Document:

Exhibit 10.7

 

EXECUTION

 

[Osprey TEBS]

 

LIMITED
SUPPORT AGREEMENT

(Centerline Holding Company)

 

This Limited Support
Agreement (as amended, modified or supplemented from time to time, this “Agreement”)
is entered into as of December 1, 2007, between CENTERLINE HOLDING
COMPANY, a statutory trust organized and existing under the laws of
the State of Delaware (together with its successor and permitted assigns, (“Agreement
Provider”), and FEDERAL HOME LOAN MORTGAGE CORPORATION
a shareholder-owned, government-sponsored enterprise organized and existing
under the laws of the United States, as obligee under the Reimbursement
Agreement (together with any successor obligee under said Reimbursement
Agreement and their respective successors and assigns, the “Obligee”).

 

RECITALS

 

A.                                   Pursuant to the Bond Exchange and Sale Agreement dated as of
the date hereof (the “Bond Exchange Agreement”) among Obligee, the Transferors
named therein and the Centerline Sponsor 2007-1 Securitization, LLC, a limited liability
company organized and existing under the laws of the State of Delaware (together
with its successors and permitted assigns, the “Sponsor”), the Bonds therein
described are being exchanged for the Class A Certificates and the Class B
Certificates therein described (the latter being pledged back to Obligee
pursuant to the Reimbursement, Pledge and Security Agreement dated as of the
date hereof between Obligee and the Sponsor (as the same may be amended,
modified or supplemented from time to time, the “Reimbursement Agreement”, to
secure the Sponsor’s obligations thereunder). 
Pursuant to the Reimbursement Agreement and each Series Certificate
Agreement (as therein defined), Obligee has agreed to provide its Credit
Enhancement (as therein defined) and liquidity support for the Class A
Certificates on the terms provided therein.

 

B.                                     Sponsor is an Affiliate of the Agreement Provider.

 

C.                                     It is a condition precedent to Obligee’s obligation to
provide the Credit Enhancement and liquidity support that Agreement Provider
shall have entered into this Agreement to guarantee certain obligations of the
Sponsor to Obligee.

 

NOW, THEREFORE, in order to
induce Obligee to provide its Credit Enhancement and liquidity support, and in
consideration of the Recitals, and other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby Agreement Provider and Obligee hereby agree as follows:

 

1.                                       “Obligations” and other capitalized terms used but not
defined in this Agreement shall have the meanings assigned to them in the
Reimbursement Agreement.

 

2.                                       The following terms shall have the respective meanings set
forth below for purposes of this Agreement:

 

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(a)                                  “Net Worth” means, at any date, the Tangible Assets of a
Person which (after deducting depreciation, obsolescence, amortization, and any
valuation or other reserves on account of upward revaluation of assets and
without reduction for any unamortized debt discount or expense) would be shown,
in accordance with generally accepted accounting principles, on its balance
sheet, minus liabilities (other than capital stock and surplus but including
all reserves for contingencies and other potential liabilities) which would be
shown, in accordance with generally accepted accounting principles, on such
balance sheet.

 

(b)                                 “Person” means any individual, partnership, corporation,
association, joint venture, trust (including any beneficiary thereof) or
unincorporated organization, and a government or agency or political
subdivision thereof.

 

(c)                                  “Tangible Assets” means total assets except: (i) that
portion of deferred assets and prepaid expenses (other than prepaid insurance,
prepaid rent and prepaid taxes) which do not mature or, in accordance with
generally accepted accounting principles, are not amortizable within one year
from the date of calculation, and (ii) trademarks, trade names, good will,
and other similar intangibles.

 

3.                                       Agreement Provider hereby absolutely, unconditionally and
irrevocably guarantees to Obligee the full and prompt payment when due, whether
at maturity or earlier, by reason of acceleration or otherwise, and at all
times thereafter, and the full and prompt performance when due, of all of the
following:

 

(a)                                  All actual out-of-pocket costs and expenses, including
reasonable fees and out of pocket expenses of attorneys and expert witnesses,
incurred by Obligee in enforcing its rights under this Agreement.

 

(b)                                 The payment and performance of all obligations of Sponsor
pursuant to Section 3.12(b) of the Reimbursement Agreement.

 

4.                                       The obligations of Agreement Provider under this Agreement
shall survive any foreclosure proceeding, any foreclosure sale and any release
of record of the collateral securing the Reimbursement Agreement.

 

5.                                       Agreement Provider’s obligations under this Agreement
constitute an unconditional guaranty of payment and performance and not merely
a guaranty of collection.

 

6.                                       The obligations of Agreement Provider under this Agreement
shall be performed within five (5) days of written demand therefore, by Obligee
and shall be unconditional irrespective of the genuineness, validity,
regularity or enforceability of the Reimbursement Agreement or any Sponsor
Document, and without regard to any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety, a guarantor, a borrower
or a mortgagor.  Agreement Provider
hereby waives the benefit of all principles or provisions of law, statutory 

 

