EXHIBIT 10.38
EXECUTION VERSION
FIRST AMENDMENT TO REVOLVING LOAN AGREEMENT
(Wachovia/Arbor)
     THIS FIRST AMENDMENT TO REVOLVING LOAN AGREEMENT, dated as of December 24,
2009 (this “Amendment No. 1”), is entered into by and among ARBOR REALTY TRUST,
INC., a Maryland corporation, as a borrower (together with its successors and
permitted assigns, “ART”), ARBOR REALTY GPOP, INC., a Delaware corporation, as a
borrower (together with its successors and permitted assigns, “GPOP”), ARBOR
REALTY LPOP, INC., a Delaware corporation, as a borrower (together with its
successors and permitted assigns, “LPOP”), ARBOR REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership, as a borrower (together with its successors and
permitted assigns, “ARLP”), ARBOR REALTY SR, INC., a Maryland corporation, as a
borrower (together with its successors and permitted assigns, “ARSR”), ARBOR
REALTY COLLATERAL MANAGEMENT, LLC, a Delaware limited liability company, as a
borrower (together with its successors and permitted assigns, “ARCM”, and,
together with ART, GPOP, LPOP, ARLP and ARSR, each as the “Borrower”), WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association (together with its
successors and assigns, “Wachovia”), in its capacity as initial lender (together
with its successors and assigns in such capacity, the “Lender”) and in its
capacity as administrative agent (together with its successors and assigns in
such capacity, the “Administrative Agent”). Capitalized terms used and not
otherwise defined herein shall have the meanings given to such terms in the Loan
Agreement (as defined below).
R E C I T A L S
     WHEREAS, the Borrower, the Lender and the Administrative Agent are parties
to that certain First Amended and Restated Revolving Loan Agreement, dated as of
July 23, 2009, as amended by this Amendment No. 1, the “Loan Agreement”;
     WHEREAS, the Borrower desires to make certain modifications to the Loan
Documents; and
     WHEREAS, the Lender and the Administrative Agent are willing to modify the
Loan Documents as requested by the Borrower on the terms and conditions
specified herein.
     NOW THEREFORE, in consideration of the foregoing recitals, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
     Section 1. Amendment to Loan Agreement.
     (a) The following definition of “Credit Obligations” is hereby added to
Subsection 1.1 of the Loan Agreement:
     ““Credit Obligations”: Defined in the Arbor Credit Agreement.”
     (b) The following definition of “Discounted Payoff Amount” is hereby added
to Subsection 1.1 of the Loan Agreement:

 

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     ““Discounted Payoff Amount”: Defined in the Arbor Credit Agreement.”
     (c)The following new Section 2.16 is hereby added to the Credit Agreement:
     “Section 2.16 Discounted Payoff Amount.
     (a) Notwithstanding anything set forth in the Loan Documents to the
contrary, subject to the terms of this Section 2.16, Lender will accept the
Discounted Payoff Amount in full satisfaction of the Credit Obligations
provided, that (i) no Event of Default has occurred and is continuing, (ii) the
Lender has received the Discounted Payoff Amount in immediately available funds
on or before May 31, 2010 (as such date may be extended as set forth in
Section 2.18(b) of the Arbor Credit Agreement, the “Payoff Date”), (iii) the
Borrowers and the Guarantors deliver to the Lender and the Administrative Agent
on or before the Payoff Date an executed agreement terminating the Loan
Documents (subject to any provisions which by the terms expressly survive
termination) in the form of Exhibit A attached hereto, and (iv) the conditions
set forth in Section 2.18(a) of the Arbor Credit Agreement have been satisfied.
     (b) In the event that any of the conditions set forth in this Section 2.16
are not satisfied on or before Payoff Date (as the same may be extended in
accordance with the terms hereof), the Lender shall have no obligation
whatsoever under this Section 2.16 or otherwise to accept the Discounted Payoff
Amount in satisfaction of the outstanding Credit Obligations. For the avoidance
of doubt, until the conditions precedent set forth in this Section 2.16 are
satisfied, the Lender and the Administrative Agent shall have the right to
exercise all of its rights and remedies under the Arbor Loan Documents, the Loan
Documents and Requirements of Law. For the avoidance of doubt, until the
Borrowers pay the Discounted Payoff Amount and comply with the other provisions
of this Section 2.16, all obligations, duties and agreements of the Borrowers
and Guarantors continue to remain in full force and effect.”
     Section 2. [Reserved].
     Section 3. Loan Documents in Full Force and Effect as Modified.
     Except as specifically modified hereby, the Loan Documents shall remain in
full force and effect. All references to any Loan Document shall be deemed to
mean each Loan Document as modified by this Amendment No. 1. This Amendment
No. 1 shall not constitute a novation of the Loan Documents, but shall
constitute a modification thereof. The parties hereto agree to be bound by the
terms and conditions of the Loan Documents, as modified by this Amendment No. 1,
as though such terms and conditions were set forth herein.
     Section 4. Representations.
     Each Borrower represents and warrants, as of the date of this Amendment
No. 1, as follows:
     (a) it is duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of organization and each
jurisdiction where it conducts business;
     (b) the execution, delivery and performance by it of this Amendment No. 1
is within its corporate, company or partnership powers, has been duly authorized
and does not contravene (1) its Authority Documents or its applicable
resolutions, (2) any Applicable Law or (3) any Contractual Obligation,
Indebtedness or Guarantee Obligation;
Amendment No. 1 to
Revolving Loan Agreement
(Wachovia/Arbor)

