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EXHIBIT 10.17
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REVOLVING CREDIT AGREEMENT
dated as of December 7, 2004
among
ARBOR REALTY LIMITED PARTNERSHIP, as Borrower,
ARBOR REALTY TRUST, INC., as Guarantor,
THE LENDERS LISTED HEREIN, and
WATERSHED ADMINISTRATIVE LLC,
as Administrative Agent
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1
Definitions...............................................................
1
Section 1.2 Accounting
Terms and Determinations.......................................
16
Section 1.3 Types of
Borrowings.......................................................
16
ARTICLE II
THE CREDITS
Section 2.1
Commitments to
Lend.......................................................
16
Section 2.2 Notice of
Borrowing.......................................................
17
Section 2.3
Intentionally
Omitted.....................................................
17
Section 2.4 Notice to
Lenders; Funding of Loans.......................................
17
Section 2.5
Notes.....................................................................
17
Section 2.6
Intentionally
Omitted.....................................................
18
Section 2.7 Interest
Rate.............................................................
18
Section 2.8
Fees......................................................................
18
Section 2.9 Maturity
Date.............................................................
19
Section 2.10 Mandatory
Prepayments.....................................................
20
Section 2.11 Optional
Prepayments......................................................
20
Section 2.12 General
Provisions as to Payments.........................................
21
Section 2.13 Intentionally
Deleted.....................................................
21
Section 2.14 Computation of
Interest and Fees..........................................
21
Section 2.15 Use of
Proceeds...........................................................
22
ARTICLE III
CONDITIONS
Section 3.1
Closing...................................................................
22
Section 3.2
Borrowings................................................................
23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Existence
and Power.......................................................
24
Section 4.2 Power and
Authority.......................................................
24
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Section 4.3 No
Violation..............................................................
25
Section 4.4 Financial
Information.....................................................
25
Section 4.5
Litigation................................................................
25
Section 4.6 Compliance
with ERISA.....................................................
26
Section 4.7
Environmental
Matters.....................................................
26
Section 4.8
Taxes.....................................................................
26
Section 4.9 Full
Disclosure...........................................................
27
Section 4.10
Solvency..................................................................
27
Section 4.11 Use of Proceeds;
Margin Regulations.......................................
27
Section 4.12 Governmental
Approvals....................................................
27
Section 4.13 Investment
Company Act; Public Utility Holding Company Act................
27
Section 4.14 Principal
Offices.........................................................
27
Section 4.15 REIT
Status...............................................................
28
Section 4.16 Patents,
Trademarks, etc..................................................
28
Section 4.17 Intentionally
Omitted.....................................................
28
Section 4.18 No
Default................................................................
29
Section 4.19 Licenses,
etc.............................................................
28
Section 4.20 Compliance With
Law.......................................................
28
Section 4.21 No Burdensome
Restrictions................................................
28
Section 4.22 Brokers'
Fees.............................................................
28
Section 4.23 Labor
Matters.............................................................
28
Section 4.24
Insurance.................................................................
29
Section 4.25 Organizational
Documents..................................................
29
Section 4.26 Other
Indebtedness........................................................
29
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
Section 5.1
Information...............................................................
29
Section 5.2 Payment of
Obligations....................................................
32
Section 5.3
Maintenance of Property; Insurance;
Leases................................ 32
Section 5.4 Conduct of Business
and Maintenance of Existence.......................... 33
Section 5.5 Compliance
with Laws......................................................
33
Section 5.6 Inspection
of Property, Books and Records.................................
33
Section 5.7
Existence.................................................................
33
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Section 5.8 Financial
Covenants.......................................................
33
Section 5.9
Restriction on Fundamental
Changes........................................ 34
Section 5.10 Changes in
Business.......................................................
35
Section 5.11 Margin
Stock..............................................................
35
Section 5.12 Intentionally
Deleted.....................................................
35
Section 5.13 ABR
Status................................................................
35
Section 5.14 Intentionally
Deleted.....................................................
36
Section 5.15 Affiliated
Transactions...................................................
36
Section 5.16 Additional
Rights of Administrative Agent.................................
37
Section 5.17 New Arbor REIT
Securitization Transaction.................................
37
Section 5.18 Recalculation of
the Borrowing Base.......................................
37
ARTICLE VI
DEFAULTS
Section 6.1 Events of
Default.........................................................
38
Section 6.2 Rights and
Remedies.......................................................
40
Section 6.3 Notice of
Default.........................................................
41
Section 6.4
Distribution of Proceeds after
Default.................................... 41
ARTICLE VII
THE AGENTS
Section 7.1
Appointment and
Authorization.............................................
42
Section 7.2 Agency and
Affiliates.....................................................
42
Section 7.3 Action by
Administrative Agent............................................
42
Section 7.4
Consultation with
Experts.................................................
42
Section 7.5 Liability
of Administrative Agent.........................................
42
Section 7.6
Indemnification...........................................................
43
Section 7.7 Credit
Decision...........................................................
43
Section 7.8 Successor
Administrative Agent............................................
43
Section 7.9 Consents
and Approvals....................................................
44
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Section 8.1 Basis for
Determining Interest Rate Inadequate or Unfair..................
45
Section 8.2
Illegality................................................................
45
Section 8.3 Increased
Cost and Reduced Return.........................................
46
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Section 8.4
Taxes.....................................................................
47
Section 8.5 Base Rate Loans Substituted for
Affected Euro-Dollar Loans................ 49
ARTICLE IX
MISCELLANEOUS
Section 9.1
Notices...................................................................
50
Section 9.2 No
Waivers................................................................
50
Section 9.3 Expenses;
Indemnification.................................................
51
Section 9.4 Sharing of
Set-Offs.......................................................
52
Section 9.5 Amendments
and Waivers....................................................
53
Section 9.6 Successors
and Assigns....................................................
53
Section 9.7
Collateral................................................................
55
Section 9.8 Governing
Law; Submission to Jurisdiction.................................
55
Section 9.9
Counterparts; Integration;
Effectiveness.................................. 56
Section 9.10 WAIVER OF JURY
TRIAL......................................................
56
Section 9.11 Survival
56
Section 9.12 Domicile of
Loans.........................................................
56
Section 9.13 Limitation of
Liability...................................................
56
Section 9.14 Recourse
Obligation.......................................................
56
Section 9.15 USA Patriot
Act...........................................................
57
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Schedule 4.6 - Borrower and ABR ERISA Plans
Exhibit A - Form of Note
Exhibit B - Intentionally Omitted
Exhibit C - Notice of Borrowing
Exhibit D - Intentionally Omitted
Exhibit E - Transfer Supplement
Schedule 1.1 - Description of New Arbor
REIT Securitization Transaction
Schedule 4.4 - Financial Documents
Schedule 4.5 - Litigation
Schedule 4.6 - Borrower and ABR ERISA
Plans
Schedule 4.26 - Other Indebtedness
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement"), dated as of
December 7, 2004, is among ARBOR REALTY
LIMITED PARTNERSHIP (the "Borrower"),
ARBOR REALTY TRUST, INC. ("ABR" or
"Guarantor"), the LENDERS listed on the
signature pages hereof, and WATERSHED
ADMINISTRATIVE LLC, as Administrative
Agent.
W I T N E S S E T H
WHEREAS, for good and valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms, as used herein,
have
the following meanings:
"Administrative Agent" shall mean Watershed Administrative LLC,
in
its capacity as Administrative Agent
hereunder, and its permitted successors in
such capacity in accordance with the terms
of this Agreement.
"Administrative Questionnaire" means, with respect to each
Lender,
an administrative questionnaire in the form
prepared by the Administrative Agent
and submitted to the Administrative Agent
duly completed by such Lender.
"Affiliate", as applied to any Person, means any other Person
that
directly or indirectly controls, is
controlled by, or is under common control
with, that Person. For purposes of this
definition, "control" (including, with
correlative meanings, the terms
"controlling", "controlled by" and "under common
control with"), as applied to any Person,
means the possession, directly or
indirectly, of the power to vote ten
percent (10.0%) or more of the equity
Securities having voting power for the
election of directors of such Person or
otherwise to direct or cause the direction
of the management and policies of
that Person, whether through the ownership
of voting equity Securities or by
contract or otherwise.
"Agreement" shall mean this Revolving Credit Agreement as the
same
may from time to time hereafter be
modified, supplemented or amended.