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or
otherwise, which are or might be in conflict with the terms of this Agreement
and agrees that Agreement Provider’s obligations shall not be affected by any
circumstances, whether or not referred to in this Agreement, which might
otherwise constitute a legal or equitable discharge of a surety, a guarantor, a
borrower or a mortgagor.  Agreement
Provider hereby waives the benefits of any right of discharge under any and all
statutes or other laws relating to a guarantor, a surety, a borrower or a mortgagor
and any other rights of a surety, a guarantor, a borrower or a mortgagor
thereunder.  Without limiting the
generality of the foregoing, Agreement Provider hereby waives, to the fullest
extent permitted by law, diligence in collecting the Obligations, presentment,
demand for payment (except as expressly set forth herein), protest, all notices
with respect to the Reimbursement Agreement and this Agreement which may be
required by statute, rule of law or otherwise to preserve Obligee’s rights
against Agreement Provider under this Agreement, including, but not limited to (except
as expressly set forth herein), notice of acceptance, notice of any amendment
of the Sponsor Documents, notice of the occurrence of any default or Event of
Default, notice of intent to accelerate, notice of acceleration, notice of
dishonor, notice of foreclosure, notice of protest, and notice of the incurring
by Sponsor of any obligation or indebtedness. 
Agreement Provider also waives, to the fullest extent permitted by law,
all rights to require Obligee to (a) proceed against Sponsor or any other
guarantor of Sponsor’s payment or performance with respect to the Obligations
(an “Other
Guarantor”) (b) if any Other
Guarantor is a partnership, proceed against any general partner of the Other
Guarantor, or (c) proceed against or exhaust any collateral held by Obligee
to secure the repayment of the Obligations. 
Agreement Provider further waives, to the fullest extent permitted by
applicable law, any right to revoke this Agreement as to any future advances by
Obligee under the Reimbursement Agreement to protect Obligee’s interest in the
UCC Collateral securing the Reimbursement Agreement.

 

7.                                       At any time or from time to time and any number of times,
without notice to Agreement Provider and without affecting the liability of
Agreement Provider, (a) the time for payment of the Obligations may be
extended or the Obligations may be renewed in whole or in part; (b) the
time for Sponsor’s performance of or compliance with any covenant or agreement
contained in the Reimbursement Agreement or any other Sponsor Document, whether
presently existing or hereinafter entered into, may be extended or such
performance or compliance may be waived; (c) the maturity of the
Obligations may be accelerated as provided in the Reimbursement Agreement or
any other Sponsor Document; (d) the Reimbursement Agreement, and the
security instrument or any other loan document evidencing or securing the
obligations of Owners (as defined in the Reimbursement Agreement) may be
modified or amended by Obligee and Sponsor in any respect, including, but not
limited to, an increase in the principal amount; and (e) any security for
the Obligations may be modified, exchanged, surrendered or otherwise dealt with
or additional security may be pledged or mortgaged for the Obligations.

 

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8.                                       Obligee, in its sole and absolute discretion, may (a) bring
suit against Agreement Provider, or any one or more of the persons constituting
Agreement Provider and any Other Guarantor, jointly and severally, or against
any one or more of them; (b) compromise or settle with any one or more of
the persons constituting Agreement Provider for such consideration as Obligee
may deem proper; (c) release one or more of the persons constituting
Agreement Provider or any Other Guarantor, from liability; and (d) otherwise
deal with Agreement Provider and any Other Guarantor, or any one or more of
them, in any manner, and no such action shall impair the rights of Obligee to
collect from Agreement Provider any amount guaranteed by Agreement Provider
under this Agreement.  Nothing contained
in this paragraph shall in any way affect or impair the rights or obligations
of Agreement Provider with respect to any Other Guarantor.

 

9.                                       Any indebtedness of Sponsor held by Agreement Provider now
or in the future is and shall be subordinated to the Obligations and any such
indebtedness of Sponsor shall be collected, enforced and received by Agreement
Provider, as trustee for Obligee, but without reducing or affecting in any
manner the liability of Agreement Provider under the other provisions of this
Agreement.

 

10.                                 Agreement Provider shall have no right of, and hereby waives
any claim for, subrogation or reimbursement against Sponsor or any member of
Sponsor by reason of any payment by Agreement Provider under this Agreement,
whether such right or claim arises at law or in equity or under any contract or
statute, until the Obligations has been paid in full and there has expired the
maximum possible period thereafter during which any payment made by Sponsor to Obligee
with respect to the Obligations could be deemed a preference under the United
States Bankruptcy Code.

 

11.                                 If any payment by Sponsor is held to constitute a preference
under any applicable bankruptcy, insolvency, or similar laws, or if for any
other reason Obligee is required to refund any sums to Sponsor, such refund
shall not constitute a release of any liability of Agreement Provider under
this Agreement.  It is the intention of Obligee
and Agreement Provider that Agreement Provider’s obligations under this
Agreement shall not be discharged except by Agreement Provider’s performance of
such obligations and then only to the extent of such performance.

 

12.                                 Agreement Provider shall from time to time, upon request by Obligee,
deliver to Obligee such financial statements as are reasonably needed to
determine compliance with Section 16 hereof, but not more frequently than
once each year.  As a condition to
Agreement Provider’s delivery of its financial information, Obligee agrees that
such information is confidential information, shall not be used for any purpose
other than evaluating compliance by the Agreement Provider with this Agreement,
and shall be disclosed only to those employees, directors, officers and agents
of Obligee who need to know such information for purposes of performing or
enforcing Obligee’s obligations and rights under this Agreement and who are
advised of the need to maintain the confidentiality of such information.  Obligee shall not otherwise use or disclose
Agreement Provider’s financial information without Agreement Provider’s prior
written consent.  The 

 

4

 

restrictions
on use and disclosure set forth above shall not apply when and to the extent
that the information received by Obligee (a) is or becomes generally
available to the public through no fault of Obligee (or anyone acting on its
behalf); (b) was previously known by Obligee free of any obligation to
keep it confidential; (c) is subsequently disclosed to Obligee by a third
party who may rightfully transfer and disclose such information without
restriction and free of any obligation to keep it confidential; or (d) is required
to be disclosed by Obligee by applicable law.

 

13.                                 Solely in connection with an assignment by Obligee of its
rights and obligations under the Reimbursement Agreement to which the Sponsor
has consented (unless no such consent is necessary because a Remedy Event
exists under the Reimbursement Agreement), Obligee may assign its rights under
this Agreement in whole or in part to the transferee of its rights and
obligations under the Reimbursement Agreement and upon any such assignment, all
the terms and provisions of this Agreement shall inure to the benefit of such
assignee to the extent so assigned.  Obligee
agrees to notify Agreement Provider of any such assignment.  The terms used to designate any of the
parties herein shall be deemed to include the heirs, legal representatives,
successors and assigns of such parties; and the term “Obligee” shall include, in addition to Obligee, any lawful owner,
holder or pledgee of the Reimbursement Agreement to whom Sponsor has consented
(unless no such consent is necessary because a Remedy Event exists under the
Reimbursement Agreement).  Reference
herein to “person” or “persons” shall be deemed to include individuals and
entities.

