SECOND AMENDMENT TO
MORTGAGE WAREHOUSE LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO MORTGAGE WAREHOUSE LOAN AND SECURITY AGREEMENT, dated
as of November 9, 2012 (this “Amendment”), is by and among Centerline Mortgage
Capital Inc., a Delaware corporation having its principal place of business at
100 Church Street, 15th Floor, New York, New York 10007 (“CMC”), Centerline
Mortgage Partners Inc., a Delaware corporation having its principal place of
business at 100 Church Street, 15th Floor, New York, New York 10007 (“CMP” and
together with CMC collectively referred to as the “Borrowers”), and
Manufacturers and Traders Trust Company, with offices at 25 South Charles
Street, 17th Floor, Baltimore, Maryland 21201 (the “Lender”).

 

R E C I T A L S

 

A.          The Lender and the Borrowers are parties to that certain Mortgage
Warehouse Loan and Security Agreement dated as of November 14, 2011, as amended
by the First Amendment to Mortgage Warehouse Loan and Security Agreement dated
as of October 19, 2012, and as it may be further amended, modified, supplemented
and/or restated from time to time (the “Loan Agreement”), pursuant to which the
Lender makes Advances to the Borrowers secured by the Collateral. Capitalized
terms used but not otherwise defined herein shall have the meanings set forth in
the Loan Agreement.

 

B.          The Borrowers have requested an extension of the Facility
Termination Date by one (1) year, and the Lender has agreed to such request
subject to the terms and conditions set forth in this Amendment.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the Lender and the Borrowers, the Lender and
the Borrowers agree as follows:

 

1.          Amendments.

 

(a)          Change in Defined Terms. The following definitions in the Loan
Agreement are hereby amended and restated in their entirety to read as follows:

 

“Applicable Nonusage Rate: means the sum of the Minimum Nonusage Rate plus the
Nonusage Rate Adjustment, provided that in no event shall the Applicable
Nonusage Rate be less than the Minimum Nonusage Rate or greater than the Maximum
Nonusage Rate. The Applicable Nonusage Rate shall be determined quarterly as
follows: for any calendar quarter, the Applicable Nonusage Rate shall be
calculated using the Deposit Level Average of the prior calendar quarter. For
illustration purposes only, the chart below shows what the Applicable Nonusage
Rate would be for a calendar quarter when the corresponding Deposit Level
Average of the prior calendar quarter is at the amount shown below.”

 

Deposit Level Average Applicable Nonusage Rate $15,000,000 .10% $7,500,000 .60%
0 1.10%”    

 

 

 

 

“Credit Note: means that certain Amended and Restated Daily Adjusting LIBOR
Revolving Line Note dated as of November 9, 2012 executed and delivered by the
Borrowers payable to the order of the Lender in the principal face amount of
$50,000,000, as amended, modified and/or restated from time to time.”

 

“Facility Termination Date: means the earliest of (a) November 14, 2013, or (b)
the date the Lender terminates the Commitment pursuant to Section 9.2.1,
provided that if the Facility Termination Date, as so determined, is not a
Business Day, the Facility Termination Date shall be the next succeeding
Business Day.”

 

(b)          Section 7.13 of the Loan Agreement is hereby amended and restated
in its entirety to read as follows:

 

“SECTION 7.13. Minimum Deposits.

 

To maintain average deposit balances of the Borrowers and their Affiliates held
at the Lender of not less than Fifteen Million Dollars ($15,000,000) in the
aggregate (the “Deposit Level Target”), provided that the sole remedy of the
Lender for the Borrowers’ failure to satisfy the Minimum Deposit Target shall be
an increase in the Applicable Interest Rate Spread (as defined in the Credit
Note) and the Applicable Nonusage Rate as provided herein.”

 

(c)          Interest on Advances. The outstanding principal balance of Advances
made by the Lender to the Borrowers prior to the date hereof shall bear interest
at the rate set forth in that certain Daily Adjusting LIBOR Revolving Line Note
dated November 14, 2011 and executed and delivered by the Borrowers payable to
the order of the Lender in the principal face amount of $50,000,000. The
outstanding principal balance of Advances made by the Lender to the Borrowers on
or after the date hereof shall bear interest at the rate set forth in that
certain Amended and Restated Daily Adjusting LIBOR Revolving Line Note dated
November 9, 2012 and executed and delivered by the Borrowers payable to the
order of the Lender in the principal face amount of $50,000,000.

