Document:

Exhibit 10.2

Exhibit
10.2

MANAGEMENT AGREEMENT

This MANAGEMENT AGREEMENT, dated as of March 5, 2010, is made and entered into by and among
ISLAND CENTERLINE MANAGER LLC, a Delaware limited liability company (the “Manager”), on the
one hand, and CENTERLINE HOLDING COMPANY, a Delaware statutory trust (“CHC”), CENTERLINE
CAPITAL GROUP INC., a Delaware corporation (“CCG” and, together with CHC, the
“Company”), jointly and severally on the other hand.

WHEREAS, the Company desires to retain the Manager to provide executive management and
strategic, restructuring and general advisory services to the Company and its Subsidiaries (as
defined below) on the terms and conditions hereinafter set forth, and the Manager desires to be
retained to provide such services upon the terms and conditions hereof; and

WHEREAS, this Agreement shall become effective upon the closing date (the “Effective
Date”) of that certain Purchase and Sale Agreement, dated as of the date hereof, by and among
C-III Capital Partners LLC, a Delaware limited liability company, CHC and the additional parties
thereto, as amended from time to time (the “Purchase Agreement”).

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements
made herein and in any other agreements executed by the parties concurrently herewith or
contemplated hereby, and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:

Section 1. Definitions. The following terms have the following meanings assigned to
them:

(a) “Adjusted EBITDA” means, for any given period, EBITDA for such period less
Corporate Interest Expense for such period, adjusted to [back out write-downs, write-ups and actual
gains and losses attributable to pre-transaction investments and other assets].

(b) “Affiliate” means, with respect to any Person, any other Person at the time
directly or indirectly controlling, directly or indirectly controlled by or under direct or
indirect common control with such Person. For purposes hereof, the terms “control,”
“controlling,” “controlled by,” and “under common control with” shall mean
the possession, directly or indirectly, of the legal power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting securities, by
contract, or otherwise. Notwithstanding the foregoing, the Company and its Subsidiaries shall not
be deemed an Affiliate of the Manager or its Affiliates for purposes of this Agreement.

(c) “Agency Lending Business” means the business of (i) originating mortgage loans as
an agent for the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation
and similar government-sponsored entities and government agencies (each, an “Agency
Lender”), but in each case limited to lending programs of the Agency Lenders in which the
Company participates on the Effective Date, and (ii) where appropriate, closing such loans

 

 

 

using short-term warehouse lines of credit and selling such loans to Agency Lenders and/or
third party private investors.

(d) “Agreement” means this Management Agreement, as amended, restated or supplemented
from time to time.

(e) “B Bonds” means those certain series B certificates held initially by Centerline
Sponsor 2007-1 Securitization, LLC in connection with the Bond Transaction.

(f) “Bankruptcy” means, with respect to any Person, (a) the filing by such Person of a
voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in any form,
of its debts under Title 11 of the United States Code or any other federal, state or foreign
insolvency law, or such Person’s filing an answer consenting to or acquiescing in any such
petition, (b) the making by such Person of any assignment for the benefit of its creditors, (c) the
expiration of 90 days after the filing of an involuntary petition under Title 11 of the United
States Code, an application for the appointment of a receiver for a material portion of the assets
of such Person, or an involuntary petition seeking liquidation, reorganization, arrangement or
readjustment of its debts under any other federal, state or foreign insolvency law,
provided that the same shall not have been vacated, set aside or stayed within such 90-day
period or (d) the entry against it of a final and non-appealable order for relief under any
bankruptcy, insolvency or similar law now or hereinafter in effect.

(g) “Base Management Fee” shall have the meaning set forth in Section 6 of
this Agreement.

(h) “Board of Trustees” means the Board of Trustees of CHC, as constituted from time
to time. The phrase “subject to the approval of the Board of Trustees” or phrases of similar import
and effect used in this Agreement shall mean the approval of a majority of the independent members
of the Board of Trustees or a duly appointed committee of the Board of Trustees comprised of
independent members thereof.

(i) “Bond Transaction” means the exchange of a portfolio of bonds from Centerline
2007-1 EIT Securitization, LLC, Centerline 2007-1 SU Securitization, LLC and Centerline 2007-1 T
Securitization, LLC to Freddie Mac, pursuant to which Freddie Mac issued series A certificates that
were sold by a placement agent and series B certificates that were held initially by SPV I for
purposes of a securitization of such portfolio that is credit enhanced by Freddie Mac pursuant to a
Bond Exchange and Sale Agreement dated as of December 1, 2007 among Freddie Mac, Centerline 2007-1
EIT Securitization, LLC, Centerline 2007-1 SU Securitization, LLC, Centerline 2007-1 T
Securitization, LLC, SPV I and SPV II, and the documents contemplated thereby.