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     (c) no consent, license, permit, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority or other
Person is required in connection with the execution, delivery, performance,
validity or enforceability by or against it of this Amendment No. 1;
     (d) this Amendment No. 1 has been duly executed and delivered by it;
     (e) this Amendment No. 1, as well as each of the Loan Documents as modified
by this Amendment No. 1, constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally or by
general principles of equity;
     (f) no Default or Event of Default exists or will exist after giving effect
to this Amendment No. 1; and
     (g) each of the Loan Documents is in full force and effect and no Borrower
has any defense, offset, counterclaim, abatement, right of rescission or other
claims, actions, causes of action, demands, damages or liabilities of any kind
or nature, in all cases whether legal or equitable, available to the Borrower or
any other Person with respect to (i) this Amendment No. 1, the Loan Agreement,
the Loan Documents or any other instrument, document and/or agreement described
herein or therein, as modified and amended hereby, (ii) the obligation of the
Borrowers to repay the Obligations and other amounts due under the Loan
Documents or (iii) the Administrative Agent, the Lenders or the Administrative
Agent’s or the Lenders’ respective officers, employees, representatives, agents,
counsel or directors arising out of or from or in any way related to or in
connection with the Loan Agreement or the Loan Documents, including, without
limitation, any action by such Persons, or failure of such Persons to act, under
the Loan Agreement or the other Loan Documents on or prior to the date hereof.
     Section 5. Conditions Precedent.
     The effectiveness of this Amendment No. 1 is subject to the following
conditions precedent: (i) delivery to the Administrative Agent of this Amendment
No. 1 duly executed by each of the parties hereto; (ii) the payment of all
reasonable legal fees and expenses of Moore & Van Allen PLLC, as counsel to the
Administrative Agent, in the amount to be set forth on a separate invoice; and
(iii) delivery to the Administrative Agent of such other documents, agreements
or certifications as the Administrative Agent may reasonably require.
     Section 6. Miscellaneous.
     (a) This Amendment No. 1 may be executed in any number of counterparts
(including by facsimile), and by the different parties hereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement.
     (b) The descriptive headings of the various sections of this Amendment
No. 1 are inserted for convenience of reference only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
Amendment No. 1 to
Revolving Loan Agreement
(Wachovia/Arbor)

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     (c) This Amendment No. 1 may not be amended or otherwise modified, waived
or supplemented except as provided in the Loan Agreement.
     (d) The interpretive provisions of Sections 1.2, 1.3 and 1.4 of the Loan
Agreement are incorporated herein mutatis mutandis.
     (e) This Amendment No. 1 represents the final agreement among the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties. There are no unwritten oral agreements
between the parties.
     (f) THIS AMENDMENT NO. 1 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Amendment No. 1 to
Revolving Loan Agreement
(Wachovia/Arbor)

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     IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

