Attached files
Exhibit 10.13
EXECUTION COPY
REAFFIRMATION OF GUARANTEE
REAFFIRMATION OF GUARANTEE (this Reaffirmation), dated as of March 5, 2010, is executed by
CENTERLINE HOLDING COMPANY (formerly known as and successor to CharterMac), a Delaware business
trust (the Guarantor), in favor of MERRILL LYNCH CAPITAL SERVICES, INC., a Delaware corporation
(MLCS).
WHEREAS, Centerline Capital Group Inc. (formerly known as and successor to Charter Mac
Corporation), a Delaware corporation (CCG), and MLCS entered into that certain ISDA Master
Agreement, dated as of December 31, 2001 (the Master Agreement), together with the
Multicurrency-Cross Border Schedule to the Master Agreement (the Schedule), the ISDA Credit
Support Annex thereto (the Annex) and the confirmation letters identified on Schedule I to the
Transaction Assignment Agreements (as defined below) (such confirmation letters collectively being
referred to herein as the Existing Confirmation Letters) evidencing transactions between CCG and
MLCS with respect to certain payment obligations under various Investor Return Floor Agreements
(the IRFAs) (all such documents, as amended, restated and/or supplemented from time to time,
collectively, the Existing Swap Agreement and, together with all documents providing security
therefore or guaranteeing the same, the Existing Swap Documents);
WHEREAS, Guarantor executed that certain Seventh Amended and Restated Guarantee of CharterMac,
dated August 17, 2006 (the Guarantee), in favor of MLCS with respect to certain obligations of
CCG under the Existing Swap Agreement (a true and correct copy of the Guarantee is attached hereto
as Appendix A);
WHEREAS, on the date hereof, Guarantor, CCG, Centerline Affordable Housing Advisors LLC
(CAHA), Centerline Guaranteed Manager II LLC (Guaranteed Manager), Centerline Guaranteed
Holdings LLC (Guaranteed Holdings), Centerline Mortgage Capital Inc. (CMC) and Centerline
Guaranteed Manager LLC (Former Guaranteed Manager) are entering into that certain Master
Assignment, Stabilization, Assignment Allocation, Servicing and Asset Management Agreement (the
Master Assignment Agreement);
WHEREAS, capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Master Assignment Agreement or the Existing Swap Documents, as applicable;
WHEREAS, on the date hereof, (i) the Property Assignors are assigning and conveying to
Guaranteed Holdings all rights of each Property Assignor to certain payments, interests and other
rights; (ii) Former Guaranteed Manager is assigning and conveying to Guaranteed Manager all
interests of Former Guaranteed Manager as a non-member manager in each Guaranteed Fund GP,
Guaranteed SLP and Affiliated Local General Partner; (iii) Centerline Acquisitions II LLC and
Centerline Dispositions II LLC are assigning and conveying to Guaranteed LTGP all interests of
Centerline Acquisitions II LLC and Centerline Dispositions II LLC in each Affiliated
Local General Partner; and (iv) Guaranteed Holdings is being admitted in place of CCG as a
member of each Guaranteed Partnership GP (collectively, the Assignments);
WHEREAS, in connection with and in consideration, inter alia, for the Assignments, the rights
and obligations of CCG under the Existing Confirmation Letters are being assigned to and assumed by
Guaranteed Holdings pursuant to a Transaction Assignment Agreement, dated as of the date hereof
(the Transaction Assignment Agreement), among MLCS, CCG and Guaranteed Holdings (and with the
consent and acknowledgement of Guarantor), such that the Existing Confirmation Letters will be
governed by and subject to an ISDA Master Agreement, together with a Multicurrency-Cross Border
Schedule to the Master Agreement and an ISDA Credit Support Annex thereto, entered into on the date
hereof between MLCS and Guaranteed Holdings (collectively, as amended, restated and/or supplemented
from time to time, the New Swap Agreement and, together with all documents providing security
therefore or guaranteeing the same, as amended, restated and/or supplemented from time to time, the
New Swap Documents, and together with the Master Assignment Agreement, and the Assignments, the
Restructuring Documents);
WHEREAS, in consideration of MLCSs agreement to consent to the assignment of the obligations
