to do business as a limited liability
company and is in good standing in all
jurisdictions in which the ownership of its
assets or in which the conduct of
its business requires or shall require such
qualification; the Co-Issuer has
full power and authority to own its assets
and conduct its business as described
in the Offering Materials and to enter into
and perform its obligations under
this Agreement and the Indenture and to
enter into and consummate all the
transactions in connection therewith as
contemplated by such agreements and in
the Offering Materials;
(h) the
Issuer has the authorized share capital as set
forth in the Offering Memorandum and all of
the issued ordinary shares of the
Issuer have been duly and validly
authorized and issued and are fully paid and
nonassessable and all of the issued
ordinary shares of the Issuer shall be held
by ARMS 2004-1 Equity Holdings LLC,
relating to such ordinary shares;
(i) the
Co-Issuer has the authorized capitalization as set forth in the
Offering Memorandum and all of the
membership interests of the Co-Issuer have
been duly and validly authorized and issued
and all of the issued membership
interests of the Co-Issuer shall be held by
Arbor Realty SR, Inc.;
(j) the
Notes have been duly authorized by the Co-Issuer, and when
issued
and delivered and when appropriate entries
have been made in the Note Register
pursuant to this Agreement and the
Indenture against payment therefor, shall
have been duly executed, authenticated,
issued and delivered and shall
constitute valid and legally binding
obligations of the Co-Issuer, enforceable
against the Co-Issuer in accordance with
their terms and entitled to
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the benefits provided by the Indenture,
subject, as to enforcement, to
bankruptcy, insolvency, reorganization and
other laws of general applicability
relating to or affecting creditors' rights
and to general equity principles;
(k) the
Notes have been duly authorized by the Issuer and, when issued
and
delivered and when appropriate entries have
been made in the Note Register
pursuant to this Agreement and the
Indenture against payment therefor, shall
have been duly executed, authenticated,
issued and delivered and shall
constitute valid and legally binding
obligations of the Issuer, enforceable
against the Issuer in accordance with their
terms and entitled to the benefits
provided by the Indenture, subject, as to
enforcement, to bankruptcy,
insolvency, reorganization and other laws
of general applicability relating to
or affecting creditors' rights and to
general equity principles;
(l) each
of the Indenture and this Agreement have been duly authorized
by
the Co-Issuer and, when executed and
delivered by the parties thereto, shall
constitute a valid and legally binding
instrument, enforceable in accordance
with their respective terms, subject, as to
enforcement, to bankruptcy,
insolvency, reorganization and other laws
of general applicability relating to
or affecting creditors' rights and to
general equity principles;
(m) each
of the Indenture, the Collateral Management Agreement, this
Agreement, each Collateral Debt Securities
Purchase Agreement and each Hedge
Agreement has been duly authorized by the
Issuer and, when executed and
delivered by the parties thereto, shall
constitute a valid and legally binding
instrument, enforceable in accordance with
its terms under the laws of the State
of New York and all other relevant laws,
subject, as to enforcement, to
bankruptcy, insolvency, reorganization and
other laws of general applicability
relating to or affecting creditors' rights
and to general equity principles;
(n) except
as may be required under state securities laws, no filing with,
or authorization, approval, consent,
license, order, registration, qualification
or decree of, any court or governmental
authority or agency is necessary or
required for the performance by the
Co-Issuer of its obligations hereunder, in
connection with the offering, issuance or
sale of the Notes hereunder or the
consummation of the transactions
contemplated by or for the due execution,
delivery or performance of this Agreement,
the Indenture or any other agreement
or instrument entered into or issued or to
be entered into or issued by the
Co-Issuer in connection with the
consummation of the transactions contemplated
herein and in the Offering Materials
(including the issuance and sale of the
Notes and the use of the proceeds from the
sale of the Notes as described in the
Offering Memorandum under the caption "Use
of Proceeds");
(o) except
as may be required under state securities laws, no filing with,
or authorization, approval, consent,
license, order, registration, qualification
or decree of, any court or governmental