          THE BORROWERS:  ARBOR REALTY TRUST, INC.,
a Maryland corporation
        By:   /s/ John Natalone         Name:   John Natalone        Title:  
Executive Vice President          ARBOR REALTY GPOP, INC.,
a Delaware corporation
        By:   /s/ John Natalone         Name:   John Natalone        Title:  
Executive Vice President          ARBOR REALTY LPOP, INC.,
a Delaware corporation
        By:   /s/ John Natalone         Name:   John Natalone        Title:  
Executive Vice President          ARBOR REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
        By:   Arbor Realty GPOP, Inc.,         its General Partner             
      By:   /s/ John Natalone         Name:   John Natalone        Title:  
Executive Vice President     

[Signatures Continued on the Following Page]
Amendment No. 1 to
Revolving Loan Agreement
(Wachovia/Arbor)

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          THE BORROWERS (cont.):   ARBOR REALTY SR, INC.,
a Maryland corporation

      By:   /s/ John Natalone         Name:   John Natalone        Title:  
Executive Vice President 
        ARBOR REALTY COLLATERAL MANAGEMENT, LLC,
a Delaware limited liability company
      By:   /s/ John Natalone         Name:   John Natalone        Title:  
Executive Vice President     

[Signatures Continued on the Following Page]
Amendment No. 1 to
Revolving Loan Agreement
(Wachovia/Arbor)

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          THE LENDER:  WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association

      By:   /s/ John Nelson         Name:   John Nelson        Title:   Managing
Director        THE ADMINISTRATIVE AGENT:  WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association
        By:   /s/ John Nelson         Name:   John Nelson        Title:  
Managing Director     

Amendment No. 1 to
Revolving Loan Agreement
(Wachovia/Arbor)

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Form of Release Agreement
TERMINATION AND RELEASE AGREEMENT
(Wachovia/Arbor Working Capital Facility)
     THIS TERMINATION AND RELEASE AGREEMENT, dated as of [__________], 2010
(this “Release Agreement”), is entered into by and among ARBOR REALTY TRUST,
INC., a Maryland corporation, as a borrower (together with its successors and
permitted assigns, “ART”), ARBOR REALTY GPOP, INC., a Delaware corporation, as a
borrower (together with its successors and permitted assigns, “GPOP”), ARBOR
REALTY LPOP, INC., a Delaware corporation, as a borrower (together with its
successors and permitted assigns, “LPOP”), ARBOR REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership, as a borrower (together with its successors and
permitted assigns, “ARLP”), ARBOR REALTY SR, INC., a Maryland corporation, as a
borrower (together with its successors and permitted assigns, “ARSR”), ARBOR
REALTY COLLATERAL MANAGEMENT, LLC, a Delaware limited liability company, as a
borrower (together with its successors and permitted assigns, “ARCM”, and,
together with ART, GPOP, LPOP, ARLP and ARSR, each as the “Borrower”), WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association (together with its
successors and assigns, “Wachovia”), in its capacity as initial lender (together
with its successors and assigns in such capacity, the “Lender”) and in its
capacity as administrative agent (together with its successors and assigns in
such capacity, the “Administrative Agent”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association (together with its successors and
permitted assigns, “Custodian”), as the custodian. Capitalized terms used and
not otherwise defined herein shall have the meanings given to such terms in the
Loan Agreement (as defined below).
R E C I T A L S
     WHEREAS, the Borrower, the Lender and the Administrative Agent are parties
to that certain First Amended and Restated Revolving Loan Agreement, dated as of
July 23, 2009 (as amended, modified, restated, replaced, waived, substituted,
supplemented or extended from time to time, including, but not limited to,
pursuant to that First Amendment to First Amended and Restated Revolving Loan
Agreement dated as of December 24, 2009 (the “First Amendment”), the “Loan
Agreement”);
     WHEREAS, the Borrower has requested, and the Lender and the Administrative
Agent have agreed, subject to all covenants, terms and conditions provided for
in the First Amendment, to accept the Discounted Payoff Amount, which amount is
less than the outstanding principal amount of the Loan, in full satisfaction of
the Credit Obligations, provided that the Borrowers pay to the Lender such
Discounted Payoff Amount and the other amounts required under the First
Amendment in a timely manner, the Borrowers execute this Release Agreement and
the other requirements of the First Amendment are satisfied;
     WHEREAS, the Custodian is party to a Loan Document and desires to evidence
its agreement to the termination set forth herein; and
     WHEREAS, the Borrowers, the Lender, the Administrative Agent and the
Custodian desire to terminate their rights, duties and obligations under the
Loan Agreement and the other Loan Documents (such terminated documents
hereinafter referred to as the “Terminated Documents”; for the avoidance of
doubt, agreements evidencing or relating to Borrower-Related Obligations which
are unrelated to the
Termination and Release Agreement
(Wachovia/Arbor)