 

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2.          Miscellaneous.

 

(a)          Condition Precedent. This Amendment shall become effective upon
completion or satisfaction of the following in the Lender’s determination:

 

(i)          The execution and delivery of this Amendment by the Borrowers and
the Lender.

 

(ii)          The execution and delivery of the Amended and Restated Daily
Adjusting LIBOR Note substantially in the form attached hereto as Exhibit A.

 

(iii)          The execution and delivery of that certain letter agreement dated
as of October 19, 2012 with respect to certain fees by the Borrowers and agreed
to and accepted by the Lender (the “Fee Letter”).

 

(iv)          The Borrowers shall have paid to the Lender the fees in
immediately available funds in the amount stated in the Fee Letter. The
Borrowers acknowledge that such fees shall be paid in addition to the Nonusage
Fee due and payable in accordance with Section 3.1 of the Loan Agreement during
the term of the Loan, including, without limitation, during the Temporary
Funding Period.

 

(v)          The Borrowers shall have delivered to the Lender the following, all
in form and substance reasonably satisfactory to the Lender: (A) a certificate
of good standing of each Borrower, dated no earlier than thirty (30) days prior
to the date of this Amendment; (B) a certificate of the Secretary of each
Borrower dated as of the date of this Amendment and certifying as to the
Certificate of Incorporation and By-Laws of each Borrower, the incumbency and
signatures of officers of each of the Borrowers executing this Amendment, the
Amended and Restated Daily Adjusting LIBOR Note or otherwise acting on behalf of
each Borrower hereunder and the resolutions authorizing the transactions
contemplated by this Amendment; and (C) a legal opinion of Nixon Peabody LLP, as
counsel to the Borrowers dated as of the date hereof, addressed to and in form
and substance reasonably satisfactory to the Lender and its counsel.

 

(vi)          The Borrowers shall have paid the Lender’s reasonable attorneys’
fees and expenses related to the preparation, negotiation and closing of this
Amendment.

 

(b)          Release of Claims. Each Borrower hereby releases, waives and
forever relinquishes all claims, demands, obligations, liabilities and causes of
action of whatever kind or nature, whether known or unknown, which they have,
may have, or might assert now or in the future against the Lender and/or the
Lender’s affiliates, participants, affiliates, officers, directors, employees,
agents, attorneys, accountants, consultants, successors and assigns, directly or
indirectly, arising out of, based upon, or in any manner connected with (i) any
transaction, event, circumstance, action, failure to act or occurrence of any
sort or type, whether known or unknown, which occurred, existed, was taken,
permitted or begun prior to the execution of this Amendment with respect to the
Obligations, the Loan Documents and/or the administration thereof or the
obligations created thereby; (ii) any discussions, commitments, negotiations,
conversations or communications with respect to the refinancing, restructuring
or collection of any obligations; or (iii) any thing or matter related to any of
the foregoing. The inclusion of this paragraph in this Amendment, and the
execution of this Amendment by the Lender, does not constitute an acknowledgment
or admission by the Lender of liability for any matter, or a precedent upon
which liability may be asserted. The foregoing paragraph does not constitute a
release of the Lender from its ongoing and future obligations under the Loan
Agreement as amended hereby or under the other Loan Documents.

 

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(c)          Amendment as Loan Document. Each party hereto agrees and
acknowledges that this Amendment constitutes a “Loan Document” under and as
defined in the Loan Agreement.

 

(d)          Existing Loan Documents. Unless specifically modified hereby, all
terms and provisions of the Loan Agreement and the other Loan Documents shall
remain in full force and effect in accordance with their terms and are hereby
ratified and confirmed.

 

(e)          Confirmation of Representations, Warranties and Covenants. Each
Borrower hereby confirms that (i) all representations, warranties and covenants
made in the Loan Agreement, and the other Loan Documents to which it is a party,
remain true and correct as of the date hereof, (ii) there has been no material
adverse change in each Borrower’s financial condition from the date of the most
recent financial statements submitted to the Lender pursuant to the Loan
Agreement, and (iii) there have occurred no Defaults or Events of Default under
the Loan Agreement and the other Loan Documents which are continuing as of the
date hereof.

 

(f)          Governing Law. This Amendment shall be construed in accordance with
and governed by the law of the State of New York.

 

(g)          Counterparts. This Amendment may be executed in any number of
counterparts, all of which constitute one and the same instrument.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Amendment
as an instrument under seal as of the date first set forth above.

