EXHIBIT 10.1
 
EXECUTION COPY

 

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AMENDED AND RESTATED
WAREHOUSING CREDIT AND SECURITY AGREEMENT

AMONG
 
CENTERLINE MORTGAGE CAPITAL INC.,
 
a Delaware corporation
 
AND
 
CENTERLINE MORTGAGE PARTNERS INC.,
 
a Delaware corporation
 
AND
 
BANK OF AMERICA, N.A., as Agent
 
AND
 
THE LENDERS PARTY HERETO
 
Dated as of May 30, 2008
 

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TABLE OF CONTENTS
Page
 
1.
DEFINITIONS.
1
 
1.1.
Defined Terms
1
 
1.2.
Other Definitional Provisions
12
 
1.3.
Accounting Principles
14
2.
THE CREDIT.
14
 
2.1.
The Commitment.
14
 
2.2.
Procedures for Obtaining Advances.
15
 
2.3.
Notes
15
 
2.4.
Interest.
15
 
2.5.
Principal Payments.
16
 
2.6.
Expiration of Commitment
18
 
2.7.
Payments
19
 
2.8.
Loan Fees.
19
 
2.9.
Reserved.
20
 
2.10.
Increased Costs; Capital Requirements
20
 
2.11.
Taxes.
21
3.
COLLATERAL.
22
 
3.1.
Grant of Security Interest
22
 
3.2.
Authenticated Record
24
 
3.3.
Release of Security Interest in Pledged Assets.
24
 
3.4.
Delivery of Collateral Documents.
25
 
3.5.
Collection and Servicing Rights
26
 
3.6.
Return or Release of Collateral at End of Commitment
26
4.
CONDITIONS PRECEDENT.
26
 
4.1.
Initial Advance
26
 
4.2.
Each Advance
29
5.
REPRESENTATIONS AND WARRANTIES.
30
 
5.1.
Organization; Good Standing; Subsidiaries
30
 
5.2.
Authorization and Enforceability
30
 
5.3.
Financial Condition
31
 
5.4.
Litigation
31
 
5.5.
Compliance with Laws
31
 
5.6.
Regulation U and X
31
 
5.7.
Holding Company and Investment Company Act
31
 
5.8.
Agreements
32
 
5.9.
Title to Properties
32
 
5.10.
ERISA
32

 
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5.11.
Eligibility
33
 
5.12.
Special Representations Concerning Collateral
33
 
5.13.
Franchises, Patents, Copyrights, etc
36
 
5.14.
Proper Names
36
 
5.15.
Direct Benefit From Loans
36
 
5.16.
Loan Documents Do Not Violate Other Documents
37
 
5.17.
Continuing Authority of Authorized Representatives
37
 
5.18.
Consents Not Required
37
 
5.19.
Material Fact Representations
37
 
5.20.
Place of Business
38
 
5.21.
Tax Returns and Payments
38
 
5.22.
Certain Transactions
38
 
5.23.
No Broker or Finder
38
 
5.24.
Special Representations Concerning Servicing Portfolio
39
 
5.25.
Special Representations Concerning FHA Mortgage Loans
39
 
5.26.
Ownership, Subsidiaries and taxpayer identification numbers.
40
 
5.27.
Material Adverse Change
40
 
5.28.
Ongoing Representations and Warranties
40
6.
AFFIRMATIVE COVENANTS.
40
 
6.1.
Payment of Notes
40
 
6.2.
Financial Statements and Other Reports
41
 
6.3.
Maintenance of Existence; Conduct of Business
42
 
6.4.
Compliance with Applicable Laws
42
 
6.5.
Inspection of Properties and Books
42
 
6.6.
Notice
43
 
6.7.
Payment of Debt, Taxes, etc
43
 
6.8.
Insurance
43
 
6.9.
Closing Instructions
44
 
6.10.
Other Loan Obligations
44
6.11.
Accounts. Maintain the Operating Account, the Funding Account, and the Cash
Collateral Account with Agent
44
 
6.12.
Special Affirmative Covenants Concerning Collateral.
44
 
6.13.
Appraisals of Servicing Portfolio
45
 
6.14.
Cure of Defects in Loan Documents
45
 
6.15.
Charging Accounts
46
7.
NEGATIVE COVENANTS.
46
 
7.1.
Merger; Acquisitions
46
 
7.2.
Loss of Eligibility
47
 
7.3.
Tangible Net Worth (CMC)
47
 
7.4.
Tangible Net Worth (CMP)
47
 
7.5.
Liquidity (CMC)
47
 
7.6.
Liquidity (CMP)
47

 
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7.7.
Limits on Corporate Distributions
47
 
7.8.
Loans and Advances
47
 
7.9.
No Investments Except Approved Investments
48
 
7.10.
Charter Documents and Business Termination.
48
 
7.11.
Reserved.
48
 
7.12.
No Sales, Leases or Dispositions of Property
48
 
7.13.
Changes in Business or Assets
49
 
7.14.
Changes in Office Location
49
 
7.15.
Special Negative Covenants Concerning Collateral.
49
 
7.16.
No Indebtedness
49
 
7.17.
No Liens
50
 
7.18.
Pledge of Servicing Contracts
52
 
7.19.
Recourse Servicing Contracts
52
 
7.20.
Gestation Agreements
52
 
7.21.
Minimum Servicing Portfolio
52
 
7.22.
Maximum Serviced Loans Delinquencies
52
 
7.23.
Subsidiaries
52
8.
DEFAULTS; REMEDIES.
53
 
8.1.
Events of Default
53
 
8.2.
Remedies.
56
 
8.3.
Application of Proceeds
59
 
8.4.
Agent Appointed Attorney-in-Fact
60
 
8.5.
Right of Offset
60
 
8.6.
Waivers
60
 
8.7.
Performance by Agent
61
 
8.8.
No Responsibility
61
 
8.9.
No Waiver
61
 
8.10.
Cumulative Rights
61
9.
NOTICES.
62
10.
REIMBURSEMENT OF EXPENSES; INDEMNITY.
63
 
10.1.
Reimbursement of Expenses and Indemnification by Borrower
63
 
10.2.
INDEMNIFICATION BY THE BORROWER
64
 
10.3.
INDEMNIFICATION BY THE LENDERS
64
11.
THE AGENT AND THE LENDERS
66
 
11.1.
Rights, Duties and Immunities of the Agent.
66
 
11.2.
Respecting Loans and Payments.
70
 
11.3.
Assignment and Participation.
73
 
11.4.
Administrative Matters.
75
 
11.5.
Commitment Increases.
77
12.
MISCELLANEOUS.
78

 
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12.1.
Confidentiality
78
 
12.2.
Governing Law
79
 
12.3.
Relationship of the Parties
79
 
12.4.
Severability
80
 
12.5.
Usury
80
 
12.6.
Consent to Jurisdiction
81
 
12.7.
ADDITIONAL INDEMNITY
81
 
12.8.
No Waivers Except in Writing
82
 
12.9.
WAIVER OF JURY TRIAL
82
 
12.10.
Multiple Counterparts
82
 
12.11.
No Third Party Beneficiaries
83
 
12.12.
RELEASE OF LIABILITY
83
 
12.13.
Patriot Act
83
 
12.14.
Setoff
83
 
12.15.
Entire Agreement; Amendment
84
 
12.16.
Replacement Documentation
85
 
12.17.
Survival
85
 
12.18.
Claims Against Agent or Lenders.
85
 
12.19.
Obligations Absolute
86
 
12.20.
Time Of the Essence
86
 
12.21.
Monthly Statements
86
 
12.22.
Joint and Several Obligations
86

 

 

 

 
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AMENDED AND RESTATED
WAREHOUSING CREDIT AND SECURITY AGREEMENT
 
This Amended and Restated Warehousing Credit and Security Agreement (this
“Agreement”), is dated as of May 30, 2008, by and among Centerline Mortgage
Capital Inc., a Delaware corporation, Centerline Mortgage Partners Inc., a
Delaware corporation, the lenders from time to time party hereto as defined on
Schedule 1 (together with any successors and assigns thereof, being hereinafter
referred to individually as a “Lender” and collectively as the “Lenders”) and
Bank of America, N.A., in its capacity as one of the Lenders and as agent (it
and its successors in that capacity called the “Agent”) for the Lenders.
 
Reference is hereby made to the following:
 
WHEREAS, Centerline Mortgage Capital Inc., Centerline Mortgage Partners Inc.,
and Citicorp USA, Inc. entered into that certain Warehousing Credit and Security
Agreement dated as of May 31, 2007 (as amended from time to time, the “Prior
Agreement”);
 
WHEREAS, pursuant to an Assignment and Acceptance dated as of December 27, 2007,
Bank of America, N.A. succeeded to Citicorp USA, Inc.’s rights and obligations
under the Prior Agreement; and
 
WHEREAS, the Lenders, the Agent, Centerline Mortgage Capital Inc. and Centerline
Mortgage Partners Inc. desire to amend and restate the Prior Agreement in its
entirety as set forth in this Agreement.
 
NOW THEREFORE, for good and valuable consideration, the amount and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto
hereby agree as follows:
 
1.           DEFINITIONS.
 
1.1.           Defined Terms.  Capitalized terms defined below or elsewhere in
this Agreement (including the exhibits hereto) shall have the following
meanings:
 
“Additional Lender” means a Person admitted as a Lender under this Agreement by
the terms of an amendment hereto.
 
“Advance” means a disbursement by the Lenders under the Commitment pursuant to
Article 2 of this Agreement.
 
“Advance Date” means, for any Advance, the date it is disbursed.
 
“Advance Rate” has the meaning set forth in Exhibit B hereof.
 
“Advance Request” has the meaning set forth in Section 2.2(a) hereof.
 

 
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“Affiliate” of any Person means (a) any other Person which, directly or
indirectly, controls, is controlled by, or is under common control with such
Person or (b) any other Person who is director or officer (i) of such Person or
(ii) of any Person described in the preceding clause (a).  For purposes of this
definition “control” (including “controlled by” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise or owning or
possessing the power to vote ten percent (10%) or more of any class of voting
securities of any Person.  Without limiting the generality of the foregoing, for
purposes of this Agreement, Borrower and each of its respective Subsidiaries
shall be deemed to be Affiliates of one another.
 
“Agency” means Fannie Mae, Freddie Mac or Ginnie Mae.
 
“Agency Security” means a Mortgage-backed Security issued or guaranteed by any
Agency.
 
“Agent” means, at any time, Bank of America, N.A. or its successors acting as
agent for Lenders under the Loan Documents.
 
“Agreement” means this Amended and Restated Warehousing Credit and Security
Agreement, either as originally executed or as it may from time to time be
supplemented, modified or amended.
 
“Applicable Rate” means, for any day, either (a) the Daily Floating LIBOR Rate
for such day, plus one percent (1%), or (b) if the Daily Floating LIBOR Rate is
unavailable (as described in the definition thereof), then the Prime Rate for
such day.
 
“Approved Custodian” means a pool custodian or other Person designated by an
Agency or that Agent deems acceptable, in its reasonable discretion, to hold
Mortgage Loans for inclusion in a Mortgage Pool or to hold Mortgage Loans as
agent for an Investor that has issued a Purchase Commitment for those Mortgage
Loans.
 
“Authorized Representatives” has the meaning set forth in Section 5.17 hereof.
 
“Borrower” means CMC or CMP individually or collectively and jointly and
severally.
 
“Business Day” means any day excluding Saturday, Sunday and any day on which
Agent is closed for business.  If any day on which a payment is due is not a
Business Day, then the payment shall be due on the next day following which is a
Business Day.  Further, if there is no corresponding day for a payment in the
given calendar month (i.e., there is no “February 30th”), the payment shall be
due on the last Business Day of the calendar month.
 
“Cash Collateral Account” means the non-interest bearing demand checking account
established and maintained with, and pledged to, Agent for the benefit of
Lenders into which shall be deposited the proceeds from any sale of Collateral.
 

 
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“CMC” means Centerline Mortgage Capital Inc., a Delaware corporation, a Borrower
hereunder.
 
“CMP” means Centerline Mortgage Partners Inc., a Delaware corporation, a
Borrower hereunder.
 
“Collateral” has the meaning set forth in Section 3.1 hereof.
 
“Collateral Documents” means all of the documents and other items described on
Exhibit C hereto and required to be delivered to the Agent in connection with an
Advance.
 
“Collateral Value” means, as of any date of determination, (a) with respect to
any Eligible Loan, the lesser of (1) the amount of the Advance permitted against
such Eligible Loan under Exhibit B or (2) the Fair Market Value of such Eligible
Loan; and (b) if Eligible Loans have been exchanged for Agency Securities, the
lesser of (1) the amount of any Advances outstanding against the Eligible Loans
backing the Agency Securities or (2) the Fair Market Value of the Agency
Securities.
 
“Commitment” means the commitment of the Lenders to make Advances hereunder in
an aggregate principal amount at any time outstanding that shall not exceed an
amount equal to ONE HUNDRED AND FIFTY MILLION AND NO/100 DOLLARS
($150,000,000.00), subject to any increases or decreases of such amount pursuant
to the terms of this Agreement; provided, however, that no Lender’s portion of
such Advances may ever exceed its Commitment Amount.
 
“Commitment Amount” means, with respect to each Lender, the amount set forth
opposite its name and so designated on Schedule 1 hereto, as the same may be
amended and as that amount may be canceled or terminated under this Agreement.
 
“Commitment Percentage” means, at any time, for any Lender, the proportion
(stated as a percentage) that its Commitment Amount bears to the total
Commitment subject to any adjustment by the Agent pursuant to the terms of this
Agreement.
 
“Committed Purchase Price” means for an Eligible Loan (a) the dollar price as
set forth in the Purchase Commitment or, if the price is not expressed in
dollars, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in a Purchase Commitment for the
Eligible Loan, or (b) if the Eligible Loan is to be used to back an Agency
Security, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in a Purchase Commitment for the Agency
Security.
 
“Compliance’s Certificate” means a certificate executed on behalf of the
Borrower by its chief financial officer or its treasurer or by such other
officer as may be designated herein, in substantially the form of Exhibit D
hereto.
 
“Constituent Documents” means, with respect to any Person, its articles or
certificate of incorporation, constitution, bylaws, partnership agreements,
organizational documents,
 

 
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limited liability company agreements, or such other document as may govern such
entity’s formation or organization.
 
“Daily Floating LIBOR Rate” means, for each day, the rate per annum equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Bloomberg
(or other commercially available source providing quotations of BBA LIBOR as
designated by the Agent from time to time) at approximately 11:00 a.m. (London
time) on such day (if such day is a LIBOR Business Day) or the immediately
preceding LIBOR Business Day (if such day is not a LIBOR Business Day), for U.S.
dollar deposits with a term equivalent to one (1) month.  If such rate is not
available at such time for any reason, then the “Daily Floating LIBOR Rate”
shall be the rate per annum determined by the Agent to be the rate at which
deposits in U.S. dollars in same day funds in the approximate amount of the then
outstanding principal balance of the Advances and with a term equivalent to one
(1) month would be offered by the Agent’s London Branch to major banks in the
London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) on such day (if such day is a LIBOR Business Day) or the
immediately preceding LIBOR Business Day (if such day is not a LIBOR Business
Day).  If at any time the Agent’s London branch is not offering such rate, the
Daily Floating LIBOR Rate shall be deemed to be unavailable.  As used herein,
“LIBOR Business Day” means a Business Day upon which commercial banks in London,
England are open for domestic and international business.
 
“Default” means the occurrence of any event or existence of any condition which,
but for the giving of Notice, the lapse of time, or both, would constitute an
Event of Default.
 
“Deficiency” has the meaning set forth in Section 2.5(d) hereof.
 
“Default Rate” has the meaning set forth in Section 2.4(c) hereof.
 
“Delinquent Lender” has the meaning set forth in Section 11.2(g) hereof.
 
“DUS Program” means Fannie Mae’s Delegated Underwriting and Servicing Program.
 
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of any Lender, and (c)
any other Person approved by the Agent, which approval will not be unreasonably
withheld, conditioned or delayed.
 
“Eligible Loan” means a Mortgage Loan that satisfies the conditions and
requirements of Exhibit B and other applicable provisions of this Agreement for
supporting an Advance.
 
“Eligible Mortgage Pool” means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification (on the basis of which an Agency
Security is to be issued), (b) there exists a Purchase Commitment covering the
related Agency Security, and (c) such Agency Security will be delivered to the
Agent.
 

 
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“ERISA” means the Employee Retirement Income Security Act of 1974 and all rules
and regulations promulgated thereunder, as amended from time to time and any
successor statute.
 
“ERISA Plan” has the meaning set forth in Section 5.10 hereof.
 
“Event of Default” means the occurrence of any of the conditions or events set
forth in Section 8.1 hereof.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time and any successor statute.
 
“Fair Market Value” means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from Fannie Mae or Freddie Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Agent
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Agent deems appropriate in its sole discretion.
 
“Fannie Mae” means the Federal National Mortgage Association, a corporation
created under the laws of the United States, and any successor thereto.
 
“Fannie Mae DUS Mortgage Loan” means a permanent Mortgage Loan on a Multifamily
Property or other Mortgaged Property originated in compliance with Fannie Mae’s
DUS Program.
 
“Fannie Mae Loan Loss Reserves” means reserves established by the Borrower to
absorb estimated future losses related to Fannie Mae DUS Mortgage Loans sold by
the Borrower to Fannie Mae.
 
“Fannie Mae Reserve Account” means that certain lender reserve account
established in favor of Fannie Mae by the Borrower and maintained at US Bank
pursuant to that certain the Amended and Restated Fannie Mae Delegated
Underwriting and Servicing Master Loss Sharing Agreement dated as of September
30, 2005 by and among Fannie Mae, the Borrower and US Bank, as amended and in
effect.
 
“Fee Letter” means that certain letter agreement of even date herewith between
the Borrower and the Agent.
 
“FHA” means the Federal Housing Administration and any successor thereto.
 
“FHA Construction Mortgage Loan” means a FHA fully insured Mortgage Loan for the
construction or rehabilitation of a Multifamily Property or other Mortgaged
Property originated in compliance with FHA requirements applicable to such
Mortgage Loan.
 

 
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“FHA Project Mortgage Loan” means a FHA fully insured Multifamily Mortgage Loan
or other Mortgaged Property originated in compliance with FHA requirements
applicable to such Mortgage Loan.
 
“Freddie Mac” means the Federal Home Loan Mortgage Corporation, a corporation
created under the laws of the United States, and any successor thereto.
 
“Freddie Mac Loan” means a permanent Mortgage Loan on a Multifamily Property or
other Mortgaged Property originated in compliance with Freddie Mac’s Program
Plus Guide or shared risk program.
 
“FICA” means the Federal Insurance Contributions Act or any successor statute.
 
“First Mortgage” means a Mortgage that constitutes a first Lien on the real
property covered by the Mortgage.
 
“First Mortgage Loan” means a Mortgage Loan secured by a First Mortgage.
 
“Funding Account” means the non-interest bearing demand checking account
established with, maintained by, and pledged to Agent for the benefit of Lenders
into which shall be deposited the proceeds of Advances, and from which funds
shall be disbursed for the funding or acquisition of Mortgage Loans.
 
“Future Commitment” has the meaning set forth in Section 11.2(g) hereof.
 
“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination.
 
“Gestation Agreement” means an agreement between the Borrower and any Person
under which the Borrower agrees to sell or finance (a) a Pledged Loan prior to
the date of purchase by an Investor, or (b) a Mortgage Pool prior to the date
the Agency Security is issued.
 
“Ginnie Mae” means the Government National Mortgage Association and any
successor thereto.
 
“Hedging Arrangement” means an arrangement designed to protect a Person from
fluctuations in interest rates or asset values and not acquired by a Person for
speculation.
 
“HUD” means the Department of Housing and Urban Development and any successor
thereto.
 

 
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“Indebtedness” means all obligations, contingent and otherwise, that in
accordance with GAAP should be classified upon the consolidated balance sheet of
the Borrower and the Borrower’s Subsidiaries as liabilities, including in any
event and whether or not so classified: (a) all obligations for borrowed money
or other extensions of credit whether or not secured or unsecured, absolute or
contingent, including, without limitation, unmatured reimbursement obligations
with respect to letters of credit or guarantees issued for the account of or on
behalf of the Borrower and its Subsidiaries and all obligations representing the
deferred purchase price of property, (b) all obligations evidenced by bonds,
notes, debentures or other similar instruments; (c) all liabilities secured by
any mortgage, pledge, security interest, lien, charge, or other encumbrance
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; and (d) all guarantees,
endorsements and other contingent obligations whether direct or indirect in
respect of indebtedness of others, including any obligations with respect to
puts, swaps, and other similar undertakings, any obligation to supply funds to
or in any manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit;
and (e) that portion of all obligations arising under capital leases that is
required to be capitalized on the consolidated balance sheet of the Borrower and
its Subsidiaries; but excluding, in all events obligations arising under
operating leases and accounts payable arising in the ordinary course of
business, loan loss reserves, and deferred taxes.
 
“Indemnified Liabilities” has the meaning set forth in Article 10 hereof.
 
“Information” has the meaning set forth in Section 12.1 hereof.
 
“Interim Date” has the meaning set forth in Section 4.1(d) hereof.
 
“Internal Revenue Code” means the Internal Revenue Code of 1986, or any
subsequent federal income tax law or laws, as any of the foregoing have been or
may from time to time be amended.
 
“Investment” means the acquisition of any real or tangible personal property or
of any stock or other security, any loan, advance, bank deposit, money market
fund, contribution to capital, extension of credit (except for accounts
receivable arising in the ordinary course of business and payable in accordance
with customary terms), or purchase or commitment or option to purchase or
otherwise acquire real estate or tangible personal property or stock or other
securities of any party or any part of the business or assets comprising such
business, or any part thereof, but excluding Mortgage Loans, Agency Securities,
and any real property acquired on exercise of rights under a Mortgage Loan.
 
“Investor” means Fannie Mae, Freddie Mac, or any of the entities listed on
Exhibit G attached hereto.
 
“Late Charge” has the meaning set forth in Section 2.4(d) hereof.
 

 
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“Lender” has the meaning set forth in the first paragraph of this Agreement.
 
“Legal Requirements” shall mean all applicable federal, state, county and local
laws, by-laws, rules, regulations, codes and ordinances, and the requirements of
any governmental agency or authority having or claiming jurisdiction with
respect thereto, including, but not limited to, those applicable to any Pledged
Assets, Fannie Mae, FHA, Freddie Mac, Ginnie Mae, zoning, subdivision, building,
health, fire, safety, sanitation, the protection of the handicapped, and
environmental matters and shall also include all orders and directives of any
court, governmental agency or authority having or claiming jurisdiction with
respect thereto.
 
“Lien” means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
 
“Loan” has the meaning set forth in Section 2.1(a) hereof.
 
“Loan Documents” means this Agreement, the Notes, and each other document,
instrument or agreement executed by the Borrower or any other Person in
connection herewith or therewith, as any of the same may be amended, restated,
renewed or replaced from time to time.
 
“Majority Lenders” means, at any date, the Lenders whose Commitment Amounts in
the aggregate, total at least fifty-one percent (51%) of the Commitment;
provided, however, that if at any time there are only two Lenders, Majority
Lenders means all of the Lenders.  A Delinquent Lender and its Commitment Amount
shall be disregarded for purposes of determining Majority Lenders.
 
“Master Credit Agreement” means any agreement between Borrower and one or
mortgagors under which Borrower makes Special Fannie Mae Mortgage Loans to those
mortgagors secured by Mortgages on Multifamily Properties.
 
“Material Adverse Change “ means a material adverse change (a) in the financial
condition, business, affairs or operations of the Borrower, (b) with respect to
the value of a material portion of the Collateral, or (c) affecting the validity
and enforceability of this Agreement or the Loan Documents against the Borrower,
which, in each case, is reasonably likely to or, for purposes of Sections
4.1(n), 4.2(f) and 8.1(q), in Agent’s reasonable judgment may, jeopardize the
ability of the Borrower to pay or perform the Obligations.
 
“Maturity Date” means the earlier of May 29, 2009 or the date upon which the
whole of the Commitments are terminated or the Loan is accelerated in accordance
with applicable provisions of this Agreement.
 
“Maximum Rate” has the meaning set forth in Section 13.9 hereof.
 
“Mortgage” means a mortgage, deed of trust, deed to secure debt or other form of
mortgage instrument, appropriate and effective for the U.S. jurisdiction where
the real estate is
 

 
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located to create, perfect and maintain in full force and effect a first or
second or third, as permitted by any Agency in connection with its Purchase
Commitment of any Eligible Loan, priority mortgage lien against it, securing a
Mortgage Note and granting a perfected first or second or third, as permitted by
any Agency in connection with its Purchase Commitment of any Eligible Loan,
priority lien on real, personal, or mixed property consisting of land,
improvements and other property more particularly described therein.
 
“Mortgage-backed Securities” means securities that are secured or otherwise
backed by Mortgage Loans.
 
“Mortgage Loan” means any loan evidenced by a Mortgage Note.
 
“Mortgage Note” means a note secured by a Mortgage.
 
“Mortgage Note Amount” means, as of the date of determination, the then
outstanding unpaid principal amount of a Mortgage Note.
 
“Mortgage Pool” means a pool of Mortgage Loans that were warehoused with the
Agent, on the basis of which there is to be issued a Mortgage-backed Security.
 
“Mortgaged Property” means the property, real, personal, tangible or intangible,
securing a Mortgage Note.
 
“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA that is maintained for employees of the Borrower or
a Subsidiary of the Borrower.
 
“Multifamily Mortgage Loan” means a Mortgage Loan secured by a Mortgage on
improved Multifamily Property.
 
“Multifamily Property” means real property containing or which will contain more
than four (4) dwelling units and as more particularly defined by the regulations
promulgated by HUD.
 
“Note” means any promissory note delivered by Borrower to a Lender, Eligible
Assignee, Additional Lender or Increase Lender pursuant to Section 2.3,
Section 11.3 or Section 11.5 hereof, each in the form attached hereto as
Exhibit E, and any promissory note delivered by Borrower to a Lender in
connection with a Temporary Increase, each in substantially the form attached
hereto as Exhibit A to Exhibit H-2 (with such changes as the Agent, in its sole
discretion, shall deem necessary), together with all renewals, modifications and
extensions thereof.
 
“Notices” has the meaning set forth in Article 9 hereof.
 
“Obligations” means any and all indebtedness, obligations, and liabilities of
the Borrower to each Lender and the Agent (whether now existing or hereafter
arising, voluntary or involuntary, whether or not jointly owed with others,
direct or indirect, absolute or
 

 
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contingent, liquidated or unliquidated, and whether or not from time to time
decreased or extinguished and later increased, created or incurred), arising out
of or related to the Loan Documents, or any of them, and any renewals,
extensions, modifications, enlargements, reinstatements or rearrangements
thereof, and for Automated Clearing House exposure and liabilities and
obligations under the Borrower’s other cash management arrangements and account
agreements with the Agent or a Lender, and under any Hedging Arrangements
between the Borrower and the Agent or any Lender (or any Affiliate of the Agent
or any Lender) solely with respect to Advances made hereunder.
 
“Operating Account” means a demand deposit account maintained at Agent in the
name of the Borrower to be charged from time to time for payment of the
Obligations, and designated for funding that portion of each Eligible Loan not
funded by an Advance made against that Eligible Loan and for returning any
excess payment from an Investor for a Pledged Asset.
 
“Other Fannie Mae Mortgage Loan” means a permanent Mortgage Loan on a
Multifamily Property or other Mortgaged Property in compliance with and covered
by a Purchase Commitment issued by Fannie Mae (other than a Fannie Mae DUS
Mortgage Loan or a Special Fannie Mae Mortgage Loan).
 
“Permitted Intercompany Subordinated Debt” means indebtedness owed by the
Borrower and/or one or more of its Subsidiaries to an Affiliate (other than one
another), which indebtedness has a maturity date which is later than the
Maturity Date, and which is subordinate to the Obligations pursuant to a
subordination agreement reasonably satisfactory to the Agent.
 
“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and federal and state governments
and agencies or regulatory authorities and political subdivisions thereof.
 
“Pledged Assets” means, collectively, Pledged Loans and Pledged Securities.
 
“Pledged Hedging Accounts” has the meaning set forth in Section 3.1(h) hereof.
 
“Pledged Hedging Arrangement” has the meaning set forth in Section 3.1(h)
hereof.
 
“Pledged Loans” has the meaning set forth in Section 3.1(b) hereof.
 
“Pledged Securities” has the meaning set forth in Section 3.1(c) hereof.
 
“Prepaid Principal” has the meaning set forth in Section 2.5(b) hereof.
 
“Prime Rate” means the per annum rate of interest so designated from time to
time by the Agent as its prime rate.  The Prime Rate is a reference rate and
does not necessarily
 

 
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represent the lowest or best rate being charged to any customer.  Changes in the
Prime Rate shall be effective on the date the Agent announces a change in its
“prime” or “base” rate.
 
“Purchase Commitment” a written commitment, in form and substance reasonably
satisfactory to Agent, issued in favor of any the Borrower by an Investor under
which that Investor commits to purchase Pledged Assets.
 
“Rating Agencies” means Standard & Poor’s, Moodys, or any other nationally
recognized Person reasonably acceptable to Agent in the business of rating
creditworthiness.
 
“Receivables” has the meaning set forth in Section 3.1(g) hereof.
 
“Release Amount” has the meaning set forth in Section 3.3(f) hereof.
 
“Register” has the meaning set forth in Section 11.3(b) hereof.
 
“Serviced Loans” means each of those loans secured by a mortgage lien on a
multi-family residential property, health care facility, senior citizen facility
or other property, with respect to which the Borrower provides servicing or
subservicing (but only if such subservicing is technically styled as
subservicing but is performed under a contract directly between the Borrower and
Fannie Mae, Freddie Mac or Ginnie Mae) pursuant to a Servicing Contract.
 
“Servicing Contract” means each direct agreement with the owner of the subject
Serviced Loans, as it may be amended from time to time, pursuant to which the
Borrower services Serviced Loans.
 
“Servicing Portfolio” means the portfolio of Servicing Contracts pursuant to
which the Borrower has the rights to service Serviced Loans.
 
“Servicing Rights” means all rights of the Borrower as a servicer or subservicer
(but only if such subservicing is technically styled as subservicing but is
performed under a contract directly between the Borrower and Fannie Mae, Freddie
Mac or Ginnie Mae) of Serviced Loans.
 
“Special Fannie Mae Mortgage Loan” means a permanent Mortgage Loan on one or
more Multifamily Properties originated by Borrower under a Master Credit
Facility Agreement and evidenced by one or more Mortgage Notes in the possession
of Fannie Mae.
 
“Statement Date” has the meaning set forth in Section 4.1(d) hereof.
 
“Subordinated Debt” means, with respect to any Person, all Indebtedness of such
Person, for borrowed money, which is, by its terms (which terms shall have been
approved by the Majority Lenders) or by the terms of a subordination agreement,
in form and substance satisfactory to the Majority Lenders, effectively
subordinated in right of payment to the Obligations.
 

 
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“Subsidiary” means any corporation, association or other business entity in
which more than fifty percent (50%) of the total voting power or shares of stock
entitled to vote in the election of directors, managers or trustees thereof is
at the time owned or controlled, directly or indirectly, by any Person or one or
more of the other Subsidiaries of that Person or a combination thereof.
 
“Tangible Net Worth” means, as to the Borrower (on a non-consolidated basis), as
of the date of determination, the excess of such Persons’ Total Assets over
Total Liabilities, MINUS intangible assets, PLUS, to the extent not otherwise
included in determining “Tangible Net Worth” (i) Fannie Mae Loan Loss Reserves,
(ii) Servicing Contracts valued at the lesser of book value or fair market
value, and (iii) any Permitted Intercompany Subordinated Debt.  For purposes of
calculating the Tangible Net Worth of the Borrower and its Subsidiaries,
advances or loans to shareholders, directors, officers, employees or Affiliates,
investments in Affiliates, assets pledged to secure any liabilities not included
in the Indebtedness of such Persons, intangible assets, those other assets that
would be deemed by HUD to be non-acceptable in calculating adjusted net worth in
accordance with its requirements in effect as of that date, as those
requirements appear in “Consolidated Audit Guide for Audits of HUD Programs,”
and other assets Agent deems unacceptable, in its sole discretion, shall be
excluded from such Person’s Total Assets.
 
“Temporary Increase” has the meaning set forth in Section 11.6(a) hereof.
 
“Total Assets” means, at the time of determination, all assets of the Borrower
(on a non-consolidated basis) determined in accordance with GAAP applied in a
manner consistent with the most recent audited financial statements delivered
pursuant to the Agreement.
 
“Total Liabilities” means as to the Borrower (on a non-consolidated basis), as
of the date of determination, all liabilities of the Borrower determined in
accordance with GAAP applied in a manner consistent with the most recent audited
financial statements delivered pursuant to the Agreement and, whether or not so
classified, all redemption obligations, and off-balance sheet financial
transactions as to which there is recourse to the Borrower.
 
“Trust Receipt” means a trust receipt in a form approved by the Agent and
pursuant to which the Agent may deliver any document relating to the Collateral
to the Borrower for correction or completion.
 
“UCC” means the Uniform Commercial Code in effect in the state of New York, or
any other applicable jurisdiction.
 
1.2.           Other Definitional Provisions.  Unless otherwise specified in the
Loan Documents:
 
(a)           References in a Loan Document to “Sections,” “Exhibits,” and
“Schedules” are to sections, exhibits, and schedules in and to such Loan
Document.
 

 
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(b)           References in a Loan Document to any document, instrument, or
agreement (i) shall include all exhibits, schedules, and other attachments
thereto, (ii) shall include all documents, instruments, or agreements issued or
executed in replacement or restatement thereof, to the extent permitted hereby,
and (iii) shall mean such document, instrument, or agreement, or replacement or
predecessor thereto, as amended, supplemented, restated, or otherwise modified
from time to time to the extent permitted hereby and in effect at any given
time.
 
(c)           Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine, or neuter gender shall include the
masculine, the feminine, and the neuter.
 
(d)           Unless explicitly set forth to the contrary, a reference to a
“Subsidiary” means a Subsidiary of the Borrower or a Subsidiary of such
Subsidiary, and a reference to an “Affiliate” means a reference to an Affiliate
of the Borrower.
 
(e)           Titles and captions of Sections, subsections, and clauses in any
Loan Document are for convenience only, and neither limit nor amplify the
provisions of such Loan Document.
 
(f)           Unless otherwise indicated, all references to time are references
to Boston, Massachusetts, time.
 
(g)           All references to money or dollars (including the symbol “$”) are
to lawful currency of the United States.
 
(h)           References to “including” mean including without limiting the
generality of any description preceding that word.
 
(i)           The rule of construction providing that references to general
items following references to specific items are limited to the same type or
character of those specific items is not applicable in the Loan Documents.
 
(j)           References to any Person include that Person’s heirs, personal
representatives, successors, trustees, receivers, and permitted assigns.
 
(k)           References to any Legal Requirement include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it.
 
(l)           References in any of the Loan Documents to any property being
pledged to the Agent or any Liens or security interests being granted to or held
by the Agent (or required so to be) shall mean, respectively, pledged to,
granted to or held by Agent for itself as Lender and as agent for the other
Lenders.
 

 
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1.3.           Accounting Principles.  All accounting and financial terms used
in the Loan Documents and the compliance with each financial covenant therein
shall be determined in accordance with GAAP, and all accounting principles shall
be applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period.  The Borrower shall notify the Agent of any change
in GAAP from that in effect on the date hereof which would in any way effect the
operation of any covenant in any Loan Documents, whereupon, the Agent and the
Borrower shall attempt for a reasonable period (not to exceed ten (10) Business
Days unless the Agent and the Borrower agrees to extend such time period) to
agree upon appropriate amendments to the affected covenants to eliminate such
effect and to produce equivalent results, failing which, for purposes of
calculating such financial covenants, GAAP will mean generally accepted
accounting principles on the date just prior to the date on which any such
change in GAAP became effective.
 
2.           THE CREDIT.
 
2.1.           The Commitment.
 
(a)           Subject to the terms and conditions of this Agreement and provided
no Default or Event of Default has occurred and is continuing, each Lender
severally and not jointly agrees, from time to time during the period from the
date hereof up to, but not including the Maturity Date, to make Advances to the
Borrower, provided, however, that (1) the sum of the total aggregate principal
amount outstanding at any one time of all such Advances shall not exceed the
Commitment, and (2) no Lender’s portion of the Advances shall exceed such
Lender’s Commitment Amount.  The aggregate amount of all Advances outstanding
from time to time hereunder may hereinafter collectively be referred to as the
“Loan.”  Within the Commitment, the Borrower may borrow, repay and
reborrow.  All Advances under this Agreement shall constitute a single
indebtedness, and all of the Collateral shall be security for the Notes and for
the performance of all the Obligations of the Borrower.
 
