Document:

Exhibit 10.6

Exhibit 10.6

EXECUTION COPY

	 	 	 
	DATE:

	 	March 5, 2010
	 
	 	 
	TO:

	 	CENTERLINE CAPITAL GROUP INC. (f/k/a Charter Mac Corporation)
	 

	 	(“Assignor”)
	 
	 
	ATTENTION:

	 	Andrew Weil
	 

	 	Executive Director
	 

	 	TELEPHONE: (212) 521-6394
	 

	 	FACSIMILE: (212) 751-3543
	 
	 	 
	TO:

	 	CENTERLINE GUARANTEED HOLDINGS LLC
	 

	 	(“Assignee”)
	 
	 
	ATTENTION:

	 	Andrew Weil
	 

	 	Executive Director
	 

	 	TELEPHONE: (212) 521-6394
	 

	 	FACSIMILE: (212) 751-3543
	 
	 	 
	FROM:

	 	MERRILL LYNCH CAPITAL SERVICES, INC.
	 

	 	(“Remaining Party” or “MLCS”)
	 

	 	 
	 
	 
	CONTACT:

	 	James Nacos

Municipal Capital Markets
	 

	 	TELEPHONE: (212) 449-7358
	 

	 	FACSMILE: (212) 449-9856
	 
	 	 
	RE:

	 	TRANSACTION ASSIGNMENT AGREEMENT FOR THE TRANSACTIONS SPECIFIED

ON SCHEDULE I ATTACHED HERETO

Dear Sir or Madam:

The purpose of this communication (the “Transaction Assignment Agreement”) dated as of March
5, 2010 (the “Assignment Trade Date”) is to set forth the terms and conditions of the assignment to
and assumption by Assignee of all of the rights and obligations of Assignor under the Confirmation
Letters (collectively, the “Confirmation Letters”) for the Transactions entered into between MLCS
and Assignor as specified on Schedule I attached hereto (collectively, the “Transactions”) in
connection with that certain ISDA Master Agreement, together with the Multicurrency-Cross Border
Schedule and Credit Support Annex thereto, between MLCS and Assignor dated as of December 31, 2001
and as amended, restated/or supplemented from time to time (the “Prior Agreement”).

Centerline Holding Company (“Guarantor”), as successor to CharterMac, a Delaware statutory
trust, unconditionally guaranteed the obligations of Assignor under the Prior Agreement and, by its
signature hereto, consents to and acknowledges the assignment to and assumption by Assignee of the
rights and obligations of Assignor thereunder and the obligations of Guarantor with respect to the
Transactions by virtue of that that certain Reaffirmation of Guarantee, dated as of the date hereof
(the “Reaffirmation”), among MLCS, Guarantor, Assignor and Assignee.

This Transaction Assignment Agreement (including Schedule I) supplements, forms part of, and
is subject to that certain ISDA Master Agreement, together with the Multicurrency-Cross Border
Schedule and Credit Support Annex thereto (as amended, restated and/or supplemented from time to
time, collectively, the “Agreement”), between MLCS and Assignee dated as of even date herewith.
All

 

 

 

provisions contained in the Agreement shall govern this Transaction Assignment Agreement and
the Transactions, except as expressly modified below.

Assignment Provisions. Upon the execution and delivery of this Transaction Assignment
Agreement by all the parties hereto, in consideration of the promises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties will be deemed to have agreed, on the Assignment Trade
Date, as follows:

	(a)	 	Assignor sells, assigns, transfers, and sets over to Assignee, its successors and permitted
assigns, all of its right, title, and interest in, to, under, and in respect of, the
Transactions including, without limitation, its rights to the collateral securing Remaining
Party under the Prior Agreement which it hereby directs Remaining Party to transfer to the
collateral account of Assignee which transfer shall be a condition precedent to the assignment
hereunder. Assignor releases and discharges Remaining Party from, and agrees not to make any
claim against Remaining Party with respect to, any obligations of Remaining Party arising and
to be performed under and in respect of the Transactions.

	(b)	 	Assignee accepts such sale, assignment and transfer and assumes and agrees to perform each
and every obligation of Assignor arising and to be performed under the Transactions on and
after the date hereof, with the same force and effect as if Assignee had been a party to the
Transactions originally, and with the exceptions that (i) the Independent Amounts specified
under each of the Confirmation Letters previously were amended by Assignor and MLCS pursuant
to that certain Amendment to Swap Documents, dated as of December 27, 2007, and now shall
apply to Assignee as set forth under the Credit Support Annex to the Multicurrency-Cross
Border Schedule to the Agreement and (ii) Assignee shall provide MLCS a monthly servicing
report regarding the payment status of each bond issue and any other indebtedness secured by
the Properties (as defined in the Agreement).

	(c)	 	Remaining Party consents to the sale, assignment and transfer by Assignor and the assumption
by Assignee referred to above. Remaining Party releases and discharges Assignor from, and
agrees not to make any claim against Assignor with respect to, any obligations of Assignor
arising and to be performed under and in respect of the Transactions on or after the date
hereof provided nothing herein shall affect the obligations of the Guarantor under the
Reaffirmation. Assignee agrees that Assignee shall be liable for any obligations in respect
of the Transactions whether or not such obligations relate to events or circumstances that
arose prior to the date hereof.

	(d)	 	Assignor hereby represents and warrants to, and covenants and agrees with, Assignee and
Remaining Party that: (i) it is duly organized, validly existing, and in good standing under
the law of the jurisdiction of its organization; (ii) it has all requisite power and authority
to assign and delegate to Assignee its rights and obligations under the Transactions as
provided herein and has taken all necessary action to authorize such assignment and
delegation; and (iii) such assignment and delegation is its legal, valid, and binding
obligations enforceable against Assignor in accordance with the terms hereof.

	(e)	 	Assignee hereby represents and warrants to, and covenants and agrees with, Assignor and
Remaining Party that: (i) it is duly organized, validly existing, and in good standing under
the law of the jurisdiction of its organization; (ii) it has all requisite power and authority
to assume the rights and obligations of Assignor under the Transactions as provided herein and
has taken all necessary action to authorize such assumption and performance; and (iii) such
assumption and the Transactions are its legal, valid, and binding obligations enforceable
against Assignee in accordance with the terms hereof.

 

 

 

	(f)	 	Remaining Party hereby consents to the termination of the Participation Agreement (as defined
in the Prior Agreement) by Assignee following its assignment to Assignee by Assignor on the
date hereof.

	 
	(g)	 	Account Details:

	 
	 	 	Payments to Remaining Party:       [PLEASE ADVISE]

	 
	 	 	Payments to Assignee:                    Not Applicable

[Remainder of page intentionally left blank]

 

 

 

Please confirm that the foregoing Transaction Assignment Agreement correct sets forth the
terms of our agreement by executing where specified below and returning to us by facsimile or
electronic transmission.

	 	 	 	 	 
	 	Yours sincerely,

MERRILL LYNCH CAPITAL SERVICES, INC., a

Delaware corporation

 	 
	 	By:  	/s/ Edward H. Curland
 	 
	 	 	Name:  	Edward H. Curland 	 
	 	 	Authorized Signatory 	 
	 

Accepted and Confirmed as of the

Assignment Trade Date written above:

CENTERLINE CAPITAL GROUP INC.,

a Delaware corporation, Assignor

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 

CENTERLINE GUARANTEED HOLDINGS LLC,

a Delaware limited liability company, Assignee

By: Centerline Capital Group Inc., its managing

member

	 	 	 	 	 
	 	 	 
	 	By:  	     /s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 

Acknowledged and Consented To By:

CENTERLINE HOLDING COMPANY,

a Delaware statutory trust, Guarantor

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and President 	 

 

 

 

	 	 	 	 	 

SCHEDULE I TO TRANSACTION ASSIGNMENT AGREEMENT

List of Transactions and Confirmation Letters assigned to and assumed by

Centerline Guaranteed Holdings LLC

	 	 	 	 	 
	Transaction Number	 	MLCS Administrative Number	 	Original Notional Amount
	 
	 	 	 	 
	004
	 	02MU00759	 	USD 75,576,609
	006
	 	03MU01716	 	USD 93,177,000
	008
	 	03MU02151	 	USD 60,610,000
	010
	 	04MU00899	 	USD 88,772,000
	012
	 	04MU01631	 	USD 9,294,715
	014
	 	04MU01934	 	USD 69,362,000Exhibit 10.7

	 	 	 	 	 

MASTER ASSIGNMENT, STABILIZATION, ASSIGNMENT ALLOCATION,

SERVICING AND ASSET MANAGEMENT AGREEMENT

DATED AS OF MARCH 5, 2010

 

 

 

	 	 	 	 	 
	ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION
	 	 	2	 
	 
	 	 	 	 
	1.1. Definitions
	 	 	2	 
	1.2. Rules of Interpretation
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 2 FORMATION OF GUARANTEED HOLDINGS ASSIGNMENT OF RECEIVABLES,
INTERESTS AND OTHER RIGHTS; FUND AND LOCAL PARTNERSHIP
ADVANCES
	 	 	13	 
	2.1. Formation of Guaranteed Holdings
	 	 	13	 
	2.2. Assignment of Receivables, Interests and Other Rights
	 	 	13	 
	2.3. Assignment of Certain Non-Member Manager Interests
	 	 	14	 
	2.4. Assignment of Certain Interests in Lower Tier Property Partnership
General Partners
	 	 	14	 
	2.5. Admission of Guaranteed Holdings
	 	 	14	 
	2.6. Use of Guaranteed Holdings Proceeds
	 	 	14	 
	2.7. Payment Direction and Assignment of Guaranteed Holdings Assigned Rights
	 	 	15	 
	2.8. Replacement of Former Guaranteed Manager with Guaranteed Manager
Former Guaranteed Manager shall assign to Guaranteed Manager all of its rights
as manager or managing member, as the case may be, of each of the Fund General
Partners and Special Limited Partners
	 	 	16	 
	2.9. Replacement of Members of Centerline Controlled Local General Partners
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 3 ASSIGNMENT OF EXISTING BTB SWAP AGREEMENTS , ISSUANCE OF REPLACEMENT GUARANTEED HOLDINGS SWAP AGREEMENTS , REAFFIRMATION
OF CHC GUARANTY AND TERMINATION OF ASSIGNMENT AND SUBROGATION AGREEMENTS
	 	 	16	 
	3.1. Assignment of Existing BTB Swap Agreement, Reaffirmation of Guaranty,
and Issuance of Replacement Swap
	 	 	16	 
	3.2. Termination of Assignment and Assumption Agreements
	 	 	17	 
	3.3. Assignment and Termination of Participation Agreement
	 	 	17	 
	3.4. Termination of CCG Investor Guarantees
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 4 PRINCIPAL REDUCTION AGREEMENTS
	 	 	17	 
	4.1. Bond Reductions
	 	 	17	 
	4.2. Calculation of the Principal Reduction Amounts
	 	 	17	 
	4.3. Sources for Funding the Principal Reduction Amounts
	 	 	18	 
	4.4. Interest Reductions
	 	 	19	 
	4.5. Payment of the Principal Reduction Amount
	 	 	19	 