authority or agency is necessary or
required for the performance by the Issuer
of its obligations hereunder, in
connection with the offering, issuance or
sale of the Notes hereunder or the
consummation of the transactions
contemplated by or for the due execution,
delivery or performance of this Agreement,
the Indenture, the Notes, each
Collateral Debt Securities Purchase
Agreement, the Collateral Management
Agreement, each Hedge Agreement or any
other agreement or instrument entered
into or issued or to be entered into or
issued by the Issuer in connection with
the consummation of the transactions
contemplated herein and in the Offering
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Materials (including the issuance and sale
of the Notes and the use of the
proceeds from the sale of the Notes as
described in the Offering Memorandum
under the caption "Use of Proceeds");
(p) the statements set forth in
the Offering Memorandum under the
captions "Description of the Securities,"
"Security for the Notes," "The
Collateral Management Agreement," "Hedge
Agreements," "The Issuer" and "The
Co-Issuer" insofar as they purport to
constitute a description of the Issuer or
the Co-Issuer or a summary of the terms of
the Notes, the Indenture, the Hedge
Agreements and the Collateral Management
Agreement and under the captions
"Income Tax Considerations," "ERISA
Considerations" and "Subscription and Sale,"
insofar as they purport to describe the
provisions of the laws and documents
referred to therein, are correct in all
material respects;
(q) the issue and sale of the
Notes and the compliance by the Issuer or
the Co-Issuer as applicable, with all of
the provisions of the Indenture, each
Collateral Debt Securities Purchase
Agreement, the Notes, each Hedge Agreement,
the Collateral Management Agreement and
this Agreement and the consummation of
the transactions herein and therein
contemplated shall not conflict with or
result in a breach or violation of any of
the terms or provisions of, or
constitute a default under, any other
agreement or instrument to which the
Issuer or the Co-Issuer is a party or by
which the Issuer or the Co-Issuer is
bound, nor shall such action result in any
violation of the provisions of the
Governing Documents of each of the Issuer
or the Co-Issuer or any statute or any
order, rule or regulation of any court or
governmental agency or body having
jurisdiction over the Issuer or the
Co-Issuer or each of their assets; and, no
consent, approval, authorization, order,
registration or qualification of or
with any court or governmental agency or
body is required for the issue and sale
of the Notes or the consummation of the
transactions by the Issuer and the
Co-Issuer contemplated by this Agreement,
the Indenture, each Collateral Debt
Securities Purchase Agreement, each Hedge
Agreement or the Collateral Management
Agreement, (other than any governmental or
other consents that have already been
obtained by either the Issuer or the
Co-Issuer and that were in full force and
effect);
(r) the Trustee shall have a
perfected security interest in the Pledged
Obligations and the Issuer's rights under
the Collateral Management Agreement,
each Hedge Agreement and each Collateral
Debt Securities Purchase Agreement for
the benefit and security of the holders of
the Notes subject to the priorities
set forth in the Indenture;
(s) there are no legal or
governmental proceedings, inquiries or
investigations pending to which the Issuer
or the Co-Issuer is a party or of
which any property of the Issuer or
Co-Issuer is the subject; and, no such
proceedings are threatened or contemplated
by governmental authorities or
threatened by others;
(t) on the Closing Date, there
shall not exist any default by any of the
Issuer or the Co-Issuer or any condition,
event or act, which, with notice or
lapse of time or both, would constitute an
Event of Default by the Issuer or the
Co-Issuer under the Indenture;
(u) none of the Issuer, the
Co-Issuer or any persons acting on their
behalf (other than the Initial Purchaser as
to whom the Co-Issuers make no
representation) has engaged or shall engage
in any directed selling efforts as
defined in Rule 902 of Regulation S under
the
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Securities Act with respect to the Notes,
and none of the foregoing persons has
offered or sold any of the Notes except to
the Initial Purchaser pursuant to
this Agreement,
(v)
neither the Issuer nor the Co-Issuer has entered into
contractual
arrangements (other than this Agreement)
with any Person other than the Initial
Purchaser with respect to the distribution
of the Notes;
(w) no
stamp or other issuance or transfer taxes or duties and no
capital
gains, income, withholding or other taxes
are payable by or on behalf of the