"Applicable Margin" means, with respect to each Euro-Dollar
Rate
Loan, (x) from the Closing Date through the
day immediately prior to the Initial
Maturity Date, seven hundred basis points
(7.00%), (y) from and after the
Initial Maturity Date through the day
immediately prior to the First Extended
Maturity Date, seven hundred and fifty
basis points (7.50%) and (z) from the
First Extended Maturity Date through the
Second Extended Maturity Date eight
hundred basis points (8.00%)
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"ABR" means Arbor Realty Trust, Inc., a Maryland real estate
investment trust, the sole general partner
of the Borrower.
"ABR Guaranty" means the Guaranty of Payment, dated as of the
date
hereof, executed by ABR in favor of
Administrative Agent and the Lenders.
"ABR 2003 Form 10-K" means ABR's annual report on Form 10-K for
2003, as filed with the Securities and
Exchange Commission pursuant to the
Securities Exchange Act of 1934, as
amended.
"Assignee" has the meaning set forth in Section 9.6(c).
"Bankruptcy Code" shall mean Title 11 of the United States
Code,
entitled "Bankruptcy", as amended from time
to time, and any successor statute
or statutes.
"Base Rate" means, a rate per annum, determined as of and
adjusted
on the first day of each month during the
term of this Agreement, equal to the
higher of (i) the Prime Rate as of the date
of such calculation and (ii) the sum
of 0.5% plus the Federal Funds Rate as of
the date of such calculation.
"Benefit Arrangement" means at any time an employee benefit
plan
within the meaning of Section 3(3) of ERISA
which is not a Plan or a
Multiemployer Plan and which is maintained
or otherwise contributed to by any
member of the ERISA Group.
"Base Rate Borrowing" is a Borrowing comprised of Base Rate
Loans.
"Base Rate Loan" means
a Loan to be made by a Lender which bears
interest based on the Base Rate.
"Borrower" means Arbor Realty Limited Partnership, a Delaware
limited partnership.
"Borrower Loan" means, collectively, those loans and
investments
owned directly or indirectly by Borrower,
ABR or any of their Consolidated
Subsidiaries which were either originated,
or purchased from third parties or
Affiliates, by Borrower, ABR or any of
their Consolidated Subsidiaries
including, without limitation, bridge
mortgage loans, note acquisition loans,
mezzanine investments, mortgage-related
securities, mortgage-backed securities
and preferred equity investments.
"Borrowing" has the meaning set forth in Section 1.3.
"Borrowing Base" means the amount equal to Total Assets minus
Total
Liabilities.
"Business Day" means any day except a Saturday, Sunday or other
day
on which commercial lenders in New York,
New York, San Francisco, California, or
London are authorized by law to close.
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"Capital Leases" as applied to any Person, means any lease of
any
property (whether real, personal or mixed)
by that Person as lessee which, in
conformity with GAAP, is or should be
accounted for as a capital lease on the
balance sheet of that Person.
"Cash or Cash Equivalents" means (i) cash, (ii) direct
obligations
of the United States Government, including,
without limitation, treasury bills,
notes and bonds, (iii) interest bearing or
discounted obligations of Federal
agencies and Government sponsored entities
or pools of such instruments offered
by banks rated AA or better by S&P or
Aa2 by Moody's and dealers, including,
without limitation, Federal Home Loan
Mortgage Corporation participation sale
certificates, Government National Mortgage
Association modified pass-through
certificates, Federal National Mortgage
Association bonds and notes, Federal
Farm Credit System securities, (iv) time
deposits, domestic and Eurodollar
certificates of deposit, bankers
acceptances, commercial paper rated at least
A-1 by S&P and P-1 by Moody's, and/or
guaranteed by an Aa rating by Moody's, an
AA rating by S&P, or better rated
credit, floating rate notes, other money
market instruments and letters of credit
each issued by banks which have a
long-term debt rating of at least AA by
S&P or Aa2 by Moody's, (v) obligations
of domestic corporations, including,
without limitation, commercial paper,
bonds, debentures, and loan participations,
each of which is rated at least AA
by S&P, and/or Aa2 by Moody's, and/or
unconditionally guaranteed by an AA rating
by S&P, an Aa2 rating by Moody's, or
better rated credit, (vi) obligations
issued by states and local governments or
their agencies, rated at least MIG-1
by Moody's and/or SP-1 by S&P and/or
guaranteed by an irrevocable letter of
credit of a bank with a long-term debt
rating of at least AA by S&P or Aa2 by
Moody's, (vii) repurchase agreements with
major banks and primary government
securities dealers fully secured by U.S.
Government or agency collateral equal
to or exceeding the principal amount on a
daily basis and held in safekeeping,
(viii) real estate loan pool
participations, guaranteed by an entity with an AA
rating given by S&P or an Aa2 rating
given by Moody's, or better rated credit,
and (ix) shares of any mutual fund that has
its assets primarily invested in the
types of investments referred to in clauses
(i) through (v).
"Closing Date" means the date on or after the Effective Date on
which the conditions set forth in Section
3.1 shall have been satisfied to the
reasonable satisfaction of the
Administrative Agent.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and
as it may be further amended from time to
time, any successor statutes thereto,
and applicable U.S. Department of Treasury
regulations issued pursuant thereto
in temporary or final form.
"Commitment" means, with respect to each Lender, the amount set
forth opposite the name of such Lender on
the signature pages hereof (and, for
each Lender which is an Assignee, the
amount set forth in the Transfer
Supplement entered into pursuant to Section
9.6(c) as the Assignee's
Commitment), as such amount may be reduced
from time to time pursuant to
Sections 2.10(e) and 2.11(e) or reduced or
increased in connection with an
assignment to an Assignee or from another
Lender.
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"Commitment Fee" shall have the meaning set forth in Section
2.8.
"Consolidated Subsidiary" means at any date any Subsidiary or
other
entity which is consolidated with Borrower
or ABR in accordance with GAAP.
"Contingent Obligation" as to any Person means, without
duplication,
(i) any contingent obligation of such
Person required to be shown on such
Person's balance sheet in accordance with
GAAP, and (ii) any obligation required
to be disclosed in the footnotes to such
Person's financial statements,
guaranteeing partially or in whole any
Secured Debt, lease, dividend or other
obligation, exclusive of contractual
indemnities (including, without limitation,
any indemnity or price-adjustment provision
relating to the purchase or sale of
securities or other assets) and guarantees
of non-monetary obligations (other
than guarantees of completion) which have
not yet been called on or quantified,
of such Person or of any other Person. The
amount of any Contingent Obligation
described in clause (ii) shall be deemed to
be (a) with respect to a guaranty of
interest or interest and principal, or
operating income guaranty, the Net
Present Value of the sum of all payments
required to be made thereunder (which
in the case of an operating income guaranty
shall be deemed to be equal to the
debt service for the note secured thereby),
through (I) in the case of an
interest or interest and principal
guaranty, the stated date of maturity of the
obligation (and commencing on the date
interest could first be payable
thereunder), or (II) in the case of an
operating income guaranty, the date
through which such guaranty will remain in
effect, and (b) with respect to all
guarantees not covered by the preceding
clause (a), an amount equal to the
stated or determinable amount of the
primary obligation in respect of which such
guaranty is made or, if not stated or
determinable, the maximum reasonably
anticipated liability in respect thereof
(assuming such Person is required to
perform thereunder) as recorded on the
balance sheet and on the footnotes to the
most recent financial statements of
Borrower required to be delivered pursuant
to Section 4.4 hereof. Notwithstanding
anything contained herein to the
contrary, guarantees of completion shall
not be deemed to be Contingent
Obligations unless and until a claim for
payment or performance has been made
thereunder, at which time any such guaranty
of completion shall be deemed to be
a Contingent Obligation in an amount equal
to any such claim. Subject to the
preceding sentence, (i) in the case of a
joint and several guaranty given by
such Person and another Person (but only to
the extent such guaranty is
recourse, directly or indirectly to
Borrower), the amount of the guaranty shall
be deemed to be 100% thereof unless and
only to the extent that such other
Person has delivered Cash or Cash
Equivalents to secure all or any part of such
Person's guaranteed obligations and (ii) in
the case of a guaranty (whether or
not joint and several) of an obligation
otherwise constituting Indebtedness of
such Person, the amount of such guaranty
shall be deemed to be only that amount
in excess of the amount of the obligation
constituting Indebtedness of such
Person. Notwithstanding anything contained
herein to the contrary, (xx)
"Contingent Obligations" shall be deemed
not to include guarantees of Unused
Commitments or of construction loans to the
extent the same have not been drawn,
and (yy) the aggregate amount of all
Contingent Obligations of any Consolidated
Subsidiary (except to the extent that any
such Contingent Obligation is recourse
to the Borrower or ABR) which would
otherwise exceed the total capital
contributions of the Borrower and ABR to
such entity, together with the amount
of any unfunded obligations of the Borrower
or ABR to make such additional
equity contributions to such entity
that
4
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could be legally enforced by a creditor of
such entity shall be deemed to be
equal to the amount of such capital
contributions and equity or loan
commitments. All matters constituting
"Contingent Obligations" shall be
calculated without duplication.