 

 

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	 
	 	 	Page	 
	 
	 
	4.6. Recalculated Future Amortization Payments
	 	 	19	 
	4.7. Funding Annual Shortfalls
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 5 ASSET MANAGER AND REIMBURSEMENT FOR EXPENSES
	 	 	19	 
	5.1. Asset Manager and Management of Guaranteed Funds and Guaranteed
Partnerships
	 	 	19	 
	5.2. Notwithstanding anything herein to the contrary, Affiliates of Island
Capital may provide management services on the Properties subject to
replacement by MLCS on any Property in the event such Property does not meet
its Revised Debt Service Schedule payments
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 6 RESERVED
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 7 CONDITIONS PRECEDENT
	 	 	20	 
	7.1. Effectiveness
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 8 REPRESENTATIONS AND WARRANTIES
	 	 	21	 
	8.1. Representations and Warranties to MLCS
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 9 COVENANTS
	 	 	25	 
	9.1. Management of Investments
	 	 	26	 
	9.2. Information with Respect to Bonds
	 	 	26	 
	9.3. Fees and Loans
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 10 MISCELLANEOUS
	 	 	26	 
	10.1. Amendments and Waivers; Third Party Beneficiary
	 	 	26	 
	10.2. Notices and Other Communications; Facsimile Copies
	 	 	26	 
	10.3. Survival of Representations and Warranties
	 	 	27	 
	10.4. Successors and Assigns
	 	 	27	 
	10.5. Counterparts
	 	 	28	 
	10.6. Severability
	 	 	28	 
	10.7. OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK

	 	 	28	 
	10.8. Submission to Jurisdiction; Waivers
	 	 	28	 

	 	 	 
	SCHEDULE A

	 	List of Guaranteed Partnerships, Guaranteed Partnership GPs, Guaranteed Funds,
Guaranteed Fund GPs and Investor Return
Floor Agreements
	SCHEDULE B-1

	 	Non-Stabilized Local Partnerships

 

ii

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 	 
	 
	 	 	 	Page	 
	 
	 
	SCHEDULE B-2

	 	Stabilized Local Partnerships	 	 	 
	SCHEDULE C

	 	Properties Owned by the Guaranteed Local Partnerships	 	 	 
	SCHEDULE D

	 	Centerline Controlled General Partners	 	 	 
	SCHEDULE E

	 	Affiliated Local General Partners/Assignors	 	 	 
	 
	 	 	 	 	 
	EXHIBIT 2.2.1(a)

	 	Form of Assignment of Rights Agreement	 	 	 
	EXHIBIT 2.2.1(b)

	 	Form of Receivables Assignment and Assumption Agreement	 	 	 
	EXHIBIT 3.1(a)

	 	Form of Assignment Agreement	 	 	 
	EXHIBIT 3.1(b)

	 	Form of Guaranteed Holdings BTB Swap Agreement	 	 	 
	EXHIBIT 3.1(d)

	 	Form of Reaffirmation of Guarantee	 	 	 
	EXHIBIT 5.1

	 	Bond Servicing Agreement	 	 	 
	EXHIBIT 5.1.2

	 	Asset Management Services	 	 	 
	EXHIBIT 8.1.8

	 	Entity Ownership Chart	 	 	 
	EXHIBIT 8.1.10

	 	Guaranteed Holdings Assigned Rights	 	 	 
	EXHIBIT 8.1.11

	 	Projections	 	 	 
	EXHIBIT 8.1.12

	 	Local Partnership Voluntary Loans	 	 	 
	EXHIBIT 8.1.14

	 	UCC Financing Statements	 	 	 

 

iii

 

Exhibit 10.7

MASTER ASSIGNMENT, STABILIZATION, ASSIGNMENT ALLOCATION,

SERVICING AND ASSET MANAGEMENT AGREEMENT

THIS MASTER ASSIGNMENT, STABILIZATION, ASSIGNMENT ALLOCATION, SERVICING AND ASSET MANAGEMENT
AGREEMENT (this “Agreement”) is dated as of March 5, 2010 among CENTERLINE HOLDING COMPANY, a
Delaware statutory trust (“CHC”), CENTERLINE CAPITAL GROUP INC., a Delaware corporation (“CCG”),
CENTERLINE AFFORDABLE HOUSING ADVISORS LLC, a Delaware limited liability company (“CAHA”),
CENTERLINE GUARANTEED MANAGER II LLC, a Delaware limited liability company (“Guaranteed Manager”),
CENTERLINE GUARANTEED HOLDINGS LLC, a Delaware limited liability company (“Guaranteed Holdings”),
CENTERLINE MORTGAGE CAPITAL INC., a Delaware corporation (“CMC”) and CENTERLINE GUARANTEED MANAGER
LLC, a Delaware limited liability company (“ Former Guaranteed Manager”).

HABENDUM

WHEREAS, CCG through its Affiliate CAHA has sponsored, among other funds, the Guaranteed Funds,
each of which has as its sole limited partner the respective Guaranteed Partnership; and

WHEREAS, Merrill Lynch Capital Services, Inc., a Delaware corporation (“MLCS”) has entered
into Investor Return Floor Agreements (“IRFAs”) with each of the Guaranteed Partnerships,
which IRFAs are identified on Schedule A; and

WHEREAS, CCG has entered into that certain ISDA Master Agreement, dated as of December 31, 2001,
together with the Multicurrency-Cross Border Schedule to the Master Agreement, the ISDA Credit
Support Annex and Paragraph 13 to the Schedule to the ISDA Master Agreement and various
confirmation letters (the “Confirmation Letters”) (collectively, the “Existing BTB Swap
Agreements”), with MLCS with respect to the IRFAs, which Existing BTB Swap Agreements have been
guaranteed by CHC (the “CHC Guaranty”); and

WHEREAS, each of the Guaranteed Funds has acquired Tax Credit Investments in certain Local
Partnerships whose Properties are financed by tax-exempt and taxable bond obligations in which CHC
holds a continuing interest through the indirect ownership of a participating interest in the B
Certificates that were issued as part of the Bond Transaction, which obligations are listed on
Non-Stabilized Local Partnerships on Schedule B-1 and Stabilized Local Partnerships as
Schedule B-2 annexed hereto (collectively, the “Guaranteed Fund Bonds”); and

WHEREAS, CMC is the primary servicer with respect to the Guaranteed Fund Bonds and, as of the date
hereof, CSI is the subservicer with respect to the Guaranteed Fund Bonds and CAHA is the special
subservicer with respect to the Guaranteed Fund Bonds; and

WHEREAS, the parties hereto desire to enter into the agreements and covenants contained herein and
perform the obligations contemplated in this Agreement and the other agreements to be entered into
pursuant hereto; and

 

 

 

NOW, THEREFORE, in consideration for the covenants and agreements contained herein, the parties
hereto agree as follows:

ARTICLE 1

DEFINITIONS AND RULES OF INTERPRETATION

1.1. Definitions.

1.1.1 Definitions of Parties and Affiliates. For purposes of this Agreement the
respective parties hereto and certain of their Affiliates are defined as set forth below:

CAHA. Centerline Affordable Housing Advisors LLC, a Delaware limited liability company
(formerly known as Related Capital Company LLC and as CharterMac Capital LLC).

CCG. Centerline Capital Group Inc., a Delaware corporation (formerly known as Charter Mac
Corporation).

Centerline Controlled Entities. Collectively, CHC, CCG, CAHA, GP Holdings, Guaranteed
Manager, the Guaranteed Entities, the Middle Tier Entities and the Centerline Controlled General
Partners.

Centerline Controlled General Partners. Collectively, those Local General Partners that
are Affiliates of Centerline, and designated in Schedule D as a Centerline Controlled Local
General Partner.

Centerline Parties. Collectively, CHC, CCG, CAHA, Guaranteed Manager, Former Guaranteed
Manager, CMC and Guaranteed Holdings.

Centerline Global Entities. Collectively, CHC, CCG, CAHA, GP Holdings, Guaranteed Manager,
Former Guaranteed Manager, the Guaranteed Entities, the Middle Tier Entities, the Centerline
Controlled General Partners and the Local Partnerships.

CHC. Centerline Holding Company, a Delaware statutory trust (formerly known as
CharterMac).

CMC. Centerline Mortgage Capital Inc., a Delaware corporation.

CSI. Centerline Servicing Inc., a Delaware corporation.

Former Guaranteed Manager. Centerline Guaranteed Manager LLC, a Delaware limited liability
company.

GP Holdings. Centerline GP Holdings LLC, a Delaware limited liability company.

Guaranteed Entities. The Guaranteed Funds, the Guaranteed Fund GPs, the Guaranteed
Partnerships, the Guaranteed Partnership GPs and the Guaranteed SLPs.

 

2

 

Guaranteed Holdings. Centerline Guaranteed Holdings LLC, a Delaware limited liability
company.