 

  CENTERLINE MORTGAGE CAPITAL INC., as Borrower                 By: /s/ Michael
P. Larsen       Name: Michael P. Larsen       Title: Chief Financial Officer    
                CENTERLINE MORTGAGE PARTNERS INC., as Borrower                
By: /s/ Michael P. Larsen       Name: Michael P. Larsen       Title: Chief
Financial Officer                     MANUFACTURERS AND TRADERS TRUST COMPANY,
as Lender                 By: /s/ John Mangan       Name: John Mangan      
Title: Vice President  

 

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EXHIBIT A

[image_001.jpg]

 

AMENDED AND RESTATED DAILY
ADJUSTING LIBOR REVOLVING LINE NOTE

(this “Note”)

 

New York

 

 

November 9, 2012 $50,000,000

 

This Amended and Restated Daily Adjusting LIBOR Revolving Line Note is an
amendment to and restatement, renewal and replacement of that certain Daily
Adjusting LIBOR Revolving Line Note dated as of November 14, 2011 from Borrower
(as defined below) to Bank (as defined below) in the principal face amount of
Fifty Million Dollars ($50,000,000).

 

BORROWER (Name): CENTERLINE MORTGAGE CAPITAL INC. and CENTERLINE MORTGAGE
PARTNERS INC.

(Organizational Structure): Corporations

(State Law organized under): Delaware

(Address of residence/chief executive office): 100 Church Street, 15th Floor,
New York, New York 10007

 

BANK:MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
with its principal banking office at One M&T Plaza, Buffalo, NY 14203.
Attention: Office of General Counsel

 

1.          DEFINITIONS. Each capitalized term shall have the meaning specified
herein and the following terms shall have the indicated meanings:

 

a.“Applicable Interest Rate Spread” shall mean the sum of the Minimum Interest
Rate Spread plus the Interest Rate Adjustment, provided that in no event shall
the Applicable Interest Rate Spread be less than the Minimum Interest Rate
Spread or greater than the Maximum Interest Rate Spread. The Applicable Interest
Rate Spread shall be determined quarterly as follows: for any calendar quarter,
the Applicable Interest Rate Spread shall be calculated using the Deposit Level
Average of the prior calendar quarter, provided that for the first calendar
quarter (or portion thereof) of the term of this Note, the Applicable Interest
Rate Spread shall mean 1.90%. For illustration purposes only, the chart below
shows what the Applicable Interest Rate Spread would be for a calendar quarter
when the corresponding Deposit Level Average of the prior calendar quarter is at
the amount shown below.

 

Deposit Level Average Applicable Interest Rate Spread $15,000,000 1.90%
$7,500,000 2.65% 0 3.40%

 

b.“Authorized Person” shall mean, each individually, Robert L. Levy, President
of Borrower; William T. Hyman, Chief Executive Officer of Borrower; Philip A.
Melton, Senior Managing Director of Borrower; Michael P. Larsen, Chief Financial
Officer of Borrower; John K. Larson, Managing Director of Borrower; David A.
Miller, Treasurer and Senior Vice President of Borrower; Vanessa L. Howes,
Senior Vice President of Borrower; Thomas A. Purtill, Vice President of
Borrower; and Randal S. Hering, Vice President of Borrower (include name(s) and
title(s), as appropriate), or any other officer, employee or representative of
Borrower who is authorized or designated as a signer of loan documents under the
provisions of Borrower’s most recent resolutions or similar documents on file
with the Bank. Notwithstanding that individual names of Authorized Persons may
have been provided to the Bank, the Bank shall be permitted at any time to rely
solely on an individual’s title to ascertain whether that individual is an
Authorized Person. Such authorization may be changed only upon written notice to
the Bank accompanied by evidence, reasonably satisfactory to the Bank, of the
authority of the person giving such notice and such notice shall be effective
not sooner than five (5) New York Business Days following receipt thereof by the
Bank. The Bank shall have a right of approval, not to be unreasonably withheld
or delayed, over the identity of the Authorized Persons so as to assure the Bank
that each Authorized Person is a responsible and senior officer of Borrower.

c.“Base Rate” shall mean a rate per annum equal to the sum of the Applicable
Interest Rate Spread plus the rate of interest announced by the Bank from time
to time as its prime rate of interest (“Prime Rate”).