 

14.                                 This Agreement and the other Sponsor Documents represent the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements. There are no unwritten
oral agreements between the parties.  All
prior or contemporaneous agreements, understandings, representations, and
statements, oral or written, are merged into this Agreement and the other
Sponsor Documents.  Agreement Provider
acknowledges that Agreement Provider has received copies of the Reimbursement
Agreement and all other Sponsor Documents. 
Neither this Agreement nor any of its provisions may be waived,
modified, amended, discharged, or terminated except by an agreement in writing
signed by the party against which the enforcement of the waiver, modification,
amendment, discharge, or termination is sought, and then only to the extent set
forth in that agreement.

 

15.                                 This Agreement shall be construed, and the rights and
obligations of Agreement Provider hereunder determined, in accordance with
federal statutory or common law (“federal law”).  Insofar as there may be no applicable rule or
precedent under federal law and insofar as to do so would not frustrate the
purposes of any provision of this Agreement, the local law of the State of New
York shall be deemed reflective of federal law. 
The parties agree that any legal actions among the Agreement Provider
and the Obligee regarding each party hereunder shall be originated in the
United States District Court in and for the Eastern District of Virginia, and
the parties hereby consent to the exclusive jurisdiction and venue of 

 

5

 

said
Court in connection with any action or proceeding initiated concerning this
Agreement.  Agreement Provider
irrevocably consents to service, jurisdiction, and venue of such court for any
such litigation and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence or otherwise.

 

16.                                 Net Worth.  As of the date of this Agreement, the
Agreement Provider represents and warrants to Obligee that it has a Net Worth
equal to at least $40,000,000 and, during the term of this Agreement, Agreement
Provider shall at all times maintain a Net Worth equal to at least $40,000,000.

 

17.                                 Maintenance of Existence.  During the term of the Reimbursement
Agreement, the Agreement Provider agrees (a) to maintain its existence as
a statutory trust under the laws of the State of Delaware and (b) that it
will not dissolve or otherwise dispose of all or substantially all of its
assets, and will not consolidate with or merge into any Person or permit any
Person to consolidate with or merge into it.

 

18.                                 Multiple Counterparts.  This Agreement may be simultaneously executed
in multiple counterparts, all of which shall constitute one and the same
instrument and each of which shall be, and shall be deemed to be, an original.

 

19.                               AGREEMENT PROVIDER AND OBLIGEE EACH (A) AGREES
NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS
AGREEMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS AGREEMENT PROVIDER AND OBLIGEE
THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY
JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR
IN THE FUTURE.  THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.

 

[Signatures follow]

 

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IN WITNESS WHEREOF, Agreement
Provider and Obligee have signed and delivered this Agreement or have caused
this Agreement to be signed by their duly authorized representatives.

 

	
   

  	
  AGREEMENT
  PROVIDER:

  
	
   

  	
   

  
	
   

  	
  CENTERLINE
  HOLDING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  Centerline Affordable Housing Advisors, LLC, its
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc D. Schnitzer

  	
   

  
	
   

  	
   

  	
  Marc D. Schnitzer

  
	
   

  	
   

  	
  President

  

 

[SIGNATURE PAGE TO OSPREY TEBS PARENT
LIMITED SUPPORT AGREEMENT]

 

 

	
   

  	
  OBLIGEE:

  
	
   

  	
   

  
	
   

  	
  FEDERAL
  HOME LOAN MORTGAGE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Kimball Griffith

  
	
   

  	
   

  	
  W. Kimball Griffith

  
	
   

  	
   

  	
   Vice President,
  Multifamily Affordable

  
	
   

  	
   

  	
     Housing
  Production & Investments

  

 

[SIGNATURE PAGE TO OSPREY TEBS PARENT
LIMITED SUPPORT AGREEMENT]Exhibit 10.8

 

EXECUTION

 

FHLMC Approved Form

 

[Osprey TEBs]

 

STABILIZATION
GUARANTY, ESCROW AND SECURITY AGREEMENT

 

THIS STABILIZATION GUARANTY,
ESCROW AND SECURITY AGREEMENT (as amended, modified or
supplemented from time to time, this “Agreement”), dated as of December 1, 2007,
is between CENTERLINE STABILIZATION
2007-1 SECURITIZATION, LLC, a limited liability company duly organized
and existing under the laws of the State of Delaware (together with its
successors and assigns the “Guarantor”), and FEDERAL HOME LOAN MORTGAGE
CORPORATION, a shareholder-owned government-sponsored enterprise organized and
existing under the laws of the United States (together with its successors
and assigns “Freddie Mac”).

 

The meaning of capitalized terms can be
determined by reference to Section 1.2 of this Agreement.

 

BASIS
FOR THIS AGREEMENT

 

A.            Pursuant
to a Reimbursement, Pledge and Security Agreement dated as of the date hereof
(as amended, modified or supplemented from time to time, the “Reimbursement
Agreement”) between Centerline Sponsor 2007-1, LLC, a Delaware limited
liability company (the “Sponsor”) and Freddie Mac, Sponsor is exchanging Bonds (or
interests in Bonds) for Certificates issued by Freddie Mac pursuant to each Series Certificate
Agreement.  Pursuant to the Reimbursement
Agreement and each Series Certificate Agreement, Freddie Mac has agreed to
provide its Credit Enhancement and liquidity support on the terms provided
therein.

 

B.            Guarantor
is an affiliate of the Sponsor.

 

C.            As
of the date hereof the Mortgaged Properties identified on Exhibit B
hereto are Non-Stabilized Mortgaged Properties.