Guaranteed Manager. Centerline Guaranteed Manager II LLC, a Delaware limited liability
company.

MLCS. Merrill Lynch Capital Services, Inc.

SPV I. Centerline Sponsor 2007-1 Securitization, LLC, a Delaware limited liability
company.

SPV II. Centerline Stabilization 2007-1 Securitization, LLC, a Delaware limited liability
company.

1.1.2 General Definitions. The following terms shall have the meanings set forth in
this Section or elsewhere in the provisions of this Agreement referred to below.

Affiliate. As to any Person, any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with, such Person. For the purposes of
this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”) as applied to any Person, means directly or
indirectly possessing the power (i) to vote 10% or more of the capital stock having ordinary voting
power for the election of directors of such Person, or (ii) to direct or cause the direction of the
management or policies of that Person, whether through the ownership of voting securities, by
agreement, or otherwise. Notwithstanding the foregoing, neither MLCS and its Affiliates nor Island
and its Affiliates shall be deemed to be “Affiliates” of any Centerline Party or any of their
respective Affiliates. For the avoidance of doubt, Centerline GP Holdings LLC (and its Affiliates)
shall be deemed to be Affiliates of the Centerline Parties (and each of their respective
Affiliates). As used herein, the term “Affiliated” has a meaning correlative to the term
“Affiliate”.

Affiliated Local General Partners. Those Local General Partners that are affiliated with
CCG.

Annex. The term as defined in Section 3.1(b).

Annual Servicing Fee. Shall mean the “annual servicing fee” referred to in Section V(L)(2)
of the Master Agreement Schedule.

Applicable Law. All applicable provisions of constitutions, statutes, rules, regulations
and orders of all governmental bodies and all orders and decrees of all courts, tribunals and
arbitrators.

Approved Expenses. The term as defined in Section 2.6.1(d).

Asset Management Services. Those services set forth in Exhibit 5.1.2.

Assigned BTB Transactions. The term as defined in Section 3.1(a).

Assignment Agreement. The term as defined in Section 3.1(a).

 

3

 

Assignment and Subrogation Agreements. Those Assignment and Subrogation Agreements
delivered by Guaranteed Manager to MLCS with respect to each Guaranteed Fund, pursuant to which
Guaranteed Manager pledged to MLCS its interest as managing member of the respective Guaranteed
Fund GPs and Guaranteed SLPs.

Assignment of Rights Agreement. The term as defined in Section 2.2.1(a).

B Certificates. Those certain series B certificates held by SPV I in connection with the
Bond Transaction.

Bankruptcy or Bankrupt. With respect to any Person, such Person’s making an assignment for
the benefit of creditors, becoming a party to any liquidation or dissolution action or proceeding
with respect to such Person or any bankruptcy, reorganization, insolvency or other proceeding for
the relief of financially distressed debtors with respect to such Person, or the appointment of a
receiver, liquidator, custodian or trustee for such Person or a substantial part of such Person’s
assets and, if any of the same occur involuntarily, the same is not dismissed, stayed or discharged
within 180 days; or the entry of an order for relief against such Person under the United States
Bankruptcy Code.

BOA Credit Agreement. The Revolving Credit and Term Loan Agreement dated as of December
27, 2007 by and among CHC, CCG, those Persons listed as guarantors thereto, Bank of America, N.A.
and the other lenders party thereto in their capacities as lenders and Bank of America, N.A., as
administrative agent, as the same has been amended to the date hereof, and as further amended as of
the date hereof, and as may be amended in the future.

Bond Reimbursement Agreement. That certain Reimbursement, Pledge and Security Agreement
dated as of December 1, 2007 between Freddie Mac and SPV I, as the same may be amended or modified
from time to time.

Bond Servicer. CMC, as servicer pursuant to the Bond Servicing Agreement, or any successor
thereto as servicer.

Bond Servicing Agreement. That certain Servicing Agreement dated as of December 1, 2007
between Freddie Mac and CMC, relating to the Bond Transaction, attached hereto as Exhibit
5.1.

Bond Transaction. The exchange of a portfolio of bonds from Centerline 2007-1 EIT
Securitization, LLC, Centerline 2007-1 SU Securitization, LLC and Centerline 2007-1 T
Securitization, LLC to Freddie Mac, pursuant to which Freddie Mac issued series A certificates and
the B certificates held as of the date hereof by SPV I for purposes of a securitization of such
portfolio that is guaranteed by Freddie Mac pursuant to that certain Bond Exchange and Sale
Agreement dated as of December 1, 2007 among Freddie Mac, Centerline 2007-1 EIT Securitization,
LLC, Centerline 2007-1 SU Securitization, LLC, Centerline 2007-1 T Securitization, LLC, SPV I and
SPV II, and the documents contemplated thereby.

Business Day. Any day other than a Saturday, Sunday or other day on which commercial banks
are authorized to close under the laws of, or are in fact closed in, the state of New York.

CAHA Reimbursement. The term as defined in Section 2.6.1(g).

 

4

 

Capital Contributions. With respect to any Guaranteed Entity, the capital contributions to
be made by its limited partners or members.

Capital Expenditures. Means the aggregate of all expenditures during any period for the
acquisition, leasing, construction, replacement, repair, substitution or improvement of fixed or
capital assets or additions to equipment, in each case required to be capitalized under GAAP.

Capital Transaction. Any transaction not in the ordinary course of business which results
in a Guaranteed Fund or Guaranteed Local Partnership receives cash or other consideration other
than Capital Contributions, including, without limitation, proceeds of sales or exchanges or other
dispositions of property, financings, and refinancings.

Cash Collateral. The collateral posted pursuant to the Credit Support Annex to support
CCG’s obligations under the Existing BTB Swap Agreements, as such amount may exist from time to
time.

Cash Collateral Amount. The term as defined in Section 4.3.1(a).

Cash Flow Needs. The term as defined in Section 2.6.1(c).

CCG Investor Guarantees. Means the guarantees issued by CCG to certain Guaranteed
Partnerships and their investors, which provide, in part, for guaranty obligations that are credit
enhanced by IRFAs.

CHC Guaranty. The guaranty as defined in the third paragraph of the Habendum.

Closing Date. The term as contemplated in Section 7.1.

Code. The Internal Revenue Code of 1986, as amended.

Confirmation Letters. Means the term as defined in the second paragraph of the Habendum.

Debt Service Coverage Ratio or DSCR. Means, unless otherwise stated within the indenture
with respect to a Guaranteed Fund Bond, the ratio of net operating income in each of three (3)
prior months to maximum principal and interest in any month on the applicable Guaranteed Fund Bond.

Debt Service Shortfall Payments. For any Guaranteed Local Partnership on any date on which
a scheduled principal payment, and/or a scheduled payment of accrued interest, is required to be
made on the related Guaranteed Fund Bonds, an amount equal to the lesser of:

(1) the amount of funds needed by such Guaranteed Local Partnership to enable it to pay the
full amount of such principal and/or interest payment on such scheduled payment date in accordance
with the documents governing the relevant Guaranteed Fund Bond (after taking into account all other
sources of funds available to such Guaranteed Local Partnership in accordance with such governing
documents to make such payment and to the extent such governing documents do not provide for a
priority with respect to such payments, it shall be deemed that such amount is after all other
expenses for the Guaranteed Local Partnership are paid); and

 

5

 

`

(2) the amount of such principal and/or interest payment that is then due and owing.

Disposition Fee. The disposition fee payable to Guaranteed Fund GP pursuant to the
respective Guaranteed Fund Agreement or any other similar or analogous fee.

Earn-Out Amount. The term as defined in Section 4.3.1(b).

Excluded Fee Rights. The term as contemplated in Section 2.2.2.

Existing BTB Swap Agreements. The agreements as defined in the third paragraph of the
Habendum.

Fee Rights. The term as defined in Section 2.1.1(i).

15-Year Compliance Period. The 15-year period specified in Section 42(i)(1) of the Code as
currently in effect as applicable to each building included in a Property.

Final True-Up Date has the meaning set forth in the respective Guaranteed Partnership
Agreements.

Freddie Mac. Federal Home Loan Mortgage Corporation, a shareholder-owned
government-sponsored enterprise organized and existing under the laws of the United States.

Freddie Mac Approval. The term as defined in Section 4.1.

Fund Cash Flow Needs. Means expenditures incurred by a Guaranteed Fund in connection with
the operations of the Guaranteed Fund or its general partner to the extent such expenditures exceed
the amounts available to the Fund for such purpose, including reserves held by a Guaranteed Fund
for such purpose.

Full Distribution Date. The date as of which all amounts owing to MLCS under the BTB Swap
Agreements have been paid and the obligations of MLCS under the IRFAs have terminated.

Fund Management Agreement. The Fund Management Agreement between Guaranteed Manager, the
Guaranteed Fund GPs as listed on Schedule A thereto and Centerline GP Holdings LLC, dated
as of March 5, 2010.

Fund Voluntary Loans. Loans made by the partners or other lenders permitted to make loans
to either the Guaranteed Funds or the Guaranteed Partnerships in order to pay expenses of the
Guaranteed Funds or Guaranteed Partnership or to advance funds to the Guaranteed Local Partnerships
pursuant to and as more fully defined in the Guaranteed Fund Agreements and Guaranteed Partnership
Agreements and referred to therein as “Voluntary Loans.”

GAAP. Principles that are (i) consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors and successors, as in effect from time to
time, and (ii) consistently applied with past financial statements of each Person adopting the same
principles, provided that in each case referred to in this definition of “GAAP” a certified public
accountant would, insofar as the use of such accounting principles is pertinent, be

 

6

 

in a position to deliver an unqualified opinion (other than qualifications regarding changes in
GAAP and as to normal year-end adjustments) as to financial statements in which such principles
have been properly applied.

Governmental Authority. Any foreign, federal, state, provincial, regional, local municipal
or other government, or any department, commission, board, bureau, agency, public authority or
instrumentality thereof, or any court or arbitrator.

Guarantee Payment Date Has the meaning set forth in the respective Guaranteed Partnership
Agreement.

