exh10-1.htm


  
    EXHIBIT
10.1

     

    Second
Amendment

    To
Amended and Restated Revolving

    Credit
and Term Loan Agreement

    


    This
SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN
AGREEMENT (this “Amendment”) is entered into as of May 15, 2009, by and
among:  Centerline Holding Company and Centerline Capital Group Inc.
(collectively, the “Borrowers”); those Persons listed as Guarantors on Schedule 1 hereto
(each, a “Guarantor,” and, collectively, the “Guarantors”); and, pursuant to
Section 23.1 of
the Loan Agreement (as defined below), those Lenders constituting the Required
Lenders, each as set forth on a counterpart signature page hereto, substantially
in the form of Schedule 2 hereto
(the “Required Lenders”).

     

    RECITALS

     

    Reference
is made to the following facts that constitute the background of this
Amendment:

     

    A.           The
parties hereto, among others, have entered into that certain Amended and
Restated Revolving Credit and Term Loan Agreement, dated as of December 19, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”).  Capitalized terms used herein and not otherwise
defined herein shall have the same meanings herein as ascribed to them in the
Loan Agreement.

     

    B.           The
Borrowers have requested certain consents and amendments to the Loan Agreement
that will (a) enable the Borrowers to increase the net worth of CMP by
transferring certain Freddie Mac mortgage servicing rights from CMC to CMP and
(b) revise the definition of “Net Worth” to address changes in the generally
accepted accounting principles promulgated or adopted by the Financial
Accounting Standards Board for the treatment of minority interests as reflected
in the Statement of Financial Accounting Standards No. 160 (“FAS
160”).

     

    C.           To
implement the foregoing modifications, the Borrowers, the Guarantors, the
Administrative Agent and the Required Lenders agree that certain sections of the
Loan Agreement should be amended on the terms and conditions set forth in this
Amendment.

     

    NOW,
THEREFORE, in consideration of the foregoing recitals and of the
representations, warranties, covenants and conditions set forth herein and in
the Loan Agreement, and for other valuable consideration the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as
follows:

    


    Section
1.                      Amendment to Definition of
Net Worth.  In recognition of the adoption of FAS 160, the
definition of “Net Worth” set forth in Section 1.1.2 of the
Loan Agreement is hereby amended to delete the struckthrough language and
include the double underlined and bold language in the following:

    


    Net Worth. CHC’s
total shareholders’
equity less non-controlling interests as
set forth on the most recent balance sheet of CHC in accordance with GAAP as
adjusted in the following manner, in each case, as such adjustment is approved
by the Administrative Agent in its reasonable discretion: (i) by adding the
amount attributable to Reclassified CRA Shares on the balance sheet of CHC to
the extent not already included therein, (ii) by adding any charge to shareholders’
equity based on (A) the difference between fair value of the Reclassified CRA
Shares as of the date on which such shares required reclassification and the
carrying basis of such shares, and (B) the difference between the fair value of
the Reclassified CRA Shares as of the date on which such shares required
reclassification and the future redemption price of such shares, and (iii) by
eliminating the increase or decrease to shareholders’
equity caused by the consolidation of Centerline High Yield CMBS Fund I LLC,
Centerline High Yield CMBS Fund II LLC, Centerline High Yield CMBS Fund III LLC
and Centerline Real Estate Special Situations Mortgage Fund LLC (collectively,
the “Consolidated Funds”) solely because of the application of FIN
46.  At such time as changes in GAAP require a material alteration in
the calculation of CHC’s Net Worth, shareholder equity or other similar
measurements of CHC’s equity value, including, without limitation, in the event
GAAP requires the calculation of so-called “controlling” and “non-controlling”
equity, the Administrative Agent, the Borrowers and the Guarantors shall
negotiate in good faith to revise the definition of Net Worth and to re-set the
Net Worth covenant in Section 10.14 in
order to continue to measure the economic health of CHC in a manner
substantially equivalent to the manner in which CHC’s economic health is
measured by the Net Worth covenant set forth in Section 10.14 on the
Closing Date.  Following such changes in GAAP, and prior to the
Administrative Agent, the Borrowers and the Guarantors agreeing to such
revisions and re-set of the Net Worth covenant in Section 10.14, the
definition of Net Worth and Section 10.14 in
effect on the Closing Date shall continue to apply and for purposes of
calculating Net Worth and compliance with Section 10.14 the
Borrowers shall prepare supplements to their GAAP financial statements allowing
the calculation of covenant compliance in accordance with GAAP as in effect on
the Closing Date.

