EXHIBIT 10.8
CharterMac
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
June 28, 2006
Centerbrook Financial LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
RE: CENTERBROOK CREDIT INTERMEDIATION PROGRAM
Ladies and Gentlemen:
Reference is made to the Limited Liability Company Agreement of
Centerbrook Financial LLC (the "COMPANY") dated as of June 28, 2006 (as amended,
supplemented or otherwise modified from time to time, the "OPERATING AGREEMENT")
and entered into by Centerbrook Holdings LLC ("HOLDINGS") Capitalized terms used
but not defined herein are used with the meanings assigned to them in the
Operating Agreement.
Section 1. DEFINITIONS. As used herein, the following terms shall
have the meanings ascribed thereto:
"CHANGE IN CONTROL" means at any time CharterMac and its
Controlled affiliates does not collectively own, directly or indirectly, at
least 51% of the equity interests of Holdings.
"CharterMac" means CharterMac, a Delaware statutory trust.
"CHARTERMAC AFFILIATED CREDIT INTERMEDIATION" means any Credit
Intermediation Business with respect to which the Credit Intermediation
Buyer is a CharterMac Person.
"CHARTERMAC NON-AFFILIATED CREDIT INTERMEDIATION" means any
Credit Intermediation Business with respect to which the Credit
Intermediation Buyer is not a CharterMac Person.
"CHARTERMAC PERSON" means CharterMac or any of its Affiliates
other than the Company.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative
thereto.
"CREDIT INTERMEDIATION" means, collectively, CharterMac
Affiliated Credit Intermediation and CharterMac Non-Affiliated Credit
Intermediation.
"CREDIT INTERMEDIATION BUSINESS" means any of the following:
(a) Credit intermediation, other than FM Credit
Intermediation, of tax exempt or taxable multi-family revenue
bonds or other debt obligations relating to real estate,
including without limitation real estate that is newly
constructed or under construction or rehabilitation or relating
to existing properties.
(b) Credit intermediation of TOB Tax-Exempt Certificates or
other interests relating to individual or pooled multi-family
housing revenue bonds held by a trust or other investment
vehicle.
(c) Credit intermediation of Tax Credit Investments,
including without limitation the returns and tax benefits
realized by Pass Through Entities which invest directly or
through Pass Through Entities in properties anticipated to be
entitled to Tax Credits, including without limitation Local
Partnerships.
"CREDIT INTERMEDIATION BUYER" means, with respect to any Credit
Intermediation, the beneficiary of such Credit Intermediation.
"XXXXXX XXX" means Federal National Mortgage Association, a
corporation organized and existing under the laws of the United States.
"FM CREDIT INTERMEDIATION" means any credit intermediation
transaction described in clause (a) of the definition of Credit
Intermediation Business with respect to which the provider of the related
Credit Intermediation is Xxxxxx Xxx or Freddie Mac or which involve an FHA
loan.
"FREDDIE MAC" means the Federal Home Loan Mortgage Corporation, a
shareholder-owned, United States government-sponsored enterprise.
"TAX CREDITS" means new market tax credits, low-income housing
tax credits, state low-income housing tax credits, historic rehabilitation
tax credits, state historic rehabilitation tax credits, and similar tax
credits established by state programs in accordance with Section 42 or 48
of the Code and any applicable state legislation.
Section 2. RIGHT OF FIRST REFUSAL. No CharterMac Person shall
enter into an agreement with respect to, or issue a term sheet, letter of
intent, commitment letter or similar instrument for a transaction which provides
for, Credit Intermediation to be provided by a party other than the Company
which is not the provider thereof, without first offering the Company a right to
provide such Credit Intermediation in accordance with the following terms:
(A) In connection with each such offer, CharterMac shall provide
the Company with not less than two (2) Business Days' prior written notice
of any transactions prior to entering into any such agreement or issuing
any such term sheet, letter of intent, commitment letter or similar
instrument. Each such written notice shall disclose the material terms of
such proposed transaction and shall specify the date on which CharterMac
intends to issue or accept, as applicable, a term sheet, letter of intent,
commitment letter or similar instrument with respect to such proposed
transaction. The foregoing notice periods are minimum notice periods;
CharterMac will use commercially reasonable efforts to provide the Company
with earlier notice when possible. Upon the Company's reasonable request
therefor, CharterMac shall provide the Company with such information as the
Company may request (to the extent such information is in CharterMac's
possession or reasonably obtainable by CharterMac) in order to enable the
Company to make a decision on whether to offer Credit Intermediation for
such transaction.
(B) The Company may, at any time prior to the close of business
on the date on which CharterMac has indicated it intends to deliver or
accept a term sheet, letter of intent, commitment letter or similar
instrument as aforesaid, provide written notice to CharterMac (the "NOTICE
OF ACCEPTANCE") that the Company (x) proposes to provide Credit
Intermediation for such transaction and, the terms and conditions on which
the Company will provide such Credit Intermediation, which shall result in
an execution which is not less favorable to the related Credit
Intermediation Buyer than any alternative execution such Credit
Intermediation Buyer could obtain under the prevailing market conditions
and (y) is permitted to enter into such Credit Intermediation under the
terms of the Operating Agreement (including Section 2.6(a) thereof),
whereupon in each case the related Credit Intermediation Buyer and the
Company shall use their commercially reasonable efforts to agree on the
definitive terms of such Credit Intermediation.
(C) CharterMac shall have no further obligations hereunder with
respect to such Credit Intermediation (i) upon receipt of a written notice
from the Company to the effect that it does not intend to provide Credit
Intermediation for such transaction or if no Notice of Acceptance is
delivered by the Company within the relevant time period set forth in the
preceding clause (C) or (ii) if the Company and the related Credit
Intermediation Buyer are unable to mutually agree on the definitive terms
of such Credit Intermediation within five (5) Business Days of delivery of
the related Notice of Acceptance and CharterMac shall have delivered within
such five (5) Business Day period reasonable documentation to the effect
that it has agreed to provide or can otherwise obtain such Credit
Intermediation on terms and conditions more favorable to the related Credit
Intermediation Buyer than those terms and conditions that the Company has
offered.
(D) XxxxxxxXxx acknowledges and agrees that neither the Company's
refusal to provide any Credit Intermediation nor the failure to reach an
agreement with respect to any Credit Intermediation as described in the
preceding clause (D) shall affect CharterMac's obligations to the Company
under this agreement with respect to any other Credit Intermediation.
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Section 3 CHANGE IN CONTROL. This Agreement shall terminate upon
a Change in Control, provided that if the Change in Control results from a
public offering of the interests in the Holdings, the term shall expire on the
earlier of thirty (30) months after the date of the Change in Control or the
date that the term would otherwise expire pursuant to Section 4.
Section 4 TERM. This agreement shall (i) be for a term of six (6)
years from the date hereof and (ii) automatically renew for additional one (1)
year periods, unless CharterMac gives a written notice of termination to the
Company not less then six (6) months prior to then applicable expiration date of
this Agreement.
Section 5 MISCELLANEOUS. This agreement may not be amended or
waived except by an instrument in writing signed by XxxxxxxXxx and the Company.
This agreement shall be governed by, and construed in accordance with, the law
of the State of New York. This agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
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Please confirm that the foregoing is our mutual understanding by
signing and returning to us an executed counterpart of this agreement.
Very truly yours,
CHARTERMAC
By: /S/ XXXX X. XXXXXXXXX
---------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
Accepted and agreed to as of the date first above written:
CENTERBROOK FINANCIAL LLC
By: CENTERBROOK HOLDINGS
LLC, its Managing Member
By: /S/ XXXXXX X. XXXX
------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
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