Guaranteed Fund Agreements. The agreements of limited partnership of the Guaranteed Funds,
as may be amended from time to time.

Guaranteed Fund Bonds. Those bonds as defined in the fourth paragraph of the Habendum.

Guaranteed Fund GPs. The general partner of each of the Guaranteed Funds, from time to
time, each of which as of the date hereof is listed on Schedule A under the heading
Guaranteed Fund GPs.

Guaranteed Funds. Each of the limited partnerships listed on Schedule A under the
heading Guaranteed Funds.

Guaranteed Holdings Amount. The term as defined in Section 4.3.1(c).

Guaranteed Holdings Assigned Rights. The term as defined in Section 2.2.1(b).

Guaranteed Holdings BTB Swap Agreement. Has the meaning set forth in Section 3.1(b).

Guaranteed Holdings Operating Agreement. The Limited Company Agreement of Guaranteed
Holdings, dated as of the date hereof.

Guaranteed Holdings Proceeds. The terms as defined in Section 2.6.1.

Guaranteed Local Partnerships. Local Partnerships in which a Guaranteed Fund has an
ownership interest as a limited partner or through a Middle-Tier Entity.

Guaranteed LTGP. Centerline Guaranteed LTGP LLC.

Guaranteed Obligations. The term as defined in each of the respective Guaranteed
Partnership Agreements.

Guaranteed Partnership Agreements. The agreements of limited partnership of the Guaranteed
Partnerships, as may be amended from time to time.

Guaranteed Partnership. Each of the limited partnerships listed on Schedule A
under the heading Guaranteed Partnerships.

 

7

 

Guaranteed Partnership GPs. The general partner of each of the Guaranteed Partnerships
from time to time, each of which as of the date hereof is listed on Schedule A under the
heading Guaranteed Partnership GPs.

Guarantee Payment Date. The term as defined in each of the respective Guaranteed
Partnership Agreements.

Guaranteed SLPs. The special limited partners or special members of the Guaranteed Local
Partnerships, as defined in the respective Guaranteed Fund Agreement, each of which is related to a
Guaranteed Fund.

IRFA. Each MLCS Investor Return Floor Agreement as defined in each of the Guaranteed
Partnership Agreements and as set forth on Schedule A under the heading Investor Return
Floor Agreements.

ISDA. The International Swaps and Derivatives Association, Inc.

Island. Island Capital Company LLC, and its Subsidiaries.

Island Purchaser. C-III Capital Partners LLC, a Delaware limited liability company.

Island Recapitalization. The transaction being consummated, the actions being taken and the
conditions being satisfied respecting (x) the Purchase and Sale Agreement by and among Island
Purchaser, CHC, CCG, ARcap 2004-RR3 Resecuritization, Inc., ARcap 2005-RR5 Resecuritization, Inc,
Centerline Fund Management LLC, Centerline CMBS Fund II Management LLC, Centerline REIT Inc., CM
Investor LLC, CMC and Centerline Mortgage Partners Inc., contemporaneously with closing of this
Agreement, (y) the amendment and restatement of the BOA Credit Agreement and (z) the transaction
contemplated herein.

Lien. Any mortgage, pledge, security interest, hypothecation, assignment, lien (statutory
or other) or similar encumbrance.

Loan Receivables. The term defined in Section 2.2.1(b)(ii).

Local General Partners. The general partners or managing members of the Local
Partnerships.

Local Partnership Assigned Interests. The term as defined in Section 2.4.

Local Partnership Voluntary Loans. Means Voluntary Loans issued by a Guaranteed Fund to a
Local Partnership.

Local Partnerships. The term as defined in the definition of Tax Credit Investments.

Master Agreement. The term as defined in Section 3.1(b).

Master Agreement Schedule. The term as defined in Section 3.1(b).

Master Note. The promissory note issued by each Guaranteed Fund to Guaranteed Holdings to
evidence Fund Voluntary Loans, including Voluntary Loans advanced by the Centerline Parties

 

8

 

to the Guaranteed Fund prior to the deliver of the Receivables Assignment and Assumption Agreement.

Material Adverse Effect. An effect that results in or causes, or could reasonably be
expected to result in or cause, a material adverse effect on the business, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of any Person and its
Subsidiaries taken as a whole.

Middle-Tier Entity. A limited liability company, in which a Guaranteed Fund is a member
holding all or a portion of the membership interests in such Middle Tier Entity and which Middle
Tier Entity is a limited partner or member of a Local Partnership.

MLCS Assigned Interests. The Guaranteed Holdings Assigned Rights and the Local Partnership
Assigned Interests.

Modified Stabilization. With respect to each of the Guaranteed Fund Bonds, the achievement
by the underlying Property of Stabilization, provided however that in place of using a the Debt
Service Coverage Ratio provided in the underlying Bond Indenture there shall be used a Debt Service
Coverage Ratio equal to 1.0 to 1, the determination of which shall be made by the Bond Servicer,
acting in good faith.

Must-Pay Modification. The term as defined in Section 4.4.

Non-Stabilized Bonds. Means the Guaranteed Fund Bonds respecting Non-Stabilized Local
Partnerships as set forth on Schedule B-1.

Non-Stabilized Local Partnerships. Means those Local Partnerships listed on Schedule B-2,
each of which as of the date of this Agreement are financed with Guaranteed Fund Bonds and whose
operations have not met the requirements for Stabilization.

Non-Stabilized 1.0 DSCR Reduction Amount. The term as defined in Section 4.2.1.

Non-Stabilized 1.1 DSCR Reduction Amount. The term as defined in Section 4.2.3.

Organizational Documents. (i) With respect to any corporation, the certificate or articles
of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to
any non-U.S. jurisdiction); (ii) with respect to any limited liability company, the certificate or
articles of formation or organization and operating agreement; and (iii) with respect to any
partnership, joint venture, trust or other form of business entity, the partnership, joint venture
or other applicable agreement of formation or organization and, if applicable, any agreement,
instrument, filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or organization of such
entity.

Paragraph 13. The term as defined in Section 3.1(b).

 

9

 

Participation Agreement. Means that Amended and Restated Master Participation Agreement,
dated as of September 24, 2003, among CCG and Guaranteed Fund GP’s thereto.

Person. Any individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other enterprise.

PHJW. The term as defined in Section 7.1.1(h).

Principal Reduction Amount. The term as contemplated in Section 4.2.

Projections. Means the amounts as contemplated in Section 8.1.11 and as set forth in
Exhibit 8.1.11.

Properties. The real property interests owned by Guaranteed Local Partnerships, each of
which as of the date hereof is set forth on Schedule C.

Property Assignment Agreements. Means the respective assignment and assumption agreements
pursuant to which Guaranteed Manager is assigned certain rights to receive fees or other payables
by the Local Partnerships in which a Centerline Controlled General Partner is a general partner.

Property Assignors. Each Person that has (or is required to) assign certain property to
Guaranteed Holdings pursuant to the Receivables Assignment and Assumption Agreement.

Property Cash Flow Needs. Means expenditures incurred by a Guaranteed Local Partnership in
connection with the operations of their respective Properties to the extent such expenditures
exceed the amounts available to a Local General Partnership for such purpose, including reserves
held by a Local General Partnership for such purpose.

Reaffirmation Guarantee. The term as defined in Section 3.1(d).

Receivables. Each fee, receivable, “voluntary loan”, Master Note or right to payment held
by or payable to the Guaranteed Entities, in each case in respect of the Guaranteed Funds, that
are, or are required to be, conveyed by the respective Guaranteed Entities to Guaranteed Holdings
pursuant to the Receivables Assignment and Assumption Agreement, which Receivables shall not
include the Excluded Fee Rights.

Receivables Assignment and Assumption Agreement. The term as defined in Section 2.2.1(b).

Resolution Funds. The term as defined in Section 2.6.2.

Restructuring Documents. The term as defined in Section 8.1.9.

Revised Debt Service Schedules. The term as defined in Section 4.6.

Semi-Annual Fee. Shall mean the “semi-annual fee” referred to in Section V(L)(2) of the
Master Agreement Schedule.

Soft Portion. The term as defined in Section 4.4.

 

10

 

Solvent. With respect to any Person, at any date, that (a) the sum of such Person’s debt
(including contingent liabilities) does not exceed the present fair saleable value of such Person’s
present assets, (b) such Person’s capital is not unreasonably small in relation to its business as
contemplated on such date, (c) such Person has not incurred and does not intend to incur, or
believe that it will incur, debts including current obligations beyond its ability to pay such
debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent”
within the meaning given that term and similar terms under Applicable Laws relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to become an actual or
matured liability (irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standards No. 5).

Stabilized Bonds. Means the Guaranteed Fund Bonds respecting Stabilized Local Partnerships
as set forth on Schedule B-2.

Stabilized Local Partnerships. Means those Local Partnerships listed on Schedule B-2, each
of which as of the date of this Agreement are financed with Guaranteed Fund Bonds and whose
operations have met the requirements for Stabilization.

Stabilized 1.0 DSCR Reduction Amount. The term as defined in Section 4.2.2.

Stabilization. With respect to each of the Guaranteed Fund Bonds, the definition
attributable thereto as set forth in the Stabilization Escrow Agreement, the determination of which
shall be made by the Bond Servicer, acting in good faith.

Stabilization Escrow Agreement. That certain Stabilization Escrow and Security Agreement
dated as of December 1, 2007, between Freddie Mac and SPV II, as the same may be amended or
modified from time to time.

Subsidiary. With respect to any Person, any other Person of which a majority of (a) the
voting power of the voting equity securities or (b) the outstanding equity interests, is owned,
directly or indirectly, by such Person.

Tax Credits. Low-income housing tax credits, state low-income housing tax credits,
historic rehabilitation tax credits, state historic rehabilitation tax credits and similar tax
credits established by state programs, as well as depreciation and losses derived from the
single-family and multi-family affordable housing transactions owned by any Local Partnerships that
are allocated to the limited partner or investor member of such Local Partnership in accordance
with Section 42 of the Code and any applicable state legislation.

