SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT	Exhibit 10.1


 


THIS SECOND AMENDED
AND RESTATED FORBEARANCE AGREEMENT (this “Agreement”) is dated to be effective as the 2nd day of February, 2012
(the “Effective Date”) by and among MERRILL LYNCH CAPITAL SERVICES, INC. (“MLCS”); MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED (“MLPFS”); MUNIMAE TEI HOLDINGS, LLC (“TEI”); MUNICIPAL
MORTGAGE & EQUITY, LLC (“MME”); MMA FINANCIAL HOLDINGS, INC. (“MMA Financial”); and MUNIMAE
TE BOND SUBSIDIARY, LLC (“TE Bond Sub”).


 


WITNESSETH:


 


WHEREAS, MLCS and TEI entered
into that certain ISDA Master Agreement, dated as of December 5, 2003 (as amended, restated and/or supplemented from time
to time, the “MLCS/TEI Master Agreement”) together with the (a) Multicurrency-Cross Border Schedule to the MLCS/TEI
Master Agreement, dated as of December 5, 2003 (as amended, restated and/or supplemented from time to time, the “MLCS/TEI
Cross Border Schedule”), (b) Credit Support Annex to the Schedule to the MLCS/TEI Master Agreement, dated as of December 5,
2003 (as amended, restated and/or supplemented from time to time, the “MLCS/TEI Support Annex”), and (c) various
Confirmations to the MLCS/TEI Master Agreement (all collectively, as amended, supplemented and/or restated from time to time, including
as supplemented by the execution and delivery of additional Confirmations, and together with all other documents providing security
therefor and/or guaranteeing the same, the “MLCS/TEI Swap Agreement”);


 


WHEREAS, MLCS and MME entered
into that certain ISDA Master Agreement, dated as of April 28, 1997 (as amended, restated and/or supplemented from time to
time, the “MLCS/MME Master Agreement”), together with the (a) Multicurrency-Cross Border Schedule to the MLCS/MME
Master Agreement, dated as of April 28, 1997 (as amended, restated and/or supplemented from time to time, the “MLCS/MME
Cross Border Schedule”), (b) Credit Support Annex to the Schedule to the MLCS/MME Master Agreement, dated as of April 28,
1997 (as amended, restated and/or supplemented from time to time, the “MLCS/MME Support Annex”), and (c) various
Confirmations to the MLCS/MME Master Agreement (all collectively, as amended, supplemented and/or restated from time to time, including
as supplemented by the execution and delivery of additional Confirmations, and together with all other documents providing security
therefor and/or guaranteeing the same, the “MLCS/MME Swap Agreement”);


 


WHEREAS, MLPFS and MME
entered into that certain ISDA Master Agreement, dated as of December 9, 1998 (as amended, restated and/or supplemented from
time to time, the “MLPFS/MME Master Agreement”), together with the (a) Multicurrency-Cross Border Schedule to
the MLPFS/MME Master Agreement, dated as of December 9, 1998 (as amended, restated and/or supplemented from time to time,
the “MLPFS/MME Cross Border Schedule”), (b) Credit Support Annex to the Schedule to the MLPFS/MME Master Agreement,
dated as of December 9, 1998 (as amended, restated and/or supplemented from time to time, the “MLPFS/MME Support Annex”),
and (c) various Confirmations to the MLPFS/MME Master Agreement (all collectively, as amended, supplemented and/or restated
from time to time, including as supplemented by the execution and delivery of additional Confirmations, and together with all other
documents providing security therefor and/or guaranteeing the same, the “MLPFS/MME Swap Agreement”);


 


WHEREAS, MLCS and MMA Financial
entered into that certain ISDA Master Agreement, dated as of June 14, 2004 (as amended, restated and/or supplemented from
time to time, the “MLCS/MMA Financial Master Agreement”), together with the (a) Multicurrency-Cross Border Schedule
to the MLCS/MMA Financial Master Agreement, dated as of June 14, 2004 (as amended, restated and/or supplemented from time
to time, the “MLCS/MMA Financial Cross Border Schedule”), (b) Credit Support Annex to the Schedule to the MLCS/MMA
Financial Master Agreement, dated as of June 14, 2004 (as amended, restated and/or supplemented from time to time, the “MLCS/MMA
Financial Support Annex”), and (c) various Confirmations to the MLCS/MMA Financial Master Agreement (all collectively,
as amended, supplemented and/or restated from time to time, including as supplemented by the execution and delivery of additional
Confirmations, and together with all other documents providing security therefor and/or guaranteeing the same, the “MLCS/MMA
Financial Swap Agreement”);


 


WHEREAS, the MLCS/TEI Swap
Agreement, the MLCS/MME Swap Agreement, the MLPFS/MME Swap Agreement and the MLCS/MMA Financial Swap Agreement are sometimes referred
to collectively herein as the “Swap Agreements”;


 


WHEREAS, TEI, MME and MMA
Financial are sometimes referred to individually herein as a “MuniMae Entity” and collectively herein as the “MuniMae
Entities”;


 