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Loan Agreement and/or Loan Documents are not being terminated hereby and are not
part of the Terminated Documents).
     NOW THEREFORE, in consideration of the foregoing recitals, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
     Section 1. Release of Lender and Administrative Agent.
     Each Borrower hereby waives, releases and discharges the Lender, the
Administrative Agent and the Lender’s and the Administrative Agent’s successors,
assigns, affiliates, officers, employees, representatives, agents, counsel and
directors from any and all actions, causes of action, claims, demands, damages,
liabilities, controversies, duties, covenants, responsibilities, obligations,
costs, losses and /or expenses of whatever kind or nature, in law or in equity,
now known or unknown, suspected or unsuspected, whether existing now or
hereafter, arising out of, from or in any way relating to or in connection with,
directly or indirectly, the Loan Agreement or the other Loan Documents
including, but not limited to, any action or failure to act under the Loan
Agreement or the other Loan Documents, on or prior to the date hereof.
     Section 2. Termination of Loan Documents.
     (a) Subject to Section 4 of this Release Agreement, the rights, duties and
obligations (except those rights, duties and obligations that expressly survive
termination, as set forth in the Terminated Documents) of each party under the
Loan Agreement and the other Terminated Documents, are hereby terminated, and
each of the parties hereto agrees that all duties and obligations (except such
duties and obligations that expressly survive termination, as set forth in the
Loan Agreement and the other Terminated Documents) of each party shall be
released hereby.
     (b) On and after the effective date of this Release Agreement, the
Borrowers and the Custodian shall execute and/or deliver such other
certifications, documents and agreements as the Administrative Agent shall from
time to time reasonably require to give effect to this Release Agreement.
     Section 3. Representations.
     Each Borrower represents and warrants, as of the date of this Release
Agreement, as follows:
     (a) it is duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of organization and each
jurisdiction where it conducts business;
     (b) the execution, delivery and performance by it of this Release Agreement
is within its corporate, company or partnership powers, has been duly authorized
and does not contravene (1) its Authority Documents or its applicable
resolutions, (2) any Requirements of Law or (3) any Contractual Obligation,
Indebtedness or Guarantee Obligation;
     (c) no consent, license, permit, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority or other
Person is required in connection with the execution, delivery, performance,
validity or enforceability by or against it of this Release Agreement;
     (d) this Release Agreement has been duly executed and delivered by it;
Termination and Release Agreement
(Wachovia/Arbor)

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     (e) this Release Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by general principles of equity;
     (f) no Borrower has any defense, offset, counterclaim, abatement, right of
rescission or other claims, actions, causes of action, demands, damages or
liabilities of any kind or nature, in all cases whether legal or equitable,
available to any Borrower or any other Person with respect to (i) this Release
Agreement, the Loan Agreement, the Loan Documents or any other instrument,
document and/or agreement described herein or therein, as modified and amended
hereby, or (ii) the Administrative Agent, the Lenders or the Administrative
Agent’s or the Lenders’ respective officers, employees, representatives, agents,
counsel or directors arising out of or from or in any way related to or in
connection with the Loan Agreement or the Loan Documents, including, without
limitation, any action by such Persons, or failure of such Persons to act, under
the Loan Agreement or the other Loan Documents on or prior to the date hereof;
and
     (g) the Recitals set forth herein are true and correct.
     Section 4. Conditions Precedent.
     The effectiveness of this Release Agreement is subject to the following
conditions precedent: (i) delivery to the Administrative Agent of this Release
Agreement duly executed by each of the parties hereto and the Termination and
Release Agreement, dated as of the date hereof (the “Credit Agreement Release”),
by and among Arbor Realty Funding LLC, as a borrower, ARSR Tahoe, LLC, as a
borrower, ARLP, as a borrower and guarantor , ART 450 LLC, as a borrower, ARSR,
as a borrower, pledgor and guarantor, Arbor ESH II LLC, as a borrower, ART, as a
gurantor, Wachovia Bank, National Association, as a lender and the
administrative agent, and Wells Fargo Bank, National Association, as custodian,
which agreements shall be held in escrow by the Administrative Agent’s counsel
pending satisfaction of the other conditions set forth in this Section 4; (ii)
payment to the Lender and the Administrative Agent of the Discounted Payoff
Amount in a timely manner and the Borrowers’ satisfaction of all other
conditions contained in the First Amendment; (iii) the representations and
warranties set forth in Section 3 are true and correct in all material respects;
(iv) the payment of all legal fees and expenses of Moore & Van Allen PLLC, as
counsel to the Administrative Agent, in the amount to be set forth on a separate
invoice; and (v) delivery to the Administrative Agent of such other documents,
agreements or certifications as the Administrative Agent may reasonably require.
Upon satisfaction of the foregoing conditions, which satisfaction must be
confirmed in writing by the Administrative Agent and the Administrative Agent’s
release from escrow to all parties copies of this Release Agreement and the
Credit Agreement Release executed by all parties, the Borrowers are authorized
(at the Borrowers’ expense) to terminate the relevant UCC financing statements
filed against the Borrowers in connection with the Terminated Documents and the
Custodian is authorized to release to the Borrowers all Mortgage Asset Files and
other documents held pursuant to the Custodial Agreement.
     Section 5. Miscellaneous.
     (a) This Release Agreement may be executed in any number of counterparts
(including by facsimile), and by the different parties hereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement.
Termination and Release Agreement
(Wachovia/Arbor)