Tax Credit Investments. Ownership interests in limited partnerships or limited liability
companies (the “Local Partnerships”) in respect of which Tax Credits are allocated to such
Local Partnerships.

True-Up Obligations. The terms as defined in Section 2.6.1(i).

 

11

 

Voluntary Loans. Means loans made by a partner of either a Guaranteed Fund or a Local
Partnership, which are unsecured loans, repayable as set forth in the Organizational Documents of
the borrower or in the note issued by such borrower.

Unfunded Equity Amount. The term as defined in Section 4.3.1(c).

Work-Out Agreements. The term defined in Section 4.1.

Work-Out Bonds. The term as defined in Section 4.1.

Work-Out Properties. The term as defined in Section 4.1.

1.2. Rules of Interpretation.

(a) Unless otherwise expressly indicated, a reference to any document or agreement shall
include such document or agreement as amended, modified, restated or supplemented from time to time
in accordance with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the singular.

(c) Unless otherwise expressly indicated, a reference to any law or regulation includes any
amendment or modification to, or replacement of, such law or regulation.

(d) A reference to any Person includes its permitted successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP
applied on a consistent basis by the accounting entity to which they refer.

(f) The words “include,” “includes” and “including” are not limiting.

(g) Reference to a particular “Section” refers to that section of this Agreement unless
otherwise indicated. Reference to a particular “Exhibit” or “Schedule” refers to that Exhibit or
Schedule, as applicable, to this Agreement.

(h) The words “herein,” “hereof,” “hereunder” and words of like import shall refer to this
Agreement as a whole and not to any particular section or subdivision of this Agreement.

(i) Unless otherwise expressly indicated, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and including,” the words
“to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

(j) This Agreement and the other documents delivered in connection herewith are the result of
negotiation among, and have been reviewed by counsel to, among

 

12

 

others, the respective parties and is the product of discussions and negotiations among all
parties. Accordingly, this Agreement and the other documents are not intended to be construed
against a Person merely on account of such Person’s involvement in the preparation of such
documents.

ARTICLE 2

FORMATION OF GUARANTEED HOLDINGS

ASSIGNMENT OF RECEIVABLES, INTERESTS AND OTHER RIGHTS; FUND AND

LOCAL PARTNERSHIP ADVANCES

2.1. Formation of Guaranteed Holdings. On or prior to the Closing Date, CCG shall
cause the formation of Guaranteed Holdings as a Delaware limited liability company. On the
Closing Date, pursuant to Guaranteed Holdings Operating Agreement, MLCS shall be admitted as
“special manager”, as such term is defined in the Guaranteed Holdings Operating Agreement.

2.2. Assignment of Receivables, Interests and Other Rights.

2.2.1 On the Closing Date

(a) each Affiliated Local General Partner listed on Schedule E hereto shall assign and
convey to Guaranteed Manager all of the rights of such Affiliated Local General Partner to certain
payments, interests and other rights pursuant to the terms of an Assignment of Rights Agreement
(the “Assignment of Rights Agreement”), in the form attached hereto as Exhibit
2.2.1(a); and

(b) the Property Assignors shall assign and convey to Guaranteed Holdings the rights of each
Property Assignor to certain payments, interests and other rights (the “Guaranteed Holdings
Assigned Rights”) pursuant to the terms of an Assignment and Assumption Agreement (the
“Receivables Assignment and Assumption Agreement”), in the form attached hereto as
Exhibit 2.2.1(b). A description of each of the items assigned pursuant to the Receivables
Assignment and Assumption Agreement is set forth on Exhibit 8.1.10 hereto. Notwithstanding
the specificity of Exhibit 8.1.10, and except as provided herein, it is the intent of the
parties hereto that the Receivables Assignment and Assumption Agreement shall include (but not be
limited to) the assignment of:

(i) all rights of the Centerline Parties and their respective wholly-owned Subsidiaries to
receive all accrued and unpaid fees and fees which have yet to accrue to the extent such fees are
payable to the Centerline Parties or their Affiliates from the Guaranteed Funds, Guaranteed
Partnerships and Guaranteed Local Partnerships, other than the Excluded Fee Rights set forth in
Section 2.2.2 (the “Fee Rights”);

(ii) all rights to repayment of amounts advanced by the Centerline Parties directly to, or
rights of reimbursement from, the Guaranteed Funds, Guaranteed Partnerships or Guaranteed Local
Partnerships including, but not limited to, each master Note (the “Loan Receivables”); and

(iii) all rights of CCG to the Cash Collateral posted to MLCS.

 

13

 

2.2.2 The Excluded Fee Rights are the following:

(a) Property management fees, to the extent such fees are objectively usual and customary
market fees for the management of properties similar to the Properties;

(b) all rights of the Centerline Parties with respect to the B Certificates, including any
servicing or other fees payable in connection therewith; and

(c) servicing fees respecting the Bond Transaction.

2.3. Assignment of Certain Non-Member Manager Interests. On the Closing Date, Former
Guaranteed Manager shall assign and convey to Guaranteed Manager all of its interests as a
non-member manager in each of the Guaranteed Fund GP, each of the Guaranteed SLPs and in each
Affiliated Local General Partner (and the Guaranteed Manager shall be admitted as a manager in
place of the Former Guaranteed Manager).

2.4. Assignment of Certain Interests in Lower Tier Property Partnership General
Partners. On the Closing Date, Centerline Acquisitions II LLC and Centerline Dispositions II
LLC shall assign and convey to Guaranteed LTGP, pursuant to an amendment of the respective LLC
agreement, all their respective interests in the Affiliated Local General Partners (the “Local
Partnership Assigned Interests”).

2.5. Admission of Guaranteed Holdings. On the Closing Date, Guaranteed Holdings
shall be admitted in place of CCG as a member of the Guaranteed Partnerships GPs, with Guaranteed
Holdings assuming the obligations to pay the Guaranteed Obligations pursuant to the IRFAs.

2.6. Use of Guaranteed Holdings Proceeds.

2.6.1 Proceeds realized by Guaranteed Holdings from (i) Guaranteed Holdings Assigned Rights or
(ii) from a release of the Cash Collateral in each such case in accordance with section (A)(1) of
the definition of “Independent Amount Reductions” in Paragraph 13 (collectively, the
“Guaranteed Holdings Proceeds”), may be used by Guaranteed Holdings for the following
purposes. Items (a) through (d) below may be made only with the consent of MLCS:

(a) to make Fund Voluntary Loans to the respective Guaranteed Funds in order for such
Guaranteed Fund to make Local Partnership Voluntary Loans to enable a Local Partnership to pay Debt
Service Shortfall Payments;

(b) to make Fund Voluntary Loans to the respective Guaranteed Funds in order for such
Guaranteed Fund to make Local Partnership Voluntary Loans to enable a Local Partnership to meet
Property Cash Flow Needs;

(c) to make Fund Voluntary Loans to the respective Guaranteed Funds in order for such
Guaranteed Fund to meet Fund Cash Flow Needs (collectively, 2.5(a)-(c), “Cash Flow Needs”);

 

14

 

(d) to pay other expenses of the Guaranteed Funds, Guaranteed Partnerships, their respective
general partners or such other purposes (“Approved Expenses”);

(e) to pay the Annual Servicing Fee;

(f) to pay the Semi-Annual Fee;

(g) to reimburse CAHA for asset management services provided directly by CAHA in an annual
amount equal to $560,000 per annum (the “CAHA Reimbursement”), so long as CAHA continues to
serve as asset manager for the Funds, as provided in Section 5.1, which payments shall be made from
Guaranteed Holdings Proceeds to the extent available, and if not available, from the Cash
Collateral. The CAHA Reimbursement shall be payable quarterly, in arrears, in which CAHA is the
asset manager, pursuant to Section 5.1;

(h) until receipt of Freddie Mac Approval, to make Debt Service Shortfall Payments on the
Stabilized Bonds and Non-Stabilized Bonds provided that CHC or CCG contribute an amount not less
than $167,000 per month for the purpose of making such payments; and

(i) to pay Guaranteed Obligations on any Guarantee Payment Date (the “True-Up
Obligations”).

2.6.2 If Stabilization has been achieved with respect to each of the Work-Out Bonds, up to an
aggregate amount of Ten Million Dollars ($10,000,000) (less other amounts previously used to fund
Debt Service Shortfalls) from Cash Collateral in accordance with section (A)(3) of the definition
of “Independent Amount Reductions” contained in Paragraph 13 may be used by Guaranteed Holdings to
fund Capital Expenditures and Debt Service Shortfalls Payments (the “Resolution Funds”).
The Resolution Funds may be disbursed by Guaranteed Holdings only with the consent of MLCS.

2.7. Payment Direction and Assignment of Guaranteed Holdings Assigned Rights. In
order to secure the obligation of the Property Assignors to assign the Guaranteed Holdings
Assigned Rights:

(a) pursuant to the Receivable Assignment Agreement, Guaranteed Manager shall convey to
Guaranteed Holdings all of its rights to receive from the Guaranteed Funds payments of the fees
agreed to be paid pursuant to the Fund Management Agreement;

(b) each of the Guaranteed Fund GPs will acknowledge such assignment and agree to make
payments of such fees to Guaranteed Holdings;

(c) all Fund Voluntary Loans shall be evidenced by promissory notes, which shall be in an
original principal amount equal to all amounts previously advanced to the respective Guaranteed
Fund as voluntary loans and shall be made payable to Guaranteed Holdings;

 

15

 

(d) each Centerline Entity having an interest in fees or loans payable by the Centerline
Controlled Local Partnerships shall assign to CAHA or Guaranteed Manager all fees, loans or other
receivables relating to the Centerline Controlled Local Partnership and further assigned to
Guaranteed Holdings pursuant to the Receivable Assignment Agreement; and

(e) each Guaranteed Fund will acknowledge the granting of such assignment and agree to make
repayments of Fund Voluntary Loans when payable to Guaranteed Holdings.

