Document:

Exhibit 10.10

Exhibit 10.10

EXECUTION COPY

 

MULTICURRENCY — CROSS BORDER SCHEDULE

to the Master Agreement

between

MERRILL LYNCH CAPITAL SERVICES, INC.,

(“Party A”)

and

CENTERLINE GUARANTEED HOLDINGS LLC,

(“Party B”)

Dated as of March 5, 2010

 

 

 

 

I.

TERMINATION PROVISIONS

In this Agreement:

	A.	 	“Specified Entity” means in relation to Party A for the purpose of:

	 	 	 
	Section 5(a)(v),

	 	Not Applicable
	Section 5(a)(vi),

	 	Not Applicable
	Section 5(a)(vii),

	 	Not Applicable
	Section 5(b)(iv),

	 	Not Applicable

in relation to Party B for the purpose of:

	 	 	 
	Section 5(a)(v),

	 	Not Applicable
	Section 5(a)(vi),

	 	Not Applicable
	Section 5(a)(vii),

	 	Not Applicable
	Section 5(b)(iv),

	 	Not Applicable

	B.	 	“Specified Transaction” will have the meaning specified in Section 14 of this Agreement. No
change from Section 14, other than the definition of “Specified Transaction” shall expressly
include any Transaction or Confirmation entered into between Party A and Party B under this
Agreement, including without limitation the Transactions and Confirmations specified on
Schedule I to that certain Transaction Assignment Agreement, dated as of even date herewith,
among Party A, Party B and Centerline Capital Group, Inc.

	C.	 	The “Cross Default” provisions of Section 5(a)(vi) will apply to Party A and Party B.

If such provisions apply:

“Specified Indebtedness” will have the meaning specified in Section 14 of this
Agreement unless another meaning is specified here: No change from Section 14.

“Threshold Amount” means, in respect of Party A, U.S. $100,000,000 or its
equivalent in other currencies, and in respect of Party B, U.S. $0 or its equivalent
in other currencies.

	D.	 	The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will apply to Party A and
Party B.

	E.	 	The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A or
Party B.

	F.	 	“Payments on Early Termination.” In lieu of any payments that would otherwise be due under
Section 6(e) of the Agreement, if any Early Termination Date occurs with respect

 

 

 

to any Confirmation, Party B shall be deemed required to pay under Section 6(e) of the
Agreement Party A’s Loss as determined by Party A as a result of the termination of such
Confirmation.

	G.	 	“Termination Currency” means United States Dollars.

	H.	 	“Additional Termination Events.” The following shall constitute Additional Termination
Events pursuant to Section 5(b)(v): With respect to any Confirmation, any Additional
Termination Event as defined in said Confirmation.

II.

TAX REPRESENTATIONS

	A.	 	Payer Representations. For the purpose of Section 3(e) of this Agreement, Party A and
Party B make the following representation:

It is not required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii), or 6(e) of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement,
and the accuracy and effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the satisfaction of the agreement
of the other party contained in Section 4(d) of this Agreement, provided that it
shall not be a breach of this representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section 4(a)(iii) by reason of
material prejudice to its legal or commercial position.

	B.	 	Payee Representations. For the purpose of Section 3(f) of this Agreement, Party A and
Party B will make the following representations specified below:

	 	(i)	 	Party A: Party A is a corporation created and existing under
the laws of the State of Delaware. Party A is a U.S. person within the meaning
of Section 7701 of the Internal Revenue Code and its U.S. employer
identification number is 13-3227875.

	 	(ii)	 	Party B: Party B is a limited liability company created and
existing under the laws of the State of Delaware. Party B is a U.S. person
within the meaning of Section 7701 of the Internal Revenue Code and its U.S.
employer identification number is 27-1991375.

 

2

 

III.

DOCUMENTS TO BE DELIVERED

For the purposes of Section 4(a)(i) and (ii) of this Agreement, each party agrees to deliver
the following documents as applicable:

	 	1.	 	Tax forms, documents or certificates to be delivered are:

Each party agrees to deliver to the other party, upon reasonable demand by such
other party, any tax form that may be required or reasonably requested in writing in
order to allow such other party to make a payment under this Agreement (or under any
Credit Support Document) without any deduction or withholding for or on account of
any tax imposed by any government or other taxing authority in respect of any such
payment (other than a stamp, registration, documentation or similar tax), or with
such deduction or withholding at a reduced rate, which form shall be correct,
complete and duly executed.

 

3

 

	 	2.	 	Other Documents to be delivered are:

	 	 	 	 	 	 	 
	Party Required	 	 	 	 	 	Covered by
	to Deliver	 	Form/Document/	 	Date by which to	 	Section 3(d)
	Document	 	Certificate	 	be Delivered	 	Representation
	Party A/Party B

	 	Annual audited and
quarterly unaudited
financial
statements (or in
the case of
Party A, of its
Credit Support
Provider and in the
case of Party B, of
itself and any
Credit Support
Provider) prepared
in accordance with
generally accepted
accounting
principles in the
country in which
the party (or its
Credit Support
Provider as
applicable) is
organized; in
addition, Party B
shall provide
Party A notice of
any Monetary
Liability
Collateral Trigger
Event and, after
the expiration of
any applicable
notice and cure
period, notice of
any default with
respect to any debt
which is secured by
the Properties (the
“Subject Debt”)
which would give
any person or
entity the right to
foreclose, and
shall, promptly
upon request,
provide such other
information as
Party A may
reasonably request,
including, but not
limited to, any
information
necessary for
Party A to
calculate Exposure,
any Independent
Amount and/or
Monetary Liability
under this
Agreement.
Provided, however,
that Party B shall
not be required to
provide such
audited financial
statements if Party
A does not approve
payment for the
expense of
delivering those
statements.
	 	Promptly after
request (except
with respect to
notices of the
occurrence of any
Monetary Liability
Collateral Trigger
Event or any
default on the
Subject Debt which
would give any
Person or entity
the right to
foreclosure, as to
which Party B shall
give Party A notice
within five (5)
business days (or,
except with respect
to any Monetary
Liability
Collateral Trigger
Event, if a notice
and right to cure
period is
applicable, within
five (5) business
days of the
expiration of such
notice and cure
period). Provided
that financial
statements shall
have been deemed
delivered hereunder
to the extent
publicly available.
	 	Yes.

 

4

 

	 	 	 	 	 	 	 
	Party Required	 	 	 	 	 	Covered by
	to Deliver	 	Form/Document/	 	Date by which to	 	Section 3(d)
	Document	 	Certificate	 	be Delivered	 	Representation
	Party A/Party B

	 	A duly executed
copy of any Credit
Support Document.
	 	Concurrently with
the execution of
this Agreement, or
if set forth in any
Confirmation,
concurrently with
the delivery of
such Confirmation
provided, however
the Account
Agreements shall be
delivered no later
than March 19,
2010.
	 	No.
	 