(b)           Advances shall be used by the Borrower solely for the purpose of
funding the origination of Eligible Loans as specified in the Advance Request,
and none other, and shall be made at the request of the Borrower in the manner
hereinafter provided in Section 2.2, against the pledge of such Mortgage Loans,
and such other collateral as is set forth in Section 3.1 hereof as Collateral
therefor.
 
(c)           In addition to the limitations set forth in this Agreement, each
Advance to fund an Eligible Loan shall be limited to the lesser of (x) the
Mortgage Note Amount, or (y) the Committed Purchase Price amount.
 
(d)           In the event at any time the outstanding principal balance of the
Loan should exceed the lesser of (x) the Commitment or (y) the aggregate
Collateral Value of all Eligible Loans against which Advances are then
outstanding, the Borrower shall repay such excess amount on demand to the Agent
so that the outstanding principal balance of the Loan is in compliance with the
terms and provisions hereof.
 

 
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(e)           The Lenders shall have no obligation to make any Advances
hereunder to fund the origination of Fannie Mae DUS Mortgage Loans, Other Fannie
Mae Mortgage Loans or Freddie Mac Loans if Standard & Poor’s reduces the credit
rating of Fannie Mae (with respect to Fannie Mae DUS Mortgage Loans or Other
Fannie Mae Mortgage Loans) or Freddie Mac (with respect to Freddie Mac Loans) to
A or lower (or another Rating Agency reduces such credit rating to a comparable
rating).
 
2.2.           Procedures for Obtaining Advances.
 
(a)           The Borrower may obtain an Advance hereunder, subject to the
satisfaction of the conditions set forth in Sections 4.1 and 4.2 hereof, upon
compliance with the procedures set forth in this Section 2.2 and in the
applicable Exhibit C attached hereto and made a part hereof.  Requests for
Advances shall be initiated by the Borrower (i) by delivering to the Agent not
later than 1 Business Day before the Business Day on which the Borrower desires
the Advance, a completed and signed request for an Advance (an “Advance
Request”) in the form of Exhibit A attached hereto and made a part hereof,  The
Agent shall have the right, on not less than three (3) Business Days’ prior
Notice to the Borrower, to modify the form of the Advance Request or any
exhibits hereto, subject to the prior written consent of the Borrower, not to be
unreasonably withheld, and, as so modified, said Advance Request or exhibits
shall be deemed a part hereof.
 
(b)           Subject to the delivery of an Advance Request, and the
satisfaction of the conditions set forth in Sections 4.1 and 4.2, the Borrower
is entitled to obtain an Advance under this Agreement upon compliance with the
procedures set forth in this Section and in the applicable Exhibit C, including
delivery to the Agent of all required Collateral Documents.
 
(c)           To make an Advance, the Agent shall credit the Borrower’s Funding
Account upon compliance by the Borrower with the terms of this Agreement.
 
2.3.           Notes.  The Borrower’s obligation to pay the principal of, and
accrued and unpaid interest on, all Advances made by the Lenders shall be
evidenced by the Notes of the Borrower in favor of each Lender.  All terms and
provisions of the Notes are hereby incorporated herein.
 
2.4.           Interest.
 
(a)           Except as provided in Section 2.4(c) below, the unpaid amount of
each Advance hereunder shall bear interest from the date of such Advance until
paid in full, at the Applicable Rate.
 
(b)           All interest shall be:  (a) payable in arrears on the first day of
each calendar month and on the Maturity Date; and (b) calculated on the basis of
a 360 day year and the actual number of days elapsed.  If Borrower does not pay
interest when due following the invoice pursuant to Section 2.7, Borrower
authorizes Agent to charge the Operating Account for the payment of accrued and
unpaid interest for any calendar month; Agent shall notify Borrower of such
charge.
 

 
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(c)           Obligations not paid when due (whether at stated maturity, upon
acceleration following the occurrence of an Event of Default or otherwise) shall
bear interest, from the date due until paid in full, at a rate of interest
(“Default Rate”) at all times equal a floating rate of interest which is
equal two percent (2%) per annum over the Applicable Rate, said interest to be
payable on demand by Agent.
 
(d)           The Borrower shall pay, upon billing therefor, a “Late Charge”
equal to five percent (5%) of the amount of any payment of principal, other than
principal due at the Maturity Date (or the date on which the Agent accelerates
the time for payment of the Loan after the occurrence of an Event of Default),
interest, or other Obligations, which are not paid within ten (10) days of the
due date thereof.  Late Charges are: (a) payable in addition to, and not in
limitation of, the Default Rate, (b) intended to compensate Agent and the
Lenders for administrative and processing costs incident to late payments,
(c) not interest, and (d) not subject to refund or rebate or credit against any
other amount due.
 
(e)           Notwithstanding any other provision of this Agreement, if,
pursuant to this Agreement, the Agent debits the Borrower’s Operating Account to
honor an item presented against the Operating Account and that debit or
direction results in an overdraft, the Agent may, but in no event shall be
obligated to, make an additional Advance to fund that overdraft (an “Overdraft
Advance”).  The Borrower shall pay the outstanding amount of any Overdraft
Advance within one (1) Business Day after the date of the Overdraft Advance.
 
2.5.           Principal Payments.
 
(a)           Upon acceleration of the Loan, if the Loan has been accelerated by
the Agent (or the Facility has been automatically terminated) upon an Event of
Default, or at the Maturity Date, all accrued and unpaid interest, principal and
other Obligations due with respect to the Loan shall be due and payable in full,
and the principal balance and such other Obligations, but not unpaid interest,
shall continue to bear interest at the Default Rate until so paid.
 
(b)           The Borrower shall have the right to prepay the outstanding
Advances in whole or in part, from time to time, without premium or penalty,
provided that: (i) the Agent shall have actually received from the Borrower
prior written Notice of (a) the Borrower’s intent to prepay, (b) the amount of
principal which will be prepaid (the “Prepaid Principal”), and (c) the date on
which the prepayment will be made; (ii) each prepayment shall be in a minimum
amount of $1,000,000 or more (unless the prepayment retires the outstanding
balance of a Warehouse Advance with respect to a particular Pledged Asset or the
Loan in full); and (iii) each prepayment shall be in the amount of 100% of the
Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other Obligations relating specifically to the Prepaid
Principal or which otherwise have become due and payable to the Agent and
Lenders under the Loan Documents on or before the date of prepayment but have
not been paid.
 

 
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(c)           The Borrower shall be obligated to pay to the Agent on behalf of
the Lenders, without the necessity of prior demand or Notice from the Agent or
any Lender, and the Borrower authorizes the Agent on behalf of the Lenders to
charge the Operating Account or any other accounts of the Borrower in Agent’s
possession for the amount of any outstanding Advance against a specific Pledged
Asset upon the earliest occurrence of any of the following events:
 
1.           Upon the earlier to occur of (x) the payment of the Committed
Purchase Price from an Investor with respect to any Pledged Asset or (y) that
date which is ninety (90) days from the date of the funding of such Advance;
 
2.           On the date an Advance was made if the Pledged Loan that was to
have been funded by that Advance is not closed and funded;
 
3.           Three (3) Business Days elapse from the date an Advance was made
against a Pledged Loan, without receipt by the Agent of the Collateral Documents
relating to that Pledged Loan required to be delivered on that date, or such
Collateral Documents, upon examination by the Agent, are found not to be in
compliance with the requirements of this Agreement or the related Purchase
Commitment and the Borrower fails to cure such non-compliance within three (3)
Business Days after written Notice thereof;
 
4.           Ten (10) Business Days elapse without the return of a Collateral
Document delivered by the Agent to the Borrower under a Trust Receipt for
correction or completion;
 
5.           Three (3) Business Days after Borrower has received written Notice
that a Pledged Loan is determined to have been originated or issued based on
materially untrue, incomplete or inaccurate information or otherwise to be
subject to fraud, whether or not the Borrower had knowledge of the
misrepresentation, incomplete or incorrect information or fraud;
 
6.           On the date the Pledged Loan or a Lien prior to the Pledged Loan is
defaulted and remains in default for a period of 60 days or more;
 
7.           On the mandatory delivery date of the related Purchase Commitment
if the related Pledged Asset has not been delivered under the Purchase
Commitment prior to such mandatory delivery date, or on the date the related
Purchase Commitment expires or is terminated;
 
8.           Three (3) Business Days after the date a Pledged Asset is rejected
for purchase by an Investor unless another Purchase Commitment is provided
within that 3 Business Day period;
 
9.           On the date the Pledged Loan does not qualify as an Eligible Loan;
and
 

 
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10.           Upon the sale, other disposition or prepayment of any Pledged
Asset or, with respect to a Pledged Loan included in an Eligible Mortgage Pool,
upon the sale or other disposition of the related Agency Security.
 
(d)           In addition to the payments required pursuant to Section 2.5(c),
if the principal amount of any Pledged Loan is prepaid in whole or in part while
a Advance is outstanding against the Pledged Loan, the Borrower must pay to
Agent, without the necessity of prior demand or Notice from Agent, the amount of
the prepayment, to be applied against such Advance.
 
(e)           The proceeds of the sale or other disposition of Pledged Assets
must be paid directly by the Investor to the Cash Collateral Account.  The
Borrower must give Notice to Agent (by telephone or electronic mail, and if by
telephone, followed promptly by written Notice) of the Pledged Assets for which
proceeds have been received.  Upon receipt of such Notice from the Borrower,
Agent will apply any proceeds deposited into the Cash Collateral Account to the
payment of the Advance related to the Pledged Assets identified by the Borrower
in its Notice, and those Pledged Assets will be considered to have been redeemed
from pledge.  Agent is entitled to rely upon the Borrower’s affirmation that
deposits in the Cash Collateral Account represent payments from Investors for
the purchase of the Pledged Assets specified by the Borrower in its Notice.  If
the payment from an Investor for the purchase of Pledged Assets is less than the
outstanding Advance against the Pledged Assets identified by the Borrower in its
Notice (the “Deficiency”), the Borrower shall immediately deposit into the Cash
Collateral Account the amount of such Deficiency in collected funds, and the
Borrower authorizes Agent to charge the Borrower’s Cash Collateral Account for
the amount deposited by the Borrower to cover such Deficiency to be applied
against such Advance.  As long as no Default exists, Agent will transfer into
the Borrower’s Operating Account any excess payment from an Investor for Pledged
Assets.
 
2.6.           Expiration of Commitment.  Unless extended or terminated earlier
as permitted hereunder, the Commitment shall expire of its own term, and without
the necessity of action by the Lenders or the Agent, at the close of business on
the Maturity Date.  However, the remainder of this Agreement shall remain in
full force and effect until all amounts due on the Obligations have been paid in
full.  The Lenders have not made, and do not hereby make, any commitment to
renew, extend, rearrange or otherwise refinance the outstanding and unpaid
principal of the Notes or accrued interest thereon.  In the event, however, the
Lenders from time to time renew, extend, rearrange, increase and/or otherwise
refinance any portion or all of any Obligation and any accrued interest thereon
at any time, such refinancing shall be evidenced by appropriate promissory notes
in form and substance satisfactory to the Lenders and, unless otherwise noted or
modified at such time or times by the terms of such promissory note or any
agreements executed in connection therewith, any such promissory notes and
refinancing evidenced thereby shall be governed in all respects by the terms of
this Agreement.  Notwithstanding the foregoing, Borrower may terminate the
Commitment upon not less than thirty (30) days prior written Notice to the
Agent.  All Obligations of the Borrower shall automatically become due and
payable, without demand or Notice of any kind, on the effective
 

 
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date of such termination including, but not limited to, all Advances, accrued
and unpaid interest, accrued and unpaid Non-Usage Fees and Agent’s Fees through
the effective date.
 
2.7.           Payments.  Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent on behalf of the Lenders not later
than the close of business on the date when due unless such date is a
non-Business Day, in which case, such payment shall be due not later than 2:00
p.m. on the first Business Day thereafter, and shall be made in lawful money of
the United States of America in immediately available funds.  Any such payment
made after 2:00 p.m. shall be deemed to be received on the next Business Day
and, if applicable, interest thereon shall continue to accrue until such next
Business Day.  No Lender directly invoices Borrower for – and only Agent
invoices Borrower for – interest under the Loan Documents.  Agent may submit
monthly billings reflecting payments due; however, any changes in the interest
rate which occur between the date of billing and the due date may be reflected
in the billing for a subsequent month.  Neither the failure of Agent to submit a
billing nor any error in any such billing shall excuse the Borrower from the
obligation to make full payment of all the Borrower’s payment Obligations when
due.  All payments shall be applied first to the payment of all fees, expenses,
and other amounts due to the Lenders under this Agreement (excluding principal
and interest), then to accrued interest, and the balance on account of
outstanding principal, provided, however, that after the occurrence and during
the continuation of an Event of Default, payments will be applied to the
Obligations as the Agent determines, subject to the provisions of Section 8.3.
 
2.8.           Loan Fees.
 
(a)           Commitment Fee.  The Borrower shall pay the commitment fee
described in the Fee Letter.
 
(b)           Unused Fee.  An unused fee in an amount equal to the Daily Unused
Amount (if a positive number), multiplied by ten (10) basis points per
annum.  As used herein, “Daily Unused Amount” means the Commitment then in
effect, minus the outstanding principal balance of the Advances.  The unused fee
shall be calculated for each day of a calendar quarter (or portion thereof) and
shall be payable by the Borrower to the Agent (for the ratable benefit of the
Lenders) quarterly in arrears on the last Business Day of June, September, and
December and on the Maturity Date.
 
(c)           Miscellaneous Fees.  The Borrower shall pay to the Agent, promptly
following an invoice therefor, miscellaneous fees including:
 
(i)           Wire transfer fees customarily charged by the Agent;
 
(ii)           Customary handling fees of $50 per transaction involving the
Collateral;
 
(iii)           Customary handling fees of $50 per transaction involving
Mortgage-backed Securities; and
 

 
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(iv)           An annual custody account fee of $3,500.
 
(d)           Administrative Fees.  If, for any reason, (a) the Borrower repays
an Advance on the same day that it was made by the Lenders, or (b) the Borrower
instructs Agent not to make a previously requested Advance after the Lenders
have reserved funds or made other arrangements necessary to enable such Lenders
to fund that Advance, Borrower agrees to pay to each Lender an administrative
fee equal to one day of interest on that Advance at the Applicable
Rate.  Administrative fees are due and payable in the same manner as interest is
due and payable under this Agreement.
 
2.9.           Reserved.
 
2.10.         Increased Costs; Capital Requirements.  In the event there is a
change after the date of this Agreement in any applicable law, order, regulation
or directive issued by any governmental or monetary authority, or any change
after the date of this Agreement in the governmental or judicial interpretation
or application thereof, and such change:
 
(a)           Does or shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Advances made hereunder, or change the
basis of taxation on payments to such Lender of principal, fees, interest or any
other amount payable hereunder (except for change in the rate of tax on the
overall gross or net income of such Lender by the jurisdiction in which such
Lender’s principal office is located);
 
(b)           Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the account
of, advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of such Lender which are not otherwise included in the
determination of the interest rate as calculated hereunder;
 
and the result of all of the foregoing taken as a whole is to increase the cost
to such Lender of making, renewing or maintaining any Advance or to reduce any
amount receivable in respect thereof or to reduce the rate of return on the
capital of such Lender or any Person controlling such Lender as it relates to
credit facilities in the nature of that evidenced by this Agreement, then, in
any such case, the Borrower shall promptly pay any additional amounts necessary
to compensate such Lender for such additional cost or reduced amounts receivable
or reduced rate of return as reasonably determined by such Lender with respect
to this Agreement or Advances made hereunder or such Lender’s obligations
hereunder.  If a Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall notify the Borrower through the Agent of the
event by reason of which it has become so entitled and the Borrower shall pay
such amount within fifteen (15) days thereafter. Notwithstanding the foregoing,
the Borrower shall not be obligated to pay any such additional amounts
attributable to the period (the “Excluded Period”) ending ninety (90) days prior
to the date the Borrower receives written Notice of the law, order, regulation,
directive, change or request by reason of which such additional amounts are
payable, except to the extent such additional amounts accrued during the
Excluded Period due to the retroactive application of such law, order,
regulation, directive, change or
 

 
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request, in which case the limitation set forth in this sentence shall not
apply. A certificate as to any additional amount payable pursuant to the
foregoing sentence containing the calculation thereof in reasonable detail
submitted by a Lender, through the Agent, to the Borrower shall be conclusive in
the absence of manifest error. The obligations of the Borrower under this
Section shall survive the payment of all other Obligations and the termination
of this Agreement.
 
2.11.        Taxes.
 
(a)           Any and all payments by the Borrower to or for the account of the
Agent or any Lender under any Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of the Agent and each
Lender, taxes imposed on or measured by its overall net income, and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which the Agent or such Lender,
as the case may be, is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as “Taxes”).  If the Borrower shall be required by any Laws to deduct any Taxes
from or in respect of any sum payable under any Loan Document to the Agent or
any Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section), each of the Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Agent (which shall forward the same
to such Lender) the original or a certified copy of a receipt evidencing payment
thereof.
 
(b)           In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).
 
(c)           If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Agent or any Lender, the Borrower shall also pay to the Agent or to such Lender,
as the case may be, at the time interest is paid, such additional amount that
the Agent or such Lender specifies is necessary to preserve the after-tax yield
(after factoring in all taxes, including taxes imposed on or measured by net
income) that the Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
 
(d)           The Borrower agrees to indemnify the Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or
 

 
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asserted by any jurisdiction on amounts payable under this Section) paid by the
Agent and such Lender, (ii) amounts payable under Section 2.11(c) and (iii) any
liability (including additions to tax, penalties, interest and expenses) arising
therefrom or with respect thereto, in each case whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  Payment under this subsection (d) shall be made within
30 days after the date the Lender or the Agent makes a demand therefor.
 
The Agreement of the Borrower contained in this Section 2.11 shall survive the
expiration or termination of this Agreement and the payment in full of the
Notes.
 
3.           COLLATERAL.
 
3.1.           Grant of Security Interest.  As security for the payment of the
Notes and for the payment and performance of all of the Borrower’s Obligations
hereunder, the Borrower hereby assigns and transfers all of its rights, titles
and interests in and to and grants a security interest to the Agent for the
benefit of the Lenders in the following described property, whether now owned or
hereafter acquired by the Borrower (the “Collateral”):
 
(a)           All amounts advanced by Lenders to or for the account of the
Borrower under this Agreement to fund a Mortgage Loan until that Mortgage Loan
is closed and those funds disbursed.
 
(b)           All Mortgage Loans, including all Mortgage Notes and Mortgages
evidencing or securing those Mortgage Notes, and all assignments of the same,
that from time to time are delivered or caused to be delivered to the Agent for
the benefit of the Lenders, come into the possession, custody or control of the
Agent for the purpose of assignment or pledge or in respect of which an Advance
has been made by the Lenders hereunder (the “Pledged Loans”).
 
(c)           All Mortgage-backed Securities that are created in whole or in
part on the basis of Pledged Loans or are delivered or caused to be delivered to
the Agent for the benefit of the Lenders, or are otherwise in the possession of
the Agent or its agent, bailee or custodian as assignee, or pledged to the
Agent, or for such purpose are registered by book-entry in the name of, the
Agent (including delivery to or registration in the name of a third party on
behalf of the Agent or any Lender) hereunder or in respect of which from time to
time an Advance has been made by the Lenders hereunder (the “Pledged
Securities”).
 
(d)           All commitments issued by FHA to insure or guarantee any Mortgage
Loans included in the Pledged Loans; all Purchase Commitments held by the
Borrower covering Pledged Assets, and all proceeds from the sale of Pledged
Assets to Investors pursuant to those Purchase Commitments; and all personal
property, contract rights, servicing and servicing fees and income or other
proceeds, amounts and payments payable to the Borrower whether as compensation
or reimbursement, accounts or general intangibles of whatsoever kind relating to
Pledged Assets, FHA Commitments and the Purchase Commitments (subject to any
restrictions on the pledge thereof under the applicable requirements of Fannie
Mae and Freddie Mac), and all other documents or instruments relating
 

 
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to Pledged Assets, including any interest of the Borrower in any fire, casualty
or hazard insurance policies and any awards made by any public body or decreed
by any court of competent jurisdiction for a taking or for degradation of value
in any eminent domain proceeding as the same relate to Pledged Assets.
 
(e)           All documents, instruments, files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs, cards, accounting
records (including all information, records, tapes, data, programs, discs and
cards necessary or helpful in the administration or servicing of the foregoing
Collateral) and other information and data of the Borrower relating to the
foregoing Collateral.
 
(f)           All cash, whether now existing or acquired after the date of this
Agreement, delivered to or otherwise in the possession of Agent or any Lender,
or their respective agents, bailees or custodians (provided, that with respect
to funds held by the Borrower in trust or escrow for any other Person with the
Agent or any Lender, only the Borrower’s interest in earnings on such funds
shall be Collateral) or designated on the books and records of the Borrower as
assigned and pledged to Agent for the benefit of the Lenders, including all cash
deposited in the Cash Collateral Account.
 
(g)           All Accounts or General Intangibles (as those terms are defined in
the New York Uniform Commercial Code owned by the Borrower (“Receivables”)
related to the Collateral referenced in Sections 3.1(a) through and including
3.1(c) for the payment of money against (1) FHA or a private mortgage insurer
under an FHA or private insurer’s mortgage insurance policy insuring payment of,
or any other Person under any other agreement (excluding a Servicing Contract)
relating to, all or part of a defaulted Mortgage Loan repurchased by the
Borrower from an investor or out of a pool of Mortgage Loans serviced by the
Borrower, (2) obligors and their accounts, or any Investor, insurer or guarantor
covering, or out of the proceeds of any sale of or foreclosure sale in respect
of, any Mortgage Loan being serviced by any Borrower, in either case, for the
reimbursement of real estate taxes or assessments, or casualty or liability
insurance premiums, paid by the Borrower in connection with Mortgage Loans and
(3) obligors and their accounts, or any other Investor, insurer or guarantor
under or in respect of, or out of the proceeds of any sale or foreclosure sale
in respect of, any Mortgage Loans serviced by the Borrower for repayment of
advances made by the Borrower to cover shortages in principal and interest
payments.
 
(h)           All Hedging Arrangements related to the Collateral referenced in
Section 3.1(a) through and including 3.1(c) (“Pledged Hedging Arrangements”) and
the Borrower’s accounts in which those Hedging Arrangements are held (“Pledged
Hedging Accounts”), including all rights to payment arising under the Pledged
Hedging Arrangements and the Pledged Hedging Accounts, except that Agent’s
security interest in the Pledged Hedging Arrangements and Pledged Hedging
Accounts is limited to benefits, including rights to payment, related to the
Collateral.
 
(i)           All Accounts, Chattel Paper, Instruments, General Intangibles,
Certificated Securities, Uncertificated Securities, and Investment Property, as
those terms are
 
 
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defined in the New York Uniform Commercial Code, arising from or relating to any
of the foregoing Collateral.
 
(j)           All cash and non-cash proceeds of the foregoing Collateral,
including all dividends, distributions and other rights in connection with, and
all additions to, modifications of and replacements for, the foregoing
Collateral, and all products and proceeds of the foregoing Collateral, together
with whatever is receivable or received when the foregoing Collateral or
proceeds thereof are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, including, without
limitation, all rights to payment with respect to any cause of action affecting
or relating to the foregoing Collateral or proceeds thereof.
 
(k)           The Cash Collateral Account, the Funding Account, and the
Operating Account, all amounts now or hereafter on deposit therein and all
interest or other amounts now or hereafter accrued thereon.
 
3.2.           Authenticated Record.  This Agreement constitutes an
authenticated record which authorizes the Agent to file such financing
statements as the Agent determines as appropriate to perfect or protect the
security interests created by this Agreement.
 
3.3.           Release of Security Interest in Pledged Assets.
 
(a)           Except as provided in Section 3.3(b) below, Pledged Loans will be
released from Agent’s security interest only against payment to Agent of the
Release Amount in connection with those Pledged Loans.  If Pledged Loans are
transferred to a pool custodian or an investor for inclusion in a Mortgage Pool
and Agent’s security interest in the Pledged Loans included in the Mortgage Pool
is not released before the issuance of the related Mortgage-backed Security,
then that Mortgage-backed Security, when issued, is a Pledged Security, Agent’s
security interest continues in the Pledged Loans backing that Pledged Security
and Agent is entitled to possession of the Pledged Security in the manner
provided in this Agreement.
 
(b)           If Pledged Loans are transferred to an Approved Custodian and
included in an Eligible Mortgage Pool, Agent’s security interest in the Pledged
Loans included in the Eligible Mortgage Pool will be released upon the delivery
of the Agency Security to Agent (including delivery to or registration in the
name of a third party on behalf of Agent), and that Agency Security is a Pledged
Security.  Agent’s security interest in that Pledged Security will be released
only against payment to Agent of the Release Amount in connection with the
Mortgage Loans backing that Pledged Security.
 
(c)           The Agent for the benefit of the Lenders has the exclusive right
to possession of all Pledged Securities or, if Pledged Securities are issued in
book-entry form or issued in certificated form and delivered to a clearing
corporation (as such term is defined in the UCC) or its nominee, Agent has the
right to have the Pledged Securities registered in the name of a securities
intermediary (as such term is defined in the UCC) in an account containing only
customer securities and credited to an account of Agent.  Agent has no duty or
 

 
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obligation to deliver Pledged Securities to an Investor or to credit Pledged
Securities to the account of an Investor or the Investor’s designee except
against payment of the Release Amount for those Pledged Securities, unless the
Agent shall have entered into a master agreement with such Investor on terms and
conditions satisfactory to the Agent.  The Borrower acknowledges that Agent may
enter into one or more standing arrangements with securities intermediaries with
respect to Pledged Securities issued in book entry form or issued in
certificated form and delivered to a clearing corporation or its nominee, under
which the Pledged Securities are registered in the name of the securities
intermediary, and the Borrower agrees, upon request of Agent, to execute and
deliver to those securities intermediaries the Borrower’s written concurrence in
any such standing arrangements.
 
(d)           If no Event of Default has occurred and is continuing, the
Borrower may redeem a Pledged Loan or Pledged Security from Agent’s security
interest by notifying Agent of its intention to redeem the Pledged Loan or
Pledged Security from pledge and paying, or causing an Investor to pay, to Agent
the Release Amount in connection with the Pledged Loan or the Pledged Loans
backing that Pledged Security.
 
(e)           If an Event of Default has occurred and is continuing, Agent may,
with no liability to the Borrower or any Person, continue to release its
security interest in any Pledged Asset against payment of the Release Amount in
connection with that Pledged Asset.
 
(f)           The amount (“Release Amount”) to be paid by the Borrower to obtain
the release of Agent’s security interest in a Pledged Asset will be (1) unless
and until an Event of Default occurs and is continuing, the principal amount of
the Advances outstanding against the Pledged Asset, and (2) while an Event of
Default exists, the full Committed Purchase Price therefor, or amount paid to
Agent in a commercially reasonable disposition of that Pledged Asset by the
Agent in the exercise of its rights and remedies under this Agreement.
 
3.4.           Delivery of Collateral Documents.
 
(a)           If no Event of Default has occurred and is continuing, the Agent
will deliver documents relating to the Collateral to the Borrower for correction
or completion under a Trust Receipt.
 
(b)           If no Event of Default has occurred and is continuing, upon
delivery by the Borrower to the Agent of shipping instructions pursuant to the
applicable Exhibit C, the Agent will transmit Pledged Loans or Pledged
Securities, together with all related loan documents and pool documents in the
Agent’s possession, to the applicable Investor, Approved Custodian or other
party acceptable to Agent in its sole discretion.
 
(c)           Upon receipt of Notice from the Borrower, and payment of the
Release Amount with respect to a Pledged Loan identified by the Borrower, Agent
will release to the Borrower any Collateral Documents relating to the redeemed
Pledged Loan or the Pledged Loans backing a Pledged Security that Agent has in
its possession and that have not been delivered to an Investor or Approved
Custodian.

 
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3.5.           Collection and Servicing Rights.  So long as no Event of Default
shall have occurred and is continuing, the Borrower shall have a revocable and
nontransferable license to service and retain subservicers, and receive and
collect directly all sums payable to the Borrower in respect of the Collateral
other than proceeds of any Purchase Commitment or proceeds of the sale of any
Collateral.  During the continuance of any Event of Default, the Agent or its
designee may revoke such license by Notice to the Borrower (or its successor,
trustee, or receiver) whereupon the Borrower’s rights to so service the
Collateral shall terminate.  Agent or its designee shall thereafter be entitled
to service and receive and collect all sums payable to the Borrower in respect
of the Collateral, and in such case (a) the Agent or its designee in its
discretion may, in its own name or in the name of the Borrower or otherwise,
demand, sue for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but shall be
under no obligation to do so, (b) the Borrower shall, if the Agent so requests,
forthwith deliver the credit files and the servicing files for the Collateral to
the Agent or its designee and pay to the Agent, on behalf of the Lenders, at its
principal office all amounts thereafter received by the Borrower upon or in
respect of any of the Collateral, advising the Agent as to the source of such
funds, and (c) all amounts so received and collected by the Agent shall be held
by it for the benefit of the Lenders as part of the Collateral.
 
3.6.           Return or Release of Collateral at End of Commitment.  If (a) the
Commitment shall have expired or been terminated, and (b) no Advances, interest
or other Obligations evidenced by the Loan Documents or due under this Agreement
shall be outstanding and unpaid, the Agent shall deliver or release all
Collateral in its possession to the Borrower.  The receipt of the Borrower for
any Collateral released or delivered to the Borrower pursuant to any provision
of this Agreement shall be a complete and full acquittance for the Collateral so
returned, and the Agent and the Lenders shall thereafter be discharged from any
liability or responsibility therefor.
 
4.           CONDITIONS PRECEDENT.
 
4.1.           Initial Advance.  The obligation of the Lenders to make any
Advance under this Agreement is subject to the satisfaction, in the sole
discretion of the Agent, on or before the date thereof, of the following
conditions precedent, save and except that Agent may, at its sole option, waive
any one or more of the following conditions prior to the Initial Advance but
such waiver shall not prevent Agent from requiring compliance of such
condition(s) prior to any subsequent Advance to the extent set forth in a
supplemental agreement entered into between the Borrower and Agent:
 
(a)           Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto and, shall be in full force and
effect and shall be in form and substance satisfactory to each of the Lenders.
 
(b)           UCC, tax lien and judgment searches of the appropriate public
records for the Borrower that do not disclose the existence of any prior Lien on
the Collateral other than in favor of Agent or as permitted under this
Agreement, or other than a Lien in favor of

 
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any Person which Lien shall be terminated in accordance with the provisions of
this Agreement.
 
(c)           Agent shall have received from the Borrower a copy, certified as
of a recent date by the appropriate officer of the State in which such Person is
organized to be true and complete, of the corporate charter and any other
organization documents of such Person as in effect on such date of
certification.  The Borrower shall furnish evidence satisfactory to the Agent
that they are each duly qualified and in good standing in each jurisdiction in
which it owns or leases property or in which the conduct of its business
requires it to so qualify, except where the failure to so qualify could not have
a materially adverse effect on the business, assets, or financial condition of
the Borrower.
 
(d)           Agent shall have received from the Borrower financial statements
of the Borrower (and its Subsidiaries, on a consolidated basis) containing a
balance sheet as of December 31, 2007 (the “Statement Date”) and related
statements of income, changes in stockholders’ equity and cash flows for the
period ended on the Statement Date and a balance sheet as of March 31, 2008
(“Interim Date”) and related statement of income for the period ended on the
Interim Date, all prepared in accordance with GAAP applied on a basis consistent
with prior periods and in the case of the statements as of the Statement Date,
audited by independent certified public accountants of recognized standing
acceptable to the Agent, together with an Officer Certificate prepared as of the
Interim Date and executed by any officer of the Borrower.
 
(e)           UCC financing statements naming the Borrower as debtor and the
Agent as secured party covering the Collateral shall have been duly recorded and
filed to the satisfaction of Agent and its counsel.
 
(f)           Agent shall have received evidence, in form, scope and substance
and with such insurance carriers, satisfactory to the Agent, for all insurance
policies required under any of the Loan Documents.
 
(g)           There shall be no pending or threatened litigation involving the
Borrower which could reasonably be expected to result in a Material Adverse
Change, and no judgment, order, injunction or other similar injunction or other
similar restraint prohibiting any of the transactions contemplated hereby shall
exist.
 
(h)           All action on the part of the Borrower necessary for the valid
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents shall have been duly and effectively taken, and evidence
thereof satisfactory to the Agent shall have been provided to the Agent.  Agent
shall have received from the Borrower true copies of resolutions adopted by the
their respective boards of directors authorizing the transactions described
herein, each certified by each of their secretaries as of a recent date to be
true and complete.
 
(i)           Agent shall have received from the Borrower an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of the Borrower and giving
 

 
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the name and bearing a specimen signature of each individual who shall be an
Authorized Representative: (a) to sign, in the name and on behalf of such
Person, each of the Loan Documents to which such Person is or is to become a
party; (b) with respect to the Borrower, to make requests for Advances; and
(c) to give Notices and to take other action on behalf of the Borrower under the
Loan Documents.
 
(j)           Agent shall have received a favorable written opinion of counsel
to the Borrower, dated as of the Closing Date in form, scope, and substance
satisfactory to the Agent, addressed to the Agent and the Lenders.
 
(k)          Copies of the certificates, documents or other written instruments
that evidence the Borrower’s eligibility described in Section 5.11, together
with copies of all seller/servicer contracts to which the Borrower is a party,
all in form and substance satisfactory to Agent.
 
(l)           Borrower shall have paid to the Agent all fees and expenses
required pursuant to this Agreement and the other Loan Documents.
 
(m)         The Agent shall be satisfied that (i) the Borrower has obtained all
material and appropriate authorizations and approvals of all governmental
authorities (including, without limitation, any approvals required by any of
Fannie Mae, FHA, Freddie Mac, Ginnie Mae, HUD), required for the due execution,
delivery and performance by the Borrower of each of the Loan Documents and for
the perfection of or the exercise by the Agent and each Lender of their
respective rights and remedies under the Loan Documents, and (ii) all
transactions contemplated hereby shall be in material compliance with, and the
Borrower shall have obtained all material and appropriate approvals pertaining
to, all applicable laws, rules, regulations and orders, including, without
limitation, all governmental, environmental, ERISA, retiree health benefits,
workers’ compensation and other requirements, regulations and laws and shall not
contravene any charter, by-law, debt instrument or other material contact or
agreement to which Borrower is a party.
 
(n)           No Material Adverse Change shall have occurred since the Statement
Date and the Interim Date.
 
(o)           Borrower shall have provided such additional instruments and
documents to the Agent and the Lenders as the Agent and the Agent’s counsel may
have reasonably requested.
 
 

 
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4.2.           Each Advance.  The obligation of the Lenders to make any Advance
under this Agreement is subject to the satisfaction, in the sole discretion of
the Agent, as of the date of each such Advance, of the following additional
conditions precedent, save and except that Agent may, at its sole option, waive
any one or more of the following conditions prior to the requested Advance but
such waiver shall not prevent Agent from requiring compliance of such
condition(s) prior to any subsequent Advance:
 
(a)           In connection with an Advance, the Borrower shall have delivered
to the Agent the Advance Request, and the Collateral Documents, called for
under, and shall have satisfied the procedures set forth in, Section 2.2 hereof
and the applicable Exhibit C hereto described in that Section, according to the
type of the requested Advance.  All items delivered to the Agent shall be
satisfactory to the Agent, in form and content, and the Agent may reject such of
them as do not meet the requirements of this Agreement or of the related
Purchase Commitment.
 
(b)           The Agent shall have received evidence satisfactory to it as to
the making and/or continuation of any book entry or the due filing and recording
in all appropriate offices of all financing statements and other instruments as
may be necessary to perfect the security interest of the Agent in the Collateral
under the Uniform Commercial Code of New York or other applicable law.
 
(c)           The representations and warranties of the Borrower contained in
Article 5 hereof shall be accurate and complete in all material respects as if
made on and as of the date of each Advance (except to the extent of changes
resulting from transactions contemplated and permitted by this Agreement and the
other Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and except to the
extent that such representations and warranties relate expressly to an earlier
date, and, unless Agent and each of the Lenders is notified to the contrary
prior to the disbursement of the requested Advance).
 
(d)           The Borrower shall have performed all agreements to be performed
by it hereunder, including without limitation, the payment of all fees when due
hereunder, and, as of the date of the Advance Request, and after giving effect
to the requested Advance, there shall exist no Default or Event of Default
hereunder.
 
(e)           No change shall have occurred in any Legal Requirement that in the
reasonable opinion of any Lender would make it illegal for such Lender to make
such Advance, and each Lender shall have received such statements in substance
and form reasonably satisfactory to such Lender as such Lender shall require for
the purpose of compliance with any applicable regulations of the Comptroller of
the Currency or the Board of Governors of the Federal Reserve System.
 
(f)           No Material Adverse Change shall have occurred since the date of
this Agreement.
 
 
 

 
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Acceptance of the proceeds of the requested Advance by the Borrower shall be
deemed a representation by the Borrower that all conditions set forth in this
Article 4 shall have been satisfied as of the date of such Advance.

