Document:

Exhibit 10.22

Exhibit 10.22

EXECUTION COPY

CONSULTING AND ADVISORY AGREEMENT

This Consulting and Advisory Agreement (this “Agreement”), dated as of March 5, 2010, is
entered by and between CENTERLINE CAPITAL GROUP, INC., a Delaware corporation (the
“Company”), and TRCLP AFFORDABLE ACQUISITIONS LLC, a Delaware limited liability company
(“Consultant”).

Preliminary Statement

The Company has advised the Consultant that it expects to enter into a purchase and sale agreement,
by and among C-III Capital Partners LLC (“Newco”), on the one hand, and the Company, its
parent, Centerline Holding Company, a Delaware statutory trust (“Centerline”) and certain
Company Subsidiaries, on the other hand, pursuant to which Newco will acquire (i) the Company’s
assets comprising the former ARCap Investors LLC (“ARCap”) business and certain other
assets and (ii) newly issued Special Series A Shares representing an approximately twenty percent
(20%) fully diluted ownership interest in Centerline, for an aggregate purchase price equal to (a)
approximately $50,000,000 in cash and (b) the assumption of approximately $60,000,000 of
Centerline’s senior secured debt obligations (the “Island Sale”).

In addition, the Company will enter into various agreements with certain of its lenders, creditors
and claimants to restructure certain of its other outstanding debt obligations and a management
agreement with an affiliate of Newco pursuant to which such affiliate will provide executive
management services to the Company (the “Restructuring”, and together with the Island Sale,
the “Transaction”).

Effective upon the consummation of the Transaction (the “Transaction Closing Date”),
Consultant has agreed to perform consulting and advisory services for the Company, from time to
time and on the terms set forth herein, in consideration for which the Company will grant to the
Consultant, among other things, rights of first refusal and rights of first offer (the
“ROFO/ROFR Rights”) with respect to certain Tax Credit Properties (as defined below) and
Tax Credit Equity Interests (as defined below) and pay the Consultant certain fees and expenses.

In consideration of the ROFO/ROFR Rights, Consultant has agreed to incur five million dollars
($5,000,000) of Centerline’s senior secured debt that will be outstanding immediately prior to the
consummation of the Restructuring pursuant to a separate agreement with the lender (the
“Consultant Loan Agreement”); which debt (at its then remaining principal balance) will be
assumed by Centerline and/or the Company if the Company exercises its option to terminate this
Agreement in the event the Consultant, its principal owner or their Affiliates engage in
Competitive Business (as defined below).

NOW, THEREFORE, in consideration of the representations, warranties, premises and agreements
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

 

Agreement

ARTICLE I.

DEFINITIONS

1.1 Definitions. For purposes of this Agreement, the following terms shall have the
meanings set forth below:

“Advisory Services” has the meaning given such term in Section 2.1(a).

“Affiliate” means, as to any Person, any other Person that Controls, is Controlled by,
or is under common Control with, such Person.

“Agreement” has the meaning given such term in the preamble hereto.

“Applicable Law” means, with respect to any Person, any treaty, constitution, law,
statute, ordinance, rule, order, decree, regulation or other directive which is legally binding and
has been enacted, issued or promulgated by any Governmental Entity, in each case binding upon such
Person or any of its property or to which such Person or any of its property is subject.

“ARCap” has the meaning given such term in the preliminary statement hereto.

“Authorized Expense” has the meaning given such term in Section 4.3.

“Business Day” means any day other than a Saturday, a Sunday, or any other day on
which banks are authorized or required to be closed in the State of New York.

“Change in Control” shall be deemed to have occurred if: (A) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), which is not an Affiliate
of Centerline is or becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of voting securities of Centerline representing 50.1% or
more of the combined voting power of Centerline’s then outstanding voting securities; (B) any
consolidation or merger of Centerline with or into any other corporation or other entity or person
(other than an Affiliate of Centerline) in which the shareholders of Centerline prior to such
consolidation or merger own or owns less than 50.1% of Centerline’s voting power immediately after
such consolidation or merger (excluding any consolidation or merger effected exclusively to change
the domicile of Centerline); (C) a sale of all or substantially all of the assets of Centerline;
or (D) a liquidation or dissolution of Centerline.

“Code” means the Internal Revenue Code of 1986, as amended, and any applicable
regulations.

“Company Subsidiary” means any Person which is Controlled, directly or indirectly, by
the Company.

“Competitive Business” means the syndication and sale of Tax Credits and Tax Credit
Syndication Interests; provided, however, that the following shall not be deemed to
be a

 

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Competitive Business: (i) the acquisition, development or co-development of a Tax Credit
Property and the sale of the Tax Credit Syndication Interests resulting from such development and
(ii) the acquisition of Tax Credits and Tax Credit Syndication Interests (other than any Tax
Credits or Tax Credit Syndication Interests arising from transactions sponsored by the Company
without the prior consent of the Company) through tender offers or other methods provided (A) the
Consultant engages in such activities for its own account; and (B) the Tax Credit Syndication
Interests acquired in connection with such activities are not acquired for the purpose of resale or
syndication.

“Confidential Information” means all information pertaining to the business and
operations of the Company and any of the Company Subsidiaries that is not generally available to
the public and that is used, developed or obtained by the Company or any of its Affiliates or the
Company Subsidiaries in connection with their respective businesses, including but not limited to,
Property Information, the Information Schedule and information related to (i) financial information
and projections, (ii) business strategies, (iii) products or services, (iv) fees, costs and pricing
structures, (v) designs and layouts, (vii) results of research and development analysis, (vii)
drawings, photographs and reports, (viii) computer software (including source code, object code,
data, databases, documentation, operating systems, applications and programs listings), (ix) flow
charts, manuals and documentation, (x) accounting and business methods, (xi) technology, trade
secrets, know-how, inventions, devices, developments, improvements, enhancements, methods and
processes, whether patentable or unpatentable and whether or not reduced to practice, (xii)
customers and clients and customer or client lists, (xiii) copyrights (registered or unregistered),
(xiv) copyrightable works, (xv) vendors and suppliers and vendor or supplier lists, including lists
of field service representatives, and (xvi) all similar and related information in whatever form or
medium now known or hereafter existing. Information shall not be deemed to be generally available
to the public merely because individual portions of the information have been separately published
but only if all materials features comprising such information have been published in combination.

“Consultant” has the meaning given such term in the preamble hereto.

“Consultant Loan Agreement” has the meaning given such term in the preliminary
statement hereto.

“Continuing Default” means (a) an Event of Default has occurred, (b) the
non-defaulting party has delivered a notice to the defaulting party specifying the Event of Default
and (c) the Event of Default has continued without cure for a period of thirty (30) days following
delivery of the Default Notice.

“Control” or “Controlled” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.

“Controlled Tax Credit Property” means any Tax Credit Property that is owned and
Controlled by a Controlled Ownership Entity.

 

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“Controlled Ownership Entity” means any Ownership Entity that is directly or
indirectly Controlled by the Company.

“Entity” means any corporation, limited liability company, partnership, trust, bank or
other similar entity formed under the laws of any state, the United States of America or any
foreign jurisdiction.

“Entity Information” means the immediate past five (5) years of financial statements
for the entity in which the Tax Credit Equity Interest represents an ownership interest, as well as
all material agreements entered into by such entity or that are binding on such entity.

“Event of Default” means, with respect to any party hereto, the material default in
the performance of such party’s obligations under this Agreement.

“Governmental Entity” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government having jurisdiction
over any of the parties hereto.

“Information Schedule” means Schedule I hereto.

“Initial Term” has the meaning given such term in Section 3.1.

“Interest Offer” means a bona fide written offer for the purchase of a Tax Credit
Equity Interest that sets forth in reasonable detail the terms and conditions of such offer.

“Interest ROFR Exercise Notice” has the meaning given such term in Section 7.2(a).

“Interest ROFR Notice” has the meaning given such term in Section 7.2(a).

“Interest ROFO Exercise Notice” has the meaning given such term in Section 8.2(a).

“Interest ROFO Notice” has the meaning given such term in Section 8.2(a).

“Island Sale” has the meaning given such term in the preliminary statement hereto.

“Key Personnel” means Justin Ginsberg and Andrew Weil.

“LIHTC” means the low income housing tax credit available to an Ownership Entity
pursuant to Section 42 of the Code.

“LIHTC Agency Sale Notice” means a request by an Ownership Entity to the LIHTC
allocating or monitoring agency for a Tax Credit Property to find a purchaser for such Tax Credit
Property pursuant to Section 42(h)(6) of the Code.

“Loss” means all losses, causes of action, liabilities, claims, demands, obligations,
damages, penalties, fines, forfeitures, judgments, legal fees and other costs, fees and expenses.

“Newco” has the meaning given such term in the preliminary statement hereto.

 

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“Offer Terms” means reasonably detailed terms for the purchase of a Controlled Tax
Credit Property or a Tax Credit Entity Interest, as applicable, including, but not limited to (i)
whether such offer is subject to any material condition, including, obtaining or assuming
financing, issuance of tax-exempt bonds, receipt of LIHTC assistance or subsidy, or subject to
governmental consents or approvals; (ii) whether the offer includes consideration unrelated to the
sale of the Controlled Tax Credit Property or Tax Credit Equity Interest; (iii) the purchase price
and the terms of payment of the purchase price and (iv) the expected closing date of the sale.

“Option Right” means a right pursuant to a written agreement to purchase a Tax Credit
Property or Tax Credit Equity Interest (e.g., pursuant to a purchase option or a right of first
refusal).

“Ownership Entity” means the legal owner of a Tax Credit Property (or beneficial
owner, in circumstances where legal title to the Tax Credit Property is held on a nominee or
similar basis).

“Person” means an individual, partnership, corporation, limited liability company,
trust, firm, incorporated or unincorporated association or organization, joint venture, joint stock
corporation, government (or agency or political subdivision thereof) or other entity of any kind.

“Proceeding” means any threatened, pending or completed action, claim, complaint,
dispute, grievance, summons suit, litigation, arbitration, mediation, proceeding (including any
civil, criminal, administrative, investigative or appellate proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination or investigation

“Property Information” means all material information with regard to the ownership,
financing and operation of the applicable Tax Credit Property as is in the possession of the
Company or any Company Subsidiary, or which may reasonably be obtained without material cost by
such entities, including: (i) Entity Information (ii) subsidy or PILOT agreements; (iii) rent roll
with delinquency report (aged) / commercial leases; (iv) plans and specifications; (v) financing
documents; (vi) governmental agency correspondence; (vii) the latest site inspection reports; and
(viii) any other documents or information reasonably requested by the Consultant that may
reasonably be obtained without cost by the Company.

“Property Offer” means a bona fide written offer from a third party for a Controlled
Tax Credit Property that sets forth in reasonable detail the terms and conditions of such offer.

“Property ROFR Exercise Notice” has the meaning given such term in Section 7.1(a).

“Property ROFR Notice” has the meaning given such term in Section 7.1(a).

“Property ROFO Exercise Notice” has the meaning given such term in Section 8.1(a).

“Property ROFO Notice” has the meaning given such term in Section 8.1(a).

“Renewal Period” has the meaning given such term in Section 3.2.

 

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“Required Sale Notice” means the notice given by a Company Subsidiary pursuant to the
partnership or operating agreement of an Ownership Entity, which notice requires that the general
partner, managing member or manager of such Ownership Entity promptly use its reasonable efforts to
obtain a buyer for the Tax Credit Property owned by such Ownership Entity on the most favorable
terms then obtainable.

“Restructuring” has the meaning given such term in the preliminary statement hereto.

“Special Series A Shares” means the Special Series A Shares of the Company, with the
rights and privileges set forth in the certificate of designation of the Special Series A Shares to
be adopted in connection with the Restructuring.

“Tax Credit Equity Interest” means (i) any equity interest in any Ownership Entity,
(ii) any non-equity manager, limited liability company or partnership interest in any Ownership
Entity and (iii) any equity interest in any entity that directly or indirectly owns (a) any equity
interest in any Ownership Entity or (b) any non-equity manager, limited liability company or
partnership interest in any Ownership Entity.

“Tax Credit Equity Interest Purchase” has the meaning given such term in Section
9.1(a).

“Tax Credit Property” means any real property that (i) is owned by any Entity in which
the Company or any Company Subsidiary owns, directly or indirectly, any equity interest or of which
the Company or any Company Subsidiary is a non-equity manager, member or partner as of the
Effective Date and (ii) received LIHTC benefits at any time while such real property was owned by
such Entity.

“Tax Credit Property Sale” has the meaning given such term in Section 9.1(a).

“Tax Credit Syndication Interests” shall mean (i) a Tax Credit Property or (ii) a
direct or indirect ownership interest in a partnership, limited liability company or other entity
that has been formed to provide a pass-through of Tax Credits and tax losses from Tax Credit
Properties including, without limitation, those which produce “421a Certificates” or “Inclusionary
Zoning Certificates” with respect to New York City properties.

“Tax Credits” mean (i) Housing Tax Credits under (A) Section 42 of the Code (or any
substantially equivalent replacement thereof) or (B) any applicable state-law equivalent thereof,
including, without limitation, those real estate developments which have been allocated Housing Tax
Credits pursuant to a tax-exempt bond allocation; (ii) Historic Rehabilitation Tax Credits under
(A) Section 47 of the Code (or any substantially equivalent replacement thereof) or (B) any
applicable state-law equivalent thereof; and (iii) New Markets Tax Credits under (A) Section 45(D)
of the Code (or any substantially equivalent replacement thereof) and (B) any applicable state-law
equivalent thereof.

“Termination Fee” means a dollar amount equal to the fair market value of the
Consultant’s remaining rights under this Agreement (assuming no termination thereof) determined in
accordance with the procedures set forth on Schedule II.

“Transaction” has the meaning given such term in the preliminary statement hereto.

 

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“Transaction Closing Date” has the meaning given such term in the preliminary
statement hereto.

“Updated Information Schedule” has the meaning given such term in Section 6.2(b).

ARTICLE II.

RETENTION OF CONSULTANT

2.1 Retention of Consultant; Advisory Services.

(a) Subject to the terms and conditions of this Agreement, effective as the Transaction
Closing Date, the Company hereby engages the Consultant and the Consultant hereby accepts the
engagement by the Company to perform consulting and advisory services (the “Advisory
Services”) in connection with the Company’s low income housing tax credit business as requested
by the Company from time to time upon reasonable advance notice.

(b) The Advisory Services shall include (i) furnishing advice and consultation concerning the
operation of the Tax Credit Properties to ensure compliance with applicable LIHTC law, (ii) an
evaluation of the opportunities available to the Company for Tax Credit Properties and/or the
Company’s Tax Credit Equity Interests at the end of the applicable LIHTC compliance periods, (iii)
assistance regarding interaction with governmental agencies providing assistance to Tax Credit
Properties, (iv) evaluation of refinancing opportunities for Tax Credit Properties, (v) monitoring
changes in governmental programs and policies that could have an impact on Tax Credit Properties or
Ownership Entities, (vi) participation in conferences with regard to the acquisition, maintenance
and disposition of the Tax Credit Properties and/or the Company’s Tax Credit Equity Interests and
(vii) participation in discussions regarding special projects and new initiatives concerning the
LIHTC business.

ARTICLE III.

TERM; AUTOMATIC RENEWAL

3.1 Initial Term. Subject to Section 3.2 and Article X, the term of this Agreement shall
be a period of three (3) years, commencing on the date hereof and terminating on the third
anniversary of the date hereof (the “Initial Term”).

3.2 Automatic Renewal. At the end of the Initial Term and subject to Article X, this
Agreement shall automatically renew for additional one (1) year periods (each, a “Renewal
Period”) unless written notice of non-renewal is provided to the Company by the Consultant at
least ninety (90) days prior to the expiration of the then-current Initial Term or Renewal Period.

ARTICLE IV.

DUTIES; STATUS; FEES; EXPENSES

4.1 Duties. During the term of this Agreement, the Consultant shall make itself available
as reasonably requested by the Company on an as-needed basis and as reasonably acceptable to the
Company. The Consultant shall perform its duties hereunder with fidelity and to the best of its
ability. The Consultant shall have no fixed hours or schedule and shall be permitted to provide
services at times and locations it and the Company agree are mutually convenient. The manner

 

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in which such services are provided shall be at the Consultant’s discretion; provided, however,
that the Consultant shall at all times conduct itself with a standard of professionalism consistent
with professionals in its field.

4.2 Status. The Consultant is an independent contractor, and nothing in this Agreement
shall be construed or inferred to imply that the Consultant is a partner, joint venturer, agent or
representative of, or otherwise associated with, the Company or any of its Affiliates or have the
power to bind the Company. The Consultant shall have no authority to act as an agent of the
Company and shall not represent to the contrary to any Person. The Consultant shall only consult,
render advice and perform such tasks as the Company reasonably requests. The Consultant shall not
make any, or otherwise represent to any third party that it has the authority to make any,
management decisions or undertake to commit or bind the Company to any course of action in relation
to any third party.

4.3 Fees. The Company shall pay the Consultant, quarterly in arrears, a fee in and amount
equal to the interest incurred on the Consultant Loan Agreement for such quarter. For the
avoidance of doubt, interest shall be computed from time to time on the then remaining principal
balance of the Consultant Loan Agreement and the fee shall not include any additional interest
required to be paid by Consultant to lender upon a default by the Consultant under the Consultant
Loan Agreement.

4.4 Expenses. The Company shall reimburse the Consultant for all of its documented
reasonably incurred direct costs and expenses paid to third parties in connection with providing
the Advisory Services, not to exceed $25,000 per year in the aggregate unless approved in writing
in advance by the Company (the “Authorized Expenses”).

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

5.1 Representations and Warranties of the Company. The Company hereby represents and
warrants to the Consultant as of the Transaction Closing Date that:

(a) Due Organization; Good Standing. The Company is duly created, validly existing
and in good standing as a corporation under the laws of the State of Delaware.

(b) Authority; Enforceability; Corporate and Other Proceedings.

(i) The Company has the requisite corporate power and authority to execute and deliver this
Agreement and to carry out the transactions contemplated hereby.

(ii) This Agreement has been duly authorized, executed and delivered by the Company and
(assuming the due authorization, the execution and delivery by the Consultant) constitutes the
legal, valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be subject to or limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting rights of
creditors and (ii) general equitable principles, regardless of whether enforcement is sought in a
proceeding at law or in equity.

 

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(c) Absence of Defaults. The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby will not violate:

(i) any provision of Applicable Law,

(ii) any provisions of the Company’s organizational documents; or

(iii) any order, judgment, injunction, determination, award or decree of any court or other
Governmental Entity applicable to the Company or its assets.

(d) Consents. The Company is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any Governmental Entity in
connection with or as a condition to the performance of this Agreement.

5.2 Representations and Warranties of the Consultant. The Consultant hereby represents and
warrants to the Company as of the Transaction Closing Date that:

(a) Due Organization; Good Standing. The Consultant is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization.

(b) Authority; Enforceability; Corporate and Other Proceedings.

(i) The Consultant has the requisite power and authority to execute and deliver this Agreement
and to carry out the transactions contemplated hereby.