 

D.            It
is a condition precedent to Freddie Mac’s obligation to provide the Credit
Enhancement and liquidity support that Guarantor shall have entered into this
Agreement to guaranty certain obligations of the Sponsor to Freddie Mac and provide
Freddie Mac additional security with respect to such Non-Stabilized Mortgaged
Properties.

 

NOW, THEREFORE, in
consideration of the mutual covenants and undertakings set forth in this
Agreement and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by Guarantor and Freddie Mac, Guarantor
and Freddie Mac agree as follows:

 

 

1.             Incorporation of Recitals;
Definitions; Interpretation; Reference Materials.

 

1.1           Incorporation of
Recitals.  The recitals set
forth in “Basis for this Agreement” are, by this reference, incorporated into
and deemed a part of this Agreement.

 

1.2           Definitions.  Initially capitalized terms used in this
Agreement and not otherwise defined in this Agreement, but defined in the
Reimbursement Agreement, shall have the meanings given to those terms in the
Reimbursement Agreement or the Servicing Agreement (as defined in the
Reimbursement Agreement).

 

1.3           Interpretation.  Words importing any gender include all
genders.  The singular form of any word
used in this Agreement shall include the plural, and vice versa, unless the
context otherwise requires.  Words
importing persons include natural persons, associations, partnerships and
corporations.

 

1.4           Reference Materials.  Sections mentioned by number only are the
respective sections of this Agreement so numbered.  Reference to “this section” or “this
subsection” shall refer to the particular section or subsection in which such
reference appears.  Any captions, titles
or headings preceding the text of any section and any table of contents or
index attached to this Agreement are solely for convenience of reference and
shall not constitute part of this Agreement or affect its meaning, construction
or effect.

 

2.             Deposits to Stabilization
Escrow.

 

2.1           Deposits and Permitted
Investments.

 

(a)           Upon
execution of this Agreement, Guarantor shall deposit with Freddie Mac the sum
of $76,000,000.00 (the “Initial Deposit”).

 

(b)           Thereafter,
Guarantor shall deposit or cause to be deposited with Freddie Mac the following
additional deposits (collectively, the “Stabilization Escrow Required
Additional Deposits”) but only up to the amount that the Deposit (hereinafter
defined) equals the Required Escrow Amount (hereinafter defined):

 

(i)            Within
three (3) Business Days after an increase of the principal amount of the
Bank Credit Facility to an amount in excess of $350,000,000, the amount of such
excess.

 

(ii)           Commencing
on July 1, 2008 and continuing on the first day of each month thereafter,
an amount equal to one-twelfth (1/12th) of the amount of the Escrow
Shortfall (the “Monthly Deposit”) determined as of June 30, 2008;
provided, however; that only one-half of each Monthly Deposit is required to be
paid on the first day of each month (the “Cash Portion”) and the remaining one-half
shall be deferred and paid on the last day of the calendar quarter (the “Deferred
Portion”) following recalculation of the Required Escrow Amount.  The Deferred Portion payable on the last day
of each calendar quarter shall be reduced, if applicable, by the reduction in
the Required Escrow Amount due to Non-Stabilized 

 

2

 

Mortgaged Properties having been
re-classified during such quarter based on “Completion” or “Stabilization”
pursuant to Sections 3.2(a) and (b), and if such reduction exceeds the
Deferred Portion, the amount of such excess shall be credited against the
ensuing Monthly Deposits (i.e., Monthly Cash Portions and quarterly Deferred
Portions) until such excess is fully credited. 
As used herein, the term “Escrow Shortfall” shall mean, as of the date
of determination, the amount equal to the difference between (i) the
Required Escrow Amount on such date and (ii) the Deposit.  For purposes of determining whether any
Stabilization Escrow Required Additional Deposits are required, any withdrawals
from the Stabilization Escrow to pay Sponsor’s Stabilization Obligations shall
not be taken into account.

 

(c)           From
and after the date on which the Deposit equals or exceeds the Required Escrow
Amount, the obligation to make Stabilization Escrow Required Additional
Deposits and to pay the Shortfall Fee (hereinafter defined) shall terminate and
shall thereafter be of no further force or effect for the remaining term of
this Agreement.

 

(d)           The
Guarantor may, but shall not be required to, make or cause to be made
additional cash deposits from time to time (collectively the “Voluntary Additional
Deposits”).

 

The Initial Deposit, the Stabilization
Escrow Required Additional Deposits and, to the extent actually paid to Freddie
Mac, the Voluntary Additional Deposits are hereinafter collectively referred to
as the “Deposit.”  Freddie Mac shall hold
the Deposit in a segregated account (the “Stabilization Escrow”) until used or
released as provided herein, and invest the Deposit in any of the Permitted
Investments described on Exhibit A hereto as directed from time to
time by Guarantor, and in the absence of such direction or upon and during the
continuance of a Termination Event under the Reimbursement Agreement, in
Permitted Investments of the type specified in Category 5 of Exhibit A
hereto.  Earnings on the Deposit shall be
held in the Stabilization Escrow and invested in Permitted Investments.  Subject to Section 3.2(c) below, such
earnings shall be distributed quarterly to Guarantor no later than the 15th of
the month next following the end of each calendar quarter commencing with the
end of the first calendar quarter in 2008.

 

The Guarantor represents and
warrants to Freddie Mac that as of December 27, 2007, the outstanding
balance of the Bank Credit Facility is $350,000.00.

 

2.2           Shortfall Fee.  The Guarantor shall pay Freddie Mac a fee equal
to the Shortfall Fee Percentage (hereinafter defined) times the Escrow
Shortfall as of the first day of each calendar month (the “Shortfall Fee”).  The Shortfall Fee shall accrue from January 1,
2008, shall be due and payable in arrears on the first day of each month commencing
on February 1, 2008, and shall be calculated on a 30/360 basis.  The “Shortfall Fee Percentage” shall be five
percent (5%) per annum for the six month period commencing January 1,
2008, eight percent (8%) per annum for the six-month period commencing July 1,
2008, and eleven percent (11%) per annum for the period commencing January 1,
2009.