2.8. Replacement of Former Guaranteed Manager with Guaranteed Manager. Former
Guaranteed Manager shall assign to Guaranteed Manager all of its rights as manager or managing
member, as the case may be, of each of the Fund General Partners and Special Limited Partners.

2.9. Replacement of Members of Centerline Controlled Local General Partners.
Centerline Manager shall assume the obligations of the existing manager of the Centerline
Controlled General Partners and Guaranteed LTGP LLC shall be admitted as the sole member of the
Centerline Controlled General Partners in place of Centerline Acquisitions II LLC and Centerline
Dispositions II LLC.

ARTICLE 3

ASSIGNMENT OF EXISTING BTB SWAP AGREEMENTS , ISSUANCE OF

REPLACEMENT GUARANTEED HOLDINGS SWAP AGREEMENTS , REAFFIRMATION

OF CHC GUARANTY AND TERMINATION OF ASSIGNMENT AND SUBROGATION

AGREEMENTS

3.1. Assignment of Existing BTB Swap Agreement, Reaffirmation of Guaranty, and Issuance
of Replacement Swap. On the Closing Date, the following actions will be taken:

(a) CCG, as assignor and Guaranteed Holdings, as assignee, shall enter into an assignment and
assumption agreement in the form attached hereto as Exhibit 3.1(a) (the “Assignment
Agreement”) pursuant to which the obligations under the Confirmation Letters to the Existing
BTB Swap Agreements (the “Assigned BTB Transactions”) will be assigned to Guaranteed
Holdings and Guaranteed Holdings will assume the obligations thereunder.

(b) Guaranteed Holdings shall enter into an ISDA 1992 Master Agreement (the “Master
Agreement”) with MLCS, together with a Multicurrency-Cross Border Schedule to the Master
Agreement (the “Master Agreement Schedule”), an ISDA Credit Support Annex to the Master
Agreement Schedule (the “Annex”) and Paragraph 13 to the Annex (the “Paragraph
13”), all in the form of Exhibit 3.1(b) (the “Guaranteed Holdings BTB Swap
Agreement”) revising its obligations with respect to the Assigned BTB Transactions.

(c) CCG, by the effectiveness of the Assignment Agreement, will be released and discharged
from certain of its obligations under the Existing BTB Swap Agreements.

 

16

 

(d) On the Closing Date, CHC shall be released from its obligations under the CHC Guaranty
except for such obligations and rights retained under Reaffirmation of Guarantee in the form of
Exhibit 3.1(d) (the “Reaffirmation Guarantee”).

3.2. Termination of Assignment and Assumption Agreements. Effective as of the
Closing Date, the Assignment and Assumption Agreements issued by Former Guaranteed Manager and GP
Holdings shall each be terminated.

3.3. Assignment and Termination of Participation Agreement. On the Closing Date, CCG
shall assign and convey to Guaranteed Holdings all of its rights and interests in the
Participation Agreement, which Participation Agreement shall then be terminated.

3.4. Termination of CCG Investor Guarantees. Guaranteed Holdings and Centerline
shall following the Closing Date negotiate with the limited partners of the Guaranteed
Partnerships to replace any CCG Investor Guarantees with guarantees from Guaranteed Holdings.

ARTICLE 4

PRINCIPAL REDUCTION AGREEMENTS

4.1. Bond Reductions. If on or before January 12, 2012 (x) Freddie Mac delivers
acknowledgements (“Freddie Mac Approval”) that the actions to be taken pursuant to this
Section 4.1 will constitute an event that will cause Stabilization to occur with respect to each
of the Work-Out Bonds and (y) CAHA determines that the actions to be taken are appropriate, then
CAHA as the special servicer with respect to the Work-Out Bonds, and each of respective borrowers
under the Work-Out Bonds will enter workout-agreements for each of the Work-Out Bonds (the
“Work-Out Agreements”) which will provide for the following with respect to the bonds
listed on Schedule B (the “Work-Out Bonds”) issued in connection with the
Properties owned by Guaranteed Local Partnerships (the “Work-Out Properties”).

4.2. Calculation of the Principal Reduction Amounts. The Principal Reduction Amounts
shall consist of the following:

4.2.1 the difference at any point in time between (x) the face amount of the Work-Out Bonds
with respect to Non-Stabilized Properties and (y) the face amount of such Work-Out Bonds for which
the underlying Work-Out Properties generate sufficient net operating income (including Capital
Expenditures permitted to be made with respect to such loan) to qualify for Modified Stabilization
as if such Work-Out Bonds bore an interest rate of 5.75% per annum for the remaining term of such
Work-Out Bonds (the “Non-Stabilized 1.0 DSCR Reduction Amount”);

4.2.2 the difference at any point in time between (x) the face amount of the Work-Out Bonds
with respect to Stabilized Properties and (y) the face amount of such Work-Out Bonds for which the
underlying Work-Out Properties generate sufficient net operating income (including Capital
Expenditures permitted to be made with respect to such loan) ) at a 1.0 to 1

 

17

 

Debt Service Coverage Ratio as if such Work-Out Bonds bore an interest rate of 5.75% per annum
for the remaining term of such Work-Out Bonds (the “Stabilized 1.0 DSCR Reduction Amount”);
and

4.2.3 (a) the difference at any point in time between (x) the face amount of the Work-Out
Bonds with respect to Non-Stabilized Properties and (y) the face amount of such Work-Out Bonds for
which the underlying Work-Out Properties generate sufficient net operating income (including
Capital Expenditures permitted to be made with respect to such loan) to qualify for Stabilization
if such bonds bore an interest rate of 5.75% for the remaining term of such Work-Out Bonds less (b)
the Non-Stabilized 1.0 DSCR Reduction Amount (the “Non-Stabilized 1.1 DSCR Reduction
Amount”).

4.3. Sources for Funding the Principal Reduction Amounts.

4.3.1 Guaranteed Holdings shall provide or cause to be provided:

(a) (x) Twenty Five Million Dollars ($25,000,000) from a release of the Cash Collateral in
accordance with section (A)(2) of the definition of “Independent Amount Reductions” in Paragraph 13
(the “Cash Collateral Amount”);

(b) the earn-out reserves with respect to the Work-Out Properties, which earn-out reserves are
currently in the amount of approximately Three Million Dollars ($3,000,000) (the “Earn-Out
Amount”); and

(c) the capital contributions withheld by Funds from the respective Local Partnerships payable
subject to the condition of Stabilization being achieved, which unpaid capital contributions are
currently in the amount of approximately Eight Million Four Hundred Thousand Dollars ($8,400,000)
the “Unfunded Equity Amount”, and collectively with the Cash Collateral Amount and the
Earn-Out Amount, the “Guaranteed Holdings Amount”).

4.3.2 Centerline Parties shall provide, either directly by cash, a reduction of the
Stabilization Escrow or reduction in the value of the B Certificates in the following amounts:

(a) in the case of Modified Stabilization:

(i) the sum of (w) the Non-Stabilized 1.0 DSCR Reduction Amount and (x) the lesser of (1) the
Stabilized 1.0 DSCR Reduction Amount and (2) Fifty One Million, Four Hundred Thousand Dollars
($51,400,000) less the Non-Stabilized 1.0 DSCR Reduction Amount, less

(ii) the Guaranteed Holdings Amount:

(b) in the case of Stabilization:

(i) the sum of (w) the Non-Stabilized 1.0 DSCR Reduction Amount, (x) the lesser of (1) the
Stabilized 1.0 DSCR Reduction Amount and (2) Fifty One Million, Four Hundred Thousand Dollars
($51,400,000) less the Non-Stabilized 1.0 DSCR Reduction Amount and (y) Non-Stabilized 1.1 DSCR
Reduction Amount less

 

18

 

(ii) the Guaranteed Holdings Amount.

4.4. Interest Reductions. The difference between the stated Work-Out Bond interest
coupon and 5.75% (the “Soft Portion”) shall be payable by the respective Work-Out Property
only to the extent that such Work-Out Property generates sufficient net operating income
(including Capital Expenditures permitted to be made with respect to such loan) to make such
payments when they are due, and to the extent not payable, on the next date that net operating
income (including Capital Expenditures permitted to be made with respect to such loan) is
sufficient to pay any unpaid Soft Portion amount, with any balance of the unpaid Soft Portion
amount due upon maturity of such Work-Out Bond (the “Must-Pay Modification”).

4.5. Payment of the Principal Reduction Amount. Entering into the Work-Out
Agreements and the method in which the Principal Reduction Amounts are applied is expressly
subject to the conditions as set forth in section (A)(2) of the definition of “Independent Amount
Reductions” of Paragraph 13.

4.6. Recalculated Future Amortization Payments. Centerline and Freddie Mac shall
recalculate future amortization payments to reflect the principal reductions (the “Revised
Debt Service Schedules”). Centerline shall provide MLCS with the Revised Debt Service
Schedules prior to closing based on a projected allocation.

4.7. Funding Annual Shortfalls. Until receipt of Freddie Mac Approval, Guaranteed
Holdings shall make Debt Service Shortfall Payments on the Stabilized Bonds and Non-Stabilized
Bonds from a release of the Cash Collateral as provided for in “Exhibit A to Paragraph 13
to ISDA Credit Support Annex” of Paragraph 13, provided that CCG or CHC contribute or pay an
amount not less than $167,000 per month for the purpose of making such payments.

ARTICLE 5

ASSET MANAGER AND REIMBURSEMENT FOR EXPENSES

5.1. Asset Manager and Management of Guaranteed Funds and Guaranteed Partnerships.
Until the Full Distribution Date:

5.1.1 CAHA agrees that, CAHA will continue to perform Asset Management Services for the
respective Guaranteed Fund (i) so long as Guaranteed Manager is the manager of the Guaranteed Fund
GP or an Affiliate of CAHA is the general partner of the Guaranteed Fund, (ii) so long as CAHA is
in the business of providing such services to funds acquiring Tax Credit Investments, (iii) until
CAHA is replaced with a third party by MLCS, in which event CAHA will cooperate with such
replacement; or (iv) until CAHA delivers to MLCS notice that it is withdrawing as the provider of
Asset Management Services, provided that CAHA may not withdraw from providing such services unless
CAHA shall provide MLCS with notice of its intent to withdraw not less than ninety (90) days prior
to the date of such withdrawal. In the case of any of the foregoing CAHA shall provide assistance
to MLCS in locating a successor asset manager and in turning over management to such successor.