(ii) This Agreement has been duly authorized, executed and delivered by the Consultant and
(assuming the due authorization, the execution and delivery by the Company) constitutes the legal,
valid and binding obligation of the Consultant, enforceable against the Consultant in accordance
with its terms, except as the enforceability thereof may be subject to or limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting rights of
creditors and (b) general equitable principles, regardless of whether enforcement is sought in a
proceeding at law or in equity.

(c) Absence of Defaults. The execution, delivery and performance of this Agreement by
the Consultant and the consummation of the transactions contemplated hereby will not violate:

(i) any provision of Applicable Law,

(ii) any provision of the Consultant’s organizational documents or governing instruments, or

(iii) any order, judgment, injunction, determination, award or decree of any court or other
Governmental Entity applicable to the Consultant or its assets.

(d) No Conflicts. The execution, delivery and performance of this Agreement by the
Consultant and the consummation of the transactions contemplated hereby will not conflict with or
require the consent of any other Person under any material agreement, document, instrument,

 

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or any organizational document, or any judgment, decree, order, law, statute, rule or
regulation, applicable to the Consultant.

(e) Consents. The Consultant is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any Governmental Entity in
connection with or as a condition to the performance of this Agreement.

ARTICLE VI.

COVENANTS

6.1 Notice of Certain Events. The Company shall promptly notify the Consultant upon the
occurrence of any of the following events:

(a) the Company’s or any Company Subsidiary’s receipt of a notification with respect to any
Person’s intent to exercise an Option Right;

(b) the Company’s or any Company Subsidiary’s delivery of a Required Sale Notice at the end of
the LIHTC compliance period for a Tax Credit Property;

(c) the Company’s or any Company Subsidiary’s determination not to deliver a Required Sale
Notice at the end of the LIHTC compliance period for a Tax Credit Property and an explanation of
the reason for not sending such notice;

(d) the Company’s or any Company Subsidiary’s delivery of a LIHTC Agency Sale Notice on or
after the date that is one (1) year prior to the end of the LIHTC compliance period for a Tax
Credit Property;

(e) the Company’s or any Company Subsidiary’s determination not to deliver an LIHTC Agency
Sale Notice on or after the date that is one (1) year prior to the end of the LIHTC compliance
period for a Tax Credit Property and an explanation of the reason for not sending such notice;

(f) the Company’s or any Company Subsidiary’s determination that title to any Tax Credit
Property should be delivered to a lender or Governmental Agency; and

(g) any request received by the Company in writing from a bona fide purchaser to acquire a Tax
Credit Property or Tax Credit Equity Interest where the Company or its Affiliate owns a
non-controlling interest.

6.2 Information Schedule; Availability of Key Personnel.

(a) The Information Schedule attached hereto sets forth, or will be set forth (i) all Tax
Credit Properties, including the address of such property, the LIHTC compliance period expiration
date, the number of units, the amount of mortgage indebtedness and the mortgage maturity date, (ii)
all Tax Credit Equity Interests owned by the Company or a Company Subsidiary, and (iii) for each
non-Controlled Tax Credit Property, the name and address of the general partner, managing member or
manager of the Ownership Entity that owns such non-Controlled Tax Credit Property, in each case, as
of the Transaction Closing Date. To the extent

 

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such information is not readily available, the Information Schedule will be updated and
provided to the Consultant within thirty (30) days after the Transaction Closing Date.

(b) The Company shall update the Information Schedule on a quarterly basis (each, an
“Updated Information Schedule”) and shall promptly deliver such schedule to the Consultant.

(c) In addition to updating the categories of information set forth in Section 6.2(a), the
Updated Information Schedule shall also provide any additional information mutually agreed upon by
the Company and the Consultant.

(d) In no event shall the Company be required to provide any information in the Information
Schedule that it reasonably believes is subject to a confidentiality covenant or confidentiality
obligation that is binding upon the Company or any Company Subsidiary, by contract or otherwise.

(e) The Company shall ensure that its Key Personnel are reasonably available to the Consultant
to discuss the information contained on the Updated Information Schedule.

6.3 Obligation to Inquire. Subject to any Applicable Law, contractual obligation, third
party consent and any fiduciary duties (including those to its shareholders) reasonably determined
in good faith to be owed by the Company or a Company Subsidiary to any other Person, in the event
the Company or a Company Subsidiary makes a final determination to remove the general partner,
managing member or manager of any Ownership Entity, the Company shall promptly notify the
Consultant of such final determination and inquire as to whether the Consultant is interested in
being considered for the day-to-day management of the Tax Credit Property owned by such Ownership
Entity. Nothing herein shall commit the Company to make or cause to make the Consultant the
day-to-day manager of any Tax Credit Property owned by such Ownership Entity and any such decision
shall be in the sole and exclusive discretion of the Company.

ARTICLE VII.

RIGHT OF FIRST REFUSAL

7.1 Controlled Tax Credit Properties.

(a) Subject to any (x) Applicable Law, contractual obligations, third-party consents and any
fiduciary duties (including those to its shareholders) as are determined by the Company in good
faith to be owed by the Company and/or any Company Subsidiary to any other Person and (y)
exceptions for transfers of certain Tax Credit Properties to Governmental Entities or non-profit
organizations, if (1) any Controlled Ownership Entity receives an unsolicited, bona fide written
offer from a third party not affiliated with the Company to purchase any Controlled Tax Credit
Property and (2) the Controlled Ownership Entity determines that it is willing to sell such
Controlled Tax Credit Property on the terms described in such offer, then the Company shall cause
such Controlled Ownership Entity to send written notice thereof (a “Property ROFR Notice”)
to the Consultant, together with a copy of such third party offer (and, if such offer does not meet
the criteria of a Property Offer, then the Company shall set forth in such Property ROFR Notice the
missing Offer Terms upon which the Company is willing to sell such Controlled Tax Credit Property).
On or before the fifteenth (15th) day following the date on which the Consultant receives the
Property ROFR Notice, the Consultant may send the Company

 

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a written notice (a “Property ROFR Exercise Notice”) informing the Company that the
Consultant desires to purchase the subject Controlled Tax Credit Property on terms and conditions
that are at least as favorable, in the aggregate, to the subject Controlled Ownership Entity as
those set forth in the Property ROFR Notice and to proceed to negotiate a definitive agreement with
respect thereto. If the Consultant does not timely send a Property ROFR Exercise Notice to the
Company, then the Consultant shall cease to have any rights hereunder with respect to such
Controlled Tax Credit Property, except as provided below. If the Consultant does timely send a
Property ROFR Exercise Notice to the Company, then the Consultant shall, and the Company shall
cause the Controlled Ownership Entity to, negotiate with one another in good faith for a period of
up to thirty (30) days to reach a definitive agreement for the purchase and sale of such Controlled
Tax Credit Property. Within five (5) Business Days of receipt of the Property ROFR Exercise
Notice, the Company shall cause the Controlled Ownership Entity to provide the Consultant with the
Property Information and shall allow the Consultant upon reasonable notice to inspect the
Controlled Tax Credit Property and the books and records of the Controlled Ownership Entity. If
the Consultant (or its designee) and the Controlled Ownership Entity do not enter into a definitive
agreement for the purchase and sale of such Controlled Tax Credit Property within such thirty (30)
day period or the Consultant does not negotiate in good faith, then the Consultant shall cease to
have any rights hereunder with respect to such Controlled Tax Credit property, except as provided
below.

(b) The Controlled Ownership Entity may not sell the Controlled Tax Credit Property to any
third party on terms and conditions that are materially more favorable, in the aggregate, to the
buyer than those set forth in the Property ROFR Notice. If the Controlled Ownership Entity does
not consummate the sale of the Controlled Tax Credit Property to a third party on or prior to the
nine (9) month anniversary of the date on which the Property ROFR Notice was sent to the
Consultant, then the Consultant’s rights hereunder with respect to such Controlled Tax Credit
Property shall be reinstated.

7.2 Tax Credit Equity Interests Owned by the Company or a Company Subsidiary.

(a) Subject to (x) any Applicable Law, contractual obligations, third-party consents and any
fiduciary duties (including those to its shareholders) as are determined by the Company in good
faith to be owed by the Company and/or any Company Subsidiary to any other Person and (y)
exceptions for transfers of certain Tax Credit Equity Interests to Governmental Entities or
non-profit organizations, if (i) the Company or any Company Subsidiary receives an unsolicited,
bona fide written offer from a third party not affiliated with the Company to purchase any Tax
Credit Equity Interest owned by any Company or any Company Subsidiary and (ii) the owner of such
Tax Credit Equity Interest determines that it is willing to sell such interest on the terms
described in such offer, then the Company shall send written notice thereof (an “Interest ROFR
Notice”) to the Consultant, together with a copy of such third party offer (and, if such offer
does not meet the criteria of an Interest Offer, then the Company shall set forth in such Interest
ROFR Notice the missing Offer Terms upon which the Company is willing to sell such Tax Credit
Equity Interest). On or before the fifteenth (15th) day following the date on which the Consultant
receives the Interest ROFR Notice, the Consultant may send the Company a written notice (an
“Interest ROFR Exercise Notice”) informing the Company that the Consultant desires to
purchase the subject Tax Credit Equity Interest on terms and conditions that are at least as
favorable, in the aggregate, to the owner of such interest as those set forth in

 

12

 

the Interest ROFR Notice and to proceed to negotiate a definitive agreement with respect
thereto. If the Consultant does not timely send an Interest ROFR Exercise Notice to the Company,
then the Consultant shall cease to have any rights hereunder with respect to such Tax Credit Equity
Interest, except as provided below. If the Consultant does timely send an Interest ROFR Exercise
Notice to the Company, then the Consultant shall, and the Company shall cause the owner of the Tax
Credit Equity Interest to, negotiate with one another in good faith for a period of up to thirty
(30) days to reach a definitive agreement for the purchase and sale of such Tax Credit Equity
Interest. Within five (5) Business Days of receipt of the Interest ROFR Exercise Notice, the
Company shall provide the Consultant with information with respect to the Tax Credit Equity
Interest and shall allow the Consultant, upon reasonable notice and to the extent the Company has
the direct or indirect ability to do so, to inspect the applicable Controlled Tax Credit Property
and the books and records of the applicable Controlled Ownership Entity. If the Consultant (or its
designee) and the owner of the Tax Credit Equity Interest do not enter into a definitive agreement
for the purchase and sale of such Tax Credit Equity Interest within such thirty (30) day period or
the Consultant does not negotiate in good faith, then the Consultant shall cease to have any rights
hereunder with respect to such Tax Credit Equity Interest, except as provided below. Anything
herein to the contrary notwithstanding, the Company may cause a sale of a Tax Credit Equity
Interest owned by the Company or a Company Subsidiary to an existing third party general partner,
managing member or manager (or such Person’s Affiliate) of the Ownership Entity that owns the Tax
Credit Property in which such Tax Credit Equity Interest represents a direct or indirect equity
interest without complying with the provisions of this paragraph if the Company determines in good
faith that such a sale is in the best interests of the Company and / or other investors in such Tax
Credit Property because of the purchaser’s status.

(b) The owner of the Tax Credit Equity Interest may not sell such interest to any third party
on terms and conditions that are materially more favorable, in the aggregate, to the buyer than
those set forth in the Interest ROFR Notice. If the owner of the Tax Credit Equity Interest does
not consummate the sale thereof to a third party on or prior to the nine (9) month anniversary of
the date on which the Interest ROFR Notice was sent to the Consultant, then the Consultant’s rights
hereunder with respect to such Tax Credit Equity Interest shall be reinstated.

ARTICLE VIII.

RIGHT OF FIRST OFFER

8.1 Controlled Tax Credit Properties.

(a) Subject to (i) any applicable, contractual obligations, third-party consents and any
fiduciary duties (including those to its shareholders) as are determined by the Company in good
faith to be owed by the Company and/or any Company Subsidiary to any other Person and (ii)
exceptions for transfers of certain Tax Credit Properties to Governmental Entities or non-profit
organizations, if any Controlled Ownership Entity determines (other than in connection with an
unsolicited offer from a third party) that it desires to sell a Controlled Tax Credit Property,
then prior to any general marketing of such Controlled Tax Credit Property, the Company shall cause
such Controlled Ownership Entity to send written notice thereof (a “Property ROFO Notice”)
to the Consultant, which notice shall set forth all of the Offer Terms upon which the Company is
willing to sell such Controlled Tax Credit Property. On or before the thirtieth (30th) day
following the date on which the Consultant receives the Property ROFO Notice, the Consultant

 

13

 

may send the Company a written notice (a “Property ROFO Exercise Notice”) informing
the Company that the Consultant desires to purchase the subject Controlled Tax Credit Property on
terms and conditions that are at least as favorable, in the aggregate, to the subject Controlled
Ownership Entity as those set forth in the Property ROFO Notice and to proceed to negotiate a
definitive agreement with respect thereto. If the Consultant does not timely send a Property ROFO
Exercise Notice to the Company, then the Consultant shall cease to have any rights hereunder with
respect to such Controlled Tax Credit Property, except as provided below. If the Consultant does
timely send a Property ROFO Exercise Notice to the Company, then the Consultant shall, and the
Company shall cause the Controlled Ownership Entity to, negotiate with one another in good faith
for a period of up to forty-five (45) days to reach a definitive agreement for the purchase and
sale of such Controlled Tax Credit Property. Within five (5) Business Days of receipt of the
Property ROFO Exercise Notice, the Company shall cause the Controlled Ownership Entity to provide
the Consultant with the Property Information and shall allow the Consultant upon reasonable notice
to inspect the Controlled Tax Credit Property and the books and records of the Controlled Ownership
Entity. If the Consultant (or its designee) and the Controlled Ownership Entity do not enter into
a definitive agreement for the purchase and sale of such Controlled Tax Credit Property within such
forty-five (45) day period or the Consultant does not negotiate in good faith, then the Consultant
shall cease to have any rights hereunder with respect to such Controlled Tax Credit Property,
except as provided below.

(b) The Ownership Entity may not sell the Controlled Tax Credit Property to any third party on
terms and conditions that are materially more favorable, in the aggregate, to the buyer than those
set forth in the Property ROFO Notice. If the Ownership Entity does not consummate the sale of the
Controlled Tax Credit Property to a third party on or prior to the nine (9) month anniversary of
the date on which the Property ROFO Notice was sent to the Consultant, then the Consultant’s rights
hereunder with respect to such Controlled Tax Credit Property shall be reinstated.

8.2 Tax Credit Equity Interests Owned by the Company or a Company Subsidiary.

(a) Subject to (i) any Applicable Law, contractual obligations, third-party consents and any
fiduciary duties (including those to its shareholders) as are determined in good faith by the
Company to be owed by the Company and/or any Company Subsidiary to any other Person and (ii)
exceptions for transfers of certain Tax Credit Equity Interests to Governmental Entities or
non-profit organizations, if the Company or any Company Subsidiary determines (other than in
connection with an unsolicited offer from a third party) that it desires to sell a Tax Credit
Equity Interest, then prior to any general marketing of such Tax Credit Equity Interest, the
Company shall send written notice thereof (an “Interest ROFO Notice”) to the Consultant,
which notice shall set forth all of the Offer Terms upon which the Company is willing to sell such
Tax Credit Equity Interest. On or before the thirtieth (30th) day following the date on which the
Consultant receives in the Interest ROFO Notice, the Consultant may send the Company a written
notice (an “Interest ROFO Exercise Notice”) informing the Company that the Consultant
desires to purchase the subject Tax Credit Equity Interest on terms and conditions that are at
least as favorable, in the aggregate, to the owner thereof as those set forth in the Interest ROFO
Notice and to proceed to negotiate a definitive agreement with respect thereto. If the Consultant
does not timely send an Interest ROFO Exercise Notice to the Company, then the Consultant shall
cease to have any rights hereunder with respect to such Tax Credit Equity Interest, except as

 

14

 

provided below. If the Consultant does timely send an Interest ROFO Exercise Notice to the
Company, then the Consultant shall, and the Company shall cause the owner of such Tax Credit Equity
Interest to, negotiate with one another in good faith for a period of up to forty-five (45) days to
reach a definitive agreement for the purchase and sale of such Tax Credit Equity Interest. Within
five (5) Business Days of receipt of the Interest ROFO Exercise Notice, the Company shall provide
the Consultant with information with respect to the Tax Credit Equity Interest and shall allow the
Consultant, upon reasonable notice and to the extent the Company has the direct or indirect ability
to do so, to inspect the applicable Controlled Tax Credit Property and the books and records of the
applicable Controlled Ownership Entity. If the Consultant (or its designee) and the Controlled
Ownership Entity do not enter into a definitive agreement for the purchase and sale of such Tax
Credit Equity Interest within such forty-five (45) day period or the Consultant does not negotiate
in good faith, then the Consultant shall cease to have any rights hereunder with respect to such
Tax Credit Equity Interest, except as provided below. Anything herein to the contrary
notwithstanding, the Company may cause a sale of a Tax Credit Equity Interest owned by the Company
or a Company Subsidiary to an existing third party general partner, managing member or manager (or
such Person’s Affiliate) of the Ownership Entity that owns the Tax Credit Property in which such
Tax Credit Equity Interest represents a direct or indirect equity interest without complying with
the provisions of this paragraph if the Company determines in good faith that such a sale is in the
best interests of the Company and / or other investors in such Tax Credit Property because of the
purchaser’s status.

(b) The owner of the Tax Credit Equity Interest may not sell such interest to any third party
on terms and conditions that are materially more favorable, in the aggregate, to the buyer than
those set forth in the Interest ROFO Notice. If the owner of the Tax Credit Equity Interest does
not consummate the sale thereof to a third party on or prior to the nine (9) month anniversary of
the date on which the Interest ROFO Notice was sent to the Consultant, then the Consultant’s rights
hereunder with respect to such Tax Credit Equity Interest shall be reinstated.

ARTICLE IX.

 SALE PROVISIONS

9.1 Sale of Tax Credit Property or Purchase of Tax Credit Equity Interest.

(a) Subject to Section 9.1(b) below and provided that the Company has the right to make the
requests set forth below, not later than sixty (60) days from the expiration of the LIHTC
compliance period for any Tax Credit Property, the Company or a Company Subsidiary shall either (i)
request that such Tax Credit Property be sold (the “Tax Credit Property Sale”) or (ii) make
a request to purchase the Tax Credit Equity Interest of any Person (other than the Company or a
Company Subsidiary) having an interest in the Ownership Entity (the “Tax Credit Equity Interest
Purchase”), in either case, for fair market value.

(b) In the event the Company or a Company Subsidiary determines:

(i) that it has a good business reason not to pursue the Tax Credit Property Sale or the Tax
Credit Equity Interest Purchase, including its determination that doing so would violate Applicable
Law, contractual obligations, third-party rights or fiduciary duties (including

 

15

 

those owed to its shareholders) or would be imprudent due to specific market conditions or
third party rights to acquire Tax Credit Property, or

(ii) that the Tax Credit Property Sale (or the sale of the Company’s Tax Credit Equity
Interest therein) to an existing third party general partner, managing member (or such Person’s
Affiliate) of the applicable Ownership Entity would be in the best interests of the Company and /
or other investors in such Tax Credit Property because of the purchaser’s status

the Company shall send a notice to the Consultant setting forth the basis of such
determination and the details thereof; provided, however, that the Company shall not be required to
disclose any details which it determines, in its sole and absolute discretion, would violate
Applicable Law, contractual obligations, third party rights or fiduciary duties (including those
owed to its shareholders).