of CCG to Guaranteed Holdings pursuant to the Transaction Assignment Agreement, MLCSs agreement to
enter into the New Swap Agreement and MLCSs agreement contained herein to release the Guarantor
from certain obligations pursuant to the terms hereof, the Guarantor has agreed to reaffirm its
obligations for the Ongoing Guarantee Liabilities hereunder;
WHEREAS, it is a condition precedent to MLCSs agreement to enter into the Transaction
Assignment Agreement and the New Swap Agreement that the Guarantor execute and deliver this
Reaffirmation in favor of MLCS with respect to certain obligations relating to the Existing Swap
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the parties
hereto agree as follows:
1. Representations and Warranties. THE PARTIES HERETO RECOGNIZE THAT SOME OF THE MATTERS AS
TO WHICH REPRESENTATIONS AND WARRANTIES ARE MADE BY GUARANTOR IN THIS REAFFIRMATION ARE OUTSIDE THE
KNOWLEDGE OF GUARANTOR AND THAT IN SOME INSTANCES SUCH REPRESENTATIONS AND WARRANTIES MAY NOT BE
KNOWN TO BE TRUE AND CORRECT IN EACH AND EVERY RESPECT WHEN MADE. THE PURPOSE OF THE
REPRESENTATIONS AND WARRANTIES IS TO (1) ALLOCATE THE RISK OF LOSS AS PROVIDED IN THIS
REAFFIRMATION IN THE EVENT OF ANY LOSS TO WHICH MLCS IS ENTITLED TO INDEMNIFICATION HEREUNDER
ARISING FROM ANY SUCH REPRESENTATION OR WARRANTY BEING UNTRUE AND (2) TO DEFINE THE RIGHTS OF THE
PARTIES IN SUCH EVENT. FOR CLARITY AND THE AVOIDANCE OF DOUBT, WHETHER GUARANTOR OR MLCS HAS
KNOWLEDGE THAT A REPRESENTATION OR WARRANTY IS OR MAY BE UNTRUE OR INACCURATE SHALL NOT ON THE ONE
HAND, BE A BAR OR DEFENSE TO OR OTHERWISE AFFECT MLCSS RIGHT TO INDEMNIFICATION OR OFFSET AND
SHALL NOT, ON
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THE OTHER HAND, GIVE RISE TO A CLAIM BY MLCS AGAINST GUARANTOR FOR FRAUD, FRAUDULENT
INDUCEMENT, GROSS NEGLIGENCE OR THE LIKE.
Guarantor hereby represents and warrants to MLCS as of the Closing Date, as follows:
1.1 Corporate Status. Each of the Centerline Controlled Entities (i) is a duly
organized and validly existing corporation or other entity in good standing under the laws of the
jurisdiction of its organization and has the corporate or other organizational power and authority
to own its property and assets and to transact the business in which it is engaged and (ii) has
duly qualified and is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified.
1.2 Corporate Power and Authority; Enforceability. Each of the Centerline Controlled
Entities has the corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the applicable Restructuring Documents and has taken all
necessary corporate or other organizational action to authorize the execution, delivery and
performance of such documents. Each of the Centerline Controlled Entities has duly executed and
delivered the applicable Restructuring Documents and such documents constitute the legal, valid and
binding obligation of such Person enforceable in accordance with its terms. Each of Centerline
Controlled Entities (i) is in compliance with all Applicable Laws and (ii) has all requisite
governmental licenses, authorizations, consents and approvals to operate its business as currently
conducted.
1.3. No Violation. None of (i) the execution, delivery and performance by any of
Centerline Controlled Entities of the applicable Restructuring Documents and compliance with the
terms and provisions therein, nor (ii) the consummation of the other transactions contemplated
thereby on the relevant dates therefor will (1) contravene any applicable provision of any
Applicable Law of any Governmental Authority, (2) result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any obligation 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 any of the Centerline Controlled Entities (other than Liens under any
security agreements contemplated herein) pursuant to, the terms of any indenture, loan agreement,
lease agreement, mortgage or deed of trust or any other contractual obligation to which the
Centerline Controlled Entities is a party or by which they or any of their property or assets is
bound, or (3) violate any provision of the Organizational Documents of the Centerline Controlled
Entities.