 

19

 

5.1.2 CAHA shall perform the Asset Management Services (a) in accordance with (i) applicable
laws, (ii) the terms of the respective Guaranteed Fund Agreements and Guaranteed Partnership
Agreements; and (iii) the express terms of this Agreement; (b) using a degree of skill and
attention no less than that which CAHA presently provides to other funds with Tax Credit
Investments in which it serves as asset manager and (c) in a manner consistent with the practices
and procedures followed by reasonable and prudent managers of national standing relating to
investments similar to the Tax Credit Investments.

5.1.3 Guaranteed Holdings shall, for MLCS’ benefit, engage a third party to provide oversight
of CAHA’s performance of Asset Management Services.

5.2. Notwithstanding anything herein to the contrary, Affiliates of Island Capital may
provide management services on the Properties subject to replacement by MLCS on any Property in
the event such Property does not meet its Revised Debt Service Schedule payments.

ARTICLE 6

RESERVED

ARTICLE 7

CONDITIONS PRECEDENT

7.1. Effectiveness. The “Closing Date” shall be the earliest date as of which each
of the following have occurred:

7.1.1 Documents.

(a) Guaranteed Holdings, as managing member and shall have entered into Guaranteed Holdings
Operating Agreement which shall reflect, among other things, certain provisions of this Agreement.

(b) This Agreement shall have been executed and delivered by duly authorized officers of each
of the Centerline Parties.

(c) The Receivables Assignment and Assumption Agreement and the Property Assignment Agreements
shall have been executed and delivered by duly authorized officers of each of the parties thereto;

(d) The Assignment Agreement shall have been executed and delivered by duly authorized
officers of each of the parties thereto.

(e) The Guaranteed Holdings BTB Swap Agreement shall have been executed and delivered by duly
authorized officers of each of MLCS and Guaranteed Holdings.

(f) CHC shall have executed and delivered the Reaffirmation of Guarantee.

 

20

 

(g) The consent of the lenders under the BOA Credit Agreement to the transactions contemplated
hereby and by the other Restructuring Documents.

(h) MLCS shall have received all required legal opinions from Paul, Hastings, Janofsky and
Walker LLP (“PHJW”) and Richards Layton and Finger, special Delaware counsel.

(i) PHJW shall have delivered its memorandum with respect to treatment of the restructuring of
the Guaranteed Fund Bonds.

(j) MLCS shall have received such other documents, agreements, instruments, consents,
approvals and opinions as it shall require, in its sole discretion, in connection with this
Agreement and the transactions referred to herein or contemplated hereby.

7.1.2 Terms of the Transactions.

(a) CCG shall have assigned to Guaranteed Holdings all of its rights and interests in the Cash
Collateral that was previously posted to MLCS under the credit support annex to the Existing BTB
Swap Agreements.

(b) Guaranteed Manager shall have entered into an assignment conveying to Guaranteed Holdings
all of its rights to receive from the Guaranteed Funds payments of the fees agreed to be paid
pursuant to the Fund Management Agreement, which shall have been acknowledged and agreed to by each
of the Guaranteed Fund GPs.

(c) CAHA and CCG shall have conveyed to Guaranteed Holdings all of their rights to receive
repayment of all Fund Voluntary Loans advanced to the Guaranteed Funds, which shall have been
acknowledged and agreed to by each Guaranteed Fund and Guaranteed Fund GP and or delivered endorsed
promissory notes evidencing the obligation to repay the Fund Voluntary Loans.

(d) Each of the limited liability company agreements of each of the Guaranteed Partnership GPs
shall have been amended as contemplated herein.

(e) The Guaranteed Holdings Operating Agreement shall have been entered into as contemplated
herein.

(f) The Island Recapitalization shall have occurred contemporaneously herewith.

(g) The BOA Credit Agreement shall have been amended and restated.

(h) All other transactions contemplated under Article 5 shall have occurred.

ARTICLE 8

REPRESENTATIONS AND WARRANTIES

 

21

 

8.1. Representations and Warranties to MLCS. Each Party hereto makes the following
representations and warranties to MLCS.

8.1.1 Corporate Status. Each of the Centerline Controlled Entities (i) is a duly
organized and validly existing corporation or other entity in good standing under the laws of the
jurisdiction of its organization and has the corporate or other organizational power and authority
to own its property and assets and to transact the business in which it is engaged and (ii) has
duly qualified and is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified, except where the failure to be so qualified could not reasonably
be expected to result in a Material Adverse Effect.

8.1.2 Corporate Power and Authority; Enforceability. Each of the Centerline
Controlled Entities has the corporate or other organizational power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and has taken all necessary
corporate or other organizational action to authorize the execution, delivery and performance of
the Agreement. Each of CHC, CCG, CAHA, Guaranteed Manager, Guaranteed Holdings and CMC has duly
executed and delivered this Agreement and such Agreement constitutes the legal, valid and binding
obligation of such Person enforceable in accordance with its terms, subject to the effects of
Bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or
affecting creditors’ rights generally and general principles of equity (whether considered in a
proceeding in equity or law). Each of CHC, CCG, CAHA, Guaranteed Manager, Guaranteed Holdings and
CMC (i) is in compliance with all Applicable Laws and (ii) has all requisite governmental licenses,
authorizations, consents and approvals to operate its business as currently conducted except, in
each case to the extent that failure to be in compliance therewith or to have all such licenses,
authorizations, consents and approvals could not reasonably be expected to have a Material Adverse
Effect.

8.1.3 No Violation. None of (i) the execution, delivery and performance by any of
CHC, CCG, CAHA, Guaranteed Manager, Guaranteed Holdings or CMC of this Agreement and compliance
with the terms and provisions herein or (ii) the consummation of the other transactions
contemplated hereby on the relevant dates therefore will (1) contravene any Centerline Entities
applicable provision of any material Applicable Law of any Governmental Authority, (2) result in
any breach of any of the terms, covenants, conditions or provisions of, or constitute a default
under, or give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under, or result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of any of the Centerline
Controlled Entities (other than Liens under any security agreements contemplated herein) pursuant
to, the terms of any indenture, loan agreement, lease agreement, mortgage or deed of trust or any
other contractual obligation to which the Centerline Controlled Entities is a party or by which
they or any of their property or assets is bound, except to the extent that any such conflict,
breach, contravention, default, creation or imposition could not reasonably be expected to result
in a Material Adverse Effect or (3) violate any provision of the Organizational Documents of the
Centerline Controlled Entities.

8.1.4 Governmental Approvals. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any Governmental
Authority is required to authorize or is required in connection with (a) the

 

22

 

execution, delivery and performance of this Agreement or (b) the legality, validity, binding
effect or enforceability of this Agreement, except, in the case of either clause (a) or (b), such
as have been obtained or made and are in full force and effect except for section 2530 approval
from HUD with respect to the change in the managing member of the Affiliated Local General
Partner.

8.1.5 Solvency. Taking into account the obligations hereunder, each of the Centerline
Parties, is on a consolidated basis, taken as a whole, Solvent, and will be Solvent following the
consummation of the transactions contemplated hereby. Taking into account the transactions
contemplated herein, each of the Guaranteed Entities and Guaranteed Holdings is Solvent, and will
be Solvent following the consummation of the transactions contemplated hereby.

8.1.6 Intentionally Deleted

8.1.7 Liens. There are no Liens on the property or assets of any Guaranteed Fund,
other than (i) Liens on the limited partnership interests of the Guaranteed Funds interest in the
Local Partnerships securing the obligations of the Guaranteed Fund to make contributions to the
Local Partnerships, and (ii) Liens on the partnership interests of the Guaranteed Asset Managers in
each Guaranteed Fund GP’s pursuant to the Assignment and Subrogation Agreements, which Assignment
and Subrogation Agreements shall be terminated in accordance with Section 3.2 herein.
Notwithstanding the foregoing, no representation is made with respect to any rights or Liens with
respect to any rights to Fee Rights or Loan Receivables which have been obtained by the Centerline
Parties from former Local General Partners or their Affiliates, including rights to development
fees or other fees, other than that the Centerline Parties have not affirmatively agreed to any
Liens with respect to such rights.

8.1.8 Ownership. Exhibit 8.1.8 sets forth a complete and accurate chart, in
all material respects, of each of the Centerline Global Entities (excluding CHC and CCG) and their
Subsidiaries, including (i) the legal name of each such Centerline Global Entity, (ii) the
jurisdiction of organization of each such Centerline Global Entity, (iii) each Person that has an
ownership interest (including minority interests) in each such Centerline Global Entity, including
(1) the percentage voting ownership and percentage economic ownership of each such Centerline
Global Entity, and (2) any unfunded equity commitments with respect to each such Centerline Global
Entity, and (iv) the manager and/or servicer with respect to each such Centerline Global Entity.

8.1.9 Information True, Complete and Not Misleading. CHC, CCG and CAHA have made
available to MLCS all material agreements, instruments and corporate or other restrictions
(including under their respective organizational documents) to which the Centerline Controlled
Entities are subject or by which any of their property or activities is bound or subject.

CHC, CCG and CAHA have disclosed to MLCS all matters known to it that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect on Holdings or MLCS,
in its capacity as issues of the IRFAs.