9.2 Participation in Sale Process. Subject to Applicable Law, contractual obligations,
third party consents and any fiduciary duties (including those to its shareholders) reasonably
determined in good faith to be owed by the Company or any Company Subsidiary to any other Person,
the Company shall:

(a) use commercially reasonable efforts to enable the Consultant to have an opportunity to bid
on the sale of any Tax Credit Property that the Company knows will be or is being marketed for sale
by, or on behalf of, an Ownership Entity that is not a Controlled Ownership Entity; and

(b) use commercially reasonable efforts to enable the Consultant to have an opportunity to bid
on the sale of Tax Credit Equity Interests not owned by the Company or any Company Subsidiary that
the Company knows will be or is being marketed for sale

including, in each case, providing the Consultant with copies of all information relating to
such potential sale as is reasonably available to the Company or any Company Subsidiary; provided,
however, that neither the Company nor any Company Subsidiary shall be required to disclose any such
information if the Company or Company Subsidiary determines, in its sole and absolute discretion,
that the disclosure of such information is prohibited by Applicable Law, contract or otherwise.
The Company shall have no obligation or liability to the Consultant for any determination by
investors in an Ownership Entity or any fund which invests in an Ownership Entity or the general
partner or manager of any Ownership Entity that the Consultant is not an acceptable buyer of any
Tax Credit Property or Tax Credit Equity Interest which is subject to the terms of this Section
9.2.

ARTICLE X.

TERMINATION

10.1 Termination. This Agreement may be terminated only as follows:

(a) The Company and the Consultant may terminate this Agreement by mutual written consent.

 

16

 

(b) The Consultant may terminate this Agreement at any time upon ninety (90) days prior
written notice to the Company.

(c) The Consultant may terminate this Agreement upon five (5) days prior written notice to the
Company in the event of a Continuing Default by the Company.

(d) The Company may terminate this Agreement upon five (5) days prior written notice to the
Consultant in the event of a Continuing Default by the Consultant.

(e) The Company may terminate this Agreement upon thirty (30) days prior written notice to the
Consultant in the event the Consultant has not, in the sole determination of the Company,
reasonably performed its duties under this Agreement to the satisfaction of the Company and the
Consultant fails to cure within a period of thirty (30) days following delivery of such notice.

(f) The Company may terminate this Agreement in the event of a Change in Control following the
Transaction.

(g) The Company may terminate this Agreement upon thirty (30) days prior written notice to the
Consultant if the Consultant or any Controlled Affiliate of Stephen M. Ross or the Related
Companies, L.P. directly or indirectly engages in any Competitive Business and such persons fail to
cease such Competitive Business within thirty (30) days following delivery of such notice.

10.2 Notice of Termination. In the event any party hereto desires to terminate this
Agreement pursuant to Section 10.1 above, such party shall give written notice of termination
setting forth the reason therefor to the other party hereto in accordance with Section 11.1 below.

10.3 Effect of Termination. If this Agreement is terminated, all further obligations of
the parties hereto shall be terminated without further liability of any party to the other;
provided, however, that (i) in the event the Agreement is terminated pursuant to
Section 10.1(f), the Company shall pay to the Consultant the Termination Fee; (ii) in the event the
Agreement is terminated pursuant to Section 10.1(g), Centerline and/or the Company (or any designee
acceptable to the lender under the Consultant Loan Agreement) shall assume the Consultant Loan
Agreement and all obligations thereunder and indemnify the Consultant and its Affiliates for any
loss, cost and expense incurred from and after the date of such assumption; and (iii) the
provisions of Article XI shall remain in full force and effect. Furthermore, upon any termination
of this Agreement, the parties acknowledge that they are also bound to comply with their respective
obligations under the side letter to the Consultant Loan Agreement as such side letter relates to
this Article X, a copy of which is attached hereto as Exhibit A.

ARTICLE XI.

MISCELLANEOUS

11.1 Notices. Any notice, request, demand or other communication required or permitted
under this Agreement shall be given in writing and shall be delivered or sent by registered or
certified mail, return receipt requested in a prepaid envelope, by overnight mail or courier, or by

 

17

 

facsimile transmission, to the addresses set forth below or such other addresses as such party
shall hereafter specify in accordance with this Section:

	 	 	 
	If to the Company:

	 	Centerline Capital Group Inc.
	 

	 	625 Madison Avenue
	 

	 	New York, NY 10022
	 

	 	Attention: Marc D. Schnitzer
	 

	 	Telephone: (212) 317-5700
	 

	 	Facsimile: (212) 593-5769
	 
	 	 
	For notices to the Company, with a
copy to (which copy shall not
constitute notice):

	 	Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

New York, NY 10022

Attention: Alan S. Cohen

Telephone: (212) 318-6000

Facsimile: (212) 319-4090
	 
	 	 
	If to the Consultant:

	 	TRCLP Affordable Acquisitions LLC
	 

	 	60 Columbus Circle
	 

	 	New York, NY 10023
	 

	 	Attention: Jeff T Blau
	 

	 	Telephone: 212 801 1030
	 

	 	Facsimile: 212 801 1036
	 
	 	 
	For notices to the Consultant, with
a copy to (which copy shall not
constitute notice):

	 	The Related Companies, L.P.

60 Columbus Circle

New York, NY 10023

Attention: Michael Orbison

Telephone: 212 801 3780

Facsimile: 212 801 1036

Such notice or other communication shall be deemed to have been given (i) when delivered, if
sent by registered or certified mail or delivered personally or by facsimile transmission, or (ii)
on the second following Business Day if sent by overnight mail or overnight courier.

11.2 Public Announcements. No party hereto shall make any public announcement or filing
with respect to the transactions provided for herein without the consent of the other parties
hereto, unless such party hereto has been advised by legal counsel that such disclosure is required
by Applicable Law.

11.3 Proprietary Rights. All materials or information (whether or not protectable by
patent or copyright) developed, furnished or prepared by the Consultant pursuant to this Agreement
or arising out of the Consultant’s performance of this Agreement, whether originated, developed,
made, conceived or authored by the Consultant alone or jointly with others, is work made for hire
by the Consultant for the Company and shall be deemed “Confidential Information” subject

 

18

 

to Section 11.4 below. All right, title and interest, including copyright, to such materials or
information are the Company’s exclusive property for its use in whatever way it may determine, and
shall be delivered to the Company promptly upon completion of the work hereunder or upon
termination of this Agreement. The Consultant agrees to execute any document reasonably required
to give effect to this Section 11.3.

11.4 Confidentiality.

(a) The Consultant will treat and hold as such any Confidential Information it receives or has
received from the Company or any Company Subsidiaries or any of their representatives and will not
use any of the Confidential Information (i) except in connection with this Agreement or (ii) for
the benefit of anyone other than the Company; provided, however, that in the event
the Consultant or any of its representatives or agents is requested to, or required by, Applicable
Law to disclose any of such Confidential Information, the Consultant will notify the Company so
that the Company may seek a protective order or other appropriate remedy or, in its sole
discretion, waive compliance with the terms of this Section 11.4; and in the event that no such
protective order or other remedy is obtained, or that the Company does not waive compliance with
the terms of this Section 11.4, the Consultant will furnish only that portion of the Confidential
Information which the Consultant is advised by counsel is legally required and will exercise all
reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to the
Confidential Information. The Consultant will cause its representatives and agents to observe the
terms of this Section 11.4 and the Consultant will be responsible for any breach of this Section
11.4 by any of its representatives or agents. If this Agreement is terminated for any reason
whatsoever, the Consultant will either (i) promptly destroy all tangible embodiments (and all
copies) of the Confidential Information in its possession and confirm such destruction to the
Company in writing or (ii) return to the Company all tangible embodiments (and all copies) of the
Confidential Information in the Consultant’s possession, except that the Consultant may maintain
such embodiments and copies of the Confidential Information as may be necessary to preserve or
defend its rights in connection with any potential dispute with the Consultant arising out of or
relating to such termination.

(b) The Company and the Consultant will each treat and maintain as confidential and shall not
disclose the existence or terms of this Agreement, except (i) to the extent required by Applicable
Law, (ii) to the extent required to assert or defend rights under this Agreement in connection with
any Proceeding and (iii) the parties hereto may disclose such matters to their advisors and
representatives as necessary in connection with the ordinary conduct of their business (so long as
such Persons agree to keep the terms of this Agreement confidential).

11.5 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives, successors and
permitted assigns.

11.6 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under Applicable Law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under Applicable
Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any provision in any other jurisdiction, but this
Agreement shall be

 

19

 

reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

11.7 Entire Agreement; Amendments. This Agreement (including any schedules and exhibits
hereto) and the Consultant Loan Agreement constitute the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes any and all prior agreements,
representations and understandings of the parties hereto, written or oral. The terms of this
Agreement shall not be modified or amended except by subsequent written agreement of the parties
hereto.

11.8 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT
REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

11.9 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY AGREE AND CONSENT THAT ANY CLAIM,
DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, WHETHER
IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

11.10 Jurisdiction. Any Proceeding arising out of or relating to this Agreement, the
enforcement of any provision hereof or any matters contemplated hereby shall be brought or
otherwise commenced exclusively in any state or federal court located in the Borough of Manhattan,
County of New York, State of New York. Each party hereto, on behalf of itself and its successors
in interest and assigns:

(a) expressly and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the Borough of Manhattan, County of New York, State of New York (and each
appellate court located in the State of New York), in connection with any such Proceeding;

(b) agrees that service of any process, summons, notice or document by U.S. mail addressed to
it at the address set forth in Section 11.1 shall constitute effective service of such process,
summons, notice or document for purposes of any such Proceeding;

(c) agrees that for any such Proceeding each state and federal court located in the Borough of
Manhattan, County of New York, State of New York, shall be deemed to be a convenient forum with
respect to any such Proceeding; and

(d) agrees not to assert (by way of motion, as a defense or otherwise), in any such Proceeding
commenced in any state or federal court located in the Borough of Manhattan, County of New York,
State of New York, any claim that it, he or she is not subject personally to

 

20

 

the jurisdiction of such court, that such legal proceeding has been brought in an inconvenient
forum, that the venue of such Proceeding is improper or that this Agreement or the subject matter
of this Agreement may not be enforced in or by such court.

11.11 Execution of Agreement; Counterparts; Electronic Signatures.

(a) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same instrument,
and shall become effective when counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto; it being understood that all parties hereto need not sign
the same counterparts.

(b) Electronic Signatures. The exchange of copies of this Agreement and of signature
pages by facsimile transmission (whether directly from one facsimile device to another by means of
a dial-up connection or whether mediated by the worldwide web), by electronic mail in “portable
document format” or “pdf” form, or by any other electronic means intended to preserve the original
graphic and pictorial appearance of a document, or by combination of such means, shall constitute
effective execution and delivery of this Agreement as to the parties hereto and may be used in lieu
of the original Agreement for all purposes. Signatures of the parties hereto transmitted by
facsimile shall be deemed to be their original signatures for all purposes.

11.12 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each party hereto agrees to execute and deliver any and all additional
instruments and documents and perform any additional acts that may be necessary or appropriate to
effectuate and perform the provisions of this Agreement and those transactions.

11.13 Remedies. The parties hereto shall be entitled to enforce their rights under this
Agreement specifically, to recover damages by reason of any breach of any provision of this
Agreement (including costs of enforcement) and to exercise any and all other rights at law or at
equity existing in their favor. The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this Agreement (and thus waive as
defense that there is an adequate remedy at law), and that each party hereto may in its sole
discretion apply to any court of law or equity of competent jurisdiction for specific performance
or injunctive relief (without posting a bond or other security) in order to enforce or prevent
violation or threatened violation of the provisions of this Agreement.

11.14 Third Parties. Nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any Person, other than the parties to this Agreement and their respective
successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

11.15 Headings; References; Interpretation. The headings of the Articles and Sections of
this Agreement are solely for convenience and reference and shall not limit or otherwise affect the
meaning or interpretation of any of the terms or provisions of this Agreement. The references
herein to Articles, Sections, Schedules and Exhibits, unless otherwise indicated, are references to
sections and subsections of and schedules to this Agreement. Whenever the words “include”,
"includes”, or “including” are used in this Agreement, they shall be deemed to be followed by

 

21

 

the words “without limitation”. Unless the context requires otherwise, all words used in this
Agreement in the singular number shall extend to and include the plural number, all words in the
plural number shall extend to and include the singular number, and all words in any gender shall
extend to and include all genders.

11.16 Effect of Waiver or Consent. A waiver or consent, express or implied, to or of any
breach or default by any Person in the performance by that Person of its obligations hereunder is
not a consent or waiver to or of any other breach or default in the performance by that Person of
the same or any other obligations of that Person hereunder. Failure on the part of a Person to
complain of any act of any Person or to declare any Person in default hereunder, irrespective of
how long that failure continues, does not constitute a waiver by that Person of its rights with
respect to that default until the applicable statute of limitations period has run.

11.17 No Construction Against Drafter. This Agreement has been negotiated and prepared by
all parties hereto and their respective attorneys and, should any provision of this Agreement
require judicial interpretation, the court interpreting or construing such provision shall not
apply the rule of construction that a document is to be construed more strictly against one party
hereto.

[Signature Page Follows]

 

22

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and sealed as
of the day and year first written above.

	 	 	 	 	 
	 	CENTERLINE CAPITAL GROUP INC.

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 
	 	TRCLP AFFORDABLE
ACQUISITIONS LLC

 	 
	 	By:  	                                                    /s/ Jeff Blau
 	 
	 	 	Name:  	Jeff Blau 	 
	 	 	Title:  	PresidentExhibit 10.23

Exhibit 10.23

EXECUTION COPY

 

TAX BENEFITS PRESERVATION PLAN

BETWEEN

CENTERLINE HOLDING COMPANY

AND

COMPUTERSHARE TRUST COMPANY, N.A.

DATED AS OF MARCH 5, 2010

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Article I. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	2	 
	 
	 	 	 	 
	Article II. APPOINTMENT, COMPENSATION, INDEMNIFICATION AND DUTIES OF RIGHTS AGENT; SURVIVAL
	 	 	7	 
	 
	 	 	 	 
	2.1 Appointment of Rights Agent
	 	 	7	 
	 
	 	 	 	 
	2.2 Compensation of Rights Agent
	 	 	7	 
	 
	 	 	 	 
	2.3 Indemnification of Rights Agent
	 	 	7	 
	 
	 	 	 	 
	2.4 Duties of Rights Agent
	 	 	7	 
	 
	 	 	 	 
	2.5 Change of Rights Agent
	 	 	9	 
	 
	 	 	 	 
	2.6 Survival
	 	 	10	 
	 
	 	 	 	 
	Article III. ISSUANCE OF RIGHTS AND RIGHT CERTIFICATES; FORM OF RIGHT CERTIFICATES;
DUE AUTHORIZATION AND EXECUTION OF RIGHT CERTIFICATES; REGISTRATION OF RIGHT
CERTIFICATES
	 	 	10	 
	 
	 	 	 	 
	3.1 Issuance of Rights; Evidence of Rights
	 	 	11	 
	 
	 	 	 	 
	3.2 Form of Right Certificates
	 	 	12	 
	 
	 	 	 	 
	3.3 Due Authorization and Execution of Right Certificates
	 	 	13	 
	 
	 	 	 	 
	3.4 Registration of Right Certificates
	 	 	13	 
	 
	 	 	 	 
	Article IV. TRANSFER AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN CERTIFICATES
	 	 	13	 
	 
	 	 	 	 
	4.1 Transfer and Exchange of Right Certificates
	 	 	13	 
	 
	 	 	 	 
	4.2 Mutilated, Destroyed, Lost or Stolen Certificates
	 	 	14	 
	 
	 	 	 	 
	Article V. EXERCISE OF RIGHTS
	 	 	14	 
	 
	 	 	 	 
	5.1 Exercise Period
	 	 	14	 
	 
	 	 	 	 
	5.2 Obligations of Rights Agent and Company Upon Exercise
	 	 	14	 
	 
	 	 	 	 
	5.3 Record Holder of Issued Series B Shares
	 	 	15	 
	 
	 	 	 	 
	5.4 New Rights Certificate
	 	 	15	 
	 
	 	 	 	 
	5.5 Termination of Rights
	 	 	15	 
	 
	 	 	 	 
	5.6 Condition to Transfer
	 	 	16	 
	 
	 	 	 	 
	Article VI. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES
	 	 	16	 
	 
	 	 	 	 
	6.1 Cancellation of Right Certificates
	 	 	16	 
	 
	 	 	 	 
	6.2 Destruction of Right Certificates
	 	 	16	 
	 
	 	 	 	 

 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Article VII. RESERVATION AND AVAILABILITY OF SERIES B SHARES;
LISTING OF SERIES B SHARES; REGISTRATION OF SERIES B SHARES; COMPLIANCE WITH SECURITIES LAWS; DUE
AUTHORIZATION OF SERIES B SHARES; PAYMENT OF TAXES AND OTHER GOVERNMENTAL CHARGES
	 	 	17	 
	 
	 	 	 	 
	7.1 Reservation and Availability of Series B Shares
	 	 	17	 
	 
	 	 	 	 
	7.2 Listing of Series B Shares
	 	 	17	 
	 
	 	 	 	 
	7.3 Registration of Series B Shares; Compliance with Securities Laws
	 	 	17	 
	 
	 	 	 	 
	7.4 Due Authorization of Series B Shares
	 	 	18	 
	 
	 	 	 	 
	7.5 Payment of Taxes and Other Governmental Charges
	 	 	18	 
	 
	 	 	 	 
	Article VIII. ADJUSTMENT OF PURCHASE PRICE; NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS
	 	 	18	 
	 
	 	 	 	 
	8.1 Adjustment of Purchase Price
	 	 	18	 
	 
	 	 	 	 
	8.2 Computation of Current Market Price
	 	 	19	 
	 
	 	 	 	 
	8.3 Rights Issued Subsequent to Adjustments
	 	 	21	 
	 
	 	 	 	 
	8.4 Company Election to Defer Issuance
	 	 	21	 
	 
	 	 	 	 
	8.5 Additional Reductions in Purchase Price
	 	 	21	 
	 
	 	 	 	 
	8.6 Preservation of Rights
	 	 	21	 
	 
	 	 	 	 
	Article IX. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES
	 	 	21	 
	 
	 	 	 	 
	9.1 Certificate of Adjusted Purchase Price or Number of Shares
	 	 	22	 
	 
	 	 	 	 
	Article X. FRACTIONAL RIGHTS AND FRACTIONAL SHARES
	 	 	22	 
	 
	 	 	 	 
	10.1 Fractions of Rights
	 	 	22	 
	 
	 	 	 	 
	10.2 Fractions of Series B Shares
	 	 	22	 
	 
	 	 	 	 
	10.3 Fractions of Existing Shares
	 	 	22	 
	 
	 	 	 	 
	10.4 Waiver of Right to Receive Fractional Rights or Fractional Shares
	 	 	23	 
	 
	 	 	 	 
	Article XI. AGREEMENT OF HOLDERS OF RIGHTS
	 	 	23	 
	 
	 	 	 	 
	11.1 Agreement of Holders of Rights
	 	 	23	 
	 
	 	 	 	 
	Article XII. HOLDER OF A RIGHT CERTIFICATE NOT DEEMED A SHAREHOLDER
	 	 	23	 
	 
	 	 	 	 
	12.1 Holder of a Right Certificate Not Deemed a Shareholder
	 	 	23	 
	 
	 	 	 	 
	Article XIII. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
	 	 	24	 
	 
	 	 	 	 