5.           REPRESENTATIONS AND WARRANTIES.
 
The Borrower hereby represents and warrants to the Agent and the Lenders, as of
the date of this Agreement and (unless otherwise notified in writing by the
Borrower and Agent, in its sole discretion, approves in writing) as of the date
of each Advance Request and the making of each Advance, that:
 
5.1.           Organization; Good Standing; Subsidiaries.  The Borrower and each
Subsidiary of the Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
the full legal power and authority to own its property and to carry on its
business as currently conducted and is duly qualified as a foreign corporation
to do business and is in good standing in each jurisdiction in which the
transaction of its business makes such qualification necessary, except in
jurisdictions, if any, where a failure to be in good standing could not
reasonably be expected to result in a Material Adverse Change.  For the purposes
hereof, good standing shall include qualification for any and all licenses and
payment of any and all taxes required in the jurisdiction of its incorporation
and in each jurisdiction in which the Borrower transacts business.  The Borrower
has no Subsidiaries except as set forth on Schedule 5.1 hereto.  Schedule 5.1
sets forth with respect to each such Subsidiary, its name, address, place of
incorporation, each state in which it is qualified as a foreign corporation, and
the percentage ownership of the Borrower in such Subsidiary.
 
5.2.           Authorization and Enforceability.  The Borrower has all requisite
corporate power and authority to execute, deliver, create, issue, comply and
perform this Agreement, the Notes and all other Loan Documents to which the
Borrower is party and to make the borrowings hereunder.  The execution, delivery
and performance by the Borrower of this Agreement, the Notes and all other Loan
Documents to which the Borrower is party and the making of the borrowings
hereunder and thereunder, have been duly and validly authorized by all necessary
corporate action on the part of the Borrower (none of which actions has been
modified or rescinded, and all of which actions are in full force and effect)
and do not and will not conflict with or violate any provision of law or of the
articles of incorporation or by-laws of the Borrower, conflict with or result in
a breach of or constitute a default or require any consent under any contracts
to which Borrower is a party, or result in the creation of any Lien upon any
property or assets of the Borrower other than the Lien on the Collateral granted
hereunder, or result in or require the acceleration of any Indebtedness of the
Borrower pursuant to any agreement, instrument or indenture to which the
Borrower is a party or by which the Borrower or its property may be bound or
affected.  This Agreement, the Notes and all other Loan Documents contemplated
hereby or thereby constitute legal, valid, and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other such laws affecting the enforcement
of creditors’ rights generally.
 
 
 

 
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5.3.           Financial Condition.  The balance sheet of the Borrower provided
to Agent pursuant to Section 4.1(d) hereof (and if applicable, its Subsidiaries,
on a consolidating and consolidated basis) as at the Statement Date, and the
related statements of income, changes in stockholders’ equity, and cash flows
for the fiscal year ended on the Statement Date, heretofore furnished to the
Agent, fairly present in accordance with GAAP the financial condition of the
Borrower and its Subsidiaries as at the Statement Date and the Interim Date and
the results of its and their operations for the fiscal period ended on the
Statement Date and the Interim Date.  The Borrower had, on the Statement Date
and the Interim Date no known material liabilities of a kind required to be
disclosed on a balance sheet or the notes thereto in accordance with GAAP, or
any known redemption obligations, hedging liabilities, or other off-balance
sheet financial transactions as to which there is recourse to the Borrower. Said
financial statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved.  Since the Interim Date, there
has been no Material Adverse Change, nor is the Borrower aware of any state of
facts particular to the Borrower which (with or without Notice or lapse of time
or both) could reasonably be expected to result in a Material Adverse Change.
 
5.4.           Litigation.  Except as disclosed on Schedule 5.4, there are no
actions, claims, suits or proceedings pending, or to the knowledge of the
Borrower, threatened or reasonably anticipated against or affecting the Borrower
or any Subsidiary of the Borrower in any court or before any arbitrator or
before any government commission, board, bureau or other administrative agency
which could reasonably be expected to, either in any case or in the aggregate,
result in a Material Adverse Change or materially impair the right of such
Person to carry on business substantially as now conducted by it, or result in
any substantial liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of such Person
(considering the Borrower and its Subsidiaries as a single Person for purposes
of this Section 5.4), or which question the validity of this Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
 
5.5.           Compliance with Laws.  Neither the Borrower nor any Subsidiary of
the Borrower is in violation of any provision of any law, or of any judgment,
award, rule, regulation, order, decree, writ or injunction of any court or
public regulatory body or authority which could reasonably be expected to result
in a Material Adverse Change.  
 
5.6.           Regulation U and X.  The Borrower is not engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no part of the proceeds of
any Advances made hereunder will be used for the purpose of purchasing or
carrying any “margin security” or “margin stock” as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R.  Parts 221 and 224.
 
5.7.           Holding Company and Investment Company Act.  None of the Borrower
nor any of its Subsidiaries is a “holding company”, or a “subsidiary company” of
a “holding company”, or an “affiliate” of a “holding company”, as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
“investment company”, or an “affiliated

 
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company” or a “principal underwriter” of an “investment company”, as such terms
are defined in the Investment Company Act of 1940.

5.8.           Agreements.  Neither the Borrower nor any Subsidiary of the
Borrower is a party to any agreement, instrument or indenture, or subject to any
restriction, materially and adversely affecting its business, operations, assets
or financial condition, except as disclosed in the financial statements
described in Section 5.3 hereof.  The Borrower and each Subsidiary of the
Borrower are not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement,
instrument, or indenture, which default could reasonably be expected to result
in a Material Adverse Change.  No holder of any Indebtedness for money borrowed
having a principal amount of $500,000 or more by the Borrower or of any of its
Subsidiaries has given Notice of any alleged default thereunder or, if given,
the same has been cured or will be cured by Borrower within the cure period
provided therein, and no liquidation or dissolution of the Borrower or any of
its Subsidiaries and no receivership, insolvency, bankruptcy, reorganization or
other similar proceedings relative to the Borrower or any of its Subsidiaries or
any of their respective properties is pending, or to the knowledge of the
Borrower, threatened.
 
5.9.           Title to Properties.  The Borrower and each Subsidiary of the
Borrower has good, valid, and in the case of real property insurable and
marketable title to all of its material properties and assets (whether real or
personal, tangible or intangible) reflected on the financial statements
described in Section 5.3 hereof, and all such properties and assets are free and
clear of all Liens except as disclosed in such financial statements and not
prohibited under this Agreement.
 
5.10.         ERISA.  Neither the Borrower nor any entity that could be treated
as a single employer with the Borrower under Internal Revenue Code
Section 414(b), (c), (m), (n) or (o), now or at any time during the sixty month
period ending on the date hereof, sponsor(ed), maintain(ed) or contribute(d) to
(or have or had an obligation to contribute to) any pension, profit sharing,
stock option, insurance or other arrangement or plan for current or former
employees that is subject to Title IV of the Employer Retirement Income Security
Act of 1974, as now or hereafter amended (“ERISA”) or ERISA Section 302 except
as may be identified to Agent in writing (which writing shall be supplemented,
within 30 days of Agent’s request, by a copy of the arrangement or plan, and the
financial statements and accountant’s reports for such arrangement or plan) by
the Borrower from time to time (“ERISA Plan”) and no “Reportable Event,” as
defined for purposes of Section 4043 of ERISA, has occurred with respect to any
such ERISA Plan.  The granting of the Loan, the performance by the Borrower of
its obligations under the Loan Documents, and the Borrower’s conducting of its
operations do not and will not violate any provisions of ERISA or any ERISA
Plan.
 

 
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5.11.       Eligibility.  Except as permitted in Section 7.2 hereof, Borrower is
and will remain at all times approved and qualified and in good standing as a
lender or seller/servicer, as set forth below, and meets all requirements
applicable to its status as:
 
(a)           for CMC and solely with respect to Pledged Loans that are FHA
fully insured Mortgage Loans, a FHA approved mortgagee, eligible to originate,
purchase, hold, sell and service FHA fully insured Mortgage Loans.

(b)           for CMC and solely with respect to Pledged Securities that are
guaranteed by Ginnie Mae, a Ginnie Mae approved seller/servicer of Mortgage
Loans and issuer of Mortgage-backed Securities guaranteed by Ginnie Mae.
 
(c)           for CMC, a Fannie Mae approved seller/servicer of Mortgage Loans,
eligible to originate, purchase, hold, sell and service Mortgage Loans to be
sold to Fannie Mae.
 
(d)           for CMC, a Fannie Mae approved and qualified Delegated
Underwriting and Servicing Lender, eligible to process, underwrite, hold, sell
to Fannie Mae and service Fannie Mae Mortgage Loans under the DUS Program.
 
(e)           for CMC and CMP, a Freddie Mac approved seller/servicer of
Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage
Loans to be sold to Freddie Mac.
 
5.12.        Special Representations Concerning Collateral.  The Borrower hereby
represents and warrants to the Agent and each Lender, as of the date of this
Agreement and as of the date of each Advance, that:
 
(a)           The Borrower has not selected the Collateral in a manner so as to
affect adversely the Agent’s interests.
 
(b)           The Borrower is the legal and equitable owner and holder of the
Pledged Assets, free and clear of all Liens, other than Liens granted under this
Agreement and assignments of Mortgages to Fannie Mae and Freddie Mac, which
Fannie Mae and Freddie Mac, as applicable, have agreed to assign back to the
Agent if Fannie Mae or Freddie Mac, as applicable, does not acquire the
corresponding Pledged Asset.  All Pledged Assets and related Purchase
Commitments have been duly authorized and validly issued to the Borrower, and
all of the foregoing items of Collateral comply with all of the requirements of
this Agreement, and have been and will continue to be validly pledged or
assigned to Agent, subject to no other Liens.
 
(c)           The Borrower has, and will continue to have, the full right, power
and authority to pledge the Collateral pledged and to be pledged by it
hereunder.
 
(d)           Each Mortgage Loan and each related document included in the
Pledged Loans (1) has been duly executed and delivered by the parties to that
Mortgage Loan and that

 
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related document, (2) has been made in compliance with all applicable laws,
rules and regulations (including all laws, rules and regulations relating to
usury), (3) is and will continue to be a legal, valid and binding obligation,
enforceable in accordance with its terms, without setoff, counterclaim or
defense in favor of the mortgagor under the Mortgage Loan or any other obligor
on the Mortgage Note and (4) has not been modified, amended or any requirements
of which waived, except in a writing that is part of the Collateral
Documents.  No party to any Mortgage Loan or related document included in the
Pledged Loans is in violation of any applicable law, rule or regulation if the
violation would impair the collectibility of the Mortgage Loan or the
performance by the mortgagor or any other obligor of its obligations under the
Mortgage Note or any related document.
 
(e)           Each Pledged Loan is secured by a Mortgage on real property
located in one of the states of the United States or the District of Columbia.
 
(f)           Each Pledged Loan has been closed or will be closed and funded
with the Advance made against it.
 
(g)           Each Pledged Loan that is not an FHA Construction Mortgage Loan
has been fully advanced in the face amount of its Mortgage Note.  The Agent
acknowledges and agrees that in certain instances, a portion of the proceeds of
a Pledged Loan, although advanced to the borrower thereunder, will be held by
the Borrower in escrow to be disbursed upon the completion of repairs to the
subject property or upon the achievement of specified factors.
 
(h)           Each First Mortgage Loan is secured by a first Lien on the
premises described in that Mortgage and each second Mortgage Loan or third
Mortgage Loan is secured by a second or third Lien on the premises described in
that Mortgage, and with respect to each second Mortgage Loan or third Mortgage
Loan, the Borrower shall be the servicer and the Purchase Commitment shall be
from the same Investor which holds the senior Lien on the premises.  Each
Pledged Loan has or will have a title insurance policy, in ALTA form or
equivalent, from a recognized title insurance company, insuring the priority of
the Lien of the Mortgage and meeting the usual requirements of Investors
purchasing those Mortgage Loans.
 
(i)           Each Property has been evaluated or appraised in accordance with
Title XI of FIRREA, to the extent required.
 
(j)           The Mortgage Note for each Pledged Loan is (1) payable or endorsed
to the order of the Borrower, (2) an “instrument’ within the meaning of
Section 9-102 of the Uniform Commercial Code of all applicable jurisdictions and
(3) is denominated and payable in United States dollars.
 
(k)           No monetary default and, to the Borrower’s knowledge, no other
default has existed for 60 days or more under any Mortgage Loan included in the
Pledged Loans.
 
(l)           The Borrower has complied and will continue to comply with all
laws, rules and regulations in respect of the FHA insurance of each Mortgage
Loan included in the

 
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Pledged Loans designated by the Borrower as an FHA insured or VA guaranteed
Mortgage Loan, and such insurance or guarantee is and will continue to be in
full force and effect.
 
(m)           All fire and casualty policies covering Mortgaged Property
encumbered by a Pledged Loan (1) name the Borrower and its successors and
assigns as the insured under a standard mortgagee clause, (2) are and will
continue to be in full force and effect, and (3) afford and will continue to
afford insurance against fire and such other risks as are usually insured
against in the broadest form of extended coverage insurance from time to time
available.
 
(n)           Pledged Loans encumbering Mortgaged Property located in a special
flood hazard area designated as such by the Secretary of HUD and/or the Director
of the Federal Emergency Management Agency are and shall continue to be covered
by special flood insurance under the National Flood Insurance Program.
 
(o)           Each Pledged Loan against which a Advance is made on the basis of
a Purchase Commitment meets all of the requirements of that Purchase Commitment,
and each Pledged Security against which an Advance is outstanding meets all of
the requirements of the related Purchase Commitment.
 
(p)           Pledged Loans that are intended to be exchanged for Agency
Securities comply or, prior to the issuance of the Agency Securities will
comply, with the requirements of any governmental instrumentality, department or
agency or any other Person issuing or guaranteeing the Agency Securities.
 
(q)           Pledged Loans that are intended to be used in the formation of
Mortgage-backed Securities (other than Agency Securities) comply with the
requirements of the issuer of the Mortgage-backed Securities (or its sponsor)
and of the Rating Agencies.
 
(r)           None of the Pledged Loans is a graduated payment Mortgage Loan or
has a shared appreciation or other contingent interest feature, and each Pledged
Loan provides for periodic payments of all accrued interest on the Mortgage Loan
on at least a monthly basis.
 
(s)           The Borrower does not have any ownership interest, right to
acquire any ownership interest or equivalent economic interest in any property
securing a Mortgage Loan or the mortgagor under the Mortgage Loan or any other
obligor on, or guarantor of, the Mortgage Note.
 
(t)           The original assignments of Mortgage and of UCC financing
statements delivered to the Agent for each Pledged Loan are in recordable form
and comply with all applicable laws and regulations governing the filing and
recording of such documents.
 
(u)           Each Pledged Loan secured by real property to which a manufactured
home is affixed will create a valid Lien on that manufactured home that will
have priority over any other Lien on the manufactured home, whether or not
arising under applicable real property law or the UCC or other applicable law.
 
 

 
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(v)           Agent will have a valid and duly perfected security interest,
without further requirements for perfection, in (a) the Pledged Loans and
Pledged Securities upon the delivery thereof to the Agent for the benefit of the
Lenders and (b) the other Collateral described in Section 3.1 hereof to the
extent that a security interest therein may be perfected under Article 9 of the
UCC solely by filing a financing statement with the Secretary of State of
Delaware, which lien shall be superior to any other interests therein.
 
(w)           All Pledged Assets have been underwritten in accordance with the
standards and guidelines issued by Fannie Mae, Freddie Mac, FHA or Ginnie Mae,
as applicable, except to the extent of any variation from such standards and
guidelines permitted under the applicable Purchase Commitments or the standard
agreements between Fannie Mae, Freddie Mac, FHA or Ginnie Mae, as applicable,
and mortgage lenders or seller/servicers.
 
(x)           .In connection with any Indebtedness incurred by Borrower that is
permitted pursuant to Section 7.16(j), at the time of the initial sale pursuant
to the ASAP Program to Fannie Mae of a Mortgage Loan, such Mortgage Loan will be
subject to a Purchase Commitment and the Borrower’s primary obligation will be
to deliver such Mortgage Loan to Fannie Mae in accordance with such Purchase
Commitment and, in the event such Borrower is unable to deliver such Mortgage
Loan in accordance with such Purchase Commitment, to buy back such Mortgage
Loan, resulting in recourse exposure with respect to such Mortgage Loan
substantially similar to the Borrower’s recourse exposure in connection with
Fannie Mae DUS Mortgage Loans.
 
5.13.         Franchises, Patents, Copyrights, etc.  Borrower possesses all
franchises, patents, copyrights, trademarks, trade names, licenses and permits,
and rights in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted, without known conflict with any rights of
others.
 
5.14.         Proper Names.  Borrower does not originate Mortgage Loans or
otherwise conduct business under any names other than its legal name and the
assumed names set forth on Schedule 5.14.  The Borrower has made all filings and
taken all other action as may be required under the laws of any jurisdiction in
which it originates Mortgage Loans or otherwise conducts business under any
assumed name.  The Borrower’s use of the assumed names set forth on Schedule
5.14 does not conflict with any other Person’s legal rights to any such name,
nor otherwise give rise to any liability by the Borrower to any other Person.
 
5.15.         Direct Benefit From Loans.  The Borrower has received, or, upon
the execution and funding thereof, will receive (a) direct and indirect benefit
from the making and execution of this Agreement and the other Loan Documents to
which it is a party, and (b) fair and independent consideration for the entry
into, and performance of, this Agreement and the other Loan Documents to which
it is a party.  Contemporaneously with the disbursements of each Advance by the
Lenders to the Borrower, all such proceeds will be used to for the purposes set
forth in Section 2.1 hereof and none other.
 
 

 
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5.16.         Loan Documents Do Not Violate Other Documents.  Neither the
execution and delivery by the Borrower of this Agreement or any other Loan
Document to which it is a party nor the consummation of the transactions herein
and therein contemplated, nor the performance of, or compliance with, the terms
and provisions hereof and thereof, does or will contravene, breach or conflict
with any provision of either of its articles of incorporation or by-laws, or any
applicable law, statute, rule or regulation or any judgment, decree, writ,
injunction, franchise, order or permit applicable to the Borrower or its assets
or properties, or does or will conflict or be inconsistent with, or does or will
result in any breach or default of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
or other instrument to which the Borrower is a party or by which the Borrower or
any of its property may be bound, the contravention, conflict, inconsistency,
breach or default of which will have a materially adverse effect on the
Borrower’s condition, financial or otherwise, or affect its ability to perform,
promptly and fully, its obligations hereunder or under any of the other Loan
Documents.
 
5.17.         Continuing Authority of Authorized Representatives.  Agent and
each of the Lenders are authorized to rely upon the continuing authority of the
Persons hereafter designated by the Borrower (“Authorized Representatives”) to
bind the Borrower with respect to all matters pertaining to the Loan and the
Loan Documents including, but not limited to, the submission of requests for
Advances, and certificates with regard thereto.  Such authorization may be
changed only upon written Notice to Agent accompanied by evidence, reasonably
satisfactory to Agent, of the authority of the person giving such Notice and
such Notice shall be effective not sooner than five (5) Business Days following
receipt thereof by Agent.  The Authorized Representatives as of the date of this
Agreement are listed on Schedule 5.17.
 
5.18.         Consents Not Required.  Except for those consents that have
already been obtained and delivered to Agent or required as a condition to any
Advance hereunder, no consent of any Person and no consent, license, permit,
approval, or authorization of, exemption by, or registration or declaration
with, any Tribunal is required in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement or any of the Loan
Documents by the Borrower.
 
5.19.         Material Fact Representations.  Neither the Loan Documents nor any
other agreement, document, certificate, or written statement furnished to the
Agent or any Lender by or on behalf of the Borrower in connection with the
transactions contemplated in any of the Loan Documents contains any untrue
statement of a material adverse fact.  There are no facts or conditions known to
the Borrower which could reasonably be expected to result in a Material Adverse
Change that have not been fully disclosed, in writing, to the Agent and the
Lenders, it being understood that this representation is made as of, and shall
be limited to the date of this Agreement.  All writings heretofore or hereafter
exhibited or delivered to the Agent or any Lender by or on behalf of the
Borrower are and will be genuine and what they purport to be.
 
 

 
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5.20.         Place of Business.  As of the date of this Agreement, the
principal place of business of the Borrower and the chief executive office of
the Borrower and the office where it keeps its financial books and records
relating to its property and all contracts relating thereto and all accounts
arising therefrom are located at its principal office at New York, New York, or
its office where Mortgage servicing is conducted at Irving, Texas, or at its
office in Jersey City, New Jersey.

5.21.         Tax Returns and Payments.  All federal, state and local income,
excise, property and other tax returns required to be filed with respect to
Borrower’s operations and those of its Subsidiaries in any jurisdiction have
been filed on or before the due date thereof (plus any applicable extensions);
all such returns are true and correct; all taxes, assessments, fees and other
governmental charges upon the Borrower, and Borrower’s Subsidiaries and upon its
property, income or franchises, which are due and payable have been paid,
including, without limitation, all FICA payments and withholding taxes, if
appropriate, other than those which are being contested in good faith by
appropriate proceedings, diligently pursued and as to which the Borrower has
established adequate reserves determined in accordance with GAAP, consistently
applied.  The amounts reserved, as a liability for income and other taxes
payable, in the financial statements described in Section 5.3 hereof are
sufficient for payment of all unpaid federal, state and local income, excise,
property and other taxes, whether or not disputed, of the Borrower and its
Subsidiaries, accrued for or applicable to the period and on the dates of such
financial statements and all years and periods prior thereto and for which the
Borrower, and Borrower’s Subsidiaries may be liable in their own right or as
transferee of the assets of, or as successor to, any other Person.
 
5.22.         Certain Transactions.  Except as set forth in Schedule 5.22
hereof, as of the date of this Agreement, none of the officers, trustees,
directors, or employees of the Borrower or any of their Subsidiaries is
presently a party to any transaction with the Borrower or any of their
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement (i) providing for the
furnishing of services to or by, (ii) providing for rental of real or personal
property to or from, or (iii) otherwise requiring payments to or from, any
officer, trustee, director or such employee or any corporation, partnership,
trust or other entity in which any officer, trustee, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
 
5.23.         No Broker or Finder.  None of the Borrower nor anyone on behalf
thereof has dealt with any broker, finder or other person or entity who or which
may be entitled to a broker’s or finder’s fee, or other compensation, payable by
the Agent or any of the Lenders in connection with this Loan.
 
 

 
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5.24.        Special Representations Concerning Servicing Portfolio.  Schedule
5.24 is a true and complete list of the Borrower’s Servicing Portfolio as of the
date set forth therein.  The Borrower hereby represents and warrants to Agent
and the Lenders, as of the date of this Agreement and as of the date of each
Advance Request and the making of each Advance, that:
 
(a)           The Borrower is the legal and equitable owner and holder, free and
clear of all Liens of the Servicing Contracts.
 
(b)           Except as otherwise disclosed to the Agent and the Lenders, all of
the Borrower’s servicing rights under the Servicing Contracts constitute primary
servicing rights.
 
(c)           Each Servicing Contract is in full force and effect and is legal,
valid and enforceable in accordance with its terms, and no default or event
that, with Notice or lapse of time or both, would become a default, exists under
any Servicing Contract, except where the failure of the foregoing could not
reasonably be expected to result in a Material Adverse Change.
 
(d)           Each right to the payment of money under the Servicing Contracts
is genuine and enforceable in accordance with its terms against the parties
obligated to pay the same, which terms have not been modified or waived in any
respect or to any extent, except where such modification or waiver could not
reasonably be expected to result in a Material Adverse Change.
 
(e)           To the best of the Borrower’s knowledge, no obligor has any
defense, set off, claim or counterclaim against the Borrower that can be
asserted against Agent or any Lender, whether in any proceeding to enforce
Agent’s rights in the related Mortgage Loan or otherwise, except to the extent
that any such defense, setoff, claim or counterclaim could not reasonably be
expected to result in a Material Adverse Change.
 
5.25.        Special Representations Concerning FHA Mortgage Loans.  The
Borrower hereby represents and warrants to Agent and the Lenders, as of the date
of this Agreement and as of the date of each Advance Request and the making of
each Advance, that:
 
(a)           Each FHA-insured Mortgage Loan included in the Pledged Loans meets
in all material respects all applicable Legal Requirements and any other
governmental requirements for such insurance.  The Borrower has complied and
will continue to comply in all material respects with all laws, rules and
regulations with respect to the FHA insurance of each Pledged Loan designated by
the Borrower as an FHA-insured Mortgage Loan, and such insurance is and will
continue to be in full force and effect.
 
(b)           For FHA-insured Pledged Loans that will be used to back Ginnie Mae
Mortgage-backed Securities, the Borrower received from Ginnie Mae confirmation
notices for additional commitment authority and pool numbers, and there remains
available under those agreements a commitment on the part of Ginnie Mae
sufficient to permit the issuance of Ginnie Mae Mortgage-backed Securities in an
amount at least equal to the amount of the Pledged Loans designated by the
Borrower as the Mortgage Loans to be used to back those Ginnie Mae

 
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Mortgage-backed Securities; each of those confirmation notices is in full force
and effect; each of those Pledged Loans has been assigned by the Borrower to one
of those pool numbers and a portion of the available Ginnie Mae commitment has
been allocated to this Agreement by the Borrower, in an amount at least equal to
those Pledged Loans; and each of those assignments and allocations has been
reflected in the books and records of the Borrower.
 
5.26.        Ownership, Subsidiaries and taxpayer identification numbers.
 
(a)           All of the stockholders of the Borrower and a description of the
ownership interests held by the same, and of each of the Borrower’s
Subsidiaries, are listed on Schedule 5.26 and no additional ownership interests,
or rights or instruments convertible into such ownership interests, exist.
 
(b)           The taxpayer identification numbers and state organizational
numbers (if applicable) of the foregoing Persons are accurately stated on
Schedule 5.26.
 
(c)           Borrower is the owner, free and clear of all liens and
encumbrances, of all of the issued and outstanding capital stock, membership
interests or other equity interests of each of their respective Subsidiaries.
 
5.27.        Material Adverse Change.  There has been no Material Adverse Change
since the date of the latest financial statements delivered by the Borrower
hereunder.
 
5.28.        Ongoing Representations and Warranties.  Each request by the
Borrower for an Advance: (i) shall constitute an affirmation by the Borrower on
behalf of itself that the foregoing representations and warranties remain true
and correct as of the date of such request (except as to matters specifically
disclosed in writing to Agent and each of the Lenders prior to or simultaneously
with such written request, and except to the extent of changes resulting from
transactions contemplated and permitted by this Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse, and except to the extent that
such representations and warranties relate expressly to an earlier date) and,
unless Agent and each of the Lenders is notified to the contrary prior to the
disbursement of the requested Advance, will be so on the date of such Advance,
and (ii) shall constitute the representation and warranty of the Borrower that
the information set forth in each such request is true and correct and omits no
material fact necessary to make the same not misleading.
 
6.           AFFIRMATIVE COVENANTS.
 
The Borrower hereby covenants and agrees with the Agent and the Lenders that, so
long as the Commitment is outstanding or there remain any Obligations of the
Borrower to be paid or performed under this Agreement or under any other Loan
Document, the Borrower shall:
 
6.1.           Payment of Notes.  Punctually pay or cause to be paid the
principal of, interest on and all other amounts payable hereunder and under the
Notes in accordance with the terms thereof.
 
 
 
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6.2.           Financial Statements and Other Reports.  Deliver or cause to be
delivered to the Agent for the Borrower:
 
(a)           As soon as practicable, but in any event not later than sixty
(60) days after the end of each fiscal quarter of the Borrower (including for
the fourth fiscal quarter, which shall be subject to normal year end audit
adjustments), the management prepared consolidating balance sheet of the
Borrower and its Subsidiaries at the end of such quarter, and the related
management prepared consolidating statements of earnings for such quarter, each
setting forth in comparative form the figures for the same fiscal quarter of the
previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with GAAP.
 
(b)           As soon as practicable, but in any event not later than one
hundred twenty (120) days after the end of each fiscal year of the Borrower, the
audited consolidated and unaudited consolidating balance sheet of the Borrower
and its Subsidiaries at the end of such year, and the related statements of
earnings and cash flows for such year, each setting forth in comparative form
the figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with GAAP, and accompanied by an
auditor’s report prepared without qualification by an independent certified
public accountant reasonably acceptable to the Agent.
 
(c)           Concurrently with the delivery of the financial statements
referred to in Sections 6.2 (a) and (b) above, a certificate (to be in the form
of Exhibit D or on such other form as the Agent may from time to time
prescribe) of an Authorized Representative stating that, to the best of such
Authorized Representative’s knowledge, the Borrower during such period observed
or performed in all material respects all of their covenants and other
agreements, and satisfied in all material respects every material condition,
contained in this Agreement or the other Loan Documents to be observed,
performed or satisfied by them, and that such Authorized Representative has
obtained no knowledge of any Default except as specified in such certificate and
such certificate shall include the calculations in reasonable detail required to
indicate the Borrower’s compliance with financial covenants set forth in
Article 7 hereof.
 
(d)           As soon as available and in any event within sixty (60) days after
the end of each fiscal quarter in the Borrower’s fiscal year, a consolidated
loan production report as of the end of that fiscal quarter, presenting the
total dollar volume and the number of Mortgage Loans originated and closed or
purchased during that fiscal quarter and for the fiscal year-to-date, specified
by property type and loan type.
 
(e)           As soon as available and in any event within 60 days after the end
of each calendar quarter, a consolidated report (“Servicing Portfolio Report”)
as of the end of the calendar quarter, as to all Mortgage Loans the servicing
rights to which are owned by the Borrower (specified by investor type, recourse
and non-recourse) regardless of whether the Mortgage Loans are Pledged
Loans.  The Servicing Portfolio Report must indicate which Mortgage Loans
(1) are current and in good standing, (2) are more than 30, 60 or 90 days past
due, (3) are the subject of pending bankruptcy or foreclosure proceedings, or
(4) have been

 
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converted (through foreclosure or other proceedings in lieu of foreclosure) into
real estate owned by, the Borrower.
 
(f)           At the Agent’s request, a commitment summary and pipeline report
dated as of the end of such month and in form, substance and scope acceptable to
the Agent.
 
(g)           Promptly after the Borrower’s receipt thereof, copies of all
accountants’ management letters delivered to the Borrower or its Subsidiaries.
 
(h)           Within ten (10) days after filing, copies of all regular or
periodic financial and other reports, if any, which the Borrower shall file with
the Securities and Exchange Commission or any governmental agency successor
thereto and copies of any audits completed by Ginnie Mae, Freddie Mac, Fannie
Mae, FHA, or HUD.
 
(i)           From time to time, with reasonable promptness, such further
information regarding the business, operations, properties or financial
condition of the Borrower as the Agent may reasonably request.
 
6.3.           Maintenance of Existence; Conduct of Business.  Preserve and
maintain its corporate existence in good standing and all of its rights,
privileges, licenses and franchises necessary in the normal conduct of its
business, including, without limitation, its eligibility as lender,
seller/servicer and issuer described under Section 5.11 hereof; conduct its
business in an orderly and efficient manner; maintain a net worth of acceptable
assets as required by HUD at any and all times for maintaining the Borrower’s
status as a FHA approved mortgagee; and make no material change in the nature or
character of its business if it would result in the Borrower engaging in a
business other than the mortgage banking business a majority of which shall
focus on multifamily mortgages consistent with its historical business.
 
6.4.           Compliance with Applicable Laws.  Comply with all Legal
Requirements, a breach of which could reasonably be expected to result in a
Material Adverse Change, except where contested in good faith and by appropriate
proceedings, and with sufficient reserves established therefor, and if at any
time while any Obligation is outstanding or the Lenders have any obligation to
make Advances hereunder, any authorizations from governmental authorities or
other third party consents, approvals, or notifications shall become necessary
or required in order that Borrower may pay or perform any of the Obligations,
promptly take or cause to be taken all reasonable steps within the power of
Borrower to obtain such authorizations, consents, approvals, or notifications,
and furnish the Agent and the Lenders with evidence thereof, unless the failure
to do so could not reasonably be expected to result in a Material Adverse
Change.
 
6.5.           Inspection of Properties and Books.  Permit authorized
representatives of the Agent and any Lender to (a) discuss the business,
operations, assets and financial condition of the Borrower and Borrower’s
Subsidiaries with their officers and employees and to examine their books of
account, records, reports and other papers and make copies or extracts thereof,
and (b) inspect all of the Borrower’s property and all related information and
reports at the

 
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expense of such Lender or Agent, as applicable, all at such reasonable times as
the Agent or any Lender may request.
 
6.6.           Notice.  Give prompt written Notice to the Agent of (a) any
action, suit or proceeding instituted by or against the Borrower or any of its
Subsidiaries in any federal or state court or before any commission or other
regulatory body (federal, state or local, domestic or foreign) which action,
suit or proceeding has at issue in excess of FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00) (except for normal collection and foreclosure proceedings
initiated by the Borrower in connection with a Mortgage Loan or any other
Mortgage loan), or any such proceedings threatened against the Borrower, or any
of Borrower’s Subsidiaries in writing containing the details thereof, (b) the
filing, recording or assessment of any federal, state or local tax Lien against
it, or any of its assets or any of its Subsidiaries, (c) the occurrence of any
Event of Default hereunder or the occurrence of any Default and continuation
thereof for five (5) days, (d) the suspension, revocation or termination of the
Borrower’s eligibility, in any respect, as approved lender, seller/servicer or
issuer as described under Section 5.11 hereof, (e) the transfer, loss or
termination of any Servicing Contract with an Investor to which the Borrower is
a party, or which is held for the benefit of the Borrower, and the reason for
such transfer, loss or termination, if known to the Borrower, (f) any change in
its accounting method as in effect on the date of this Agreement or change in
its fiscal year ending date from December 31, and (f) any other action, event or
condition of any nature which could reasonably be expected to result in a
Material Adverse Change.
 
6.7.           Payment of Debt, Taxes, etc.  Pay and perform all Indebtedness
for money borrowed by the Borrower having a principal amount of $500,000 or
more, and cause to be paid and performed all Indebtedness  for money borrowed by
its Subsidiaries having a principal amount of $500,000 or more in accordance
with the terms thereof and pay and discharge or cause to be paid and discharged
all taxes, assessments and governmental charges, tax Liens, or levies imposed
upon the Borrower or its Subsidiaries, or upon their respective income, receipts
or properties before the same shall become past due, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
become a Lien or charge upon such properties or any part thereof; provided,
however, that the Borrower and its Subsidiaries shall not be required to pay
obligation, Indebtedness, taxes, assessments or governmental charges or levies
or claims for labor, materials or supplies for which the Borrower or its
Subsidiaries shall have obtained an adequate bond or adequate insurance or which
are being contested in good faith and by proper proceedings which are being
reasonably and diligently pursued if such proceedings do not involve any
likelihood of the sale, forfeiture or loss of any such property or any interest
therein while such proceedings are pending, and provided further that book
reserves adequate under GAAP shall have been established with respect thereto,
to the extent required, and provided further that the owing Person’s title to,
and its right to use, its property is not materially adversely affected thereby.
 
6.8.           Insurance.  Maintain and cause each of its Subsidiaries to
maintain insurance with respect to its other properties with financially sound
and reputable insurers, insurance with respect to such properties and its
business against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in

 
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similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent.  Schedule 6.8 sets forth
all insurance maintained by the Borrower at the date of this Agreement.
 
6.9.           Closing Instructions.  Indemnify and hold the Agent and each
Lender and all those claiming by, through or under the Agent and each of the
Lenders, harmless from and against any loss, including reasonable attorneys’
fees and costs, attributable to the failure of any title insurance company,
agent or approved attorney to comply with Borrower’s disbursement or instruction
letter relating to any Mortgage Loan.  Agent has the right to pre-approve the
Borrower’s disbursement or instruction letter to the title insurance company,
agent or approved attorney in any case in which the Borrower intends to obtain a
Advance against the Mortgage Loan to be created at settlement or to pledge that
Mortgage Loan as Collateral under this Agreement.  The Borrower’s disbursement
or instruction letter must state that Agent, for the benefit of the Lenders has
a security interest in any amounts advanced to fund a Mortgage Loan and in the
Mortgage Loan funded with those amounts and must require the title insurance
company, agent or approved attorney involved in the transaction to return any
amounts advanced by any Lender and not used to fund the Mortgage Loan.
 
6.10.         Other Loan Obligations.  Perform all material obligations under
the terms of each loan agreement, note, mortgage, security agreement or debt
instrument by which the Borrower is bound or to which any of its property is
subject, and promptly notify the Agent in writing of a declared default under or
the termination, cancellation, reduction or non-renewal of any of its other
lines of credit or financing agreements with any other lender.  Schedule 6.10
hereto is a true and complete list of all such lines of credit or financing
agreements as of the date hereof.
 
6.11.        Accounts. Maintain the Operating Account, the Funding Account, and
the Cash Collateral Account with Agent.  Nothing herein shall be deemed to
restrict the Borrower from maintaining reserve or other accounts with other
financial institutions.
 