 

23

 

None of the reports, financial statements, certificates or other information furnished or
given by CHC, CCG or CAHA on behalf of any Centerline Party to MLCS in connection with the
negotiation of this Agreement, the Receivable Assignment Agreements, the Master Notes, the
Assignment Agreement, the Holdings BTB Swap Agreements, the Amended and Restated Credit Enhanced GP
Agreements, the Holdings Operating Agreement (collectively, the “Restructuring Documents”)
or delivered hereunder or there under (as modified or supplemented by other information so
furnished), when considered as a whole, contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, (i) with respect to projections,
estimates and forward-looking information, CHC, CCG and CAHA represent only that such information
was prepared in good faith based upon assumptions believed to be reasonable at the time, it being
recognized by the MLCS that such projections, estimates and forward-looking information as it
relates to future events is not to be viewed as fact and that actual results during the period or
periods covered by such projections, estimates and forward-looking information may differ from the
projected results set forth therein, and such differences may be material, and (ii) such reports,
financial statements, certificates and other information were based upon financial information
provided by the Local General Partners and Local Partnerships and CHC, CCG and CAHA assume that
such financial information provided by the Local General Partners and Local Partnerships does not
contain any untrue statement of material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.

8.1.10 Guaranteed Holdings Assigned Rights. Exhibit 8.1.10 sets forth a
complete and accurate list, in all material respects, of all Guaranteed Holdings Assigned Rights as
of the dates noted thereon, including a description of each of the items assigned. All Guaranteed
Holdings assigned rights are held by the parties that have assigned them to Guaranteed Holdings
pursuant to the Receivable Assignment and Assumption Agreement and all present and rights to future
Guaranteed Holdings Assigned Rights have been transferred to Guaranteed Holdings pursuant to such
Receivable Assignment and Assumption Agreement. Other than as disclosed on Exhibit 8.1.10, there
are no other agreements, instruments or other legal documents known to CHC, CCG and CAHA that will
or could give rise to any Guaranteed Holdings Assigned Rights.

8.1.11 Projections. Exhibit 8.1.11, sets forth projections of the (i) the
required amounts to achieve Stabilization for each of the Work-Out Bonds and (ii) the amount of the
Debt Service Shortfall Payments (collectively, the “Projections”), which Projections were
prepared in good faith based upon information then available to the Bond Servicer and to the best
of each Centerline Party’s knowledge is a reasonable approximation of the amount of such
obligations and assumptions believed by CHC, CCG and CAHA to be reasonable at the time made; it
being recognized by MLCS that such projections are as to future events and are not to be viewed as
facts, the projections are subject to significant uncertainties and contingencies, many of which
are beyond the control of CHC, CCG and CAHA, that no assurance can be given that any particular
projections will be realized and that actual results during the period or periods covered by any
such projections may differ from the projected results and such differences may be material.

 

24

 

8.1.12 Local Partnership Voluntary Loans. As of the Closing Date, there are no direct
Voluntary Loans made by any of the Centerline Parties to any Local Partnership, except those set
forth on Exhibit 8.1.12.

8.1.13 Taxes and Other Obligations. Each of the Guaranteed Funds and the Guaranteed
Partnerships has paid or caused to be paid all material payments, expenses and taxes required to
have been paid by it, except where (i) such payments and expenses are Guaranteed Holdings Assigned
Rights, (ii) the validity or amount thereof is being contested in good faith by appropriate
proceedings, (iii) such Guaranteed Fund or Guaranteed Partnership has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, or (iv) the failure to make payment
pending such contest could not reasonably be expected to result in a Material Adverse Effect.

8.1.14 Uniform Commercial Code Financing Statements. Exhibit 8.1.14 sets
forth a complete and accurate list, in all material respects, of each Uniform Commercial Code
financing statement filed against the entity listed thereon.

8.1.15 Disposition Fees. There have been no Disposition Fees on or prior to the
Closing Date with respect to any of the Centerline Global Entities.

8.1.16 Employees. None of the Guaranteed Funds or the Guaranteed Partnerships have
any employees. No employees of CHC, CCG or CAHA hold any Guaranteed Holdings Assigned Rights.

8.1.17 Compliance with Laws. Each of CHC, CCG, CAHA, the Guaranteed Manager and CMC
is in compliance with all Applicable Law binding upon it or its property, in each case, except to
the extent any such failure to comply could not reasonably be expected to have a Material Adverse
Effect.

8.1.18 No Violation. None of (i) the execution, delivery and performance by any of
any Centerline Global Entity (excluding CHC, CCG, CAHA, Guaranteed Manager, Guaranteed Holdings and
CMC) of this Agreement and compliance with the terms and provisions herein, or (ii) the
consummation of the other transactions contemplated hereby on the relevant dates therefore will (1)
result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a
default under, or give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under, or result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of any Centerline Global Entity
(excluding CHC, CCG, CAHA, Guaranteed Manager, Guaranteed Holdings and CMC) pursuant to the BOA
Credit Agreement, except to the extent that any such conflict, breach, contravention, default,
creation or imposition could not reasonably be expected to result in a Material Adverse Effect or
(2) violate any provision of the Organizational Documents of any Centerline Global Entity
(excluding CHC, CCG, CAHA, Guaranteed Manager, Guaranteed Holdings and CMC).

ARTICLE 9

COVENANTS

 

25

 

9.1. Management of Investments. Each Centerline Party agrees to use reasonable
commercial efforts within its capacity as asset manager, without any obligation to expend funds
other than as required herein, to cause the Guaranteed Local Partnerships to operate their
Properties in compliance with the requirements under Section 42 of the Code and in a manner so as
to avoid recapture of Tax Credits.

9.2. Information with Respect to Bonds. The Centerline Parties shall promptly
provide to MLCS all amendments to the documents executed in connection with the Guaranteed Fund
Bonds when received.

9.3. Fees and Loans. Each Centerline Parties covenants that they will respect the
structure of ownership of the Guaranteed Entities and Guaranteed Holdings and will cause fees and
payments to be made as contemplated by such structure.

ARTICLE 10

MISCELLANEOUS

10.1. Amendments and Waivers; Third Party Beneficiary. Except as expressly set forth
in this Agreement, neither this Agreement, nor any terms hereof may be amended, supplemented,
modified or waived except with the written consent of each of the parties hereto. MLCS is a third
party beneficiary of this Agreement and shall receive notice of any amendment hereto, and, to the
extent that any amendment of this Agreement could adversely effect the rights or interests of
MLCS, the written consent of MLCS to such amendment shall be required for such amendment to be
effective, which consent shall not be unreasonably delayed, conditioned or denied. There are no
other third party beneficiaries of this Agreement.

10.2. Notices and Other Communications; Facsimile Copies.

10.2.1 General. All notices, demands, requests, directions and other communications
required or expressly authorized to be made by this Agreement shall, whether or not specified to be
in writing but unless otherwise expressly specified to be given by any other means, be given in
writing and (i) addressed to the party to be notified and sent to the address or facsimile number
as indicated below, or (ii) addressed to such other address as shall be notified in writing to each
other party hereto.

If to a Centerline Party, to:

c/o Centerline Affordable Housing Advisors LLC 

625 Madison Avenue

New York, New York 10022

Attention: Andrew J. Weil

Phone: (212) 521-6394

Fax: (212) 751-3550

with a copy to:

 

26

 

Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

New York, New York 10022

Attention: Alan S. Cohen, Esq.

Phone: (212) 318-6075

Fax: (212) 230-5160

If to MLCS, to:

Merrill Lynch Capital Services, Inc. Merrill Lynch Capital 

Services, Inc.

4 World Financial Center, 11th Floor

250 Vesey Street

New York, NY 10080

Attention: James Nacos

with copies to:

Merrill Lynch Capital Services, Inc.

4 World Financial Center, 11th Floor

250 Vesey Street

New York, NY 10080

Attention: Daniel Nussbaum

Kutak Rock LLP

225 Peachtree Street, N.E.

Suite 2100

Atlanta, GA 30303

Attention: David A. Nix, Esq.

10.2.2 Effectiveness. All communications described in Section 10.2.1 above and all
other notices, demands, requests and other communications made in connection with this Agreement
shall be effective and be deemed to have been received (i) if delivered by hand, upon personal
delivery, (ii) if delivered by overnight courier service, one Business Day after delivery to such
courier service, (iii) if delivered by mail, when deposited in the mails, and (iv) if delivered by
facsimile, upon sender’s receipt of confirmation of proper transmission. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration or other
communication to any Person designated in Section 10.2.1 to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration
or other communication. The giving of any notice required hereunder may be waived in writing by
the party entitled to receive such notice.

10.3. Survival of Representations and Warranties. All representations and warranties
made hereunder shall survive the execution and delivery of this Agreement.

10.4. Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that none of CHC, CCG, CAHA, Guaranteed Manager, Guaranteed

 

27

 

Holdings and CMC may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the MLCS (and any attempted assignment or transfer by such
Person without such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby any legal or equitable right, remedy or claim
under or by reason of this Agreement.

10.5. Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by facsimile or other electronic
transmission (i.e., a “pdf” or “tif”)), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

10.6. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

10.7. OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.8. Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this
Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive
general jurisdiction of the courts of the State of New York, the courts of the United States of
America for the Southern District of New York and appellate courts from any thereof;

(b) consents that any such action or proceeding shall be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the applicable party at its respective address set forth in Section 10.2 or at such
other address of the parties hereto shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

28

 

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section 10.8 any special, exemplary,
punitive or consequential damages.

(f) WAIVERS OF JURY TRIAL. EACH OF THE CENTERLINE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.

[SIGNATURE PAGES FOLLOW]

 

29

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	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 and
President 	 
	 
	 	CENTERLINE AFFORDABLE HOUSING ADVISORS LLC

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and
President 	 
	 
	 	CENTERLINE MORTGAGE CAPITAL, INC.

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

[SIGNATURES CONTINUE ON NEXT PAGE]

Signature Page to Master Novation Agreement

 

 

 

	 	 	 	 	 
	 	CENTERLINE GUARANTEED HOLDINGS LLC

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and
President 	 
	 
	 	CENTERLINE GUARANTEED MANAGER II LLC

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and
President 	 
	 

[SIGNATURES CONTINUE ON NEXT PAGE]

Signature Page to Master Novation Agreement

 

 

 

	 	 	 	 	 
	 	WITHDRAWING MANAGER:

CENTERLINE GUARANTEED MANAGER LLC

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and
President 	 

Signature Page to Master Novation Agreement

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