 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	13.1 Merger or Consolidation of Rights Agent
	 	 	24	 
	 
	 	 	 	 
	13.2 Change of Name of Rights Agent
	 	 	24	 
	 
	 	 	 	 
	Article XIV. REDEMPTION OF RIGHTS
	 	 	24	 
	 
	 	 	 	 
	14.1 Redemption Option; Redemption Price
	 	 	24	 
	 
	 	 	 	 
	14.2 Effect of the Board’s Election to Redeem the Rights
	 	 	24	 
	 
	 	 	 	 
	Article XV. EXCHANGE OF RIGHTS
	 	 	25	 
	 
	 	 	 	 
	15.1 Exchange Option; Exchange Ratio
	 	 	25	 
	 
	 	 	 	 
	15.2 Effect of the Board’s Election to Exchange the Rights
	 	 	25	 
	 
	 	 	 	 
	15.3 Trust Agreement; Trust
	 	 	26	 
	 
	 	 	 	 
	Article XVI. NOTICE OF CERTAIN EVENTS
	 	 	26	 
	 
	 	 	 	 
	16.1 Certain Events
	 	 	26	 
	 
	 	 	 	 
	16.2 Post-Share Acquisition Date Notices
	 	 	27	 
	 
	 	 	 	 
	Article XVII. MISCELLANEOUS
	 	 	27	 
	 
	 	 	 	 
	17.1 Notices
	 	 	27	 
	 
	 	 	 	 
	17.2 Severability
	 	 	28	 
	 
	 	 	 	 
	17.3 Entire Agreement
	 	 	28	 
	 
	 	 	 	 
	17.4 Supplements and Amendments
	 	 	28	 
	 
	 	 	 	 
	17.5 Determination and Actions by the Board of Trustees
	 	 	29	 
	 
	 	 	 	 
	17.6 Successors and Assigns
	 	 	29	 
	 
	 	 	 	 
	17.7 Third Party Beneficiaries
	 	 	29	 
	 
	 	 	 	 
	17.8 Governing Law
	 	 	29	 
	 
	 	 	 	 
	17.9 Waiver of Jury Trial
	 	 	29	 
	 
	 	 	 	 
	17.10 Jurisdiction
	 	 	29	 
	 
	 	 	 	 
	17.11 Execution of Agreement; Counterparts; Electronic Signatures
	 	 	30	 
	 
	 	 	 	 
	17.12 Headings; References; Interpretation
	 	 	30	 
	 
	 	 	 	 

 

-iii-

 

TAX BENEFIT PRESERVATION PLAN, dated as of March 5, 2010 (this “Agreement”), between
Centerline Holding Company, a Delaware statutory trust (the “Company”) and Computershare
Trust Company, N.A., a federally chartered trust company, as the rights agent (the “Rights
Agent”).

Preliminary Statement

The Company expects to enter into a purchase and sale agreement, by and among C-III Capital
Partners LLC (“Newco”), on the one hand, and the Company and certain of its subsidiaries,
on the other hand, pursuant to which Newco will acquire (i) the Company’s assets comprising the
former ARCap Investors LLC business and certain other assets and (ii) newly issued Special Shares
(as defined below) representing an approximately twenty percent (20%) fully diluted ownership
interest in the Company, for an aggregate purchase price equal to (a) approximately $50,000,000 in
cash and (b) the assumption of approximately $60,000,000 of the Company’s senior secured debt
obligations (the “Island Sale”).

In addition, the Company will enter into (i) various agreements with certain of its equity holders,
lenders, creditors and claimants to restructure certain of its other outstanding debt obligations
and (ii) a management agreement with an affiliate of Newco pursuant to which it will provide
executive management services to the Company (the “Restructuring”, and together with the
Island Sale, the “Transaction”).

The Company’s corporate subsidiary, Centerline Capital Group, Inc. and its subsidiaries have
generated certain Tax Benefits for United States federal income tax purposes, such Tax Benefits may
potentially provide valuable benefits to the Company, and the Company desires to avert an
“ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as
amended, (the “Code”) and the Treasury Regulations promulgated thereunder and to preserve
its ability to utilize such Tax Benefits. In furtherance of such objective, and as a condition to
consummating the Transaction, the Company desires to enter into this Agreement.

On March 5, 2010, the board of trustees of the Company (the “Board”) delegated to the
Rights Plan Evaluation Committee (the “Committee”) the power and authority to declare a
distribution of one Series B Share purchase right (a “Right”) for each Common Share, CRA
Share, Series A CRA Share and Special Preferred Share, and fifteen Rights for each Special Share
outstanding at the Close of Business on or after the date of the resolution declaring such
distribution (the “Record Date”) and further directed the Committee to consider authorizing
the issuance, upon the terms and subject to the conditions herein, of one Right (subject to
adjustment) in respect of each Common Share, CRA Share, Series A CRA Share and Special Preferred
Share, and fifteen Rights (subject to adjustment) in respect of each Special Share issued after the
Record Date, each Right representing the right to purchase, upon the terms and subject to the
conditions herein, one one-millionth (subject to adjustment) of a Series B Share.

NOW, THEREFORE, in consideration of the representations, warranties, premises and agreements
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1

 

Article I.

DEFINITIONS

1.1 Definitions. For purposes of this Agreement, the following terms shall have the
meanings set forth below:

“Acquiring Person” means any Person who or which, together with all Affiliates and
Associates of such Person, from and after the date of this Agreement shall become a Five
Percent (5%) Shareholder (other than by reason of Section 1.382-2T(j)(3)(i) of the Treasury
Regulations) or shall be such a Five Percent (5%) Shareholder after the date hereof, whether
or not such Person continues to be a Five Percent (5%) Shareholder, but shall not include:

(i) the Company;

(ii) any Subsidiary of the Company;

(iii) any employee benefit plan of the Company, or of any Subsidiary of the Company, or
any Person organized, appointed or established by the Company for or pursuant to the terms
of any such plan;

(iv) the U.S. Government;

(v) any Person who becomes a Five Percent (5%) Shareholder as a result of (A) a
reduction in the number of Company Securities outstanding due to repurchase or redemption of
Company Securities by the Company or (B) a stock dividend, stock split, reverse stock split
or similar transaction effected by the Company, in each case unless and until such Person
increases its Percentage Stock Ownership by more than one-quarter of one percentage point
over such Person’s lowest Percentage Stock Ownership on or after the consummation of the
relevant transaction, other than an increase solely as a result of any subsequent
transaction described in clauses (A) and (B) of this sentence or with Prior Approval of the
Company;

(vi) any Person who was a Five Percent (5%) Shareholder on the date hereof, or becomes
a Five Percent (5%) Shareholder solely as a result of a transaction pursuant to which such
Person received the Prior Approval of the Company, unless after the date of this Agreement
or the date of the relevant transaction, as applicable, such Person (A) increases its
Percentage Stock Ownership by more than one-quarter of one percentage point over such
Person’s lowest Percentage Stock Ownership on or after the date of this Agreement or the
date of the relevant transaction, as applicable, other than an increase solely as a result
of any subsequent transaction described in clauses (A) and (B) of section (v) above or with
the Prior Approval of the Company; or

(vii) any Person who or which inadvertently becomes an Acquiring Person, so long as
such Person promptly enters into, and delivers to the Company, an irrevocable commitment
promptly to divest, and thereafter promptly divests (without exercising or retaining any
power, including voting, with respect to such securities), sufficient Company Securities so
that such Person ceases to be an Acquiring Person,

 

2

 

provided, however, that persons who are listed on Schedule 1 who or which have
executed agreements with the Company existing on the date of this Agreement restricting the
Transfer of Shares (each a “Lock-Up Agreement”) shall not be an Acquiring Person solely as a
result of a transaction that is not in violation of, or prohibited in whole or part by, any
Lock-Up Agreement to which such Person is a party; provided further, however, that
no Person shall be an Acquiring Person if the Board shall have affirmatively determined,
prior to the Distribution Date, in light of the intent and purposes of this Agreement or
other circumstances facing the Company, that such Person shall not be deemed an Acquiring
Person.

“Adjustment Shares” has the meaning given such term in Section 8.1(b).

“Affiliates” has the meaning given such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement, and to the
extent not included within the foregoing clause, shall also include, with respect to any
Person, any other Person whose Existing Shares would be deemed constructively owned by such
first Person for purposes of Section 382 of the Code and Treasury Regulations promulgated
thereunder.

“Agreement” has the meaning given such term in the preamble hereto.

“Associates” has the meaning given such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement, and to the
extent not included within the foregoing clause, shall also include, with respect to any
Person, any other Person whose Existing Shares would be deemed constructively owned by such
first Person for purposes of Section 382 of the Code and Treasury Regulations promulgated
thereunder.

“Beneficial Owner” means, with respect to any Person, such Person’s ownership of any
securities (i) which such Person directly owns or (ii) which such Person would be deemed to
beneficially or constructively own pursuant to Section 382 of the Code and the Treasury
Regulations promulgated thereunder.

“Board” means the board of trustees of the Company.

“Business Day” means any day other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or executive order
to close.

“Close of Business” means, with respect to any given date, 5:00 P.M. New York City
time on such date; provided, however, that if such date is not a Business
Day, it shall mean 5:00 P.M. New York City time on the next succeeding Business Day.

“Code” has the meaning given such term in the Preliminary Statement.

“Common Shares” means common shares of beneficial interest of the Company.

“Company” has the meaning given such term in the preamble hereto.

 

3

 

“Company Securities” means (i) Common Shares, (ii) Special Shares, (iii) CRA Shares,
(iv) Series A CRA Shares, (v) Special Preferred Shares, (vi) other preferred shares (other
than preferred shares described in Section 1504(a)(4) of the Code) of the Company, (vii)
warrants, rights, options (including options within the meaning of Section 1.382-4(d)(9) of
the Treasury Regulations) to purchase shares of beneficial interest (other than preferred
 shares described in Section 1504(a)(4) of the Code) in the Company, and (viii) any other
interest that would be treated as “stock” of the Company pursuant to Section 1.382-2T(f)(18)
of the Treasury Regulations.

“CRA Shares” means the Convertible Community Reinvestment Act Preferred Shares of
beneficial interest in the Company.

“Distribution Date” means the earlier of (i) the Close of Business on the tenth
Business Day after a Share Acquisition Date and (ii) the Close of Business on the tenth
Business Day (or such later day as may be designated prior to a Share Acquisition Date by
the Board) after the date of the commencement of a tender or exchange offer by any Person
if, upon consummation thereof, such Person would be an Acquiring Person; provided,
however, that if either of such dates occurs after the date of this Agreement and on
or prior to the Record Date, then the Distribution Date shall be the Record Date.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Ratio” has the meaning given such term in Section 15.1.

“Existing Shares” means (i) Common Shares, (ii) CRA Shares, (iii) Series A CRA
Shares, (iv) Special Preferred Shares and (v) Special Shares.

“Expiration Date” means the earlier of (i) the Final Expiration Date and (ii) the
time at which all Rights are redeemed as provided in Section 14 or exchanged as provided in
Section 15.

“Final Expiration Date” means the date that is thirty-six (36) months and one day
after the date hereof.

“Five Percent (5%) Shareholder” means (i) a Person or group of Persons that is a five
percent (5%) shareholder of the Company pursuant to Section 1.382-2T(g) of the Treasury Regulations
or (ii) a Person that is a “first tier entity” or “higher tier entity” (as such terms are defined
in Section 1.382-2T(f) of the Treasury Regulations) of the Company if that Person has a “public
group” or individual, or a “higher tier entity” of that Person has a “public group” or individual,
that is treated as a five percent (5%) shareholder of the Company pursuant to Section 1.382-2T(g)
of the Treasury Regulations. No Person or group of Persons shall become a Five Percent (5%)
Shareholder solely by virtue of such Person’s or group’s power to vote or direct the voting of any
Company Securities if such voting power arises solely from a revocable proxy or consent given to
such Person or group in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, Section 14(a) of the Exchange Act by means of a solicitation statement filed on
Schedule 14A. A list of the Persons who,

 

4

 

together with their Affiliates and Associates, constitute Five Percent (5%) Shareholders as of
the effective date of this Agreement is set forth on Schedule 1, attached hereto.

“Island Sale” has the meaning given such term in the Preliminary Statement.

“Newco” has the meaning given such term in the Preliminary Statement.

“Ownership Statements” means, with respect to uncertificated shares of beneficial
interest in the Company, current ownership statements issued to the record holders thereof
in lieu of such a certificate.

“Percentage Stock Ownership” means the percentage share ownership interest as
determined in accordance with Section 1.383-2(a)(3), 1.382-2T(g), (h), (j), and (k),
1.382-3(a), and 1.382-4(d) of the Treasury Regulations; provided, however,
that for the sole purpose of determining the percentage share ownership of any entity (and
not for the purpose of determining the percentage stock ownership of any other Person),
Company Securities held by such entity shall not be treated as no longer owned by such
entity pursuant to Section 1.382-2T(h)(2)(i)(A) of the Treasury Regulations.

“Person” means any individual, firm, corporation, partnership, limited liability
company, limited liability partnership, trust, syndicate, or other entity, group of persons
making a “coordinated acquisition” of Company Securities or otherwise treated as an “entity”
within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and
includes an unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose or act, and also
includes any successor (by merger or otherwise) of any such individual or entity.

“Prior Approval of the Company” means (i) the prior express written consent of the
Company to the actions in question, executed on behalf of the Company by a duly authorized
officer of the Company (ii) following express approval by the action of at least a majority
of the members of the Board then in office pursuant to the Board’s determination that such
actions would not jeopardize the Tax Benefits, provided that a Person shall be
treated as having received the Prior Approval of the Company if such Person acquires Company
Securities from the Company pursuant to an issuance by the Company that was approved by the
Board.

“Purchase Price” means the price (subject to adjustment as provided herein) at which
a holder of a Right may purchase one one-millionth of a Series B Share (subject to
adjustment as provided herein) upon exercise of a Right, which price shall initially be
$0.66.

“Record Date” has the meaning given such term in the Preliminary Statement.

“Redemption Price” has the meaning given such term in Section 14.1

“Restructuring” has the meaning given such term in the Preliminary Statement.

“Right” has the meaning given such term in the Preliminary Statement.

 

5

 

“Right Certificates” has the meaning given such term in Section 3.2(a).

“Rights Agent” has the meaning given such term in the preamble hereto.

“Securities Act” means the Securities Act of 1933, as amended.

“Series A CRA Shares” means the Series A Convertible Community Reinvestment Act
Preferred Shares of beneficial interest in the Company.

“Series B Shares” means the Series B Special Shares of the Company, having the terms
set forth in the form of certificate of designation attached hereto as Exhibit A.

“Share Acquisition Date” means the date of the first public announcement (including
the filing of a report on Schedule 13D or Schedule 13G under the Exchange Act (or any
similar or successor report)) by the Company or an Acquiring Person indicating that an
Acquiring Person has become such or that discloses information that reveals the existence of
an Acquiring Person or such earlier date as a majority of the Board shall become aware of
the existence of an Acquiring Person.

“Special Preferred Shares” means the Special Preferred Voting Shares of beneficial
interest in the Company.

“Special Shares” means the Special Series A Shares of the Company, with the rights
and privileges set forth in the certificate of designation of the Special Series A Shares to
be adopted in connection with the Restructuring.

“Subsidiary” means any Person (a) for which the Company may nominate or appoint a
majority of the members of the board of directors or persons performing similar functions,
or (b) which is otherwise effectively controlled, directly or indirectly, by the Company.

“Summary of Rights” has the meaning given such term in Section 3.1(b).

“Tax Benefits” means the net operating loss carryovers, capital loss carryovers,
general business credit carryovers, alternative minimum tax credit carryovers and foreign
tax credit carryovers, as well as any loss or deduction attributable to a “net unrealized
built-in loss” within the meaning of Section 382, of the Company or any of its Subsidiaries.

“Trading Day” means a day on which the principal national securities exchange or
over-the-counter market on which the shares of Existing Shares are listed or admitted to
trading is open for the transaction of business or, if the Existing Shares are not listed or
admitted to trading on any national securities exchange or over-the-counter market, a
Business Day.

“Transaction” has the meaning given such term in the Preliminary Statement.

“Treasury Regulations” means the final and temporary (but not proposed) tax
regulations promulgated under the Code, as such regulations may be amended from time to
time.

 

6

 

“Trust” has the meaning given such term in Section 15.3.

“Trust Agreement” has the meaning given such term in Section 15.3.

“U.S. Government” means any of (i) the federal government of the United States of
America, (ii) any instrumentality or agency of the federal government of the United States
of America and (iii) any Person wholly-owned by, or the sole beneficiary of which is, the
federal government of the United States of America or any instrumentality or agency thereof.

Article II.

APPOINTMENT, COMPENSATION, INDEMNIFICATION

AND DUTIES OF RIGHTS AGENT; SURVIVAL

2.1 Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof and the Rights Agent
hereby accepts such appointment. The Company may, from time to time, appoint such co-rights agents
as it may deem necessary or desirable upon ten (10) days’ prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-rights agent. If the Company appoints one or more co-rights agents, the
respective duties of the Rights Agent and any co-rights agents shall be as the Company shall
determine in its sole and absolute discretion.

2.2 Compensation of Rights Agent. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the preparation, delivery, administration and execution of this Agreement and the
exercise and performance of its duties hereunder.

2.3 Indemnification of Rights Agent. To the fullest extent permitted by law, the Company
agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability,
damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the
reasonable fees and expenses of legal counsel) incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for any action taken, suffered or omitted by
the Rights Agent in connection with the acceptance, administration, exercise and performance of its
duties under this Agreement. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company.

2.4 Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the advice or opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability to the Company for or
in respect of any action taken, suffered or omitted by it and in accordance with such advice or
opinion.

 

7

 

(b) Whenever in the performance of its duties under this Agreement the Rights Agent deems it
necessary that any fact or matter (including the identity of any Acquiring Person and the
determination of “current market price”) be proved or established by the Company prior to taking,
suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer, the Chairman of the Board, the
President, the Vice Chairman or any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company and delivered to the Rights Agent. Such
certificate shall be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability to the Company for or in respect of any action taken,
suffered or omitted by it under the provisions of this Agreement in reliance upon such certificate.

(c) To the fullest extent permitted by law, the Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.

(d) The Rights Agent shall not be liable to the Company for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.