WHEREAS, MLCS, MLPFS and
the MuniMae Entities entered into that certain Amended and Restated Forbearance Agreement, dated as of December 8, 2010 (the “Forbearance
Agreement”), whereby during the Forbearance Period (as defined therein) and provided certain conditions were met, MLCS and
MLPFS agreed to forbear from exercising and from directing others to exercise certain rights and remedies with respect to the Additional
Termination Event under each of the Swap Agreements (as defined therein) relating to the failure of MME to maintain the minimum
NAV set forth in each of the Swap Agreements and deliver the related quarterly NAV compliance certificates and with respect to
the Event of Default under each of the Swap Agreements relating to the failure of the MuniMae Entities to deliver upon request
certain annual audited financial statements required under the Swap Agreements;



    	 



    	 



    

 


WHEREAS, MLCS, MLPFS and
TEI entered into that certain Supplement to Guarantees and Pledge Agreements, dated as of June 9, 2010 (as amended, restated and/or
supplemented from time to time, including by virtue of that certain Amendment to Supplemental Pledge Agreement, dated as of April
27, 2011, the “Supplemental Pledge Agreement”), whereby, as additional security for the Guarantees, the Swap Agreement
Obligations and the 2005 Pledge Agreement (as each of the foregoing terms are defined in the Supplemental Pledge Agreement), TEI
granted a security interest to MLCS and MLPFS in all of TEI’s right, title and interest in and to the TE Bond Sub Membership
Interest (as such term is defined in the Supplemental Pledge Agreement);


 


WHEREAS, TEI also granted
a security interest to MLCS and MLPFS in and to the TE Bond Sub Membership Interest by virtue of the Pledge Agreements (as such
term is defined in the Supplement Pledge Agreement);


 


WHEREAS, TEI entered into
that certain Amended and Restated Operating Agreement of MuniMae TE Bond Subsidiary, LLC, a Maryland limited liability company,
dated as of May 17, 1999 (as amended, restated and/or supplemented from time to time, and including the Series Exhibits thereto
relating to the series of Preferred Shares issued by TE Bond Sub, the “TE Bond Sub Operating Agreement”), and the First
Amendment to the TE Bond Sub Operating Agreement, dated as of March 25, 2010 (the “TE Bond Sub Operating Agreement Amendment”);


 


WHEREAS, pursuant to the
TE Bond Sub Operating Agreement Amendment, TE Bond Sub agreed for the benefit of the Covered Preferred Shareholders (as such term
is defined in the TE Bond Sub Operating Agreement Amendment), among other things, not to pay or distribute “Recapitalization
Distributable Cash Flow” (as such term is defined in the TE Bond Sub Operating Agreement Amendment) except in conformance
with the terms of the TE Bond Sub Operating Agreement Amendment; and


 


WHEREAS, the parties desire
to amend and restate the Forbearance Agreement as herein provided and, during the Forbearance Period (as hereinafter defined) and
provided certain conditions specified below are met, the parties hereto have agreed that MLCS and MLPFS will continue to forbear
from exercising and from directing others to exercise certain rights and remedies with respect to the Additional Termination Event
under each of the Swap Agreements described above relating to the failure of MME to maintain the minimum NAV set forth in each
of such Swap Agreements and to deliver the related quarterly NAV compliance certificates (the “Subject Event of Default”);


 


NOW, THEREFORE, for and
in consideration of the foregoing premises, and the mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:


 


Section 1. Representations
and Warranties. To induce MLCS and MLPFS to enter into this Agreement, each of the MuniMae
Entities represents and warrants, and TE Bond Sub represents and warrants as set forth in subsections (c) through (f) and (i) below,
that:


 


(a)          MME
has failed to maintain a NAV of not less than $475,000,000 as required by each of the Swap Agreements and has failed to deliver
the related quarterly NAV compliance certificates.


 


(b)
        It is an Additional Termination Event under each of the Swap Agreements for MME
to fail to maintain a NAV of not less than $475,000,000 and to fail to deliver the related quarterly NAV compliance certificates.


 


(c)
        It is a limited liability company or corporation duly formed, validly existing
and in good standing under the laws of the state of its organization or incorporation and is authorized to transact business as
contemplated by each of the Swap Agreements.


 


(d)
       It is duly authorized to execute and deliver this Agreement, and the execution and delivery
hereof, and the performance of its obligations hereunder, do not and will not violate its limited liability company operating agreement
or by-laws or applicable organizational documents, and do not and will not constitute a breach or default under any other agreement
to which it is a party or by which it is bound.


 


(e)
       It has duly executed and delivered this Agreement and that this Agreement constitutes
a valid and binding obligation enforceable in accordance with its terms, except as such enforceability may be limited by the application
of bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally and general
principles of equity.



    	 



    	 



    

 


(f)
       It has freely and voluntarily agreed to the terms, provisions and undertakings set forth
in this Agreement and is entering into this Agreement freely and voluntarily with the advice of legal counsel of its own choosing.


 


(g)
       It has no defenses, counterclaims or offsets with respect to the Subject Event of Default
or otherwise under the Swap Agreements.