"Convertible Securities" means evidences of shares of stock,
limited
or general partnership interests or other
ownership interests, warrants,
options, or other rights or securities
(other than debt) which are convertible
into or exchangeable for, with or without
payment of additional consideration,
shares of common stock of ABR or
partnership interests of Borrower, as the case
may be, either immediately or upon the
arrival of a specified date or the
happening of a specified event.
"Customary Non-Recourse Carve-Outs" means fraud,
misrepresentation,
misapplication of cash, waste,
environmental claims and liabilities and other
circumstances customarily excluded by
institutional lenders from exculpation
provisions and/or included in separate
indemnification agreements.
"Default" means any condition or event which with the giving of
notice or lapse of time or both would,
unless cured or waived, become an Event
of Default.
"Default Rate" has the meaning set forth in Section 2.7(d).
"Depreciation and Amortization" means, for any period, the
depreciation and amortization of ABR and
its Consolidated Subsidiaries, on a
consolidated basis, all as determined in
accordance with GAAP.
"EBITDA" means, for any period, Net Income, plus each of the
following (without duplication as an
addition) if and only if such item was
deducted in determining Net Income: (1)
Interest Expense, (2) Total Taxes, and
(3) Depreciation and Amortization, all for
such period.
"Effective Date" means the date this Agreement becomes effective
in
accordance with Section 9.9.
"Environmental Affiliate" means any partnership, joint venture,
trust or corporation in which an equity
interest is owned by the Borrower and/or
ABR, either directly or indirectly, and, as
a result of the ownership of such
equity interest, the Borrower and/or ABR
may have recourse liability for
Environmental Claims against such
partnership, joint venture, trust or
corporation (or the property thereof).
"Environmental Approvals" means any permit, license, approval,
ruling, variance, exemption or other
authorization required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any
notice,
claim, demand or similar communication
(written or oral) by any other Person
alleging potential liability of such Person
for investigatory costs, cleanup
costs, governmental response costs, natural
resources damage, property damages,
personal injuries, fines or penalties
arising out of, based on or resulting from
(i) the presence, or release into the
5
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environment, of any Materials of
Environmental Concern at any location, whether
or not owned by such Person or (ii)
circumstances forming the basis of any
violation, or alleged violation, of any
Environmental Law, in each case (with
respect to both (i) and (ii) above) as to
which there is a reasonable
possibility of an adverse determination
with respect thereto and which, if
adversely determined, would have a Material
Adverse Effect on the Borrower.
"Environmental Laws" means any and all federal, state, and
local
statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions,
permits, concessions, grants, licenses,
agreements and other governmental
restrictions relating to the environment, the
effect of the environment on human health
or to emissions, discharges or
releases of Materials of Environmental
Concern into the environment including,
without limitation, ambient air, surface
water, ground water, or land, or
otherwise relating to the manufacture,
processing, distribution, use, treatment,
storage, disposal, transport or handling of
Materials of Environmental Concern
or the clean up or other remediation
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974,
as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members
of
a controlled group of corporations and all
trades or businesses (whether or not
incorporated) under common control which,
together with the Borrower or any
Subsidiary, are treated as a single
employer under Section 414 of the Code.
"Extension Fee" shall mean a fee in an amount equal to one
hundred
basis points (1.00%) due and payable on the
aggregate amount of the continuing
Commitments on the Initial Maturity Date
and the First Extended Maturity Date,
as applicable, pursuant to the terms of
Subsection 2.9(b) hereof.
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar
Loans.
"Euro-Dollar Loan" means a Loan which bears interest based on
the
Euro-Dollar Rate.
"Euro-Dollar Rate" means a simple rate per annum, determined as
of
and adjusted on the first day of each month
during the term of this Agreement,
equal to the quotient obtained (rounded
upward if necessary, to the next higher
1/100 of 1%) by dividing (i) London
Interbank Offered Rate at approximately
11:00 a.m. (London time) as of the date of
such calculation by (ii) 1.00 minus
the Euro-Dollar Reserve Percentage. In no
event, however, shall the Euro-Dollar
Rate be less than two hundred basis points
(2.00%) per annum.
"Euro-Dollar Reserve Percentage" means, for any day that
percentage
(expressed as a decimal) which is in effect
on such day as prescribed by the
Board of Governors of the Federal Reserve
System (or any successor) for
determining the maximum reserve requirement
(including basic, supplemental,
emergency, special and marginal reserves)
generally applicable to financial
institutions regulated by the Federal
6
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Reserve Board comparable in size and type
to the Administrative Agent under
Regulation D, in respect of "Eurocurrency
liabilities", or under any similar or
successor regulation with respect to
Eurocurrency liabilities or Eurocurrency
funding (or in respect of any other
category of liabilities which include
deposits by reference to which the interest
rate on Euro-Dollar Loans is
determined), whether or not the
Administrative Agent has any Euro-Currency
liabilities or such requirement otherwise
in fact applies to the Administrative
Agent. The Euro-Dollar Rate shall be
adjusted automatically as of the effective
date of each change in the Euro-Dollar
Reserve Percentage.
"Event of Default" has the meaning set forth in Section 6.1.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded
upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted
average of the rates on overnight Federal
funds transactions with members of the
Federal Reserve System arranged by Federal
funds brokers on such day, as
published by the Federal Reserve Bank of
New York on the Business Day next
succeeding such day, provided that (i) if
such day is not a Business Day, the
Federal Funds Rate for such day shall be
such rate on such transactions on the
next preceding Business Day as so published
on the next succeeding Business Day,
and (ii) if no such rate is so published on
such next succeeding Business Day,
the Federal Funds Rate for such day shall
be the average rate quoted to the
Administrative Agent from three (3) Federal
funds brokers of recognized standing
selected by it on such day on such
transactions.
"Federal Reserve Board" means the Board of Governors of the
Federal
Reserve System as constituted from time to
time.
"First Extended Maturity Date " has the meaning set forth in
Section
2.9(b) hereof.
"First Extension Notice" has the meaning set forth in Section
2.9(b)
hereof.
"First Extension Option" has the meaning set forth in Section
2.9(b)
hereof.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower and ABR which
shall
be the twelve (12) month period ending on
the last day of December in each year.
"Fixed Charges" means, for any period, the sum of (i) Total
Debt
Service for such period, plus (ii)
dividends on preferred units payable by
Borrower, ABR and their Consolidated
Subsidiaries for such period.
"Funds from Operation" means, for any period, (1) Net Income
for
such period (before extraordinary and
non-recurring items), minus (or plus) (2)
gains (or losses) from debt restructuring
and sales of property during such
period, plus (3) depreciation and
amortization of real and personal property
assets for such period (but only to the
extent such item was previously deducted
in determining Net Income) plus (4)
without
7
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duplication, income from unconsolidated
partnerships and joint ventures,
determined in each case in accordance with
GAAP.
"GAAP" means generally accepted accounting principles recognized
as
such in the opinions and pronouncements of
the Accounting Principles Board and
the American Institute of Certified Public
Accountants and the Financial
Accounting Standards Board or in such other
statements by such other entity as
may be approved by a significant segment of
the accounting profession, which are
applicable to the circumstances as of the
date of determination.
"Indebtedness" as applied to any Person (and without
duplication),
means (a) all indebtedness, obligations or
other liabilities of such Person for
borrowed money, (b) all indebtedness,
obligations or other liabilities of such
Person evidenced by Securities or other
similar instruments, (c) all Contingent
Obligations of such Person, (d) all
reimbursement obligations and other
liabilities of such Person with respect to
letters of credit or Banker's
acceptances issued for such Person's
account, or other similar instruments for
which a contingent liability exists, (e)
all obligations of such Person to pay
the deferred purchase price of Property or
services, other than trade payables
incurred in the ordinary course of
business, (f) all obligations in respect of
Capital Leases (including ground leases) of
such Person, (g) all indebtedness
obligations or other liabilities of such
Person or others secured by a Lien on
any asset of such Person, whether or not
such indebtedness, obligations or
liabilities are assumed by, or are a
personal liability of such Person, (h) all
indebtedness, obligations or other
liabilities (other than interest expense
liability) in respect of Interest Rate
Contracts and foreign currency exchange
agreements (other than Interest Rate
Contracts purchased to hedge Indebtedness),
(i) ERISA obligations currently due and
payable and (j) all other items which,
in accordance with GAAP, would be included
as liabilities on the liability side
of the balance sheet of such Person,
exclusive, however, of all accounts
payable, accrued interest and expenses,
prepaid rents, security deposits and
dividends and distributions declared but
not yet paid, except to the extent such
indebtedness (other than Customary
Non-Recourse Carve-Outs) is recourse to the
Borrower or ABR.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Initial Maturity Date" shall mean the first anniversary of the
Closing Date.