Initial Purchaser to the government of the
Cayman Islands or any political
subdivision or taxing authority thereof or
therein in connection with the
issuance, sale and delivery by the Issuer
and the Co-Issuer or the sale and
delivery by the Initial Purchaser outside
the Cayman Islands of the Notes to the
investors thereof; provided, that Cayman
Islands stamp duty will be payable if
any of the Notes or Transaction Agreements
are executed in, or after execution,
brought into the Cayman Islands;
(x) none
of the Issuer or the Co-Issuer has offered or sold the Notes by
means of any form of general solicitation
or general advertising and none of the
foregoing persons shall offer to sell,
offer for sale or sell the Notes by means
of any advertisement, article, notice or
other communication published in any
newspaper, magazine or similar medium or
broadcast over television or radio, or
any seminar or meeting whose attendees have
been invited by any general
solicitation or general advertising;
(y)
assuming compliance by the Initial Purchaser with the offer and
sale
restrictions set forth herein and
compliance by the purchaser with the
Subscription Agreement, neither the Issuer
nor the Co-Issuer is required to be
registered as an "investment company" and
neither the Issuer nor the Co-Issuer
shall be required to register as an
investment company under the Investment
Company Act as a result of the conduct of
its business in the manner
contemplated by the Offering
Memorandum;
(z)
assuming compliance by the Initial Purchaser with the offer and
sale
restrictions set forth herein and
compliance by the purchaser with the
Subscription Agreement, no registration of
the Notes under the Securities Act is
required for the offer and sale of the
Notes in the manner contemplated by this
Agreement and the Offering Memorandum and
no qualification of an indenture under
the Trust Indenture Act of 1939, as
amended, is required for the offer and sale
of the Notes in the manner contemplated by
this Agreement and the Offering
Memorandum;
(aa) each
of the Issuer and the Co-Issuer shall make available to the
Initial Purchaser such number of copies of
the Offering Memorandum and any
amendment or supplement thereto as the
Initial Purchaser shall reasonably
request;
(bb)
neither the Issuer nor the Co-Issuer has offered and neither
the
Issuer nor the Co-Issuer shall offer the
Notes except pursuant to this
Agreement;
(cc) each
of the Issuer and the Co-Issuer shall immediately notify the
Initial Purchaser, and confirm such notice
in writing, of (A) any filing made by
the Co-Issuers of information relating to
the offering of the Notes with any
securities exchange or any other regulatory
body in the United States or any
other jurisdiction, and (B) prior to the
completion of
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the purchase of the Notes by the Initial
Purchaser, any material changes in or
affecting the earnings, business affairs or
business prospects of either the
Issuer or the Co-Issuer which (i) make any
statement in the Offering Materials
false or misleading in any material respect
or (ii) are not disclosed in the
Offering Memorandum. In such event or if
during such time any event shall occur
or condition shall exist as a result of
which it is necessary, in the opinion of
any of the Issuer, the Co-Issuer, their
counsel, the Initial Purchaser or its
counsel, to amend or supplement the
Offering Materials in order that the final
Offering Materials not include any untrue
statement of a material fact or omit
to state a material fact necessary in order
to make the statements therein not
misleading in the light of the
circumstances then existing, each of the Issuer
and the Co-Issuer shall forthwith amend or
supplement the final Offering
Materials by preparing and furnishing to
the Initial Purchaser an amendment or
amendments of, or a supplement or
supplements to, the final Offering Materials
(in form and in substance satisfactory in
the opinion of counsel for the Initial
Purchaser) so that, as so amended or
supplemented, the final Offering Materials
shall not include an untrue statement of a
material fact or omit to state a
material fact necessary in order to make
the statements therein, in light of the
circumstances existing at the time it is
delivered to an investor, not
misleading;
(dd) each
of the Issuer and the Co-Issuer shall advise the Initial
Purchaser promptly of any proposal to amend
or supplement the Offering Materials
and shall not effect such amendment or
supplement without the consent of the
Initial Purchaser, which shall not be
unreasonably withheld or delayed. Neither
the consent of the Initial Purchaser to,
nor the Initial Purchaser's delivery
of, any such amendment or supplement, shall
constitute a waiver of any of the