 

3

 

2.3           Reports.  Freddie Mac or the Investment Agent (hereinafter
defined) shall provide Guarantor (i) on or before the 5th Business Day of
each month, a monthly report detailing the amount of the Escrow Shortfall (if
any), the balance of the Stabilization Escrow and all earnings added thereto
and distributions therefrom, and (ii) contemporaneously with any quarterly
recalculation pursuant to Section 3.3, an updated Exhibit B
reflecting Non-Stabilized Mortgaged Properties which have achieved
Stabilization or which have been re-classified as “Lease-up” upon having
achieved Completion.

 

2.4           Losses.  Freddie Mac shall not be liable for any
losses resulting from investment of the Stabilization Escrow (except for any
loss resulting from Freddie Mac’s willful misconduct or gross negligence), nor
shall any such loss diminish the amount of the Stabilization Obligations (as
hereinafter defined).

 

2.5           Security Interest.  Guarantor assigns and pledges to Freddie Mac
and grants to Freddie Mac a continuing security interest in and lien on all of Guarantor’s
right, title and interest in the Deposit and the Stabilization Escrow
(including all monies or Permitted Investments held therein), together with all
additions, substitutions, replacements and proceeds thereof and all income,
interest, dividends and other distributions thereon, as security for its
guaranty herein and for all of Sponsor’s Stabilization Obligations; provided,
however, Freddie Mac shall have the right to make disbursements from the
Stabilization Escrow in accordance with the terms of this Agreement.

 

2.6           Investment Agent.  Freddie Mac may contract with a third party
(the “Investment Agent”) to hold, invest and disburse the Stabilization Escrow
pursuant to the terms hereof.  The
Investment Agent shall be the sole and exclusive agent of Freddie Mac pursuant
to a separate agreement between the Investment Agent and Freddie Mac and
Freddie Mac may at any time and in its sole discretion replace the Investment
Agent or terminate the services of the Investment Agent.  Freddie Mac shall have the exclusive right to
direct the Investment Agent with respect to all entitlement orders,
instructions and directions of any kind, including without limitation,
directions to liquidate all or any part of the Stabilization Escrow and to pay
over to Freddie Mac all proceeds therefrom; provided, however the Guarantor
shall have the right to direct investments of the Stabilization Escrow as
provided in Section 2.1.  Deutsche
Bank National Trust Company shall be the initial Investment Agent.

 

3.             Disbursements and Releases
from the Stabilization Escrow

 

3.1           Disbursements from the
Stabilization Escrow.  Freddie
Mac may from time to time disburse funds from the Stabilization Escrow for the
payment of any of the following with respect only to Non-Stabilized Mortgaged
Properties prior to the date, if any, on which they achieve Stabilization
(without regard to when a release of funds is made pursuant to Section 3.2):  (collectively, “Sponsor’s Stabilization
Obligations”):

 

(a)           To
fund the payment of any Release Purchase Price due on behalf of Sponsor with
respect to any Non-Stabilized Mortgaged Property prior to the achievement of
Stabilization as contemplated under Section 5.3(b), (d) or (f) of
the Reimbursement Agreement.

 

4

 

(b)           To
fund the payment of the Release Purchase Price when Freddie Mac exercises its
purchase right with respect to a Non-Stabilized Mortgaged Property that has not
achieved Stabilization by the Required Stabilization Date (as may be extended)
pursuant to Section 7.3(b) of the Reimbursement Agreement, or to make
payments when due under any related Bond Purchase Loan as contemplated under Section 7.3(b) of
the Reimbursement Agreement.

 

(c)           To
reimburse Freddie Mac for (i) any other Advance made by Freddie Mac with
respect to a Non-Stabilized Mortgaged Property, or (ii) for any cost or
expense that Freddie Mac suffers or incurs as a direct result of an Inaccuracy
with respect to a Non-Stabilized Mortgaged Property and any loss or damage suffered
or incurred prior to the achievement of Stabilization respecting a
Non-Stabilized Mortgaged Property as a direct result of such Inaccuracy;
provided, however, any loss or damage suffered or incurred in respect of a Non-Stabilized
Mortgaged Property or the related Bonds shall only be determined at the time of
Asset Resolution, whereas any other cost or expense subject to indemnification
under this Section 3.1(c) will be determined at the time of
incurrence.

 

3.2           Releases from the
Stabilization Escrow.

 

(a)           At
any time that a Non-Stabilized Mortgaged Property classified as “Construction”
or “Rehabilitation” on Exhibit B shall have achieved “Completion” (as
defined in the Bond Documents related to such Non-Stabilized Mortgaged
Property) but not Stabilization, Guarantor may deliver to the Servicer (for
redelivery by Servicer to Freddie Mac pursuant to the Servicing Agreement) a
Certification of Completion in the form attached hereto as Exhibit C
and may request from Freddie Mac a release from the Stabilization Escrow in an
amount equal to the Applicable Escrow Release Amount specified in such notice
and to be determined pursuant to Section 3.3 below (together with a
calculation of such amount pursuant to Section 3.3).  Delivery of any such Certification of
Completion shall be deemed to be an “assumption” for the purposes of Section 2.1
of the Reimbursement Agreement such that any inaccuracy set forth in such
Certification shall constitute an Inaccuracy, as defined in the Reimbursement
Agreement, which shall afford Freddie Mac the remedies with respect thereto as
set forth in Section 2.4(c) of the Reimbursement Agreement.  Upon Freddie Mac’s determination (which has
been delegated to the Servicer pursuant to the terms of the Servicing Agreement)
that such Non-Stabilized Mortgaged Property has achieved Completion and
verification by Freddie Mac as to completeness of required documentation and
accuracy of calculations of the Applicable Escrow Release Amount, Freddie Mac
shall release such amount from the Stabilization Escrow to the Guarantor in
accordance with Section 3.4 below and reclassify such Non-Stabilized
Mortgaged Property as “Lease-up” on an updated (as of the end of each calendar
quarter) Exhibit B.