"Interest Expenses" means, for any period, interest expenses of
ABR
and its Consolidated Subsidiaries, on a
consolidated basis, all as determined in
accordance with GAAP.
"Interest Rate Contracts" means, collectively, interest rate
swap,
collar, cap or similar agreements providing
interest rate protection.
"Investment Mortgages" means mortgages securing indebtedness
directly or indirectly owed to Borrower,
ABR or Subsidiaries of either or both,
including certificates of interest in real
estate mortgage investment conduits.
8
<PAGE>
"Lender" means each lender listed on the signature pages
hereof,
each Assignee which becomes a Lender
pursuant to Section 9.6(c), and their
respective successors.
"Lending Office" means, as to each Lender, its office located at
its
address in the United States set forth in
its Administrative Questionnaire (or
identified in its Administrative
Questionnaire as its Lending Office) or such
other office as such Lender may hereafter
designate as its Lending Office by
notice to the Borrower and the
Administrative Agent.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge,
charge, security interest or encumbrance of
any kind, or any other type of
preferential arrangement, in each case that
has the effect of creating a
security interest, in respect of such
asset. For the purposes of this Agreement,
the Borrower, ABR or any Subsidiary of
either or both shall be deemed to own
subject to a Lien any asset which it has
acquired or holds subject to the
interest of a vendor or lessor under any
conditional sale agreement, capital
lease or other title retention agreement
relating to such asset.
"Liquid Assets" means the following assets owned by a Person as
of
any date of determination: (i) unrestricted
and unencumbered cash, funds on
deposit in any bank located in the United
States, investment grade commercial
paper, money market funds, or marketable
securities; (ii) the excess, if any, of
Mortgage Loans and Mortgage-backed
Securities held for sale (valued in
accordance with GAAP) over the outstanding
aggregate principal amount of any
Debt against which those Mortgage Loans or
Mortgage-backed Securities are
pledged as collateral; and (iii) the amount
available to be borrowed under
committed working capital or other similar
facilities (not including any
Commitments available hereunder) with
respect to which all conditions to
borrowing have been satisfied.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans"
means Base Rate Loans or Euro-Dollar Loans
or any combination of the foregoing.
"Loan Documents" means this Agreement, the Notes, and the ABR
Guaranty.
"London Interbank Offered Rate" means the rate per annum
(rounded
upwards, if necessary, to the nearest 1/100
of 1%) appearing on Telerate Page
3750 (or any successor page) as the London
interbank offered rate for deposits
in U.S. Dollars for a one (1) month term.
If for any reason such rate is not
available, the term "London Interbank
Offered Rate" shall mean the rate per
annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London
interbank offered rate for deposits in
U.S. Dollars; provided, however, if more
than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such
rates.
"Management Agreement" means that certain Management and
Advisory
Agreement, dated as of July 1, 2003, by and
among ABR, Borrower and Arbor
9
<PAGE>
Commercial Mortgage, LLC, a New York
limited liability company, as the same may
be modified from time to time in accordance
with this Agreement.
"Manager" shall have the meaning set forth in Section 5.16.
"Margin Stock" shall have the meaning provided such term in
Regulation U of the Federal Reserve
Board.
"Material Adverse Effect" means an effect resulting from any
circumstance or event or series of
circumstances or events, of whatever nature
(but excluding general economic
conditions), which does or could reasonably be
expected to, materially and adversely (i)
affect the business, operations,
properties, assets or financial condition
of the Borrower and/or ABR and their
Consolidated Subsidiaries taken as a whole,
(ii) impair the ability of the
Borrower and/or ABR, taken as a whole, to
perform their respective obligations
under the Loan Documents, or (iii) cause a
Default under Sections 5.8, 5.9 or
5.13.
"Material Litigation" has the meaning set forth in Section 4.5.
"Material Plan" means at any time a Plan or Plans having
aggregate
Unfunded Liabilities in excess of
$5,000,000.
"Materials of Environmental Concern" means and includes
pollutants,
contaminants, hazardous wastes, toxic and
hazardous substances, asbestos, lead,
petroleum and petroleum by-products.
"Maturity Date" shall mean the Initial Maturity Date, provided
that
(a) in the event of the exercise by
Borrower of the First Extension Option
pursuant to Section 2.9(b) hereof, the
Maturity Date shall be the First Extended
Maturity Date, and (b) in the event of the
exercise by Borrower of the Second
Extension Option pursuant to Section 2.9(b)
hereof, the Maturity Date shall be
the Second Extended Maturity Date, or such
earlier date on which the all of the
Obligations hereunder become due and
payable, whether at such stated maturity
date, by declaration of acceleration, or
otherwise.
"Mortgage Loan" means any loan evidenced by a mortgage note and
secured by a mortgage and, if applicable, a
security agreement.
"Mortgage-backed Securities" means securities that are secured
or
otherwise backed by Mortgage Loans.
"Multiemployer Plan" means at any time an employee pension
benefit
plan within the meaning of Section
4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing
an obligation to make contributions
or has within the preceding five plan years
made contributions, including for
these purposes any Person which ceased to
be a member of the ERISA Group during
such five year period.
"Net Bond Proceeds" means all cash received by ABR or the
Borrower
as a result of the issuance or offering of
any unsecured note, bond or debt
instrument the
10
<PAGE>
proceeds of which are not used to refinance
existing Indebtedness, less
customary costs and discounts of issuance
paid by ABR or the Borrower, as the
case may be.
"Net Income" means, for any period, net income of ABR, Borrower
and
their Consolidated Subsidiaries, on a
consolidated basis, all as determined in
accordance with GAAP plus the line item
identified as "Income allocated to
minority interest" on ABR's consolidated
financial statements if and only if
such item was deducted in determining Net
Income.
"Net Offering Proceeds" means all cash or other assets received
by
ABR or Borrower as a result of the sale of
common shares of beneficial interest,
preferred shares of beneficial interest,
partnership interests, limited
liability company interests, Convertible
Securities or other ownership or equity
interests in ABR or Borrower, less
customary costs of issuance. "Net Offering
Proceeds" shall not include proceeds
received in connection with the exercise of
any warrant.
"Net Present Value" shall mean, as to a specified or
ascertainable
dollar amount, the present value, as of the
date of calculation of any such
amount using a discount rate equal to the
Base Rate in effect as of the date of
such calculation.
"Net Sale Proceeds" means all cash or other assets received by
ABR
or Borrower as a result of the sale of
material assets of ABR or Borrower or any
of their Consolidated Subsidiaries in a
period of six (6) months or less and not
made in the ordinary course of business,
less all amounts required to be paid on
any and all Indebtedness secured by such
assets. For purposes hereof, (i)
"material assets" shall be deemed to mean
assets comprising more than fifteen
percent (15%) in the aggregate of Total
Assets (excluding Cash and Cash
Equivalents), and (ii) sales shall not be
deemed to include receipt of
prepayment amounts or amounts due at the
maturity of any Borrower Loan or other
loan asset. Any and all cash and/or other
assets received by ABR or Borrower in
connection with the New Arbor REIT
Securitization Transaction shall be
specifically excluded from the calculation
of Net Sale Proceeds.
"New Arbor REIT Securitization Transaction" means the
securitization
transaction described on Schedule 1.1.
"New Arbor REIT Subsidiary" means the entity to be formed in
connection with the New Arbor REIT
Securitization Transaction, which entity
shall be a ninety-nine percent (99%) owned
subsidiary of the Borrower and shall
qualify as a real estate investment trust,
and into which the Borrower will
contribute all or substantially all of its
assets (including any loans the
Borrower directly holds and the Borrower's
entire interest as the sole member of
Arbor Realty Funding LLC).
"Non-Performing Loans" means those Borrower Loans delinquent
for
more than ninety (90) days.
"Notes" means promissory notes of the Borrower, substantially in
the
form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the
Loans, and "Note" means any one of such
promissory notes issued hereunder.