	 	 	 	 	 	 
	Party A/Party B

	 	A certificate of an
authorized officer
for such party and
any Credit Support
Provider of such
party certifying
the authority,
names and true
signatures of the
officers signing
this Agreement,
each Confirmation
and any Credit
Support Document,
reasonably
satisfactory in
form and substance
to the other party,
and, as applicable,
certified copies of
any applicable
resolution(s) or
other documents
authorizing the
execution and
delivery of this
Agreement as
reasonably
satisfactory in
form and substance
to the other party.
	 	Concurrently with
the execution of
this Agreement,
and, if a
Confirmation so
requires it on or
before the date set
forth therein.
	 	Yes.
	 
	 	 	 	 	 	 
	Party B

	 	Opinion of outside
counsel as to due
authorization,
execution and
delivery and
enforceability of
this Agreement
(including the
Schedule, any
Confirmations
executed on the
date hereof and any
Credit Support
Documents) in form
and substance
acceptable to Party
A.
	 	Concurrently with
the execution of
this Agreement.
	 	No.

 

5

 

IV.

MISCELLANEOUS

	A.	 	Addresses for Notices. For the purpose of Section 12(a) of this Agreement:

Address for notices or communications to Party A:

	 	 	 
	Address:

	 	Merrill Lynch World Headquarters
	 

	 	4 World Financial Center, 11th Floor
	 

	 	250 Vesey Street
	 

	 	New York, New York 10080
	 

	 	Attention: Municipal Capital Markets
	 

	 	Facsimile: (917) 778-0836
	 

	 	Telephone: (212) 449-7403
	 
	 	 

(For all purposes)

	 	 	 
	 
	 	 
	With a copy to:

	 	GMI Counsel
	 

	 	Merrill Lynch World Headquarters
	 

	 	4 World Financial Center, 12th Floor
	 

	 	New York, New York 10080
	 

	 	Attention: Swap Group
	 

	 	Facsimile: (212) 449-6993

(For all notices pursuant to Sections 5, 6 and 7 of this Agreement as well as any
changes to Party B’s address, telephone number or facsimile number)

Address for notices or communications to Party B:

	 	 	 
	 

	 	Centerline Guaranteed Holdings LLC]
	 

	 	625 Madison Avenue, 5th Floor
	 

	 	New York, New York 10022
	 

	 	Attention: Andrew Weil, Executive Director
	 

	 	Facsimile: (212) 751-3543
	 

	 	Telephone: (212) 521-6394

	B.	 	Process Agent. For the purpose of Section 13(c):

Party A appoints as its Process Agent: Not Applicable

Party B appoints as its Process Agent: Not Applicable

	C.	 	Offices. The provisions of Section 10(a) will apply to this Agreement.

	D.	 	Multibranch Party. For the purpose of Section 10(c) of this Agreement:

Party A is not a Multibranch Party.

 

6

 

Party B is not a Multibranch Party.

	E.	 	Calculation Agent. The Calculation Agent is Party A, unless otherwise specified in a
Confirmation in relation to the relevant Transaction.

	F.	 	Credit Support Document. Details of any Credit Support Document:

	 	 	 
	Party A:

	 	None.
	 
	 	 
	Party B:

	 	(i) that certain Credit Support Annex to the Schedule to this Master
Agreement, as amended, restated and/or supplemented from time to time;
	 
	 	 
	 

	 	(ii) that certain (a) Pledge and Security Agreement (All Assets),
dated as of even date herewith, between Party A and Party B; (b)
Assignment, Pledge and Security Agreement, dated as of even date
herewith, between Party A and Centerline Affordable Housing LLC
(“CAHA”); (c) Assignment, Pledge and Security Agreement, dated as of
even date herewith, among Party A and Centerline Guaranteed Manager
II LLC (“Guaranteed Manager”); and (d) Assignment, Pledge and
Security Agreement, dated as of even date herewith, among Party A,
CAHA and Guaranteed Manager (the foregoing, collectively, as amended,
restated and/or supplemented from time to time, the “Pledge
Agreements”);
	 
	 	 
	 

	 	(iii) that certain (a) Cash Management Agreement, dated as of the
date hereof, between Party A, Party B and Guaranteed Manager; (b)
Deposit Account Control Agreement, dated as of even date herewith,
among Party A, Party B and Wachovia Bank, National Association; (c)
Deposit Account Control Agreement, dated of even date herewith, among
Party A, Guaranteed Manager and Wachovia Bank, National Association
and any other account control agreements securing Party B’s
obligations hereunder (the foregoing, collectively, as amended,
restated and/or supplemented from time to time, the “Account
Agreements”);
	 
	 	 
	 

	 	(iv) Guaranty of Centerline Holding Company (“Guarantor”), as
reaffirmed on the date hereof by virtue of that certain Reaffirmation
of Guarantee; provided, however, the obligations of the Guarantor
thereunder shall be limited as described therein; and
	 
	 	 
	 

	 	(iv) any other documents evidencing, securing and/or guaranteeing
Party B’s obligations under the Agreement.

	G.	 	Credit Support Provider.

	 	1.	 	“Credit Support Provider” means in relation to Party A, None.

 

7

 

	 	2.	 	“Credit Support Provider” means in relation to Party B, the Guarantor and any
obligor, assignor, or pledgor under any Credit Support Document securing Party B’s
obligations under the Agreement.

	H.	 	Governing Law. This Agreement will be governed by and construed in accordance with the laws
of the State of New York without reference to choice of law doctrine.

	I.	 	Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will apply, unless
one party provides at least fifteen days’ prior notice to the other that subparagraph (ii)
will not apply.

	J.	 	“Affiliate” will have the meaning specified in Section 14 of this Agreement.

V.

OTHER PROVISIONS

	A.	 	Financial Statements. Section 3(d) is hereby amended by adding in the third line thereof
after the word “respect” and before the period:

“or, in the case of financial statements, a fair presentation of the financial
condition of the relevant party”

	B.	 	Additional Representations. For purposes of Section 3, the following shall be added,
immediately following paragraph (f) thereto:

(g) It is an “eligible contract participant” within the meaning of the United
States Commodity Exchange Act.

(h) It has entered into this Agreement (including each Transaction evidenced
hereby) in conjunction with its line of business (including financial intermediation
services) or the financing of its business.

(i) It is entering into this Agreement, any Credit Support Document to which it
is a party, each Transaction and any other documentation relating to this Agreement
or any Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise).

(j) Each party represents that the individuals executing and delivering this
Agreement and any other documentation (including any Credit Support Document)
relating to this Agreement on behalf of such party or to secure such party’s
obligation hereunder are duly empowered and authorized to do so, and such
individuals have duly executed and delivered this Agreement and any such other
documentation.