     

     

     

    
      
        
        

      

      
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    Section
2.                      Amendment to Definition of
GAAP.  In connection with the adoption of FAS 160, the
definition of “GAAP” set forth in Section 1.1.2 of the
Loan Agreement is hereby amended to allow for the preparation of financial
statements in accordance with FAS 160.

     

    Section
3.                      Consent to Transfer of
Assets from CMC to CMP.  In accordance with Section 10.4.2(a) of
the Loan Agreement, and in reliance upon the description of such transaction
provided to the Agent in that certain Letter Agreement re: Collateral for
Reimbursement Obligations under Master Agreements with Freddie Mac, dated as of
April 30, 2009, by and among Freddie Mac and CMC, a copy of which is attached
hereto as Schedule
3 (the “Letter Agreement”), the Required Lenders hereby consent to CMC’s
transfer of those certain mortgage servicing rights of CMC relating to its
business with Freddie Mac, as set forth on Schedule 4 hereto
(the “Freddie MSRs”), to CMP in connection with Freddie Mac permitting CMP to
originate and service loans for Freddie Mac without obtaining additional letters
of credit or third party guarantees in support of CMP’s credit.

     

    Section
4.                      Representations and
Warranties.  The Borrowers and Guarantors, jointly and
severally, represent and warrant to the Lenders, the Issuing Bank and the
Administrative Agent as of the date of this Amendment that: (a) other than on
account of certain accounts payable advances made on behalf of various funds and
the protective advances made to a property that does not support the Bond
Transaction, each as more fully described in that certain email, dated as of
March 18, 2009, from Eliza Kwong, no Default is in existence on the date hereof,
or will result from the execution and delivery of this Amendment or the
consummation of any transactions contemplated hereby; (b) each of the
representations and warranties of the Borrowers and the Guarantors in the Loan
Agreement and the other Loan Documents is true and correct in all material
respects on the effective date of this Amendment (except for representations and
warranties limited as to time or with respect to a specific event, which
representations and warranties shall continue to be limited to such time or
event); and (c) this Amendment and the Loan Agreement are legal, valid and
binding agreements of the Borrowers and the Guarantors and are enforceable
against them in accordance with their terms.

     

    Section
5.                      Ratification.  Except
as hereby amended, the Loan Agreement, all other Loan Documents and each
provision thereof are hereby ratified and confirmed in every respect and shall
continue in full force and effect, and, except as specified herein, this
Amendment shall not be, and shall not be deemed to be, a waiver of any Default
or of any covenant, term or provision of the Loan Agreement or the other Loan
Documents.  In furtherance of the foregoing ratification, by executing
this Amendment in the spaces provided below, each of the Guarantors, on a joint
and several basis, hereby absolutely and unconditionally (a) reaffirms its
obligations under the Guaranties, and (b) absolutely and unconditionally
consents to (i) the execution and delivery by the Borrowers of this Amendment,
(ii) the continued implementation and consummation of arrangements and
transactions contemplated by the Loan Agreement (including, without limitation,
as amended or waived hereby) and the other Loan Documents, and (iii) the
performance and observance by each Borrower and each Guarantor of all of its
respective agreements, covenants, duties and obligations under the Loan
Agreement (including, without limitation, as amended hereby) and the other Loan
Documents.

     

    Section
6.                      Conditions
Precedent.  The agreements set forth in this Amendment are
conditional and this Amendment shall not be effective until (i) receipt by the
Administrative Agent of a fully-executed counterpart of this Amendment and (ii)
payment by the Borrowers of all of the Administrative Agent’s reasonable fees
associated with the preparation, negotiation, execution, delivery and
administration of this Amendment and the Loan Agreement accrued through the date
hereof, including without limitation, the Administrative Agent’s reasonable
attorneys’ fees billed and outstanding through the date hereof as reflected on
the Borrowers’ Serengeti e-billing system..