 

(b)           At
any time that a Non-Stabilized Mortgaged Property shall have achieved
Stabilization, Guarantor may deliver to the Servicer (for redelivery by
Servicer to Freddie Mac pursuant to the Servicing Agreement) a Certification of
Stabilization in the form attached hereto as Exhibit D and may
request from Freddie Mac a release from the Stabilization Escrow in an amount
equal to the Applicable Escrow Release Amount 

 

5

 

specified in such notice and to be determined pursuant to Section 3.3
below (together with a calculation of such amount pursuant to Section 3.3).  Delivery of any such Certification of
Stabilization shall be deemed to be an “assumption” for the purposes of Section 2.1
of the Reimbursement Agreement such that any inaccuracy set-forth in such
Certification shall constitute an “Inaccuracy” as defined in the Reimbursement
Agreement, which shall afford Freddie Mac the remedies with respect thereto as
set forth in Section 2.4(c) of the Reimbursement Agreement.  Upon Freddie Mac’s determination (which has
been delegated to the Servicer pursuant to terms set forth in the Servicing
Agreement) that such Non-Stabilized Mortgaged Property has achieved
Stabilization and (ii) verification by Freddie Mac as to completeness of
required documentation and accuracy of calculations of the Applicable Escrow
Release Amount, Freddie Mac shall release such amount from the Stabilization
Escrow to the Guarantor in accordance with Section 3.4 below and
reclassify such Non-Stabilized Mortgaged Property as “Stabilized” on an updated
(as of the end of each calendar quarter) Exhibit B.

 

(c)           No
amounts, including earnings on the Deposit, shall be released from the
Stabilization Escrow under Sections 2.1 or 3.2 unless and until all Stabilization
Escrow Required Additional Deposits shall have been made.

 

3.3           Calculation of
Applicable Escrow Release Amount.

 

(a)           For
the purposes hereof the “Applicable Escrow Release Amount” shall mean, with
respect to any Mortgaged Property, the product of (i) the UPB of Related
Bond Mortgage Loan (as shown on Exhibit B hereto), multiplied by (ii) the
Applicable Release Factor.  The “Applicable
Release Factor” with respect to any Non-Stabilized Mortgaged Property shall be
determined by Freddie Mac in accordance with the following:

 

(i)            In
the case where a Non-Stabilized Mortgaged Property classified as “Rehabilitation”
or “Construction” has achieved Completion but has not achieved Stabilization,
the Applicable Release Factor shall be determined based on the classification
of the Mortgaged Property as shown on Exhibit B, as follows:

 

	
  Classification of Mortgaged Property

  	
   

  	
  Applicable Release Factor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rehabilitation

  	
   

  	
  7.0

  	
  %

  
	
  Construction

  	
   

  	
  8.8

  	
  %

  

 

(ii)           In
the case where Stabilization has been achieved, the Applicable Release Factor
with respect to a Mortgaged Property shall be determined based on the then
current classification of the Mortgaged Property as shown on the most recent
updated Exhibit B, as follows:

 

6

 

	
  Classification of Mortgaged Property

  	
   

  	
  Applicable Release Factor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lease-up

  	
   

  	
  4.5

  	
  %

  
	
  Rehabilitation

  	
   

  	
  11.5

  	
  %

  
	
  Construction

  	
   

  	
  13.3

  	
  %

  

 

(iii)          Notwithstanding
the foregoing, with respect to any Bond classified as “Construction Bond” on
the Data Tape, the related Mortgaged Property shall be deemed to have achieved
Stabilization upon repayment in full of such Bond.

 

(iv)          Notwithstanding
the foregoing, if prior to Stabilization there exists a partial mandatory
redemption with respect to any Bond classified as “P & C” on the Data
Tape, the related Non-Stabilized Mortgaged Property shall be treated as having
achieved Stabilization in part in an amount equal to the amount of such
redemption.

 

(b)           The
Applicable Escrow Release Amount as calculated in accordance with Section 3.3(a)(i) and/or
(ii) shall be reduced, if applicable, under the following circumstances:

 

(i)            At
any time that less than 50% of the Non-Stabilized Mortgaged Properties (measured
in terms of the UPB of the related Bond Mortgage Loans shown on the original
Exhibit B) have reached Stabilization, upon a release under Section 3.2(b),
the Applicable Escrow Release Amount shall be reduced by an amount equal to 10%
of the Applicable Escrow Release Amount calculated based on the related
Mortgaged Property Type shown on the original  Exhibit B.  There shall be no reduction under this
subsection for any release under (x) Section 3.2(a), (y) Section 3.2(b) after
50% of the Non-Stabilized Mortgaged Properties (measured in terms of the UPB of
the related Bond Mortgage Loans shown on the original  Exhibit B)
have reached Stabilization, or (z) Section 3.3(a) (iii) or
(iv).

 

(ii)           At
any time, after the deposit of all Stabilization Escrow Required Additional
Deposits has been made, that the amount on deposit in the Stabilization Escrow
is less than the Required Escrow Amount for the then remaining Non-Stabilized
Mortgaged Properties, the Applicable Escrow Release Amount shall be reduced by
such difference, and if such difference equals or exceeds the Applicable Escrow
Release Amount as calculated in accordance with Section 3.3(a)(i) or
(ii), the Applicable Escrow Release Amount shall be zero ($0).  The “Required Escrow Amount” shall be the sum
of all of the amounts determined for each remaining Non-Stabilized Mortgaged
Property by multiplying the UPB of 

 

7

 

the Related Bond Mortgage Loan (as shown on
the most recently updated Exhibit B) times the Applicable Release
Factor specified in Section 3.3(a)(ii).