(k) There are no other documents or agreements relating to any Guaranteed
Partnership Agreement except for the Amended and Restated Master Participation
Agreement dated September 24, 2003 and the Original Master

 

8

 

Participation Agreement referred to therein (collectively and individually, as
applicable, as amended, restated and/or supplemented from time to time, the
“Participation Agreement”) other than those described therein each of which have
been assumed by Party B and terminated as of the date hereof. Party A as a third
party beneficiary of the Participation Agreement hereby consents to such assumption
and termination. In addition, Party A hereby acknowledges the termination of the
assignments of interests relating to the Participation Agreement.

In addition, the parties each represent (which representations will be deemed to be repeated
on each date on which a Transaction is entered into) that:

(j) Non-Reliance. Each party represents to the other party (which
representation will be deemed to be repeated by each party on each date on which a
Transaction is entered into or amended, extended or otherwise modified) that it is
acting for its own account, and has made its own independent decisions to enter into
this Agreement and any Transaction hereunder and as to whether this Agreement and
any Transaction hereunder is appropriate or proper for it based on its own judgment
and upon advice from such advisors as it has deemed necessary. It is not relying on
any communication (written or oral) of the other party as investment advice or as a
recommendation to enter into this Agreement or any Transaction hereunder, it being
understood that information and explanations related to the terms and conditions of
this Agreement and any Transaction hereunder shall not be considered investment
advice or a recommendation to enter into this Agreement or any Transaction
hereunder. No communication (written or oral) received from the other party shall
be deemed to be an assurance or guarantee as to the expected results of any
Transaction hereunder.

	C.	 	Transfer. Notwithstanding the provisions of Section 7 of this Agreement, Party A may assign
and delegate, in whole but not in part, its rights and obligations under this Agreement
without the consent of Party B to any wholly-owned corporate subsidiary of Merrill Lynch &
Co., Inc. (“ML&Co.”) organized in the United States of America, provided that no Event of
Default or Termination Event shall be occurring with respect to such wholly-owned subsidiary
as result of such transfer. Further, Party A may assign and delegate any of its rights and
obligations under this Agreement with notice to Party B (and, in the event such assignment is
prior to the True-Up Adjustment Date as defined in any applicable Guaranteed Partnership
Agreement or made to one of Party B’s competitors (with competitors being limited to those
entities which are engaged in the syndication of Tax Credits as defined in the applicable
Guaranteed Partnership Agreements) as reasonably determined in good faith by Party A, with the
prior written consent of Party B, which consent shall not be unreasonably withheld or delayed;
provided, however, such consent of Party B will not be required if the proposed transfer is
based on Party A’s reasonable, good faith determination that such transfer is necessitated by
legal or regulatory requirements and there is no non-competitor to which Party A can make such
an assignment on commercially reasonable terms) to any party assuming, either directly or
indirectly, Party A’s rights and obligations under any applicable IRFA

 

9

 

pursuant to the terms thereof. Any transfer permitted by the foregoing will not constitute an event described in Section 5(a)(viii) or 5(b)(iv). In the event that a court of law makes a final
non-appealable determination that Party A impermissibly assigned this Agreement to a
competitor of Party B as defined above, without Party B’s consent, Party A shall be
obligated to pay the legal fees incurred by Party B in connection with Party B’s claim of
impermissible assignment.

	D.	 	Method of Notice. Section 12(a)(ii) of the Master Agreement is deleted in its entirety.

	E.	 	Jurisdiction.

(a) Section 13(b)(i) of the Master Agreement is amended to read in its entirety as
follows:

“(i) submits to the jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New York City,
which submission shall be exclusive unless none of such courts has lawful
jurisdiction over such Proceedings;” and

(b) the final paragraph of Section 13(b) of the Agreement is hereby deleted.

	F.	 	Set-Off.

(a) Without affecting the provisions of this Agreement requiring the calculation of
certain net payment amounts, all payments under this Agreement will be made without setoff
or counterclaim; provided, however, that in addition to any rights of setoff a party may
have as a matter of law or otherwise, upon the designation or deemed designation of any
Early Termination Date, the non-Defaulting Party or non-Affected Party (in either case, “X”)
may without prior notice set off any sum or obligation (whether or not arising under this
Agreement, whether matured or not matured, whether or not contingent and regardless of the
currency, place of payment or booking office of the obligation) owed or due by the
Defaulting Party or Affected Party (in either case, “Y”) to X against any sum or obligation
(whether or not arising under this Agreement, whether or not matured, whether or not
contingent and regardless of the currency, place of payment or booking office of the
obligation) owed or due by X or any Affiliate of X to Y.

(b) For the purpose of cross-currency set-off, X may convert any obligation to another
currency at a market rate determined by X.

(c) If an obligation is unascertained, X may in good faith estimate that obligation and
set off in respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained.

	G.	 	Escrow. If by reason of the time difference between the cities in which payments are to be
made, it is not possible for simultaneous payments to be made on any date on which both
parties are required to make payments hereunder, either party may at its option and in its
sole discretion notify the other party that payments on that date are to be made in

 

10

 

escrow. In this case deposit of the payment due earlier on that date shall be made by 2:00 p.m. (local time at the place for the earlier payment) on that date with an escrow agent selected
by the notifying party, accompanied by irrevocable payment instruction (i) to release the
deposited payment to the intended recipient upon receipt by the escrow agent of the required
deposit of the corresponding payment from the other party on the same date accompanied by
irrevocable payment instructions to the same effect or (ii) if the required deposit of the
corresponding payment is not made on that same date, to return the payment deposited to the
party that paid it in escrow. The party that elects to have payments made in escrow shall
pay the costs of the escrow arrangements and shall cause those arrangements to provide that
the intended recipient of the payment due to be deposited first shall be entitled to
interest on that deposited payment for each day in the period of its deposit at the rate
offered by the escrow agent for that day for overnight deposits in the relevant currency in
the office where it holds that deposited payment (at 11:00 a.m. local time on that day) if
that payment is not released by 5:00 p.m. local time on the date it is deposited for any
reason other than the intended recipient’s failure to make the escrow deposit it is required
to make hereunder in a timely fashion. The escrow agent selected shall be a banking
institution mutually acceptable to Party A and Party B.

	H.	 	Consent to Recording. The parties agree that each may electronically record all telephonic
conversations between marketing and trading personnel in connection with this Agreement.

	I.	 	Representations. Section 3(a)(iii) is hereby amended by inserting the words “or investment
policies, or guidelines, procedures, or restrictions” immediately following the word
“documents.”