11
<PAGE>
"Notice of Borrowing" means a Notice of Borrowing (as defined
in
Section 2.4) substantially in the form of
Exhibit C attached hereto and made a
part hereof.
"Obligations" means all obligations, liabilities, indemnity
obligations and Indebtedness of every
nature of the Borrower, from time to time
owing to Administrative Agent or any Lender
under or in connection with this
Agreement or any other Loan Document.
"Parent" means, with respect to any Lender, any Person
controlling
such Lender.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity
succeeding to any or all of its functions
under ERISA.
"Permitted Liens" means:
(a) Liens for
Taxes, assessments or other governmental charges not
yet due
and payable or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted in
accordance
with the terms hereof;
(b) statutory
liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are
incurred in
the
ordinary course of business for sums not more than sixty (60)
days
delinquent
or which are being contested in good faith in accordance with
the terms
hereof;
(c) deposits
made in the ordinary course of business in connection
with
worker's compensation, unemployment insurance and other social
security
legislation or to secure liabilities to insurance carriers;
(d) utility
deposits and other deposits to secure the performance
of bids,
trade contracts (other than for borrowed money), leases,
purchase
contracts,
construction contracts, governmental contracts, statutory
obligations, surety bonds, performance bonds and other obligations
of a
like
nature incurred in the ordinary course of business;
(e) Liens for
purchase money obligations for equipment (or Liens
to secure
Indebtedness incurred within 90 days after the purchase of any
equipment
to pay all or a portion of the purchase price thereof or to
secure
Indebtedness incurred solely for the purpose of financing the
acquisition of any such equipment, or extensions, renewals, or
replacements of any of the foregoing for the same or lesser
amount);
provided
that (i) the Indebtedness secured by any such Lien does not
exceed the
purchase price of such equipment, (ii) any such Lien encumbers
only the
asset so purchased and the proceeds upon sale,
12
<PAGE>
disposition, loss or destruction thereof, and (iii) such Lien,
after
giving
effect to the Indebtedness secured thereby, does not give rise
to
an Event
of Default;
(f) easements,
rights-of-way, zoning restrictions, other similar
charges or
encumbrances and all other items listed on Schedule B to the
owner's
title insurance policies, except in connection with any
Indebtedness, for any of the Real Property Assets, so long as
the
foregoing
do not interfere in any material respect with the use or
ordinary
conduct of the business of the owner and do not diminish in any
material
respect the value of the Property to which it is attached or
for
which it
is listed;
(g) Liens and
judgments (i) which have been or will be bonded (and
the Lien
thereby removed other than on any cash or securities serving as
security
for such bond) or released of record within thirty (30) days
after the
date such Lien or judgment is entered or filed against ABR,
Borrower,
or any Subsidiary, or (ii) which are being contested in good
faith by
appropriate proceedings for review and in respect of which
there
shall have
been secured a subsisting stay of execution pending such appeal
or
proceedings;
(h) Liens on
Property of the Borrower, ABR or the Subsidiaries of
either or
both securing Indebtedness which may be incurred or remain
outstanding without resulting in an Event of Default hereunder;
and
(i) Liens in
favor of the Borrower against any asset of any
wholly-owned Subsidiary of the Borrower and/or ABR.
"Person" means an individual, a corporation, a partnership, an
association, a trust, a limited liability
company or any other entity or
organization, including a government or
political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other
than a Multiemployer Plan) which is covered
by Title IV of ERISA or subject to
the minimum funding standards under Section
412 of the Code and either (i) is
maintained, or contributed to, by any
member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has
at any time within the preceding five
years been maintained, or contributed to,
by any Person which was at such time a
member of the ERISA Group for employees of
any Person which was at such time a
member of the ERISA Group.
"Portfolio Performance Ratio" means, at any date of
determination
for all assets owned by Borrower, ABR or
any of their Consolidated Subsidiaries
during any month, the ratio of (i) the
aggregate amount of all interest income
and preferred equity return actually
received in such month, to (ii) the
aggregate amount of all interest expense
and fees (in the case of financing
agreements), equivalent monthly amounts (in
the case
13
<PAGE>
of repurchase agreements) and preferred
dividends payable in such month pursuant
to any financing or repurchase
agreements.
"Prime Rate" means the rate per annum specified in the New York
City
edition of The Wall Street Journal as the
"prime rate".
"Property" means, with respect to any Person, any real or
personal
property, building, facility, structure,
equipment or unit, or other asset owned
or leased by such Person.
"Real Property Assets" means as of any time, the real property
assets (including interests in
participating mortgages in which the Borrower's
interest therein is characterized as equity
according to GAAP) owned directly or
indirectly by the Borrower, ABR and the
Consolidated Subsidiaries of either or
both at such time.
"Recourse Debt" shall mean Indebtedness that is not Secured
Debt.
"Regulation U" means Regulation U of the Board of Governors of
the
Federal Reserve System, as in effect from
time to time.
"Required Lenders" means at any time Lenders having at least 51%
of
the aggregate amount of the Commitments or,
if the Commitments shall have been
terminated, holding Notes evidencing at
least 51% of the aggregate unpaid
principal amount of the Loans.
"Second Extended Maturity Date " has the meaning set forth in
Section 2.9(b) hereof.
"Second Extension Notice" has the meaning set forth in Section
2.9(b) hereof.
"Second Extension Option" has the meaning set forth in Section
2.9(b) hereof.
"Secured Debt" means Indebtedness of ABR or the Borrower, on a
consolidated basis, the payment of which is
secured by a Lien on any Property
owned or leased by ABR, Borrower, or any
Consolidated Subsidiary.
"Securities" means any stock, partnership interests, shares,
shares
of beneficial interest, voting trust
certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or
unsecured, convertible, subordinated
or otherwise, or in general any instruments
commonly known as "securities," or
any certificates of interest, shares, or
participations in temporary or interim
certificates for the purchase or
acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing,
but shall not include any evidence of
the obligations, all of which shall be
passive investments.
"Solvent" means, with respect to any Person, that the fair
saleable
value of such Person's assets exceeds the
Indebtedness of such Person.
14
<PAGE>
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests
having ordinary voting power to elect a
majority of the board of directors or other
persons performing similar functions
are at the time directly or indirectly
owned by the Borrower and/or ABR.
"Tangible Net Worth" means, at any time, the difference between
Total Tangible Assets and Total
Liabilities.
"Taxes" means all federal, state, local and foreign income and
gross
receipts taxes.
"Term" has the meaning set forth in Section 2.9.
"Termination Event" shall mean (i) a "reportable event", as
such
term is described in Section 4043 of ERISA
(other than a "reportable event" not
subject to the provision for 30-day notice
to the PBGC), or an event described
in Section 4062(e) of ERISA, (ii) the
withdrawal by any member of the ERISA
Group from a Multiemployer Plan during a
plan year in which it is a "substantial
employer" (as defined in Section 4001(a)(2)
of ERISA), or the incurrence of
liability by any member of the ERISA Group
under Section 4064 of ERISA upon the
termination of a Multiemployer Plan, (iii)
the filing of a notice of intent to
terminate any Plan under Section 4041 of
ERISA, other than in a standard
termination within the meaning of Section
4041 of ERISA, or the treatment of a
Plan amendment as a distress termination
under Section 4041 of ERISA, (iv) the
institution by the PBGC of proceedings to
terminate, impose liability (other
than for premiums under Section 4007 of
ERISA) in respect of, or cause a trustee
to be appointed to administer, any Plan or
(v) any other event or condition that
might reasonably constitute grounds for the
termination of, or the appointment
of a trustee to administer, any Plan or the
imposition of any liability or
encumbrance or Lien on the Real Property
Assets or any member of the ERISA Group
under ERISA.
"Total Assets" means, as of the date of determination, the
total
assets of ABR and its Consolidated
Subsidiaries, on a consolidated basis, each
as determined in accordance with GAAP.
"Total Debt Service" means, for any period, an amount equal to
the
sum of (i) interest (whether accrued, paid
or capitalized) payable on
Indebtedness of Borrower, ABR and their
Consolidated Subsidiaries for such
period plus (ii) scheduled payments of
principal on such Indebtedness, whether
or not paid by Borrower (excluding balloon
payments) for such period.
"Total Liabilities" means, as of the date of determination,
total
liabilities of ABR and its Consolidated
Subsidiaries, on a consolidated basis,
all as determined in accordance with
GAAP.