 

3.4           Timing of Releases from
Stabilization Escrow.  Freddie
Mac will release amounts to the Guarantor as required pursuant to Section 3.2
on a quarterly basis as follows:  if a Guarantor
request and applicable Certification of Completion or Certification of
Stabilization is received (accompanied by all documentation required to be
submitted by the Servicer under the Servicing Agreement in connection with such
release) no later than the 15th day of the last month in the
calendar quarter and verified by Freddie Mac as to completeness and accuracy of
calculations, Freddie Mac will release the Applicable Escrow Release Amount to
the Guarantor no later than the 5th Business Day of the month next
following the end of such calendar quarter, provided, however, with respect to
the first two (2) releases hereunder, Freddie Mac shall have until the 15th
day of the month next following the end of such calendar quarter to release the
Applicable Escrow Release Amount to the Guarantor.

 

3.5           Final Release Upon
Termination or 100% Stabilization. 
This Agreement and the assignments, pledges and security interests
created or granted by this Agreement shall terminate upon the earlier to occur
of (i) disbursement or release of all funds in the Stabilization Escrow in
accordance with Sections 3.1, 3.2 and 3.4, or (ii) the achievement of
Stabilization by all of the remaining Non-Stabilized Mortgaged Properties;
provided that any then unpaid Sponsor’s Stabilization Obligations shall have
been satisfied in full, in either of which events Freddie Mac shall promptly
deliver to Guarantor all remaining funds in the Stabilization Escrow.

 

4.             Guaranty.

 

4.1           Absolute Guaranty.  Guarantor hereby absolutely, unconditionally
and irrevocably guarantees to Freddie Mac the full and prompt payment when due,
whether at maturity or earlier, by reason of acceleration or otherwise, and at
all times thereafter, and the full and prompt performance when due, of all of
the following:

 

(a)           All
actual out-of-pocket costs and expenses, including reasonable fees and out of
pocket expenses of attorneys and expert witnesses, incurred by Freddie Mac in
enforcing its rights under this Agreement.

 

(b)           The
payment and performance of all of Sponsor’s Stabilization Obligations.

 

4.2           Obligations
Unconditional.  Guarantor’s
obligations under this Agreement constitute an unconditional guaranty of
payment and performance and not merely a guaranty of collection.

 

4.3           Waivers by Guarantor.  The obligations of Guarantor under this
Agreement shall be performed within five (5) days of written demand
therefor, by Freddie Mac and shall be unconditional irrespective of the
genuineness, validity, regularity or enforceability of the Reimbursement
Agreement, and without regard to any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety, a guarantor, a borrower
or a mortgagor.  Guarantor (to the
fullest extent permitted by law) hereby waives the benefit of all 

 

8

 

principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this Agreement
and agrees that Guarantor’s obligations shall not be affected by any
circumstances, whether or not referred to in this Agreement, which might
otherwise constitute a legal or equitable discharge of a surety, a guarantor, a
borrower or a mortgagor.  Guarantor
hereby waives the benefits of any right of discharge under any and all statutes
or other laws relating to a guarantor, a surety, a borrower or a mortgagor and
any other rights of a surety, a guarantor, a borrower or a mortgagor
thereunder.  Without limiting the
generality of the foregoing, Guarantor hereby waives, to the fullest extent
permitted by law, diligence in collecting the Sponsor’s Stabilization
Obligations, presentment, demand for payment (except as expressly set forth
herein), protest, all notices with respect to the Reimbursement Agreement and
this Agreement which may be required by statute, rule of law or otherwise
to preserve Freddie Mac’s rights against Guarantor under this Agreement,
including, but not limited to (except as expressly set forth herein), notice of
acceptance, notice of any amendment of the Reimbursement Agreement, notice of
the occurrence of any default or Event of Default, notice of intent to
accelerate, notice of acceleration, notice of dishonor, notice of foreclosure,
notice of protest, and notice of the incurring by Sponsor of any obligation or
indebtedness.  Guarantor also waives, to
the fullest extent permitted by law, all rights to require Freddie Mac to (a) proceed
against Sponsor with respect to the Sponsor’s Stabilization Obligations, or (b) proceed
against or exhaust any collateral held by Freddie Mac to secure the repayment of
the Obligations.  Guarantor further
waives, to the fullest extent permitted by applicable law, any right to revoke
this Agreement as to any future advances by Freddie Mac under the Reimbursement
Agreement.

 

4.4           Modifications to
Documents.  At any time or
from time to time and any number of times, without notice to Guarantor and
without affecting the liability of Guarantor, (a) the time for payment of
the Sponsor’s Stabilization Obligations may be extended or the Sponsor’s
Stabilization Obligations may be renewed in whole or in part; (b) the time
for Sponsor’s performance of or compliance with any covenant or agreement
contained in the Reimbursement Agreement, whether presently existing or
hereinafter entered into, may be extended or such performance or compliance may
be waived; (c) the Reimbursement Agreement, and the security instrument or
any other loan document evidencing or securing the obligations of Owners (as
defined in the Reimbursement Agreement) may be modified or amended by Freddie
Mac and Sponsor in any respect; and (d) any security for the Sponsor’s
Stabilization Obligations may be modified, exchanged, surrendered or otherwise
dealt with or additional security may be pledged or mortgaged for the Sponsor’s
Stabilization Obligations.

 

4.5           Subordination of
Sponsor’s Indebtedness.  Any
indebtedness of Sponsor held by Guarantor now or in the future is and shall be
subordinated to the Sponsor’s Stabilization Obligations and any such
indebtedness of Sponsor shall be collected, enforced and received by Guarantor,
as trustee for Freddie Mac, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Agreement.