	J.	 	Recharacterization. The Parties intend that each Confirmation and each of the Transactions
as defined therein be treated as a swap transaction under the ISDA Master Agreement. In the
event that, notwithstanding the intention of the parties, any of the Confirmations is
recharacterized as a commercial loan, Party B hereby grants to Party A a first lien on and
security interest in all of the Collateral described in the Pledge Agreements and the
Collateral or the Collateral Account Funds described in any of the applicable Account
Agreements and the proceeds thereof as security for the repayment of such commercial loan.

	K.	 	WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
TRANSACTION AND ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTY’S
ENTERING INTO THIS AGREEMENT.

	L.	 	ADDITIONAL COVENANTS OF PARTY B.

	 	1.	 	With respect to each IRFA (as defined in the Confirmations; collectively, all
Confirmations relating to any IRFA, shall be referred to as the “Back-to-Back

 

11

 

Confirm”), prior to the True-Up Adjustment Date (as defined in the applicable
Guaranteed Partnership Agreement), Party B shall deliver to Party A a certificate
containing a statement as to whether Party B is aware of the occurrence of any
Monetary Liability Collateral Trigger Event (as defined in the Credit Support Annex)
and containing True-Up Adjustment calculations substantially similar to the True-Up
Projections to be delivered in connection with the True-Up Adjustment Date in form
and substance as may reasonably be required by Party A within 60 days after the end
of each calendar quarter. Such calculations shall be certified by Reznick Group
LLP, or any other firm of independent certified public accountants acceptable to
Party A (collectively, “Reznick”) annually on or before July 1 (but only need to be
certified by Reznick once a year). Promptly after the True-Up Adjustment Date
Party B shall deliver a copy of the calculations made by Reznick in determining the
True-Up Adjustment. Following the True-Up Adjustment Date, annually on or before
each July 1, Party B shall cause Reznick to deliver to Party A a certified
calculation of the actual and currently projected Internal Rate of Return (as
defined in the Guaranteed Partnership Agreement) to the Limited Partners in form and
substance as may reasonably be required by Party A to enable Party A to determine
whether any Monetary Liability (as defined in the Credit Support Annex) may exist as
a result thereof.

	 	2.	 	On or prior to July 1 of each year, Party B will pay Party A an annual
servicing fee of $2,000 with respect to each of the Properties shown on Annex C to the
Credit Support Annex; provided, however, Party B shall receive a credit against any
such servicing fee to the extent Party B or its affiliates have otherwise paid amounts
to Party A or its affiliates for servicing the bonds financing the applicable property.

	 	3.	 	Party B will pay Party A a semi-annual fee equal to 0.2% per annum of the
Notional Amount of the IRFA’s (as defined in the Confirmations), without duplication,
as to which the Confirmations relate, payable semi-annually on each December 31 and
June 30 in arrears, commencing on the date hereof and with the first payment due on
June 30, 2010, and terminating, as accrued, upon the earlier to occur of (i) the end of
the last day of the Compliance Period with respect to all of the Properties as to which
the applicable IRFA relates, or (ii) until such time as Party A is no longer the
obligor with respect to all the IRFAs, and Party A is satisfied that it no longer has
any liability thereunder and all amounts owed to Party A under the Agreement in
connection with the IRFAs have been paid in full; provided, however, that Party A shall
agree to defer fifty percent (50%) of such fee until the earlier of (i) or (ii) to
occur.

	 	4.	 	Party B will pay Party A an assumption fee (the “Assumption Fee”) equal to
$42,000,000, which shall be due upon the earlier of the termination of all Transactions
hereunder (whether as the result of the Scheduled Termination Date, Early Termination
Date, or otherwise), or any earlier date upon which Party A permits Party B to make
distributions to any holder of equity or membership interests in Party B (collectively
“the Assumption Fee Due Date”); provided, however, such Assumption Fee shall be payable
in an amount up to fifty percent

 

12

 

(50%) of the value of any collateral securing Party
B’s obligations hereunder (including the value of any assets pledged under the Pledge Agreements, including
the Pledged Interests and all collateral as defined therein) which remains after
payment of all amounts due hereunder on the Assumption Fee Due Date other than the
Assumption Fee. The value of such collateral shall be determined by Party A.

	 	5.	 	Neither the Guarantor nor Party B shall consent to any amendment or
modification of any of the applicable Project Documents as defined in the Guaranteed
Partnership Agreement or any Fund Agreement (as defined in each Guaranteed Partnership
Agreement) without the prior written consent of Party A if such amendment could have an
adverse effect on Party A.

	 	6.	 	None of the Properties shall be used to secure any additional debt without the
holder of such debt entering into a subordination and standstill agreement requiring
Party B’s consent prior to the initiation of any foreclosure proceedings, and Party B
shall not provide any such consent to initiate foreclosure proceedings without the
consent of Party A; and provided that bondholder consent is required prior to the
initiation of foreclosure proceedings.

	 	7.	 	Party B must obtain written consent of Party A prior to the sale or transfer of
any interest in Party B, CAHA, Guaranteed Manager, any interest owned or controlled by
Party B in any Partnership (as defined in each Guaranteed Partnership Agreement), any
interest owned or controlled by Party B in any Fund (as defined in each Guaranteed
Partnership Agreement) and/or any interest owned or controlled by Party B in any Local
Partnership (as defined in each Guaranteed Partnership Agreement).

	 	8.	 	Party B shall not make any distributions, and shall not permit any Affiliate
that is a member or partner in any Guaranteed Partnership, Fund or Local Partnership to
make any distributions, other than in accordance with the terms of the Agreement and
documents providing security for Party B’s obligations thereunder (including, without
limitation, the Account Agreements).

	 	9.	 	Party B shall not consent, and shall not permit any Affiliate that is a partner
or member in any Guaranteed Partnership, Fund or Local Partnership, to consent to any
sale or other transfer of a Property without Party A’s prior written consent.

	 	10.	 	Party A shall have the right to cause Party B, or any Affiliate of Party B that
is a partner or member in any Guaranteed Partnership, Fund or Local Partnership, to
replace the manager of any Property for which collateral posted under the Credit
Support Annex is used to fund debt service shortfalls or other expenses of the
Property.

	 	11.	 	Party B shall deliver, or caused to be delivered, to Party A copies of all
servicing and asset management files, to the extent available, including accounting,

 

13

 

	 	 	 	compliance (Form 8609 and first year files), and tax-related documentation, and copies
of all legal documents relating to the Guaranteed Partnerships and Funds.

	 
	 	12.	 	Party B shall not consent and shall not permit any Affiliate that is a partner
or member in any Guaranteed Partnership, Fund or Local Partnership, to consent or
approve any termination of a deficit restoration obligation.

	M.	 	ADDITIONAL COVENANTS OF PARTY A.

	 	1.	 	Party A will not amend any IRFA without the prior written consent of Party B if
said amendment could increase Party B’s obligations hereunder. In the event Party A
amends any IRFA without the prior written consent of Party B and such amendment has the
effect of increasing Party B’s obligations hereunder, Party B shall not be obligated
hereunder for any such increased obligations resulting from such amendment.