 

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d.“Base Rate Loan” shall mean a Loan that accrues interest at the Base Rate.

e.“Deposit Level Average” shall mean, for any calendar quarter, the average
deposit balances of Borrower and their affiliates held at the Bank during such
calendar quarter, as calculated by the Bank.

f.“Deposit Level Quotient” shall mean the Deposit Level Average divided by the
Deposit Level Target.

g.“Deposit Level Target” shall mean Fifteen Million Dollars ($15,000,000).

h.“Draw Date” shall mean, in relation to each Loan, the date that such Loan is
made or deemed to be made to Borrower pursuant to this Note.

i.“Interest Rate Adjustment” shall mean the Maximum Interest Rate Adjustment
less the amount obtained by multiplying the Maximum Interest Rate Adjustment by
the Deposit Level Quotient.

j.“LIBOR” shall mean the rate per annum (rounded upward, if necessary, to the
nearest 1/16th of 1%) obtained by dividing (i) the applicable London Interbank
Offered Rate (see LIBOR Rate definition below), as fixed by the British Bankers
Association for United States dollar deposits in the London interbank market at
approximately 11:00 a.m. London, England time (or as soon thereafter as
practicable) on the appropriate day in accordance with the terms of this Note,
as determined by the Bank from any broker, quoting service or commonly available
source utilized by the Bank, by (ii) a percentage equal to 100% minus the stated
maximum rate of all reserves required to be maintained against “Eurocurrency
Liabilities” as specified in Regulation D (or against any other category of
liabilities, which includes deposits by reference to which the interest rate on
LIBOR Rate Loan(s) is determined, or any category of extensions of credit or
other assets which includes loans by a non-United States’ office of a bank to
United States’ residents) on such date to any member bank of the Federal Reserve
System. Notwithstanding any provision above, the practice of rounding to
determine LIBOR may be discontinued at any time in the Bank’s sole discretion.

k.“LIBOR Rate” shall mean the rate per annum equal to the sum of the Applicable
Interest Rate Spread plus one-month LIBOR, adjusting daily.

l.“LIBOR Rate Loan” shall mean any Loan that accrues interest at a LIBOR Rate,
as determined by the Bank.

m.“Loan” shall mean any advance of funds made to Borrower by the Bank pursuant
to this Note.

n.“Loan Agreement” shall mean that certain Mortgage Warehouse Loan and Security
Agreement dated as of November 14, 2011 among Borrower and the Bank, as amended
by the First Amendment to Mortgage Warehouse Loan and Security Agreement dated
as of October 19, 2012 among Borrower and the Bank and the Second Amendment to
Mortgage Warehouse Loan and Security Agreement dated as of the date hereof among
Borrower and the Bank, as amended, restated, supplemented or otherwise modified
from time to time.

o.“Loan Documents” shall mean this Note, the Loan Agreement and any and all
other agreements or documents executed in connection with this Note or the Loan
Agreement, as the same from time to time may be extended, restated, amended,
supplemented or waived or modified in whole or in part.

p.“London Business Day” shall mean any day on which dealings in United States
dollar deposits are carried on by banking institutions in the London interbank
market.

q.“Maximum Interest Rate Adjustment” shall mean one and one-half percent
(1.50%).

r.“Minimum Interest Rate Spread” shall mean one and ninety hundredths percent
(1.90%).

s.“Maximum Interest Rate Spread” shall mean three and forty hundredths percent
(3.40%).

t.“Maximum Principal Amount” shall mean Fifty Million Dollars ($50,000,000).

r.“New York Business Day” shall mean any day other than Saturday, Sunday or
other day on which commercial banking institutions in New York, New York are
authorized or required by law or other governmental action to remain closed for
business.

s.“Outstanding Principal Amount” shall mean, at any point in time, the aggregate
outstanding principal amount of all Loans made pursuant to this Note.

 

2.          PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES.

 

a.Promise to Pay. For value received, and intending to be legally bound,
Borrower promises to pay to the order of the Bank, at the times set forth in
this Note and the Loan Agreement, the Maximum Principal Amount or the
Outstanding Principal Amount, if less, plus interest as set forth below and all
fees and costs (including without limitation the Bank’s attorneys’ fees and
disbursements, whether for internal or outside counsel) the Bank incurs in order
to collect any amount due under this Note and the other Loan Documents, to
negotiate or document a workout or restructuring, or to preserve its rights or
realize upon any guaranty or other security for the payment of this Note
(“Expenses”). The total principal sum, or the amount thereof outstanding,
together with any accrued but unpaid interest, shall be due and payable in full
on the Facility Termination Date, and is subject to acceleration in accordance
with, the Loan Agreement pursuant to which this Note has been issued.