1.4 Governmental Approvals. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any Governmental
Authority is required to authorize or is required in connection with (a) the execution, delivery
and performance of the applicable Restructuring Documents or (b) the legality, validity, binding
effect or enforceability of the applicable Restructuring Documents.
1.5. Intentionally Omitted.
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1.6 Solvency. Taking into account the obligations hereunder, the Centerline
Controlled Entities, on a consolidated basis, taken as a whole, are Solvent, and will be Solvent
following the consummation of the transactions contemplated hereby. Taking into account the
transactions contemplated herein, each of the Guaranteed Entities and Guaranteed Holdings is
Solvent, and will be Solvent following the consummation of the transactions contemplated by the
applicable Restructuring Documents.
1.7 Liens. There are no Liens on the property or assets of any Guaranteed Fund, other
than (i) Liens on the limited partnership interests of the Guaranteed Funds interest in the Local
Partnerships securing the obligations of the Guaranteed Fund to make contributions to the Local
Partnerships, and (ii) Liens on the partnership interests of the Guaranteed Manager in each
Guaranteed Fund GPs and Guaranteed SLPs pursuant to the Assignment and Subrogation Agreements.
1.8 Ownership. Exhibit 7.1.8 to the Master Assignment Agreement sets forth a complete
and accurate chart, in all material respects, of each of the Centerline Global Entities (excluding
CHC and CCG) and their Subsidiaries, including (i) the legal name of each such Centerline Global
Entity, (ii) the jurisdiction of organization of each such Centerline Global Entity, (iii) each
Person that has an ownership interest (including minority interests) in each such Centerline Global
Entity, including (1) the percentage voting ownership and percentage economic ownership of each
such Centerline Global Entity, and (2) any unfunded equity commitments with respect to each such
Centerline Global Entity, and (iv) the manager and/or servicer with respect to each such Centerline
Global Entity.
1.9 Information True, Complete and Not Misleading. CHC, CCG and CAHA have made
available to MLCS all material agreements, instruments, side agreements and corporate or other
restrictions (including under their respective organizational documents) to which the Centerline
Controlled Entities are subject or by which any of their property or activities is bound or
subject.
CHC, CCG and CAHA have disclosed to MLCS all matters known to it that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect on Guaranteed
Holdings or MLCS, in its capacity as issuer of the IRFA.
None of the reports, financial statements, certificates or other information furnished or
given by CHC, CCG or CAHA on behalf of any Centerline Controlled Entity to MLCS in connection with
the negotiation of the Restructuring Documents or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished), when considered as a whole, contains any material
misstatement of fact or omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that, (i)
with respect to projections, estimates and forward-looking information, CHC, CCG and CAHA represent
only that such information was prepared in good faith based upon assumptions believed to be
reasonable at the time and such assumptions have been updated to the extent such assumptions were
determined to be unreasonable, it being recognized by MLCS that such projections, estimates and
forward-looking information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such projections, estimates and
forward-looking information may differ from
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the projected results set forth therein, and such differences may be material, and (ii) such
reports, financial statements, certificates and other information were based upon financial
information provided by the Local General Partners and Local Partnerships and CHC, CCG and CAHA
assume that such financial information provided by the Local General Partners and Local
Partnerships does not contain any untrue statement of material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading (each of (i) and (ii) being the Projection Exceptions).
1.10 Guaranteed Holdings Assigned Rights. Exhibit 4.3 to the Master Assignment
Agreement sets forth a complete and accurate list, in all material respects, of all Guaranteed
Holdings Assigned Rights as of the date hereof, including a description of each of the items
assigned. All Guaranteed Holdings Assigned Rights are held by the parties that have assigned them
to Guaranteed Holdings pursuant to the Property Assignment Agreement and all present and rights to
future Guaranteed Holdings Assigned Rights have been transferred to Guaranteed Holdings pursuant to
such Property Assignment Agreement. Other than as disclosed on Exhibit 4.3 to the Master
Assignment Agreement, there are no other agreements, side letters, instruments or other legal
documents known to CHC, CCG and CAHA that will or could give rise to any Guaranteed Holdings
Assigned Rights. All rights of any Affiliate of Guarantor that has an equity or economic interest
in any entity involved in the transactions relating to the IRFAs have been assigned to Guaranteed
Holdings or an Affiliate thereof other than the interests of CAHA and Centerline Guaranteed
Holdings LLC.