(e) The Rights Agent shall not be responsible (i) in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its countersignature
thereof), (ii) for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate, (iii) for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 5.5) or (iv) any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided herein or the ascertaining of
the existence of facts that would require any such adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any such adjustment). The Rights
Agent shall not by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Series B Shares or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Series B Shares or other securities
will, when issued, be duly authorized, validly issued, fully paid and nonassessable.

(f) The Company agrees that it will perform, execute, acknowledge and deliver, or cause to be
performed, executed, acknowledged and delivered, all such acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from the Chief Executive Officer, the Chairman of the
Board, the President, or the Secretary of the Company and any such officer or a Vice President of
Centerline Capital Group, Inc., the advisor to the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable to the Company for
any action taken, suffered or omitted to be taken by it in good faith in

 

8

 

accordance with the instructions of any such officer or for any delay in acting while waiting
for those instructions. The Rights Agent shall be fully authorized and protected from liability to
the Company in relying upon the most recent instructions received by any such officer.

(h) The Rights Agent and any shareholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not the Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or any other Person.

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable to the Company for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company or to any holders of
Rights resulting from any such act, default, neglect or misconduct; provided that
reasonable care was exercised in the selection and continued employment thereof.

(j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.

(k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has not been completed, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the Company.

(l) The Rights Agent shall be protected and shall incur no liability to the Company for or in
respect of any action taken, suffered or omitted by it in connection with the administration of
this Agreement or the exercise or performance of its duties hereunder in reliance upon any Right
Certificate or certificate for Existing Shares or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction,
direction, consent, certificate, statement or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.

2.5 Change of Rights Agent.

(a) The Rights Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days’ notice to the Company and, in the event that the
Rights Agent or one of its Affiliates is not also the transfer agent for the Company, to each
transfer agent of Existing Shares and Series B Shares.

(b) In the event the transfer agency relationship in effect between the Company and the Rights
Agent terminates, the Rights Agent will be deemed to have resigned automatically

 

9

 

and be discharged from its duties under this Agreement as of the effective date of such
termination, and the Company shall be responsible for sending any required notice to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Existing
Shares and Series B Shares registered or certified mail, and, after a Distribution Date, to the
holders of the Right Certificates by issuing a public announcement.

(c) If the Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
Company shall appoint a successor to the Rights Agent.

(d) If the Company fails to make such appointment within a period of thirty (30) days after
giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent.

(e) Any successor Rights Agent, whether appointed by the Company or by such a court, shall be:

(i) a corporation or entity organized, in good standing and doing business under the laws of
the United States or of any state of the United States, authorized under such laws to exercise
share transfer or corporate trust powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $10,000,000; or

(ii) an Affiliate of a corporation or entity described in clause (i) above.

(f) After appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and delivery any further
assurance, conveyance, act or deed necessary for the purpose.

(g) Not later than the effective date of any such appointment, the Company shall file notice
thereof with the predecessor Rights Agent and each transfer agent of the Existing Shares and the
Series B Shares, and, subsequent to a Distribution Date, issue a public announcement for the
benefit of the registered holders of the Right Certificates.

(h) Failure to give any notice provided for in this Section 2.5, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

2.6 Survival. The provisions of this Section 2 shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation, replacement or removal of
the Rights Agent.

Article III.

ISSUANCE OF RIGHTS AND RIGHT CERTIFICATES; FORM OF RIGHT 

 

10

 

CERTIFICATES; DUE AUTHORIZATION AND EXECUTION OF 

RIGHT CERTIFICATES; REGISTRATION OF RIGHT CERTIFICATES

3.1 Issuance of Rights; Evidence of Rights.

(a) Generally. One Right shall be issued in respect of each Common Share, CRA Share,
Series A CRA Share and Special Preferred Share, and 15 Rights shall be issued in respect of each
Special Share, outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of a Distribution Date and the Expiration
Date, in each case subject to adjustment as set forth herein.

(b) Pre-Distribution Date.

(i) Prior to the Distribution Date, (i) the Rights (unless earlier expired, redeemed or
terminated) will be evidenced by certificates for the Existing Shares or Ownership Statements (or
the Summary of Rights, as applicable) and not by separate Right Certificates and the registered
holders of Existing Shares shall be deemed to be the registered holders of the associated Rights,
and (ii) the Rights will be transferred only in connection with the transfer of the underlying
Existing Shares. The Company will make available, as promptly as practicable following the Record
Date, a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit B (the
“Summary of Rights”), to each holder of Existing Shares as of the Record Date (other than
any Acquiring Person or Affiliate or Associate thereof).

(ii) Certificates or Ownership Statements issued after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date shall have printed or written on or
otherwise affixed to them the following legend:

This [certificate] [statement] also evidences certain Rights as
set forth in a Tax Benefits Preservation Plan, dated as of
March 5, 2010 (the “Agreement”), between Centerline
Holding Company (the “Company”) and Computershare Trust
Company, N.A. (the “Rights Agent”), as may be amended
from time to time, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of the Company. The Company will
mail to the holder of this [certificate] [statement] a copy of
the Agreement without charge promptly after receipt of a
written request therefor. Under certain circumstances, as set
forth in the Agreement, such Rights may be evidenced by
separate [certificate] [statements] instead of by this
[certificate] [statement] and may be redeemed or exchanged or
may expire.

As set forth in the Agreement, Rights issued or transferred to,
or beneficially owned by, any Person who is, was or becomes an
Acquiring Person (as such terms are defined in the Agreement),
whether currently beneficially owned by or on

 

11

 

behalf of such Person or by any subsequent holder, may be null
and void.

(c) On or Post-Distribution Date.

(i) From and after the Distribution Date, the Rights will be evidenced solely by separate
Right Certificates and will be transferable only in connection with the transfer of the Right
Certificates pursuant to Section 4. As soon as practicable after the Company has notified the
Rights Agent of the occurrence of a Distribution Date, the Rights Agent will send, by first class,
insured, postage prepaid mail, (i) to each record holder of Common Shares, CRA Shares, Series A CRA
Shares and Special Preferred Shares as of the Close of Business on the Distribution Date (other
than any Acquiring Person or Affiliate or Associate thereof), one or more Right Certificates
evidencing one Right (subject to adjustment as provided herein) for each Common Share, CRA Share,
Series A CRA Share and Special Preferred Share so held and (ii) to each record holder of Special
Shares as of the Close of Business on the Distribution Date (other than any Acquiring Person or
Affiliate or Associate thereof), one or more Right Certificates evidencing fifteen Rights (subject
to adjustment as provided herein) for each Special Share so held. If an adjustment in the number
of Rights per Existing Share has been made pursuant to Section 8, the Company shall, at the time of
distribution of the Right Certificates, make the necessary and appropriate rounding adjustments in
accordance with Section 10 so that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights.

(ii) In addition, in connection with the issuance or sale of Existing Shares following a
Distribution Date and prior to the Expiration Date, the Company (A) shall, with respect to Existing
Shares so issued or sold (x) pursuant to the exercise of options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other securities issued by the
Company prior to the Distribution Date, and (B) may, in any other case, if deemed appropriate by
the Board, issue Right Certificates representing the appropriate number of Rights in connection
with such issuance or sale, provided that no such Right Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise be made in lieu of the issuance thereof.

3.2 Form of Right Certificates.

(a) Form of Right Certificate. The certificates evidencing the Rights (and the forms
of assignment, election to purchase and certificates to be printed on the reverse thereof) (the
“Right Certificates”) shall be substantially in the form attached hereto as Exhibit C and
may have such marks of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law, rule or regulation or
with any rule or regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage.

(b) Purchase Price. The Right Certificates shall entitle the holders thereof to
purchase such number of one one-millionths of a Series B Share upon payment of the Purchase

 

12

 

Price; provided that the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

3.3 Due Authorization and Execution of Right Certificates.

(a) Execution of the Right Certificates by the Company. The Right Certificates shall
be executed on behalf of the Company by a Managing Trustee, the Chief Executive Officer, the Chief
Financial Officer or the Controller, either manually or by facsimile signature.

(b) Countersignature of the Right Certificates by the Rights Agent. The Right
Certificates shall be countersigned, either manually or by facsimile signature, by an authorized
signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign
all of the Right Certificates hereunder. No Right Certificate shall be valid for any purpose
unless so countersigned.

(c) Effect of a Change in Authorized Officers of the Company. In case any officer of
the Company who shall have signed any of the Right Certificates shall cease to be such an officer
of the Company before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and effect as though the Person who signed
such Right Certificates had not ceased to be such an officer of the Company. Any Right Certificate
may be signed on behalf of the Company by any Person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Plan any such person was not such an officer.

3.4 Registration of Right Certificates. Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on its face by each of
the Right Certificates, the certificate number of each of the Right Certificates and the date of
each of the Right Certificates.

Article IV.

TRANSFER AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN

CERTIFICATES

4.1 Transfer and Exchange of Right Certificates. At any time after a Distribution Date and
prior to the Expiration Date, any Right Certificate (other than any Right Certificate representing
Rights that have become void pursuant to Section 5.5 hereof or exchanged pursuant to Section 15
hereof) may, upon the terms and subject to the conditions set forth in this Agreement, be
transferred or exchanged for another Right Certificate evidencing a like number of Rights as the
Right Certificate surrendered. Any registered holder desiring to transfer or exchange any Right
Certificate shall surrender such Right Certificate (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed) to the Rights Agent at the
principal office or offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with respect to the

 

13

 

transfer of any such surrendered Right Certificate or Certificates until the registered holder of
the Rights has complied with the requirements of Section 5.6. Upon satisfaction of the foregoing
requirements, the Rights Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Certificates as so requested. The Company may require payment of a sum sufficient
to cover any transfer tax or other governmental charge that may be imposed in connection with any
transfer or exchange of any Right Certificate or Certificates.

4.2 Mutilated, Destroyed, Lost or Stolen Certificates. Subject to the provisions of
Section 5.5, upon receipt by the Company and the Rights Agent or evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in the case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will issue and deliver a new Right Certificate of like tenor
to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

Article V.

EXERCISE OF RIGHTS

5.1 Exercise Period. The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as specifically provided in Section 5.7 or as otherwise provided
herein) in whole or in part at any time after the Distribution Date and prior to the Expiration
Date upon the surrender of the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together with payment (in lawful money
of the United States of America by certified check, cashier’s check, bank draft or money order
payable in immediately available funds to the order of the Company) of the aggregate Purchase Price
with respect to the Rights then to be exercised and an amount equal to any applicable transfer tax
or other governmental charge.

5.2 Obligations of Rights Agent and Company Upon Exercise.

(a) Obligations of Rights Agent. Upon satisfaction of the requirements of Section 5.1
and subject to Section 2, the Rights Agent shall thereupon promptly:

(i) (1) requisition from any transfer agent of the Series B Shares (or make available, if the
Rights Agent is the transfer agent therefor) certificates for the total number of one
one-millionths of a Series B Share to be purchased (and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests), or

(2) if the Company shall have elected to deposit Series B Shares issuable upon exercise of the
Rights with a depositary agent, requisition from the depositary agent depositary receipts
representing interests in such number of one one-millionth of a Series B Share to be purchased (in
which case certificates for the Series B Shares represented by such receipts shall be deposited by
the transfer agent with the depositary agent and the Company will direct the depositary agent to
comply with such request);

 

14

 

(ii) requisition from the Company the amount of cash, if any, to be paid in lieu of issuance
of fractional shares in accordance with Section 10; and

(iii) after receipt of such certificates or depositary receipts and cash, if any, cause the
same to be delivered to or upon the order of the registered holder of such Right Certificate (with
such certificates or receipts registered in such name or names as may be designated by such
holder).

(b) Obligations of Company. If the Company is obligated to deliver Existing Shares or
other securities or assets pursuant to this Agreement, the Company will make all arrangements
necessary so that such securities and assets are available for delivery by the Rights Agent, if and
when appropriate.

5.3 Record Holder of Issued Series B Shares. Upon the exercise of Rights, each Person
(other than the Company) in whose name any certificate for Series B Shares is issued shall for all
purposes be deemed to have become the holder of record of such Series B Shares represented thereby
on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any transfer taxes or other
governmental charges) was made; provided that if the date of such surrender and payment is
a date upon which the transfer books of the Company relating to the Series B Shares are closed,
such Person shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the applicable transfer books
of the Company are open.

5.4 New Rights Certificate. In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing the number
of Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Right Certificate, registered in such name or names as may
be designated by such holder.

5.5 Termination of Rights.

(a) Notwithstanding anything in this Agreement to the contrary, any Rights beneficially owned
by:

(i) an Acquiring Person or an Affiliate or Associate of an Acquiring Person from and after the
date on which the Acquiring Person becomes such or

(ii) a transferee of Rights beneficially owned by an Acquiring Person (or any Affiliate or
Associate thereof) who

(1) becomes a transferee after the Share Acquisition Date with respect to such Acquiring
Person or

(2) becomes a transferee prior to or concurrently with the Share Acquisition Date with respect
to such Acquiring Person and receives such Rights with actual knowledge that the transferor is or
was an Acquiring Person (or Affiliate or Associate thereof) or pursuant to either (x) a transfer
(whether or not for consideration) from the Acquiring Person (or

 

15

 

Affiliate or Associate thereof) to holders of equity interests in such Acquiring Person (or
Affiliate or Associate thereof) or to any Person with whom the Acquiring Person (or Affiliate or
Associate thereof) has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (y) a transfer which the Board determines in good faith is part of a plan,
arrangement or understanding which has as a primary purpose or effect the avoidance of this Section
5.5,

shall become null and void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under this Agreement or otherwise.

(b) The Company shall use all reasonable efforts to insure that the provisions of this Section
5.5 are complied with, but shall, to the fullest extent of the law, have no liability to any holder
of Right Certificates or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or any transferee of an Acquiring Person hereunder.

(c) The Company shall give the Rights Agent written notice of the identity of any such
Acquiring Person or its nominee, and the Rights Agent may rely on such notice in carrying out its
duties under this Agreement and shall be deemed not to have any knowledge of the identity of any
such Acquiring Person or its nominee (or any other Person described herein) unless and until it
shall have received such notice.

5.6 Condition to Transfer. Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to
any purported transfer pursuant to Section 4 or exercise pursuant to this Section 5 unless the
registered holder of the applicable rights (i) shall have completed and signed the certificate
contained in the form of assignment or election to purchase, as the case may be, set forth on the
reverse side of the Right Certificate surrendered for such transfer or exercise, as the case may
be, and (ii) shall have provided such additional evidence of the identity of the Beneficial Owner
or former Beneficial Owner (and any Affiliates and Associates) thereof as the Company shall
reasonably request.

5.7 Limitation on Exercise. Notwithstanding anything to the contrary herein, the Company
shall have the authority, in its sole and absolute discretion, to prevent the exercise by any
Person of such Person’s Rights to the extent that the exercise of such Rights could reasonably be
expected to cause a “change in ownership” for purposes of Section 382 of the Code. Any exercise of
Rights that is determined to be in violation of this Section 5.7 shall be immediately cancelled and
shall be void ab initio.

Article VI.

CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES

6.1 Cancellation of Right Certificates.

(a) All Right Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.

 

16

 

(b) The Company shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof.

6.2 Destruction of Right Certificates. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a certificate of destruction thereof
to the Company.

Article VII.

RESERVATION AND AVAILABILITY OF SERIES B SHARES; LISTING OF SERIES B SHARES; REGISTRATION OF
SERIES B SHARES; COMPLIANCE WITH SECURITIES LAWS; DUE AUTHORIZATION OF SERIES B SHARES; PAYMENT
OF TAXES AND OTHER GOVERNMENTAL CHARGES

7.1 Reservation and Availability of Series B Shares. The Company covenants and agrees
that it will cause to be reserved and kept available a number of authorized but not outstanding
Series B Shares sufficient to permit the exercise in full of all outstanding Rights as provided in
this Agreement.

7.2 Listing of Series B Shares. So long as the Series B Shares issuable upon the
exercise of Rights may be listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become exercisable, all securities
reserved for such issuance to be listed on any such exchange upon official notice of issuance upon
such exercise.

7.3 Registration of Series B Shares; Compliance with Securities Laws.

(a) The Company shall use its best efforts, if then necessary to permit the issuance of the
Series B Shares issuable upon the exercise of the Rights, to:

(i) file, as soon as practicable following the earliest of the Share Acquisition Date and
determination of the consideration to be delivered by the Company upon exercise of the Rights in
accordance with Section 8, or as soon as is required by law following a Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to the securities
issuable upon exercise of the Rights,

(ii) cause such registration statement to become effective as soon as practicable after such
filing, and

(iii) cause such registration statement to remain effective (with a prospectus at all times
meting the requirements of the Securities Act) until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Expiration Date.

(b) The Company may temporarily suspend, for a period of time not to exceed one hundred twenty
(120) days after the date set forth in Section 7.3(a)(i), the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the

 

17

 

exercisability of the Rights has been temporarily suspended, as well as a public announcement
when the suspension is no longer in effect.

(c) The Company shall also take such action as may be appropriate to ensure compliance with
the securities or blue sky laws of the various states in connection with the exercisability of such
Rights.

(d) Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not
be exercisable for securities in any jurisdiction if the requisite qualification in such
jurisdiction has not been obtained, such exercise is not permitted under applicable law or a
registration statement is respect of such securities has not been declared effective.

7.4 Due Authorization of Series B Shares. The Company shall take all such actions as may
be necessary to insure that all one one-millionths of a Series B Share issuable upon exercise of
Rights shall, at the time of delivery of the certificates for such securities (subject to payment
of the Purchase Price), be duly authorized, validly issued, fully paid and nonassessable.

7.5 Payment of Taxes and Other Governmental Charges.

(a) The Company shall pay when due and payable any and all federal and state transfer taxes
and other governmental charges which may be payable in respect of the issuance or delivery of the
Right Certificates and of any certificates for Series B Shares upon the exercise of Rights.

(b) The Company shall not, however, be required to pay any transfer tax or other governmental
charge which may be payable in respect of any transfer involved in the issuance or delivery of any
Right Certificates or any certificates for Series B Shares to a Person other than the registered
holder of the applicable Right Certificate. Prior to any such issuance or delivery of any Right
Certificates or any certificates of Series B Shares or such other securities, any such transfer
tax or other governmental charge shall have been paid by the holder of such Right Certificate or it
shall have been established to the Company’s satisfaction that no such tax or other governmental
charge is due.

Article VIII.

ADJUSTMENT OF PURCHASE PRICE; NUMBER 

AND KIND OF SHARES OR NUMBER OF RIGHTS

8.1 Adjustment of Purchase Price.

(a) (i) To preserve the actual or potential economic value of the Rights, if at any time after
the date hereof there shall be any change in the Existing Shares or the Series B Shares, whether
by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers,
consolidations, combinations or exchanges of securities, split-ups, split-offs, liquidations, other
similar changes in capitalization, any distribution or issuance or cash, assets, evidences of
indebtedness or subscription rights, options or warrants to holders of Existing Shares or Series B
Shares, as the case may be (other than distribution of the Rights or regular quarterly cash
distributions) or otherwise, then, in each such event the Board shall make such appropriate
adjustments in the number of Series B Shares (or the number and kind of other securities)

 

18

 

issuable upon exercise of each Right (or in exchange for any Right pursuant to Section 15),
the Purchase Price and Redemption Price in effect at such time and/or the number of Rights
outstanding at such time (including the number of Rights or fractional Rights associated with each
Existing Share) or take such other action as the Board determines in good faith may be required
such that following such adjustment such event shall not have had the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such event. If an event
occurs which requires an adjustment under both this Section 8.1(a) and Section 8.1(b), the
adjustment provided for in this Section 8.1(a) shall be made prior to, and in addition to, any
adjustment required pursuant to Section 8.1(b).

