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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,
WELLS 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
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TABLE OF CONTENTS
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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
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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
WELLS 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 Wells Fargo Bank,
National Association
("Wells 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
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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, Wells 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 Maples
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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<PAGE>
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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<PAGE>
(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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<PAGE>
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 de
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