1.11 Projections. The projections of the (i) current average amounts and the future
expected amounts of Guaranteed Fund Expenses, (ii) the required amounts to achieve Stabilization
for each of the Work-Out Bonds as set forth on Schedule B to the Master Assignment Agreement and
(iii) the amount of the Debt Service Shortfall Payments, delivered to MLCS on or before the Closing
Date were prepared in good faith based upon current information available to the Bond Servicer and
to the best of each Centerline Partys knowledge, after due inquiry, is a reasonable approximation
of the amount of such obligations and assumptions believed by CHC, CCG and CAHA to be reasonable at
the time made; it being recognized by MLCS that such projections are subject to the Projection
Exceptions.
1.12 Local Partnership Voluntary Loans. As of the Closing Date, there are no direct
Voluntary Loans made by any of the Centerline Parties to any Local Partnership, except those set
forth on Exhibit 4.3 to the Master Assignment Agreement. There are no past due amounts on any
Bonds.
1.13 Taxes and Other Obligations. Each of the Guaranteed Funds and the Guaranteed
Partnerships has paid or caused to be paid all material payments, expenses and Taxes required to
have been paid by it, except where (i) such payments and expenses are Receivables Contributions,
(ii) the validity or amount thereof is being contested in good faith by appropriate proceedings,
and (iii) such Guaranteed Fund or Guaranteed Partnership has set aside on its books adequate
reserves with respect thereto in accordance with GAAP.
1.14 Uniform Commercial Code Financing Statements. Exhibit 8.1.14 to the Master
Assignment Agreement sets forth a complete and accurate list, in all material respects, of each
Uniform Commercial Code financing statement filed against the entity listed thereon.
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1.15 Disposition Fees. There have been no Disposition Fees (earned or accrued) on or
prior to the Closing Date with respect to any of the Centerline Global Entities.
1.16 Employees. None of the Guaranteed Funds nor the Guaranteed Partnerships have any
employees. No employees of CHC, CCG or CAHA hold any Guaranteed Holdings Assigned Rights.
1.17 Compliance with Laws. Each of CHC, CCG, CAHA, the Guaranteed Manager and CMC is
in compliance with all Applicable Laws binding upon it or its property, in each case. The
ownership and operation of the Properties have been conducted in accordance with all Applicable
Laws of all Governmental Authorities having jurisdiction over the Properties and/or the applicable
Centerline Controlled Entity.
1.18 No Violation. None of (i) the execution, delivery and performance by any of any
Centerline Global Entity of the Restructuring Documents and compliance with the terms and
provisions therein, or (ii) the consummation of the other transactions contemplated thereby on the
relevant dates therefor will (1) result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or give rise to any right to accelerate or to require
the prepayment, repurchase or redemption of any obligation 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 any Centerline Global Entity pursuant to the BOA Credit Agreement or (2) violate any provision
of the Organizational Documents of any Centerline Global Entity.
1.19. Litigation. There is no action, suit, claim, proceeding, arbitration
governmental inquiry or investigation pending threatened against any Centerline Global Entity or
any Affiliate thereof, at law or in equity, before or by any Governmental Authority, which, if
adversely determined, would prevent the consummation of the this Reaffirmation or the transactions
contemplated by the Master Assignment Agreement, or materially and adversely affect the Assignments
or the transactions contemplated by the Master Assignment Agreement. There is no action or suit by
or against any Property Assignor pending or threatened by or against any other Person or entity
relating to the Assignments or the transactions contemplated by the Master Assignment Agreement.
1.20. LIHTC Matters. Except as set forth on Exhibit A, (i) each Property held by a
Guaranteed Local Partnership is a qualified low-income housing project, and (ii) each apartment
building at such Property is a qualified low-income building, (within the meaning of Section
42(c)(2) and Section 42(i)(3), of the Code respectively), and (iii) each Property has received
8609s for all buildings in which Tax Credits have been claimed (except the Timber Oaks project).