6.12.        Special Affirmative Covenants Concerning Collateral.
 
(a)           Warrant and defend the right, title and interest of the Agent and
the Lenders in and to the Collateral against the claims and demands of all
Persons whomsoever.
 
(b)           Service or cause to be serviced all Pledged Loans in accordance
with the standard requirements of the issuers of Purchase Commitments covering
them and all applicable HUD, Fannie Mae and Freddie Mac requirements, including
taking all actions necessary to enforce the obligations of the obligors under
such Mortgage Loans; and must service or cause to be serviced all Mortgage Loans
backing Pledged Securities in accordance with applicable governmental
requirements and requirements of issuers of Purchase Commitments covering them.
 
(c)           Execute and deliver to the Agent such Uniform Commercial Code
financing statements with respect to the Collateral as the Agent may
request.  The Borrower shall also execute and deliver to the Agent such further
instruments of sale, pledge or

 
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assignment or transfer, and such powers of attorney, as reasonably required by
the Agent to secure the Collateral, and shall do and perform all matters and
things reasonably requested by the Agent that are necessary or desirable to be
done or observed, for the purpose of effectively creating, maintaining and
preserving a first priority security interest in the Collateral and all other
benefits intended to be afforded the Lenders under this Agreement.  The Agent,
on behalf of the Lenders, shall have all the rights and remedies of a secured
party under the Uniform Commercial Code of New York, or any other applicable
law, in addition to all rights provided for herein.
 
(d)           Notify the Agent within two (2) Business Days after receipt of
notice from an Investor of any default under, or of the termination of, any
Purchase Commitment relating to any Pledged Loan, Eligible Mortgage Pool or
Pledged Security.
 
(e)           Promptly comply in all respects with the terms and conditions of
all Purchase Commitments, and all extensions, renewals and modifications or
substitutions thereof or thereto.  The Borrower will cause to be delivered to
the Investor the Pledged Loans and Pledged Securities to be sold under each
Purchase Commitment not later than the mandatory delivery date of the Pledged
Loans or Pledged Securities under the Purchase Commitment.
 
(f)           Maintain, at its principal office at New York, New York, or its
offices at Irving, Texas and Jersey City, New Jersey (until such office is
closed and moved to its principal office at New York, New York), or at other
offices approved by the Agent, or in the office of a computer service bureau
engaged by the Borrower and approved by the Agent, and, upon request, shall make
available to the Agent, for the benefit of the Lenders, the originals, or copies
in any case where the originals have been delivered to the Agent, for the
benefit of the Lenders, or to an Investor, of its Mortgage Notes and Mortgages
included in Collateral, Mortgage-backed Securities delivered to the Agent, for
the benefit of the Lenders, as Pledged Securities, Purchase Commitments, and all
related Mortgage Loan documents and instruments, and all files, surveys,
certificates, correspondence, appraisals, computer programs, tapes, discs,
cards, accounting records and other information and data relating to the
Collateral.
 
(g)           Be in good standing with Fannie Mae, Freddie Mac, Ginnie Mae, and
FHA, except to the extent related to programs in which the applicable Borrower
has ceased to originate Mortgage Loans and, in the case of Fannie Mae and
Freddie Mac, such cessation was not the result of a termination or other action
by Fannie Mae, Freddie Mac, Ginnie Mae, or FHA, as applicable.
 
6.13.        Appraisals of Servicing Portfolio.  Within forty-five (45) days
after the end of each calendar quarter ending September 30, provide to the
Agent, at the Borrower’s sole cost and expense, an annual appraisal of the
Servicing Rights by Prestwick Mortgage Group or any other Servicing Rights
appraiser approved by Agent in writing, such approval not be unreasonably
withheld.
 
6.14.        Cure of Defects in Loan Documents.  Promptly cure and cause to be
promptly cured any defects in the creation, issuance, execution and delivery of
this Agreement and the

 
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other Loan Documents; and upon request of the Agent and at the Borrower’s
expense, the Borrower will promptly execute and deliver, and cause to be
executed and delivered, to the Agent or its designee, all such additional
documents, agreements and/or instruments in compliance with or in accomplishment
of the covenants and agreements of this Agreement and the other Loan Documents,
and/or to create, perfect, preserve, extend and/or maintain any and all Liens
created pursuant hereto or pursuant to any other Loan Document as valid and
perfected Liens (of a priority as set forth in this Agreement) in favor of the
Agent for the benefit of the Lenders to secure the Obligations, all as
reasonably requested from time to time by the Agent.

6.15.         Charging Accounts.  Agent is hereby authorized, on or after the
due date, to charge the Operating Account and/or the Cash Collateral Account
with the amount of all principal and interest payments due under this Agreement,
the Notes or the other Loan Documents, and, in addition, upon the occurrence and
during the continuation of an Event of Default, the Agent is hereby authorized
on or after the due date, to charge the Operating Account and/or the Cash
Collateral Account with the amount of all unpaid fees, costs and expenses to
which the Agent and the Lenders are entitled under this Agreement.  The failure
of Agent to so charge any such account shall not affect or limit the Borrower’s
obligation to make any required payment.
 
6.16.         Custodial Fees.  The Borrower, the Lenders and the Agent
acknowledge that (a) Collateral and Collateral Documents relating to Advances
outstanding on the date hereof shall continue to be held and administered by
Deutsche Bank National Trust Company (the “Custodian”), pursuant to the terms of
pursuant to the Custodial Agreement dated as of May 30, 2007, among the
Borrower, the Agent and the Custodian, and (b) as of the date hereof, the Agent
and the Custodian have entered into an agreement to terminate such Custodial
Agreement as of June 30, 2008.  The Borrower agrees to reimburse the Agent for
all fees and expenses payable by the Agent to the Custodian under such Custodial
Agreement to the extent the same accrue on or after June 1, 2008.
 
7.           NEGATIVE COVENANTS.
 
The Borrower hereby covenants and agrees with the Agent and the Lenders that, so
long as the Commitment is outstanding or there remain any Obligations of the
Borrower to be paid or performed under this Agreement or any other Loan
Document, the Borrower shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of the Agent:
 
7.1.           Merger; Acquisitions.  Except for a merger of a Borrower with
another Borrower, become a party to any merger or consolidation, or agree to or
effect any asset acquisition or disposition or stock acquisition or disposition
(other than the acquisition or disposition of assets in the ordinary course of
business consistent with past practices, including the acquisition or
disposition of Mortgage Loans and property acquired on foreclosure of Mortgages)
except (i) the merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower, (ii) the merger or consolidation of two or
more

 
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Subsidiaries of the Borrower, and (iii) other dispositions of Service Contracts
in an amount not to exceed five percent (5%) of the Servicing Portfolio during
any twelve (12) month period.
 
7.2.           Loss of Eligibility.  Take any action that would cause the
Borrower to lose all or any part of its status as an eligible lender,
seller/servicer and issuer as described under Section 5.11 hereof (except to the
extent related to programs in which the applicable Borrower has ceased to
originate Mortgage Loans and, in the case of Fannie Mae and Freddie Mac, such
cessation was not the result of a termination or other action by Fannie Mae,
Freddie Mac, Ginnie Mae, or FHA, as applicable).
 

7.3.           Tangible Net Worth (CMC).  Permit the Tangible Net Worth of CMC
(and its Subsidiaries, on a consolidated basis) to be less than the greater of
(x) $50,000,000.00 or (y) an amount sufficient to satisfy the requirements from
time to time of both Fannie Mae and Freddie Mac, to be tested as of the Closing
Date and on the last day of each calendar quarter thereafter.
 
7.4.           Tangible Net Worth (CMP).  Permit the Tangible Net Worth of CMP
(and its Subsidiaries, on a consolidated basis) to be less than the greater of
(x) $2,000,000.00 or (y) an amount sufficient to satisfy the requirements from
time to time to participate in any applicable Multifamily Property program, to
be tested as of the Closing Date and on the last day of each calendar quarter
thereafter.
 
7.5.           Liquidity (CMC).  Permit at any time the unrestricted cash and
Cash Equivalents of CMC (and its Subsidiaries, on a consolidated basis) to be
less than $500,000 plus 0.10% of the aggregate outstanding principal amount of
the aggregate of Serviced Loans serviced on behalf of Fannie Mae, or such higher
level as Fannie Mae may require from time to time.
 
7.6.           Liquidity (CMP).  Permit at any time the unrestricted cash and
Cash Equivalents of CMP (and its Subsidiaries, on a consolidated basis) to be
less than $200,000 calculated in a manner required for eligibility as a Freddie
Mac Program Seller/Servicer.
 
7.7.           Limits on Corporate Distributions.  Pay, make or declare or incur
any liability to pay, make or declare any dividend (excluding stock dividends)
or other distribution, direct or indirect, on or on account of any shares of its
stock or any redemption or other acquisition, direct or indirect, of any shares
of its stock or of any warrants, rights or other options to purchase any shares
of its stock nor purchase, acquire, redeem or retire any stock or ownership
interest in itself whether now or hereafter outstanding except that so long as
no Default or Event of Default exists at such time, or would exist immediately
thereafter, the Borrower may declare and pay cash dividends or distributions to
its shareholders.
 
7.8.           Loans and Advances.  Except as permitted in Section 7.10 and 7.17
hereof, make any loans or advances to any Person other than (a) Mortgage Loans,
(b) intercompany loans at a time when a Distribution would be permitted under
Section 7.7 hereof, or (c) advances to the Borrower’s or its Subsidiaries’
employees in the ordinary course of business for reasonable expenses to be
incurred by such employees for the benefit of the Borrower or

 
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such Subsidiaries.  Notwithstanding the foregoing, the Borrower may purchase and
originate Mortgage Loans in the ordinary course of business consistent with past
practices.
 
7.9.           No Investments Except Approved Investments.  Without the prior
written consent of Agent, make or permit to remain outstanding any Investment
except an Investment which is in:
 
(a)           Cash Equivalents (provided, however, the Fannie Mae Reserve
Account may be invested for a period that exceeds 364 days); and
 

(b)           Property acquired in the normal and ordinary course of the
Borrower’s present business of originating and purchasing Mortgage Loans
(including property acquired on foreclosure of Mortgages and, as to the Borrower
and its Subsidiaries, the origination and purchase of Mortgage Loans in the
ordinary course of their business) as conducted on the date hereof and any other
business permitted under this Agreement.
 
7.10.       Charter Documents and Business Termination.
 
(a)           Issue, sell or commit to issue or sell any shares of its or their
capital stock of any class, or other equity or investment security;
 
(b)           Amend or otherwise modify its or their corporate charter or
otherwise change its or their corporate structure in any manner which could
reasonably be expected to result in a Material Adverse Change; or
 
(c)           Take any action with a view toward its or their dissolution,
liquidation or termination, or, in fact, dissolve, liquidate or terminate its
existence; or
 
(d)           Change its or their respective taxpayer identification numbers and
state organizational numbers unless such Person shall have provided the Agent
with not less than forty-five days prior written Notice.
 
7.11.        Reserved.
 
7.12.        No Sales, Leases or Dispositions of Property.  Except in the
ordinary course of its business, sell, lease, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) all or any substantial
part of such Person’s business or assets, whether now owned or acquired after
the Closing Date, other than, in the ordinary course of business consistent with
past practices and to the extent not otherwise prohibited by this Agreement, to
a Subsidiary of the Borrower, and sales of (1) Mortgage Loans,
(2) Mortgage-backed Securities , (3) Servicing Contracts (provided that this
provision shall not be deemed to restrict subservicing by an Affiliate of the
Borrower) and (4) other dispositions of Serviced Loans in an amount not to
exceed five percent (5%) of the Servicing Portfolio during any twelve (12) month
period.
 
 
 
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7.13.         Changes in Business or Assets.  Cease actively to engage in the
business of originating or acquiring Mortgage Loans or make any other material
change in the nature or scope of the business in which each such Person engages
as of the date of this Agreement.
 
7.14.         Changes in Office Location.  Change the current addresses and/or
locations of its principal office at New York, New York, or its office where its
principal servicing activities are conducted at Irving, Texas, unless approved
by the Agent.

7.15.        Special Negative Covenants Concerning Collateral.
 
(a)           Amend or modify, or waive any of the terms and conditions of, or
settle or compromise any claim in respect of, any Pledged Assets, except for
amendments to correct errors and amendments or waivers which are not material to
the applicable Pledged Asset.
 
(b)           Sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or pledge or otherwise encumber (except pursuant to this
Agreement or as permitted herein) any of the Collateral or any interest therein.
 
(c)           Make any compromise, adjustment or settlement in respect of any of
the Collateral or accept other than cash in payment or liquidation of the
Collateral.
 
7.16.        No Indebtedness.  Create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:
 
(a)           the Obligations;
 
(b)           current liabilities of the Borrower or its Subsidiaries incurred
in the ordinary course of business but not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
 
(c)           endorsements of negotiable instruments for collection in the
ordinary course of business;
 
(d)           secured purchase money debt or capitalized lease obligations;
 
(e)           Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in accordance
with the provisions of Section 6.7 hereof;
 
(f)           Indebtedness of less than ONE MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($1,500,000.00), in the aggregate, incurred in the ordinary
course of business for capital expenditures;
 
(g)           Indebtedness secured by real property acquired upon foreclosure of
Mortgages, which, either (x) is so secured at the time of such acquisition, or
(y) is directly related to such real property, not in excess of the fair market
value thereof, and reasonably

 
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expected by the Borrower or the subject Subsidiary to be recovered from the sale
or other disposition of the subject real property;
 
(h)           unsecured Indebtedness for borrowed money incurred in the ordinary
course of business and not exceeding $1,500,000, plus intercompany liabilities
which have a maturity date which is later than the Maturity Date and which are
subordinated to the Obligations pursuant to subordination agreements
satisfactory to the Agent which shall permit repayment as long as (A) no Default
then exists, and (B) no Default would thereupon occur (including on a pro forma
basis as if applicable financial covenants were tested as of the date of such
repayment;
 
(i)           Indebtedness (exclusive of the Indebtedness referred to in clause
(h) above) incurred to finance no greater than 100% of the purchase or leasing
of equipment, in the ordinary course of business;
 
(j)           Indebtedness to Fannie Mae, Freddie Mac, Ginnie Mae, FHA or other
parties with whom the Borrower and its Subsidiaries originate, sell, repurchase
or service Mortgage Loans (including Indebtedness under the ASAP and ASAP Plus
programs), to the extent directly relating to or arising out of such
origination, sale, repurchase, or servicing in the ordinary course of business
consistent with past practices;
 
(k)           Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which a Borrower shall at
the time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review;
 
(l)           Indebtedness in respect of mortgage warehouse lines of credit on
terms and conditions consistent with the terms and conditions hereof, including,
without limitation, that the underlying mortgage loans made by Borrower under
such warehouse lines shall be entered into pursuant to unconditional purchase
commitments from Fannie Mae, Freddie Mac, Ginnie Mae, or other investors
acceptable to the Agent in its reasonable discretion;
 
(m)           unsecured Indebtedness in respect to reimbursement agreements
entered into in connection with the issuance of letters of credit to satisfy
Borrower’s reimbursement obligations to Freddie Mac and Fannie Mae on terms and
conditions consistent with the terms and conditions of the Reimbursement
Agreement dated as of August 23, 2005 between, among others, CMP and Bank of
America, N.A., provided that the aggregate principal balance of such
Indebtedness shall not exceed $15,000,000.00; and
 
(n)           Indebtedness existing on the date of this Agreement and listed and
described on Schedule 7.16 hereto.
 
7.17.                      No Liens.  Except in connection with its purchase,
origination and sale from time to time of Mortgage Loans and related assets in
the ordinary course of business as conducted on the date hereof, (a) create or
incur or suffer to be created or incurred or to exist

 
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any lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom;
(b) transfer any of its property or assets or the income or profits therefrom
for the purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (e) pledge any accounts, contract rights, general intangibles,
chattel paper or instruments, with or without recourse; (f) agree to a negative
pledge in favor of any Person other than the Agent or the Lenders pursuant to
the Acquisition Facility with respect to any assets or rights, now owned or
hereafter arising provided that the Borrower and any Subsidiary of the Borrower
may create or incur or suffer to be created or incurred or to exist:
 
(a)           liens on properties to secure taxes, assessments and other
government charges or claims for labor, material or supplies in respect of
obligations not overdue or which are being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the property subject to any
such lien is not yet subject to foreclosure, sale, collection, levy or loss on
account thereof);
 
(b)           deposits or pledges made in connection with, or to secure payment
of, workmen’s compensation, unemployment insurance, old age pensions or other
social security obligations;
 
(c)           liens on properties the Indebtedness with respect to which is
permitted by Section 7.16 hereof;
 
(d)           presently outstanding liens listed on Schedule 7.17 hereto.
 
(e)           liens in favor of the Agent and the Lenders under the Loan
Documents; liens securing Indebtedness to Fannie Mae, Freddie Mac, Ginnie Mae,
FHA or other parties with whom the Borrower or its Subsidiaries originate, sell,
repurchase or otherwise service Mortgage Loans provided such liens relate to the
foregoing transactions, but only to the extent directly relating to or arising
out of such origination, sale, repurchase, or servicing in the ordinary course
of business;
 
(f)           liens securing Indebtedness secured by real property acquired upon
foreclosure of Mortgages, which either (x) is so securing at the time of such
acquisition, or (y) is directly related to such real property, not in excess of
the fair market value thereof, and reasonably expected by the Borrower or the
subject Subsidiary to be recovered from the sale or other disposition of the
subject real property;
 
 
 
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(g)           liens arising from good faith deposits in connection with or to
secure performance of tenders, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the payment of borrowed
money);
 
(h)           easements, rights-of-way, restrictions (including zoning
restrictions), matters of plat, minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered property for its intended purposes;
 
(i)           liens securing Indebtedness permitted pursuant to Section 7.16(i),
provided such lien does not extend beyond the equipment which is the subject of
the Indebtedness; and
 
(j)           liens in favor of Ginnie Mae in connection with Ginnie Mae
Mortgage Loans, provided such liens relate to the subject Mortgage Loan.
 
7.18.         Pledge of Servicing Contracts.  Pledge or grant a security
interest in any existing or future Servicing Contracts of the Borrower other
than to Agent.
 
7.19.         Recourse Servicing Contracts.  Acquire or enter into Servicing
Contracts under which the Borrower must repurchase or indemnify the holder of
the Mortgage Loans as a result of defaults on the Mortgage Loans at any time
during the term of those Mortgage Loans, except for loss sharing under Fannie
Mae DUS Mortgage Loans, Freddie Mac loss sharing and FHA/Ginnie Mae coinsurance
and as a result of customary representations and warranties consistent with past
practices in the ordinary course of the Borrower’s business concerning the
Mortgage Loans.
 
7.20.         Gestation Agreements.  Directly or indirectly sell or finance a
Mortgage Loan under any Gestation Agreement if the Mortgage Loan is pledged to
the Agent as Collateral under this Agreement.
 
7.21.         Minimum Servicing Portfolio.  Permit the aggregate principal
amount of the Serviced Loans (exclusive of Serviced Loans which are sixty (60)
days or more past due or otherwise in default) to be less than SIX BILLION AND
NO/100 DOLLARS ($6,000,000,000.00), computed as of the end of each calendar
quarter.
 
7.22.         Maximum Serviced Loans Delinquencies.  At no time shall the
aggregate principal amount of Serviced Loans as to which the Borrower has any
loss sharing exposure which are sixty (60) days or more past due or otherwise in
default exceed 2% of aggregate principal balances of all such Serviced Loans.
 
7.23.         Subsidiaries.  The Borrower hereby covenants and agrees that it
shall not create, obtain, acquire, suffer to exist or otherwise have any
Subsidiaries, without the Agent’s prior written consent (which consent may be
withheld in the Agent’s unrestricted discretion); provided, however, that the
Borrower may acquire, form or otherwise invest in a Subsidiary

 
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which engages in the mortgage banking business, and, with respect to any such
Subsidiary’s originations of Mortgage Loans in pursuit of such business, a
majority of such business shall focus on multi-family mortgages consistent with
the Borrower’s historic business.  Any Subsidiary so created or acquired by the
Borrower shall constitute a “Borrower” as referred to herein.  The Borrower
acknowledges and covenants that upon the creation or acquisition of any new
Subsidiary permitted hereby, the Borrower shall provide at least 30 days prior
written notice of the creation or acquisition thereof, and at the Agent’s option
such Subsidiary shall execute and deliver to the Agent an agreement reasonably
satisfactory to the Agent under which such Subsidiary joins this Agreement as a
Borrower.
 
8.            DEFAULTS; REMEDIES.
 
8.1.           Events of Default.  The occurrence of any of the following
conditions or events shall be an event of default (“Event of Default”):
 
(a)           Failure to pay the principal of any Advance when due, whether at
stated maturity, by acceleration, or otherwise; or failure to pay any
installment of interest on any Advance or any other amount due under this
Agreement within ten (10) days after the due date; or
 
(b)           Failure of the Borrower or any of its Subsidiaries to pay, or any
default in the payment of any principal or interest on, any other Indebtedness
for money borrowed beyond any period of grace provided; or breach or default
with respect to any other material term of any other Indebtedness for money
borrowed under any loan agreement, mortgage, indenture or other agreement
relating thereto, if the effect of such failure, default or breach is to cause,
or to permit the holder or holders thereof (or a trustee on behalf of such
holder or holders) to cause, Indebtedness of the Borrower or its Subsidiaries
for money borrowed in the aggregate amount of FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00) or more to become or be declared due prior to its stated
maturity (upon the giving or receiving of Notice, lapse of time, both, or
otherwise); or
 
(c)           (i) Borrower shall fail to comply with (y) the provisions of
clauses (a) through (e) inclusive of Section 7.17 with respect to any lien not
resulting from a voluntary action by the Borrower within five (5) days from the
date of the Agent’s written notice to the Borrower informing the Borrower of the
failure to have so complied with said provisions, or (z) the covenants set forth
in Sections 7.1 through 7.23 (other than as set forth in clause (i)(y) of this
Section with respect to Section 7.17), or (ii) any of the Borrower’s
representations or warranties made or deemed made herein or in any other Loan
Document, or in any statement or certificate at any time given by the Borrower
in writing pursuant hereto or thereto shall be inaccurate or incomplete in any
materially adverse respect on the date as of which made or deemed made; or
 
(d)           The Borrower shall default in the performance of or compliance
with any term or covenant contained in this Agreement and such default shall not
have been remedied or

 
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waived within thirty (30) days after receipt of written Notice from the Agent of
such default other than those referred to above in Subsections 8.1(a), 8.1(b),
or 8.1(c); or
 
(e)           (1) A court having jurisdiction shall enter a decree or order for
relief in respect of the Borrower or any of Borrower’s Subsidiaries in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect in respect of the Borrower or any of Borrower’s
Subsidiaries, which decree or order is not stayed; or a filing of an involuntary
case under any applicable bankruptcy, insolvency or other similar law in respect
of the Borrower or any of Borrower’s Subsidiaries has occurred; or (2) any
other similar relief shall be granted under any applicable federal or state law;
or a decree or order of a court having jurisdiction for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Borrower or any of Borrower’s Subsidiaries, or over all
or a substantial part of their respective property, shall have been entered; or
the involuntary appointment of an interim receiver, trustee or other custodian
of the Borrower or any of Borrower’s Subsidiaries, for all or a substantial part
of their respective property; or the issuance of a warrant of attachment,
execution or similar process against any substantial part of the property of the
Borrower or any of Borrower’s Subsidiaries, and the continuance of any such
events in Subsections (1) and (2) above for sixty (60) days unless dismissed or
discharged; or
 
(f)           The Borrower or any of Borrower’s Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion to an involuntary case, under any such law, or shall
consent to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; the making by the
Borrower or any of Borrower’s Subsidiaries of any assignment for the benefit of
creditors; or the failure of the Borrower or any of Borrower’s Subsidiaries, or
the admission by any of them of its inability, to pay its debts as such debts
become due; or
 
(g)           Any money judgment, writ or warrant of attachment, or similar
process involving in any case an amount in excess of FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($500,000.00) which has been denied coverage under the Borrower’s
insurance policies, as applicable, shall be entered or filed against the
Borrower or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of thirty (30)
days or in any event no later than five (5) days prior to the date of any
proposed sale thereunder; or
 
(h)           Any order, judgment or decree shall be entered against the
Borrower decreeing the dissolution or split up of the Borrower and such order
shall remain undischarged or unstayed for a period in excess of forty-five (45)
days; or
 
(i)           Any Plan maintained by the Borrower or any of Borrower’s
Subsidiaries shall be terminated within the meaning of Title IV of ERISA or a
trustee shall be appointed by an appropriate United States district court to
administer any Plan, or the Pension Benefit

 
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Guaranty Corporation (or any successor thereto) shall institute proceedings to
terminate any Plan or to appoint a trustee to administer any Plan if as of the
date thereof the Borrower’s or any Subsidiary’s liability (after giving effect
to the tax consequences thereof) to the Pension Benefit Guaranty Corporation (or
any successor thereto) for unfunded guaranteed vested benefits under the Plan
exceeds the then current value of assets accumulated in such Plan by more than
FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) (or in the case of a termination
involving the Borrower or any of Borrower’s Subsidiaries as a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA) the withdrawing employer’s
proportionate share of such excess shall exceed such amount); or

(j)           The Borrower or any of Borrower’s Subsidiaries as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from such
Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have
notified such withdrawing employer that such employer has incurred a withdrawal
liability in an annual amount exceeding FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00); or
 
(k)           The Borrower shall contest the validity or enforceability hereof,
or the Agent’s security interest on any portion of the Collateral shall become
unenforceable or otherwise impaired; provided that, subject to the Agent’s
approval, no Event of Default shall occur and be continuing as a result of such
impairment if all Advances made against any such Collateral shall be paid in
full within ten (10) days of the date of such impairment; or
 
(l)           The Borrower dissolves or terminates its existence, or
discontinues its business of engaging in the mortgage banking business, a
majority of which shall focus on multifamily mortgage loans consistent with its
historical business; or
 
(m)           Any court shall find or rule, or the Borrower shall assert or
claim, (i) that the Agent does not have a valid, first priority perfected,
enforceable Lien and security interest in the Collateral as represented in this
Agreement or in any other Loan Document, or (ii) that this Agreement or any of
the Loan Documents does not or will not constitute the legal, valid, binding and
enforceable obligations of the party or parties (as applicable) thereto, or
(iii) that any Person has a conflicting or adverse Lien, claim or right in, or
with respect to, the Collateral and the Borrower is unable within ten (10) days
to have such finding or ruling reversed or to have such adverse Lien, claim or
right removed; or
 
(n)           The Borrower shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or
defraud its creditors or any of them, or made or suffered a transfer of any of
its property which may be fraudulent under any bankruptcy, fraudulent conveyance
or similar law; or shall have made any transfer of its property to or for the
benefit of a creditor at a time when other creditors similarly situated have not
been paid; or shall have suffered or permitted, while insolvent, any creditor to
obtain a Lien upon any of its property through legal proceedings or other
process which is not vacated within sixty (60) days from the date thereof; or
 
 

 
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(o)           Borrower or its Subsidiaries shall be indicted for a federal
crime, a punishment for which could include the forfeiture of any assets of
Borrower or its Subsidiaries; or
 
(p)           Any change in the ownership of the capital stock of Borrower from
that existing on the date hereof; or
 
(q)           A Material Adverse Change shall occur.
 
If an Event of Default is waived by the Majority Lenders (or all of the Lenders
if and to the extent required by the terms hereof), in their sole discretion,
pursuant to a specific written
instrument executed by an authorized officer of Agent, the Event of Default so
waived shall be deemed to have never occurred.
 
8.2.           Remedies.
 
(a)           Upon the occurrence of any Event of Default described in Sections
8.1(e), 8.1(f), 8.1(h) or 8.1(k), the Commitment shall automatically terminate
and all unpaid and accrued Obligations of the Borrower shall automatically
become due and payable, without Notice, presentment for payment, demand, notice
of non-payment, protest, notice of protest, notice of intent to accelerate,
notice of acceleration, maturity, or any other Notices or requirements of any
kind to the Borrower or any other Person liable thereon or with respect thereto,
all of which are hereby expressly waived by the Borrower.
 
(b)           Upon the occurrence of any Event of Default, other than those
described in Sections 8.1(e), 8.1(f), 8.1(h) or 8.1(k), the Agent may, by
written Notice to the Borrower, terminate the Commitment and/or declare all
unpaid and accrued Obligations of the Borrower to be immediately due and
payable, whereupon the same shall forthwith become due and payable, together
with all accrued and unpaid interest thereon, and the obligation of the Lenders
to make any Advances shall thereupon terminate.
 
(c)           Upon the occurrence of any Event of Default, the Agent may also do
any of the following:
 
1.           Foreclose upon or otherwise enforce its security interest in and
Lien on the Collateral to secure all payments and performance of Obligations of
the Borrower in any manner permitted by law or provided for hereunder.
 
2.           Notify all obligors, servicers or other Persons in respect of the
Collateral that the Collateral has been assigned to the Agent, for the benefit
of the Lenders, and that all payments thereon are to be made directly to the
Agent, for the benefit of the Lenders, or such other party as may be designated
by the Agent; settle, compromise, or release, in whole or in part, any amounts
owing on the Collateral, any such obligor or any Investor or any portion of the
Collateral, on terms acceptable to the Agent; enforce payment and prosecute any
action or proceeding with respect to any and all Collateral; and where any such
Collateral is in default, foreclose on and enforce security interests in, such
Collateral

 
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by any available judicial procedure or without judicial process and sell
property acquired as a result of any such foreclosure.
 
3.           Act, or contract with a third Person to act, as servicer or
subservicer of each item of Collateral requiring servicing and perform all
obligations required in connection with Purchase Commitments, such third party’s
fees to be paid by the Borrower.
 
4.           Require the Borrower to assemble the Collateral and/or books and
records relating thereto and make such available to the Agent at a place to be
designated by the Agent.

5.           Enter onto property where any Collateral or books and records
relating thereto are located and take possession thereof with or without
judicial process.
 
6.           Prior to the disposition of the Collateral, prepare it for
disposition in any manner and to the extent the Agent deems appropriate.
 
7.           Exercise all rights and remedies of a secured creditor under the
Uniform Commercial Code of New York or other applicable law, including, but not
limited to, selling or otherwise disposing of the Collateral, or any part
thereof, at one or more public or private sales, whether or not such Collateral
is present at the place of sale, for cash or credit or future delivery, on such
terms and in such manner as the Agent may determine, including, without
limitation, sale pursuant to any applicable Purchase Commitment.  If notice is
required under such applicable law, the Agent will give the Borrower not less
than ten (10) days’ Notice of any such public sale or of the date after which
private sale may be held.  The Borrower agrees that ten (10) days’ Notice shall
be commercially reasonable notice.  The Agent may, without Notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned.  The Agent is authorized at any such sale, if the Agent deems it
advisable so to do, to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or resale of
any of the Collateral.  The Borrower specifically agrees that any such sale,
whether public or private, of any Collateral pursuant to the commitment of any
investor to purchase such Collateral that was obtained by (or with the approval
of) the Borrower will be commercially reasonable, and if such sale is for the
price provided for in such commitment, then such sale shall be held to be for
value reasonably equivalent to the value of the Collateral so sold.  Upon any
such sale, the Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold.  Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right of whatsoever
kind, including any equity or right of redemption, stay or appraisal which the
Borrower has or may have under any rule of law or statute now existing or
hereafter adopted.  In any case of any sale of all or any part of the Collateral
on credit or for future delivery, the Collateral so sold may be retained by the
Agent until the selling price is paid by the purchaser, but the Agent shall not
incur any liability in case of such purchaser’s failure to take up and pay for
the Collateral so sold and, in case of any such failure, such Collateral may
again be sold upon like Notice.  In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Agent until the selling price is paid by the purchaser thereof,
but the Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of

 
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any such failure, such Collateral may again be sold upon like Notice.  The Agent
may, however, instead of exercising the power of sale herein conferred upon it,
proceed by a suit or suits at law or in equity to collect all amounts due upon
the Collateral or to foreclose the pledge and sell the Collateral or any portion
thereof under a judgment or decree of a court or courts of competent
jurisdiction, or both.
 
8.           Proceed against the Borrower on the Notes.

9.           Exercise any or all of its rights, remedies or recourses under any
other Loan Documents, at law, in equity, or otherwise.
 
(d)           Neither the Agent nor any Lender shall incur any liability as a
result of the sale or other disposition of the Collateral, or any part thereof,
at any public or private sale or disposition.  The Borrower hereby waives (to
the extent permitted by law) any claims it may have against the Agent and the
Lenders arising by reason of the fact that the price at which the Collateral may
have been sold at such private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate amount of the
outstanding Advances and the unpaid interest accrued thereon, even if the Agent
accepts the first offer received and does not offer the Collateral to more than
one offeree and none of the actions described herein shall render Agent’s
disposition of the Collateral in such a manner as commercially
unreasonable.  Any sale of Collateral pursuant to the terms of a Purchase
Commitment, or any other disposition of collateral arranged by the Borrower,
whether before or after the occurrence of an Event of Default, shall be deemed
to have been made in a commercially reasonable manner.
 
(e)           In connection with any sale of the Collateral pursuant to the
terms of a Purchase Commitment, Agent may, without liability to the Borrower or
any other Person, continue to transmit Pledged Loans or Pledged Securities,
together with all related loan documents and pool documents in Agent’s
possession, to the applicable Investor, Approved Custodian or other party
acceptable to Agent in its sole discretion.
 
(f)           The Borrower specifically waives (to the extent permitted by law)
any equity or right of redemption, all rights of redemption, stay or appraisal
which the Borrower has or may have under any rule of law or statute now existing
or hereafter adopted, and any right to require the Agent to (1) proceed against
any Person, (2) proceed against or exhaust any of the Collateral or pursue its
rights and remedies as against the Collateral in any particular order, or
(3) pursue any other remedy in its power.  The Agent shall not be required to
take any steps necessary to preserve any rights of the Borrower against holders
of mortgages prior in lien to the Lien of any Mortgage included in the
Collateral or to preserve rights against prior parties.

 
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(g)           The Lenders may, but shall not be obligated to, advance any sums
or do any act or thing necessary to uphold and enforce the Lien and priority of,
or the security intended to be afforded by, any Mortgage included in the
Collateral, including, without limitation, payment of delinquent taxes or
assessments and insurance premiums.  All advances, charges, costs and expenses,
including reasonable attorneys’ fees and disbursements, incurred or paid by the
Lenders in exercising any right, power or remedy conferred by this Agreement, or
in the enforcement hereof, together with interest thereon, at the Default Rate,
from the time of payment until repaid, shall become a part of the principal
balance outstanding hereunder and under the Notes.
 
(h)           No failure on the part of the Agent to exercise, and no delay in
exercising, any right, power or remedy provided hereunder, at law or in equity
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Agent of any right, power or remedy provided hereunder, at law or in equity
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.  Without intending to limit the foregoing, all defenses
based on the statute of limitations are hereby waived by the Borrower to the
extent permitted by law.  The remedies herein provided are cumulative and are
not exclusive of any remedies provided at law or in equity.
 
8.3.           Application of Proceeds.  The proceeds of any sale, disposition
or other enforcement of the security interest in all or any part of the
Collateral shall be applied by the Agent as follows:
 
First, to the payment of the costs and expenses of such sale or enforcement,
including reasonable compensation to the Agent’s agents and counsel, and all
expenses, liabilities and advances made or incurred by or on behalf of the Agent
in connection therewith;
 
Second, to the payment of all amounts due (other than principal and interest)
under the Notes or this Agreement ─ payable ratably to Lenders in the proportion
that each Lender’s share of those amounts bears to the total of those amounts
for all Lenders;
 
Third, to the payment of interest accrued and unpaid on the Notes ─ payable
ratably to each Lender in accordance with its Commitment Percentage;
 
Fourth, on a pari passau basis, to (a) to all Lenders in accordance with their
proportional share based upon their respective Commitment Percentages until all
Lenders have been paid in full all principal due to the Lenders under the Loan,
and (b) to the counterparty on any Hedging Arrangements between the Borrower and
a Lender (or an Affiliate of a Lender) solely with respect to Advances made
hereunder, until all Obligations thereunder have been paid in full;
 
Fifth, to the payment of all other Obligations payable ratably to Lenders in the
proportion that each Lender’s share of those amounts bears to the total of those
amounts for all Lenders; and
 

 
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Finally, to the payment to the Borrower, or to its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
 
If the proceeds of any such sale, disposition or other enforcement are
insufficient to cover the costs and expenses of such sale, as aforesaid, and the
payment in full of all Obligations of the Borrower, the Borrower shall remain
liable for any deficiency.
 