	 	2.	 	Without the consent of Party B, Party A will not consent to any of the actions
which, without such consent of Party A, would constitute an Additional Termination
Event under subsections (i) or (ii) of numbered Section 3 of any IRFA Confirmation.

	N.	 	Section 9(b) of the Agreement is hereby amended by adding at the end thereof the following:

Notwithstanding the foregoing, Party B hereby agrees to execute and deliver any
amendments, modifications or waivers (collectively, the “Modifications”) reasonably
requested by Party A in connection with any transfer or assignment of any IRFA
pursuant to the terms thereof. Party A agrees to seek payment under the applicable
IRFA for all fees and costs incurred by Party B in connection with such
Modifications and to the extent Party A receives payment for such fees and costs
pursuant to the applicable IRFA, it shall pay such costs to Party B.

	O.	 	Suspension of Payments and Transfers. Notwithstanding any language contained in the
Agreement that may be argued should be interpreted to the contrary, including without
limitation Section 2(a) of the Master Agreement and Paragraph 4 of the ISDA Credit Support
Annex, Party B shall have no right to suspend any payments due under the Agreement or any
Transfers due under the Credit Support Annex, for any reason.

[Remainder of page left blank intentionally]

 

14

 

[Signature page to Multicurrency-Cross Border Schedule to Master Agreement]

Please confirm your agreement to be bound by the terms of the foregoing by executing the copy
of this Multicurrency — Cross Border Schedule enclosed for that purpose and returning it to us.

	 	 	 	 	 
	 	Very truly yours,

MERRILL LYNCH CAPITAL SERVICES, INC.,
 a Delaware
corporation

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

[Signatures continued on following page]

 

 

 

[Signature page to Multicurrency-Cross Border Schedule to Master Agreement]

	 	 	 	 	 
	 	CENTERLINE GUARANTEED HOLDINGS LLC, a Delaware limited liability company

 	 
	 	By: Centerline Capital Group Inc., its
 managing member
 	 
	 	 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and PresidentExhibit 10.11

Exhibit 10.11

EXECUTION COPY

			
	 	 	 
	(Bilateral Form)
	 	(ISDA Agreements Subject to New York Law Only)

ISDA®

International Swaps and Derivatives Association, Inc.

CREDIT SUPPORT ANNEX

to the Schedule to the

ISDA Master Agreement

dated as of March 5, 2010

between

	 	 	 	 	 
	MERRILL LYNCH CAPITAL SERVICES, INC.
	 	and
	 	CENTERLINE GUARANTEED HOLDINGS LLC
	(“Party A”)
	 	 	 	(“Party B”)

This Annex supplements, forms part of, and is subject to, the above-referenced Agreement, is part
of its Schedule and is a Credit Support Document under this Agreement with respect to each party.

Accordingly, the parties agree as follows:—

Paragraph 1. Interpretation

(a) Definitions and Inconsistency. Capitalized terms not otherwise defined herein or
elsewhere in this Agreement have the meanings specified pursuant to Paragraph 12, and all
references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any
inconsistency between this Annex and the other provisions of this Schedule, this Annex will
prevail, and in the event of any inconsistency between Paragraph 13 and the other provisions of
this Annex, Paragraph 13 will prevail.

(b) Secured Party and Pledgor. All references in this Annex to the “Secured Party” will be to
either party when acting in that capacity and all corresponding references to the “Pledgor” will be
to the other party when acting in that capacity; provided, however, that if Other Posted Support is
held by a party to this Annex, all references herein to that party as the Secured Party with
respect to that Other Posted Support will be to that party as the beneficiary thereof and will not
subject that support or that party as the beneficiary thereof to provisions of law generally
relating to security interests and secured parties.

Paragraph 2. Security Interest

Each party, as the Pledgor, hereby pledges to the other party, as the Secured Party, as security
for its Obligations and grants to the Secured Party a first priority continuing security interest
in, lien on and right of Set-off against all Posted Collateral Transferred to or received by the
Secured Party hereunder. Upon the Transfer by the Secured Party to the Pledgor of Posted
Collateral, the security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by either party.

 

 

 

 

Paragraph 3. Credit Support Obligations

(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon demand made by the Secured Party on or
promptly following a Valuation Date, if the Delivery Amount for that Valuation Date equals or
exceeds the Pledgor’s Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party
Eligible Credit Support having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13,
the “Delivery Amount” applicable to the Pledgor for any Valuation Date will equal the amount by
which:

(i) the Credit Support Amount

exceeds

(ii) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party.

(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly
following a Valuation Date, if the Return Amount for that Valuation Date equals or exceeds Secured
Party’s Minimum Transfer Amount, then the Secured Party will Transfer to the Pledgor Posted Credit
Support specified by the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to Paragraph 13). Unless otherwise
specified in Paragraph 13, the “Return Amount” applicable to the Secured Party for any Valuation
Date will equal the amount by which:

(i) the Value as of that Valuation Date of all Posted Credit Support held by the Secured
Party

exceeds

(ii) the Credit Support Amount.

“Credit Support Amount” means, unless otherwise specified in Paragraph 13, for any Valuation Date
(i) the Secured Party’s Exposure for that Valuation Date plus (ii) the aggregate of all Independent
Amounts applicable to the Pledgor, if any, minus (iii) all Independent Amounts applicable to the
Secured Party, if any, minus (iv) the Pledgor’s Threshold; provided, however, that the Credit
Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields a
number less than zero.

Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and Substitutions

(a) Conditions Precedent. Each Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of
the Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the conditions precedent
that:

(i) no Event of Default, Potential Event of Default or Specified Condition has occurred and
is continuing with respect to the other party; and

(ii) no Early Termination Date for which any unsatisfied payment obligations exist has
occurred or been designated as the result of an Event of Default or Specified Condition with
respect to the other party.

(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise specified, if a demand
for the Transfer of Eligible Credit Support or Posted Credit Support is made by the Notification
Time, then the relevant Transfer will be made not later than the close of business on the next
Local Business Day; if a demand is made after the Notification Time, then the relevant Transfer
will be made not later than the close of business on the second Local Business Day thereafter.

(c) Calculations. All calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d)
will be made by the Valuation Agent as of the Valuation Time. The Valuation Agent will notify each
party (or the other party, if the Valuation Agent is a party) of its calculations not later than
the Notification Time on the Local Business Day following the applicable Valuation Date (or in the
case of Paragraph 6(d), following the date of calculation).

 

3

 

(d) Substitutions.