 

b.Interest. Each Loan shall earn interest on the Outstanding Principal Amount
thereof calculated on the basis of a 360-day year for the actual number of days
of each year (365 or 366), as follows:

 

i.LIBOR Rate Loans. Interest shall accrue each day on any LIBOR Rate Loan, from
and including the Draw Date to, but not including, the date such LIBOR Rate Loan
is paid in full (or converts to a Base Rate Loan), at the LIBOR Rate in effect
for that day. The applicable LIBOR Rate shall be determined each day using LIBOR
in effect for that day, which, if such day is not a London Business Day, shall
have been fixed on the nearest preceding London Business Day.

 

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ii.Base Rate Loans. Interest shall accrue each day on any Base Rate Loan, from
and including the first day a Loan becomes a Base Rate Loan to, but not
including, the day such Base Rate Loan is paid in full, at a rate per annum
equal to the Base Rate in effect each day. Any change in the Base Rate resulting
from a change in the Prime Rate shall be effective on the date of such change.

 

c.Maximum Legal Rate. It is the intent of the Bank and Borrower that in no event
shall interest be payable at a rate in excess of the maximum rate permitted by
applicable law (the “Maximum Legal Rate“). Solely to the extent necessary to
prevent interest under this Note from exceeding the Maximum Legal Rate, any
amount that would be treated as excessive under a final judicial interpretation
of applicable law shall be deemed to have been a mistake and automatically
canceled, and, if received by the Bank, shall be refunded to Borrower.

 

d.Payment of Loans and Interest. All Loans hereunder shall be due and payable as
set forth in this Note and the Loan Agreement; provided, however, that the
Outstanding Principal Amount of this Note and all accrued and unpaid interest
shall automatically become immediately due and payable upon any Event of Default
(as defined in the Loan Agreement) or if Borrower or any guarantor or endorser
of this Note commences or has commenced against it any bankruptcy or insolvency
proceeding. Borrower hereby waives protest, presentment and notice of any kind
in connection with this Note. Absent demand by the Bank for payment of interest
monthly, interest shall be due and payable at the time any Loan is repaid to the
Bank.

 

e.Payments. Payments shall be made in immediately available United States funds
at any banking office of the Bank.

 

f.Preauthorized Transfers from Deposit Account. If a deposit account number is
provided in the following blank, Borrower hereby authorizes the Bank to debit
Centerline Mortgage Capital Inc.’s deposit account #9854533859 with the Bank
and/or Centerline Mortgage Partners Inc.’s deposit account #9854533842 with the
Bank automatically for any amount which becomes due under this Note.

 

g.Late Charge. If Borrower fails to pay, within five (5) days of its due date,
any amount due and owing pursuant to this Note or any other Loan Document,
Borrower shall immediately pay to the Bank a late charge equal to the greatest
of (a) $50.00, (b) five percent (5%) of the delinquent amount, or (c) the Bank’s
then current late charge as announced by the Bank from time to time.

 

h.Default Rate. If the Borrower fails to make any payment when due under this
Note, the interest rate on the Outstanding Principal Amount shall immediately
and automatically increase to five (5) percentage points per year above the
otherwise applicable rate per year, and any judgment entered hereon or otherwise
in connection with any suit to collect amounts due hereunder shall bear interest
at such default rate (the “Default Rate”).

 

i.Interest Accrual; Application of Payments. Interest will continue to accrue on
the Outstanding Principal Amount until the earlier of the particular Loan is
repaid or the Outstanding Principal Amount is paid in full. All installment
payments (excluding voluntary prepayments of principal) will be applied as of
the date each payment is received and processed. Payments may be applied in any
order in the sole discretion of the Bank, but, prior to demand for payment in
full, may be applied chronologically (i.e., oldest invoice first) to unpaid
amounts due and owing, in the following order: first to accrued interest, then
to principal, then to late charges and other fees, and then to all other
Expenses.

 

3.          CREDIT AVAILABILITY.

 

a.General. This Note is issued by Borrower to the Bank in connection with a
certain line of credit or loan limit made available by the Bank to Borrower
pursuant to the Loan Agreement (the “Credit”). Except as otherwise provided
herein, each Loan advanced hereunder shall be in the form of a LIBOR Rate Loan.