(ii) Notwithstanding any provision of this Agreement to the contrary, no adjustment of any
item described in Section 8.1(a)(i) above shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the relevant item; provided that any
adjustments which by reason of this Section 8.1(a)(ii) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.

(b) If any Person becomes at any time after the date of this Agreement an Acquiring Person,
then each holder of a Right shall (except as otherwise provided herein, including Section 5.5) be
entitled to receive upon exercise thereof (in accordance with the provisions of Section 5) at the
then current Purchase Price such number of one one-millionths of a Series B Share (such number of
one-millionths of a share being referred to herein as the “Adjustment Shares”) equal to the
result obtained by dividing:

(i) the product obtained by multiplying the then current Purchase Price by the number of one
one-millionths of a Series B Share for which a Right was exercisable immediately prior to such
first occurrence by

(ii) 50% of the current market price per Common Share (determined pursuant to Section 8.2(a)
on the date of such first occurrence).

(c) All calculations under this Section 8 shall be made to the nearest cent or one
ten-billionth of a Series B Share, as the case may be.

8.2 Computation of Current Market Price.

(a) Computation of Current Market Price for Existing Shares.

(i) For purposes of computations hereunder(except as otherwise provided in Section 10), the
“current market price” per Common Share on any date shall be the last sale price, regular way, at
the close of the regular session of trading or, if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system at the close of the regular session of trading
with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the
Common Shares are not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such shares are listed or admitted to trading or,
if such shares are not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.

 

19

 

Automated Quotations System or such other system then in use or, if on any such date such
shares are not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Shares selected by the Board
(in each case, prices which are not identified as having been reported late to such system). If on
any such date, no market maker is making a market in the Common Shares, or if such shares are not
publicly held or not so listed or traded, the “current market value” of such shares on such date
shall be as determined in good faith by the Board (or, if at the time of such determination there
is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board),
which determination shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. If the current market price per Common Share is determined during a
period that is in whole or in part following the announcement by the issuer of such shares of: (x)
a distribution on the Common Shares payable in Common Shares or securities exercisable for or
convertible into such shares (other than the Rights), or (y) any subdivision, combination or
reclassification of the Common Shares, and prior to the ex-distribution date for such distribution
or the record date for such subdivision, combination or reclassification, then, and in each such
case, the “current market price” shall be properly adjusted to take into account ex-distribution
trading.

(b) Computation of Current Market Price for CRA Shares, Series A CRA Shares, Special
Voting Shares and Series B Shares.

(i) For the purpose of any computation hereunder (except as otherwise provided in Section 10),
(1) the “current market price” per CRA Share shall be deemed to be an amount equal to the current
market price per Common Share (on an as-converted basis), (2) the “current market price” per Series
A CRA Share shall be deemed to be an amount equal to the current market price per Common Share(on
an as-converted basis), (3) the “current market price” per Special Preferred Share shall be deemed
to have a value equal to the corresponding Special Common Unit, which shall be deemed to be an
amount equal to the current market price per Common Share and (4) the “current market price” per
Special Share shall be deemed to be an amount equal to fifteen times the current market price per
Common Share, in each case as adjusted to reflect any subdivision, combination, reclassification,
recapitalization or like event in respect of any Company Securities occurring after the Record Date
or as may be deemed to be appropriate in light of the particular Company Security’s relation to the
Common Shares on an economic basis or otherwise.

(ii) For the purposes of any computation hereunder (except as otherwise provided in Section
10), the “current market price” per one one-millionth of a Series B Share shall be determined in
the same manner as set forth above for the Common Shares in Section 8.2(a).

(c) Computation of Current Market Price for Securities and Assets Other Than Existing
Shares and Series B Shares.

(i) For the purposes of any computation hereunder, the value of any securities or assets other
than Existing Shares or Series B Shares shall be the fair value as determined in good faith by the
Board, or, if at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board, which determination

 

20

 

shall be described in a statement filed with the Rights Agent and shall be conclusive for all
purposes.

8.3 Rights Issued Subsequent to Adjustments.

(a) All Rights originally issued by the Company subsequent to any adjustment made hereunder
shall evidence the right to purchase, at the Purchase Price then in effect, the then applicable
number of one-millionths of a Series B Share and other shares of beneficial interest issuable from
time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided
herein.

(b) Irrespective of any adjustment or change in the Purchase Price or the number of
one-millionths of a Series B Share issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price per one-millionth of a
share and the number of shares which were expressed in the initial Right Certificates issued
hereunder.

8.4 Company Election to Defer Issuance. In any case in which this Section 8 shall require
that an adjustment in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the issuance to the holder
of any Right exercised after such record date the number of one one-millionths of a Series B Share
or other shares of beneficial interest, if any, issuable upon such exercise over and above the
number of one-millionths of a Series B Share or other shares of beneficial interest, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided that the Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder’s right to receive such additional shares upon the occurrence of the event
requiring such adjustment.

8.5 Additional Reductions in Purchase Price. Anything in this Section 8 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 8, as and to the extent that it,
in its sole discretion, determines to be advisable so that any (i) consolidation or subdivision of
the Series B Shares or Existing Shares, (ii) issuance wholly for cash of any Series B Shares or
Existing Shares at less than the current market price, (iii) issuance wholly for cash of any Series
B Shares, Existing Shares or securities which by their terms are convertible into or exercisable
for Series B Shares or Existing Shares or (iv) issuance of rights, options or warrants referred to
in this Section 8 hereafter made by the Company to the holders of its Series B Shares or Existing
Shares shall not be taxable to such shareholders.

8.6 Preservation of Rights. Except as permitted by this Agreement, the Company agrees
that, after a Distribution Date, it will not take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the Rights.

Article IX.

CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES

 

21

 

9.1 Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is
made as provided in Section 8, the Company shall (i) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such adjustment, (ii) promptly
file with the Rights Agent and with each transfer agent for the Series B Shares and the Existing
Shares a copy of such certificate and (iii) issue a public announcement for the benefit of each
holder of a Right Certificate (or, if prior to a Distribution Date, to each holder of a certificate
representing shares of Existing Shares) in the manner set forth in Section 17. The Rights Agent
shall be fully protected from liability to the Company in relying on any such certificate and on
any adjustment therein contained.

Article X.

FRACTIONAL RIGHTS AND FRACTIONAL SHARES

10.1 Fractions of Rights. The Company is not required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable an amount in cash equal to the same
fraction of the current market price of a whole Right. For purposes of this Section 10.1, the
current market price of a whole Right shall be the closing price of a Right at the close of the
regular session of trading for a Trading Day immediately prior to the date on which such fractional
Rights would otherwise have been issuable. The closing price of a Right for any day shall be
determined in the manner set forth for the Common Shares in Section 8.2(a).

10.2 Fractions of Series B Shares. The Company is not required to issue fractions of
shares of Series B Shares (other than fractions which are multiples of one one-millionth of a
Series B Share) upon exercise of the Rights or upon exchange of the Rights pursuant to Section 5
or Section 15, and the Company is not required to distribute certificates which evidence fractional
Series B Shares (other than fractions which are multiples of one one-millionth of a Series B
Share). In lieu of any such fractional Series B Shares, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market price of one one-millionth of a Series B
Share. For purposes of this Section 10.2, the current market price of one one-millionth of a
Series B Share shall be one one-millionth of the closing price of a Series B Share (as determined
pursuant to Section 8.2(b)) for the Trading Date immediately prior to the date of such exercise.

10.3 Fractions of Existing Shares. Upon any exchange pursuant to Section 15, the Company
shall not be required to issue fractions of Existing Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Existing Shares. In lieu of fractional Existing
Shares, the Company shall pay to the registered holders of Right Certificates at the time such
Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction
of the current market price of an Existing Share. For purposes of this Section 10.3, the current
market price of a Common Share, CRA Share, Series A CRA Share, Special Preferred Share or Special
Share shall be the closing price of such share (as determined pursuant to section 8.2(a)) for the
Trading Day immediately prior to the date of such exercise or exchange.

 

22

 

10.4 Waiver of Right to Receive Fractional Rights or Fractional Shares. Each holder of a
Right, by his acceptance of the Right, expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right except as permitted by this Section 10.

Article XI.

AGREEMENT OF HOLDERS OF RIGHTS

11.1 Agreement of Holders of Rights. Each holder of a Right, by his acceptance of the
Right, consents and agrees with the Company and the Rights Agent and with every other holder of a
Right that:

(a) prior to the Distribution Date, the Rights will be evidenced by and transferable only in
connection with the transfer of Existing Shares;

(b) after a Distribution Date, the Rights will be evidenced by Right Certificates and
transferable on the registry books of the Rights Agent pursuant to Section 4;

(c) subject to Sections 4 and 5, the Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to a Distribution Date, a certificate
representing shares of Existing Shares or an Ownership Statement) is registered as the absolute
owner of such certificate and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the certificate representing shares of Existing
Shares or Ownership Statement made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to 5.5, shall be
affected by any notice to the contrary; and

(d) notwithstanding anything in this Agreement to the contrary, to the fullest extent
permitted by law, neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company may use its best efforts to have
any such order, decree or ruling lifted or otherwise overturned as soon as possible.

Article XII.

HOLDER OF A RIGHT CERTIFICATE NOT DEEMED A SHAREHOLDER

12.1 Holder of a Right Certificate Not Deemed a Shareholder. No holder, as such, of any
Right Certificate shall be entitled to vote, receive distributions or be deemed for any purpose the
holder of the shares of beneficial interest which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company (including any right to vote for the election of the Board or upon any
matter submitted to shareholders at any meeting thereof, to give or withhold consent to any Company
action, to receive notice of meetings or other actions affecting shareholders, or to

 

23

 

receive distributions or subscription rights, or otherwise) until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the provisions hereof.

Article XIII.

MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT

13.1 Merger or Consolidation of Rights Agent.

(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution of filing of any paper or
any further act on the part of any of the parties hereto; provided that such Person would
be eligible for appointment as a successor Rights Agent under the provisions of Section 2.

(b) In case at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned. In case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in the name of the successor Rights
Agent. In all such cases, such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.

13.2 Change of Name of Rights Agent. In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned. In case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights Certificates either in
its prior name or in its changed name. In all such cases, such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.

Article XIV.

REDEMPTION OF RIGHTS

14.1 Redemption Option; Redemption Price. At any time prior to a Distribution Date, the
Board may, at its option, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.00001 per Right, as such amount may be appropriately adjusted pursuant to
Section 8.1 (such redemption price being hereinafter referred to as the “Redemption
Price”). The redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board in its sole discretion may establish. The Redemption Price shall
be payable, at the option of the Company, in cash, Existing Shares, or such other form of
consideration as the Board shall determine.

14.2 Effect of the Board’s Election to Redeem the Rights. Immediately upon the action of
the Board electing to redeem the Rights (or at such later time as the Board may establish for the

 

24

 

effectiveness of such redemption) and without any further action and without any notice, the right
to exercise the Rights will terminate and thereafter the only right of the holders of Rights shall
be to receive the Redemption Price for each Right so held. The Company shall promptly thereafter
give notice of such redemption to the Rights Agent and the holders of the Rights in the manner set
forth in Section 17.1; provided that the failure to give, or any defect in, such notice
shall not affect the validity of such redemption. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price will be made.

Article XV.

EXCHANGE OF RIGHTS

15.1 Exchange Option; Exchange Ratio.

(a) At any time on or after a Share Acquisition Date, with respect to all or any part of the
then outstanding Rights (which shall not include Rights that have become void pursuant to Section
5.5), the Board may, at its option, exchange for each Right one one-millionth of a Series B Share,
subject to adjustment pursuant to Section 8.1 (such exchange ratio being hereinafter referred to as
the “Exchange Ratio”). The exchange of the Rights by the Board may be made effective at
such time, on such basis and with such conditions as the Board in its sole discretion may
establish. Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange
at any time after an Acquiring Person becomes the Beneficial Owner of fifty percent (50%) or more
of the Existing Shares then outstanding.

(b) In lieu of exchanging all or any part of the then outstanding Rights for fractional shares
of Series B Shares in accordance with Section 15.1, the Board may, at its option, exchange any such
Rights (which shall not include Rights that have become void pursuant to Section 5.5) for Common
Shares or Special Shares at an exchange ratio of one Common Share per Right or one Special Share
per each block of fifteen Rights, as may be adjusted pursuant to Section 8.1.

(c) Notwithstanding anything in the contrary herein, if any exchange pursuant to Section
15.1(a) or (b) could reasonably expected, in the sole and absolute discretion of the Company, to
cause a “change in ownership” for purposes of Section 382 of the Code, the Company shall have the
authority to reduce the Series B Shares, Common Shares or Special Shares issued to any Person
pursuant to this Section 15 to the extent required to prevent such a “change in ownership” for
purposes of Section 382. Any Series B Shares, Common Shares or Special Shares determined to be
issued in violation of this Section 15.1(c) shall be immediately cancelled and shall be void ab
initio.

15.2 Effect of the Board’s Election to Exchange the Rights. Immediately upon the
effectiveness of the action of the Board to exchange any Rights pursuant to Section 15.1 (or at
such later time as the Board may establish) and without any further action and without any notice,
the right to exercise such Rights will terminate and thereafter the only right of a holder of such
Rights shall be to receive that number of fractional Series B Shares (or Common Shares or Special
Shares) provided thereunder. The Company shall promptly thereafter give notice of such

 

25

 

exchange to the Rights Agent and the holders of the Rights to be exchanged in the manner set forth
in Section 17.1; provided that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of Rights for fractional shares of Series B Shares will be
effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to Section 5.5) held by each holder of Rights.

15.3 Trust Agreement; Trust. Prior to effecting an exchange pursuant to this Section 15,
the Board may direct the Company to enter into a Trust Agreement in such form and with such terms
as the Board shall then approve (the “Trust Agreement”). If the Board so directs, the
Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement
(the “Trust”) all of the fractional Series B Shares (or Common Shares or Special Shares,
if any), issuable pursuant to the exchange, and all Persons entitled to receive shares or other
securities pursuant to the exchange shall be entitled to receive such shares or other securities
(and any distributions made thereof after the date on which such shares or other securities are
deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and
provisions of the Trust Agreement.

Article XVI.

NOTICE OF CERTAIN EVENTS

16.1 Certain Events. If the Company proposes, at any time after a Distribution Date, to:

(a) make a distribution payable in shares of any class or to make any distribution (other than
a regular quarterly cash distribution out of earnings or retained earnings of the Company) to the
holders of Series B Shares,

(b) offer to the holders of Series B Shares or shares of beneficial interest of any class or
any other securities, rights or options,

(c) effect any reclassification of its Series B Shares (other than a reclassification
involving only the subdivision or combination of outstanding shares of Series B Shares),

(d) effect, or permit any of its Subsidiaries to effect, any consolidation, merger or
combination with any other Person, or to effect any sale or other transfer, in one transaction or a
series of related transactions, of assets or earning power aggregating more than fifty percent
(50%) of the assets or earning power of the Company and its Subsidiaries, taken as a whole; or

(e) effect the liquidation, dissolution or winding-up of the Company,

then, in each such case, the Company shall give to each holder of a Right, a notice of such
proposed action specifying the record date for the purposes of any such distribution or offering of
rights or warrants, or the date on which any such reclassification, consolidation, merger,
combination, sale, transfer, liquidation, dissolution or winding-up is to take place and the date
of participation therein by the holders of Series B Shares, if any such date is to be fixed, and
such

 

26

 

notice shall be so given in the case of any action covered by Section 16(a) or Section 16(b) above
at least twenty (20) days prior to the record date for determining holders of the Series B Shares
entitled to participate in such distribution or offering, and in the case of any such other action,
at least twenty (20) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Series B Shares, whichever shall be earlier. The failure
to give notice required by this Section or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.

16.2 Post-Share Acquisition Date Notices.

(a) The Company shall as soon as practicable after a Share Acquisition Date give to each
holder of a Right, in accordance with Section 17.1, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of rights under Section 8.

(b) All references in Section 16 to Series B Shares shall be deemed thereafter to refer to
Existing Shares or other shares of beneficial interest, as the case may be.

Article XVII.

MISCELLANEOUS

17.1 Notices.

(a) Notices to the Company or the Rights Agent. Any notice, request, demand or other
communication required or permitted under this Agreement shall be given in writing and shall be
delivered or sent by registered or certified mail, return receipt requested in a prepaid envelope,
by overnight mail or courier, or by facsimile transmission, to the addresses set forth below or
such other addresses as such party shall hereafter specify in accordance with this Section:

	 	 	 
	If to the Company:

	 	Centerline Capital Group Inc. 

625 Madison Avenue 

New York, NY 10022

Attention: John D’Amico, Esq. 

Telephone: (212) 317-5700

Facsimile: (212) 593-5769
	 
	 	 
	For notices to the 
Company, with a
copy to 
(which copy shall not
constitute notice):

	 	Paul, Hastings, Janofsky & Walker LLP 

75 East 55th Street 

New York, NY 10022

Attention: Alan S. Cohen 

Telephone: (212) 318-6000

Facsimile: (212) 319-4090

 

27

 

	 	 	 
	If to the Rights Agent:

	 	Computershare Trust Company, N.A. 

250 Royall Street 

Canton, MA 02021

Attention: Client Services 

Telephone: (781) 575-3231

Facsimile: (781) 575-2549

Such notice or other communication shall be deemed to have been given when sent by registered
or certified mail, by overnight mail or courier, or by facsimile transmission.

(b) Notices to the Holders of Right Certificates. Notices or demands authorized by
this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right
Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry books of the
Company; provided that prior to the Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the holders of securities
of the Company, including the Rights, for purposes of this Agreement and no other notice need be
given.

17.2 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under Applicable Law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any provision in any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

17.3 Entire Agreement. This Agreement (including any schedules and exhibits hereto)
constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof
and supersedes any and all prior agreements, representations and understandings of the parties
hereto, written or oral.

17.4 Supplements and Amendments. For so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement in any respect without the approval of
any holders of Rights. The Rights Agent will duly execute and deliver any supplement or amendment
hereto requested by Company, provided that such supplement or amendment does not adversely affect
the rights, duties or obligations of the Rights Agent under this Agreement. From and after the
time that the Rights are no longer redeemable, the Company may, and the Rights Agent shall, if the
Company so directs, from time to time supplement or amend this Agreement without the approval of
any holders of Rights (i) to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein or (ii) to make any
other changes or provisions in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable; provided, however, that no such supplement or
amendment shall adversely affect, in any material way, the interests of the Rights Agent hereunder
or the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), and no such supplement

 

28

 

or amendment may cause the Rights again to become redeemable or cause this Agreement again to
become amendable as to an Acquiring Person or an Affiliate or Associate of an Acquiring Person
other than in accordance with this sentence. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 17.4, the Rights Agent shall execute such supplement or
amendment.