conditions set forth in Section 7
hereof;
(ee) each
of the Issuer and the Co-Issuer agrees that it shall not make
any offer or sale of Notes of any class if,
as a result of the doctrine of
"integration" referred to in Rule 502
promulgated under the Securities Act, such
offer or sale would render invalid (for the
purpose of (i) the sale of the Notes
to the Initial Purchaser or (ii) the resale
of the Notes by the initial
investors to others) the exemption from the
registration requirements of the
Securities Act provided by Section 4(2)
thereof or by Rule 144A or by Regulation
S thereunder;
(ff) each
of the Issuer and the Co-Issuer agrees that, in order to render
the Notes eligible for resale pursuant to
Rule 144A under the Securities Act,
while any of the Notes remain outstanding,
they shall make available, upon
request, to any holder of the Notes or
prospective purchasers of the Notes
designated by any Holder the information
specified in Rule 144A(d)(4), unless
each of the Issuer and the Co-Issuer
furnishes information to the United States
Securities and Exchange Commission (the
"Commission") pursuant to Section 13 or
15(d) of the Exchange Act (such
information, whether made available to holders
or prospective purchasers or furnished to
the Commission, is hereinafter
referred to as "Additional
Information");
(gg) until
the expiration of two years after the original issuance of the
Notes, each of the Issuer and the Co-Issuer
shall not resell any Notes which are
"restricted securities" (as such term is
defined under Rule 144(a)(3) under the
Securities Act) that have been re-acquired
by any of them and shall immediately
upon any purchase of any such Notes submit
such Notes to the Trustee for
cancellation;
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(hh)
each of the Issuer and
the Co-Issuer shall use the net proceeds
received by them from the sale of the Notes
in the manner specified in the
Offering Memorandum under "Use of
Proceeds";
(ii)
during a period of 180
days from the date of the Offering
Memorandum, neither the Issuer nor the
Co-Issuer shall, directly or indirectly,
issue, sell, offer to sell grant any option
for the sale of, or otherwise
dispose of, any debt securities or
guarantees of debt securities of the Issuer
or the Co-Issuer, as applicable, or any
securities convertible or exchangeable
into or exercisable for any debt securities
or guarantees of debt securities of
the Issuer or the Co-Issuer, as applicable,
or any securities convertible or
exchangeable into or exercisable for any
debt security or guarantee of debt
securities of the Issuer or Co-Issuer,
except as described in the Offering
Memorandum;
(jj)
the Co-Issuers shall
use all reasonable efforts in cooperation with
the Initial Purchaser to permit the Notes
to be eligible for clearance and
settlement through DTC;
(kk)
each certificate
representing a Note shall bear the legend contained
in the Offering Memorandum for the time
period and upon the other terms stated
in the Offering Memorandum;
(ll)
the Co-Issuers shall
have no debt other than as indicated in or
contemplated by the Offering Memorandum
(including, without limitation, expenses
incurred in connection with the offering of
the Notes);
(mm)
the application of the
proceeds of the sale of the Notes shall not
be in violation of Regulations T, U or X of
the Board of Governors of the
Federal Reserve System, as amended and in
effect on the Closing Date;
(nn)
The Issuers have taken
all necessary steps to ensure that any
Bloomberg screen containing information
about the Notes represented by Rule 144A
Global Notes includes the following (or
similar) language:
(i)
the "Note Box"
on the bottom of the "Security Display" page
describing the Rule 144A
Global Notes shall state: "Iss'd Under 144A/3c7";
(ii)
the "Security Display"
page shall have flashing red indicator "See
Other Available
Information"; and
(iii) the
indicator shall link to the "Additional Security Information"
page, which shall state that
the securities "are being offered in reliance on
the exemption from
registration under Rule 144A of the Securities Act to
persons who are both (i)
qualified institutional buyers (as defined in Rule
144A under the Securities
Act) and (ii) qualified purchasers (as defined
under Section 3(c)(7) under
the 1940 Act)."
(oo)
The Issuers shall
instruct The Depository Trust Company ("DTC") to
take these or similar steps with respect to
the Notes represented by Rule 144A
Global Notes:
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(i) the
DTC 20-character security descriptor and 48-character
additional
descriptor shall indicate
with marker "3c7" that sales are limited to
Qualified Institutional
Buyers/Qualified Purchasers;
(ii) where
the DTC deliver order ticket sent to purchasers by DT