 

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b.Authorized Representatives. The Bank may make any Loan pursuant to the Credit
in reliance upon any oral, telephonic, written, teletransmitted or other request
(the “Request(s)”) that the Bank in good faith believes to be valid and to have
been made by Borrower or on behalf of Borrower by an Authorized Person. The Bank
may act on the Request of any Authorized Person until the Bank shall have
received from Borrower, and had a reasonable time to act on, written notice
revoking the authority of such Authorized Person. Borrower acknowledges that the
transmission between Borrower and Bank of any Request or other instructions with
respect to the Credit involves the possibility of errors, omissions,
misinterpretations, fraud and mistakes, and agrees to adopt such internal
measures and operational procedures as may be necessary to prevent such
occurrences. By reason thereof, Borrower hereby assumes all risk of loss and
responsibility for, and releases and discharges the Bank from any and all
responsibility or liability for, and agrees to indemnify, reimburse on demand
and hold Bank harmless from, any and all claims, actions, damages, losses,
liability and expenses by reason of, arising out of, or in any way connected
with or related to: (i) Bank’s accepting, relying on and acting upon any Request
or other instructions with respect to the Credit; or (ii) any such error,
omission, misinterpretation, fraud or mistake, provided such error, omission,
misinterpretation, fraud or mistake is not directly caused by the Bank’s gross
negligence or willful misconduct. The Bank shall incur no liability to Borrower
or to any other person as a direct or indirect result of making any Loan
pursuant to this paragraph.

 

c.Limit on Facility. Any Request for a Loan hereunder shall be limited in
amount, such that the sum of (i) the principal amount of such Request; (ii) the
Outstanding Principal Amount under this Note; and (iii) the aggregate face
amounts of (or, if greater, Borrower’s aggregate reimbursement obligations to
the Bank (or any of its affiliates) in connection with) any letters of credit
issued by the Bank (or any of its affiliates) at the request (or for the
benefit) of Borrower, pursuant to this Credit; does not exceed the Maximum
Principal Amount under this Note.

 

d.Revolving Credit. This Note evidences a revolving Credit. Subject to all
applicable provisions in this Note, the Loan Agreement and in any and all other
Loan Documents, the Borrower may borrow, pay, prepay and reborrow hereunder at
any time prior to demand for payment in full of the Outstanding Principal
Amount. Notwithstanding that, from time to time, there may be no amounts
outstanding respecting this Note, this Note shall continue in full force and
effect until all obligations and liabilities evidenced by this Note are paid in
full and the Credit evidenced by this Note has been terminated by the Bank.
Prior to making any Loan hereunder, all conditions precedent to an advance set
forth in the Loan Agreement must be satisfied.

 

e.Request for LIBOR Rate Loans. In making any Request for a Loan, Borrower shall
specify the aggregate amount of such Loan and the Draw Date; provided, however,
if a Request is received by the Bank after 2:00 p.m. (Eastern Standard Time) on
any given day, the earliest possible Draw Date will be the next New York
Business Day.

 

f.Delivery of Requests. Delivery of a Request for a LIBOR Rate Loan shall be
made to the Bank at the following address, or such other address designated by
the Bank from time to time:

 

M&T Bank

M&T Commercial Real Estate

25 South Charles Street, 17th Floor

Mail Code: MD2-CS64

Baltimore, MD 21201

Attn: John Mangan

Tel. (410) 545-2373

jmangan@mtb.com

 

 

4.          CONVERSION UPON DEFAULT. Unless the Bank shall otherwise consent in
writing, if (i) Borrower fails to pay when due, in whole or in part, the
indebtedness under this Note (whether by demand or otherwise), or (ii) there
exists a condition or event which, with the passage of time, the giving of
notice or both, shall constitute an Event of Default under the Loan Agreement or
any other Loan Document, the Bank, in its sole discretion, may convert any LIBOR
Rate Loan to a Base Rate Loan. Nothing herein shall be construed to be a waiver
by the Bank to have any Loan accrue interest at the Default Rate of interest
(which shall be calculated from the higher of the LIBOR Rate or the Base Rate,
as described above).

 

5.          RIGHT OF SETOFF. The Bank shall have the right to set off against
the amounts owing under this Note any property held in a deposit or other
account with the Bank or any of its affiliates or otherwise owing by the Bank or
any of its affiliates in any capacity to Borrower or any guarantor or endorser
of this Note. Such setoff shall be deemed to have been exercised immediately at
the time the Bank or such affiliate elects to do so.