17.5 Determination and Actions by the Board of Trustees. The Board shall have the
exclusive power and authority to administer this Agreement and to exercise the rights and powers
specifically granted to the Board or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or amend this Agreement). All such actions, calculations,
interpretations and determinations that are done or made by the Board in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and
all other parties.

17.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives, successors and assigns.

17.7 Third Party Beneficiaries. Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered holders of the Right
Certificate any legal or equitable right, remedy or claim under this Agreement. This Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and any holder of a
Right (including the registered holders of the Right Certificates).

17.8 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT
REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

17.9 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY AGREE AND CONSENT THAT ANY CLAIM,
DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, WHETHER
IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

17.10 Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally
agrees (i) that it is and shall continue to be subject to the jurisdiction of the courts of the
State of Delaware and of the federal courts sitting in the State of Delaware, and (ii)(A) to the
extent that such party is not otherwise subject to service of process in the State of Delaware, to
appoint and maintain an

 

29

 

agent in the State of Delaware as such party’s agent for acceptance of legal process and notify the
other parties hereto of the name and address of such agent, and (B) to the fullest extent permitted
by law, that service of process may also be made on such party by prepaid certified mail with a
proof of mailing receipt validated by the U.S. Postal Service constituting evidence of valid
service, and that, to the fullest extent permitted by applicable law, service made pursuant to
(ii)(A) or (B) above shall have the same legal force and effect as if serviced upon such party
personally within the State of Delaware.

17.11 Execution of Agreement; Counterparts; Electronic Signatures.

(a) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same instrument,
and shall become effective when counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto; it being understood that all parties hereto need not sign
the same counterparts.

(b) Electronic Signatures. The exchange of copies of this Agreement and of signature
pages by facsimile transmission (whether directly from one facsimile device to another by means of
a dial-up connection or whether mediated by the worldwide web), by electronic mail in “portable
document format” or “pdf” form, or by any other electronic means intended to preserve the original
graphic and pictorial appearance of a document, or by combination of such means, shall constitute
effective execution and delivery of this Agreement as to the parties hereto and may be used in lieu
of the original Agreement for all purposes. Signatures of the parties hereto transmitted by
facsimile shall be deemed to be their original signatures for all purposes.

17.12 Headings; References; Interpretation. The headings of the Articles and Sections of
this Agreement are solely for convenience and reference and shall not limit or otherwise affect the
meaning or interpretation of any of the terms or provisions of this Agreement. The references
herein to Articles, Sections, Schedules and Exhibits, unless otherwise indicated, are references to
sections and subsections of and schedules to this Agreement. Whenever the words “include”,
“includes”, or “including” are used in this Agreement, they shall be deemed to be followed by the
words “without limitation”. Unless the context requires otherwise, all words used in this Agreement
in the singular number shall extend to and include the plural number, all words in the plural
number shall extend to and include the singular number, and all words in any gender shall extend to
and include all genders.

17.13 Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights
Agent shall not be liable for any delays or failures in performance resulting from acts beyond its
reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data
due to power failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war, or civil unrest.

[Signature Page Follows]

 

30

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and sealed as
of the day and year first written above.

	 	 	 	 	 
	 	CENTERLINE HOLDING COMPANY

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ Martin J. McHale
 	 
	 	 	Name:  	Martin J. McHale 	 
	 	 	Title:  	President 	 

 

 

 

	 	 	 	 	 

SCHEDULE 1

FIVE PERCENT (5%) SHAREHOLDERS as of the effective date of the CENTERLINE TAX

BENEFITS PRESERVATION PLAN 

Bank of America, N.A.

Bank of America, N.A, as successor-by-merger to Merrill Lynch Bank & Trust Co.

Merrill Lynch Community Development Company, L.L.C.

FIA Card Services, as successor-by-merger to MBNA Bank America, N.A.

Related Special Assets, LLC

Related General II, L.P.

Stephen M. Ross

Jeff Blau

Bruce Beal

Wells Fargo Bank, N.A.

Wells Fargo Community Development Corporation

C-III Capital Partners LLC

 

 

 

EXHIBIT A

Form of Certificate of Designation of Series B Shares

 

2

 

[EXHIBIT A — FORM OF CERTIFICATE OF DESIGNATION]

FORM OF CERTIFICATE OF DESIGNATION

OF

SERIES B SPECIAL SHARES

OF

CENTERLINE HOLDING COMPANY

CENTERLINE HOLDING COMPANY (the “Company”), a Delaware statutory trust created and existing
under the Delaware Statutory Trust Act, and acting pursuant to the authority expressly vested in
the board of trustees of the Company (the “Board”) by that certain Second Amended and
Restated Trust Agreement, dated as of November 17, 2003, as amended by Amendment No. 1 thereto,
dated as of September 20, 2005, as further amended by Amendment No. 2 thereto, dated as of November
30, 2005, as further amended by Amendment No. 3 thereto, dated as of June 13, 2006, and as further
amended by Amendment No. 4 thereto, dated as of April 2, 2007 (the “Trust Agreement”), DOES
HEREBY CERTIFY:

	 	A.	 	The Board duly approved and adopted resolution on March 5, 2010 (i) creating a
series of shares of beneficial interest in the Company designated as “Series B Special
Shares” with (1) the designations, powers, preferences, (2) the relative,
participating, optional or other special rights and (3) the qualifications, limitations
or restrictions, as set forth in this certificate of designation (this “Certificate
of Designation”) (in addition to those set forth in the Trust Agreement) and (ii)
directing that this Certificate of Designation be attached as an appendix to the Trust
Agreement.

NOW, THEREFORE, the terms of the Series B Special Shares of the Company are as set forth below:

SERIES B SPECIAL SHARES

	1.	 	DESIGNATION AND AMOUNT. The shares of such series shall be designated as “Series B
Special Shares” (the “Series B Shares”) and the number of shares constituting the
Series B Shares shall be 1,000,000. Such number of shares may be increased or decreased by
resolution of the Board; provided that no decrease shall reduce the number of shares of Series
B Shares to a number than less than the number of shares then outstanding plus the number of
 shares reserved for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding shares of beneficial interest issued by the Company
convertible into Series B Shares.
	 
	2.	 	DISTRIBUTIONS.

	 	a.	 	Subject to the prior and superior rights of holders of any shares of any class or
series of shares of the Company ranking prior and superior to the Series B Shares with
respect to distributions, the holders of Series B Shares, in preference to the holders of
Common Shares of beneficial interests in the Company (the “Common Shares”), the
Convertible Community Reinvestment Act Preferred Shares of beneficial interests in the
Company

 

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(the “CRA Shares”), the Series A Convertible Community Reinvestment Act Preferred
Shares of beneficial interests in the Company (the “Series A CRA Shares”), the
Special Preferred Voting Shares of beneficial interests in the Company (the “Special
Preferred Shares”) and the Special Series A Shares of beneficial interests in the
Company (the “Special Shares” and, together with the Common Shares, the CRA Shares,
the Series A CRA Shares and the Special Preferred Shares, the “Existing Shares”),
and of any other shares of beneficial interest of the Company ranking junior to the Series B
Shares, shall be entitled to receive, when, as and if declared by the Board out of funds
legally available for the purpose, quarterly distributions payable in cash on the first day
of March, June, September and December in each year (each such date being referred to herein
as a “Quarterly Distribution Payment Date”), commencing on the first Quarterly
Distribution Payment Date after the first issuance of Series B Share or a fraction of a
Series B Share, in an amount per share (rounded to the nearest cent) equal to the greater of
(i) $1.00 or (ii) subject to the provision for adjustment hereinafter set forth, 1,000,000
times the aggregate per share amount of all cash distributions, and 1,000,000 times the
aggregate per share amount (payable in kind) of all non-cash distributions, other than a
distribution payable in shares of Existing Shares or a subdivision of the outstanding shares
of Existing Shares (by reclassification or otherwise), declared on the Common Shares since
the immediately preceding Quarterly Distribution Payment Date or, with respect to the first
Quarterly Distribution Payment Date, since the first issuance of any Series B Share or
fraction of a Series B Share. In the event the Company shall at any time declare or pay any
distribution on the Existing Shares payable in Existing Shares (by reclassification or
otherwise than by payment of a distribution on the shares of Existing Shares) into a greater
or lesser number of Existing Shares, then in each such case the amount to which holder of
Series B Shares were entitled immediately prior to such event under clause (ii) of the
preceding sentence shall be appropriately adjusted.

	 	b.	 	The Company shall declare a distribution on the Series B Shares as provided in
paragraph (a) of this Section 2 immediately after it declares a distribution on the
Existing Shares (other than a distribution payable in Existing Shares); provided that, in
the event no distribution shall have been declared on Existing Shares during the period
between any Quarterly Distribution Payment Date and the next subsequent Quarterly
Distribution Payment Date, a distribution of $1.00 per share on the Series B Shares shall
nevertheless be payable on such subsequent Quarterly Distribution Payment Date.

	 	c.	 	Distributions shall begin to accrue and be cumulative on outstanding Series B Shares
from the Quarterly Distribution Payment Date next preceding the date of issue of such
 shares, unless the date of issue of such shares is prior to the record date for the first
Quarterly Distribution Payment Date or is a date after the record date for the
determination of holders of Series B Shares entitled to receive a quarterly distribution
and before such Quarterly Distribution Payment Date, in either of which events such
distributions shall begin to accrue and be cumulative from such Quarterly Payment Date.
Accrued but unpaid distributions shall not bear interest. Distributions paid on the
Series B Shares in an amount less than the total amount of such distributions at the time
accrued and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board may fix a record date for the
determination of holders of Series B Shares entitled to receive a payment of a distribution

 

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declared thereon, which record date shall not be more than sixty (60) days prior to the date
fixed for the payment thereof.

	3.	 	Voting Rights. The holder of Series B Shares shall have the following voting rights:

	 	a.	 	Subject to the provision for adjustment hereinafter set forth, each Series B Share
shall entitle the holder to 1,000,000 votes on all matters submitted to a vote of the
shareholders of the Company. In the event the Company shall at any time declare or pay any
distribution on the Existing Shares payable in Existing Shares, or effect a subdivision,
combination or consolidation of the outstanding Existing Shares (by reclassification or
otherwise than by payment of a distribution in Existing Shares) into a greater or lesser
number of Existing Shares, then in each such case the number of votes per share to which
holders of Series B Shares were entitled immediately prior to such event shall be
appropriately adjusted.

	 	b.	 	Except as otherwise provided herein, in any other Certificate of Designations creating
a series of shares of the Company, or by law, the holders of Series B Shares and the
holders of Existing Shares and any other shares of beneficial interest in the Company
having general voting rights shall vote together as one single class on all matters
submitted to a vote of shareholders of the Company.

	 	c.	 	Except as set forth herein, or as otherwise provided by law, holders of Series B Shares
shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Existing Shares as set forth herein) for
taking any trust action.

	 	d.	 	If, at the time of any annual meeting of shareholders for the election of members of
the Board, the equivalent of six quarterly distributions (whether or not consecutive)
payable on any Series B Share or Series B Shares are in default, the number of members of
the Board constituting the Board shall be increased by two. In addition to voting together
with the holders of Existing Shares for the election of the other members of the Board, the
holders of record of a majority of the Series B Shares, voting separately as a class to the
exclusion of the holders of Existing Shares, shall be entitled at such meeting of
shareholders (and at each subsequent annual meeting of shareholders), unless all
distributions in arrears on the Series B Shares have been paid or declared and set apart
for payment prior thereto, to nominate and vote for the election of two members of the
Board, the holders of any Series B Shares being entitled to cast a number of votes per
Series B Share as is specified in paragraph (a) of this Section 3. Each such additional
member of the Board shall serve until his successor shall be elected and shall qualify, or
until his right to hold such office terminates pursuant to the provisions of this Section
3(d). Until the default in payment of all distributions which permitted the election of
said members of the Board shall cease to exist, any member of the Board who shall have been
so elected pursuant to the provisions of this Section 3(d) may be removed at any time, with
or without cause, by the affirmative vote of the holders of at least a majority of the
Series B Shares, and any vacancy thereby created may be filled by the vote of such holders.
If and when such default shall cease to exist, the holders of Series B Shares shall be
divested of the foregoing special voting rights, subject to revesting in the event of each

 

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and every subsequent like default in payments of distributions. Upon the termination of the
foregoing special voting rights, the terms of office of all persons who may have been
elected members of the Board pursuant to said special voting rights shall forthwith
terminate, and the number of members of the Board constituting the Board shall be reduced by
two. The voting rights granted by this Section 3(d) shall be in addition to any other
voting rights granted to the holders of Series B Shares in this Section 3.

	4.	 	Certain Restrictions.

	 	a.	 	Whenever quarterly distributions or other distributions payable on the Series B Shares
as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid
distributions, whether or not declared, on Series B Shares outstanding shall have been paid
in full, the Company shall not:

	 	i.	 	declare or pay distributions, or make any other distributions, on any
 shares ranking junior (either as to distributions or upon liquidation, dissolution
or winding up) to the Series B Shares;

	 	ii.	 	declare or pay distributions, or make any other distributions, on any
 shares ranking on a parity (either as to distributions or upon liquidation,
dissolution or winding up) with the Series B Shares, except distributions paid
ratably on the Series B Shares and all such parity shares on which distributions
are payable or in arrears in proportion to the total amounts to which the holders
of all such share are then entitled;

	 	iii.	 	redeem or purchase or otherwise acquire for consideration any shares
ranking junior (either as to distributions or upon liquidation, dissolution or
winding up) to the Series B Shares, provided that the Company may at any time
redeem, purchase or otherwise acquire any such junior shares in exchange for any
 shares of the Company ranking junior (both as to distributions and upon
dissolution, liquidation or winding up) to the Series B Shares; or

	 	iv.	 	redeem or purchase or otherwise acquire for consideration any Series B
Shares, or any shares ranking on a parity with the Series B Shares, except in
accordance with a purchase offer made in writing or by publication (as determined
by the Board) to all holders of such shares upon terms as the Board, after
consideration of the respective annual distribution rates and other relative rights
and preferences of the respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective series or classes.

	 	b.	 	The Company shall not permit any subsidiary of the Company to purchase or otherwise
acquire for consideration any share of beneficial interest in the Company unless the
Company could, under paragraph (a) of this Section 4, purchase or otherwise acquire such
 shares at such time and in such manner.

	5.	 	Reacquired Shares. Any Series B Shares purchased or otherwise acquired by the
Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized and may be reissued

 

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subject to the conditions and restrictions on issuance set forth herein, in the Trust Agreement
or in any other Certificate of Designations creating a series of shares of the Company or as
otherwise required by law.

	6.	 	Liquidation, Dissolution or Winding Up.

	 	a.	 	Upon any liquidation, dissolution or winding up of the Company, voluntary or otherwise
no distribution shall be made:

	 	i.	 	to the holders of shares ranking junior (either as to distributions or
upon liquidation, dissolution or winding up) to the Series B Shares unless, prior
thereto, the holders of Series B Shares shall have received an amount per share
(the “Series A Liquidation Preference”) equal to $10.00 per share, plus an amount
equal to accrued and unpaid distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of Series B Shares shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000,000 times the aggregate amount to
be distributed per share to holders of Common Shares, or

	 	ii.	 	to the holders of shares ranking on parity (either as to distributions
or upon liquidation, dissolution or winding up) with the Series B Shares, except
distributions made ratably on the Series B Shares and all such parity shares in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.

	 	b.	 	In the event the Company shall at any time declare or pay any distribution on the
Existing Shares payable in Existing Shares, or effect a subdivision, combination or
consolidation of the outstanding Existing Shares (by reclassification or otherwise than by
payment of a distribution in Existing Shares) into a greater or lesser number of Existing
Shares, then in each such case the aggregate amount to which holders of Series B Shares
were entitled immediately prior to such event under the proviso in clause (i) above shall
be appropriately adjusted.

	 	c.	 	In the event, however, that there are not sufficient assets available to permit payment
in full of the Series A Liquidation Preference and the liquidation preferences of all other
classes and series of shares of beneficial interest in the Company, if any, that rank of a
parity with the Series B Shares in respect thereof, then the assets available for such
distribution shall be distributed ratably to the holders of the Series B Shares and the
holders of such parity shares in proportion to their respective liquidation preferences.

	 	d.	 	Neither the merger or consolidation of the Company into or with another entity nor the
merger or consolidation of another entity into or with the Company shall be deemed to be a
liquidation, dissolution or winding up of the Company within the meaning of this Section 6.

	7.	 	Consolidation, Merger, Etc. In case the Company shall enter into any consolidation,
merger, combination or other transaction in which the Existing Shares are exchanged for or
changed into other shares or securities, cash and/or any other property, then in any such case
each

 

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Series B Share shall at the same time be similarly exchanged or changed into an amount per
share, subject to the provision for adjustment hereinafter set forth equal to 1,000,000 times
the aggregate amount of shares, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each Common Share is changed or exchanged. In the
event the Company shall at any time declare or pay any distribution on the Existing Shares
payable in Existing Shares, or effect a subdivision, combination or consolidation of the
outstanding Existing Shares (by reclassification or otherwise than by payment of a distribution
in Existing Shares) into a greater or lesser number of Existing Shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or change of Series
B Shares shall be appropriately adjusted.

	8.	 	No Redemption. The Series B Shares shall not be redeemable by the Company.

	9.	 	Rank. The Series B Shares shall rank, with respect to the payment of distributions
and the distribution of assets upon liquidation, dissolution or winding up, junior to all
series of any other class of the Company’s shares (other than the Existing Shares), except to
the extent that any such series specifically provided that it shall rank on a parity with or
junior to the Series B Shares.

	10.	 	Amendment. At any time share of Series B Shares are outstanding, this Certificate of
Designation shall not be further amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series B Shares so as to affect them
adversely without the affirmative vote or consent of the holders of at least two-thirds of the
outstanding Series B Shares, voting separately as a single class.

	11.	 	Fractional Shares. Series B Shares may be issued in fractions of a share that shall
entitle the holder, in proportion to such holder’s fractional shares, to exercise voting
rights, receive distributions, participate in distributions and to have the benefit of all
other rights of holders of Series B Shares.

	12.	 	Governing Law. This Certificate of Designation shall be interpreted in accordance
with the laws of the State of Delaware (without regard to conflict of laws principles), all
rights and remedies being governed by such laws.

	13.	 	Severability of Provisions. Each provision of this Certificate of Designation shall
be considered severable and if for any reason any provision or provisions herein are
determined to be invalid, unenforceable or illegal under any existing or future law, such
invalidity, unenforceability or illegality shall not impair the operation of or affect those
portions of this Certificate of Designation which are valid, enforceable and legal.