(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured Party specifying
the items of Posted Credit Support to be exchanged, the Pledgor may, on any Local Business
Day, Transfer to the Secured Party substitute Eligible Credit Support (the “Substitute
Credit Support”); and

(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of
Posted Credit Support specified by the Pledgor in its notice not later than the Local
Business Day following the date on which the Secured Party receives the Substitute Credit
Support, unless otherwise specified in Paragraph 13 (the “Substitution Date”); provided that
the Secured Party will only be obligated to Transfer Posted Credit Support with a Value as
of the date of Transfer of that Posted Credit Support equal to the Value as of that date of
the Substitute Credit Support.

Paragraph 5. Dispute Resolution

If a party (a “Disputing Party”) disputes (I) the Valuation Agent’s calculation of a Delivery
Amount or a Return Amount or (II) the Value of any Transfer of Eligible Credit Support or Posted
Credit Support, then (1) the Disputing Party will notify the other party and the Valuation Agent
(if the Valuation Agent is not the other party) not later than the close of business on the Local
Business Day following (X) the date that the demand is made under Paragraph 3 in the case of (I)
above or (Y) the date of Transfer in the case of (II) above, (2) subject to Paragraph 4(a), the
appropriate party will Transfer the undisputed amount to the other party not later than the close
of business on the Local Business Day following (X) the date that the demand is made under
Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of (II) above, (3) the
parties will consult with each other in an attempt to resolve the dispute and (4) if they fail to
resolve the dispute by the Resolution Time, then:

(i) In the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise
specified in Paragraph 13, the Valuation Agent will recalculate the Exposure and the Value
as of the Recalculation Date by:

(A) utilizing any calculations of Exposure for the Transactions (or Swap Transactions)
that the parties have agreed are not in dispute;

(B) calculating the Exposure for the Transactions (or Swap Transactions) in dispute by
seeking four actual quotations at mid-market from Reference Market-makers for purposes
of calculating Market Quotation, and taking the arithmetic average of those obtained;
provided that if four quotations are not available for a particular Transaction (or Swap
Transaction), then fewer than four quotations may be used for that Transaction (or Swap
Transaction); and if no quotations are available for a particular Transaction (or Swap
Transaction), then the Valuation Agent’s original calculations will be used for that
Transaction (or Swap Transaction);

(C) utilizing the procedures specified in Paragraph 13 for calculating the Value, if
disputed, of Posted Credit Support.

(ii) In the case of a dispute involving the Value of any Transfer of Eligible Credit Support
or Posted Credit Support, the Valuation Agent will recalculate the Value as of the date of
Transfer pursuant to Paragraph 13.

Following a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party
(or the other party, if the Valuation Agent is a party) not later than the Notification Time on the
Local Business Day following the Resolution Time. The appropriate party will, upon demand
following that notice by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.

 

4

 

Paragraph 6. Holding and Using Posted Collateral

(a) Care of Posted Collateral. Without limiting the Secured Party’s rights under Paragraph 6(c),
the Secured Party will exercise reasonable care to assure the safe custody of all Posted Collateral
to the extent required by applicable law, and in any event the Secured Party will be deemed to have
exercised reasonable care if it exercises at least the same degree of care as it would exercise
with respect to its own property. Except as specified in the preceding sentence, the Secured Party
will have no duty with respect to Posted Collateral, including, without limitation, any duty to
collect any Distributions, or enforce or preserve any rights pertaining thereto.

(b) Eligibility to Hold Posted Collateral; Custodians.

(i) General. Subject to the satisfaction of any conditions specified in Paragraph 13 for
holding Posted Collateral, the Secured Party will be entitled to hold Posted Collateral or
to appoint an agent (a “Custodian”) to hold Posted Collateral for the Secured Party. Upon
notice by the Secured Party to the Pledgor of the appointment of a Custodian, the Pledgor’s
obligations to make any Transfer will be discharged by making the Transfer to that
Custodian. The holding of Posted Collateral by a Custodian will be deemed to be the holding
of that Posted Collateral by the Secured Party for which the Custodian is acting.

(ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian fails to satisfy
any conditions for holding Posted Collateral, then upon a demand made by the Pledgor, the
Secured Party will, not later than five Local Business Days after the demand, Transfer or
cause its Custodian to Transfer all Posted Collateral held by it to a Custodian that
satisfies those conditions or to the Secured Party if it satisfies those conditions.

(iii) Liability. The Secured Party will be liable for the acts or omissions of its
Custodian to the same extent that the Secured Party would be liable hereunder for its own
acts or omissions.

(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and without limiting the
rights and obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured
Party is not a Defaulting Party or an Affected Party with respect to a Specified Condition and no
Early Termination Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party will, notwithstanding
Section 9-207 of the New York Uniform Commercial Code, have the right to:

(i) sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business any Posted Collateral it holds, free from any claim or right
of any nature whatsoever of the Pledgor, including any equity or right of redemption by the
Pledgor; and

(ii) register any Posted Collateral in the name of the Secured Party, its Custodian or a
nominee for either.

For purposes of the obligation to Transfer Eligible Credit Support or Posted Credit Support
pursuant to Paragraphs 3 and 5 and any rights or remedies authorized under this Agreement, the
Secured Party will be deemed to continue to hold all Posted Collateral and to receive Distributions
made thereon, regardless of whether the Secured Party has exercised any rights with respect to any
Posted Collateral pursuant to (i) or (ii) above.

(d) Distributions and Interest Amount.

(i) Distributions. Subject to Paragraph 4(a), if the Secured Party receives or is deemed to
receive Distributions on a Local Business Day, it will Transfer to the Pledgor not later
than the following Local Business Day any Distributions it receives or is deemed to receive
to the extent that a Delivery Amount would not be created or increased by that Transfer, as
calculated by the Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose).

 

5

 

(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and subject to
Paragraph 4(a), in lieu of any interest, dividends or other amounts paid or deemed to have
been paid with respect to Posted Collateral in the form of Cash (all of which may be
retained by the Secured Party), the Secured Party will Transfer to the Pledgor at the times
specified in Paragraph 13 the Interest Amount to the extent that a Delivery Amount
would not be created or increased by that Transfer, as calculated by the Valuation Agent
(and the date of calculation will be deemed to be a Valuation Date for this purpose). The
Interest Amount or portion thereof not Transferred pursuant to this Paragraph will
constitute Posted Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.

Paragraph 7. Events of Default

For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist with respect
to a party if:

(i) that party fails (or fails to cause its Custodian) to make, when due, any Transfer of
Eligible Collateral, Posted Collateral or the Interest Amount, as applicable, required to be
made by it and that failure continues for two Local Business Days after notice of that
failure is given to that party;

(ii) that party fails to comply with any restriction or prohibition specified in this Annex
with respect to any of the rights specified in Paragraph 6(c) and that failure continues for
five Local Business Days after notice of that failure is given to that party; or

(iii) that party fails to comply with or perform any agreement or obligation other than
those specified in Paragraphs 7(i) and 7(ii) and that failure continues for 30 days after
notice of that failure is given to that party.