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     (b) The descriptive headings of the various sections of this Release
Agreement are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.
     (c) This Release Agreement may not be amended or otherwise modified, waived
or supplemented except as provided in the Loan Agreement.
     (d) The interpretive provisions of Sections 1.2, 1.3 and 1.4 of the Loan
Agreement are incorporated herein mutatis mutandis.
     (e) This Release Agreement represents the final agreement among the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties. There are no unwritten oral agreements
between the parties.
     (f) THIS RELEASE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS RELEASE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
     (g) Each provision of this Release Agreement shall be valid, binding and
enforceable to the fullest extent permitted by Requirements of Law. In case any
provision in or obligation under this Release Agreement shall be invalid,
illegal or unenforceable in any jurisdiction (either in its entirety or as
applied to any Person, fact, circumstance, action or inaction), the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction or as applied to any
Person, fact, circumstance, action or inaction, shall not in any way be affected
or impaired thereby.
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Termination and Release Agreement
(Wachovia/Arbor)

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     IN WITNESS WHEREOF, the parties have caused this Release Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

          THE BORROWERS:  ARBOR REALTY TRUST, INC.,
a Maryland corporation

      By:           Name:           Title:             ARBOR REALTY GPOP, INC.,
a Delaware corporation

      By:           Name:           Title:             ARBOR REALTY LPOP, INC.,
a Delaware corporation

      By:           Name:           Title:             ARBOR REALTY LIMITED
PARTNERSHIP,
a Delaware limited partnership
        By:   Arbor Realty GPOP, Inc.,         its General Partner             
      By:           Name:           Title:        

[Signatures Continued on the Following Page]
Termination and Release Agreement
(Wachovia/Arbor)

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          THE BORROWERS (cont.):  ARBOR REALTY SR, INC.,
a Maryland corporation

      By:           Name:           Title:             ARBOR REALTY COLLATERAL
MANAGEMENT, LLC,
a Delaware limited liability company

      By:           Name:           Title:        

[Signatures Continued on the Following Page]
Termination and Release Agreement
(Wachovia/Arbor)

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          THE LENDER: WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association

      By:           Name:   John Nelson        Title:   Managing Director       
THE ADMINISTRATIVE AGENT: WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association
        By:           Name:   John Nelson        Title:   Managing Director     

[Signatures Continued on the Following Page]
Termination and Release Agreement
(Wachovia/Arbor)

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          THE CUSTODIAN:  WELLS FARGO BANK, NATIONAL ASSOCIATION

      By:           Name:           Title:        

              Address for Notices:
      Wells Fargo Bank, National Association     1055 10th Avenue SE    
Minneapolis, Minnesota 55414
 
  Attention:   Karolyn Kleingartner
 
      Trust Officer
 
  Facsimile No:   (612) 466—5416
 
  Confirmation No:   (612) 466—5895

Termination and Release Agreement
(Wachovia/Arbor)

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