 


(h)
       Each of the Guarantees, the Pledge Agreements and the Supplemental Pledge Agreement are
in full force and effect, are hereby ratified and confirmed in all particulars and no default or breach has occurred thereunder
on the part of the applicable MuniMae Entity. Each of the Swap Agreements is in full force and effect and is hereby ratified and
confirmed in all particulars, except as may be expressly modified hereby and, other than with respect to the Subject Event of Default,
no Event of Default in respect of which a MuniMae Entity is Defaulting Party or Termination Event in respect of which a MuniMae
Entity is an Affected Party has occurred thereunder.


 


(i)        The
Restricted Payments Test (as such term is defined in the TE Bond Sub Operating Agreement Amendment) has been satisfied and, by
the terms of the TE Bond Sub Operating Agreement, TE Bond Sub is authorized to make Restricted Payments in excess of $11,000,000
and still be in compliance with the Restricted Payments Test based on TE Bond Sub’s December 31, 2011 financial statements.


 


Section 2. Agreement
to Forbear. From and after the Effective Date, and as long as each and every one of the
Forbearance Conditions (as hereinafter defined) is and remains satisfied with respect to the Subject Event of Default, each of
MLCS and MLPFS agrees that during the Forbearance Period (as hereinafter defined) it will not exercise or direct others to exercise
any default or other remedy available to it under the Swap Agreements as a result of the Subject Event of Default. As used herein,
the term “Forbearance Period” shall mean the period from and after the Effective Date and through and including the
earlier of (a) the 30th day of June, 2013 or (b) the date on which the Forbearance Release Terms (as
defined in Section 26 hereof) are satisfied. 


 


Section 3. Forbearance
Conditions. The continued satisfaction of each and every one of the following conditions
(collectively, the “Forbearance Conditions”) shall be a condition to the agreement of MLCS and MLPFS to stand by and
forbear as set forth in Section 2 hereof:


 


(a)         Each
of the MuniMae Entities and TE Bond Sub shall duly and punctually observe, perform and discharge each and every obligation and
covenant on its part to be performed under this Agreement.


 


(b)         From
and after the Effective Date, there shall occur or exist no breach, Event of Default in respect of a MuniMae Entity or any Termination
Event in respect of which a MuniMae Entity is an Affected Party under any of the Swap Agreements (taking into consideration all
applicable notice requirements and cure periods provided for in the Swap Agreements), other than the Subject Event of Default.


 


(c)         The
TE Bond Sub Operating Agreement and the TE Bond Sub Operating Agreement Amendment shall be complied with in all particulars (taking
into consideration all applicable notice requirements and cure periods provided for in such documents).


 


(d)         Having
achieved the Recapitalization described in the TE Bond Sub Operating Agreement Amendment, a portion of each quarterly distribution
of Distributable Cash Flow (as such term is defined in the TE Bond Sub Operating Agreement Amendment) authorized to be made by
TE Bond Sub to its Common Shareholder, beginning with the distribution for the fourth quarter of 2011 and continuing until the
end of the Forbearance Period, shall be transferred on such quarterly distribution date by TE Bond Sub at the direction of TEI
to the collateral account established under the MLCS/TEI Swap Agreement (the “Pledge Account”) and be used by TEI from
time to time to purchase the outstanding principal amount of the Demand Notes (as defined in Section 26 hereof) or post collateral
for the Interest Rate Swap Exposure (as defined below) of the MuniMae Entities (in addition to any scheduled reduction of Interest
Rate Swap Exposure or other reduction of such Interest Rate Swap Exposure) in the following minimum amounts and by the following
outside dates:


 


(i)         $3,120,000
of the distribution for the fourth quarter of 2011 shall be used to purchase the Barkley Place Demand Note at par and the balance
of such amount shall be posted as collateral for Interest Rate Swap Exposure.


 


(ii)         $3,120,000
of the April 2012 distribution shall be posted as collateral for Interest Rate Swap Exposure.



    	 



    	 



    

 


(iii)         $3,120,000
of the July 2012 distribution shall be posted as collateral for Interest Rate Swap Exposure.


 


(iv)         $3,120,000
of the October 2012 distribution shall be posted as collateral for Interest Rate Swap Exposure.


 


(v)         $3,120,000
of the January 2013 distribution shall be used to purchase a portion of the remaining Demand Notes at par.


   


(vi)        $2,800,000
of the April 2013 distribution shall be used to purchase the remaining Demand Notes at par and $320,000 shall be posted as collateral
for Interest Rate Swap Exposure.


 


(e)  
       The MuniMae Entities shall
post additional collateral from time to time, including without limitation from amounts relating to quarterly distributions of
Distributable Cash Flow, to the extent the aggregate Interest Rate Swap Exposure exceeds certain limits during certain periods
as follows:


 


	 	(i)	From one day after the date TE Bond Sub makes its distribution of Distributable Cash Flow to TEI for the fourth quarter of 2011 through April 30, 2012:  $14,200,000.
	 	 	 
	 	(ii)	From May 1, 2012 through July 31, 2012:  $10,200,000.
	 	 	 
	 	(iii)	From August 1, 2012 through October 31, 2012:  $6,500,000.
	 	 	 
	 	(iv)	From November 1, 2012 through January 31, 2013:  $2,600,000.
	 	 	 
	 	(v)	From February 1, 2013 through April 30, 2013:  $2,400,000.
	 	 	 
	 	(vi)	From May 1, 2013 through June 29, 2013:  $1,900,000.
	 	 	 