8.4.           Agent Appointed Attorney-in-Fact.  The Agent is hereby appointed
the attorney-in-fact of the Borrower, with full power of substitution, for the
purpose of carrying out the provisions hereof and taking any action and
executing any instruments which the Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest and shall remain in full force and
effect until the full and final payment and performance of all
Obligations.  Without limiting the generality of the foregoing, the Agent shall
have the right and power, either in the name of the Borrower or in its own name,
to (a) give notices of its security interest in the Collateral to any Person,
(b) endorse in blank, to itself, or to a nominee all items of Collateral that
are transferable by endorsement and are payable to the order of the Borrower,
including canceling, completing or supplying any needed or incomplete or missing
endorsement of the Borrower and any related assignment, (c) change or cause to
be changed the book-entry registration or name of subscriber or Investor on any
Pledged Security, and (d) receive, endorse and collect all checks made payable
to the order of the Borrower representing any payment on account of the
principal of or interest on, or the proceeds of sale of, any of the Pledged
Loans or Pledged Securities and to give full discharge for the same.
 
8.5.           Right of Offset.  Borrower hereby grants to Agent and to each
Lender a right of offset, subject to the following sentence relating to any
exercise of such right, to secure the repayment of the Obligations, upon any and
all monies, securities, or other property of Borrower, and the proceeds
therefrom now or hereafter held or received by or in transit to Agent or such
Lender from or for the account of Borrower, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or special, time or demand, provisional or final) and credits
of Borrower, and any and all claims of Borrower against Agent or such Lender, at
any time existing.  Upon the occurrence of any Default, Agent and each Lender
are authorized at any time and from time to time, without Notice to Borrower, to
offset, appropriate, and apply any and all of those items against the
Obligations.  Notwithstanding anything in this section or elsewhere in this
Agreement to the contrary, neither Agent nor any other Lender shall have any
right to offset, appropriate, or apply any accounts of Borrower which consist of
escrowed funds (except and to the extent of any beneficial interest which
Borrower have in such escrowed funds) which have been so identified by Borrower
in writing at the time of deposit thereof.
 
8.6.           Waivers.  Borrower waives any right to require Agent to
(a) proceed against any Person, (b) proceed against or exhaust any of the
Collateral or pursue its rights and remedies as against the Collateral in any
particular order, or (c) pursue any other remedy in its power.  Agent shall not
be required to take any steps necessary to preserve any rights of Borrower
against any Person from which Borrower purchased any Mortgage Loans or to
preserve rights against prior parties.  Borrower and each surety, endorser,
guarantor, pledgor, and other party

 
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ever liable or whose property is ever liable for payment of any of the
Obligations jointly and severally waive presentment and demand for payment,
protest, notice of intention to accelerate, notice of acceleration, and notice
of protest and on payment, and agree that their or their property’s liability
with respect to the Obligations, or any part thereof, shall not be affected by
any renewal or extension in the time of payment of the Obligations, by any
indulgence, or by any release or change in any security for the payment of the
Obligations, and hereby consent to any and all renewals, extensions,
indulgences, releases, or changes, regardless of the number thereof.
 
8.7.           Performance by Agent.  Should any covenant, duty, or agreement of
Borrower fail to be performed in accordance with the terms of this Agreement or
of any document delivered under this Agreement, Agent may, at its option, after
Notice to Borrower, as the case may be, perform, or attempt to perform, such
covenant, duty, or agreement on behalf of the Borrower and shall notify each
Lender that it has done so.  In such event, Borrower shall jointly and
severally, at the request of Agent, promptly pay any amount expended by Agent in
such performance or attempted performance to Agent at its principal place of
business, together with interest thereon at the Maximum Rate from the date of
such expenditure by Agent until paid.  Notwithstanding the foregoing, it is
expressly understood that Agent does not assume and shall never have, except by
express written consent of Agent, any liability or responsibility for the
performance of any duties of Borrower under this Agreement or under any other
document delivered under this Agreement.
 
8.8.           No Responsibility.  Except in the case of fraud, gross
negligence, or willful misconduct, neither Agent nor any of its officers,
directors, employees, or attorneys shall assume or ever have any liability or
responsibility for, any diminution in the value of the Collateral or any part of
the Collateral.
 
8.9.           No Waiver.  The acceptance by Agent or any Lender at any time and
from time to time of partial payment or performance by Borrower of any of their
respective obligations under this Agreement or under any Loan Document shall not
be deemed to be a waiver of any Default then existing.  No waiver by Agent or
any Lender shall be deemed to be a waiver of any other then existing or
subsequent Default.  No delay or omission by Agent or any Lender in exercising
any right under this Agreement or under any other document required to be
executed under or in connection with this Agreement shall impair such right or
be construed as a waiver thereof or any acquiescence therein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof, or the exercise of any other right under this Agreement or otherwise.
 
8.10.        Cumulative Rights.  All rights available to Agent and the Lenders
under this Agreement or under any other document delivered under this Agreement
shall be cumulative of and in addition to all other rights granted to Agent and
the Lenders at law or in equity, whether or not the Notes be due and payable and
whether or not Agent shall have instituted any suit for collection, foreclosure
or other action in connection with this Agreement or any other document
delivered under this Agreement.
 
 

 
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9.           NOTICES.
 
All notices, demands, consents, requests and other communications required or
permitted to be given or made hereunder (collectively, “Notices”) shall, except
as otherwise expressly provided hereunder, be in writing addressed to the
respective parties hereto at their respective addresses hereinafter set forth
and shall be either (a) delivered in person, or (b) mailed, by certified,
registered, or express mail, postage prepaid, or (c) delivered by overnight
courier, or (d) telecopied to their respective telecopy numbers (with a paper
copy mailed the same day as aforesaid) as hereinafter set forth; provided any
party may change its address for Notice by designating such party’s new address
in a Notice to the sending party given at least five (5) Business Days before it
shall become effective.  All Notices shall be conclusively deemed to have been
properly given or served when duly received, in person regardless of how
sent.  Regardless of when received, all Notices shall be conclusively
deemed given or served if addressed in accordance with this Section and (1) if
by overnight courier, on the next Business Day or (2) if mailed, by certified,
registered, or express mail, postage prepaid, on the third Business Day after
being deposited in the mails, or (3) if telecopied, when telecopied to the
telecopy number set forth below (provided a paper copy is mailed the same day):
 

 

  If to the Borrower:  Centerline Mortgage Capital Inc.
Attn:  Chief Financial Officer
625 Madison Avenue
New York, New York 10022
Fax No.: 212-751-3550
E-mail: rlevy@centerline.com 
              with a copy to:  
Centerline Mortgage Capital Inc.
Attn:  General Counsel
625 Madison Avenue
New York, New York 10022
Fax No.: 212-751-3550
E-mail: jdamico@centerline.com 
          and           
Proskauer Rose LLP
Attn:  Steven A. Fishman
1585 Broadway
New York, NY 10022
Fax No.  212-969-2900
E-mail: safishman@proskauer.com 

 
 
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        If to Agent: 
Bank of America, N.A.
Attn:  John F. Simon, Senior Vice President
One Federal Street, Fourth Floor
Mail Code: MA5-503-04-16
Boston, MA 02110
Fax No.: 617 346 4670
E-mail:  john.f.simon@bankofamerica.com 
        with a copy to:  
Nutter, McClennen & Fish, LLP
Attn:  Stephen J. Patterson
World Trade Center West
155 Seaport Boulevard
Boston, MA 02210
Fax No.: 617 310 9827
E-mail: spatterson@nutter.com 

 
If to a Lender, to such address for such Lender as appears on Schedule 1.
 
10.           REIMBURSEMENT OF EXPENSES; INDEMNITY.
 
10.1.        Reimbursement of Expenses and Indemnification by Borrower.  The
Borrower shall pay (promptly upon receipt of an invoice therefore): (a) all the
actual and reasonable out-of-pocket costs and expenses of preparation of the
Loan Documents and any consents, amendments, waivers, or other modifications
thereto; (b) the reasonable fees, expenses, and disbursements of counsel to the
Agent in connection with the negotiation, preparation, execution, and
administration of the Loan Documents and any consents, amendments, waivers, or
other modifications thereto and any other documents or matters requested by the
Borrower; (c) all other actual and reasonable out-of-pocket costs and expenses
incurred by the Agent in connection with the establishment of the Loan, the
syndication of the Commitment and the negotiation, preparation, and execution of
the Loan Documents and any consents, amendments, waivers, or other modifications
thereto and the transactions contemplated thereby (including, without
limitation, any Temporary Increases); (d) all reasonable out-of-pocket expenses
(including reasonable attorneys’ fees and costs, which attorneys may be
employees of the Agent or any Lender and the fees and costs of appraisers,
brokers, investment bankers or other experts retained by the Agent or any
Lender) incurred by the Agent or any Lender in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any other Person, or the administration thereof, (ii) any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a so-called “work-out” or pursuant to any insolvency
or bankruptcy proceedings, and (iii) any litigation, proceeding or dispute
whether arising hereunder or otherwise, in any way related to the Agent’s or any
Lender’s relationship with the Borrower, except to the extent arising out of the
Agent’s or any Lender’s bad faith, gross negligence, willful misconduct or
material breach of this Agreement or any other Loan Document, as finally
determined by a court of competent jurisdiction.  The covenants of this Section
shall survive payment or satisfaction of payment of amounts owing with respect
to the Notes.  The amount of all such
 
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expenses shall, until paid, bear interest at the rate applicable to principal
hereunder (including the Default Rate) and be an Obligation secured by any
Collateral.
 
10.2.        INDEMNIFICATION BY THE BORROWER.  THE BORROWER SHALL INDEMNIFY, PAY
AND HOLD HARMLESS THE AGENT, EACH LENDER, AND ANY OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS AND ANY SUBSEQUENT OWNERS OR HOLDERS OF THE NOTES
(COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, JUDGMENTS, SUITS, COSTS,
EXPENSES AND DISBURSEMENTS OF ANY KIND WHATSOEVER (THE “INDEMNIFIED
LIABILITIES”) (INCLUDING, WITHOUT LIMITATION, INDEMNIFIED LIABILITIES RESULTING,
IN WHOLE OR IN PART, FROM ANY INDEMNIFIED PARTY’S OWN NEGLIGENCE OR STRICT
LIABILITY) WHICH MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST SUCH
INDEMNIFIED PARTY IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE
NOTES, OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY TO THE EXTENT THAT ANY SUCH INDEMNIFIED LIABILITIES RESULT (DIRECTLY
OR INDIRECTLY) FROM ANY CLAIMS MADE, OR ANY ACTIONS, SUITS OR PROCEEDINGS
COMMENCED OR THREATENED, BY OR ON BEHALF OF ANY CREDITOR (EXCLUDING THE LENDERS
AND THE HOLDER OR HOLDERS OF THE NOTES), SECURITY HOLDER, SHAREHOLDER, CUSTOMER
(INCLUDING, WITHOUT LIMITATION, ANY PERSON HAVING ANY DEALINGS OF ANY KIND WITH
THE BORROWER), TRUSTEE, DIRECTOR, OFFICER, EMPLOYEE AND/OR AGENT OF THE BORROWER
ACTING IN SUCH CAPACITY, THE BORROWER OR ANY GOVERNMENTAL REGULATORY BODY OR
AUTHORITY.  THE FOREGOING INDEMNITY SHALL NOT APPLY TO THE EXTENT THE
INDEMNIFIED LIABILITIES RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF ANY INDEMNIFIED PARTY OR ANY INDEMNIFIED PARTY’S OWN VIOLATIONS OF
REGULATIONS APPLICABLE TO IT.  THE AGREEMENT OF THE BORROWER CONTAINED IN THIS
SUBSECTION (c) SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT AND
THE PAYMENT IN FULL OF THE NOTES.  ATTORNEYS’ FEES AND DISBURSEMENTS INCURRED IN
ENFORCING, OR ON APPEAL FROM, A JUDGMENT PURSUANT HERETO SHALL BE RECOVERABLE
SEPARATELY FROM AND IN ADDITION TO ANY OTHER AMOUNT INCLUDED IN SUCH JUDGMENT,
AND THIS CLAUSE IS INTENDED TO BE SEVERABLE FROM THE OTHER PROVISIONS OF THIS
AGREEMENT AND TO SURVIVE AND NOT BE MERGED INTO SUCH JUDGMENT. WITHOUT LIMITING
ANY OF THE FOREGOING, THE BORROWER SHALL UPON DEMAND PROMPTLY REIMBURSE THE
AGENT FOR ALL EXTRAORDINARY SERVICING EXPENSES INCURRED BY IT.
 
10.3.         INDEMNIFICATION BY THE LENDERS.  WHETHER OR NOT ANY ADVANCE IS
MADE HEREUNDER, THE LENDERS AGREE TO INDEMNIFY, PAY,
 

 
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DEFEND, AND HOLD HARMLESS THE AGENT IN ITS RESPECTIVE CAPACITY AS SUCH (TO THE
EXTENT NOT REIMBURSED BY THE BORROWER AND WITHOUT LIMITING THE OBLIGATION OF THE
BORROWER TO DO SO), RATABLY ACCORDING TO THEIR RESPECTIVE COMMITMENT
PERCENTAGES, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
OF ANY KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION LIABILITIES RESULTING IN
WHOLE OR PART FROM THE AGENT’S OWN ORDINARY NEGLIGENCE OR STRICT LIABILITY,
WHICH MAY AT ANY TIME (INCLUDING WITHOUT LIMITATION AT ANY TIME FOLLOWING THE
PAYMENT OF THE OBLIGATIONS) BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
AGENT IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR ANY
DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER
OR IN CONNECTION WITH ANY OF THE FOREGOING; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR THE PAYMENT OF ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
RESULTING FROM THE AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER SHALL REIMBURSE THE AGENT UPON DEMAND
FOR ITS RATABLE SHARE OF ANY COSTS OR OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY
COSTS) INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER
THROUGH NEGOTIATION, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, AND ALL
EXTRAORDINARY SERVICING EXPENSES, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED
FOR SUCH EXPENSES BY OR ON BEHALF OF BORROWER.  THE AGREEMENTS IN THIS SECTION
SHALL SURVIVE THE PAYMENT OF THE OBLIGATIONS AND THE TERMINATION OF THIS
AGREEMENT.  ATTORNEYS’ FEES AND DISBURSEMENTS INCURRED IN ENFORCING, OR ON
APPEAL FROM, A JUDGMENT PURSUANT HERETO SHALL BE RECOVERABLE SEPARATELY FROM AND
IN ADDITION TO ANY OTHER AMOUNT INCLUDED IN SUCH JUDGMENT, AND THIS CLAUSE IS
INTENDED TO BE SEVERABLE FROM THE OTHER PROVISIONS OF THIS AGREEMENT AND TO
SURVIVE AND NOT BE MERGED INTO SUCH JUDGMENT.
 
TO THE EXTENT THAT, AFTER THE LENDERS HAVE MADE PAYMENTS TO AGENT PURSUANT TO
THIS SECTION 10.2, AGENT RECEIVES FROM THE BORROWER, THE COLLATERAL OR ANY OTHER
SOURCE (OTHER THAN THE LENDERS) ANY AMOUNT ON ACCOUNT OF THE LIABILITIES SO PAID
BY THE

 
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LENDERS, AGENT SHALL REIMBURSE SUCH AMOUNT RECEIVED FROM THE BORROWER, THE
COLLATERAL OR SUCH OTHER SOURCE TO THE LENDERS, RATABLY IN ACCORDANCE WITH THE
AMOUNTS RECEIVED FROM THEM PURSUANT TO SECTION 10.2 FOR PURPOSES OF THE
FOREGOING SENTENCE, AGENT MAY APPLY ANY AMOUNT RECEIVED FROM THE BORROWER OR ANY
SUCH OTHER SOURCE TO ANY OBLIGATIONS OWING TO IT UNDER ANY LOAN DOCUMENT.
 
11.           THE AGENT AND THE LENDERS
 
11.1.         Rights, Duties and Immunities of the Agent.
 
(a)           Appointment of Agent.  Each Lender hereby irrevocably designates
and appoints Bank of America, N.A. as Agent of such Lender to act as specified
herein and in the other Loan Documents, and each such Lender hereby irrevocably
authorizes the Agent to take
 
 such actions, exercise such powers and perform such duties as are expressly
delegated to or conferred upon the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto.  The Agent agrees to act as such upon the express conditions
contained in this Section 11. The Agent shall not have any duties or
responsibilities except those expressly set forth herein or in the other Loan
Documents, nor shall it have any fiduciary relationship with, or fiduciary duty
to, any Lender, and no implied covenants, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against the
Agent.  The provisions of this Section 11 are solely for the benefit of the
Agent and the Lenders, and the Borrower shall not have any rights as a third
party beneficiary of any of the provisions hereof.
 
(b)           Administration of Loan by Agent.  The Agent shall be responsible
for administering the Loan on a day-to-day basis.  In the exercise of such
administrative duties, the Agent shall use the same diligence and standard of
care that is customarily used by the Agent with respect to similar loans held by
the Agent solely for its own account. Each Lender delegates to the Agent the
full right and authority on its behalf to take the following specific actions in
connection with its administration of the Loan:
 
(i)           to fund each Advance in accordance with the provisions of the Loan
Documents, but only to the extent of immediately available funds provided to the
Agent by the respective Lenders for such purpose;
 
(ii)           to receive all payments of principal, interest, fees and other
charges paid by, or on behalf of, the Borrower and, except for fees to which the
Agent is entitled pursuant to the Loan Documents or otherwise, to distribute all
such funds to the respective Lenders as provided for hereunder;
 
(iii)           to keep and maintain complete and accurate files and records of
all material matters pertaining to the Loan, and make such files and records
available for inspection and copying by each Lender and its respective employees
and agents during normal business hours upon reasonable prior notice to the
Agent; and
 

 
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(iv)           to do or omit doing all such other actions as may be reasonably
necessary or incident to the implementation, administration and servicing of the
Loan and the rights and duties delegated hereinabove.
 
(c)           Delegation of Duties.  The Agent may execute any of its duties
under this Agreement or any other Document by or through its agents or
attorneys-in-fact, and shall be entitled to the advice of counsel concerning all
matters pertaining to its rights and duties hereunder or under the Loan
Documents.  The Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
 
(d)           Exculpatory Provisions.  Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
liable for any action lawfully taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for its
or their gross negligence or willful misconduct. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any recital, statement, representation or warranty made by the Borrower or
any of their respective officers or agents contained in this Agreement or the
other Loan Documents or in any certificate or other document delivered in
connection therewith; (ii) the performance or observance by the Borrower of any
of the covenants or agreements contained in, or the conditions of, this
Agreement or the other Loan Documents; (iii) the state or condition of any
properties of the Borrower or any other obligor hereunder constituting
Collateral for the Obligations, except as may be specifically provided in this
Agreement or the Exhibits hereto (subject to the immediately preceding
sentence), or any information contained in the books or records of the Borrower;
(iv) the validity, enforceability, collectibility, effectiveness or genuineness
of this Agreement or any other Loan Document or any other certificate, document
or instrument furnished in connection therewith; or (v) the validity, priority
or perfection of any lien securing or purporting to secure the Obligations or
the value or sufficiency of any of the Collateral.
 
(e)           Reliance by Agent.  The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any notice, consent, certificate, affidavit,
or other document or writing believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or persons, and upon the
advice and statements of legal counsel (including, without, limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Agent.  The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders (or all the Lenders,
if and to the extent required pursuant to Section 11.4.1 hereof) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of the taking or failing to take any such action.  The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with any written request of the
Majority Lenders, and each such request of the Majority Lenders, and any action
taken or failure to act by the Agent pursuant thereto, shall be binding upon all
of the Lenders; provided, however, that the Agent shall not

 
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be required in any event to act, or to refrain from acting, in any manner which
is contrary to the Loan Documents or to applicable law.
 
(f)           Notice of Default.  The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default unless the Agent has actual
knowledge of the same or has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default and stating that such
notice is a “notice of default”.  In the event that the Agent obtains such
actual knowledge or receives such a notice, the Agent shall give prompt notice
thereof to each of the Lenders.  The Agent shall take such action with respect
to such Default as shall be reasonably directed by the Majority Lenders (or all
the Lenders, if and to the extent required pursuant to Section 11.4
hereof).  Unless and until the Agent shall have received such direction, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to any such Default as it shall deem advisable
in the best interest of
 the Lenders, provided, however, that the Agent shall not accelerate the
indebtedness under this Agreement without the prior written consent of the
Majority Lenders.
 
(g)           Lenders’ Credit Decisions.  Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender, and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
investigation into the business, assets, operations, property, and financial and
other condition of the Borrower and has made its own decision to enter into this
Agreement and the other Loan Documents.  Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in determining whether or not
conditions precedent to closing any Loan hereunder have been satisfied and in
taking or not taking any action under this Agreement and the other Loan
Documents.
 
(h)           Agent’s Reimbursement and Indemnification.  The Lenders agree to
reimburse and indemnify the Agent, ratably in proportion to their respective
Commitment Amounts, for (i) any amounts not reimbursed by the Borrower for which
the Agent is entitled to reimbursement by the Borrower under this Agreement or
the other Loan Documents, (ii) any other expenses incurred by the Agent on
behalf of the Lenders in connection with the preparation, execution, delivery,
administration, amendment, waiver and/or enforcement of this Agreement and the
other Loan Documents, and (iii) any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may imposed on, incurred by or asserted against
the Agent in any way relating to or arising out of this Agreement or the other
Loan Documents or any other document delivered in connection therewith or any
transaction contemplated thereby, or the enforcement of any of the terms hereof
or thereof, provided that no Lender shall be liable for any of the foregoing to
the extent that they arise from the gross negligence or willful misconduct of
the Agent.  If any indemnity furnished to the Agent for any purpose shall, in
the opinion of the Agent, be insufficient or become impaired, the Agent may call
for additional indemnity and cease, or not commence, to do the action
indemnified against until such additional indemnity is furnished.

 
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(i)           Agent in its Individual Capacity.  With respect to its Commitment
Amount as a Lender, and the Loans made by it and the Note issued to it, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise
indicates, include the Agent in its individual capacity.  The Agent and its
subsidiaries and affiliates may accept deposits from, lend money to, and
generally engage in any kind of commercial or investment banking, trust,
advisory or other business with the Borrower or any Subsidiary or Affiliate of
the Borrower as if it were not the Agent hereunder.
 
(j)           Successor Agent.  The Agent may resign at any time by giving
thirty (30) days’ prior written notice to the Lenders and the Borrower.  The
Majority Lenders, for good cause, may remove Agent at any time by giving thirty
(30) days’ prior written notice to the Agent, the Borrower and the other
Lenders.  Upon any such resignation or removal, the Majority Lenders shall have
the right to appoint a successor Agent.  If no successor Agent shall have been
so appointed by the Majority Lenders and accepted such appointment within thirty
(30) days after the retiring Agent’s giving notice of resignation or the
Majority Lenders’ giving notice of removal, as the case may be, then the
retiring or removed Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Agent.  Each such successor Agent shall be a financial
institution having (i) senior unsecured debt obligations rated at least BBB by
Standard & Poor’s (or a comparable rating from another Rating Agency), and (ii)
total assets in excess of $10,000,000,000.00.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent, and the retiring or removed Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents.  After any retiring Agent’s resignation hereunder, or the
removal of the Agent hereunder, the provisions of this Section 11 shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Agent hereunder.
 
(k)           Duties in the Case of Enforcement.  In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, at the request, or may,
upon the consent, of the Majority Lenders, and provided that the Lenders have
given to the Agent such additional indemnities and assurances against expenses
and liabilities as the Agent may reasonably request, proceed to enforce the
provisions of this Agreement and the other Loan Documents respecting the
foreclosure of mortgages, the sale or other disposition of all or any part of
the Collateral and the exercise of any other legal or equitable rights or
remedies as it may have hereunder or under any other Loan Document or otherwise
by virtue of applicable law, or to refrain from so acting if similarly requested
by the Majority Lenders.  The Agent shall be fully protected in so acting or
refraining from acting upon the instruction of the Majority Lenders, and such
instruction shall be binding upon all the Lenders.  The Majority Lenders may
direct the Agent in writing as to the method and the extent of any such
foreclosure, sale or other disposition or the exercise of any other right or
remedy, the Lenders hereby agreeing to indemnify and hold the Agent harmless
from all costs and liabilities incurred in respect of all

 
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actions taken or omitted in accordance with such direction, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent’s compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.  The Agent may, in its
discretion but without obligation, in the absence of direction from the Majority
Lenders, take such interim actions as it believes necessary to preserve the
rights of the Lenders hereunder and in and to any Collateral securing the
Obligations, including but not limited to petitioning a court for injunctive
relief, appointment of a receiver or preservation of the proceeds of any
Collateral.  Each of the Lenders acknowledges and agrees that no individual
Lender may separately enforce or exercise any of the provisions of any of the
Loan Documents, including without limitation the Notes, other than through the
Agent.

(l)           Distributions of Notices and Documents.  The Agent will forward to
each Lender, promptly after the Agent’s receipt thereof, a copy of each notice
or other document furnished to the Agent pursuant to this Agreement other than
routine communications associated with requests for Advances or determinations
of Collateral eligibility, other routine or nonmaterial communications, notices
or documents required by any of Loan Documents to be furnished directly to the
Lenders by the Borrower, or of which the Agent has knowledge that such notice or
document otherwise had been forwarded directly to the Lenders other than by the
Agent.  Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of Borrower which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
 
11.2.        Respecting Loans and Payments.
 
(a)           Procedures for Advances.  Agent shall give written notice to each
Lender of each request for a Advance by facsimile transmission, hand delivery or
overnight courier on the same Business Day as received from the Borrower
pursuant to Section 2.2.  Each such notice shall be accompanied by a written
summary of the request for a Advance and shall specify (i) the date of the
requested Advance, (ii) the aggregate amount of the requested Advance, and (iii)
each Lender’s pro rata share of the requested Advance.  Each Lender shall,
before 11:00 a.m. (Boston time) on the date set forth in any such request for a
Advance, make available to Agent, at an account to be designated by Agent at
Bank of America, N.A. in Boston, Massachusetts, in same day funds, each Lender’s
ratable portion of the requested Advance.  After Agent’s receipt of such funds
and upon Agent’s determination that the applicable conditions to making the
requested Advance have been fulfilled, Agent shall make such funds available to
the Borrower as provided for in this Agreement.  Within a reasonable period of
time following the making of each Advance, Agent shall deliver to each Lender a
copy of the Borrower’s request for such Advance.  Promptly after receipt by
Agent of written request from any Lender, Agent shall deliver to the requesting
Lender the accompanying certifications and such other instruments, documents,
certifications and approvals delivered by or on behalf of the Borrower to Agent
in support of the requested Advance.
 

 
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(b)           Nature of Obligations of Lenders.  The obligations of the Lenders
hereunder are several and not joint.  Failure of any Lender to fulfill its
obligations hereunder shall not result in any other Lender becoming obligated to
advance more than its Commitment Percentage of the Loan, nor shall such failure
release or diminish the obligations of any other Lender to fund its Commitment
Percentage provided herein.
 
(c)           Payments to Agent.  All payments of principal of and interest on
the Loan or the Notes shall be made to the Agent by the Borrower or any other
obligor or guarantor for the account of the Lenders in immediately available
funds as provided in the Notes and this Agreement and any other Loan Document.
Except as otherwise expressly provided herein, the Agent agrees to use its
reasonable best efforts to promptly to distribute to each Lender on the same
Business Day upon which each such payment is made, such Lender’s proportionate
share of each such payment in immediately available funds excluding liquidation
proceeds which shall be distributed in accordance with Section 11.2(d).  The
Agent shall upon each distribution promptly notify the Borrower of such
distribution and each Lender of the amounts distributed to it applicable to
principal of, and interest on, the proportionate share held by the applicable
Lender.  Each payment to the Agent under the first sentence of this Section
11.2(c) shall constitute a payment by the Borrower to each Lender in the amount
of such Lender’s proportionate share of such payment, and any such payment to
the Agent shall not be considered outstanding for any purpose after the date of
such payment by the Borrower to the Agent without regard to whether or when the
Agent makes distribution thereof as provided above.  If any payment received by
the Agent from the Borrower is insufficient to pay both all accrued interest and
all principal then due and owing, unless otherwise provided herein, the Agent
shall first apply such payment to all outstanding interest until paid in full
and shall then apply the remainder of such payment to all principal then due and
owing, and shall distribute the payment to each Lender accordingly.
 
(d)           Liquidation Proceeds.  The proceeds of any sale, disposition or
other enforcement of the security interest in all or any part of the Collateral
shall be applied by the Agent as provided in Section 8.3.
 
(e)           Adjustments.  If, after Agent has paid each Lender’s proportionate
share of any payment received or applied by Agent in respect of the Loan, that
payment is rescinded or must otherwise be returned or paid over by Agent,
whether pursuant to any bankruptcy or insolvency law, sharing of payments clause
of any loan agreement or otherwise, such Lender shall, at Agent’s request,
promptly return its proportionate share of such payment or application to Agent,
together with the Lender’s proportionate share of any interest or other amount
required to be paid by Agent with respect to such payment or application.
 
(f)           Setoff.  If any Lender (including the Agent), acting in its
individual capacity, shall exercise any right of setoff against a deposit
balance or other account of the Borrower held by such Lender on account of the
obligations of the Borrower under this Agreement, such Lender shall remit to the
Agent all such sums received pursuant to the exercise of such right of setoff,
and the Agent shall apply all such sums for the benefit of all of the Lenders
hereunder in accordance with the terms of this Agreement.
 
 

 
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(g)           Distribution by Agent.  If in the opinion of the Agent
distribution of any amount received by it in such capacity hereunder or under
the Notes or under any of the other Loan Documents might involve any liability,
it may refrain from making distribution until its right to make distribution
shall have been adjudicated by a court of competent jurisdiction or has been
resolved by the mutual consent of all Lenders.  In addition, the Agent may
request full and complete indemnity, in form and substance satisfactory to it,
prior to making any such distribution.  If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is to be
repaid, each person to whom any such distribution shall have been made shall
either repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over to the same in such manner and to such persons as
shall be determined by such court.
 
(h)           Delinquent Lender.
 
(i)           If for any reason any Lender shall fail or refuse to abide by its
obligations under this Agreement, including without limitation its obligation to
make available to Agent its pro rata share of any Loans, expenses or setoff (a
“Delinquent Lender”) and such failure is not cured within ten (10) days of
receipt from the Agent of written notice thereof, then, in addition to the
rights and remedies that may be available to Agent, other Lenders, the Borrower
or any other party at law or in equity, and not in limitation thereof, (y) such
Delinquent Lender’s right to participate in the administration of, or
decision-making rights related to, the Loans, this Agreement or the other Loan
Documents shall be suspended during the pendency of such failure or refusal, and
(z) a Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans, interest,
fees or otherwise, to the remaining non-delinquent Lenders for application to,
and reduction of, their proportionate shares of all outstanding Loans until, as
a result of application of such assigned payments the Lenders’ respective pro
rata shares of all outstanding Loans shall have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.  The Delinquent Lender’s decision-making
and participation rights and rights to payments as set forth in clauses (y) and
(z) hereinabove shall be restored only upon the payment by the Delinquent Lender
of its pro rata share of any Loans, expenses or setoffs as to which it is
delinquent, together with interest thereon at the Default Rate from the date
when originally due until the date upon which any such amounts are actually
paid.
 
(ii)           The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration, (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right) the Delinquent Lender’s Commitment to
fund future Loans (the “Future Commitment”).  Upon any such purchase of the pro
rata share of any Delinquent Lender’s Future Commitment, the Delinquent Lender’s
share in future Loans and its rights under the Loan Documents with respect
thereto shall terminate on the date of purchase, and the Delinquent Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest, including, if so requested, an Assignment and Acceptance.  Each
Delinquent Lender shall indemnify Agent and each non-delinquent Lender from and
against

 
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any and all loss, damage or expenses, including but not limited to reasonable
attorneys’ fees and funds advanced by Agent or by any non-delinquent Lender, on
account of a Delinquent Lender’s failure to timely fund its pro rata share of a
Loan or to otherwise perform its obligations under the Loan Documents.
 
(i)           Holders.  The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent.  Any request, authority or consent of any person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or endorsee, as the case may be, of such Note or
of any Note or Notes issued in exchange therefor.
 
11.3.        Assignment and Participation.
 
(a)           Conditions to Assignment by Lenders.  Except as provided herein,
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it and the Notes held by it), upon satisfaction of
the following conditions: (i) each of the Agent and the Borrower shall have
given its prior written consent to such assignment (provided that, in the case
of the Borrower, such consent will not be unreasonably withheld and shall not be
required if a Default shall have occurred and be continuing); (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement, (iii) each
assignment shall be in an amount that is at least $10,000,000.00 and is a whole
multiple of $250,000.00, (iv) each Lender which is a Lender at the time of such
assignment shall retain, free of any such assignment, an amount of its
Commitment of not less than $5,000,000.00, (v) the Agent, in its individual
capacity as a Lender, shall retain, free of any such assignment, an amount of
its Commitment of not less than $20,000,000.00, and (vi) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit F hereto (an “Assignment and Acceptance”), together with any
Notes subject to such assignment.  Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (y) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (z) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in Section 11.3(b), be released from its
obligations under this Agreement.
 
(b)           Register.  The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the “Register”) for
the recordation of the names and addresses of the Lenders and the Commitment
Percentage of, and principal amount of the Loans owing to the Lenders from time
to time.  The entries in the Register shall

 
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be conclusive, in the absence of manifest error, and the Borrower, the Agent and
the Lenders may treat each person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement.  The Register shall be
available for inspection by the Borrower and the Lenders at any reasonable time
and from time to time upon reasonable prior notice.  Upon each such recordation,
the assigning Lender agrees to pay to the Agent a registration fee in the sum of
($5,000.00).
 
(c)           New Notes.  Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to the Borrower and the
Lenders (other than the assigning Lender).  Within five (5) Business Days after
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder.  Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be substantially the form of the assigned Notes.  Within five (5) days
of issuance of any new Notes pursuant to this Section 11.3(c), the Borrower
shall deliver an opinion of counsel, addressed to the Lenders and the Agent,
relating to the due authorization, execution and delivery of such new Notes and
the legality, validity and binding effect thereof, in form and substance
satisfactory to the Lenders.  The surrendered Notes shall be cancelled and
returned to the Borrower.
 
(d)           Participations.  Each Lender may sell participations to one or
more banks or other financial institutions in all or a portion of such Lender’s
rights and obligations under this Agreement and the other Loan Documents;
provided that (i) the Borrower shall have given its prior written consent to
such participation (provided that such consent will not be unreasonably withheld
and shall not be required if a Default shall have occurred and be continuing),
(ii) each such participation shall be in a minimum amount of $5,000,000.00,
(iii) each participant shall meet the requirements of an Eligible Assignee, (iv)
any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrower, and (v) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on any Loans, extend the term or increase the amount of the
Commitment of such Lender as it relates to such participant, reduce the amount
of any commitment fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.
 
(e)           Disclosure.  The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants

 
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and potential assignees or participants hereunder; provided that such assignees
or participants or potential assignees or participants shall agree (i) to treat
in confidence such information unless such information otherwise becomes public
knowledge, (ii) not to disclose such information to a third party, except as
required by law or legal process and (iii) not to make use of such information
for purposes of transactions unrelated to such contemplated assignment or
participation.
 
(f)           Miscellaneous Assignment Provisions.  Any assigning Lender shall
retain its rights to be indemnified pursuant to Section 10.1 with respect to any
claims or actions arising prior to the date of such assignment.  If any assignee
Lender is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to  exemption from
deduction or withholding of any United States federal income taxes.  Anything
contained in this Section 11.3.7 to the contrary notwithstanding (i) any Lender
may at any time pledge all or any portion of its interest and rights under this
Agreement (including all or any portion of its Notes) to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341, and (ii) any Lender may assign, pledge or participate its
interests, rights and obligations under this Agreement, including its right to
receive and retain payments on its Note, in connection with any arrangement
maintained by such Lender to fund credit facilities provided to that Lender;
provided, however, that such Lender shall remain primarily and directly liable
to timely and fully perform all of its obligations under this Agreement, and no
such pledge or the enforcement thereof shall release the pledgor Lender from its
obligations hereunder or under any of the other Loan Documents or require the
Borrower to have direct duties or responsibilities to more than one such
assignee, pledgee, or participant of such pledgor Lender under this sentence.
 
(g)           Assignment by Borrower.  The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Lenders.
 
11.4.        Administrative Matters.
 
(a)           Amendment, Waiver, Consent, Etc.  Except as otherwise provided
herein or as to any term or provision hereof which provides for the consent or
approval of the Agent, no term or provision of this Agreement or any other Loan
Document may be changed, waived, discharged or terminated, nor may any consent
required or permitted by this Agreement or any other Loan Document be given,
unless such change, waiver, discharge, termination or consent receives the
written approval of the Majority Lenders.
 