     

     

    
      
        
        

      

      
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    Section
7.                      Counterparts.  This
Amendment may be executed and delivered in any number of counterparts with the
same effect as if the signatures on each counterpart were upon the same
instrument.  Any counterpart delivered by facsimile or by other
electronic method of transmission shall be deemed an original signature
thereto.

     

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

     

    Section
9.                                GOVERNING
LAW.  THIS AMENDMENT SHALL BE DEEMED TO CONSTITUTE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK, INCLUDING ARTICLE 5 OF THE UCC,
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO ITS CONFLICTS OF LAW
RULES).

     

    Section
10.                      Successors and
Assigns.  This Amendment shall be binding upon each of the
Borrowers, the Guarantors, the Lenders, the Issuing Bank, the Administrative
Agent, the Agents and their respective successors and assigns, and shall inure
to the benefit of each such Person and their permitted successors and
assigns.

     

    Section
11.                      Headings.  Section
headings in this Amendment are included herein for convenience of reference only
and shall not constitute a part of this Amendment for any other
purpose.

     

    Section
12.                      Expenses.  Each
Borrower jointly and severally agrees to promptly reimburse the Administrative
Agent for all expenses, including, without limitation, reasonable fees and
expenses of outside legal counsel, such Person has heretofore or hereafter
incurred or incurs in connection with the preparation, negotiation and execution
of this Amendment and all other instruments, documents and agreements executed
and delivered in connection with this Amendment.

     

    Section
13.                      Integration.  This
Amendment contains the entire understanding of the parties hereto and with any
other Lenders and parties to the Loan Agreement with regard to the subject
matter contained herein.  This Amendment supersedes all prior or
contemporaneous negotiations, promises, covenants, agreements and
representations of every nature whatsoever with respect to the matters referred
to in this Amendment, all of which have become merged and finally integrated
into this Amendment.  Each of the parties hereto understands that in
the event of any subsequent litigation, controversy or dispute concerning any of
the terms, conditions or provisions of this Amendment, no party shall be
entitled to offer or introduce into evidence any oral promises or oral
agreements between the parties relating to the subject matter of this Amendment
not included or referred to herein and not reflected by a writing included or
referred to herein.

     

    Section
14.                      Waiver and
Release.

    


    (a)           The
Borrowers and the Guarantors acknowledge and agree that, to their knowledge, as
of the date hereof:  (i) none of the Borrowers or Guarantors have any
claim or cause of action against the Administrative Agent or the Lenders arising
out of, under or in any way relating to the Loan Agreement or the Loan Documents
(including this Amendment), any documents, instruments, agreements, dealings or
other matters in connection with the Loan Documents, the transactions
contemplated by the Loan Documents, or any actions taken or not taken by the
Administrative Agent or the Lenders in connection therewith; (ii) none of the
Borrowers or the Guarantors have any offset rights, counterclaims or defenses of
any kind against payment and performance of the obligations under the Loan
Documents; and (iii) the Administrative Agent and the Lenders have heretofore
properly performed and satisfied in a timely manner all of their obligations to
the Borrowers and the Guarantors under the Loan Documents.

    


    (b)           In
consideration of the amendments and consents provided by and the covenants of
the Administrative Agent and the Lenders herein, the Borrowers and the
Guarantors agree to eliminate any possibility that any past conditions, acts,
omission, events, circumstances or matters, of which any of the Borrowers or
Guarantors have knowledge as of the date hereof, would impair or otherwise
adversely affect any of the rights, interests, contracts, collateral security or
rights and remedies of the Administrative Agent or the Lenders under the Loan
Documents.  Therefore, each of the Borrowers and the Guarantors, on
their own behalf and on behalf of each of their respective successors and
assigns, hereby waives, releases and discharges the Administrative Agent and the
Lenders, from any and all claims, demands, actions or causes of action, of which
any of the Borrowers or Guarantors have knowledge on or before the date hereof
and arising out of, under or in any way relating to the Loan Documents
(including this Amendment), any documents instruments, agreements, dealings or
other matters connected with the Loan Documents, the transactions contemplated
by the Loan Documents or any actions taken or not taken by the Administrative
Agent or the Lenders in connection therewith, including, without limitation, all
matters, claims, transactions or things occurring on or prior to the date hereof
of which any of the Borrowers or Guarantors have knowledge.  The
waivers, releases and discharges in this paragraph shall be effective regardless
of any other event that may occur or not occur prior to, or on or after the date
hereof.