(j) “Business Day” means any day except a Saturday, a Sunday or a day on which banking
institutions in New York, New York are not required to be open.

 

2

 

(k) “CHC’s Net Income” means the net income (or loss) of the CHC as determined in
accordance with GAAP and, in the case of CHC, as reported in CHC’s Filings as filed with the SEC or
any national securities exchange from time to time.

(l) “Claim” shall have the meaning set forth in Section 10(b) of this
Agreement.

(m) “Code” means the Internal Revenue Code of 1986, as amended.

(n) “Common Shares” means the common shares of beneficial interest of CHC.

(o) “Common Share Equivalents” shall mean convertible securities and rights entitling
the holder thereof to receive, directly or indirectly, Common Shares without the payment of any
consideration by such holder for such Common Shares.

(p) “Company Change of Control” means the occurrence of any of the following: (a) any
merger or consolidation of CHC or CCG with or into any Person or group of Persons (within the
meaning of Section 13 or 14 of the Exchange Act), if, after immediately giving effect to such
transaction, the shareholders of CHC prior to the transaction, other than the Manager and its
Affiliates, are no longer the beneficial owners (within the meaning of Rule 13d-3 promulgated by
the SEC under the Exchange Act) of securities representing a majority of the total voting power on
a fully diluted basis of the aggregate outstanding securities of the surviving entity normally
entitled to vote in the election of directors, managers or trustees of the surviving entity; (b)
the election to the Board of Trustees of a majority of Trustees not nominated by the Board of
Trustees or a duly appointed committee thereof; (c) any sale, transfer or other conveyance, whether
direct or indirect, of all or substantially all of the assets of CHC or CCG, on a consolidated
basis, in one transaction or a series of related transactions, if immediately after giving effect
to such transaction, the shareholders of CHC prior to the transaction, other than the Manager and
its Affiliates, are not the beneficial owners (within the meaning of Rule 13d-3 promulgated by the
SEC under the Exchange Act) of securities representing a majority of the total voting power on a
fully diluted basis of the aggregate outstanding securities of the transferee normally entitled to
vote in the election of directors, managers or trustees; or (d) the acquisition by any Person or
group of Persons (other than the Manager and its Affiliates) of securities representing the greater
of (x) 30% or more of the total voting power on a fully diluted basis of the aggregate outstanding
securities of CHC normally entitled to vote in the election of Trustees of CHC, and (y) the
percentage of such total voting power then represented by the securities beneficially owned by the
Manager and its Affiliates, provided, however, with respect to clause (d), no
Company Change of Control shall be deemed to result from any acquisition of beneficial ownership of
securities from the Manager or any of its Affiliates.

(q) “Company Indemnified Person” shall have the meaning set forth in Section
10(e) of this Agreement.

(r) “Company and Subsidiaries Expenses” means all operating and capital expenses,
other than Reimbursable Manager Expenses, related to the administration, operations, investment
activities and business and other affairs of the Company and its Subsidiaries, including the
expenses referred to in Section 2(d).

 

3

 

(s) “Corporate Interest Expense” means, for any given period, interest expense accrued
by the Company during such period with respect to (i) Term Loan indebtedness outstanding during
such period and (ii) long-term indebtedness incurred by the Company or any of its Subsidiaries
following the Effective Date to finance any merger, consolidation, acquisition or other non-organic
expansion transaction involving the Company or any of its Subsidiaries; provided,
however, that interest expense with respect to the Term Loan shall be deemed for this
purpose to be the lesser of (x) actual interest expense accrued during the period (net of
associated hedging costs accrued during the period, if applicable) and (y) the product of (1) the
average outstanding principal balance of the Term Loan outstanding during the period, multiplied by
(2) six percent (6%) divided by 365, multiplied by (3) the number of days in such period. For the
avoidance of doubt, “Corporate Interest Expense” shall not include interest with respect to
outstanding indebtedness under warehouse credit facilities, revolving credit facilities and similar
short-term borrowing arrangements.

(t) “Covered Event” shall have the meaning set forth in Section 10(b) of this
Agreement.

(u) “Dispute” shall have the meaning set forth in Section 21(a) of this
Agreement.