"Total Tangible Assets" means, as of the date of determination,
Total Assets minus all intangible assets
(goodwill, intellectual property and so
forth) of ABR
15
<PAGE>
and its Consolidated Subsidiaries, on a
consolidated basis, all as determined in
accordance with GAAP.
"Total Taxes" means, for any period, the taxes of ABR and its
Consolidated Subsidiaries, on a
consolidated basis, all as determined in
accordance with GAAP.
"Underwriting Guidelines" means Borrower's policies and
procedures
for underwriting its investments, as in
effect on the Closing Date, as the same
may be modified from time to time in
accordance with this Agreement.
"United States" means the United States of America, including
the
fifty states and the District of
Columbia.
"Unused Commitments" shall mean an amount equal to all
unadvanced
funds which any third party is obligated to
advance to Borrower or another
Person or otherwise pursuant to any loan
document, written instrument or
otherwise.
"Unused Fee" shall have the meaning set forth in Section 2.8.
Section 1.2 Accounting Terms and Determinations. Unless
otherwise
specified herein, all accounting terms used
herein shall be interpreted, all
accounting determinations hereunder shall
be made, and all financial statements
required to be delivered hereunder shall be
prepared in accordance with GAAP
applied on a basis consistent (except for
changes concurred in by the Borrower's
independent public accountants) with the
most recent audited consolidated
financial statements of the Borrower and
its Consolidated Subsidiaries delivered
to the Administrative Agent.
Section 1.3 Types of Borrowings. The term "Borrowing" denotes
the
aggregation of Loans of one or more Lenders
to be made to the Borrower pursuant
to Article 2 on the same date.
ARTICLE II
THE CREDITS
Section 2.1 Commitments to Lend. Each Lender severally agrees,
on
the terms and conditions set forth in this
Agreement, to make Loans to the
Borrower from time to time during the term
hereof in amounts such that the
aggregate principal amount of Loans by such
Lender at any one time outstanding
shall not exceed the amount of its
Commitment, and in no event shall the
aggregate outstanding Loans exceed
twenty-five percent (25%) of the Borrowing
Base. Each Borrowing outstanding under this
Section 2.1 shall be in an aggregate
principal amount of $1,000,000, or an
integral multiple of $500,000 in excess
thereof (except that any such Borrowing may
be in the aggregate amount available
in accordance with Section 3.2(b)) and
shall be made from the several Lenders
ratably in proportion to their respective
Commitments. In no event shall the
aggregate Loans outstanding at any time,
exceed $50,000,000, as the same may be
16
<PAGE>
reduced from time to time as a result of
cancellation of Commitments by
Borrower. Borrower agrees that, subject to
the terms and conditions of Article
VIII hereof, all Borrowings by Borrower
hereunder shall be Euro-Dollar
Borrowings.
Section 2.2 Notice of Borrowing. The Borrower shall give
Administrative Agent notice not later than
10:00 a.m. (San Francisco time) one
Business Day before each Borrowing, which
notice shall include:
(i) the date of
such Borrowing, which shall be a Business
Day,
(ii) the aggregate
amount of such Borrowing, and
(iii) a representation by the Borrower that the Borrowing Base
as of the
date of such Borrowing is not less than $200,000,000.
Section 2.3 Intentionally Omitted.
Section 2.4 Notice to Lenders; Funding of Loans.
(a) Upon receipt
of a notice from Borrower in accordance with
Section 2.2 hereof (each such notice being
a "Notice of Borrowing"), the
Administrative Agent shall, on the date
such Notice of Borrowing is received by
the Administrative Agent, promptly notify
each Lender of the contents thereof
and of such Lender's share of such
Borrowing, and such Notice of Borrowing shall
not thereafter be revocable by the
Borrower, unless Borrower shall pay any
applicable expenses pursuant to Section
2.13.
(b) Not later
than 1:00 p.m. (New York time) on the date of each
Borrowing as indicated in the Notice of
Borrowing, each Lender shall make
available its share of such Borrowing in
Federal funds immediately available in
New York, to the Administrative Agent at
its address referred to in Section 9.1.
Upon any change in any of the Commitments
in accordance herewith, there shall be
an automatic adjustment to such
participations to reflect such changed shares.
Section 2.5 Notes.
(a) The Loans of
each Lender shall be evidenced by a single Note
payable to the order of such Lender for the
account of its Lending Office.
(b) Each such
Note shall be in substantially the form of Exhibit A
hereto.
(c)
Upon receipt of
each Lender's Note pursuant to Section 3.1(a),
the Administrative Agent shall forward such
Note to such Lender. Each Lender
shall record the date, amount, type and the
date and amount of each payment of
principal made by the Borrower with respect
thereto, and may, if such Lender so
elects in connection with any transfer or
enforcement of its Note, endorse on
the appropriate schedule appropriate
17
<PAGE>
notations to evidence the foregoing
information with respect to each such Loan
then outstanding; provided that the failure
of any Lender to make any such
recordation or endorsement shall not affect
the obligations of the Borrower
hereunder or under the Notes. Each Lender
is hereby irrevocably authorized by
the Borrower so to endorse its Note and to
attach to and make a part of its Note
a continuation of any such schedule as and
when required.
(d) The Loans
shall mature, and the principal amount thereof shall
be due and payable, on the Maturity
Date.
Section 2.6 Intentionally Omitted.
Section 2.7 Interest Rate.
(a) The
outstanding principal amount of the Base Rate Loans shall
bear interest, for each day from the date
such Loan is made until the date it is
repaid, at a rate per annum equal to the
Base Rate for the applicable month.
Such interest shall be payable in arrears
on the fifth (5th) Business Day of
each month for interest that accrued during
the prior month.
(b) The
outstanding principal amount of the Euro-Dollar Loans
shall bear interest, for each day from the
date such Loan is made until the date
it is repaid, at a rate per annum equal to
the sum of the Applicable Margin for
Euro-Dollar Loans for such day plus the
Euro-Dollar Rate for the applicable
month. Such interest shall be payable in
arrears on the fifth (5th) Business Day
of each month for each month for interest
that accrued during the prior month.
(c)
Intentionally Omitted.
(d) In the event
that, and for so long as, any Event of Default
shall have occurred and be continuing, the
outstanding principal amount of the
Loans, and, to the extent permitted by
applicable law, overdue interest in
respect of all Loans, shall bear interest
at the annual rate equal to the sum of
the Base Rate and ten percent (10%) (the
"Default Rate").
(e) The
Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The
Administrative Agent shall give prompt
notice to the Borrower and the Lenders of
each rate of interest so determined,
and its determination thereof shall be
conclusive in the absence of demonstrable
error.
Section 2.8 Fees.
(a) Unused Fee.
The Borrower shall pay to the Administrative
Agent, for the account of the Lenders
ratably in proportion to their respective
unborrowed Commitments, an unused fee (the
"Unused Fee") equal to the product of
0.08% and the daily average aggregate
unborrowed Commitments for the immediately
preceding month. Such fee shall be payable
on the fifth (5th) Business Day of
each month and on the Maturity Date.
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(b)
Administrative Fee. The Borrower shall pay to the
Administrative Agent, in advance, an
administrative fee equal to the product of
0.025% and the aggregate Commitments. Such
fee shall be payable on the fifth
(5th) Business Day of each month.
(c) Extension
Fee. An Extension Fee shall be payable in accordance
with Section 2.9 hereof.
(d) Commitment
Fee. The Borrower shall pay to the Lenders, on the
Closing Date, a commitment fee (the
"Commitment Fee") equal to the product of 1%
and the aggregate Commitments.
(e) Fees
Non-Refundable. All fees set forth in this Section 2.8
shall be deemed to have been earned on the
date payment is due in accordance
with the provisions hereof and shall be
non-refundable. The obligation of the
Borrower to pay such fees in accordance
with the provisions hereof shall be
binding upon the Borrower and shall inure
to the benefit of the Administrative
Agent and the Lenders regardless of whether
any Loans are actually made.
Section 2.9 Maturity Date.
(a) The term
(the "Term") of the Commitments (and each Lender's
obligations to make Loans hereunder) shall
terminate and expire on the Maturity
Date. Upon the date of the termination of
the Term, any Loans then outstanding
(together with accrued interest thereon and
all other Obligations) shall be due
and payable on such date.