	 	(vii)	From and after June 30, 2013:  $0.


 


“Interest
Rate Swap Exposure” shall mean Exposure under the Transactions listed in Exhibit “A” attached hereto,
which for the avoidance of doubt shall be without reference to the pledge of the TE Bond Sub Membership Interest. Collateral posted
towards Interest Rate Swap Exposure under one or more of the Swap Agreements alternatively may be used to terminate one or more
of the Transactions listed on Exhibit “A” by the MuniMae Entities in accordance with the terms of the applicable Swap
Agreement.


 


(f)         The
MuniMae Entities may acquire Demand Notes and/or post collateral relating to any Interest Rate Swap Exposure in advance of the
scheduled payments set forth in subsection (d) above and will receive a dollar for dollar credit against the related subsequent
payment obligations. The MuniMae Entities shall have the right to select the Swap Agreements with respect to which Interest Rate
Swap Exposure is required to be collateralized as contemplated by this Section 3.


 


(g)         TEI
shall not permit TE Bond Sub to declare or make common equity distributions exceeding Distributable Cash Flow without the prior
written consent of MLCS and MLPFS. Any Restricted Payments which are permitted under the TE Bond Sub Operating Agreement or the
TE Bond Sub Operating Agreement Amendment shall require the prior written consent of MLCS and MLPFS. MLCS and MLPFS shall consent
to Restricted Payments to be used by TEI to acquire any Series of Preferred Shares of TE Bond Sub provided such shares will be
contributed to TE Bond Sub as an equity contribution. MLCS and MLPFS hereby consent for up to $5,000,000 of Restricted Payments
to be used to acquire any MMA Financial Subordinate Debentures at price not to exceed 25% of par. MLCS and MLPFS hereby consent
to Restricted Payments by TE Bond Sub to TEI to reimburse TEI for any prior purchase of any Series of Preferred Shares or MMA Financial
Subordinate Debentures made with funds from MuniMae Entities other than TE Bond Sub and not subject to the terms hereof, provided
such purchase was approved in writing, in advance by MLCS and MLPFS.


 


(h)         The
MuniMae Entities shall deliver, upon request by MLCS and MLPFS, any and all financial statements required under the Swap Agreements
if, and to the extent, the information is disclosed in any 10-Q, 10-K or 8-K reports filed with the Securities and Exchange Commission
by MME and, in addition, management-prepared projections or other reports of cash flow prepared for the use of MME’s management.



    	 



    	 



    

 


Section 4. Events
of Default. If at any time prior to the end of the Forbearance Period, one or more of
the Forbearance Conditions are not satisfied (taking into consideration all applicable notice requirements and cure periods provided
for in the Swap Agreements), each of MLCS and MLPFS may in its discretion declare an Event of Default under or terminate the Swap
Agreements (or any of them) and may terminate this Agreement by written notice thereof to the MuniMae Entities, whereupon all rights,
options and obligations of the parties under this Agreement shall automatically cease to be of any further force or effect, and
each of MLCS and MLPFS may (subject to the provisions of the Swap Agreements) pursue any rights or remedies it may have against
the MuniMae Entities as provided in the Swap Agreements (or any of them) with respect to any Events of Default and/or Termination
Events, as applicable, which may then exist under such documents, including, without limitation, with respect to the Subject Event
of Default.


 


Section 5. Relationship
of Parties. For the avoidance of doubt, except as specifically set forth herein, nothing
in this Agreement shall be construed to alter the TE Bond Sub Operating Agreement, the TE Bond Sub Operating Agreement Amendment
or the existing relationships between MLCS, MLPFS and the MuniMae Entities set forth in the Swap Agreements. This Agreement is
not intended, nor shall it operate or be construed, to create a partnership or joint venture relationship between or among any
of the parties hereto.


 


Section 6. Entire
Agreement; Modification of Agreement. This Agreement and the Swap Agreements constitute
the entire understanding of the parties to each such document with respect to the subject matter hereof and thereof. All prior
dealings and promises with respect to the forbearance granted herein are merged into this Agreement. This Agreement may not be
modified, altered or amended except by an agreement in writing signed by each party hereto.


 


Section 7. Non-Waiver
and Non-Cure of Defaults. Neither the terms of this Agreement, nor the forbearance granted
hereunder, nor the continued forbearance in accordance with this Agreement, shall operate or be construed as a waiver of, consent
to, or an acknowledgment of a cure of, the Subject Event of Default. Each of the MuniMae Entities agrees, and TE Bond Sub acknowledges,
that neither the Subject Event of Default, nor any other breach, default or event of default under the Swap Agreements, shall be
deemed to have been waived, released or cured by virtue of the agreement to forbear with respect to the Subject Event of Default
pursuant to the terms hereof or the execution of this Agreement by MLCS and MLPFS. Nothing contained herein is intended, nor shall
it be deemed, to waive or limit in any manner the right of MLCS or MLPFS to call for additional collateral at any time or from
time to time pursuant to any of the Swap Agreements.