     

     

    
      
        
        

      

      
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    Section
15.                      Jury Trial
Waiver.  THE BORROWERS, GUARANTORS, ADMINISTRATIVE AGENT AND
LENDERS BY ACCEPTANCE OF THIS AMENDMENT MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECOND
AMENDMENT, THE LOAN AGREEMENT, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF ANY AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, ARISING OUT OF TORT, STRICT LIABILITY,
CONTRACT OR ANY OTHER LAW, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.

     

    


     

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blank; signature pages follow]

     


    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties have caused this Amendment to be duly executed by
their duly authorized officers or representatives, all as of the date first
above written.

    


    BORROWERS:         CENTERLINE
HOLDING COMPANY

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer and President

     

    CENTERLINE
CAPITAL GROUP INC.

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    


     

    (Signatures
continued on next page)

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    GUARANTORS:       CENTERLINE
CAPITAL COMPANY LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer and President

     

    CENTERLINE
AFFORDABLE HOUSING ADVISORS LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    CENTERLINE/AC
INVESTORS LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    CENTERLINE
HOLDING TRUST

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    CENTERLINE
INVESTORS I LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    CENTERLINE
MANAGER LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    CENTERLINE
GUARANTEED MANAGER LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    


     

    (Signatures
continued on next page)

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    GUARANTORS
(CONT.):   CENTERLINE REIT INC.

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chairman

     

    CENTERLINE
SERVICING INC.

     

    


    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chairman

     

    CENTERLINE
FINANCE CORPORATION

     

    


    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chairman

     

    CENTERLINE
INVESTOR LP LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer and President

     

     CENTERLINE
INVESTOR LP II LLC

    


    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Executive Managing Director

     

    CENTERLINE
CREDIT MANAGEMENT LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer and President

     

    CM
INVESTOR LLC

     

    By:      /s/
Marc D. Schnitzer

          Name:
Marc D. Schnitzer

          Title:
Chief Executive Officer

     

    


     

    (Signatures
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    CENTERLINE
SERIES M INVESTOR LLC

    By:  Centerline
Affordable Housing Advisors LLC,

            its
sole member

     

    By:      /s/
Marc D. Schnitzer

    Name:
Marc D. Schnitzer

    Title:
Chief Executive Officer

     

    


     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
1

    


    Guarantors

     

    1.           Centerline
Investor LP

    2.           Centerline
Investor LP II,

    3.           CCC

    4.           CAHA

    5.           Centerline/AC

    6.           Holding
Trust

    7.           Centerline
Investors

    8.           Centerline
REIT Inc.

    9.           Centerline
Servicing Inc.

    10.         Centerline
Finance Corporation

    11.         Credit
Management

    12.         CM
Investor LLC

    13.         Centerline
Manager LLC

    14.         Centerline
Guaranteed Manager LLC

    15.         Centerline
Series M Investor LLC

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    Schedule
2

    


    Form of Signature Page for
Lenders included in Required Lenders for purposes of approving SECOND AMENDMENT
TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN
AGREEMENT:

    


    The
undersigned hereby evidences its agreement to the terms of the SECOND AMENDMENT
TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT, and the
consummation of the transactions contemplated thereby, amending that certain
Amended and Restated Revolving Credit and Term Loan Agreement, dated as of
December 19, 2008,  by and among Centerline Holding Company and
Centerline Capital Group Inc. as the Borrowers, the Guarantors described
therein, the Lenders described therein, and Bank of America, N.A., as
Administrative Agent and Issuing Bank, as such agreement is amended, restated,
supplemented or otherwise modified from time to time.

    


    


    [Name
of Lender]

    


    


    By:
________________________________

    Name:

    Title:

    


    


    Representing
_____% of all Term Loans outstanding, all Revolving Exposure, unused Revolving
Loan Commitments and unused Term Loan Commitments