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Future Relations Agreement
Future Relations Agreement (58K)
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FUTURE RELATIONS AGREEMENT
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This FUTURE RELATIONS AGREEMENT (this "Agreement") is made as of
this 17th day of November, 2003 by and among Stephen M. Ross, Related General II
L.P., RCMP Management, Inc. and The Related Companies, L.P. (individually, a
"Contributor Party" and collectively, the "Contributor Parties"), on behalf of
themselves and their Affiliates (as hereinafter defined), and CharterMac Capital
Company, LLC, a Delaware limited liability company ("CCC").
W I T N E S S E T H:
--------------------
WHEREAS, certain of Contributor Parties (together with certain
other parties) and CCC have entered into a Contribution Agreement dated as of
December 17, 2002 (the "Contribution Agreement");
WHEREAS, pursuant to the Contribution Agreement, upon the Closing
of the transactions described in the Contribution Agreement, CCC shall own,
among other interests, 100% of the general partnership interests in Related
Capital Company ("RCC"); and
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Contribution Agreement that Contributor Parties
and CCC enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, and for other good and valuable consideration,
it is hereby agreed by and among the parties hereto as follows:
1. Defined Terms.
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(a) Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Contribution Agreement.
(b) As used herein, the following terms shall have the following
meanings:
"Affiliates" shall mean, at the time of determination:
(i) With respect to a Contributor Affiliated Party (A) a Person
which, directly or indirectly, controls, is controlled by, or is under common
control with, such Contributor Affiliated Party, where "control" means the
possession, directly or indirectly, individually or together with other entities
affiliated with a Contributor Affiliated Party of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or otherwise, and/or (B) any
Person in which Contributor Affiliated Parties, individually or as a group,
directly and/or indirectly, owns 50% or more of the Economics, which Person in
the case of this clause (B) owns Tax Credit Syndication Interests or owns or
controls directly or indirectly an entity which owns Tax Credit Syndication
Interests. For purposes of this definition, (x) CentRe Mortgage Capital Company,
LLC, Credit Re Mortgage Capital, LLC, Credit Mortgage Capital, LLC and any
successor program organized by a Contributor Affiliated Party (collectively, the
"CMC Entities") are Affiliates and (y) JMP Management, Inc., Related General of
Florida, JMP Services, Inc. and any Person controlled by Jorge M. Perez in which
a Contributor Affiliated Party is also an equity owner are not Affiliates; or
(ii) With respect to Persons other than Contributor Affiliated
Parties, an Affiliate (as defined in the Contribution Agreement).
"Agency Lender" shall mean a Person which is licensed or
authorized by Fannie Mae, Freddie Mac or FHA (collectively, the "Agencies" and
individually an "Agency") to
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originate and/or service mortgage loans for or on behalf of such entities,
including, without limitation, a Person which is a Fannie Mae Delegated
Underwriter and Servicer, a Freddie Mac Program Plus Seller/Servicer or FHA
originator, processor and servicer.
"Bond Enhancement" shall mean credit enhancement by insurance,
credit support, guarantees or otherwise with respect to tax-exempt bond
financing.
"CCC Affiliated Parties" shall mean CCC and its Affiliates.
"Contributor Affiliated Parties" and "Contributor Affiliated
Party" shall mean the Contributor Parties, Michael J. Brenner and Jeff T. Blau
and their respective Affiliates.
"Debt" shall mean amounts collected, accrued or otherwise payable
as debt payments (not including the base or coupon interest rate, except to the
extent such base or coupon interest rate (i) is in excess of a market rate or
(ii) is not serviced currently by the operating income of the property) measured
by reference to performance of the underlying properties.
"Developer's Package" shall mean the package of materials
customarily sent by a developer of Tax Credit Properties to a purchaser of Tax
Credit Syndication Interests, including, without limitation, all information
reasonably required by CCC Affiliated Parties in order to consider and issue a
Commitment to purchase and/or syndicate the Tax Credit Syndication Interests
(including but not limited to the items set forth on Exhibit A).
"Economic Tax Credit Syndication Interest" shall mean a Tax
Credit Syndication Interest in which the present value of the tax benefits with
respect to such Tax Credit Syndication Interest do not represent a majority of
the present value of the anticipated economic return (including tax benefits) to
the holder of such Tax Credit Syndication Interest.
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"Economics" shall mean the present value of all fees and other
amounts whether derived from Debt or equity which are reasonably expected to be
earned during the tax credit compliance period including, without limitation,
development fees and overhead reimbursement, general contractor fees and
overhead reimbursement, management fees, incentive fees, guarantee fees,
developer notes, profit from sale of "421(a) certificates" and interest in cash
flow and sales and refinancing proceeds.
"Equity Enhancement" shall mean either (i) a guarantee of a
specified internal rate of return from tax benefits, or (ii) a guarantee which
is broader in scope or longer in duration than those guarantees customarily
given by developers of Tax Credit Properties so that the Tax Credit Syndication
Interests may be offered for sale at an internal rate of return which is less
than the internal rate of return for Tax Credit Syndication Interests generally
available in the market for Tax Credit Syndication Interests which do not
benefit from the foregoing guarantees.
"Non-Economic Tax Credit Syndication Interest" shall mean a Tax
Credit Syndication Interest in which the present value of the tax benefits with
respect to such Tax Credit Syndication Interest does represent a majority of the
present value of the anticipated economic return (including tax benefits) to the
holder of such Tax Credit Syndication Interest.
"Tax Credit Allocation Year" shall mean a calendar year with
respect to which Housing Tax Credits are allocated by the applicable regulatory
authority.