 


Section 8. No
Novation. This Agreement is not intended to be, nor shall it be construed to create, a
novation or an accord and satisfaction, and except as otherwise expressly stated or modified herein, the Swap Agreements, including
all related guaranties and indemnities, shall remain in full force and effect, and are hereby ratified and confirmed in all particulars.
The parties agree that the terms of the Swap Agreements shall be strictly adhered to on and after the date hereof.


 


Section 9. Notices.
All notices and other communications required or contemplated hereunder shall be (a) in writing, (b) promptly forwarded
to all other parties to this Agreement upon receipt by any other such party, (c) deemed to have been given (i) upon personal
delivery, (ii) one (1) Business Day (as defined in the Swap Agreements) after such notice is sent by a reputable overnight
courier service, (iii) three (3) days after mailing by United States certified or registered mail, return receipt requested
or (d) upon receipt of a facsimile or electronic mail transmission to be promptly confirmed and followed by United States
mail, in each case with (as applicable) postage, courier or delivery charges prepaid and addressed as follows:


 


	 	If to the MuniMae Entities	 
	 	and TE Bond Sub:	621 East Pratt Street
	 	 	Suite 600
	 	 	Baltimore, MD  21202
	 	 	Attention:  Gary Mentesana
	 	 	Telephone: 	(443) 263-2977
	 	 	Facsimile: 	(410) 727-5387
	 	 	 
	 	With simultaneous copies to:	Gallagher Evelius & Jones LLP
	 	 	218 North Charles Street
	 	 	Suite 400
	 	 	Baltimore, MD  21201
	 	 	Attention:	Philip F. Diamond, Esq.
	 	 	Telephone:	(410) 347 1350
	 	 	Facsimile:	(410) 468 2786


 



    	 



    	 



    

 


	 	If to MLCS and MLPFS:        One Bryant Park
	 	 	12th Floor
	 	 	New York, NY 10036
	 	 	Attention: 	Daniel Nussbaum
	 	 	Telephone: 	(646) 743-1377
	 	 	Facsimile: 	(212) 449-9856
	 	 	 	 
	 	With simultaneous copies to:	Kutak Rock LLP
	 	 	Suite 2100
	 	 	225 Peachtree Street, N.E.
	 	 	Atlanta, GA  30303
	 	 	Attention:	David A. Nix, Esq.
	 	 	Telephone:	(404) 222-4600
	 	 	Facsimile:	(404) 222-4654


 


Section 10. Construction
of Ambiguities. Each party hereto and its counsel have reviewed and revised (or requested
revisions of) this Agreement and have participated in the drafting hereof; accordingly, the normal rule of construction that any
ambiguities are to be resolved against the drafting party shall not be applicable in the construction and interpretation of this
Agreement or any amendments or exhibits hereto.


 


Section 11. Severability.
If any term or provision of this Agreement or an application thereof to any person or circumstance shall be invalid or unenforceable
to any extent, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision
of this Agreement shall be valid and enforceable to the fullest extent permitted by law.


 


Section 12. Rights
and Remedies Cumulative. The rights and remedies arising under and contained in this Agreement
shall be separate, distinct and cumulative, and none of them shall be in exclusion of the other. All remedies arising under or
contained in this Agreement shall be in addition to every other remedy now or hereafter existing at law or in equity or by statute,
or under the Swap Agreements. Neither any course of dealing by a party hereto nor any failure or delay on its part to exercise
any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof or the exercise of any other right or privilege.


 


Section 13. Successors
and Assigns. The covenants and obligations in this Agreement shall bind, and the benefits
and advantages hereof shall inure to, the parties hereto and their respective heirs, legal and personal representatives, executors,
administrators, successors and permitted assigns. This Agreement may not be assigned by the MuniMae Entities or TE Bond Sub without
the prior written consent of each of MLCS and MLPFS. This Agreement is assignable by each of MLCS and MLPFS to the extent the Swap
Agreements and Pledge Agreements are assignable by MLCS and MLPFS.


 


Section 14. Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which taken together
shall constitute one and the same instrument.


 


Section 15. Waiver
of Notice of Acceptance. Each of the parties hereto hereby waives notice of acceptance
of this Agreement by the other party hereto.


 


Section 16. Time
of Essence. TIME IS OF THE ESSENCE as to each of the MuniMae Entities’ and TE Bond
Sub’s observance and performance of each and every one of its agreements and undertakings contained in this Agreement.


 


Section 17. Waiver
of Jury Trial. To the maximum extent permitted by law, each of the MuniMae Entities, TE
Bond Sub, MLCS and MLPFS hereby knowingly, voluntarily and intentionally waives the right to a trial by jury in respect of any
litigation based hereon, arising out of, under or in connection with this Agreement or any of the Swap Agreements, or any course
of conduct, course of dealing, statement (whether verbal or written) or action of either party or any exercise by any party of
their respective rights under the Swap Agreements (including, without limitation, any action to rescind or cancel this Agreement,
and any claim or defense asserting that this Agreement was fraudulently induced or is otherwise void or voidable). This waiver
is a material inducement for each of the MuniMae Entities, TE Bond Sub, MLCS and MLPFS to enter this Agreement and the execution
and delivery of this Agreement by each of the MuniMae Entities, TE Bond Sub, MLCS and MLPFS is made in reliance upon such waiver.
Each of the MuniMae Entities, TE Bond Sub, MLCS and MLPFS further warrant and represent that such waiver has been knowingly and
voluntarily made by each party hereto, following consultation with their respective legal counsel.



