FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT
(“Agreement”),
dated to be effective as of July 1, 2008 (“Effective Date”), is executed
and delivered by and between American Mortgage Acceptance Company (“Borrower”) and Centerline
Holding Company (“Lender”).
BACKGROUND
WHEREAS,
Borrower and Lender are parties to a First Amended and Restated Loan Agreement
dated September 17, 2007, as amended by an Amendment to the First Amended and
Restated Loan Agreement dated as of July 1, 2008 (as amended, and modified,
restated and/or supplemented from time to time, the “Loan Agreement”) (capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Loan Agreement); and
WHEREAS,
Borrower has defaulted on its obligations under the Loan Agreement as set forth
herein, and Lender has agreed to forbear from exercising its rights and remedies
under the Loan Agreement and the other Loan Documents upon the terms and
conditions set forth in this Agreement; and
NOW
THEREFORE, in consideration of the foregoing premises and the promises and the
agreements hereinafter set
forth, the parties hereto hereby agree as follows:
A
G R E E M E N T:
1. Defaults.
Borrower hereby acknowledges that certain Events of Default under Sections 7.1,
7.3, 7.4 and 7.5 of the
Loan Agreement have occurred and are continuing.
2. Acknowledgment
of Obligations. Borrower hereby
acknowledges that it is unconditionally liable to Lender for the immediate and
full payment of its Obligations under the Loan Documents, and that as of the
Effective Date, Borrower has no defenses, counterclaims or setoffs with respect
to the full and immediate payment of any or all of the
Obligations.
3. Forbearance. During the Forbearance
Period (as defined below), Lender agrees to forbear from instituting any
remedies under the Loan Documents provided, (i) Borrower pays the base rate of
interest due under the Loan Agreement on a current basis, and (ii) no lender
under any other credit facility under which Borrower is obligated accelerates
the maturity of such facility upon default or otherwise exercises its remedies
as a lender under such facility (each a “Forbearance Termination Event”).
Notwithstanding the foregoing, (i) any forbearance granted by Lender shall not
constitute and shall not be construed or interpreted to constitute a waiver of
any Default or Event of Default which may now or hereafter exist under the Loan
Documents, and (ii) this Agreement and the forbearance granted by Lender
hereunder shall not constitute an amendment or modification of any of the Loan
Documents. All other rights of Lender contained in the Loan Documents
shall remain in full force and effect. Upon the termination of the
Forbearance Period (as defined below), or earlier, upon the occurrence of a
Forbearance Termination Event, Lender shall have the right to immediately cease
or terminate Lender’s forbearance hereunder, without further notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
replevy, protest or other formalities of any kind, all of which are hereby
expressly waived by Borrower, whereupon Lender shall be entitled to exercise all
rights and remedies available to Lender under the Loan Documents or at law, in
equity or otherwise, including, without limitation, institution of collection
actions against the Borrower. All periods of limitation specified by
statute and all defenses of laches or waiver as to any Default or Event of
Default existing on the Effective Date or arising during the Forbearance Period
(as defined below) will be tolled and otherwise suspended during the Forbearance
Period. During the Forbearance Period, no payment of preferred or common
dividends (“Dividends”) shall be made by Borrower to its shareholders as long as
any Default or Event of Default exists, provided that the Borrower shall not be
prohibited from paying any Dividends necessary in order to maintain Borrower’s
tax status as a real estate investment trust (REIT).
4. Forbearance
Period. The
Forbearance Period (herein so called) shall commence on the Effective Date of
this Agreement, and shall automatically terminate or expire, without notice, on
June 30, 2009.
5. No
Amendment or Modification. Except as expressly
provided in this Agreement, nothing contained herein shall in any manner be
construed to amend or modify the terms and provisions of the Loan
Documents.
6. No
Waiver, Strict Performance.
(a) Borrower
hereby expressly acknowledges and agrees that (i) no failure or delay by Lender
in exercising any right, power or remedy under this Agreement or under any of
the Loan Documents shall operate as a waiver thereof, (ii) no failure or delay
by Lender to insist upon the strict performance by Borrower or any term,
condition or covenant under this Agreement or the Loan Documents or to exercise
any right, power or remedy as a result of the breach thereof shall constitute a
waiver of any such term, condition or covenant under this Agreement or the Loan
Documents or of any breach thereof or preclude Lender from insisting on the
strict performance thereof, (iii) no single or partial exercise of any right,
power or remedy of Lender shall preclude further exercise of any right, power or
remedy under this Agreement or under the Loan Documents, (iv) Lender’s execution
of this Agreement shall not operate as a waiver of any right, power or remedy
available to Lender before the Effective Date as a result of matters that
occurred before the Effective Date, and (v) except as expressly set forth
herein, the acceptance by Lender of a partial payment of any amount due under
the terms hereof shall not preclude Lender from requiring the full and timely
payment of any and all amounts due under the terms hereof or any of the Loan
Documents.