Notwithstanding the foregoing, the unanimous written approval of all the Lenders
(other than a Defaulting Lender) shall be required with respect to any proposed
amendment, waiver, discharge, termination, or consent which:
 

 
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(i)           has the effect of (w) extending the final scheduled maturity or
the date of any amortization payment of any Loan or Note, (x) reducing the rate
or extending the time of payment of interest or fees thereon, (y) increasing or
reducing the principal amount thereof, or (z) otherwise postponing or forgiving
any indebtedness thereunder;
 
(ii)           releases or discharges any material portion of the Collateral
other than in accordance with the express provisions of the Loan Documents;
 
(iii)           amends, modifies or waives any provisions of this Section
11.4(a);
 
(iv)           amends, modifies or waives any provisions of the limitations set
forth on Exhibit B or the definition of any term used therein or used in any of
the financial covenants set forth in Section 7.3 through 7.6, 7.21 or 7.22;
 
(v)           reduces the percentage specified in the definition of Majority
Lenders;
 
(vi)           except as otherwise provided in the Agreement or arising by the
assignment by a Lender of a portion of its Commitment, changes the amount of any
Lender’s Commitment or Commitment Percentage, or
 
(vii)           releases or waives any guaranty of the Obligations or
indemnifications provided in the Loan Documents;
 
and provided, further, that without the consent of the Agent, no such action
shall amend, modify or waive any provision of this Section 11 or any other
provision of any Loan Document which relates to the rights or obligations of the
Agent.
 
(b)           Deemed Consent or Approval.  With respect to any requested
amendment, waiver, consent or other action which requires the approval of the
Majority Lenders or all of the Lenders, as the case may be, in accordance with
the terms of this Agreement, or if the Agent is required hereunder to seek, or
desires to seek, the approval of the Majority Lenders or all of the Lenders, as
the case may be, prior to undertaking a particular action or course of conduct,
the Agent in each such case shall provide each Lender with written notice of any
such request for amendment, waiver or consent or any other requested or proposed
action or course of conduct, accompanied by such detailed background information
and explanations as may be reasonably necessary to determine whether to approve
or disapprove such amendment, waiver, consent or other action or course of
conduct.  The Agent may (but shall not be required to) include in any such
notice, printed in capital letters or boldface type, a legend substantially to
the following effect:
 
“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE.  FAILURE TO RESPOND WITHIN TEN
(10) CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL CONSTITUTE A
DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION

 
 
 
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REQUESTED BY THE BORROWER OR THE COURSE OF CONDUCT PROPOSED BY THE AGENT AND
RECITED ABOVE,” 
 
and if the foregoing legend is included by the Agent in its communication, a
Lender shall be deemed to have approved or consented to such action or course of
conduct for all purposes hereunder if such Lender fails to object to such action
or course of conduct by written notice to Agent within ten (10) calendar days of
such Lender’s receipt of such notice; provided, however, that, upon the written
request of any Lender for additional time to consider such proposed action or
course of conduct in accordance with the requirements of such Lender’s internal
review process, the foregoing 10-day period shall be extended by the Agent for
up to an additional ten (10) calendar days.
 
11.5.       Commitment Increases.
 
(a)           At any time and from time to time after the date hereof, the
Commitment may be increased either by an Additional Lender establishing a
Commitment Amount or by one or more then existing Lenders, at each such Lender’s
sole discretion (“Increase Lender”) increasing its Commitment Amount (each such
increase by either means, a “Commitment Increase”) provided that no Commitment
Increase shall become effective unless and until the Agent has approved (in its
unrestricted discretion) such Commitment Increase, and the Borrower, the Agent
and the Additional Lender or the Increase Lender shall have executed and
delivered an amendment with respect to such Commitment Increase.  Prior to the
effective date of any Commitment Increase, the Borrower shall issue a Note to
the Additional Lender or, against surrender of its existing Note, to an Increase
Lender in the amount of such Lender’s Commitment Amount after giving effect to
such Commitment Increase.  Such new promissory notes shall constitute a “Note”
for the purpose of the Loan Documents.  For the avoidance of doubt, and
notwithstanding the Agent’s ability to approve or refuse Commitment Increases,
no Lender’s Commitment Amount shall be increased as a result of a Commitment
Increase without such Lender’s consent.
 
(b)           On the effective date of any Commitment Increase, the Agent shall
recompute the Commitment Percentage for each Lender following the Commitment
Increase, and within in two (2) Business Days, the Agent shall request Advances
of the affected category from or shall direct prepayments of such Advances to,
each Lender so that the total amount of all then outstanding Advances of the
affected category of each category are shared pro rata with each Lender,
pursuant to Section 2.1 hereof.
 
11.6.        Temporary Increases.
 
(a)           The Borrower may from time to time, provided no Default has
occurred and is continuing, request a temporary increase in the Commitment for
one or more periods of time (each, a “Temporary Increase”) by delivering to the
Agent a request for a Temporary Increase in substantially the form attached
hereto as Exhibit H-1, with such changes to such form as the Agent, in its sole
discretion, shall deem necessary.  If the Temporary Increase is approved by the
Agent in its unrestricted discretion, the Borrower shall complete, execute and

 
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deliver to the Lenders a temporary increase agreement and promissory notes
evidencing the temporary increase in the Commitment in substantially the forms
attached hereto as Exhibit H-2 and Exhibit A to Exhibit H-2, respectively (with
such changes to such form as the Agent, in its sole discretion, shall deem
necessary), accompanied by such documents and agreements as are referenced in or
required under each such temporary increase agreement.  For the avoidance of
doubt, and notwithstanding the Agent’s ability to approve or refuse Temporary
Increases, no Lender’s Commitment Amount shall be increased as a result of a
Temporary Increase without such Lender’s consent.
 
(b)           The Lenders whose Commitment Amounts will temporarily increase as
a result of a Temporary Increase shall set such conditions as such Lenders may
determine must be fulfilled prior to granting, and such terms as shall be
applicable to, any such Temporary Increase; provided, however, that the Agent
shall promptly notify the Borrower in writing of any additional conditions and
terms, and the Borrower may withdraw such request if the conditions and terms
are not acceptable to the Borrower.
 
(c)           In addition to any conditions set by the Lenders under Section
11.6(b), each such temporary increase agreement shall be subject to all of the
terms and conditions of this Agreement.
 
(d)           The Lenders’ agreement to any Temporary Increase shall not bind
the Lenders to grant or extend any other or further Temporary Increase.
 
12.           MISCELLANEOUS.
 
12.1.        Confidentiality.  Each of Agent and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors,
in connection with matters relating to the credit relationship with the Borrower
and/or the administration of the Loan Documents (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or under any other Loan Document or any action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any eligible assignee of or participant
in, or any prospective eligible assignee of or participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
Borrower and its obligations, (g) with the consent of Borrower or (h) to the
extent such Information (x) becomes publicly available other than as a result of
a breach of this Section 12.1 or (y) becomes available to Agent or any Lender on
a nonconfidential basis from a source other than Borrower.  For purposes of this

 
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Section 12.1, “Information” means all information received from any Borrower
relating to any Borrower or any of their respective businesses, other than any
such information that is available to Agent or any Lender on a nonconfidential
basis prior to disclosure by any Borrower.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.  Notwithstanding
anything in this Agreement to the contrary, “Information” shall not include, and
Agent and each Lender may disclose without limitation of any kind, any
information with respect to the “tax treatment” and “tax structure” (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Agent or such Lender
relating to such tax treatment and tax structure; provided that, with respect to
any document or similar item that in either case contains information concerning
the tax treatment or tax structure of the transaction as well as other
information, this sentence shall only apply to such portions of the document or
similar item that relate to the tax treatment or tax structure of the Loan and
transactions contemplated hereby. In addition, Agent may disclose to any agency
or organization that assigns standard identification numbers to loan facilities
such basic information describing the facilities provided hereunder as is
necessary to assign unique identifiers (and, if requested, supply a copy of this
Agreement), it being understood that the Person to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to make available to the public only such Information as such person normally
makes available in the course of its business of assigning identification
numbers.
 
12.2.          Governing Law.  This Agreement and the other Loan Documents shall
be governed by the laws of the State of New York, without reference to its
principles of conflicts of laws.
 
12.3.          Relationship of the Parties.  This Agreement provides for the
making of Advances by the Lenders, in their capacity as lenders, to the
Borrower, in its capacity as a borrower, and for the payment of interest,
repayment of principal by the Borrower to the Lenders, and for the payment of
certain fees by the Borrower to the Lenders and the Agent.  The relationship
between the Lenders and the Borrower is limited to that of creditor/secured
party, on the one hand, and debtor, on the other hand.  The provisions herein
for compliance with financial covenants and delivery of financial statements are
intended solely for the benefit of the Lenders to protect their interests as
lenders in assuring payments of interest and repayment of principal and payment
of certain fees, and nothing contained in this Agreement shall be construed as
permitting or obligating the Agent or the Lenders to act as a financial or
business advisor or consultant to the Borrower, as permitting or obligating the
Agent or the Lenders to control the Borrower or to conduct the Borrower’s
operations, as creating any fiduciary obligation on the part of the Agent or the
Lenders to the Borrower, or as creating any joint venture, agency, or other
relationship between the parties hereto other than as explicitly and
specifically stated in this Agreement.  The Borrower acknowledges that it has
had the opportunity to obtain the advice of experienced counsel of its own
choosing in connection with the negotiation and execution of this Agreement and
to obtain the advice of such counsel with

 
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respect to all matters contained herein, including, without limitation, the
provision for waiver of trial by jury.  The Borrower further acknowledges that
it is experienced with respect to financial and credit matters and has made its
own independent decisions to apply to the Lenders for credit and to execute and
deliver this Agreement.
 
12.4.          Severability.  If any provision of this Agreement shall be
declared to be illegal or unenforceable in any respect, such illegal or
unenforceable provision shall be and become absolutely null and void and of no
force and effect as though such provision were not in fact set forth herein, but
all other covenants, terms, conditions and provisions hereof shall nevertheless
continue to be valid and enforceable.

12.5.          Usury.  It is the intent of Lenders and the Borrower in the
execution and performance of this Agreement and the Notes or any Loan Document
to remain in strict compliance with Applicable Law from time to time in
effect.  In furtherance thereof, Lenders and the Borrower stipulate and agree
that none of the terms and provisions contained in the Notes, this Agreement or
any Loan Document shall ever be construed to create a contract to pay for the
use, forbearance or detention of money with interest at a rate or in an amount
in excess of the maximum rate permitted under permissible law (the “Maximum
Rate”).  For purposes of this Agreement, the Notes and any other Loan Document,
“interest” shall include the aggregate of all charges which constitute interest
under Applicable Law that are contracted for, taken, charged, reserved, or
received under this Agreement, the Notes or any other Loan Document.  The
Borrower shall never be required to pay unearned interest or interest at a rate
or in an amount in excess of the Maximum Rate or amount of interest that may be
lawfully charged under Applicable Law, and the provisions of this paragraph
shall control over all other provisions of this Agreement and the Notes or any
Loan Document, which may be in actual or apparent conflict herewith.  If the
Notes are prepaid, or if the maturity of the Notes is accelerated for any
reason, or if under any other contingency the effective rate or amount of
interest which would otherwise be payable under the Notes would exceed the
Maximum Rate or amount of interest any Lender or any other holder of the Notes
is allowed by Applicable Law to charge, contract for, take, reserve or receive,
or in the event any Lender or any holder of the Notes shall charge, contract
for, take, reserve or receive monies that are deemed to constitute interest
which would, in the absence of this provision, increase the effective rate or
amount of interest payable under the Notes to a rate or amount in excess of that
permitted to be charged, contracted for, taken, reserved or received under
Applicable Law then in effect, then the principal amount of the Notes or the
amount of interest which would otherwise be payable under the Notes or both
shall be reduced to the amount allowed under Applicable Law as now or
hereinafter construed by the courts having jurisdiction, and all such moneys so
charged, contracted for, taken, reserved or received that are deemed to
constitute interest in excess of the Maximum Rate or amount of interest
permitted by Applicable Law shall immediately be returned to or credited to the
account of the Borrower upon such determination.  Lenders and the Borrower
further stipulate and agree that, without limitation of the foregoing, all
calculations of the rate or amount of interest contracted for, charged, taken,
reserved or received under the Notes which are made for the purpose of
determining whether such rate or amount exceeds the Maximum Rate, shall be made
to the extent not prohibited by Applicable Law, by amortizing, prorating,
allocating and spreading during the period of the full stated

 
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term of the Notes, all interest at any time contracted for, charged, taken,
reserved or received from the Borrower or otherwise by any Lender or any other
holder of the Notes.
 
12.6.         Consent to Jurisdiction.  THE BORROWER, AGENT, AND EACH LENDER
AGREES THAT ANY SUIT OR PROCEEDING UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURT
AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER, AGENT
OR SUCH LENDER BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
BORROWER, AGENT, OR SUCH LENDER AT THE
 ADDRESS SPECIFIED IN SECTION 9 HEREOF.  THE BORROWER, AGENT, AND EACH LENDER
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
 
12.7.         ADDITIONAL INDEMNITY.  IN ADDITION TO THE INDEMNITY PROVIDED IN
SECTION 10, THE BORROWER SHALL INDEMNIFY AND HOLD AGENT, LENDER, AND THEIR
RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS, AND EMPLOYEES (COLLECTIVELY, THE
“INDEMNIFIED PARTIES”), HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS,
SUITS, PROCEEDINGS, COSTS, EXPENSES, DAMAGES, FINES, PENALTIES, AND LIABILITIES,
INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND COSTS, ARISING OUT OF,
CONNECTED WITH, OR RESULTING FROM (A) THE OPERATION OF THE BORROWER’S
BUSINESSES, (B) ANY INDEMNIFIED PARTY’S PRESERVATION OR ATTEMPTED PRESERVATION
OF COLLATERAL, AND (C) ANY FAILURE OF THE SECURITY INTERESTS AND LIENS IN THE
COLLATERAL GRANTED TO THE AGENT FOR THE BENEFIT OF THE LENDERS PURSUANT TO THIS
AGREEMENT TO BE OR TO REMAIN PERFECTED OR TO HAVE THE PRIORITY AS CONTEMPLATED
THEREIN REGARDLESS OF WHETHER THE CLAIM IS CAUSED BY OR ARISES OUT OF, IN WHOLE
OR IN PART, THE NEGLIGENCE OF ANY INDEMNIFIED PARTY OR MAY BE BASED ON THE
STRICT LIABILITY OF ANY INDEMNIFIED PARTY.  THIS INDEMNITY SHALL NOT APPLY TO
THE EXTENT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY.  AT THE REQUEST
OF ANY INDEMNIFIED PARTY, THE BORROWER SHALL, AT ITS OWN COST AND EXPENSE,
DEFEND OR CAUSE TO BE DEFENDED ANY AND ALL SUCH ACTIONS OR SUITS THAT MAY BE
BROUGHT AGAINST ANY INDEMNIFIED PARTY AND, IN ANY EVENT, SHALL SATISFY, PAY, AND
DISCHARGE ANY AND ALL JUDGMENTS, AWARDS, PENALTIES, COSTS, AND FINES THAT MAY BE
RECOVERED AGAINST ANY INDEMNIFIED PARTY IN ANY SUCH ACTION, PLUS ALL ATTORNEYS’
FEES AND COSTS RELATED THERETO TO THE EXTENT PERMITTED BY APPLICABLE LAW;
PROVIDED, HOWEVER, THAT SUCH INDEMNIFIED PARTY SHALL GIVE THE BORROWER

 
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(TO THE EXTENT SUCH INDEMNIFIED PARTY SEEKS INDEMNIFICATION THEREFOR FROM THE
BORROWER UNDER THIS SECTION 13.10) WRITTEN NOTICE OF ANY SUCH CLAIM, DEMAND, OR
SUIT AFTER SUCH INDEMNIFIED PARTY HAS RECEIVED WRITTEN NOTICE THEREOF, AND SUCH
INDEMNIFIED PARTY SHALL NOT SETTLE ANY SUCH CLAIM, DEMAND, OR SUIT, IF SUCH
INDEMNIFIED PARTY SEEKS INDEMNIFICATION THEREFOR FROM THE BORROWER, WITHOUT
FIRST GIVING NOTICE TO THE BORROWER OF THE INDEMNIFIED PARTY’S DESIRE TO SETTLE
AND OBTAINING THE CONSENT OF THE BORROWER TO THE SAME, WHICH CONSENT THE
BORROWER HEREBY AGREES NOT TO UNREASONABLY WITHHOLD.  ALL OBLIGATIONS OF THE
BORROWER UNDER THIS SECTION 13.10 SHALL SURVIVE THE PAYMENT OF THE NOTES AND THE
OBLIGATIONS.
 
12.8.         No Waivers Except in Writing.  No failure or delay on the part of
the Agent in exercising any power or right hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  No Notice to or demand on
the Borrower or any other Person in any case shall entitle the Borrower or such
other Person to any other or further Notice or demand in similar or other
circumstances.
 
12.9.         WAIVER OF JURY TRIAL.  AS TO THIS AGREEMENT THE BORROWER, THE
AGENT AND EACH OF THE LENDERS HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT
TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY, BY THE BORROWER, THE AGENT AND EACH OF THE LENDERS, AND THIS WAIVER
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT OF A JURY TRIAL WOULD OTHERWISE ACCRUE. THE AGENT, THE LENDERS AND THE
BORROWER ARE HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY
COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS
TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY
TRIAL.  FURTHER THE AGENT, THE BORROWER AND EACH OF THE LENDERS HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF ANY OF THEM, RESPECTIVELY, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, TO ANY OF THE UNDERSIGNED THAT EITHER OF THE AGENT, THE
BORROWER OR ANY OF THE LENDERS WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION.
 
12.10.         Multiple Counterparts.  This Agreement and each other Loan
Document may be executed in any number of counterparts, all of which, taken
together, shall constitute one and the same instrument.  In making proof of this
agreement, it shall not be necessary to produce

 
 
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or account for more than one such counterpart which is executed by the party
against whom enforcement of such loan agreement is sought.
 
12.11.         No Third Party Beneficiaries.  This Agreement is for the sole and
exclusive benefit of the Borrower, the Agent, and Lenders.  This Agreement does
not create, and is not intended to create, any rights in favor of or enforceable
by any other Person.  This Agreement may be amended or modified by the agreement
of the Borrower, the Agent, and Lenders, without any requirement or necessity
for Notice to, or the consent of or approval of any other Person.
 
12.12.         RELEASE OF LIABILITY.  TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW FROM TIME TO TIME IN EFFECT, THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY (AND AFTER IT HAS CONSULTED WITH ITS OWN ATTORNEY) IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT NO CLAIM MAY BE MADE BY THE BORROWER AGAINST THE
AGENT, EACH LENDER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS, ACCOUNTANTS, AGENTS OR INSURERS, OR ANY OF THEIR SUCCESSORS AND
ASSIGNS, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT
OF ANY BREACH OR WRONGFUL CONDUCT (WHETHER THE CLAIM IS BASED ON CONTRACT OR
TORT OR DUTY IMPOSED BY LAW) ARISING OUT OF, OR RELATED TO, THE TRANSACTIONS
CONTEMPLATED BY ANY OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENTS,
OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR
THEREWITH.  IN FURTHERANCE OF THE FOREGOING, THE BORROWER HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR
NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
 
12.13.         Patriot Act.  Each Lender and the Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Agent, as applicable, to identify the Borrower in accordance with the Act.
 
12.14.         Setoff.  If an Event of Default occurs and is continuing, any
deposits, balances or other sums credited by or due from Agent or any of the
Lenders, or from any such Affiliate of Agent or any of the Lenders, to the
Borrower, may to the fullest extent not prohibited by applicable law at any time
or from time to time, without regard to the existence, sufficiency or adequacy
of any other collateral, and without Notice or compliance with any other
condition precedent now or hereafter imposed by statute, rule of law or
otherwise, all of which are hereby waived, be set off, appropriated and applied
by Agent or such Lender or Affiliate against any or all of the Obligations
irrespective of whether demand shall have been made and

 
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although such obligations may be unmatured, in such manner as Agent or such
Lender or Affiliate  in its sole and absolute discretion may determine;
provided, however, that such right of setoff shall not apply to any property or
deposit of escrow monies being held on behalf of the obligors under Pledged
Assets or on behalf of other third parties that are not Affiliates of the
Borrower, including any non-affiliate lenders with which the Company has loan
servicing arrangements.  Within five (5) Business Days of making any such set
off, appropriation or application, Agent agrees to notify the Borrower thereof,
provided the failure to give such Notice shall not affect the validity of such
set off or appropriation or application.  ANY AND ALL RIGHTS TO REQUIRE AGENT,
SUCH LENDER OR SUCH AFFILIATE TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.  Each of the Lenders
agrees with each other Lender that (a) if an amount to be set off is to be
applied to indebtedness of the Borrower to such Lender, other than the
Obligations evidenced by the Note held by such Lender, unless such amount is
held by such Lender in connection with a specific relationship with the Borrower
other than that evidenced by the Loan Documents, such amount shall be applied
ratably to such other indebtedness and to the Obligations evidenced by the Note
held by such Lender, and (b) if such Lender shall receive from the Borrower,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Note held by such Lender
by proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note held by such
Lender any amount in excess of its ratable portion of the payments received by
all of the Lenders with respect to the Note held by all of the Lenders, such
Lender will make such disposition and arrangements with the other Lenders with
respect to such excess, either by way of distribution, participation, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Lender
receiving in respect of the Note held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
 
12.15.         Entire Agreement; Amendment.  This Agreement, the Notes, and the
other Loan Documents referred to herein embody the final, entire Agreement among
the parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof.  This Agreement and each of the other Loan Documents may
only be amended, terminated, extended or otherwise modified by a writing signed
by the party against which enforcement is sought (except no such writing shall
be required for any party which, pursuant to a specific provision of any Loan
Document, is required to be bound by changes without such party’s assent).  In
no event shall any oral agreements, promises, actions, inactions, knowledge,
course of conduct, course of dealings or the like be effective to amend,
terminate, extend or otherwise modify this Agreement or any of the other Loan
Documents.
 

 
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12.16.       Replacement Documentation.  Upon receipt of an affidavit of an
officer of Agent as to the loss, theft, destruction or mutilation of this
Agreement, any other Loan Document, or any other security document which is not
of public record, or an affidavit from any Lender as to the occurrence of the
same to such Lender’s Note, and customary (unsecured, unbonded) indemnification
from the Agent or the Lender, as applicable, reasonably satisfactory to the
Borrower, the Borrower will issue, in lieu thereof, a replacement Note,
Agreement, Loan Document or other security document in the same principal amount
thereof and otherwise of like tenor.
 

12.17.       Survival.  All representations, warranties, covenants and
agreements of the Borrower herein or in any other Loan Document, or in any
notice, certificate, or other paper delivered by or on behalf of the Borrower
pursuant hereto are significant and shall be deemed to have been relied upon by
Agent and each of the Lenders notwithstanding any investigation made by Agent or
each of the Lenders or on its behalf and shall survive the delivery of the Loan
Documents and the making of the Loan and each advance pursuant thereto.  No
review or approval by Agent or the Lenders, or by any of their consultants or
representatives, of any opinion letters, certificates by professionals or other
item of any nature shall relieve the Borrower or anyone else of any of the
obligations, warranties or representations made by or on behalf of the Borrower
under any one or more of the Loan Documents.
 
12.18.      Claims Against Agent or Lenders.
 
(a)           Borrower Must Notify.  The Agent and each of the Lenders shall not
be in default under this Agreement, or under any other Loan Document, unless a
written notice specifically setting forth the claim of the Borrower shall have
been given to Agent and each of the Lenders within thirty (30) days after the
Borrower first had actual knowledge or actual notice of the occurrence of the
event which the Borrower allege gave rise to such claim and the Agent or such
Lender, as the case may be, does not remedy or cure the default, if any there
be, with reasonable promptness thereafter.  Such actual knowledge or actual
notice shall refer to what was actually known by, or expressed in a written
notification furnished to any Authorized Representative.
 
(b)           Remedies.  If it is determined by the final order of a court of
competent jurisdiction, which is not subject to further appeal, that Agent or
any of the Lenders has breached any of its obligations under the Loan Documents
and has not remedied or cured the same with reasonable promptness following
notice thereof, Agent’s and each of the Lender’s responsibilities shall be
limited to: (i) where the breach consists of the failure to grant consent or
give approval in violation of the terms and requirements of a Loan Document, the
obligation to grant such consent or give such approval and to pay the Borrower’s
reasonable costs and expenses including, without limitation, reasonable
attorneys’ fees and disbursements in connection with such court proceedings; and
(ii) the case of any such failure to grant such consent or give such approval,
or in the case of any other such default by Agent or any of the Lenders, where
it is also so determined that Agent or any of the Lenders acted in bad faith,
the payment of any actual, direct, compensatory damages sustained by the
Borrower as a result

 
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thereof plus the Borrower’s reasonable costs and expenses, including, without
limitation, reasonable attorneys’ fees and disbursements in connection with such
court proceedings.
 
(c)           Limitations.  In no event, however, shall Agent and any of the
Lenders be liable to the Borrower or anyone else for other damages such as, but
not limited to, indirect, speculative, consequential or punitive damages
whatever the nature of the breach by Agent or any of the Lenders of its
obligations under this Agreement or under any of the other Loan Documents.  In
no event shall Agent or any of the Lenders be liable for direct damages to the
Borrower or anyone else unless a written notice specifically setting forth the
claim of the Borrower shall have been given to Agent and each of the Lenders
within the time period specified above.
 
12.19.      Obligations Absolute.  Except to the extent prohibited by applicable
law which cannot be waived, the Obligations of the Borrower under the Loan
Documents shall be  absolute, unconditional and irrevocable and shall be paid
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the existence of any
claim, set off, defense or other right which the Borrower may have at any time
against Agent or any of the Lenders whether in connection with the Loan or any
unrelated transaction.
 
12.20.      Time Of the Essence.  Time is of the essence of each provision of
this Agreement and each other Loan Document.
 
12.21.      Monthly Statements.  While Agent may issue invoices or other
statements on a monthly or periodic basis (a “Statement”), it is expressly
acknowledged and agreed that:
 
(a)           The failure of Agent to issue any Statement on one or more
occasions shall not affect the Borrower’s obligations to make payments under the
Loan Documents as and when due.
 
(b)           The inaccuracy of any Statement shall not be binding upon the
Agent or the Lenders and so the Borrower shall always remain obligated to pay
the full amount(s) required under the Loan Documents as and when due
notwithstanding any provision to the contrary contained in any Statement.
 
(c)           All Statements are issued for information purposes only and shall
never constitute any type of offer, acceptance, modification, or waiver of the
Loan Documents or any of the Agent’s or Lenders’ rights or remedies thereunder.
 
(d)           In no event shall any Statement serve as the basis for, or a
component of, any course of dealing, course of conduct, or trade practice which
would modify, alter, or otherwise affect the express written terms of the Loan
Documents.
 
12.22.                      Joint and Several Obligations.  Each of CMP and CMC
hereby acknowledges and agrees that it shall be jointly and severally liable for
all of the Obligations of the Borrower.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 
 BORROWERS:      
CENTERLINE MORTGAGE CAPITAL INC.                 
By:
/s/ James L. Duggins       
(Signature)
    Its:  James L. Duggins, Chief Executive Officer       
  (Printed Name and Title)
 

 
 
CENTERLINE MORTGAGE PARTNERS INC.                 
By:
/s/ James L. Duggins       
(Signature)
    Its:   James L. Duggins, Chief Executive Officer       
  (Printed Name and Title)
 

                                          
AGENT:                    
BANK OF AMERICA, N.A.                
By:
/s/ John F. Simon       
John F. Simon, Senior Vice President
 

 
LENDERS:                   
BANK OF AMERICA, N.A.                
By:
/s/ John F. Simon       
John F. Simon, Senior Vice President

                                           
                   
BANK OF AMERICA, N.A.                
By:
/s/ Derrick C. Brown       
, First Vice President

 

(Signature Page to Credit Agreement)
 
 

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SCHEDULE 1:  LENDERS AND COMMITMENTS

 
Lender
Commitment Amount
Address for Notices
Address for Advance Requests
Bank of America, N.A.
$100,000,000.00
 
Bank of America, N.A.
One Federal Street, 4th Floor
Mail Code:  MA5-503-04-16
Boston, Massachusetts 02110
Attn:: Mr. John F. Simon
  Senior Vice President
email: john.f.simon@bankofamerica.com
telephone: 617-346-4272
 
 
Bank of America, N.A.
One Federal Street, 4th Floor
Mail Code:  MA5-503-04-16
Boston, Massachusetts 02110
 
 
Attn:  Pauline Lettieri
           Assistant Vice President
email:  pauline.lettieri@bankofamerica.com
telephone: 617-346-4008
 
 
Attn:   Jordan A. Casella
            Vice President
email:  jordan.a.casella@bankofamerica.com
telephone:  617-346-0733
 
 
SunTrust Bank
$50,000,000.00
 
SunTrust Bank
25 Park Place, 18th Floor
Atlanta, GA 30303
Attn: Derrick C. Brown
           First Vice President
email: Derrick.Brown@SunTrust.com
telephone: 404-230-5353
 
 
SunTrust Bank
25 Park Place, 18th Floor
Atlanta, GA  30303
Attn:  Kitty Trowell
email: kitty.trowell@suntrust.com
telephone:  404-724-3282
 
 

 
 

--------------------------------------------------------------------------------

 

            EXHIBIT A: ADVANCE REQUEST
 
__________________________________________________________________________
 
Centerline Mortgage Capital Inc. and Centerline Mortgage Partners Inc.
 
                                               Date of Request: _____________
___, 2008
 
The undersigned hereby gives Notice pursuant to that certain Warehousing Credit
and
Security Agreement dated as of May 30, 2008 of its request to have the following
Advance made
to it on ______________, 2008
 
ELIGIBLE LOAN TYPE:                      □ FANNIE MAE DUS MORTGAGE LOAN
□ OTHER FANNIE MAE MORTGAGE LOAN
□ FREDDIE MAC MORTGAGE LOAN
□ FHA CONSTRUCTION MORTGAGE LOAN
□ FHA PROJECT MORTGAGE LOAN

STATUS OF ELIGIBLE LOAN:         □ FIRST MORTGAGE LOAN
□ SECOND MORTGAGE LOAN
□ THIRD MORTGAGE LOAN

 
Loan No.: ____________________________        Warehouse Date:
_____________________
Project Name: _________________________        Contract/Pool No.:
____________________
Project State and Zip Code: ______________
 
Mortgage Note Amount: ________________         Interest Rate:
________________________
Mortgage Note Date: ___________________
Advance Amount: __________
 
Approved Warehouse Amount: ___________        Endorsement Amount:
_________________
Cumulative Endorsement Amount: ________
 
Investor: ___________________________           Expiration Date:
______________________
Committed Purchase Price: _____________
 
Title Company/Closing Agent: __________________________________________________
Title Contact Person:  __________________          Phone No.:
______________________
Title Company Address: _______________________________________________________
 
Security Rate: ___________       Issue Rate: ____________      Maturity Date:
______________
 
 
            WIRE TRANSFER INFORMATION
 
                                                                                          
 WIRE #1
 
Wire Amount: ________________________          Date of Wire:
________________________
 
Receiving Bank: ______________________            ABA No.:
___________________________
 
City & State: _________________________
 
Credit Account Name: __________________          Number:
____________________________
 
Advise: _____________________________          Phone:
_____________________________
 
Email Address:
 

 
 

--------------------------------------------------------------------------------

 

                                                                                           
WIRE #2
 
Wire Amount: ________________________          Date of Wire:
________________________
 
Receiving Bank: ______________________           ABA No.:
___________________________
 
City & State: _________________________
 
Credit Account Name: __________________         Number:
____________________________
 
Advise: _____________________________         Phone:
_____________________________
 
Email Address:
 
As applicable, ______________________________ (the “Borrower”) hereby grants a
security interest to Bank of America, N.A., as Agent (the “Agent”) for a
syndicate of Lenders (the “Lenders”), in all of Borrower’s right, title and
interest in and to the Mortgage Loan described above and all related Collateral
pursuant to Section 3.1 of that certain Amended and Restated Warehousing Credit
and Security Agreement, dated as of May 30, 2008, as amended, among the
Borrower, the Agent and the Lenders (as amended, restated, renewed or replaced,
the “Agreement”). Capitalized terms used in this Advance Request without further
definition have the meanings set forth in the Agreement.
 
The undersigned represents and warrants as follows:
 
(a)           The Advance requested hereby complies with the requirements of the
Agreement.
 
(b)           Each representation and warranty made under Section 5 of the
Agreement is true and correct at and as of the date hereof and (except to the
extent the undersigned gives Notice to the Agent to the contrary prior to 5:00
p.m. on the Business Day before the requested date for the making of the
Advance) will be true and correct at and as of the time the Advance is made, in
each case both with and without giving effect to the Advance and the application
of the proceeds thereof, except to the extent of changes resulting from
transactions contemplated and permitted by this Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that singly
or in the aggregate could not reasonably be expected to result in a Material
Adverse Change and except to the extent that such representations and warranties
relate expressly to an earlier date.
 
(c)           No Default has occurred and is continuing as of the date hereof or
would result from the making of the Advance or from the application of the
proceeds thereof if the Advance was made on the date hereof, and (except to the
extent the undersigned gives Notice to the Agent to the contrary prior to 5:00
p.m. on the Business Day before the requested date for the making of the
Advance) no Default will have occurred and be continuing at the time the Advance
is to be made or would result from the making of the Advance or from the
application of the proceeds thereof.
 
(d)           Borrower agrees to cause the Mortgage Note(s) and all other
required Collateral Documents to be delivered to the Agent no later than the
first Business Day after the date of the Advance made to fund the Mortgage Loan
or the second Business Day after the date of the Advance if delivery is not
practical due to the time of the settlement; provided that the
 

 
 

--------------------------------------------------------------------------------

 

foregoing is not applicable where Freddie Mac is the Investor, as Freddie Mac
requires the Mortgage Note and all required Collateral Documents to be delivered
to their office on or before the delivery date.  The Mortgage Note will be
forwarded to the Agent for endorsement immediately following closing.  The Agent
will then forward the original Mortgage Note to Freddie Mac.
 

CENTERLINE MORTGAGE CAPITAL INC.
 
By:           ________________________________
          (Signature)
 
Its:           ________________________________
(Printed Name and Title)
 
      CENTERLINE MORTGAGE PARTNERS INC.
 
      By:                      ________________________________
           (Signature)
 
      Its:                      ________________________________
 (Printed Name and Title)
   

 
 

--------------------------------------------------------------------------------

 

EXHIBIT B:  ELIGIBLE LOANS AND OTHER ASSETS
 
Lenders’ obligation to make Advances under Section 2 of the Agreement is subject
to the following limitations (in addition to all other limitations, terms and
conditions set forth in the Agreement):
 
1.           No Advance will be made against any Mortgage Loan that has been
previously sold or pledged to obtain financing (whether or not such financing
constitutes Debt) under another warehousing financing arrangement or a Gestation
Agreement.
 
2.           No Advance will be made against any Mortgage Loan that Agent
reasonably believes may be based on untrue, incomplete or inaccurate or
fraudulent information or may otherwise be subject to fraud.
 
3.           No Advance will be made against a Mortgage Loan if the Advance will
exceed the Advance Rate applicable to that type of Eligible Loan at the time it
is pledged.
 
4.           No Advance will be made against any Mortgage Loan originated and
funded by a third party (other than with funds provided by Borrower at closing
to purchase the Mortgage Loan) and subsequently purchased by such Borrower.
 
5.           No Advance will be made against a Special Fannie Mae Mortgage Loan.
 
6.           No Advance will be made against an FHA Construction Mortgage Loan
unless (A) Agent has at one time had or will obtain (as provided in Exhibit C-3)
possession of the related Mortgage Note and (B) the related Mortgage Note is in
the possession of a Person other than the Borrower or an Affiliate of the
Borrower.
 
ELIGIBLE LOANS AND TERMS OF ADVANCES
 
Subject to compliance with the terms and limitations set forth below and the
terms, representations and warranties and the covenants in the Agreement, each
of the following Mortgage Loans is an Eligible Loan for purposes of the
Agreement:
 

          1.   Fannie Mae DUS Mortgage Loan             
(a)
 
Definition.                    A permanent Mortgage Loan on a Multifamily
Property originated under Fannie Mae’s Delegated Underwriting and Servicing
Guide, including, without limitation, a Mortgage Loan secured by a
mobile/manufactured home park.
           
(b) 
Subordinate Mortgage Loan: Permitted. 
           
(c) 
Sublimit:                        No Limit. 
           
(d) 
Committed/Uncommitted:    Purchase Commitment required. 

 

 
 

--------------------------------------------------------------------------------

 
 

    
(d) 
Advance Rate:                      100% of the lesser of (i) the Mortgage Note
Amount or (ii) the Committed Purchase Price.

 

    
(d) 
Warehouse Period:               90 days for cash transactions.  90 days for an
Agency Security issued by Fannie Mae.

 

    
(d) 
Shipped Period:          45 days for cash transactions.  60 days for an Agency
Security issued by Fannie Mae.

 

          2.   Other Fannie Mae Mortgage Loan 

 

    
(a)
Definition.                   A permanent Mortgage Loan on a Multifamily
Property covered by a Purchase Commitment issued by Fannie Mae (other than a
Fannie Mae DUS Mortgage Loan or a Special Fannie Mae Mortgage Loan), including,
without limitation, a Mortgage Loan secured by a mobile/manufactured home park.