 

6.          BANK RECORDS CONCLUSIVE. The Bank shall set forth on a schedule
attached to this Note or maintained on computer, the date and original principal
amount of each Loan and the date and amount of each payment to be applied to the
Outstanding Principal Amount of this Note. The Outstanding Principal Amount set
forth on any such schedule shall be presumptive evidence of the Outstanding
Principal Amount of this Note and of all Loans. No failure by the Bank to make,
and no error by the Bank in making, any annotation on any such schedule shall
affect the Borrower’s obligation to pay the principal and interest of each Loan
or any other obligation of Borrower to the Bank pursuant to this Note.

 

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7.          PURPOSE. Borrower certifies (a) that no Loan will be used to
purchase margin stock except with the Bank’s express prior written consent for
each such purchase and (b) that all Loans shall be used for a business purpose,
and not for any personal, family or household purpose.

 

8.          AUTHORIZATION. Borrower, if a corporation, partnership, limited
liability company, trust or other entity, represents that it is duly organized
and in good standing or duly constituted in the state of its organization and is
duly authorized to do business in all jurisdictions material to the conduct of
its business; that the execution, delivery and performance of this Note have
been duly authorized by all necessary regulatory and corporate or partnership
action or by its governing instrument; that this Note has been duly executed by
an authorized officer, partner or trustee and constitutes a binding obligation
enforceable against Borrower and not in violation of any law, court order or
agreement by which Borrower is bound; and that Borrower’s performance is not
threatened by any pending or threatened litigation.

 

9.          INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.

 

a.Increased Costs. If the Bank shall determine that, due to either (a) the
introduction of any change in law (other than any change by way of imposition of
or increase in reserve requirements included in the calculation of the LIBOR) or
in the interpretation of any requirement of law, or (b) the compliance
requirements for any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making, funding or
maintaining any LIBOR Rate Loans, then Borrower shall be liable for, and shall
from time to time, upon demand therefor by the Bank, pay to the Bank such
additional amounts as are sufficient to compensate the Bank for such increased
costs.

 

b.Inability to Determine Rates. If the Bank shall determine that for any reason
adequate and reasonable means do not exist for ascertaining LIBOR with respect
to a proposed LIBOR Rate Loan, the Bank will give notice of such determination
to Borrower. Thereafter, the Bank may not make or maintain, as the case may be,
LIBOR Rate Loans hereunder until the Bank revokes such notice in writing. Upon
receipt of such notice, the Bank may convert any LIBOR Rate Loans to Base Rate
Loans, and Borrower may revoke any pending Request that Borrower previously made
for a LIBOR Rate Loan. If Borrower does not revoke any such Request, the Bank
may make the Loans, as proposed by Borrower, in the amount specified in the
applicable Request submitted by Borrower, but such Loans shall be made as Base
Rate Loans instead of LIBOR Rate Loans.

 

c.Illegality. If the Bank shall determine that the introduction of any law
(statutory or common), treaty, rule, regulation, guideline or determination of
an arbitrator or of a governmental authority or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
governmental authority has asserted that it is unlawful for the Bank to make
LIBOR Rate Loans, then, on notice thereof by the Bank to Borrower, the Bank may
suspend the making of LIBOR Rate Loans until the Bank shall have notified
Borrower that the circumstances giving rise to such determination shall no
longer exist. If the Bank shall determine that it is unlawful to maintain any
LIBOR Rate Loans, Borrower shall immediately pay to the Bank the aggregate
principal amount of all LIBOR Rate Loans then outstanding, together with accrued
interest and related Expenses. If Borrower is required to pay off any LIBOR Rate
Loan as set forth in this subsection, then concurrently with such payment,
Borrower may borrow from the Bank, in the amount of such payment, a Base Rate
Loan.

 

10.          MISCELLANEOUS. This Note, together with any related loan and
security agreements and guaranties, contains the entire agreement between the
Bank and Borrower with respect to this Note, and supersedes every course of
dealing, other conduct, oral agreement and representation previously made by the
Bank. All rights and remedies of the Bank under applicable law and this Note or
amendment of any provision of this Note are cumulative and not exclusive. No
single, partial or delayed exercise by the Bank of any right or remedy shall
preclude the subsequent exercise by the Bank at any time of any right or remedy
of the Bank without notice. No waiver or amendment of any provision of this Note
shall be effective unless made specifically in writing by the Bank. No course of
dealing or other conduct, no oral agreement or representation made by the Bank,
and no usage of trade, shall operate as a waiver of any right or remedy of the
Bank. No waiver of any right or remedy of the Bank shall be effective unless
made specifically in writing by the Bank. Borrower agrees that in any legal
proceeding, a copy of this Note kept in the Bank’s course of business may be
admitted into evidence as an original. This Note is a binding obligation
enforceable against Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns. If a court deems any
provision of this Note invalid, the remainder of the Note shall remain in
effect. Section headings are for convenience only. Singular number includes
plural and neuter gender includes masculine and feminine as appropriate.