Paragraph 8. Certain Rights and Remedies

(a) Secured Party’s Rights and Remedies. If at any time (1) an Event of Default or Specified
Condition with respect to the Pledgor has occurred and is continuing or (2) an Early Termination
Date has occurred or been designated as the result of an Event of Default or Specified Condition
with respect to the Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights and remedies:

(i) all rights and remedies available to a secured party under applicable law with respect
to Posted Collateral held by the Secured Party;

(ii) any other rights and remedies available to the Secured Party under the terms of Other
Posted Support, if any;

(iii) the right to Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of any Posted Collateral
held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted
Collateral); and

(iv) the right to liquidate any Posted Collateral held by the Secured Party through one or
more public or private sales or other dispositions with such notice, if any, as may be
required under applicable law, free from any claim or right of any nature whatsoever of the
Pledgor, including any equity or right of redemption by the Pledgor (with the Secured Party
having the right to purchase any or all of the Posted Collateral to be sold) and to apply
the proceeds (or the Cash equivalent thereof) from the liquidation of the Posted Collateral
to any amounts payable by the Pledgor with respect to any Obligations in that order as the
Secured Party may elect.

Each party acknowledges and agrees that Posted Collateral in the form of securities may decline
speedily in value and is of a type customarily sold on a recognized market, and, accordingly, the
Pledgor is not entitled to prior notice of any sale of that Posted Collateral by the Secured Party,
except any notice that is required under applicable law and cannot be waived.

 

6

 

(b) Pledgor’s Rights and Remedies. If at any time an Early Termination Date has occurred or been
designated as the result of an Event of Default or Specified Condition with respect to the Secured
Party, then (except in the case of an Early Termination Date relating to less than all Transactions
(or Swap Transactions) where the Secured Party has paid in full all of its obligations that are
then due under Section 6(e) of this Agreement):

(i) the Pledgor may exercise all rights and remedies available to a pledgor under applicable
law with respect to Posted Collateral held by the Secured Party;

(ii) the Pledgor may exercise any other rights and remedies available to the Pledgor under
the terms of Other Posted Support, if any;

(iii) the Secured Party will be obligated immediately to Transfer all Posted Collateral and
the Interest Amount to the Pledgor; and

(iv) to the extent that Posted Collateral or the Interest Amount is not so Transferred
pursuant to (iii) above, the Pledgor may:

(A) Set-off any amounts payable by the Pledgor with respect to any Obligations against
any Posted Collateral or the Cash equivalent of any Posted Collateral held by the
Secured Party (or any obligation of the Secured Party to Transfer that Posted
Collateral); and

(B) to the extent that the Pledgor does not Set-off under (iv)(A) above, withhold
payment of any remaining amounts payable by the Pledgor with respect to any Obligations,
up to the Value of any remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.

(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the Pledgor any proceeds
and Posted Credit Support remaining after liquidation, Set-off and/or application under
Paragraphs 8(a) and 8(b) after satisfaction in full of all amounts payable by the Pledgor with
respect to any Obligations; the Pledgor in all events will remain liable for any amounts remaining
unpaid after any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).

(d) Final Returns. When no amounts are or thereafter may become payable by the Pledgor with
respect to any Obligations (except for any potential liability under Section 2(d) of this
Agreement), the Secured Party will Transfer to the Pledgor all Posted Credit Support and the
Interest Amount, if any.

Paragraph 9. Representations

Each party represents to the other party (which representations will be deemed to be repeated as of
each date on which it, as the Pledgor, Transfers Eligible Collateral) that:

(i) it has the power to grant a security interest in and lien on any Eligible Collateral it
Transfers as the Pledgor and has taken all necessary actions to authorize the granting of
that security interest and lien;

(ii) it is the sole owner of or otherwise has the right to Transfer all Eligible Collateral
it Transfers to the Secured Party hereunder, free and clear of any security interest, lien,
encumbrance or other restrictions other than the security interest and lien granted under
Paragraph 2;

(iii) upon the Transfer of any Eligible Collateral to the Secured Party under the terms of
this Annex, the Secured Party will have a valid and perfected first priority security
interest therein (assuming that any central clearing corporation or any third-party
financial intermediary or other entity not within the control of the Pledgor involved in the
Transfer of that Eligible Collateral gives the notices and takes the action required of it
under applicable law for perfection of that interest); and

(iv) the performance by it of its obligations under this Annex will not result in the
creation of any security interest, lien or other encumbrance on any Posted Collateral other
than the security interest and lien granted under Paragraph 2.

 

7

 

Paragraph 10. Expenses

(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its
own costs and expenses in connection with performing its obligations under this Annex and neither
party will be liable for any costs and expenses incurred by the other party in connection herewith.

(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes, assessments or
charges of any nature that are imposed with respect to Posted Credit Support held by the Secured
Party upon becoming aware of the same, regardless of whether any portion of that Posted Credit
Support is subsequently disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party’s rights under Paragraph 6(c).

(c) Liquidation/Application of Posted Credit Support. All reasonable costs and expenses incurred
by or on behalf of the Secured Party or the Pledgor in connection with the liquidation and/or
application of any Posted Credit Support under Paragraph 8 will be payable, on demand and pursuant
to the Expenses Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.

Paragraph 11. Miscellaneous

(a) Default Interest. A Secured Party that fails to make, when due, any Transfer of Posted
Collateral or the Interest Amount will be obligated to pay the Pledgor (to the extent permitted
under applicable law) an amount equal to interest at the Default Rate multiplied by the Value of
the items of property that were required to be Transferred, from (and including) the date that
Posted Collateral or Interest Amount was required to be Transferred to (but excluding) the date of
Transfer of that Posted Collateral or Interest Amount. This interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.

(b) Further Assurances. Promptly following a demand made by a party, the other party will execute,
deliver, file and record any financing statement, specific assignment or other document and take
any other action that may be necessary or desirable and reasonably requested by that party to
create, preserve, perfect or validate any security interest or lien granted under Paragraph 2, to
enable that party to exercise or enforce its rights under this Annex with respect to Posted Credit
Support or an Interest Amount or to effect or document a release of a security interest on Posted
Collateral or an Interest Amount.

(c) Further Protection. The Pledgor will promptly give notice to the Secured Party of, and defend
against, any suit, action, proceeding or lien that involves Posted Credit Support Transferred by
the Pledgor or that could adversely affect the security interest and lien granted by it under
Paragraph 2, unless that suit, action, proceeding or lien results from the exercise of the Secured
Party’s rights under Paragraph 6(c).

(d) Good Faith and Commercially Reasonable Manner. Performance of all obligations under this
Annex, including, but not limited to, all calculations, valuations and determinations made by
either party, will be made in good faith and in a commercially reasonable manner.