    	 



    	 



    

 


Section 18. Voluntary
Waiver of Automatic Stay. (a) TE BOND SUB HEREBY AGREES THAT IN THE EVENT TE BOND SUB COMMENCES A CASE UNDER THE UNITED STATES
BANKRUPTCY CODE (11 U.S.C. § 101, ET SEQ., AS AMENDED, THE “BANKRUPTCY CODE”), OR IF A CASE IS COMMENCED
AGAINST TE BOND SUB THEREUNDER, THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, SHALL THEREUPON BE ENTITLED, AND TE BOND SUB SHALL CONSENT,
SUBJECT TO THE APPROVAL OF THE BANKRUPTCY COURT, IF REQUIRED, TO RELIEF FROM ANY AUTOMATIC STAY IMPOSED BY SECTION 362 OF
THE BANKRUPTCY CODE, OR OTHERWISE, ON OR AGAINST THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO THE TRUSTEE, MLCS OR MLPFS, AS
APPLICABLE, UNDER THIS AGREEMENT AND UNDER APPLICABLE LAW, TO ALLOW THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, TO PURSUE SUCH REMEDIES.
TE BOND SUB FURTHER AGREES THAT IT SHALL, IMMEDIATELY UPON THE REQUEST OF THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, SUBJECT TO
THE APPROVAL OF THE BANKRUPTCY COURT, IF REQUIRED, TAKE ALL ACTIONS NECESSARY TO AFFORD SUCH RELIEF TO THE TRUSTEE, MLCS OR MLPFS,
AS APPLICABLE, INCLUDING WITHOUT LIMITATION, TO EXECUTE SUCH DOCUMENTS AND TO FILE SUCH PAPERS AS THE TRUSTEE, MLCS OR MLPFS, AS
APPLICABLE, DEEMS NECESSARY AND APPROPRIATE TO OBTAIN SUCH RELIEF. TE BOND SUB FURTHER AGREES NOT TO OPPOSE ANY MOTION OF THE TRUSTEE,
MLCS OR MLPFS, AS APPLICABLE, SEEKING RELIEF FROM ANY AUTOMATIC STAY WITH RESPECT TO MLCS OR MLPFS.


 


(b)         EACH
MUNIMAE ENTITY HEREBY ACKNOWLEDGES AND AGREES THAT EACH ISDA MASTER AGREEMENT AND THE TRANSACTIONS THEREUNDER CONSTITUTE A “SWAP
AGREEMENT” AS DEFINED IN SECTION 101(53B) OF THE BANKRUPTCY CODE AND AGREES THAT IN THE EVENT A MUNIMAE ENTITY COMMENCES
A CASE UNDER THE BANKRUPTCY CODE, OR IF A CASE IS COMMENCED AGAINST A MUNIMAE ENTITY THEREUNDER, THE TRUSTEE, MLCS OR MLPFS, AS
APPLICABLE, SHALL THEREUPON NOT BE SUBJECT TO ANY AUTOMATIC STAY IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE, OR OTHERWISE,
ON OR AGAINST THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, UNDER THIS AGREEMENT, EACH
ISDA MASTER AGREEMENT AND UNDER APPLICABLE LAW, TO ALLOW THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, TO PURSUE SUCH REMEDIES. EACH
MUNIMAE ENTITY FURTHER AGREES THAT IT SHALL, IMMEDIATELY UPON THE REQUEST OF THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, TAKE ALL
ACTIONS NECESSARY TO AFFORD SUCH RELIEF TO THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, INCLUDING WITHOUT LIMITATION, TO EXECUTE
SUCH DOCUMENTS AND TO FILE SUCH PAPERS AS THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, DEEMS NECESSARY AND APPROPRIATE TO OBTAIN
SUCH RELIEF. EACH MUNIMAE ENTITY FURTHER AGREES NOT TO OPPOSE ANY MOTION OF THE TRUSTEE, MLCS OR MLPFS, AS APPLICABLE, SEEKING
RELIEF FROM ANY AUTOMATIC STAY WITH RESPECT TO MLCS OR MLPFS.


 


Section 19. Governing
Law. This Agreement shall be governed exclusively by, and construed in accordance with,
the applicable laws of the State of New York without regard to conflict of laws principles.


 


Section 20. Section
Headings and References. The headings or titles of the several Sections hereof shall be
solely for convenience of reference and shall not affect the meaning, construction or effect of this Agreement.


 


Section 21. Limited
Liability. The liability of the MuniMae Entities under this Agreement shall be in the
same manner and degree as provided in the Swap Agreements.


 


Section 22. Definitions.
Any capitalized term used in this Agreement and not defined herein shall have the meaning ascribed to such term in the Swap Agreements,
the Supplemental Pledge Agreement, the TE Bond Sub Operating Agreement and/or the TE Bond Sub Operating Agreement, as applicable.
All references to any prior version or amendment and restatement of this Agreement in any of the Swap Agreements, the Guarantees,
the Pledge Agreements, the Supplemental Pledge Agreement or any of the documents referred to therein shall be deemed to refer to
this Agreement.