	14.	 	Certificates.

	 	a.	 	Each Series B Share shall be represented by a certificate (a “Series B Share
Certificate”) and each such Series B Share Certificate shall include a statement that
requires the Company to furnish to any holder of Series B Shares upon written request and
without charge, a full statement of (i) any restrictions, limitations, preferences or
redemption provisions concerning the Series B Shares and (ii) the designations and any
preferences, conversion and other rights, voting powers, restrictions, limitations to
distributions, and

 

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other qualifications and terms and conditions of redemption of such Series B Shares and the
authority of the Board to set the relative rights and preferences of subsequent series of
Series B Shares.

	 	b.	 	Notwithstanding any provision of the Trust Agreement or the Fifth Amended and Restated
Bylaws of the Company (as amended, the “Company Bylaws”) to the contrary, a Series
B Share Certificate shall be validly issued upon the manual signature of (a) the Chief
Execute Officer of the Company (the “CEO”) or (b) any one or more of the Managing
Trustees. Such a Series B Share Certificate need not be countersigned and registered by
the Company’s transfer agent and/or registrar. The CEO or the Managing Trustees, acting
individually or collectively, shall execute and deliver each Series B Share Certificate
substantially in the form attached hereto as Exhibit A, together with such
modifications thereto as such CEO, Managing Trustee or Managing Trustees shall approve
(notwithstanding any other provisions of the Trust Agreement or Company Bylaws but subject
to the requirements sets forth in this Certificate of Designation), such approval to be
conclusively, but not exclusively, evidenced by the execution and delivery thereof by such
CEO, Managing Trustee or Managing Trustees. To the extent that this Section 14(b)
is inconsistent with the Company Bylaws, in accordance with Article XIV of the Company
Bylaws, the Company Bylaws (including Article VII thereof) shall be deemed amended for the
limited purposes set forth in this Section 14(b).

[Signature Page Follows]

 

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IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Company by the
undersigned this 5th day of March, 2010.

	 	 	 	 	 
	 	CENTERLINE HOLDING COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

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EXHIBIT B

Summary of Rights

 

 

 

[EXHIBIT B — SUMMARY OF RIGHTS]

SUMMARY OF RIGHTS

TO PURCHASE SERIES B SHARES

On March 5, 2010, the board of trustees (the “Board”) of Centerline Holding Company, a
Delaware statutory trust (the “Company”), delegated to the Rights Plan Evaluation Committee
(the “Committee”) a distribution of one Series B Special Share purchase right (a “Right”)
for each Common Share (the “Common Shares”), Convertible Community Reinvestment Act
Preferred Share (the “CRA Shares”), Series A Convertible Community Reinvestment Act
Preferred Shares (the “Series A CRA Shares”), Special Preferred Voting Shares (the
“Special Preferred Shares”), and 15 Rights for each Special Series A Share (the
“Special Shares” and, together with the Common Shares, the CRA Shares, the Series A CRA
Shares and the Special Preferred Shares, the “Existing Shares”) of the Company outstanding
at the close of business on or after the date of the Committee’s resolution approving the
distribution. The Committee has declared such distribution in respect of all such shares as of
March [Ÿ], 2010 (the “Record Date”).

As long as the Rights are attached to the Existing Shares, the Company will issue one Right
(subject to adjustment) with each new Common Share, CRA Share, Series A CRA Share and Special
Preferred Share, and 15 Rights with each new Special Share issued prior to the Distribution Date or
the Expiration Date (as defined below) so that all such shares will have attached Rights. When
exercisable, each Right will entitle the registered holder to purchase from the Company one
one-millionth of a Series B Special Share (the “Series B Shares”) at a price of $0.66 per
one one-millionth of a Series B Share, subject to adjustment (the “Purchase Price”). The
description and terms of the Rights are set forth in a Tax Benefits Preservation Plan, dated as of
March 5, 2010, as the same may be amended from time to time (the “Agreement”), between the
Company and Computershare Trust Company, N.A., a federally chartered trust company (the “Rights
Agent”).

By adopting the Agreement, the Board is seeking to protect the Company’s ability to carry forward
its net operating losses and certain other tax attributes (collectively, the “NOLs”). The
Company has experienced and may continue to experience substantial net operating losses, and for
federal and state income tax purposes, the Company may “carry forward” net operating losses in
certain circumstances to offset current and future taxable income, which will reduce federal and
state income tax liability, subject to certain requirements and restrictions.

These federal and state NOLs can be a valuable asset of the Company, which may inure to the benefit
of the Company and it shareholders. However, if the Company experiences an “ownership change”, as
defined in Section 382 of the Internal Revenue Code, as amended (the “Code”), its ability
to use the NOLs could be substantially limited, and the timing of the usage of the NOLs could be
substantially delayed, which would significantly impair the value of the Company’s NOL asset.

Generally, an “ownership change” occurs if the percentage of the shares of beneficial interest in
the Company (i.e., the Existing Shares) owned by one or more “five percent shareholders”

 

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increases
by more than fifty percentage points over the lowest percentage of shares of beneficial interest
owned by such shareholder at any time during the prior three-year period or, if sooner, since the
last “ownership change” experienced by the Company. Therefore, an NOL rights agreement with a 5%
“trigger” threshold is intended to act as a deterrent to any person or entity acquiring 5% or more
of the outstanding Existing Shares without the prior approval of the Board. This would protect the
Company’s NOL asset because changes in ownership by a person or entity owning less than 5% of the
Existing Shares are not included in the calculation of “ownership change” for purposes of Section
382 of the Code.

Until the earlier to occur of (i) the tenth business day following a public announcement that a
person, entity or group of affiliated or associated persons or entities has become a Five Percent
(5%) Shareholder (as defined in the Agreement) (an “Acquiring Person”) or (ii) ten business
days (or such later date as may be determined by action of the Board prior to such time as any
person, entity or group of affiliated persons or entities becomes an Acquiring Person) following
the commencement or announcement of an intention to make a tender offer or exchange offer the
consummation of which would result in a Person becoming an Acquiring Person (the earlier of (i) and
(ii) being called the “Distribution Date”), the Rights will be evidenced, with respect to
any of the certificates evidencing Existing Shares outstanding as of the Record Date, by such
certificate (or, with respect to any Existing Shares held in book entry form, by notation in book
entry) together with a copy of this Summary of Rights.

The Agreement provides that any person or entity who otherwise would be a Five Percent 5(%)
Shareholder on the date the Agreement was adopted, together with any affiliates and associates of
that person or entity (each an “Existing Holder”), shall not be deemed to be an “Acquiring
Person” for purposes of the Agreement unless such holder increases its “Percentage Stock Ownership”
by more than one-quarter of one percentage point over such holder’s lowest Percentage Stock
Ownership on or after the consummation of the relevant transaction, subject to certain exceptions
for increases due to repurchases or redemptions, stock dividends, stock splits and the like. The
Agreement includes a procedure whereby the Board will consider requests to exempt certain proposed
acquisitions of Existing Shares from the applicable ownership trigger if the Board determines that
the requested acquisition will not jeopardize or endanger the availability of the NOLs to the
Company.

The Agreement provides that until the Distribution Date (or earlier redemption, exchange,
termination or expiration of the Rights), the Rights will be transferred with and only with the
Existing Shares. Until the Distribution Date (or earlier redemption, exchange, termination or
expiration of the Rights), certificates for new Existing Shares (and Ownership Statements in
respect of uncertificated shares) issued after the close of business on the Record Date upon
transfer or new issuance of the Existing Shares will contain a notation incorporating the Agreement
by reference. Until the Distribution Date (or earlier redemption, exchange, termination or
expiration of the Rights), the surrender for transfer of any certificates for Existing Shares or
any book entry shares, with or without
such notation, notice or a copy of this Summary of Rights, will also constitute the transfer of the
Rights associated with the Existing Shares represented by such certificate or uncertificated
shares.

 

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As soon as practicable following the Distribution Date, separate certificates evidencing Rights
(the “Right Certificates”) will be mailed to the holders of record of Existing Shares as of
the close of business on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.

The Rights are not exercisable until the Distribution Date. The Rights will expire thirty six (36)
months and one day after the date of the Agreement (the “Final Expiration Date”), subject
to the Company’s right to extend such date, unless earlier redeemed or exchanged by the Company or
terminated.

Each Series B Share purchasable upon the exercise of the Rights will be entitled, when, as and if
declared, to a minimum preferential quarterly distribution payment of the greater of (a) $1.00 per
share, or (b) an aggregate distribution of 1,000,000 times the distribution, if any, declared per
Common Share. In the event of liquidation, dissolution or winding up of the Company, the holders
of Series B Shares will be entitled to a minimum preferential liquidation payment of $10.00 per
share (plus any accrued but unpaid distributions), provided that such holders of Series B Shares
will be entitled to an aggregate payment of 1,000,000 times the payment made per Common Share.
Each Series B Share will have 1,000,000 votes and will vote together with the shares of beneficial
interest of the Company. Finally, in the event of any merger, consolidation or other transaction
in which shares of beneficial interest are exchanged, each Series B Share will be entitled to
receive 1,000,000 times the amount received per Common Share. Series B Shares will not be
redeemable. These rights are protected by customary antidilution provisions. Because of the
nature of the Series B Share’s distribution, liquidation and voting rights, the value of one
one-millionth of a Series B Share purchasable upon exercise of each Right should approximate the
value of one Common Share.

The Purchase Price payable, and the number of Series B Shares or other shares of beneficial
interest in the Company or property of the Company issuable, upon the exercise of the Rights are
subject to adjustment from time to time to prevent dilution.

In general, at any time after a person or entity becomes an Acquiring Person, the Board may cause
the Company to exchange the Rights (other than Rights owned by an Acquiring Person which will have
become void), in whole or in part, for Series B Shares (or Common Shares or Special Shares) at an
exchange rate of one one-millionth of a Series B Share (subject to adjustment) for each Right.

No adjustment in the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Series B Shares or Existing Shares
will be issued (other than fractions of Series B Shares which are
integral multiples of one one-millionth of a Series B Share, which may, at the election of the
Company, be evidenced by depository receipts), and in lieu thereof, a payment in cash will be made
based on the market price of the Series B Shares or Existing Shares on the last trading date prior
to the date of exercise.

The Rights may be redeemed in whole, but not in part, at a price of $0.00001 per Right (the
“Redemption Price”) by the Board at any time prior to the time that an Acquiring Person has

 

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become such. The redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of
the Company beyond those as an existing shareholder, including, without limitation, the right to
vote or to receive distribution.

Any of the provisions of the Agreement may be amended by the Board for so long as the Right are
then redeemable, and after the Rights are no longer redeemable, the Company may amend or supplement
the Agreement in any manner that does not adversely affect, in any material way, the interests of
the holders of the Rights (other than an Acquiring Person or an affiliate or associate of an
Acquiring Person).

A copy of the Agreement has been filed with the Securities and Exchange Commission as an Exhibit to
a Current Report on Form 8-K. A copy of the Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete and is qualified
in its entirety by reference to the Agreement, which is incorporated herein by reference.

 

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EXHIBIT C

Form of Right Certificate

 

 

 

[EXHIBIT C — FORM OF RIGHT CERTIFICATE]

			
	 	 	 
	Certificate No. R-[•]
	 	[Ÿ] Rights

NOT EXERCISABLE AFTER MARCH 6, 2013 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN OR
UNDER CERTAIN OTHER CIRCUMSTANCES SET FORTH IN THE AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION
AT $0.0001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN
THE AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, WILL BECOME NULL AND VOID AND WILL NO
LONGER BE TRANSFERABLE.

RIGHT CERTIFICATE OF

CENTERLINE HOLDING COMPANY

This Right Certificate (this “Certificate”) certifies that [Ÿ] is the registered
owner (the “Owner”) of the number of Series B Share purchase rights (the “Rights”)
set forth above, each of which entitles the Owner, subject to terms, provisions and conditions of
the Tax Benefits Preservation Plan, dated as of March 5, 2010, as the same may be amended from time
to time (the “Agreement”), between Centerline Holding Company, a Delaware statutory trust
(the “Company”) and Computershare Trust Company, N.A., a federally chartered trust company
(the “Rights Agent”), to purchase from the Company at any time after the Distribution Date
(as defined in the Agreement) and prior to the Expiration Date (as defined in the Agreement), at
the offices of the Rights Agent, or its successors as Rights Agent, designated for such purpose,
one one-millionth of a fully paid, nonassessable Series B Special Share (the “Series B
Shares”) of the Company at a purchase price of $[Ÿ] per one one-millionth of a Series B
Share, subject to adjustment in accordance with the Agreement (the “Purchase Price”), upon
presentation and surrender of this Certificate with the “Form of Election to Purchase”
attached hereto as Annex I and the “Certification” attached hereto as Annex II duly
executed. The number of Rights evidenced by this Certificate (and the number of one one-millionths
of a Series B Share which may be purchased upon exercise thereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as
of [Ÿ] based on the Series B

 

C-1

 

Shares as constituted at such date. As provided in the Agreement, the Purchase Price and the
number of Series B Shares which may be purchased upon the exercise of the Rights evidenced by this
Certificate are subject to modification and adjustment upon the happening of certain events.

This Certificate also evidences certain Rights as set forth in the Agreement, the terms of which
are hereby incorporated herein by reference and a copy of which is on file at the principal
executive offices of the Company. The Company will mail to the holder of this Certificate a copy
of the Agreement without charge promptly after receipt of a written request therefor. Under
certain circumstances, as set forth in the Agreement, such Rights may be evidenced by separate
certificate instead of by this Certificate and may be redeemed or exchanged or may expire.

As set forth in the Agreement, Rights issued or transferred to, or beneficially owned by, any
Person who is, was or becomes an Acquiring Person (as such terms are defined in the Agreement),
whether currently beneficially owned by or on behalf of such Person or by any subsequent holder,
may be null and void.

This Certificate is subject to all of the terms, provisions and conditions of the Agreement, which
terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof
and to which reference is hereby made for a full description of the rights, limitations (including
transfer limitations), obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Certificates. Copies of the Agreement are on file at the principal
offices of the Company and the Rights Agent.

This Certificate, with or without other Certificates, upon presentation and surrender of this
Certificate with the “Form of Assignment” attached hereto as Annex III and the
“Certification” attached hereto as Annex IV duly executed, may be exchanged for another
Certificate or Certificates of like tenor and date evidencing Rights entitling the holder to
purchase an aggregate number of one one-millionths of a Series B Share as the Rights evidenced by
the Certificate or Certificates surrendered shall have entitled such holder to purchase. If this
Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Certificate or Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Agreement, the board of trustees of the Company (the
“Board”) may, at its option, (i) redeem the Rights evidenced by this Certificate at a
redemption price of $0.00001 per Right or (ii) exchange Series B Shares, Common Shares or Special
Shares (as defined in the Agreement) for the Rights evidenced by this Certificate, in whole or in
part, subject to and in accordance with the terms of the Agreement.

No fractional Series B Shares will be issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions of Series B Shares which are integral multiples of one one-millionth
of a Series B Share, which may, at the election of the Company, be evidenced by depository
receipts), but in lieu thereof a cash payment will be made, as provided in the Agreement.

 

C-2

 

No holder of this Certificate, as such, shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of Series B Shares or any other shares of beneficial interest of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in
the Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of members of the Board or
upon any matter submitted to the shareholders at any meeting thereof, or to give or withhold
consent to any trust action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Agreement), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by this Certificate shall have been exercised as
provided in the Agreement.

If any term, provision, covenant or restriction of the Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of the Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.

This Certificate shall not be valid or binding for any purpose until it shall have been
countersigned by the Rights Agent.

This Certificate shall be governed and construed in accordance with the laws of the State of
Delaware without regard to principles of conflicts of laws.

[Signature Page Follows]

 

C-3

 

IN WITNESS WHEREOF, the Company and the Rights Agent have caused this Certificate to be signed by
their proper officers this [Ÿ] day of [Ÿ], 20[Ÿ].

	 	 	 	 	 
	 	CENTERLINE HOLDING COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

C-4

 

ANNEX I — FORM OF ELECTION TO PURCHASE

To Centerline Holding Company:

The undersigned hereby irrevocably elects to exercise [Ÿ] Rights represented by this
Certificate to purchased the Series B Shares issuable upon the exercise of such Rights (or other
shares of beneficial interest of the Company, property of the Company or any securities or property
of any other Person which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of:

	 	 	 
	 

(Please print name)

	 	 
	 
	 	 
	 

(Please print address)

	 	 

If such number of Rights shall not be all the Rights evidenced by this Certificate, a new
Certificate for the balance remaining of such Rights shall be registered in the name of an
delivered to:

	 	 	 
	 

(Please print social security or other identifying number)

	 	 
	 
	 	 
	 

(Please print name)

	 	 
	 
	 	 
	 

(Please print address)

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	Dated: [•]	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Signature Guaranteed by1:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	[Name of Undersigned]	 	 	 	[Name of Guarantor]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

Name:
	 	 
	 	 	 	 

Name:
	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 

 

	 	 	 
	1	 	Signatures must be guaranteed by an “eligible guarantor
institution” as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934,
as amended.

 

C-5

 

ANNEX II — CERTIFICATION RE: ELECTION TO PURCHASE

The undersigned hereby certifies that:

1. the Rights evidenced by this Certificate are not Beneficially Owned (as defined in the
Agreement) and are not being assigned to an Acquiring Person (as defined in the Agreement) or
an Affiliate or an Associate (each as defined in the Agreement) thereof; and

2. after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Certificate from any person or entity who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate thereof.

Dated: [Ÿ]

[Name of Undersigned]

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

NOTICE

The signature in the foregoing Form of Election to Purchase must conform to the name as written
upon the face of this Certificate in every particular, without alteration or enlargement or any
change whatsoever.

In the event the certification set forth above in the Form of Election to Purchase is not
completed, the Company will deem the Beneficial Owner of the Rights evidenced by this Certificate
to be an Acquiring Person or an Affiliate or Associate thereof and such Election to Purchase will
not be honored.

 

C-6

 

ANNEX III — FORM OF ASSIGNMENT

FOR VALUE RECEIVED, [Ÿ] hereby sells, assigns and transfers unto

	 	 	 	 	 
	 

	 	 

(Please print name of assignee)
	 	 
	 
	 	 	 	 
	 

	 	 

(Please print address of assignee)
	 	 

the Rights evidenced by this Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint [Ÿ], as attorney, to transfer the Certificate
on the books of the Company, with full power of substitution.

Dated: [Ÿ]

[Name of Assignor]

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

	 	 	 	 	 	 	 
	 	 	Signature Guaranteed By2:
	 
	 	 	 	 	 	 
	 	 	[Name of Guarantor]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

 

	 	 	 
	2	 	Signatures must be guaranteed by an “eligible guarantor
institution” as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934,
as amended.

 

C-7

 

ANNEX IV — CERTIFICATION RE: ASSIGNMENT

The undersigned hereby certifies that:

1. the Rights evidenced by this Certificate are not Beneficially Owned (as defined in the
Agreement) and are not being assigned to an Acquiring Person (as defined in the Agreement)
or an Affiliate or an Associate (each as defined in the Agreement) thereof; and

2. after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Certificate from any person or entity who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate thereof.

Dated: [Ÿ]

[Name of Undersigned]

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

 

C-8

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