(b) Subject to
the provisions of this Section 2.9, Borrower shall
have the option (the "First Extension
Option"), by irrevocable written notice
(the "First Extension Notice") delivered to
Administrative Agent no later than
thirty (30) days prior to the Maturity Date
(which First Extension Notice, the
Administrative Agent shall promptly deliver
to the Lenders), to extend the
Maturity Date to the first anniversary of
the Initial Maturity Date (the "First
Extended Maturity Date"). In the event
Borrower shall have exercised the First
Extension Option, Borrower shall have the
option (the "Second Extension
Option"), by irrevocable written notice
(the "Second Extension Notice")
delivered to Administrative Agent no later
than thirty (30) days prior to the
First Extended Maturity Date (which Second
Extension Notice, the Administrative
Agent shall promptly deliver to the
Lenders), to extend the First Extended
Maturity Date to the first anniversary of
the First Extended Maturity Date (the
"Second Extended Maturity Date").
Borrower's right to so extend the Maturity
Date shall be subject to the satisfaction
of the following conditions precedent
prior to each extension hereunder: (i) no
Event of Default shall have occurred
and be continuing both on (A) the date
Borrower delivers the First Extension
Notice or the Second Extension Notice as
applicable, and (B) on the Initial
Maturity Date or the First Extended
Maturity Date, as applicable; (ii) each of
the representations and warranties of
Borrower contained in this Agreement shall
be true and correct in all material
respects on and as the Initial Maturity Date
and the First Extended Maturity Date, as
applicable; and (iii) Borrower shall
pay to the Administrative Agent,
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for the account of the Lenders, on the
Initial Maturity Date and the First
Extended Maturity Date, as applicable, the
Extension Fee.
Section 2.10 Mandatory Prepayments.
(a)
Intentionally Deleted.
(b)
Intentionally Deleted.
(c)
Intentionally Deleted.
(d) In the event
that the outstanding Loans shall at any time
exceed twenty-five percent (25%) of the
Borrowing Base, within three (3) days
after it shall be determined (or should
have been determined) by either the
Borrower or the Administrative Agent that
such excess shall exist, the Borrower
shall prepay the Loans in such an amount so
that the Loans outstanding after
such prepayment do not exceed twenty-five
percent (25%) of the Borrowing Base.
(e) In the event
of a change of control in violation of Sections
6.1(i) or (j), simultaneously with such
change of control, the Borrower shall
prepay the Loans in their entirety, and the
Commitments shall terminate.
Borrower shall make all such prepayments,
together with interest accrued to the
date of the prepayment on the principal
amount prepaid. Each such prepayment
shall be applied to prepay ratably the
Loans of the Lenders.
(f)
Intentionally Deleted.
Section 2.11 Optional Prepayments.
(a) The Borrower
may, upon at least one (1) Business Days' notice
to the Administrative Agent, prepay any
Loan in whole at any time, or from time
to time in part, in amounts aggregating
Five Hundred Thousand Dollars ($500,000)
or more, by paying the principal amount to
be prepaid together with accrued
interest thereon to the date of prepayment.
Each such optional prepayment shall
be applied to prepay ratably the Loans of
the several Lenders.
(b) The Borrower
may at any time and from time to time cancel all
or any part of the Commitments by the
delivery to the Administrative Agent of a
notice of cancellation (and the
Administrative Agent promptly shall notify the
Lenders of such cancellation), if there are
Loans then outstanding or, if there
are no Loans outstanding at such time as to
which the Commitments with respect
thereto are being cancelled, upon at least
one (1) Business Day's notice to the
Administrative Agent, whereupon, in either
event, all or such portion of the
Commitments, as applicable, shall terminate
as to the Lenders, pro rata on the
date set forth in such notice of
cancellation, and, if there are any Loans then
outstanding, Borrower shall prepay that
portion of the outstanding Loans
exceeding the Commitments (after taking
into consideration Borrower's
cancellation of the Commitments) on such
date in accordance with the
requirements of Section 2.11(a).
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Borrower shall be permitted to designate in
its notice of cancellation which
Loans, if any, are to be prepaid.
Section 2.12 General Provisions as to Payments.
(a) The Borrower
shall make each payment of interest on the Loans
and of fees hereunder, not later than 12:00
Noon (New York time) on the date
when due, in Federal or other funds
immediately available in New York, to the
Administrative Agent at its address
referred to in Section 9.1. The
Administrative Agent will promptly (and if
received prior to 12:00 noon, on the
same Business Day, if received after 12:00
noon on the immediately following
Business Day) distribute to each Lender its
ratable share of each such payment
received by the Administrative Agent for
the account of the Lenders. If and to
the extent that the Administrative Agent
shall receive any such payment for the
account of the Lenders on or before 12:00
Noon (New York time) on any Business
Day, and Administrative Agent shall not
have distributed to any Lender its
applicable share of such payment on such
Business Day, Administrative Agent
shall distribute such amount to such Lender
together with interest thereon, for
each day from the date such amount should
have been distributed to such Lender
until the date Administrative Agent
distributes such amount to such Lender, at
the Federal Funds Rate. Whenever any
payment of principal of, or interest on the
Base Rate Loans or of fees shall be due on
a day which is not a Business Day,
the date for payment thereof shall be
extended to the next succeeding Business
Day. Whenever any payment of principal of,
or interest on, the Euro-Dollar Loans
shall be due on a day which is not a
Business Day, the date for payment thereof
shall be extended to the next succeeding
Business Day unless such Business Day
falls in another calendar month, in which
case the date for payment thereof
shall be the next preceding Business Day.
If the date for any payment of
principal is extended by operation of law
or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the
Administrative Agent shall have received notice
from the Borrower prior to the date on
which any payment is due to the Lenders
hereunder that the Borrower will not make
such payment in full, the
Administrative Agent may assume that the
Borrower has made such payment in full
to the Administrative Agent on such date
and the Administrative Agent may, in
reliance upon such assumption, cause to be
distributed to each Lender on such
due date an amount equal to the amount then
due such Lender. If and to the
extent that the Borrower shall not have so
made such payment, each Lender shall
repay to the Administrative Agent forthwith
on demand such amount distributed to
such Lender together with interest thereon,
for each day from the date such
amount is distributed to such Lender until
the date such Lender repays such
amount to the Administrative Agent, at the
Federal Funds Rate.
Section 2.13 Intentionally Deleted.
Section 2.14 Computation of Interest and Fees. All interest and
fees
shall be computed on the basis of a year of
360 days and paid for the actual
number of days elapsed (including the first
day but excluding the last day).
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Section 2.15 Use of Proceeds. The Borrower shall use the proceeds
of
the Loans only to fund equity contributions
required to support loan
originations.
ARTICLE III
CONDITIONS
Section 3.1 Closing. The closing hereunder shall occur on the
date
when each of the following conditions is
satisfied (or waived by the
Administrative Agent and the Lenders), each
document to be dated the Closing
Date unless otherwise indicated:
(a) the Borrower
shall have executed and delivered to the
Administrative Agent a Note for the account
of each Lender dated on or before
the Closing Date complying with the
provisions of Section 2.5;
(b) the
Borrower, the Administrative Agent and each Lender shall
have executed and delivered to the Borrower
and the Administrative Agent a duly
executed original of this Agreement;
(c) ABR shall
have executed and delivered to the Administrative
Agent a duly executed original of the ABR
Guaranty;
(d) the
Administrative Agent shall have received an opinion of
Cullen and Dyckman Bleakley Platt LLP,
counsel for the Borrower, acceptable to
the Administrative Agent, the Lenders and
their counsel;
(e)
intentionally deleted;
(f) the
Administrative Agent shall have received all documents the
Administrative Agent may reasonably request
relating to the existence of the
Borrower and ABR, the authority for and the
validity of this Agreement and the
other Loan Documents, and any other matters
relevant hereto, all in form and
substance satisfactory to the
Administrative Agent. Such documentation shall
include, without limitation, the agreement
of limited partnership of the
Borrower, as well as the certificate of
limited partnership of the Borrower,
both as amended, modified or supplemented
to the Closing Date, certified to be
true, correct and complete by a senior
officer of the Borrower as of a date not
more than ten (10) days prior to the
Closing Date, together with a certificate
of existence as to the Borrower from the
Secretary of State of Delaware, to be
dated not more than thirty (30) days prior
to the Closing Date, as well as the
declaration of trust of ABR, as amended,
modified or supplemented to the Closing
Date, certified to be true, correct and
complete by a senior officer of ABR as
of a date not more than ten (10) days prior
to the Closing Date, together with a
good standing certificate as to ABR from
the Secretary of State (or the
equivalent thereof) of Maryland, to be
dated not more than thirty (30) days
prior to the Closing Date;
(g) the
Administrative Agent shall have received all certificates,
agreements and other documents and papers
referred to in this Section 3.1 and
the Notice
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of Borrowing referred to in Section 3.2, if
applicable, unless otherwise
specified, in sufficient counterparts,
satisfactory in form and substance to the
Administrative Agent in its sole
discretion;
(h) the Borrower
shall have taken all actions required to
authorize the execution and delivery of
this Agreement and the other Loan
Documents and the performance thereof by
the Borrower;
(i) the
Administrative Agent shall be satisfied that neither the
Borrower, ABR nor any Consolidated
Subsidiary is subject to any present or
contingent environmental liability which
could have a Material Adverse Effect;
(j) the
Administrative Agent shall have received, for its and any
other Lender's account, all fees due and
payable pursuant to Section 2.8, and
the fees and expenses accrued through the
Closing Date of Skadden, Arps, Slate,
Meagher & Flom LLP shall have been paid
directly to such firm, subject, however,
to the terms and conditions of Section 9.3
hereof;
(k) the
Administrative Agent shall have received copies of all
consents, licenses and approvals, if any,
required in connection with the
execution, delivery and performance by the
Borrower, ABR and the applicable
Consolidated Subsidiaries, and the validity
and enforceability, of the Loan
Documents, or in connection with any of the
transactions contemplated thereby,
and such consents, licenses and approvals
shall be in full force and effect; and
(l) no Default
or Event of Default shall have occurred.