Each Property has been operated in material compliance (Compliance) with all regulatory
agreements with the state agencies and each Guaranteed Local Partnership has complied in all
material respects with all applicable state and federal monitoring and reporting requirements with
respect to Tax Credits and the Properties, including, without limitation, all such requirements of
the state agency and of the IRS, whether in regulations, administrative rulings or other
promulgations, and each Guaranteed Local Partnership has fully satisfied all other material
ownership and operating restrictions contained in any restrictive covenants of record, loan
agreements, or otherwise, including tenant income and rent restrictions, applicable to the such
Property. No owner of any Property has received any notice that it was not in
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Compliance. None of the Guaranteed Local Partnerships are currently a party to any legal,
administrative or regulatory proceeding in which, among other things, the IRS is seeking to
recapture or otherwise disallow any Tax Credit claimed in the current or prior years. The
applicable Centerline Global Entities have at all times been in compliance with the provisions of
Sections 6011, 6111 and 6112 of the Code relating to tax shelter disclosure, registration, list
maintenance and record keeping and with the Treasury Regulations thereunder (including any
predecessor or successor Code provisions or Treasury Regulations thereof, as applicable). No
Centerline Global Entity, as applicable, has at any time, engaged in or entered into a listed
transaction within the meaning of Treasury Regulation Sections 1.6011, 301.6111 or 301.6112 or
that would have been such a listed transaction if current tax law was in effect at the time the
transaction was entered into.
1.21. Capital Contributions. Schedule I attached hereto contains a true, accurate
and complete list of: (i) the amount of the Capital Contributions of the applicable Centerline
Controlled Entity to each Guaranteed Local Partnership as of the Closing Date; (ii) the amount of
the remaining Capital Contributions of the applicable Centerline Controlled Entity attributable to
each Guaranteed Local Partnership as of the Closing Date; and (iii) the amount of the Capital
Account Balance of the applicable Centerline Controlled Entity with respect to each Guaranteed
Local Partnership as of December 31, 2009.
2. Guarantor hereby acknowledges and agrees that the Guarantee shall continue in full force
and effect in accordance with its terms and is hereby ratified and confirmed, notwithstanding any
action or inaction of MLCS, and Guarantor hereby agrees to indemnify MLCS for any losses, expenses,
damages, claims and/or similar liabilities (a Loss) but only to the extent Guarantor and/or CCG
would have been obligated to MLCS for any such Loss assuming the Existing Swap Documents remained
in full force and effect (and had not been modified or supplemented), other than any obligation to
post Collateral for any Exposure or Independent Amount, on and after the date hereof with respect
to any of the following (collectively, the Ongoing Guarantee Liabilities):
a. | The inaccuracy of any representations or warranties contained in Section 1
hereof. |
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b. | Relating to the Timber Oaks project; provided, however, that Guarantor shall be
released from any Ongoing Guaranteed Liability under this Section 2(b) upon receipt of
copies of all Form 8609s for all residential units at the Timber Oaks project; the
withdrawal or cancellation of all Form 8823s previously issued; an analysis of Reznick
or other accounting firm acceptable to MLCS, calculating the potential financial impact
to the investor due to the late delivery of the Form 8609s; and payment by the
Centerline Controlled Entities of the amount of the potential financial impact
(inclusive of interest and penalties that may be due to the Internal Revenue Service)
as calculated by Reznick and agreed to by MLCS as such conditions are more fully
described in Paragraph 13 of the Credit Support Annex delivered on the date hereof; |
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c. | Any Local Partnership receiving notice of non-compliance from the Internal
Revenue Service under any federal tax laws or regulation relating to any period on or
before the date hereof; |
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d. | Any non-compliance under federal tax laws or regulations by any third party
Local General Partner for any Property relating to any period on or before the date
hereof; |
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e. | Any non-compliance under federal tax laws or regulations by any Affiliated
Local General Partner for any Property relating to any period on or before the date
hereof; |
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f. | Any allocation of any Tax Credit to an investor in any Guaranteed Partnership
not entitled to receive such allocation relating to any period on or before the date
hereof; |