(e) Demands and Notices. All demands and notices made by a party under this Annex will be made as
specified in the Notices Section of this Agreement, except as otherwise provided in Paragraph 13.

(f) Specifications of Certain Matters. Anything referred to in this Annex as being specified in
Paragraph 13 also may be specified in one or more Confirmations or other documents and this Annex
will be construed accordingly.

 

8

 

Paragraph 12. Definitions

As used in this Annex:—

“Cash” means the lawful currency of the United States of America.

“Credit Support Amount” has the meaning specified in Paragraph 3.

“Custodian” has the meaning specified in Paragraphs 6(b)(i) and 13.

“Delivery Amount” has the meaning specified in Paragraph 3(a).

“Disputing Party” has the meaning specified in Paragraph 5.

“Distributions” means with respect to Posted Collateral other than Cash, all principal, interest
and other payments and distributions of cash or other property with respect thereto, regardless of
whether the Secured Party has disposed of that Posted Collateral under Paragraph 6(c).
Distributions will not include any item of property acquired by the Secured Party upon any
disposition or liquidation of Posted Collateral or, with respect to any Posted Collateral in the
form of Cash, any distributions on that collateral, unless otherwise specified herein.

“Eligible Collateral” means, with respect to a party, the items, if any, specified as such for that
party in Paragraph 13.

“Eligible Credit Support” means Eligible Collateral and Other Eligible Support.

“Exposure” means for any Valuation Date or other date for which Exposure is calculated and subject
to Paragraph 5 in the case of a dispute, the amount, if any, that would be payable to a party that
is the Secured Party by the other party (expressed as a positive number) or by a party that is the
Secured Party to the other party (expressed as a negative number) pursuant to
Section 6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions) were being
terminated as of the relevant Valuation Time; provided that Market Quotation will be determined by
the Valuation Agent using its estimates at mid-market of the amounts that would be paid for
Replacement Transactions (as that term is defined in the definition of “Market Quotation”).

“Independent Amount” means, with respect to party, the amount specified as such for that party in
Paragraph 13; if no amount is specified, zero.

“Interest Amount” means, with respect to an Interest Period, the aggregate sum of the amounts of
interest calculated for each day in that Interest Period on the principal amount of Posted
Collateral in the form of Cash held by the Secured Party on that day, determined by the Secured
Party for each such day as follows:

(x) the amount of that Cash on that day; multiplied by

(y) the Interest Rate in effect for that day; divided by

(z) 360.

“Interest Period” means the period from (and including) the last Local Business Day on which an
Interest Amount was Transferred (or, if no Interest Amount has yet been Transferred, the Local
Business Day on which Posted Collateral in the form of Cash was Transferred to or received by the
Secured Party) to (but excluding) the Local Business Day on which the current Interest Amount is to
be Transferred.

“Interest Rate” means the rate specified in Paragraph 13.

“Local Business Day”, unless otherwise specified in Paragraph 13, has the meaning specified in the
Definitions Section of this Agreement, except that references to a payment in clause (b) thereof
will be deemed to include a Transfer under this Annex.

 

9

 

“Minimum Transfer Amount” means, with respect to a party, the amount specified as such for that
party in Paragraph 13; if no amount is specified, zero.

“Notification Time” has the meaning specified in Paragraph 13.

“Obligations” means, with respect to a party, all present and future obligations of that party
under this Agreement and any additional obligations specified for that party in Paragraph 13.

“Other Eligible Support” means, with respect to a party, the items, if any, specified as such for
that party in Paragraph 13.

“Other Posted Support” means all Other Eligible Support Transferred to the Secured Party that
remains in effect for the benefit of that Secured Party.

“Pledgor” means either party, when that party (i) receives a demand for or is required to Transfer
Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred Eligible Credit Support under
Paragraph 3(a).

“Posted Collateral” means all Eligible Collateral, other property, Distributions, and all proceeds
thereof that have been Transferred to or received by the Secured Party under this Annex and not
Transferred to the Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not Transferred pursuant
to Paragraph 6(d)(ii) will constitute Posted Collateral in the form of Cash.

“Posted Credit Support” means Posted Collateral and Other Posted Support.

“Recalculation Date” means the Valuation Date that gives rise to the dispute under Paragraph 5;
provided, however, that if a subsequent Valuation Date occurs under Paragraph 3 prior to the
resolution of the dispute, then the “Recalculation Date” means the most recent Valuation Date under
Paragraph 3.

“Resolution Time” has the meaning specified in Paragraph 13.

“Return Amount” has the meaning specified in Paragraph 3(b).

“Secured Party” means either party, when that party (i) makes a demand for or is entitled to
receive Eligible Credit Support under Paragraph 3(a) or (ii) holds or is deemed to hold Posted
Credit Support.

“Specified Condition” means, with respect to a party, any event specified as such for that party in
Paragraph 13.

“Substitute Credit Support” has the meaning specified in Paragraph 4(d)(i).

“Substitution Date” has the meaning specified in Paragraph 4(d)(ii).

“Threshold” means, with respect to a party, the amount specified as such for that party in
Paragraph 13; if no amount is specified, zero.

“Transfer” means, with respect to any Eligible Credit Support, Posted Credit Support or Interest
Amount, and in accordance with the instructions of the Secured Party, Pledgor or Custodian, as
applicable:

(i) in the case of Cash, payment or delivery by wire transfer into one or more bank accounts
specified by the recipient;

(ii) in the case of certificated securities that cannot be paid or delivered by book-entry,
payment or delivery in appropriate physical form to the recipient or its account accompanied
by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and
any other documents necessary to constitute a legally valid transfer to the recipient;

(iii) in the case of securities that can be paid or delivered by book-entry, the giving of
written instructions to the relevant depository institution or other entity specified by the
recipient, together with a written copy thereof to the recipient, sufficient if complied
with to result in a legally effective transfer of the relevant interest to the recipient;
and

(iv) in the case of Other Eligible Support or Other Posted Support, as specified in
Paragraph 13.

 

10

 

“Valuation Agent” has the meaning specified in Paragraph 13.

“Valuation Date” means each date specified in or otherwise determined pursuant to Paragraph 13.

“Valuation Percentage” means, for any item of Eligible Collateral, the percentage specified in
Paragraph 13.

“Valuation Time” has the meaning specified in Paragraph 13.

“Value” means for any Valuation Date or other date for which Value is calculated and subject to
Paragraph 5 in the case of a dispute, with respect to:

(i) Eligible Collateral or Posted Collateral that is:

(A) Cash, the amount thereof; and

(B) a security, the bid price obtained by the Valuation Agent multiplied by the
applicable Valuation Percentage, if any;

(ii) Posted Collateral that consists of items that are not specified as Eligible Collateral,
zero; and

(iii) Other Eligible Support and Other Posted Support, as specified in Paragraph 13.

 

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