"Tax Credit Properties" shall mean real estate developments which
have been allocated Tax Credits.
"Tax Credit Syndication Interest" shall mean (i) a Tax Credit
Property(ies) or (ii) a direct or indirect ownership interest in a partnership,
limited liability company or other entity that has been formed to provide a
pass-through of Tax Credits and tax losses from Tax
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Credit Properties including, without limitation, those which produce "421a
Certificates" or "Inclusionary Zoning Certificates" with respect to New York
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CharterMac
As referenced in this Future Relations Agreement:
CharterMac – Companies, L.P. (individually, a
"Contributor Party" and collectively, the "Contributor Parties"), on behalf of
themselves and their Affiliates (as hereinafter defined), and CharterMac Capital
Company, LLC, a Delaware limited liability company ("CCC").
W I T N E S S E T H:
--------------------
WHEREAS, certain of Contributor
_____________
"CharterMac" – forth below:
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Term Section
---- -------
"Agency" or "Agencies" 1 ("Agency Lender")
"AMAC" 5(a)
"CCC's Agent 12(k)
"CCC Contact" 7
"CharterMac" 2
"Commitment" 3(a)
"Competitive Business" 5(a)
"Contributor's Agent" 12(j)
"IRR" 3(b)(ii)
"Lowest IRR" 3(b)(i)
"
_____________
CharterMac
– the date on which a
Contributor Affiliated Party is
no longer a member of the board
of
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Section Term
------- ----
trustees of CharterMac
Notwithstanding the foregoing, if not earlier terminated, the
Term of Section 3, shall end on the date CCC gives notice to Contributor
_____________
CharterMac, – press release or otherwise publicly announces that it
is no longer economically viable to be a syndicator of Tax Credit Syndication
Interests and CharterMac, a Delaware statutory trust ("CharterMac"), and the CCC
Affiliated Parties are no longer in the business of syndicating Tax Credit
Syndication Interests.
(
_____________
"CharterMac" – announces that it
is no longer economically viable to be a syndicator of Tax Credit Syndication
Interests and CharterMac, a Delaware statutory trust ("CharterMac" ), and the CCC
Affiliated Parties are no longer in the business of syndicating Tax Credit
Syndication Interests.
(b) Acknowledgement. Contributor Parties acknowledge
_____________
dt 253573
;
CharterMac
As referenced in this Future Relations Agreement:
CharterMac – Companies, L.P. (individually, a
"Contributor Party" and collectively, the "Contributor Parties"), on behalf of
themselves and their Affiliates (as hereinafter defined), and CharterMac Capital
Company, LLC, a Delaware limited liability company ("CCC").
W I T N E S S E T H:
--------------------
WHEREAS, certain of Contributor
_____________
"CharterMac" – forth below:
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Term Section
---- -------
"Agency" or "Agencies" 1 ("Agency Lender")
"AMAC" 5(a)
"CCC's Agent 12(k)
"CCC Contact" 7
"CharterMac" 2
"Commitment" 3(a)
"Competitive Business" 5(a)
"Contributor's Agent" 12(j)
"IRR" 3(b)(ii)
"Lowest IRR" 3(b)(i)
"
_____________
CharterMac
– the date on which a
Contributor Affiliated Party is
no longer a member of the board
of
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{PAGE}
Section Term
------- ----
trustees of CharterMac
Notwithstanding the foregoing, if not earlier terminated, the
Term of Section 3, shall end on the date CCC gives notice to Contributor
_____________
CharterMac, – press release or otherwise publicly announces that it
is no longer economically viable to be a syndicator of Tax Credit Syndication
Interests and CharterMac, a Delaware statutory trust ("CharterMac"), and the CCC
Affiliated Parties are no longer in the business of syndicating Tax Credit
Syndication Interests.
(
_____________
"CharterMac" – announces that it
is no longer economically viable to be a syndicator of Tax Credit Syndication
Interests and CharterMac, a Delaware statutory trust ("CharterMac" ), and the CCC
Affiliated Parties are no longer in the business of syndicating Tax Credit
Syndication Interests.
(b) Acknowledgement. Contributor Parties acknowledge
_____________
dt 253573
;
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Fannie Mae
As referenced in this Future Relations Agreement:
Fannie Mae – Contributor Affiliated
Parties, an Affiliate (as defined in the Contribution Agreement).
"Agency Lender" shall mean a Person which is licensed or
authorized by Fannie Mae , Freddie Mac or FHA (collectively, the "Agencies" and
individually an "Agency") to
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originate and/or service mortgage loans for or
_____________
Fannie Mae – 2
{PAGE}
originate and/or service mortgage loans for or on behalf of such entities,
including, without limitation, a Person which is a Fannie Mae Delegated
Underwriter and Servicer, a Freddie Mac Program Plus Seller/Servicer or FHA
originator, processor and servicer.
"Bond Enhancement" shall mean credit
_____________
dt 252340
;
 Freddie Mac
As referenced in this Future Relations Agreement:
Freddie Mac – Parties, an Affiliate (as defined in the Contribution Agreement).
"Agency Lender" shall mean a Person which is licensed or
authorized by Fannie Mae, Freddie Mac or FHA (collectively, the "Agencies" and
individually an "Agency") to
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originate and/or service mortgage loans for or on behalf of
_____________
Freddie Mac – loans for or on behalf of such entities,
including, without limitation, a Person which is a Fannie Mae Delegated
Underwriter and Servicer, a Freddie Mac Program Plus Seller/Servicer or FHA
originator, processor and servicer.
"Bond Enhancement" shall mean credit enhancement by insurance,
credit support, guarantees or otherwise
_____________
dt 257497
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