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g. | Any inaccuracy in, or non-compliance under any federal tax laws or regulations,
with respect to the historic components of current pro formas provided by any
Centerline Party to MLCS; |
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h. | Any inaccuracy in, or non-compliance under any federal tax laws or regulations,
with respect to the future components of current pro formas provided by any Centerline
Controlled Entity to MLCS; |
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i. | Any non-compliance under federal tax laws or regulations by any Guaranteed
Partnership, Guaranteed Fund or Guaranteed Local Partnership, or any member or partner
of any of the foregoing, relating to any period on or before the date hereof; |
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j. | Any revenues or expenses with respect to the Properties not being recorded in
accordance with federal tax laws or regulations or GAAP relating to any period before
the date hereof ; |
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k. | Failure for net income or loss to be have been properly allocated within any
Guaranteed Partnership, Guaranteed Fund and/or Guaranteed Local Partnership, or any
member or partner of any of the foregoing relating to any period on or before the date
hereof; |
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l. | Any Deficit Restoration Obligation resulting in future liability to any
investor in any Guaranteed Partnership, any Centerline Party and/or MLCS; |
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m. | Any rights of any Centerline Global Entity, Centerline Controlled Entity or an
Affiliate thereof as applicable to receive fees, payments or other receivables from the
Guaranteed Partnerships, Guaranteed Funds and/or Local Guaranteed Partnerships, or any
member or partner of any of the foregoing, not being assigned as contemplated by the
Master Assignment Agreement and/or the New Swap Agreement; |
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n. | Any equity interests in any Centerline Global Entity, Centerline Controlled
Entity or an Affiliate thereof as applicable not being assigned as contemplated by the
Master Assignment Agreement and/or the New Swap Agreement; |
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o. | Any due and unpaid outstanding liabilities of the Guaranteed Partnerships,
Guaranteed Funds and/or Guaranteed Local Partnerships, or any member or partner of any
of the foregoing, to any Centerline Global Entity, Centerline Controlled Entity or any
third party relating to any period on or before the date hereof; |
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p. | Any True-Up Payments calculation prior to the date hereof not being performed
in accordance with the Organizational Documents of the Guaranteed Partnerships; |
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q. | Any claim by or liability to investors in the Guaranteed Partnerships against
the Guaranteed Funds, the Guaranteed Fund GPs or any Centerline Controlled Entity that
any True-Up Payments calculation prior the date hereof was not performed in accordance
with the Organizational Documents of the Guaranteed Partnerships; |
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r. | Any claim or liability resulting from consent not being obtained with respect
to any action taken by any general partner or manager of any Guaranteed Partnerships,
Guaranteed Fund and/or Guaranteed Local Partnerships on or before the date hereof; |
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s. | Any negative financial impact to the Guaranteed Partnerships, the Guaranteed
Funds and/or the Guaranteed Local Partnerships resulting from units at any of the
Properties having been taken out of service due casualty, fire or similar loss on or
before the date hereof; |
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t. | Any claim or liability resulting from actions taken by CMC or any Centerline
Controlled Entity under any Bond Transaction on or before the date hereof relating to,
among other things, debt forbearances, default waivers and/or stabilization extensions; |
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u. | Any claim against or liability to the Properties, the Local General Partners,
the Guaranteed Funds, the Guaranteed Local Partnerships or MLCS resulting from any
pending or threatened litigation existing on the date hereof relating to any of the
foregoing; |
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v. | Any claim against or liability to the Properties, the Local General Partners,
the Guaranteed Funds, the Guaranteed Local Partnerships or MLCS resulting from any
environmental condition existing on the date hereof at the Properties; |
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w. | Any claim against or liability to the Properties, the Local General Partners,
the Guaranteed Funds, the Guaranteed Local Partnerships or MLCS, relating to any period
on or before the date hereof, resulting from the expiration of any Section 8 Housing
Assistance Payment Contract at the Properties; |