 

10

 

 

11.          NOTICES. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Bank’s records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower’s relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) New York Business Days after deposit in an official depository maintained by
the United States Post Office for the collection of mail or one (1) New York
Business Day after delivery to a nationally recognized overnight courier service
(e.g., Federal Express). Notice by e-mail is not valid notice under this or any
other agreement between Borrower and the Bank.

 

12.          JOINT AND SEVERAL. There is more than one Borrower; therefore, each
of them shall be jointly and severally liable for all amounts which become due
under this Note and the term “Borrower“ shall include each as well as all of
them.

 

13.          GOVERNING LAW; JURISDICTION. This Note has been delivered to and
accepted by the Bank and will be deemed to be made in the State of New York.
Except as provided under federal law, this Note will be interpreted in
accordance with the laws of the State of New York excluding its conflict of laws
rules. Borrower hereby irrevocably consents to the exclusive jurisdiction of any
state or federal court in the State of New York in a county or judicial district
where the bank maintains a branch, and consents that the Bank may effect any
service of process in the manner and at Borrower’s address set forth above for
providing notice or demand; provided that nothing contained in this Note will
prevent the Bank from bringing any action, enforcing any award or judgment or
exercising any rights against Borrower individually, against any security or
against any property of Borrower within any other county, state or other foreign
or domestic jurisdiction. Borrower acknowledges and agrees that the venue
provided above is the most convenient forum for both the Bank and Borrower.
Borrower waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Note.

 

14.          WAIVER OF JURY TRIAL. Borrower and the Bank hereby knowingly,
voluntarily, and intentionally waive any right to trial by jury Borrower and the
Bank may have in any action or proceeding, in law or in equity, in connection
with this note or the transactions related hereto. Borrower represents and
warrants that no representative or agent of the Bank has represented, expressly
or otherwise, that the Bank will not, in the event of litigation, seek to
enforce this jury trial waiver. Borrower Acknowledges that the Bank has been
induced to enter into this note by, among other things, the provisions of this
Section.

 

[Remainder of page intentionally left blank; signature page follows]

 

11

 

 

Acknowledgment. Borrower acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law, Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.

              CENTERLINE MORTGAGE CAPITAL INC.                       /s/ David
A. Miller   By: /s/ Michael P. Larsen   Signature of Witness     Name: Michael
P. Larsen         Title: Chief Financial Officer   David A. Miller Treasurer    
    Typed Name of Witness                       CENTERLINE MORTGAGE PARTNERS
INC.                       /s/ James A. Briggs   By: /s/ Michael P. Larsen  
Signature of Witness     Name: Michael P. Larsen         Title: Chief Financial
Officer   James A. Briggs Chief Accounting Officer         Typed Name of Witness
       

 

ACKNOWLEDGMENT

 

STATE OF New York )

:SS.

COUNTY OF New York)

 

On the 8th day of November, in the year 2012, before me, the undersigned, a
Notary Public in and for said State, personally appeared Michael P. Larsen , the
Chief Financial Officer of Centerline Mortgage Capital Inc., personally known to
me or proved to me on the basis of satisfactory evidence to be the individual(s)
whose name(s) is (are) subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity(ies), and that
by his/her/their signature(s) on the instrument, the individual(s), or the
person upon behalf of which the individual(s) acted, executed the instrument. 

___________________

Notary Public

 

ACKNOWLEDGMENT

 

STATE OF New York)

:SS.

COUNTY OF New York)

 

On the 8th day of November, in the year 2012, before me, the undersigned, a
Notary Public in and for said State, personally appeared Michael P. Larsen , the
Chief Financial Officer of Centerline Mortgage Partners Inc., personally known
to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

___________________

Notary Public

 

 

 

 

FOR BANK USE ONLY

Authorization Confirmed:               Product Code: 11900              
Disbursement of Funds:               Credit A/C #   Off Ck #   Payoff Obligation
#                       $     $     $