 

4.6           Waiver of Subrogation.  Guarantor shall have no right of, and hereby
waives any claim for, subrogation or reimbursement against Sponsor or any
member of Sponsor by reason of any payment by Guarantor under this Agreement,
whether such right or claim arises at law or in equity or under any contract or
statute, until the Sponsor’s Stabilization Obligations have been paid in full
and there has expired the maximum possible period thereafter during which any 

 

9

 

payment made by Sponsor to Freddie Mac with
respect to the Sponsor’s Stabilization Obligations could be deemed a preference
under the United States Bankruptcy Code.

 

4.7           Preference.  If any payment by Sponsor is held to
constitute a preference under any applicable bankruptcy, insolvency, or similar
laws, or if for any other reason Freddie Mac is required to refund any sums to
Sponsor, such refund shall not constitute a release of any liability of
Guarantor under this Agreement.  It is
the intention of Freddie Mac and Guarantor that Guarantor’s obligations under
this Agreement shall not be discharged except by Guarantor’s performance of
such obligations and then only to the extent of such performance.

 

4.8           Limited Recourse.  Notwithstanding any other
provision contained herein, the Guarantor’s obligations under this Agreement
are limited recourse obligations payable only from the Deposit held from time
to time in the Stabilization Escrow.

 

5.             Miscellaneous Provisions.

 

5.1           Further Assurances.  By its signature hereon, Guarantor hereby
agrees to cooperate with Freddie Mac in the filing and recording of, and
irrevocably authorizes Freddie Mac, at any time and from time to time, to
execute (on behalf of Guarantor), and file and record against Guarantor, any
notice, financing statement, continuation statement, amendment statement,
instrument, document or agreement under the Uniform Commercial Code that
Freddie Mac may reasonably consider necessary or desirable to create, preserve,
continue, perfect or validate any security interest granted hereunder and Guarantor
hereby irrevocably appoints Freddie Mac as Guarantor’s attorney-in-fact to do
any of the foregoing acts and things in Guarantor’s name that Freddie Mac may
deem necessary or desirable.  This power
of attorney is coupled with an interest with full power of substitution and is
irrevocable.  Guarantor hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof.

 

5.2           Termination of Security
Interest.  Upon termination of
this Agreement, Freddie Mac, if requested by Guarantor, shall execute and
deliver to Guarantor for recording or filing in each office in which any
assignment or financing statement relative to the Stabilization Escrow shall
have been filed or recorded, a termination statement or release under
applicable law (including, if relevant, the UCC) releasing Freddie Mac’s
interest therein, and such other documents and instruments as Guarantor may
reasonably request, all without recourse to or any warranty whatsoever by
Freddie Mac, and at the cost and expense of Guarantor.

 

5.3           Entire Agreement;
Amendments.  This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties to this Agreement
with respect to the subject matter of this Agreement. This Agreement may not be
amended, changed, waived or modified except by a writing executed by both
parties.

 

5.4           Successors and Assigns.  This Agreement shall inure to the benefit of,
and be enforceable by, Guarantor and Freddie Mac and their respective
successors and permitted assigns, and nothing herein expressed or implied shall
be construed to give any other Person any legal or equitable rights under this
Agreement.  Neither this Agreement nor
any of either party’s rights, interests or obligations under this Agreement
shall be assigned by such party without the prior written consent of the other
party; provided, however, the consent of the Guarantor shall 

 

10

 

not be required upon the occurrence and
during the continuation of a Remedy Event under the Reimbursement Agreement.

 

5.5           Notices.  All written notices, certificates or other
communications shall be given pursuant to the requirements for notices given
under the Reimbursement Agreement.

 

5.6           Governing Law.
This Agreement shall be construed, and the rights and obligations of Freddie
Mac and Guarantor hereunder determined, in accordance with federal statutory or
common law (“federal law”).  Insofar as
there may be no applicable rule or precedent under federal law and insofar
as to do so would not frustrate the purposes of any provision of this Agreement
and the Freddie Mac Act, the local law of the State of New York shall be deemed
reflective of federal law.  The parties
agree that any legal actions among Freddie Mac and Guarantor regarding each party
hereunder shall be originated in the United States District Court in and for
the Eastern District of Virginia, and the parties hereby consent to the
jurisdiction and venue of said Court in connection with any action or
proceeding initiated concerning this Agreement.

 

5.7           Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the greatest extent possible.

 

5.8           Multiple Counterparts.  This Agreement may be simultaneously executed
in multiple counterparts, all of which shall constitute one and the same
instrument and each of which shall be, and shall be deemed to be, an original.

 

[Signatures Commence on Following Page]

 

11

 

Guarantor and Freddie Mac have
caused this Agreement to be signed, on the date first written above, by their
respective officers duly authorized.

 

 

	
   

  	
  CENTERLINE
  STABILIZATION 2007-1 

  
	
   

  	
  SECURITIZATION,
  LLC, a Delaware limited

  
	
   

  	
  liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CENTERLINE
  HOLDING TRUST, a

  
	
   

  	
  Delaware
  statutory trust, its manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc D. Schnitzer

  	
   

  
	
   

  	
   

  	
  Marc D. Schnitzer

  
	
   

  	
   

  	
  President

  

 

[GUARANTOR’S
SIGNATURE PAGE OSPREY STABILIZATION GUARANTY, ESCROW AND SECURITY AGREEMENT]

 

 

	
   

  	
  FEDERAL HOME LOAN MORTGAGE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Kimball Griffith

  	
   

  
	
   

  	
   

  	
  W. Kimball Griffith

  
	
   

  	
   

  	
   Vice President,
  Multifamily Affordable

  
	
   

  	
   

  	
    Housing
  Production & Investments

  

 

[FREDDIE MAC’S SIGNATURE PAGE OSPREY STABILIZATION
GUARANTY, ESCROW AND SECURITY AGREEMENT]

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