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x. | Any non-compliance with any subsidy or financing program of any state that
provides direct or indirect assistance to any Property relating to any period on or
before the date hereof, |
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y. | Any adverse financial impact to the capital accounts of any partner or member
in any Local General Partners, Guaranteed Fund and/or the Guaranteed Local Partnerships
relating to any period on or before the date hereof; |
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z. | Any claim or liability relating to insufficient reserves on the part of the
Guaranteed Partnerships, the Guaranteed Funds and/or the Guaranteed Local Partnerships
existing on the date hereof; |
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aa. | Non-compliance under any federal tax laws or regulations relating to any period
on or before the date hereof with respect to any bond financing applicable to any of
the Properties; |
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bb. | Any negative financial impact to the Guaranteed Partnerships, the Guaranteed
Funds and/or the Guaranteed Local Partnerships resulting from other subsidies providing
assistance directly or indirectly to the Properties existing on the date hereof; |
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cc. | Any bankruptcy of any Centerline Global Entity or Centerline Controlled Entity
that results in an adverse financial impact to any General Partnership, Guaranteed Fund
and/or Guaranteed Local Partnership, or any partner or member of any of the foregoing;
and |
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dd. | Any of the facts or circumstances listed on Exhibit A hereto; |
provided, however, Guarantor shall only be liable to the extent any such Loss (i) relates to one of
the Properties listed on Exhibit B hereto and either Guarantor had knowledge of applicable facts or
circumstances or a prudent asset manager exercising appropriate care and due diligence should have
had knowledge of the applicable facts or circumstances, in each such case as of the date hereof,
(ii) relates to any Property other than those listed on Exhibit B; provided, however, Guarantor
shall not be liable for any Loss for which it can show it had no knowledge and with the care and
due diligence of a prudent asset manager would not have known and the facts or circumstances giving
rise to such Loss, and (iii) any such Losses relate to facts and circumstances in 2(l), (m) and (n)
regardless of who controls the Property.
3. Except with respect to the Ongoing Guarantee Liabilities set forth in Section 2 of this
Reaffirmation, MLCS agrees that the Guarantor shall be released from its obligations under the
Guarantee on the date hereof.
4. Guarantor hereby acknowledges and agrees that MLCS is relying upon this Reaffirmation in
conjunction with the execution of the Transaction Assignment Agreement and the New Swap Agreement.
The obligations of the Guarantor hereunder are only with respect to any Loss arising by reason of
the obligations under the Confirmations to the Existing Swap Agreements and that Guarantor shall
have no obligation to post Collateral relating to any Exposure or Independent Amount pursuant to
the Collateral Support Annex to the Existing Swap Agreement or otherwise.
5. Guarantor hereby represents and warrants to MLCS that it has no defenses to the enforcement
of any rights or remedies available to MLCS under the Existing Swap Agreement
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and that it has no rights of offset or other claims against MLCS with respect to the Existing
Swap Agreement or enforcement of the rights and remedies under the Existing Swap Agreement.
6. Guarantor acknowledges receipt and approval of the Transaction Assignment Agreement and the
New Swap Agreement and further agrees to their acceptance and consents to the terms thereof.
7. Guarantor hereby agrees to fund up to $167,000 per month in debt service shortfalls
relating to the Bond financing at the Properties until the earlier of January 12, 2012 or receipt
of evidence satisfactory to MLCS pursuant to Paragraph 13(m)(vi)(2)(F) of the Credit Support Annex
of the New Swap Agreement.
8. This Reaffirmation shall inure to the benefit of MLCS and its respective heirs, successors
and assigns.
9. This Reaffirmation shall be governed by the laws of the State of New York.
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[Signature Page to Reaffirmation of Guarantee]
IN WITNESS WHEREOF, Guarantor has duly executed this Reaffirmation under seal as of the day
and year first above written.
GUARANTOR CENTERLINE HOLDING COMPANY, a Delaware business trust |
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By: | /s/ Marc D. Schnitzer | |||
Name: | Marc D. Schnitzer | |||
Title: | Chief Executive Officer and President | |||
Acknowledged and Consented To By:
MERRILL LYNCH CAPITAL SERVICES, INC., a Delaware corporation |
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By: | /s/ Edward H. Curland | |||
Name: | Edward H. Curland | |||
Title: | Authorized Signatory | |||