(v) “EBITDA” means, for any given period, CHC’s Net Income attributed to CHC
shareholders adjusted for (i) the deconsolidation of partnerships and entities as required by FASB
Accounting Standards Codification Topic 810 and (ii) the deconsolidation of the Excluded Entities
plus (a) in each case to the extent deducted in determining CHC’s Consolidated Net Income, (i)
consolidated interest expense on Corporate Debt, (ii) the Unused Facility Fee and any other unused
facility fees on Corporate Debt, (iii) preferred dividends paid, accrued or allocated to preferred
Capital Stock (if actually paid), (iv) all federal, state, local and foreign income tax expense,
(v) depreciation, depletion, and amortization expense (including mortgage servicing rights) and
other similar non-cash items, (vi) non-cash impairments of non-working capital assets, including
intangibles, (vii) non-recurring net losses from the sale or other disposition of assets acquired
by the Company prior to the Effective Date outside the ordinary course of business, (viii) non-cash
losses associated with the change in fair market value of derivatives, (ix) other non-recurring
losses, including, without limitation, one-time expenses, severance payments, charges, losses or
other payments associated with the Island Recapitalization, (x) cash revenue actually received by
CHC attributable to the B Bonds and/or bonds included in the Bond Transaction, (xi) expenses
recognized by CHC in accordance with GAAP attributable to the B Bonds and/or bonds included in the
Bond Transaction minus (b) in each case to the extent added in determining CHC’s Consolidated Net
Income, (i) all federal, state, local and foreign income tax benefits, (ii) non-cash gains related
to sales of mortgage loans, (iii) (iii) non-cash recoveries of non-working capital assets,
including intangibles, (iv) non-recurring net gains from the sale or other disposition of assets
acquired by the Company prior to the Effective Date outside the ordinary course of business, (v)
non-cash gains associated with the change in fair market value of derivatives, (vi) other non-cash
gains (including, without limitation, gains related to mortgage servicing rights), (vii) revenues
recognized by CHC in accordance with GAAP attributable to the B Bonds and/or bonds included in the
Bond Transaction, (viii) cash expenses paid by CHC in accordance with GAAP attributable to the B
Bonds and/or bonds included in the Bond Transaction.

 

4

 

(w) “Effective Date” shall have the meaning set forth in the recitals hereto.

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

(y) “Excluded Entities” means Centerline Financial LLC, Centerline Financial Holdings
LLC, Centerline Guarantor LLC, Centerline Equity Issuer Trust, Centerline Guaranteed Manager LLC,
Centerline Guaranteed Manager II LLC and Centerline Guaranteed Holdings LLC.

(z) “Fannie Mae” means the Federal National Mortgage Association, a shareholder-owned
government-sponsored enterprise organized and existing under the laws of the United States.

(aa) “FASB” means the Financial Accounting Standards Board.

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

(cc) “Fully-Diluted Adjusted EBITDA Per Share” means, for any given period, Adjusted
EBITDA for such period divided by the Weighted Average Number of CSEs outstanding during such
period.

(dd) “GAAP” means principles that are (i) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors and successors, as in
effect from time to time, and (ii) consistently applied with past financial statements of each
Borrower, each Guarantor and their respective Subsidiaries adopting the same principles, provided
that in each case referred to in this definition of “GAAP” a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than qualifications regarding changes in GAAP and as to normal year-end
adjustments) as to financial statements in which such principles have been properly applied.

(ee) “Good Reason” means, with respect to the actions and/or inactions of the Board of
Trustees, the Manager’s determination that (i) the Board of Trustees has engaged in a pattern of
conduct (actions and/or inactions) that materially interferes with the Manager’s ability to perform
its obligations pursuant to this Agreement by repeatedly failing to approve or implement the
Manager’s recommendations, advice or actions given or taken pursuant to this Agreement and (ii)
such actions or inactions are not the best interests of the shareholders of CHC (other than the
Manager and its Affiliates, in their capacities as shareholders of CHC).

(ff) “Governing Instruments” means, with respect to any Person, the articles of
incorporation and bylaws in the case of a corporation, certificate of limited partnership (if
applicable) and the partnership agreement in the case of a general or limited partnership, the
articles of formation and the operating or similar agreement in the case of a limited liability

 

5

 

company, the trust instrument in the case of a trust, and any equity holder rights plan, or
similar governing documents, in each case as amended from time to time.

(gg) “Incentive Fee” shall have the meaning set forth in Section 7(a) of this
Agreement.

(hh) “Indemnified Persons” shall have the meaning set forth in Section 10(e)
of this Agreement.

(ii) “Initial Term” shall have the meaning set forth in Section 11 of this
Agreement.

(jj) “Investment Company Act” means the Investment Company Act of 1940, as amended.

(kk) “Island Capital Group” means Island Capital Group LLC, a Delaware limited
liability company.

(ll) “Last Appraiser” shall have the meaning set forth in Section 7(d) of this
Agreement.

(mm) “LIHTC Business” means the business of (i) sponsoring funds for institutional and
retail investors that invest in affordable housing properties benefiting from the Low-Income
Housing Tax Credit or other federal and state programs that promote the development of multifamily
properties and (ii) managing such funds, including fund origination, property acquisition,
underwriting, asset management and administration.

(nn) “Losses” shall have the meaning set forth in Section 10(b) of this
Agreement.