 

    
(b) 
Subordinate Mortgage Loan:  Permitted.

 

    
(c) 
Sublimit:                     No limit.

 

     
(d) 
Committed/Uncommitted:  Purchase Commitment required.

 

    
(e) 
Advance Rate:            100% of the lesser of (i) the Mortgage Note Amount or
(ii) the Committed Purchase Price.

 

    
(f) 
Warehouse Period:                 90 days for cash transactions.  90 days for an
Agency Security issued by Fannie Mae.

 

   
(g) 
Shipped Period:                       45 days for cash transactions.  60 days
for an Agency Security issued by Fannie Mae.

 

          3.   FHA Project Mortgage Loan 

 

    
(a)
Definition.                                 A permanent FHA fully-insured
Mortgage Loan on a Multifamily Property.

 

    
(b) 
Subordinate Mortgage Loan:  Second Mortgage Loans permitted.

 

    
(c) 
Sublimit:                     No limit.

 

     
(d) 
Committed/Uncommitted:  Purchase Commitment required.

 

    
(e) 
Advance Rate:             100% of the lesser of (i) the Mortgage Note Amount or
(ii) the Committed Purchase Price.

 

    
(f) 
Warehouse Period:                  90 days

 

   
(g) 
Shipped Period:                        45 days

 

 
 

--------------------------------------------------------------------------------

 
 

          4.  
FHA Construction Mortgage Loan

 

    
(a)
Definition.                    An FHA fully-insured Mortgage Loan for the
construction or substantial rehabilitation of a Multifamily Property.

 

    
(b) 
Subordinate Mortgage Loan:  Not permitted.

 

    
(c) 
Sublimit:                      No limit.

 

     
(d) 
Committed/Uncommitted:  Purchase Commitment required.

 

    
(e) 
Advance Rate:             100% of the lesser of (i) the Mortgage Note Amount or
(ii) the Committed Purchase Price.

 

    
(f) 
Warehouse Period:                  90 days

 

   
(g) 
Shipped Period:                        45 days

 
 

          5.  
Freddie Mac Mortgage Loan

 

    
(a)
Definition.                     A permanent Mortgage Loan on a Multifamily
Property covered by a Purchase Commitment issued by Freddie Mac.

 

    
(b) 
Subordinate Mortgage Loan:  Permitted.

 

    
(c) 
Sublimit:                      No limit.

 

     
(d) 
Committed/Uncommitted:  Purchase Commitment required.

 

    
(e) 
Advance Rate:             100% of the lesser of (i) the Mortgage Note Amount or
(ii) the Committed Purchase Price.

 

    
(f) 
Warehouse Period:                  90 days

 

   
(g) 
Shipped Period:                        45 days

 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT C: PROCEDURES AND DOCUMENTATION
 

 

· 
Exhibit C-1:    
Procedures and Documentation for Warehousing Freddie Mac Mortgage Loans 
      · 
Exhibit C-2: 
Procedures and Documentation for Warehousing Fannie Mae Mortgage Loans 
      · 
Exhibit C-3: 
Procedures and Documentation for Warehousing FHA Mortgage Loans 

 

 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT C-1
 
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING FREDDIE MAC MORTGAGE LOANS
 
Capitalized terms used in this Exhibit without further definition have the
meanings set forth in the Amended and Restated Mortgage Warehousing Credit and
Security Agreement dated as of May 30, 2008 (as amended and/or restated from
time to time, and as any provision thereof may be waived, the “Agreement”) among
Centerline Mortgage Capital Inc., a Delaware corporation, Centerline Mortgage
Partners Inc., a Delaware corporation, the lenders from time to time party
hereto as defined on Schedule 1 (together with any successors and assigns
thereof, being hereinafter referred to individually as a “Lender” and
collectively as the “Lenders”) and Bank of America, N.A., in its capacity as one
of the Lenders and as agent (it and its successors in that capacity called the
“Agent”) for the Lenders
 
All documentation delivered pursuant to this Exhibit must be satisfactory to the
Agent in its sole discretion.
 
Freddie Mac form numbers used in this Exhibit are for convenience only and
Borrower must use the equivalent forms required at the time of delivery of a
Pledged Loan.
 
I.              AT LEAST 3 BUSINESS DAYS PRIOR TO THE ADVANCE DATE:
 
The Agent must receive an electronic mail from an Authorized Representative of
Borrower, providing the following information on the Pledged Loan:
 
 
(a)
Mortgagor’s name.

 
 
(b)
Project name.

 
 
(c)
Borrower’s case/loan number.

 
 
(d)
Expected Advance date.

 
 
(e)
Mortgage Note Amount.

 
 
(f)
Name, street address, e-mail address, telephone number and telecopier number of
Borrower’s closing attorney, title company or settlement attorney and contact
person.

 
Upon receipt of such electronic mail, in form and substance satisfactory to
Agent, Agent will issue its escrow instructions letter to the specified
Borrower’s closing attorney, title company and/or the settlement attorney, which
will include wiring information, bailee clauses and contact information at the
Agent for the delivery of the original Mortgage Note and related Collateral
Documents.
 

 
 

--------------------------------------------------------------------------------

 

II.             AT LEAST 1 BUSINESS DAY PRIOR TO THE ADVANCE DATE:
 
The Agent must receive the following:
 
 
(a)
An original, facsimile or electronic copy of an Advance Request (Exhibit A to
the Agreement) executed by an Authorized Representative of Borrower (facsimile
or electronic copy is acceptable for funding, with the original to be forwarded
via overnight mail).

 
 
(b)
A copy of the executed Purchase Commitment for the Pledged Loan.

 
 
(c)
A copy of the Agent’s escrow instructions letter to the title company and/or the
settlement attorney, countersigned by an authorized representative of the title
company or the settlement attorney involved with the transaction.

 
 
(d)
Original assignment of the Mortgage, endorsed by Borrower in blank, in
recordable form but unrecorded (copy is acceptable for funding, with the
original to be forwarded via overnight mail).

 
 
(e)
Original assignment of security agreement, if applicable, endorsed by Borrower
in blank, in recordable form but unrecorded (copy is acceptable for funding,
with original to be forwarded via overnight mail).

 
 
(f)
Copies of the UCC financing statements to be filed by Borrower against the
mortgagor(s).

 
No Advance will be made by the Lenders prior to the Agent’s receipt of all
Collateral Documents required under Section II above or otherwise required under
the Agreement.  The Agent shall have a reasonable time (1 Business Day under
ordinary circumstances) to examine the Advance Request and the applicable
Collateral Documents before the Lenders shall fund the requested Advance, and
the Agent may reject any Eligible Loans that does not meet the requirements of
this Exhibit, the Agreement or of the related Purchase Commitment.
 
Borrower must hold or cause the applicable title company, settlement attorney or
Borrower’s closing attorney to hold, in trust and as agent and bailee for Agent,
those original Collateral Documents of which only copies are required to be
delivered to the Agent under this Exhibit.  Promptly upon request by Agent or,
if the recorded Collateral Documents have not yet been returned from the
recording office, promptly upon receipt by Borrower or its custodian of those
recorded Collateral Documents, Borrower must deliver or cause its custodian to
deliver to Agent any or all of the original Collateral Documents.
 
Agent will, upon compliance by the Borrower with the terms of the Loan
Documents, deposit the Advance into the Funding Account, for disbursement by
Borrower to the title company or settlement attorney.
 

 
 

--------------------------------------------------------------------------------

 

The Advance, when wired by the Borrower to the title company or the settlement
attorney, shall be held in an escrow account of the title company or the
settlement attorney and disbursed in accordance with the closing letter of the
Borrower or its counsel when authorized by the Agent in its escrow instruction
letter.
 
Disbursement will be authorized only after the Borrower’s closing attorney,
title company or settlement attorney, as applicable, takes possession, on behalf
of the Agent, for the benefit of the Lenders, of the signed Mortgage Note,
endorsed by the Borrower in blank and without recourse, and the title company is
prepared to issue its title insurance policy.  Immediately after disbursement,
Borrower’s closing attorney, the title company or settlement attorney, as
applicable, shall be required to transmit the Mortgage Note and certified true
copy of the title insurance policy directly to the Agent.  In the event the
Pledged Loan is not closed and the related Mortgage recorded by 3:00 p.m. on the
date of the Advance, the title company or the settlement attorney must return
the Advance to the Cash Collateral Account promptly and in any event no later
than the 1st Business Day following the date of the Advance.
 
The foregoing arrangements, permitting funding of the Advance when the Mortgage
Note has been delivered to a third person on behalf of, and as agent and bailee
for, the Agent, and before the Mortgage Note is received by the Agent, for the
benefit of the Lenders, are for the convenience of the Borrower.  All risk of
loss or nondelivery of the Mortgage Note is that of the Borrower, and neither
the Agent nor the Lenders shall have any liability or responsibility therefor.
 
III.
ON THE FIRST BUSINESS DAY AFTER THE ADVANCE DATE (or the Second Business Day
after the date of the Advance if delivery is not practical due to the time of
the settlement):

 
The Agent must receive the following:
 
 
(a)
The original Mortgage Note, endorsed by Borrower in blank and without recourse.

 
 
(b)
Originals of assignment of the Mortgage and assignment of the security agreement
(if not previously delivered).

 
 
(c)
A copy of the title insurance policy or the title insurance commitment to issue
a policy marked to show the final policy exceptions, which:

 
 
(1)
Contains recording information filed on the schedules pertaining to the Pledged
Loan and, if applicable, UCC financing statements;

 
 
(2)
Names as insured Borrower and/or the Investor, and their successors and assigns,
as their interests may appear;

 
 
(3)
Shows effective date and time which is as of the date and time of disbursement
of the Advance from escrow; and

 

 
 

--------------------------------------------------------------------------------

 

 
(4)
Sets forth an insured amount which is equal to or greater than the Advance
amount.

 
IV.
AT LEAST 1 BUSINESS DAYS BEFORE INVESTOR/APPROVED CUSTODIAN MUST RECEIVE PLEDGED
LOAN:

 
The Agent must receive the following:
 
 
(a)
Signed shipping instructions from the Borrower to the Agent for the delivery of
the Pledged Loan, including the following:

 
 
(1)
Name and address of the contact person at Investor or the Approved Custodian to
which the Collateral Documents are to be shipped, the desired shipping date and
the preferred method of delivery;

 
 
(2)
Name of project securing the Pledged Loan;

 
 
(3)
Date by which the Investor or the Approved Custodian must receive the Pledged
Loan;

 
 
(4)
Instructions for endorsement of the Mortgage Note;

 
 
(5)
For cash payments, the signed original Wire Transfer Authorization for a Cash
Warehouse Delivery (Multifamily) (Freddie Mac Form 987), showing Lender as
warehouse lender and specifying the Cash Collateral Account as the receiving
account for loan purchase proceeds; and

 
 
(6)
Completed, but not signed, Warehouse Lender Release of Security Interest
(Multifamily) (Freddie Mac Form 996), to be signed by Lender.

 
 
(b)
The remainder of the documents required for shipping to the Investor or the
Approved Custodian as specified by the Investor or the Approved Custodian or in
the Freddie Mac Seller/Servicer Guide.

 
Unless otherwise agreed in writing with Borrower, the Agent exclusively will
deliver the Mortgage Note and other original Collateral Documents required by
this Exhibit evidencing the Pledged Loan to an Investor or an Approved
Custodian.  Upon instruction by Borrower, the Agent will complete the
endorsement of the Mortgage Note.  The Agent will deliver the Mortgage Note and
the other documents required for shipping to the Investor or the Approved
Custodian as specified by the Investor or Approved Custodian or in the Freddie
Mac Seller/Servicer Guide to the Investor that issued the Purchase Commitment
for the Pledged Loan or to an Approved Custodian for the Investor.
 
Cash proceeds of the sale of a Pledged Loan will be deposited into the Cash
Collateral Account and applied to the related Advances.  As long as no Default
or Event of Default exists, Agent will return any excess proceeds from the sale
of a Pledged Loan, after repayment
 

 
 

--------------------------------------------------------------------------------

 

of the related Advances, to Borrower (by transfer to the Operating Account),
unless otherwise instructed in writing by Borrower.
 
 
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 

EXHIBIT C-2
 
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING FANNIE MAE DUS AND OTHER FANNIE MAE
MORTGAGE LOANS
 
Capitalized terms used in this Exhibit without further definition have the
meanings set forth in the Amended and Restated Mortgage Warehousing Credit and
Security Agreement dated as of May 30, 2008 (as amended and/or restated from
time to time, and as any provision thereof may be waived, the “Agreement”) among
Centerline Mortgage Capital Inc., a Delaware corporation, Centerline Mortgage
Partners Inc., a Delaware corporation, the lenders from time to time party
hereto as defined on Schedule 1 (together with any successors and assigns
thereof, being hereinafter referred to individually as a “Lender” and
collectively as the “Lenders”) and Bank of America, N.A., in its capacity as one
of the Lenders and as agent (it and its successors in that capacity called the
“Agent”) for the Lenders
 
All documentation delivered pursuant to this Exhibit must be satisfactory to the
Agent in its sole discretion.
 
Fannie Mae form numbers used in this Exhibit are for convenience only and
Borrower must use the equivalent forms required at the time of delivery of a
Pledged Asset.
 
I.              AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE ADVANCE DATE:
 
The Agent must receive an electronic mail from an Authorized Representative of
Borrower, providing the following information on the Pledged Loan:
 
(a)           Mortgagor’s name;
 
(b)           Project name;
 
(c)           The Borrower’s case/loan number;
 
(d)           Expected Advance date;
 
(e)           Mortgage Note Amount;
 
 
(f)
Name, address, telephone and facsimile of title company or settlement attorney
and contact person.

 
Upon receipt of such electronic mail, in form and substance satisfactory to
Agent, Agent will issue its escrow instructions letter to the specified title
company and/or the settlement attorney, which will include wiring information,
bailee clauses and contact information at the Agent for the delivery of the
original Mortgage Note and related Collateral Documents.
 

 
 

--------------------------------------------------------------------------------

 

I.              AT LEAST 1 BUSINESS DAY PRIOR TO THE ADVANCE DATE:
 
The Agent must receive the following:
 
 
(a)
An original, facsimile or electronic copy of an Advance Request (Exhibit A to
the Agreement) executed by an Authorized Representative of Borrower (facsimile
or electronic copy is acceptable for funding, with the original to be forwarded
via overnight mail).

 
 
(b)
A copy of the confirmed Fannie Mae Multifamily Commitment and Delivery for
either a cash or Mortgage-Backed Security transaction.

 
 
(c)
If a Mortgage-backed Security is to be issued, a copy of the executed Purchase
Commitment for the Pledged Security

 
 
(d)
A copy of the Agent’s escrow instructions letter to the title company and/or the
settlement attorney, countersigned by an authorized representative of the title
company or the settlement attorney involved with the transaction.

 
 
(e)
Original assignment of the Mortgage, endorsed by Borrower in blank, in
recordable form but unrecorded (copy is acceptable for funding, with the
original to be forwarded via overnight mail).

 
 
(f)
Original assignment of security agreement, if applicable, endorsed by Borrower
in blank, in recordable form but unrecorded (copy is acceptable for funding,
with original to be forwarded via overnight mail).

 
 
(f)
Copies of the UCC financing statements to be filed by Borrower against the
mortgagor(s).

 
No Advance will be made by the Lenders prior to the Agent’s receipt of all
Collateral Documents required under Section II above or otherwise required under
the Agreement.  The Agent shall have a reasonable time (1 Business Day under
ordinary circumstances) to examine the Advance Request and the applicable
Collateral Documents before the Lenders shall fund the requested Advance, and
the Agent may reject any Eligible Loans that does not meet the requirements of
this Exhibit, the Agreement or of the related Purchase Commitment.
 
Borrower must hold or cause the applicable title company or settlement attorney
to hold, in trust and as agent and bailee for Agent, those original Collateral
Documents of which only copies are required to be delivered to the Agent under
this Exhibit.  Promptly upon request by Agent or, if the recorded Collateral
Documents have not yet been returned from the recording office, immediately upon
receipt by Borrower or its custodian of those recorded Collateral Documents,
Borrower must deliver or cause its custodian to deliver to Agent any or all of
the original Collateral Documents.
 

 
 

--------------------------------------------------------------------------------

 

Agent will, upon compliance by the Borrower with the terms of the Loan
Documents, deposit the Advance into the Funding Account, for disbursement by
Borrower to the title company or settlement attorney.
 
The Advance, when wired by the Borrower to the title company or the settlement
attorney, shall be held in an escrow account of the title company or the
settlement attorney and disbursed in accordance with the closing letter of the
Borrower or its counsel when authorized by the Agent in its escrow instruction
letter.
 
Disbursement will be authorized only after the title company or settlement
attorney takes possession, on behalf of the Agent, for the benefit of the
Lenders, of the signed Mortgage Note, endorsed by the Borrower in blank and
without recourse, and the title company is prepared to issue its title insurance
policy.  Immediately after disbursement, the title company or settlement
attorney shall be required to transmit the Mortgage Note and certified true copy
of the title insurance policy directly to the Agent.  In the event the Pledged
Loan is not closed and the related Mortgage recorded by 3:00 p.m. on the date of
the Advance, the title company or the settlement attorney must return the
Advance to the Cash Collateral Account promptly and in any event no later than
the 1st Business Day following the date of the Advance.
 
The foregoing arrangements, permitting funding of the Advance when the Mortgage
Note has been delivered to a third person on behalf of, and as agent and bailee
for, the Agent, and before the Mortgage Note is received by the Agent, for the
benefit of the Lenders, are for the convenience of the Borrower.  All risk of
loss or nondelivery of the Mortgage Note is that of the Borrower, and neither
the Agent nor the Lenders shall have any liability or responsibility therefor.
 
III.
ON THE FIRST BUSINESS DAY AFTER THE ADVANCE DATE (or the Second Business Day
after the date of the Advance if delivery is not practical due to the time of
the settlement):

 
The Agent must receive the following:
 
 
(a)
The original Mortgage Note, endorsed by Borrower in blank and without recourse.

 
 
(b)
Originals of assignment of the Mortgage and assignment of the security agreement
(if not previously delivered).

 
 
(c)
A copy of the title insurance policy or the title insurance commitment to issue
a policy marked to show the final policy exceptions, which:

 
 
(1)
Contains recording information filed on the schedules pertaining to the Pledged
Loan and, if applicable, UCC financing statements;

 

 
 

--------------------------------------------------------------------------------

 

 
(2)
Names as insured Borrower and/or the Investor, and their successors and assigns,
as their interests may appear;

 
 
(3)
Shows effective date and time which is as of the date and time of disbursement
of the Advance from escrow; and

 
 
(4)
Sets forth an insured amount which is equal to or greater than the Advance
amount.

 
IV.
AT LEAST 1 BUSINESS DAYS BEFORE INVESTOR/APPROVED CUSTODIAN MUST RECEIVE PLEDGED
LOAN):

 
The Agent must receive the following:
 
 
(a)
Signed shipping instructions for the delivery of the Pledged Loan including the
following:

 
 
(1)
Name and address of the Investor or the Approved Custodian to which the
Collateral Documents are to be shipped, the desired shipping date and the
preferred method of delivery.

 
 
(2)
Name of project securing the Pledged Loan.

 
 
(3)
Date the Investor or the Approved Custodian must receive the Pledged Loan.

 
 
(4)
Instructions for endorsement of the Mortgage Note.

 
 
(5)
For cash payments, the signed original Wire Transfer Request (Fannie Mae Form
4639) or Fannie Mae Wiring Instructions from the confirmed Commitment and
Delivery, specifying the Cash Collateral Account as the receiving account for
loan purchase proceeds.

 
 
(6)
Executed bailee letter with Schedule A (in form approved by Fannie Mae and the
Agent).

 
 
(7)
If a Mortgage-backed Security is to be issued by Fannie Mae, a copy of the
Fannie Mae Wiring Instructions from the confirmed Commitment and Delivery,
instructing Fannie Mae to issue the Mortgage-backed Security in Borrower’s name
and to deliver the Pledged Security to Agent’s custody account.

 
 
(8)
If a Mortgage-backed Security is to be issued, completed and signed Security
Delivery Instructions, in the form attached as Schedule I to this Exhibit.

 

 
 

--------------------------------------------------------------------------------

 

 
(b)
The remainder of the documents required for shipping to Investor/Approved
Custodian as specified by Investor or in Fannie Mae’s Delegated Underwriting and
Servicing Guide.

 
Agent exclusively will deliver the Mortgage Note and other original Collateral
Documents evidencing the Pledged Loan to Investor/Approved Custodian, unless
otherwise agreed in writing with Borrower or as otherwise directed by Borrower
to comply with the requirements of Fannie Mae’s ASAP Plus program.  Upon
instruction by Borrower, Agent will complete the endorsement of the Mortgage
Note.  If no Mortgage-backed Security is to be issued, Agent will deliver the
Mortgage Note and the other documents required for shipping to Investor/Approved
Custodian as specified by Investor/Approved Custodian or in Fannie Mae’s
Delegated Underwriting and Servicing Guide with an executed bailee letter to the
Investor that issued the Purchase Commitment for the Pledged Loan or to its
Approved Custodian.  If a Mortgage-backed Security is to be issued, Agent will
deliver the Mortgage Note and the other documents required for shipping.
 
Cash proceeds of the sale of a Pledged Loan or a Pledged Security will be
deposited into the Cash Collateral Account and applied to the related
Advances.  As long as no Default or Event of Default exists, Agent will return
any excess proceeds from the sale of a Pledged Loan or a Pledged Security, after
repayment of the related Advances, to Borrower (by transfer to the Operating
Account), unless otherwise instructed in writing by Borrower.
 

 
 

--------------------------------------------------------------------------------

 

                                                              SCHEDULE I TO
EXHIBIT C-2
                                                     SECURITY DELIVERY
INSTRUCTIONS
_______________________________________________________________________

Custodial Account
Number:                                                     ______________________
Custodial Account Name:                                                        
______________________
Cash Collateral Account
No:                                                   ______________________
INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY
 
BOOK-ENTRY DATE: ___________________         SETTLEMENT DATE: _____________
ISSUER: _____________________________          SECURITY: _____________________
NO. OF CERTIFICATES: _________________         1) _____________________________
2) ________________________________

PURCHASE PRICE @ _________%                                
=           _______________________
 
ACCRUED INTEREST (_____DAYS @ _______%)     =           _______________________
 
TOTAL PURCHASE
PRICE                                                =          $_______________________
 

 
CUSIP NO. __________________________
 
Pool No. _______________                                              Coupon
Rate: __________________
 
Issue Date (M/D/Y): ____________________              Maturity Date
M/D/Y):___________
 
POOL TYPE (circle one):
 
Fannie Mae:                      FIXED ARM              DISCOUNT
NOTE               DEBENTURES
 
DELIVER TO:                    __________________ (  ) Versus Payment
 
__________________  DVP AMOUNT $_____________________
 
__________________
DELIVER TO:                   __________________ (  ) Versus Payment
__________________ DVP AMOUNT $_____________________
__________________
PROJECT NAME:                    _______________________________________________
AUTHORIZED SIGNATURE:
____________________________________________________
PRINTED NAME AND TITLE:
____________________________________________________

 
 

--------------------------------------------------------------------------------

 

EXHIBIT C-3
 
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
 
FHA PROJECT LOANS AND FHA CONSTRUCTION MORTGAGE LOANS
 
Capitalized terms used in this Exhibit without further definition have the
meanings set forth in the Amended and Restated Mortgage Warehousing Credit and
Security Agreement dated as of May 30, 2008 (as amended and/or restated from
time to time, and as any provision thereof may be waived, the “Agreement”) among
Centerline Mortgage Capital Inc., a Delaware corporation, Centerline Mortgage
Partners Inc., a Delaware corporation, the lenders from time to time party
hereto as defined on Schedule 1 (together with any successors and assigns
thereof, being hereinafter referred to individually as a “Lender” and
collectively as the “Lenders”) and Bank of America, N.A., in its capacity as one
of the Lenders and as agent (it and its successors in that capacity called the
“Agent”) for the Lenders
 
All documentation delivered pursuant to this Exhibit must be satisfactory to the
Agent in its sole discretion.
 
HUD form numbers used in this Exhibit are for convenience only and Borrower must
use the equivalent forms required at the time of delivery of a Pledged Asset.
 
I.
AT LEAST 3 BUSINESS DAYS PRIOR TO THE ADVANCE DATE:

 
The Agent must receive an electronic mail from an Authorized Representative of
Borrower, providing the following information on the Pledged Asset:
 
 
(a)
Mortgagor’s name;

 
 
(b)
Project name;

 
 
(c)
Borrower’s case/loan number;

 
 
(d)
Expected Advance date;

 
 
(e)
Mortgage Note Amount; and

 
 
(f)
Name, street address, email address, telephone and facsimile of title company or
settlement attorney and contact person.

 
Upon receipt of such electronic mail, in form and substance satisfactory to
Agent, Agent will issue its escrow instructions letter to the specified title
company and/or the settlement attorney, which will include wiring information,
bailee clauses and contact information at the Agent for the delivery of the
original Mortgage Note and related Collateral Documents.
 

 
 

--------------------------------------------------------------------------------

 
 
II.
AT LEAST 1 BUSINESS DAY PRIOR TO THE ADVANCE DATE:

 
Agent must receive the following:
 
 
(a)
An original, facsimile or electronic copy of an Advance Request (Exhibit A to
the Agreement) executed by an Authorized Representative of Borrower (facsimile
or electronic copy is acceptable for funding, with the original to be forwarded
via overnight mail).

 
 
(b)
Copy of FHA Firm Commitment to insure.

 
 
(c)
If no Mortgage-backed Security is to be issued, a copy of the executed Purchase
Commitment for the Pledged Loan.

 
 
(d)
If a Mortgage-backed Security is to be issued, a copy of the executed Purchase
Commitment for the Mortgage-backed Security (consisting, in the case of a
tax-exempt FHA Construction Mortgage Loan, of a trust indenture for the sale of
the related securities and an agreement of the issuer and trustee to purchase
the Mortgage-backed Security).

 
 
(e)
If a participation certificate is to be issued, a copy of the participation and
servicing agreement.

 
 
(f)
A copy of the Agent’s escrow instructions letter to the title company and/or the
settlement attorney, countersigned by an authorized representative of the title
company or the settlement attorney involved with the transaction.

 
 
(g)
For FHA Construction Mortgage Loans, a copy of the Application for Insurance of
Advance of Mortgage Proceeds (HUD Form 92403) to be submitted to HUD.

 
 
(h)
Original assignment of the Mortgage, endorsed by borrower in blank, in
recordable form but unrecorded (copy is acceptable for funding, with the
original to be forwarded via overnight mail).

 
 
(i)
Original assignment of the security agreement, if applicable, endorsed by
Borrower in blank, in recordable form but unrecorded (copy is acceptable for
funding, with the original to be forwarded via overnight mail).

 
 
(j)
Copies of UCC financing statements to be filed by Borrower against the
mortgagor(s).

 
No Advance will be made by the Lenders prior to the Agent’s receipt of all
Collateral Documents required under Section II. Agent has a reasonable time (1
Business Day under ordinary circumstances) to examine Borrower’s Advance Request
and the Collateral Documents to be delivered by Borrower before the Lenders
shall fund the requested Advance,
 

 
 

--------------------------------------------------------------------------------

 

and the Agent may reject any Eligible Loan that does not meet the requirements
of this Exhibit, the Credit Agreement or of the related Purchase Commitment.
 
Borrower must hold or cause its custodian to hold, in trust and as agent and
bailee for Agent, those original Collateral Documents of which only copies are
required to be delivered to Agent under this Exhibit. Promptly upon request by
Agent or, if the recorded Collateral Documents have not yet been returned from
the recording office, immediately upon receipt by Borrower or its custodian of
those recorded Collateral Documents, Borrower must deliver or cause its
custodian to deliver to the Agent any or all of the original Collateral
Documents.
 
Agent will, upon compliance by the Borrower with the terms of the Loan
Documents, deposit the Advance into Borrower’s Funding Account, for disbursement
by Borrower to the title company or settlement attorney.
 
The Advance, when wired by Borrower to the title company or the settlement
attorney, must be held in an escrow account of the title company or the
settlement attorney and disbursed in accordance with the closing letter of
Borrower or its counsel and when authorized by the terms of the escrow
instructions letter of Agent.
 
At closing, the title company or the settlement attorney must take possession on
behalf of, and as agent and bailee for, Agent (for the benefit of the Lenders)
of (a) the signed Mortgage Note, endorsed by Borrower in blank and without
recourse, and (b) a copy of the title insurance policy, after which the title
company or the settlement attorney may release the Mortgage Note and the title
insurance policy to Borrower’s counsel pursuant to an executed bailee letter
countersigned by Borrower’s counsel, in a form provided by Agent. In the bailee
letter, Borrower’s counsel must (a) acknowledge receipt of the Mortgage Note,
(b) acknowledge Agent’s security interest in the Mortgage Note (for the benefit
of the Lenders), (c) agree that the Mortgage Note is being delivered to
Borrower’s counsel solely for the purpose of obtaining HUD’s endorsement, and
(d) agree to deliver the Mortgage Note, endorsed by HUD, and the title insurance
policy directly to the Agent.  The title company or the settlement attorney may
disburse the Advance from escrow upon advice of Borrower’s counsel (which may be
telephonic) that HUD has endorsed the Mortgage Note.  In the event the Pledged
Loan is not closed and the related Mortgage recorded on the date of the Advance,
the title company or the settlement attorney must return the Advance to
Borrower’s Cash Collateral Account, promptly and in any event within one (1)
Business Day after the date of the Advance.
 
The foregoing arrangements, which permit the Agent and the Lenders to fund the
Advance after the Mortgage Note has been delivered to a third person on behalf
of, and as agent and bailee for, Agent (for the benefit of the Lenders), and
before the Mortgage Note is received by Agent, are for the convenience of
Borrower. Borrower retains all risk of loss or nondelivery of the Mortgage Note,
and neither the Agent nor the Lenders have any liability or responsibility for
those risks.
 

 
 

--------------------------------------------------------------------------------

 
 
III.
ON THE FIRST BUSINESS DAY AFTER THE ADVANCE DATE (or the Second Business Day
after the date of the Advance if delivery is not practical due to the time of
the settlement):

 
Agent must receive the following:
 
 
(a)
Original signed Mortgage Note, endorsed by Borrower in blank and without
recourse and endorsed for insurance by HUD.

 
 
(b)
A copy of the title insurance policy, which:

 
 
(1)
contains recording information filled in on the schedules pertaining to the
Pledged Loan, UCC financing statements (if applicable), and regulatory
agreement;

 
 
(2)
names as insured the “Mortgagee and/or the Secretary of the Department of
Housing and Urban Development, and their successors and assigns, as their
interests may appear”;

 
 
(3)
shows an effective date and time that is on or after the date and time of
disbursement of the Advance from escrow; and

 
 
(4)
sets forth an insured amount that is equal to or greater than the Advance
amount.

 
 
(c)
For FHA Construction Mortgage Loans, a copy of the Application for Insurance of
Advance of Mortgage Proceeds (HUD Form 92403), signed by an authorized
representative of HUD.

 
 
(d)
If a participation certificate has been issued:

 
 
(1)
the original participation certificate evidencing one hundred percent (100%) of
the undivided interests in the pool of Pledged Loans; and

 
 
(2)
original signed stock/bond power or equivalent assignment for the participation
certificate issued from Borrower to the Agent (or from the Investor to the Agent
if the participation certificate was issued in the name of the Investor).

 
 
(e)
Originals of assignment of the Mortgage and assignment of the security agreement
(if not previously delivered).

 
IV.
AT LEAST 1 BUSINESS DAYS BEFORE INVESTOR/APPROVED CUSTODIAN MUST RECEIVE PLEDGED
LOAN):

 
Agent must receive signed shipping instructions from Borrower to the Agent for
the delivery of the Pledged Loan, including the following:
 

 
 

--------------------------------------------------------------------------------

 

 
 
(a)
Name and address of contact person at Investor/Approved Custodian to whom the
Collateral Documents are to be shipped, the desired shipping date and the
preferred method of delivery, with courier number.

 
 
(b)
Name of project securing the Pledged Loan.

 
 
(c)
Date by which Investor/Approved Custodian must receive the Pledged Loan.

 
 
(d)
Instructions for endorsement of the Mortgage Note, if applicable.  For an FHA
Construction Mortgage Loan, Lender will endorse and deliver the Mortgage Note
following the initial Advance for that Mortgage Loan.

 
 
(e)
Completed but not signed Release of Security Interest (HUD Form 1171 1A), to be
signed and delivered by Agent.  For an FHA Construction Mortgage Loan, Agent
will only sign and deliver such a Release of Security Interest for the initial
and last Advances for that Mortgage Loan.

 
 
(f)
For delivery of a participation certificate, the name and address of the contact
person at Investor/Approved Custodian to whom the participation certificate is
to be delivered.

 
Agent exclusively will deliver the Mortgage Note, any Participation Certificates
and other original Collateral Documents required by this Exhibit evidencing the
Pledged Loan, together with a bailee letter, to an Investor or an Approved
Custodian, unless otherwise agreed in writing with Borrower. Upon instruction by
Borrower, Agent will complete the endorsement of the Mortgage Note. If no
Mortgage- backed Security is to be issued, Agent will deliver the Mortgage Note
with a bailee letter to the Investor that issued the Purchase Commitment for the
Pledged Loan or an Approved Custodian for the Investor. If a Mortgage-backed
Security is to be issued, Agent will deliver the Mortgage Note and the Release
of Security Interest, with an executed bailee letter to an Approved Custodian
for Ginnie Mae.
 
V.
FOR EACH SUBSEQUENT ADVANCE ON FHA CONSTRUCTION MORTGAGE LOANS:

 
 
(a)
At least 1 Business Day prior to the date of the Advance, the Agent must
receive:

 
 
(1)
An original, facsimile or electronic copy of an Advance Request (Exhibit A to
the Agreement) executed by an Authorized Representative of Borrower (facsimile
or electronic copy is acceptable for funding, with the original to be forwarded
via overnight mail).; and

 
 
(2)
Copy of an Application for Insurance of Advance of Mortgage Proceeds (HUD Form
92403), signed by an authorized representative of HUD.

 

 
 

--------------------------------------------------------------------------------

 

 
(b)
On the day of the Advance, Agent must receive evidence of title insurance
coverage in an amount equal to the aggregate amount of all Advances (including
the requested Advance).

 
 
(c)
By the first Business Day following the date of the Advance, if a participation
certificate has been issued in connection with a subsequent Advance, the agent
must receive:

 
 
(1)
the original participation certificate evidencing one hundred percent (100%) of
the undivided interests in the pool of Pledged Loans; and

 
 
(2)
original signed stock/bond power or equivalent assignment for the participation
certificate issued from Borrower to the Agent (or from the Investor to the Agent
if the participation certificate was issued in the name of the Investor).

 
VI.
IF A GINNIE MAE MORTGAGE-BACKED SECURITY IS TO BE ISSUED, NO LATER THAN 1
BUSINESS DAY PRIOR TO SETTLEMENT DATE FOR THE PLEDGED SECURITY:

 
Agent must receive:
 
 
(a)
A signed copy of the Schedule of Subscribers (HUD Form 11705), instructing
Ginnie Mae to issue the Mortgage-backed Security in Borrower’s name and
designating Agent as the subscriber, and to deliver the Pledged Security to
Agent’s custody account at Bank of America, N.A. and bearing the following
instructions: “These instructions may not be changed without prior written
approval of Bank of America, N.A.”

 
 
(b)
Completed but not signed Release of Security Interest (HUD Form 1171 IA), to be
signed by Agent.  For an FHA Construction Mortgage Loan, Agent will only sign
and deliver such a Release of Security Interest for the initial and last
Advances for that Mortgage Loan.

 
 
(c)
Completed and signed Security Delivery Instructions, in the form attached as
Schedule I to this Exhibit.

 
Upon receipt of a Pledged Security, Agent will deliver the Pledged Security to
the Investor that issued the Purchase Commitment for the Pledged Security. The
Pledged Security will be released to the Investor only upon payment of the
purchase proceeds to Agent.
 
Cash proceeds of the sale of a Pledged Loan or a Pledged Security will be
deposited into the Cash Collateral Account and applied to the related
Advances.  As long as no Default or Event of Default exists, Agent will return
any excess proceeds from the sale of a Pledged Loan or a Pledged Security, after
repayment of the related Advances, to Borrower (by transfer to the Operating
Account), unless otherwise instructed in writing by Borrower.
 