Section 23. Release.
Each of the MuniMae Entities and TE Bond Sub releases each of MLCS and MLPFS from, agrees each of MLCS and MLPFS shall not
be liable for, and agrees to hold each of MLCS and MLPFS harmless against, any loss or damage that may arise from, or that relate
directly or indirectly to, actions contemplated by or taken in furtherance of the implementation of this Agreement, except to the
extent such loss or damage resulted from the gross negligence or willful misconduct of MLCS or MLPFS.


 


Section 24. Miscellaneous.
For the avoidance of doubt, the parties hereto hereby acknowledge and agree that a default, event of default and/or Event of Default
(taking into consideration all applicable notice and cure periods) under this Agreement shall constitute an Event of Default under
the Supplemental Pledge Agreement.


  


Section 25. Account
Control Agreement. For as long as the Common Shares are pledged to MLCS or MLPFS and subject to that certain side letter of
TE Bond Sub to MLCS dated September 23, 2011, TE Bond Sub shall cause all of its revenues to be deposited in the depository account
established and governed by that certain Deposit Account Control Agreement, dated as of September 23, 2011, by and among TE Bond
Sub, MLCS and Wells Fargo Bank, N.A.



    	 



    	 



    

 


Section 26. Merrill Agreements. (a)
This Agreement shall terminate upon the MuniMae Entities satisfying the following conditions (collectively, the “Forbearance
Release Terms”):


 


(i)          All
Demand Notes are purchased by one or more of the MuniMae Entities;


 


(ii)         All
Interest Rate Swap Exposure is collateralized with Eligible Collateral, which for the avoidance of doubt shall be without reference
to the pledge of the TE Bond Sub Membership Interest;


 


(iii)        All
other Exposure under the Swap Agreements is fully collateralized, which for the avoidance of doubt shall be without reference to
the pledge of the TE Bond Sub Membership Interest, and the Letter of Credit No. WCERS 2005-01 posted under the MLCS/MMA Financial
Swap Agreement is replaced with Eligible Collateral or a letter of credit in form and substance acceptable to MLCS in its sole
and absolute discretion;


 


(iv)        TE
Bond Sub maintains Total Common Equity of not less than $200,000,000 calculated by MLCS and MLPFS in accordance with the methodology
described in Exhibit “B” attached hereto;


 


(v)         TEI
maintains a NAV of not less than $225,000,000 and MLCS and MLPFS are delivered related NAV compliance certificates as described
in Exhibit “C” attached hereto; and


 


(vi)         At
the time the Forbearance Release Terms described in subsections (i) through (v) above are satisfied, no breach, Event of Default
in respect of a MuniMae Entity or any Termination Event in respect of which a MuniMae Entity is an Affected Party exists under
any of the Swap Agreements (taking into consideration all applicable notice requirements and cure periods).


 


Upon satisfaction
of the Forbearance Release Terms, MLCS and MLPFS shall amend each of the Swap Agreements to reflect the NAV requirement in each
Cross Border Schedule being applicable to TEI consistent with subsection (v) above rather than MME.


 


(b)         Upon
the purchase of the Barkley Place Demand Note from MLPFS, so long as the MuniMae Entities are in compliance with the terms of this
Agreement, MLPFS shall release the $4,200,000 Letter of Credit of the General Retirement System of the City of Detroit securing
the Demand Notes and MLCS shall release the $5,500,000 Letter of Credit of the Police and Fire Retirement System of the City of
Detroit securing the 2005 Pledge Agreement (as such term is defined in the Supplemental Pledge Agreement). The term “Demand
Notes” shall mean collectively that certain Consolidated, Amended and Restated Promissory Note, dated March 26, 2009, in
the original principal amount of $649,460 made by SCA Meadows Limited Partnership in favor of MME (and endorsed to and held by
MLPFS); that certain Consolidated, Amended and Restated Promissory Note, dated March 26, 2009, in the original principal amount
of $2,376,211 made by Barkley Place II Limited Partnership in favor of MME (and endorsed to and held by MLPFS); that certain Consolidated,
Amended and Restated Promissory Note, dated March 26, 1999, in the original principal amount of $2,062,415 made by Newport Village
Limited Partnership in favor of MME (and endorsed to and held by MLFPS); and that certain Consolidated, Amended and Restated Promissory
Note, dated as of December 30, 1998, in the original principal amount of $3,195,658 made by Montclair Limited Partnership in favor
of MME (and endorsed to and held by MLPFS).


 


(c)        With
respect to Transaction No. 011 (Administrative No. 11MU00214) and Transaction No. 012 (Administrative No. 11MU00215) entered into
under the MLCS/TEI Swap Agreement, and provided Transaction No. 011 is otherwise adequately collateralized, MLCS agrees to release
collateral posted with respect to such Transaction Nos. 011 and 012 in an amount up to $712,000 in order to permit TEI to purchase
the Bonds described in Transaction No. 012 for the par amount thereof and terminate such Transaction No. 012, with the balance
of such amount being applied to the Interest Rate Swap Exposure posting obligation described in Section 3(d)(i) hereof.