Section 3.2 Borrowings. The obligation of any Lender to make a
Loan
on the occasion of any Borrowing is subject
to the satisfaction of the following
conditions:
(a) receipt by
the Administrative Agent of a Notice of Borrowing
as required by Section 2.2;
(b) immediately
after such Borrowing, the aggregate outstanding
principal amount of the Loans will not
exceed the aggregate amount of the
Commitments;
(c) immediately
before and after such Borrowing, no Default or
Event of Default shall have occurred and be
continuing both before and after
giving effect to the making of such
Loans;
(d) the
representations and warranties of the Borrower contained
in this Agreement shall be true and correct
in all material respects on and as
of the date of such Borrowing both before
and after giving effect to the making
of such Loans;
(e) no law or
regulation shall have been adopted, no order,
judgment or decree of any governmental
authority shall have been issued, and no
litigation shall be
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<PAGE>
pending, which does or seeks to enjoin,
prohibit or restrain, the making or
repayment of the Loans or the consummation
of the transactions contemplated by
this Agreement; and
(f) no event,
act or condition shall have occurred after the
Closing Date which, in the reasonable
judgment of the Administrative Agent, or
the Required Lenders, as the case may be,
has had or is likely to have a
Material Adverse Effect.
Each Borrowing hereunder shall be deemed to
be a representation and warranty by
the Borrower on the date of such Borrowing
as to the facts specified in clauses
(b), (c), (d), (e), and (f) of this
Section, except as otherwise disclosed in
writing by Borrower to the Lenders.
Notwithstanding anything to the contrary, no
Borrowing shall be permitted if such
Borrowing would cause Borrower to fail to
be in compliance with any of the covenants
contained in this Agreement or in any
of the other Loan Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the
other
Lenders which is or may become a party to
this Agreement to make the Loans, the
Borrower makes the following
representations and warranties as of the Closing
Date. Such representations and warranties
shall survive the effectiveness of
this Agreement, the execution and delivery
of the other Loan Documents and the
making of the Loans.
Section 4.1 Existence and Power. The Borrower is a limited
partnership, duly formed and validly
existing as a limited partnership under the
laws of the State of Delaware and has all
powers and all material governmental
licenses, authorizations, consents and
approvals required to own its property
and assets and carry on its business as now
conducted or as it presently
proposes to conduct and has been duly
qualified and is in good standing in every
jurisdiction in which the failure to be so
qualified and/or in good standing is
likely to have a Material Adverse Effect.
ABR is a real estate investment trust,
duly formed, validly existing and in good
standing as a real estate investment
trust under the laws of the State of
Maryland and has all powers and all
material governmental licenses,
authorizations, consents and approvals required
to own its property and assets and carry on
its business as now conducted or as
it presently proposes to conduct and has
been duly qualified and is in good
standing in every jurisdiction in which the
failure to be so qualified and/or in
good standing is likely to have a Material
Adverse Effect.
Section 4.2 Power and Authority. The Borrower has the
partnership
power and authority to execute, deliver and
carry out the terms and provisions
of each of the Loan Documents to which it
is a party and has taken all necessary
partnership action, if any, to authorize
the execution and delivery on behalf of
the Borrower and the performance by the
Borrower of such Loan Documents. The
Borrower has duly executed and delivered
each Loan Document to which it is a
party in accordance with the terms of this
Agreement, and each such Loan
Document constitutes the legal, valid and
binding obligation of the Borrower,
enforceable in accordance with its terms,
except as
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enforceability may be limited by applicable
insolvency, bankruptcy or other laws
affecting creditors rights generally, or
general principles of equity, whether
such enforceability is considered in a
proceeding in equity or at law. ABR has
the power and authority to execute, deliver
and carry out the terms and
provisions of each of the Loan Documents on
behalf of the Borrower to which the
Borrower is a party and has taken all
necessary action to authorize the
execution and delivery on behalf of the
Borrower and the performance by the
Borrower of such Loan Documents.
Section 4.3 No Violation. Neither the execution, delivery or
performance by or on behalf of the Borrower
of the Loan Documents to which it is
a party, nor compliance by the Borrower
with the terms and provisions thereof
nor the consummation of the transactions
contemplated by the Loan Documents, (i)
will materially contravene any applicable
provision of any law, statute, rule,
regulation, order, writ, injunction or
decree of any court or governmental
instrumentality, (ii) will materially
conflict with or result in any breach of,
any of the terms, covenants, conditions or
provisions of, or constitute a
default under, or result in the creation or
imposition of (or the obligation to
create or impose) any Lien upon any of the
property or assets of the Borrower or
any of its Consolidated Subsidiaries
pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement
or other instrument to which the
Borrower (or of any partnership of which
the Borrower is a partner) or any of
its Consolidated Subsidiaries is a party or
by which it or any of its property
or assets is bound or to which it is
subject, or (iii) will cause a material
default by the Borrower under any
organizational document of any Person in which
the Borrower has an interest, or cause a
material default under the Borrower's
agreement or certificate of limited
partnership, the consequences of which
conflict, breach or default would have a
Material Adverse Effect, or result in
or require the creation or imposition of
any Lien whatsoever upon any Property.
Section 4.4 Financial Information.
(a) The
consolidated balance sheet of ABR, the Borrower and their
respective Consolidated Subsidiaries, dated
as of December 31, 2003, and the
related consolidated statements of
operations and cash flows of ABR, Borrower
and their respective Consolidated
Subsidiaries for the fiscal year then ended,
reported on by Ernst & Young, a copy of
which has been delivered to each of the
Lenders, fairly present, in conformity with
GAAP, the consolidated financial
position of ABR, the Borrower and their
respective Consolidated Subsidiaries as
of such date and their consolidated results
of operations and cash flows for
such fiscal year.
(b) Since
September 30, 2004, (i) except as set forth on Schedule
4.4 hereto, nothing has occurred having a
Material Adverse Effect, and (ii)
except as previously disclosed to the
Lenders, neither the Borrower nor ABR has
incurred any material indebtedness or
guaranty on or before the Closing Date.
Section 4.5 Litigation. Except as set forth on Schedule 4.5
hereto,
there is no action, suit or proceeding
pending against, or to the best knowledge
of the Borrower threatened against or
affecting, nor, to the best knowledge of
the Borrower, any
25
<PAGE>
investigation of, (i) the Borrower, ABR or
any of their Consolidated
Subsidiaries, (ii) the Loan Documents or
any of the transactions contemplated by
the Loan Documents or (iii) any of their
assets, before any court or arbitrator
or any governmental body, agency or
official in which there is a reasonable
possibility of an adverse decision which
could, individually, or in the
aggregate have a Material Adverse Effect or
which in any manner draws into
question the validity of this Agreement or
the other Loan Documents (each, a
"Material Litigation").
Section 4.6 Compliance with ERISA.
(a) Except as
set forth on Schedule 4.6 attached hereto, neither
Borrower nor ABR is a member of any
material Plan or Multiemployer Plan or any
other Benefit Arrangement. In the event
that at any time after the Closing Date,
either the Borrower or ABR shall become a
member of any other Material Plan or
Multiemployer Plan, Borrower promptly shall
notify the Administrative Agent
thereof and from and after such notice,
Schedule 4.6 shall be deemed modified
thereby.
(b) The
transactions contemplated by the Loan Documents will not
constitu