(b) Lender
hereby further reserves its rights and remedies regarding all current and prior
Defaults of Borrower and Borrower hereby acknowledges Lender’s reservation of
rights and remedies regarding all current and prior Defaults of Borrower
including, but not limited to, the Defaults set forth in the Notice of Event of
Default and Reservation of Rights Letters sent by Lender to Borrower on January
23, 2008, March 3, 2008 and June 10, 2008.
(c) The
execution of this Forbearance Agreement by Borrower and Lender shall in no
manner impair, reduce or alter any Obligations of Borrower to Lender pursuant to
Loan Documents prior to the date hereof.
7. Power and
Authority; Legal, Valid, Binding Obligations. Borrower has full
power, authority and legal right to execute, deliver and perform its obligations
under the Loan Documents to which it is a party and this Agreement.
Borrower has taken all necessary actions to authorize the execution, delivery
and performance by it of each of the Loan Documents to which it is a party and
to authorize its execution and performance of this Agreement. Each of the
Loan Documents to which Borrower is a party and this Agreement have been duly
executed and delivered on behalf of Borrower. Each of the Loan Documents
and each agreement, certificate, document, instrument or other paper delivered
pursuant thereto, to which Borrower is a party, and this Agreement, constitutes
the legal, valid and binding obligation of Borrower enforceable against Borrower
in accordance with its terms.
8. Governing
Law. This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, without regard to the laws governing
conflicts of law.
9. Claims
Release. Borrower
represents and warrants that there exist no claims by Borrower against Lender,
its subsidiaries and affiliates and/or their respective directors, trustees,
officers, employees, agents, affiliates, successors, administrators and assigns,
including, without limitation, Centerline Servicing Inc. (the "Released Parties"),
with respect to the Loan Documents or any actions taken by the Released Parties
pursuant thereto (“Claims”), and further
releases the Released Parties, of and from any and all Claims which may exist as
of the date of this Amendment.
10. Headings. The section headings
hereof are inserted for convenience of reference only and shall in no way alter,
amend, define or be used in the construction or interpretation of the text of
such section.
11. Successors
and Assigns. This Agreement is
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, legal and personal representatives, successors and assigns,
provided, however, that the foregoing shall not be construed to confer any
right, title, benefit, cause of action or remedy upon any entity not a party
hereto, which such party would not or did not otherwise possess.
12. Construction. Whenever the context
hereof so requires, reference to the singular shall include the plural and
likewise, the plural shall include the singular; words denoting gender shall be
construed to mean the masculine, feminine or neuter, as appropriate; and
specific enumeration shall not exclude the general, but shall be construed as
cumulative of the general recitation.
13. Amendment. The provisions of this
Agreement may be amended or waived only by an instrument in writing signed by
the parties hereto.
14. Severability. If any clause or
provisions of this Agreement is or should ever be held to be illegal, invalid or
unenforceable under any present or future law applicable to the terms hereof,
then and in that event, it is the intention of the parties hereto that the
remainder of this Agreement shall not be affected thereby, and that in lieu of
each such clause or provision of this Agreement that it illegal, invalid or
unenforceable, such clause or provisions shall be judicially construed and
interpreted to be as similar in substance and content to such illegal, invalid
or unenforceable clause or provision, as the context thereof would reasonably
suggest, so as to thereafter be legal, valid and enforceable.
15. Counterparts. To facilitate
execution, this Agreement may be executed in as many counterparts as may be
convenient or required, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[Remainder
of Page Intentionally Left Blank/Signature Page Follows]
EXECUTED
to be effective as of the date first above written.
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THE
BORROWER:
By: /s/Xxxxxx X.
Xxxxx
Name: Xxxxxx X.
Xxxxx
Title: Chief
Executive Officer
THE
LENDER:
CENTERLINE
HOLDING COMPANY
By: /s/ Xxxx X.
Xxxxxxxxx
Name: Xxxx X.
Xxxxxxxxx
Title: Chief
Executive Officer
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[Signature
Page of Forbearance Agreement]