 
 

--------------------------------------------------------------------------------

 
 
                                                      SCHEDULE I TO EXHIBIT C-3

                                             SECURITY DELIVERY INSTRUCTIONS
 
_________________________________________________________________________

Custodial Account
Number:                                                      ______________________
Custodial Account
Name:                                                          ______________________
Cash Collateral Account
No:                                                    ______________________

INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF PICK-UP/DELIVERY
 
BOOK-ENTRY DATE: _________________             SETTLEMENT DATE: _______________
ISSUER: ___________________________              SECURITY:
_______________________
NO. OF CERTIFICATES: _______________             1)
_______________________________
2) _________________________________

PURCHASE PRICE @ _________%                                     
=           _______________________
 
ACCRUED INTEREST (_____DAYS @
_______%)          =           _______________________
 
TOTAL PURCHASE
PRICE                                                      =           $______________________
 

 
CUSIP NO. ___________________________
 
Pool No.
_______________                                                   Coupon Rate:
__________________
 
Issue Date (M/D/Y): ____________________                  Maturity Date
(M/D/Y):_________
 
POOL TYPE (circle one):
 
Ginnie Mae:                         GINNIE MAE I                  GINNIE MAE II
 
DELIVER TO:                   __________________ (  ) Versus Payment
 
__________________ DVP AMOUNT $_____________________
 
__________________
 
DELIVER TO:                    __________________  (  ) Versus Payment
 
__________________  DVP AMOUNT $_____________________
 
__________________
PROJECT
NAME:                   ____________________________________________________
AUTHORIZED SIGNATURE:
____________________________________________________
PRINTED NAME AND TITLE:
___________________________________________________

 
 

--------------------------------------------------------------------------------

 

EXHIBIT D:  COMPLIANCE CERTIFICATE

BORROWER:
CENTERLINE MORTGAGE CAPITAL INC. AND CENTERLINE MORTGAGE PARTNERS INC.
   
AGENT:
BANK OF AMERICA, N.A.,
   
TODAY’S DATE:
___________________, 20___
REPORTING PERIOD
ENDED:
_____________________ ended _____________, 20__

This certificate is delivered to Lender under the Amended and Restated
Warehousing Credit and Security Agreement dated effective as of May 30, 2008
between the Borrower and the Agent and the other lenders parties thereto (the
“Agreement”), all the defined terms of which have the same meanings when used
herein.
 
I hereby certify that: (a) I am, and at all times mentioned herein have been,
the duly elected, qualified, and acting officer of Borrower designated below;
(b) to the best of my knowledge, the Financial Statements of Borrower from the
period shown about (the “Reporting Period”) and which accompany this certificate
were prepared in accordance with GAAP and present fairly the financial condition
of Borrower as of the end of the Reporting Period and the results of its
operations for Reporting Period; (c) a review of the Agreement and of the
activities of the Borrower during the Reporting Period has been made under my
supervision with a view to determining Borrower’s compliance with the covenants,
requirements, terms, and conditions of the Agreement, and such review has not
disclosed the existence during or at the end of the Reporting Period (and I have
no knowledge of the existence as of the date hereof) of any Default or Event of
Default, except as disclosed herein (which specifies the nature a d period of
existence of each Default or Event of  Default, if any, and what action Borrower
has taken, is taking, and proposes to take with respect to each); (d) the
calculations described herein evidence that the Borrower is in compliance with
the requirements of the Agreement at the end of the Reporting Period (or if
Borrower is not in compliance, showing the extent of non-compliance and
specifying the period of non-compliance and what actions the Borrower proposes
to take with respect thereto); (e) the Borrower was, as of the end of the
Reporting Period, in compliance and good standing with applicable Fannie Mae,
Ginnie Mae, Freddie Mac, and HUD net worth requirements.
 
CENTERLINE MORTGAGE CAPITAL INC.
 
By:           ________________________________
(Signature)
 
Its:           ________________________________
    (Printed Name and Title)
 
CENTERLINE MORTGAGE PARTNERS INC.
 
By:           ________________________________
(Signature)
 
Its:           ________________________________
    (Printed Name and Title)

 
 

--------------------------------------------------------------------------------

 

EXHIBIT E: FORM OF PROMISSORY NOTE
 

 

$__________.00 
______________ 

 
FOR VALUE RECEIVED, the undersigned, CENTERLINE MORTGAGE CAPITAL INC., a
Delaware corporation AND CENTERLINE MORTGAGE PARTNERS INC., a Delaware
corporation (herein called the “Borrower”), hereby promise to pay to the order
of [LENDER NAME] (the “Lender” or, together with its successors and assigns, the
“Holder”) whose principal place of business is [LENDER ADDRESS], or at such
other place as the Holder may designate from time to time, the principal sum of
[LENDER COMMITMENT] AND 00/100 ($__________.00) or so much thereof as may be
outstanding from time to time pursuant to the Amended and Restated Warehousing
Credit and Security Agreement (the “Agreement”) dated May 30, 2008 among the
Borrower and Bank of America, N.A., in its capacity as one of the lenders and as
Agent for the other lenders party thereto and the lenders party thereto
(including the Lender), as the same may be amended, supplemented, or restated
from time to time, and to pay interest on said principal sum or such part
thereof as shall remain unpaid from time to time, from the date of each Advance
until repaid in full, and all other fees and charges due under the Agreement, at
the rate and at the times set forth in the Agreement.  All payments hereunder
shall be made in lawful money of the United States and in immediately available
funds.  Capitalized terms used herein, unless otherwise defined herein, shall
have the meanings given them in the Agreement.
 
This Note is issued and delivered under the Agreement and is a Note as defined
therein and is entitled to the benefits thereof.  Reference is hereby made to
the Agreement (which is incorporated herein by reference as fully and with the
same effect as if set forth herein at length) for a description of the
Collateral, a statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other matters contained
therein.
 
[This Note is given in renewal and extension of, and amends and restates without
novation, that certain promissory note (“Prior Note”) dated ______________ in
the original principal amount of _____ __________________________
($_____________) executed by the Borrower payable to the order of Lender.  All
liens, security interests, and assignments securing the Prior Note are hereby
ratified, confirmed, renewed, extended, and carried forward as security for the
repayment of this Note, in addition to and cumulative of all other security.]
 
The entire unpaid principal balance of this Note plus all accrued and unpaid
interest shall be due and payable in full on the Maturity Date.
 
This Note may be prepaid in whole or in part at any time without premium or
penalty.
 
Should this Note be placed in the hands of attorneys for collection, the
Borrower agrees to pay, in addition to principal and interest, fees and charges
due under the Agreement, and all costs of collecting this Note, including
reasonable attorneys’ fees and expenses.
 

 
 

--------------------------------------------------------------------------------

 

This Note shall be construed and enforced in accordance with the laws of the
State of New York, without reference to its principles of conflicts of law, and
applicable federal laws of the United States of America.
 
This Note is secured by all security agreements, collateral assignments, deeds
of trust and lien instruments executed by the Borrower in favor of the Agent for
the benefit of the Lenders, or executed by any other Person as security for this
Note, including any executed prior to, simultaneously with, or after the date of
this Note.
 
The Borrower and any and each co-maker, guarantor, accommodation party, endorser
or other Person liable for the payment or collection of this Note expressly
waive, except as expressly provided for in the Agreement, Notice, presentment,
demand for payment, protest, notice of protest and non-payment or dishonor,
notice of acceleration, notice of intent to accelerate, notice of intent to
demand, bringing of suit, and diligence in taking any action to collect amounts
called for hereunder and in the handling of Collateral at any time existing as
security in connection herewith, and shall be directly and primarily liable for
the payment of all sums owing and to be owing hereon, regardless of and without
any Notice, diligence, act or omission as or with respect to the collection of
any amount called for hereunder or in connection with any Lien at any time had
or existing as security for any amount called for hereunder.
 
It is the intention of the parties hereto to conform strictly to usury laws
applicable to the Lender.  Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the United States
of America and the State of New York), then, in that event, notwithstanding
anything to the contrary herein or in the Agreement or in any other Loan
Document or agreement entered into in connection with or as security for this
Note, it is agreed as follows:  (i) the aggregate of all consideration which
constitutes interest under law applicable to the Lender that is contracted for,
taken, reserved, charged, or received herein or under the Agreement or under any
of the other aforesaid Loan Documents or agreements or otherwise in connection
herewith shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be credited by the Lender on the principal
amount of the Obligations (or, if the principal amount of the Obligations shall
have been paid in full, refunded by the Lender to the Borrower, as required);
and (ii) in the event that the maturity of this Note is accelerated by reason of
an election of the Lender resulting from any Event of Default under the
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest under law applicable to the
Lender may never include more than the maximum amount allowed by such applicable
law, and excess interest, if any, provided for in the Agreement or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by the Lender on the
principal amount of the Obligations (or, if the principal amount of the
Obligations shall have been paid in full, refunded by the Lender to the
Borrower, as required).  Without limiting the foregoing, all calculations of the
rate of interest taken, reserved, contracted for, charged, received or provided
for under this Note or any of the Loan Documents which are made for the purpose
of determining whether the interest rate exceeds the Maximum Rate shall be made,
to the extent allowed by law, by
 

 
 

--------------------------------------------------------------------------------

 

amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of the loan evidenced hereby, all interest at any time
taken, reserved, contracted for, charged, received, or provided for under this
Note of any of the Loan Documents.
 
IN WITNESS WHEREOF, the undersigned have executed this Promissory Note as of the
date first written above.
 
CENTERLINE MORTGAGE CAPITAL INC.
 
By:           ________________________________
(Signature)
 
Its:           ________________________________
    (Printed Name and Title)
 
 
      CENTERLINE MORTGAGE PARTNERS INC.
 
      By:                      ________________________________
     (Signature)
 
      Its:                      ________________________________
           (Printed Name and Title)
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT F: FORM OF ASSIGNMENT AND ACCEPTANCE

Reference is made to the Amended and Restated Warehousing Credit and Security
Agreement dated as of May 30, 2008 (as the same may be further amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among CENTERLINE MORTGAGE CAPITAL INC. AND CENTERLINE MORTGAGE PARTNERS
INC., a Delaware corporation (“Borrower”), BANK OF AMERICA, N.A., and the other
entities from time to time parties thereto as lenders (collectively, the
“Lenders”),  and BANK OF AMERICA, N.A., as agent for the Lenders (in such
capacity, the “Agent”).  Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
 
__________ (the “Assignor”) and __________ (the “Assignee”) agree as follows:
 
The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Assignment
Effective Date (as defined below), an interest (the “Assigned Interest”), as
specified on SCHEDULE 1, in and to the Assignor’s rights and obligations under
the Credit Agreement with respect to the credit facilities contained in the
Credit Agreement as are set forth on SCHEDULE 1 (individually, an “Assigned
Facility”; collectively, the “Assigned Facilities”), in a principal amount for
each Assigned Facility as set forth on SCHEDULE 1.
 
The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower, any of its Affiliates, or any other obligor or
the performance or observance by Borrower, any of its Affiliates, or any other
obligor of any of their respective obligations under this Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto.
 
The Assignee (a) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance; (b) confirms that it has received a copy of
the Credit Agreement, together with copies of such of the financial statements
delivered pursuant to Section 6.2 thereof as it has requested and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the Agent,
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action
 

 
 

--------------------------------------------------------------------------------

 

under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Agent by the terms thereof, together with such powers as are incidental
thereto; and (e) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with its terms all the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender.
 
The effective date of this Assignment and Acceptance shall be __________ _____,
________ (the “Assignment Effective Date”).  Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to the Credit Agreement, effective as of
the Assignment Effective Date (which shall not, unless otherwise agreed to by
the Agent, be earlier than five Domestic Business Days after the date of such
acceptance and recording by the Agent).
 
Upon such acceptance and recording, from and after the Assignment Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to the Assignment Effective
Date or accrue subsequent to the Assignment Effective Date.  The Assignor and
the Assignee shall make all appropriate adjustments in payments by the Agent for
periods prior to the Assignment Effective Date or with respect to the making of
this assignment directly between themselves.
 
From and after the Assignment Effective Date, (a) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
 
This Assignment and Acceptance shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to provisions or
principles thereof relating to conflict of laws or choice of law.
 
This Assignment and Acceptance may be executed by one or more of the parties to
this Assignment and Acceptance on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
 
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on SCHEDULE 1 hereto.
 

 
 

--------------------------------------------------------------------------------

 

SCHEDULE I

TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT,
DATED AS OF MAY 30, 2008
AMONG
CENTERLINE MORTGAGE CAPITAL INC. AND CENTERLINE MORTGAGE PARTNERS INC., AS
BORROWER
THE LENDERS PARTY THERETO (THE “LENDERS”)
AND
BANK OF AMERICA, N.A.,
AS AGENT FOR THE LENDERS
(IN SUCH CAPACITY, THE “AGENT”)

--------------------------------------------------------------------------------

 
Name of Assignor:

Name of Assignee:

Effective Date of Assignment:
 
Credit
Facility Assigned
Principal
Amount Assigned
Commitment Percentage Assigned1
       
$ __________
___.___________%
     

[NAME OF ASSIGNEE]
[NAME OF ASSIGNOR]
 
 
 
By ________________________________________
Name:
Title:
 
 
 
By ________________________________________
Name:
Title:

--------------------------------------------------------------------------------

1 Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the Aggregate Commitment of all Lenders.

 
 

--------------------------------------------------------------------------------

 

Accepted for Recordation in the Register:
 
Consented To:
     
Bank of America, N.A., as the Agent
 
 
By ________________________________
Name:
Title:
 
Centerline Mortgage Capital Inc.,
as Borrower
 
 
By  ________________________________
Name:
Title:
         
Centerline Mortgage Partners Inc.,
as Borrower
 
 
By ________________________________
Name:
Title:
         
Bank of America, N.A., as the Agent
 
 
By ________________________________
Name:
Title:
     

 
 

--------------------------------------------------------------------------------

 

EXHIBIT G: LIST OF APPROVED INVESTORS
 
 
Bank of America, N.A.

 
Nomura

 
Merrill Lynch

 
Lehman Brothers

 
Credit Suisse

 
Deutsche Bank

 
Citigroup

 
RBC Greenwich Capital
  JP Morgan Chase    Morgan Stanley    Goldman Sachs    Wachovia    Royal Bank
of Scotland    Duncan Williams    Any other financially responsible private
institution that Agent deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans. 

 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT H-1:  FORM OF TEMPORARY INCREASE REQUEST

Pursuant to Section 11.6 of the Amended and Restated Warehousing Credit and
Security Agreement, dated as of May 30, 2008 (as amended or restated from time
to time, and as any provision thereof may be waived, the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the Borrower,
the Agent and the Lenders, the Borrower hereby requests that the Lenders grant
the Borrower a temporary increase in the Commitment of [$____________],
commencing on [___________, 20__] and ending on [___________, 20__] (the
“Temporary Increase”).
 
If the Temporary Increase is approved by the Lenders, the Borrower shall deliver
to the Agent a completed and executed Temporary Increase Agreement in
substantially the form appended to the Credit Agreement as Exhibit H-2 (with
such changes as the Agent, in its sole discretion, shall deem necessary), and
completed and executed Temporary Increase Credit Notes in substantially the form
appended to the Credit Agreement as Exhibit H-3 (with such changes as the Agent,
in its sole discretion, shall deem necessary), each containing such provisions
as required by the Lenders for such Temporary Increase and such other items as
are required by the Agent and Lenders as conditions to such Temporary Increase.
 
IN WITNESS WHEREOF, the Borrower has caused this Temporary Increase Request to
be duly executed by its Authorized Representatives as of [__________, 20__].
 
CENTERLINE MORTGAGE CAPITAL INC.
 
By:           ________________________________
          (Signature)
 
Its:           ________________________________
(Printed Name and Title)
 
      CENTERLINE MORTGAGE PARTNERS INC.
 
      By:                      ________________________________
           (Signature)
 
      Its:                      ________________________________
 (Printed Name and Title)

 
 

--------------------------------------------------------------------------------

 

EXHIBIT H-2:  FORM OF TEMPORARY INCREASE AGREEMENT

TEMPORARY INCREASE AGREEMENT
 
This Temporary Increase Agreement (this “Temporary Increase Agreement”) is
entered into as of [__________, 20__] by the undersigned pursuant to Section
11.6 of the Amended and Restated Warehousing Credit and Security Agreement,
dated as of May 30, 2008 (as amended or restated from time to time, and as any
provision thereof may be waived, the “Credit Agreement”, the terms defined
therein being used herein as therein defined), among the Borrower, the Agent and
the Lenders.
 
R E C I T A L S
 
A.           Pursuant to a Temporary Increase Request dated as of [_________,
20__], the Borrower has requested a Temporary Increase consisting of an increase
in the Commitment of $[_________] for a period commencing on [__________, 20__]
and ending on [_________, 20__] (the “Temporary Increase Period”), and the
Lenders have agreed to such Temporary Increase upon the terms and conditions set
forth in the Credit Agreement and this Temporary Increase Agreement.
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the Lenders, the Borrower and the Agent, the
Lenders, the Borrower and the Agent agree as follows:
 
1.           Amendment to Credit Agreement.  Solely from the date hereof through
the end of the Temporary Increase Period:
 
(a)           the definition of Commitment in the Credit Agreement shall be
replaced with the following:
 
“Commitment” means the commitment of the Lenders to make Advances hereunder in
an aggregate principal amount at any time outstanding that shall not exceed an
amount equal to $[150,000,000 plus amount of Temporary Increase], subject to any
increases or decreases in such amount pursuant to the terms of this Agreement;
provided, however, that no Lender’s portion of such Advances may ever exceed its
Commitment Amount.”
 
(b)           The Lenders’ Commitment Amounts shall be as set forth below:
 
Lender
Commitment Amount
Bank of America, N.A.
[$100,000,000.00 plus, if applicable, amount of Temporary Increase]
SunTrust Bank
[$50,000,000.00 plus, if applicable, amount of Temporary Increase]

 

 
 

--------------------------------------------------------------------------------

 

From and after the calendar day following the end of the Temporary Increase
Period, (a) Commitment shall be defined in the Credit Agreement as it was
defined immediately prior to the execution and delivery of this Temporary
Increase Agreement, (b) the Lenders’ Commitment Amounts shall revert to their
respective Commitment Amounts reflected on Schedule 1 to the Credit Agreement,
(c) this Temporary Increase Agreement shall be of no further force and effect,
and (d) provided that there is not then outstanding any Default, the Temporary
Increase Notes (as defined below) will be returned to the Borrower marked
cancelled.
 
2.           Use of Proceeds.  The Borrowers hereby covenant and agree that the
Temporary Increase made available under this Temporary Increase Agreement shall
be used solely and exclusively by the Borrower in accordance with the terms of
this Temporary Increase Agreement and the Credit Agreement.
 
3.           Continuation of Credit Agreement and Loan Documents.  Except as
specifically amended by this Temporary Increase Agreement, the terms and
conditions of the Credit Agreement and the other Loan Documents shall continue
in full force and effect in accordance with their respective terms.
 
4.           Confirmation of Representations and Warranties.  The Borrowers
hereby jointly and severally confirm that (a) each representation and warranty
made under Section 5 of the Credit Agreement is true and correct at and as of
the date hereof, both with and without giving effect to the Temporary Increase
and the use of the proceeds thereof, except to the extent of changes resulting
from transactions contemplated and permitted by the Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate could not reasonably be expected to result in a
Material Adverse Change and except to the extent that such representations and
warranties relate expressly to an earlier date, (ii) no Material Adverse Change
has occurred from the date of the most recent financial statements submitted to
the Agent and the Lenders pursuant to the Credit Agreement, and (iii) there are
in existence no Defaults under the Credit Agreement.
 
5.           Conditions Precedent.  This Temporary Increase Agreement shall
become effective upon the completion or satisfaction of the following:  
 
(a)           The execution and delivery of this Temporary Increase Agreement by
the Borrower, the Agent and the Lenders.
 
(b)           The execution and delivery by the Borrower of promissory notes in
favor of each Lender evidencing the temporary increase in the Commitment
contemplated herein, each in the form attached hereto as Exhibit A (each a
“Temporary Increase Note”).
 
(c)           In addition to the fee required to be paid by the Borrowers
pursuant to Section 2.8(a) of the Credit Agreement, the Borrowers shall have
paid to the Agent (for the ratable benefit of the Lenders) a commitment fee for
the Temporary Increase for the duration of the Temporary Increase Period equal
to $[__________].
 

 
 

--------------------------------------------------------------------------------

 

(d)           Delivery by the Borrower of an opinion of counsel to the Borrower
regarding the due authorization, execution and delivery, and enforceability of
this Temporary Increase Agreement and each Temporary Increase Note against the
Borrower (to the extent that this Temporary Increase Agreement and the Temporary
Increase Notes are not substantially similar in form and substance to Exhibits
H-2 and Exhibit A to Exhibit H-2 attached to the Credit Agreement or if the
temporary increase in the Commitment contemplated herein exceeds $150,000,000),
which opinion shall be in form and substance reasonably satisfactory to the
Agent.  
 
(e)           Delivery by the Borrower of certificates of good standing of the
Borrower, certified by the Secretary of the State of Delaware, dated no earlier
than thirty (30) days prior to the date hereof.
 
6.           Miscellaneous.  This Temporary Increase Agreement may be executed
in any number of counterparts, all of which constitute one and the same
instrument.  This Temporary Increase Agreement shall be deemed to be a Loan
Document under and as defined in the Credit Agreement.
 
7           No Course of Dealing.  The Agent and the Lenders have entered into
this Temporary Increase Agreement on the express understanding with the Borrower
that in entering into this Temporary Increase Agreement, the Agent and the
Lenders are not establishing any course of dealing with the Borrower.  The
Agent’s and the Lenders’ rights to require strict performance with all of the
terms and conditions of the Credit Agreement and the other Loan Documents shall
not in any way be impaired by the execution of this Temporary Increase
Agreement.  None of the Agent and the Lenders shall be obligated in any manner
to execute any further agreement approving a Temporary Increase and if any
Temporary Increase Request is delivered in the future, such request may be
denied or conditioned upon such terms as the Lenders, in their unrestricted
discretion, may determine.
 
(Remainder of page intentionally left blank; signature page follows)
 
 
 
 

 
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have executed and delivered this Temporary
Increase Agreement as of the date first set forth above.
 
BORROWER:
 
CENTERLINE MORTGAGE CAPITAL INC.
 
By:          ________________________________
(Signature)
 
Its:          ________________________________
(Printed Name and Title)
 
 
 
     BORROWER:
 
     CENTERLINE MORTGAGE PARTNERS INC.
 
     By:    ________________________________
(Signature)
 
     Its:    ________________________________
(Printed Name and Title)
AGENT:
 
BANK OF AMERICA, N.A.
 
By:          ________________________________
(Signature)
 
Its:          ________________________________
(Printed Name and Title)
 
     LENDER:
 
     BANK OF AMERICA, N.A.
 
     By:     ________________________________
(Signature)
 
     Its:     ________________________________
(Printed Name and Title)
 
 
 
LENDER:
 
SUNTRUST BANK
 
By:          ________________________________
(Signature)
 
Its:          ________________________________
(Printed Name and Title)
 
 

 

 

 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT A TO EXHIBIT H-2:  FORM OF TEMPORARY INCREASE NOTE
 
Temporary Increase Note
 

 

$__________.00 
______________ 

 
FOR VALUE RECEIVED, the undersigned, CENTERLINE MORTGAGE CAPITAL INC., a
Delaware corporation AND CENTERLINE MORTGAGE PARTNERS INC., a Delaware
corporation (herein called the “Maker”), hereby promise to pay to the order of
[LENDER NAME] (the “Lender” or, together with its successors and assigns, the
“Holder”) whose principal place of business is [LENDER ADDRESS], or at such
other place as the Holder may designate from time to time, the principal sum of
[_____________________] Dollars [$________________], or so much thereof as may
have been advanced to the Maker under this Temporary Increase Note, together
with interest on the unpaid principal amount outstanding from time to time prior
to maturity at the rates and at the times specified in the Credit Agreement (as
defined below).
 
This Temporary Increase Note is issued pursuant to the terms and conditions of
the Amended and Restated Warehousing Credit and Security Agreement, dated as of
May 30, 2008 (as amended or restated from time to time, and as any provision
thereof may be waived, the “Credit Agreement”, the terms defined therein being
used herein as therein defined), among the Borrower, the Agent and the
Lenders.  The amounts advanced hereunder shall be further subject to the terms
and conditions of the Temporary Increase Agreement dated the date hereof
(“Temporary Increase Agreement”) among the Borrower, the Lenders and the
Agent.  The entire outstanding balance of principal, accrued interest, and other
fees and charges under this Temporary Increase Note shall be due and payable on
the earliest of (i) the end of the Temporary Increase Period (as defined in the
Temporary Increase Agreement), (ii) upon acceleration of the Obligations, or
(iii) the Maturity Date, as applicable.  
 
This Temporary Increase Note is a Note as defined in the Credit Agreement and is
entitled to the benefits thereof.  Reference is hereby made to the Credit
Agreement (which is incorporated herein by reference as fully and with the same
effect as if set forth herein at length) for a description of the Collateral, a
statement of the covenants and agreements, a statement of the rights and
remedies and securities afforded thereby and other matters contained therein.
 
This Temporary Increase Note may be prepaid in whole or in part at any time
without premium or penalty.
 
Should this Temporary Increase Note be placed in the hands of attorneys for
collection, the Borrower agrees to pay, in addition to principal and interest,
fees and charges due under the Agreement, and all costs of collecting this
Temporary Increase Note, including reasonable attorneys’ fees and expenses.
 

 
 

--------------------------------------------------------------------------------

 

This Temporary Increase Note shall be construed and enforced in accordance with
the laws of the State of New York, without reference to its principles of
conflicts of law, and applicable federal laws of the United States of America.
 
This Temporary Increase Note is secured by all security agreements, collateral
assignments, deeds of trust and lien instruments executed by the Borrower in
favor of the Agent for the benefit of the Lenders, or executed by any other
Person as security for this Temporary Increase Note, including any executed
prior to, simultaneously with, or after the date of this Temporary Increase
Note.
 
The Borrower and any and each co-maker, guarantor, accommodation party, endorser
or other Person liable for the payment or collection of this Temporary Increase
Note expressly waive, except as expressly provided for in the Agreement, Notice,
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, bringing of suit, and diligence in taking any action to
collect amounts called for hereunder and in the handling of Collateral at any
time existing as security in connection herewith, and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any Notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder or in connection
with any Lien at any time had or existing as security for any amount called for
hereunder.
 
It is the intention of the parties hereto to conform strictly to usury laws
applicable to the Lender.  Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the United States
of America and the State of New York), then, in that event, notwithstanding
anything to the contrary herein or in the Agreement or in any other Loan
Document or agreement entered into in connection with or as security for this
Temporary Increase Note, it is agreed as follows:  (i) the aggregate of all
consideration which constitutes interest under law applicable to the Lender that
is contracted for, taken, reserved, charged, or received herein or under the
Agreement or under any of the other aforesaid Loan Documents or agreements or
otherwise in connection herewith shall under no circumstances exceed the maximum
amount allowed by such applicable law, and any excess shall be credited by the
Lender on the principal amount of the Obligations (or, if the principal amount
of the Obligations shall have been paid in full, refunded by the Lender to the
Borrower, as required); and (ii) in the event that the maturity of this
Temporary Increase Note is accelerated by reason of an election of the Lender
resulting from any Event of Default under the Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to the Lender may never include more
than the maximum amount allowed by such applicable law, and excess interest, if
any, provided for in the Agreement or otherwise shall be canceled automatically
as of the date of such acceleration or prepayment and, if theretofore paid,
shall be credited by the Lender on the principal amount of the Obligations (or,
if the principal amount of the Obligations shall have been paid in full,
refunded by the Lender to the Borrower, as required).  Without limiting the
foregoing, all calculations of the rate of interest taken, reserved, contracted
for, charged, received or provided for under this Temporary Increase Note or any
of the Loan Documents which are
 

 
 

--------------------------------------------------------------------------------

 

made for the purpose of determining whether the interest rate exceeds the
Maximum Rate shall be made, to the extent allowed by law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated term of the loan evidenced hereby, all interest at any time taken,
reserved, contracted for, charged, received, or provided for under this
Temporary Increase Note of any of the Loan Documents.
 
IN WITNESS WHEREOF, the Borrower has caused this Temporary Increase Note to be
duly executed by its Authorized Representatives as of the date first written
above.
 
CENTERLINE MORTGAGE CAPITAL INC.
 
By:           ________________________________
                 (Signature)
 
Its:           ________________________________
 (Printed Name and Title)
 
     CENTERLINE MORTGAGE PARTNERS INC.
 
     By:   ________________________________
(Signature)
 
     Its:   ________________________________
(Printed Name and Title)

 
 

--------------------------------------------------------------------------------

 

Schedule 5.1 - Subsidiaries
 
Neither CMP nor CMC has Subsidiaries.
 
 
 

 

Schedule 5.1 - Subsidiaries
 
 

--------------------------------------------------------------------------------

 

Schedule 5.4 - Litigation

Forrest Eugene McElroy v. CR Boggs Financial Services, Inc., Crossroads
Investors, Centerline Capital Group, Inc., and Chartermac Mortgage Capital Group
et al., Case No. CV08-1127,  Superior Court for the State of California, County
of Yolo, filed May 15, 2008.  The claims involving Borrower relate to the
foreclosure of a mechanic’s lien.
 
 
 

 

Schedule 5.4 - Litigation
 
 

--------------------------------------------------------------------------------

 

Schedule 5.14 – Assumed Names
 
None.
 

 
 
 

 
Schedule 5.14 – Assumed Names
 
 

--------------------------------------------------------------------------------

 

Schedule 5.17 – Authorized Representatives

Below is a list of the Authorized Representatives of CMC and CMP

Name
Office
Marc Schnitzer
Chairman
Bryan Carr
Managing Director
Robert Levy
Managing Director
J. Larry Duggins
Chief Executive Officer
Matthew Stern
Managing Director
Alan Steinmetz
Secretary and Senior Vice President
Ricka Moore
Senior Vice President
Vanessa Howes
Senior Vice President
Mary Ellen Ryan
Vice President
Marilyn Stigliano
Vice President
Ivana Pace
Associate
Randy Hering
Assistant Vice President

 
 
 

 
Schedule 5.17 – Authorized Representatives
 
 

--------------------------------------------------------------------------------

 

Schedule 5.21 – Certain Transactions

1.
Services Agreement dated May 6, 2005 between CMC and CMP.

2.
CMC and CMP originate loans for American Mortgage Acceptance Company and other
partnerships and other entities organized or managed by Centerline Capital
Group, Inc. and its affiliates or in which partnerships or other entities
organized or managed by Centerline Capital Group, Inc. or its affiliates are
directly or indirectly partners or members.

3.
CMC and CMP reimburse Centerline Capital Group, Inc. and its affiliates for
expenses incurred on their behalf.

4.
Subservicing Agreement dated January 1, 2007 between CMC and Centerline
Servicing, Inc. (formerly known as ARCap Servicing, Inc.)

 
 
 

 
Schedule 5.21 – Certain Transactions
 
 

--------------------------------------------------------------------------------

 

Schedule 5.24 – Servicing Portfolio

See attached.
 
 
 
 

 
Schedule 5.24 – Servicing Portfolio
 
 

--------------------------------------------------------------------------------

 

Schedule 5.26 –
Ownership, Subsidiaries and Taxpayer Identification Numbers
 

i. 
Below is a list of stockholders of CMC as of December 11, 2006 and a description
each entity’s ownership interests:
         
Entity
Class Of Shares
No. of Shares
 
Centerline Capital Group Inc.
Class A Common Stock
97,972
 
Centerline Capital Group Inc.
Common Stock
5,575

 

 
Below is a list of stockholders of CMP as of December 11, 2006 and a description
each entity’s ownership interests:
         
Entity
Class Of Shares
No. of Shares
 
Centerline Capital Group Inc.
Common Stock
100
                  Neither CMP nor CMC has subsidiaries. 

 
 

ii. 
Tax Payer Identification Information 
         
Entity
Taxpayer Identification No.
State Organizational No.
 
CMC
13-3602661
2254436 (DE)
 
CMP
20-2867543
3956483 (DE)

 
 
 

 

Schedule 5.26 -  Ownership, Subsidiaries and Taxpayer Identification Numbers

 
 

--------------------------------------------------------------------------------

 

Schedule 6.8 – Insurance

Company
Type
Policy
Lloyd’s of London
Mortgage Bankers Bond
SUA 2865
Lloyd’s of London
Mortgage Bankers Bond –Excess
PCEN00907
Lloyd’s of London
Force Placed / Foreclosed / Repossessed Property
B066459422A07
Twin City Fire Insurance Company
Worker’s Compensation
13WBTI9512
Federal Insurance Company
Property/General Liability/
3576-28-58
Federal Insurance Company
Auto
7354-89-92
Federal Insurance Company
Umbrella
7921-95-94
Fireman’s Fund Insurance Company
Excess Umbrella
SHX-000-7883-1039
National Union Fire Insurance Company of Pittsburgh, Pa.
Directors & Officers / General Partnership Liability
000588749
XL Specialty Insurance Company
Excess Directors & Officers/General Partnership Liability
ELU101031-07
Federal Insurance Company
Excess Directors & Officers/General Partnership Liability
8209-2146
 
Federal Insurance Company
Directors & Officers Side A – DIC
8209-2138
Vigilant Insurance Company
Employment Practices Liability
6803-6151
Illinois National Insurance Company
Corporate Counsel Professional Liab.
000600336
Illinois National Insurance Company
Fiduciary Liability
438-23-13
National Union Fire Insurance Co. of Pittsburgh, Pa.
Professional Liability
186-12-41
American Casualty Company of Reading PA
Excess Professional Liability
287168898
Zurich American Insurance Company
Excess Professional Liability
EOC 9156845 00

 
 

 

Schedule 6.8 – Insurance
 
 

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Schedule 6.10 – Indebtedness of Borrower and its Subsidiaries

1.
Multi-family ASAP Plus Agreements dated June 10, 2005 and December 12, 2006
between Centerline Mortgage Capital Inc. and Fannie Mae.

2.
See also schedule 7.16.

 
 
 
 

 
Schedule 6.10 – Indebtedness of Borrower
 
 

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Schedule 7.16 – Other Indebtedness
 

  Below is a list of Equipment leases:     
(ii)
Below is a list of Equipment leases:

 
Leasing Company
Lease Number
Equipment Type
Location
De Lage Landen
24605892
Copier
Atlanta, GA-In Storage
       
CitiCapital (transferred to CIT)
910-0004631-00
Copier
Vienna, VA
CIT
900-0048594-000
Copier
Vienna, VA
CIT
900-0042260-000
Copier
Irving, TX
Pitney Bowes
2507714
Postage Meter
Irving, TX
       
IKON
1259215-1704702
Copier
Irvine, CA
PBCC
5655908
Postage Meter
Irvine, CA
De Lage Landen
24429267
Fax
Jersey City, NJ
De Lage Landen
24488474
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24497177
Copier/Scanner/Printer
Jersey City, NJ
Pitney Bowes
258160
Postage Meter
Jersey City, NJ
De Lage Landen
24580495
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24628187
Fax
Jersey City, NJ
De Lage Landen
24628257
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24672816
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24628257
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24667704
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24699786
Copier/Scanner/Printer
Jersey City, NJ
Pitney Bowes
8170715
Overnite Pkgs. Scanner
Jersey City, NJ
CIT
900-004-43986
Copier
Metairie, LA—In Storage
IKON
1259215-1721480
Copier
San Francisco, CA
Pitney Bowes
6065528
Postage Meter
San Francisco, CA
CIT
900-0043986-000
Copier
San Rafael, CA
Pitney Bowes
5218319
Postage Meter
San Rafael, CA

 
 

 

Schedule 7.16 – Other Indebtedness
 
 

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Schedule 7.17 – Other Liens

There are outstanding liens in connection with or as noted below:

 
Leasing Company
Lease Number
Equipment Type
Location
De Lage Landen
24605892
Copier
Atlanta, GA-In Storage
       
CitiCapital (transferred to CIT)
910-0004631-00
Copier
Vienna, VA
CIT
900-0048594-000
Copier
Vienna, VA
CIT
900-0042260-000
Copier
Irving, TX
Pitney Bowes
2507714
Postage Meter
Irving, TX
       
IKON
1259215-1704702
Copier
Irvine, CA
PBCC
5655908
Postage Meter
Irvine, CA
De Lage Landen
24429267
Fax
Jersey City, NJ
De Lage Landen
24488474
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24497177
Copier/Scanner/Printer
Jersey City, NJ
Pitney Bowes
258160
Postage Meter
Jersey City, NJ
De Lage Landen
24580495
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24628187
Fax
Jersey City, NJ
De Lage Landen
24628257
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24672816
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24628257
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24667704
Copier/Scanner/Printer
Jersey City, NJ
De Lage Landen
24699786
Copier/Scanner/Printer
Jersey City, NJ
Pitney Bowes
8170715
Overnite Pkgs. Scanner
Jersey City, NJ
CIT
900-004-43986
Copier
Metairie, LA—In Storage
IKON
1259215-1721480
Copier
San Francisco, CA
Pitney Bowes
6065528
Postage Meter
San Francisco, CA
CIT
900-0043986-000
Copier
San Rafael, CA
Pitney Bowes
5218319
Postage Meter
San Rafael, CA
Avaya
102124323
Phone System
San Rafael, CA

Schedule 7.17 – Other Liens
 

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