 


[Remainder of page intentionally
left blank]


 



    	 



    	 



    

IN WITNESS WHEREOF, each
of the MuniMae Entities and TE Bond Sub has caused this Second Amended and Restated Forbearance Agreement to be executed by its
duly authorized officer and each of MLCS and MLPFS has caused this Second Amended and Restated Forbearance Agreement to be executed
by its duly authorized officer, all as of the date first above written.


 


	 	MERRILL LYNCH CAPITAL SERVICES, INC.
	 	 
	 	By: 	/s/   Daniel Nussbaum	 
	 	 
	 	Name: Daniel Nussbaum
	 	 
	 	Title: Authorized Signatory


 


[Signatures continued on following page]



    	 



    	 



    

 


[Signature Page to Second Amended and
Restated Forbearance Agreement]


 


	 	MERRILL LYNCH, PIERCE, FENNER

 & SMITH INCORPORATED
	 	 
	 	By: 	/s/   Daniel Nussbaum	 
	 	 
	 	Name: Daniel Nussbaum
	 	 
	 	Title: Authorized Signatory


 


[Signatures continued on following page]


 






    	 



    	 



    

















   


[Signature Page to Second Amended and
Restated Forbearance Agreement]


 


	 	Municipal
Mortgage & Equity, LLC, a

 Delaware limited liability company
	 	 
	 	By:	/s/ Gary A. Mentesana
	 	Name:	Gary A. Mentesana
	 	Title:	Executive Vice President
	 	 
	 	MMA FINANCIAL HOLDINGS, INC., a Florida

 corporation
	 	 	 
	 	By:	/s/ Gary A. Mentesana
	 	Name:	Gary A. Mentesana
	 	Title:	Executive Vice President
	 	 
	 	MUNIMAE TEI HOLDINGS, LLC, a Maryland limited

 liability company
	 	 	 
	 	By:	/s/ Gary A. Mentesana
	 	Name:	Gary A. Mentesana
	 	Title:	Executive Vice President
	 	 
	 	MUNIMAE TE BOND SUBSIDIARY, LLC
	 	a Maryland limited liability company
	 	 	 
	 	By:	/s/ Gary A. Mentesana
	 	Name:	Gary A. Mentesana
	 	Title:	Executive Vice President



    	 



    	 



    

 


EXHIBIT A


 


INTEREST RATE SWAP TRANSACTIONS


   


	Admin Number	 	Counterparty	 	Maturity Date	 	Notional Amount
	 	 	 	 	 	 	 
	07MU03517	 	Municipal Mortgage & Equity	 	9/14/2012	 	10,000,000
	 	 	 	 	 	 	 
	07MU00977	 	Municipal Mortgage & Equity	 	10/1/2012	 	3,750,000
	 	 	 	 	 	 	 
	06MU02276	 	Municipal Mortgage & Equity	 	8/21/2013	 	100,000,000
	 	 	 	 	 	 	 
	06MU03765	 	Municipal Mortgage & Equity	 	8/21/2013	 	100,000,000
	 	 	 	 	 	 	 
	06MU04461	 	Municipal Mortgage & Equity	 	12/28/2024	 	30,000,000
	 	 	 	 	 	 	 
	06MU00535	 	MMA Financial Holdings	 	3/2/2016	 	50,000,000


 



    	 



    	 



    

EXHIBIT B


 


TE BOND SUB TOTAL COMMON EQUITY METHODOLOGY


 


“Adjusted Assets”
means the sum of cash and cash equivalents, restricted cash, tax-exempt bonds available-for-sale and Interest receivable as set
forth in the MuniMae TE Bond Subsidiary, LLC and Subsidiary (“TE Bond Sub”) Consolidated Balance Sheets included in
the TE Bond Sub Consolidated Financial Statements for the applicable period (the “TE Bond Sub Financial Statements”).


 


“Adjusted Liabilities”
means the sum of all liabilities as set forth in the TE Bond Sub Financial Statements, excluding mandatorily redeemable preferred
shares, net of discount.


 


“Preferred Shares
at Liquidation Preference” means the amount of aggregate liquidation preference of TE Bond Sub Mandatorily Redeemable Preferred
Shares and TE Bond Sub Perpetual Preferred Shares, as of the reporting date.


 


“Total Common Equity”
means the sum of (i) Adjusted Assets, minus (ii) the sum of (A) Adjusted Liabilities plus (B) Preferred Shares at Liquidation
Preference.


 



    	 



    	 



    

EXHIBIT C


 


TEI NAV COMPLIANCE CERTIFICATE


 


With respect to
each of the Swap Agreements, MLCS and MLPFS are furnished, within 45 days after the end of each of the first three calendar quarters,
and within 90 days after the end of the last calendar quarter, a compliance certificate (the “Compliance Certificate”)
duly and properly executed by, as applicable, MME, TEI or MMA Financial (i) certifying that as of the date thereof and at
all times since the date of the previous Compliance Certificate of MME, TEI or MMA Financial, as applicable, TEI has and continues
to have NAV of not less than the amount specified in Section 26 of this Agreement and (ii) setting forth the calculation of
TEI’s book net worth as determined in accordance with generally accepted accounting principles on the certification date
(herein referred to as “NAV”) as of the end of such period and certifying as to the accuracy and completeness of such
calculation.