Exhibit 10.7


 


FORBEARANCE
AGREEMENT


 


THIS FORBEARANCE AGREEMENT (this “Agreement”) is made as of this 6th day of November, 2007, by
and between CMR Mortgage Fund II, LLC, a California limited liability company
and licensed California finance lender (“Borrower”) and
CMR Income Fund, LLC, a Nevada limited liability company (“Lender”).


 


RECITALS


 


This
Agreement is based upon the following recitals:


 


A.            On or about May 26, 2006,
Borrower made, executed and delivered to Lender that certain Promissory Note in
the original principal amount of Twenty-Five Million Dollars ($25,000,000.00),
as amended by that certain First Amendment to Promissory Note, dated May 31,
2007 (together, the “Promissory Note”).


 


B.            The Promissory Note is secured by,
among other things, that certain Pledge and Security Agreement dated as of May 26,
2006 by and between Borrower, Lender and Wells Fargo Foothill, Inc., a
California corporation (“Wells Fargo”)(the
“Pledge Agreement”) and that certain
Promissory Note (Commercial) dated as of May 25, 2006, in the original
principal amount of Forty Eight Million Dollars ($48,000,000), executed by
Eagle Meadows of Wheatland 187, LLC, Eagle Meadows of Wheatland 130, LLC and
Eagle Meadows of Wheatland 115, LLC payable to the order of Borrower (the “EMW Note”). The Promissory Note, the Pledge Agreement, the
EMW Note and all other documents evidencing or securing Borrower’s obligations
under the Promissory Note are hereinafter collectively referred to as the “Loan Documents”.


 


C.            The entire unpaid principal balance
of the loan secured by the Promissory Note became due and payable on August 31,
2007, and has not been paid (the “Payment Default”).
The principal, accrued interest, late fees, advances, attorneys’ fees and
costs, and all fees, costs, and interest which continue to accrue during the
term of this Agreement are hereinafter in the aggregate referred to as the “Indebtedness”.


 


D.            Borrower hereby acknowledges that the
Payment Default exists under the Loan Documents. Borrower has requested that Lender
forbear temporarily from exercising certain of Lender’s rights and remedies
under the Pledge Agreement and the other Loan Documents.


 


E.             Although Lender is under no
obligation to do so, Lender is willing to forbear from exercising its rights
and remedies against Borrower for the period set forth below on the terms and
conditions set forth in this Agreement, if and only if, Borrower complies with
the terms and conditions set forth in this Agreement, in a timely and punctual
manner.


 


NOW, THEREFORE, in consideration of the above recitals and for other good and
valuable considerations, the receipt and adequacy of which are hereby mutually
acknowledged, the parties hereto do hereby agree as follows:


 


1.             Lender’s
Forbearance. Lender agrees that Lender will forbear from demanding payment
in full of the Indebtedness and forbear from exercising its rights and remedies
under 


 

















 


Article 6 of the Pledge Agreement or any rights
or remedies provided under the other Loan Documents, as a result of the Payment
Default pending the outcome of Borrower’s discussions with Wells Fargo regarding
the repayment of the Additional Advance (as defined in the Pledge Agreement).


 


2.             No
Waiver. Lender expressly reserves any and all rights and remedies available
to it under this Agreement, the Loan Documents, or otherwise available to
Lender at law or in equity, in the event of a Default under this Agreement. No
failure to exercise, or delay by Lender in exercising, any right, power or
privilege hereunder shall preclude any other or further exercise thereof, or
the exercise of any other right, power or privilege. The rights and remedies
provided in this Agreement and the Loan Documents are cumulative and not
exclusive of each other or of any right or remedy provided by law or in equity.
Except as otherwise expressly provided in the Loan Documents, no notice to or
demand upon Borrower in any instance shall, in itself, entitle Borrower to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of Lender to any other or further action in
any circumstance without notice or demand. Borrower acknowledges and agrees
that Lender has not agreed to forbear from exercising its rights and remedies
pursuant to the Loan Documents, except as expressly and specifically set forth
in this Agreement.


 


 


[signatures on following pages]


 


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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto in manner and form sufficient to bind them, as of the day and year first
above written.


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  CMR MORTGAGE FUND II, LLC,

  
	
   

  	
  a California
  limited liability company,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  California
  Mortgage and Realty, Inc.,

  
	
   

  	
   

  	
  a Delaware
  corporation

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  
	
     

  	
   

  	
  By: 

  	
  /s/ James Gala

  
	
   

  	
   

  	
  James Gala,
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  CMR INCOME FUND, LLC,

  
	
   

  	
  a Nevada
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Henry Park

  
	
   

  	
  Name:

  	
  Henry Park

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  



 


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