(oo) “Majority-Owned Affiliate” means an Affiliate of a Person (i) that is directly or
indirectly controlled by such Person and (ii) in which such Person directly or indirectly owns
equity interests representing more than a 50% ownership interest in such Affiliate.

(pp) “Manager Change of Control” means Andrew Farkas ceasing to control or
beneficially own, directly or indirectly, at least 33% of the outstanding equity interests in the
Manager and, at such time or at any time thereafter, fewer than three of Jeffrey Cohen, Frank
Garrison, James Aston, George Carleton and Paul Hughson are actively involved in the management and
operations of the Manager; provided, however, that Manager Change of Control shall not
result from (i) any public offering of the equity interests of Island Capital Group or the Manager
or of any equity interests in any Person that directly or indirectly owns equity interests in the
Manager, or (ii) any permitted assignment of this Agreement by the Manager in accordance with the
terms of this Agreement.

(qq) “Manager Indemnified Person” shall have the meaning set forth in Section
10(b) of this Agreement.

(rr) “Manager Indemnitors” shall have the meaning set forth in Section 10(d)
of this Agreement.

 

6

 

(ss) “Manager Representative” means any officer, director, employee, principal,
member, manager, agent or other representative of the Manager or its Affiliates.

(tt) “Mediation Request” shall have the meaning set forth in Section 21(b) of
this Agreement.

(uu) “Outside Activities” shall have the meaning set forth in Section 3(d) of
this Agreement.

(vv) “Person” means any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

(ww) “Procedure” shall have the meaning set forth in Section 21(b) of this
Agreement.

(xx) “Procedures Review Payments” shall have the meaning set forth in Section
6(b) of this Agreement.

(yy) “Reimbursable Manager Expenses” means the following expenses paid or payable by
the Manager or any of its Affiliates (excluding the Company and its Subsidiaries), to the extent
not directly paid by the Company or any of its Subsidiaries: (i) all reasonable out-of-pocket
costs, including reasonable travel, lodging, meals and similar costs and expenses incurred by all
personnel of the Manager and its Affiliates paid or reimbursed by the Manager or its Affiliates, to
the extent that such costs and expenses relate to the administration, operations, investment
activities or other business affairs of the Company or any of its Subsidiaries (including, without
limitation, executive management and strategic, restructuring and general advisory services
provided by the Manager pursuant to this Agreement); (ii) the allocable share of the costs of
including the activities of the Manager and its Affiliates in connection with the services provided
to the Company and its Subsidiaries hereunder under directors’ and officers’ liability insurance,
investment advisor insurance, fidelity insurance and/or errors and omissions insurance maintained
by the Manager and its Affiliates and any similar insurance maintained by the Manager with respect
to the services provided under this Agreement for any period that the Company does not provide
insurance coverage in accordance with Section 5(d), whether at the election of the Manager
in accordance with Section 5(d) or otherwise; and (iii) allocable portions of all
compensation costs (including, without limitation, benefits) and general overhead expenses
(including, without limitation, office rent, supplies, telecommunications services, utilities and
the like) of personnel of the Manager and its Affiliates to the extent attributable to the services
provided to the Company and its Subsidiaries under this Agreement solely with respect to such
personnel of the Manager and its Affiliates who have been approved and on such terms as have been
approved (in advance of, during or after the rendering of such services) by the Board of Trustees.

(zz) “Renewal Term” shall have the meaning set forth in Section 11 of this
Agreement.

 

7

 

(aaa) “SEC” means the United States Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of the United States Securities
and Exchange Commission.

(bbb) “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

(ccc) “Subsidiary” means a Person of which: (a) the Company or any Subsidiary is a
general partner or managing member; or (b) voting power to elect a majority of the board of
directors, trustees or others performing similar functions with respect to such Person is held by
the Company or by any one or more of its Subsidiaries.

(ddd) “Target Adjusted EBITDA Per Share” shall mean $42.35 million divided by the
number of Common Share Equivalents outstanding on the Effective Date; provided,
however, that such per share amount shall be equitably adjusted from time to time to take
into account the effect of (i) any issuance of additional Common Shares as a dividend or other
distribution on outstanding Common Shares, (ii) any subdivision of outstanding Common Shares into a
greater number of Common Shares, or (iii) any combination or reverse split of outstanding Common
Shares into a smaller number of Common Shares, in each case following the Effective Date.

(eee) “Term” shall have the meaning set forth in Section 11 of this Agreement.

(fff) “Term Loan” means $127.5 million of original outstanding indebtedness under that
certain Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of the
Effective Date, by and among the Company, Bank of America, N.A., as administrative agent and
lender, and the other lenders and guarantors parties thereto.

(ggg) “Termination Fee” means a termination fee equal to: (i) in the case of a
termination during the first calendar year of the Term, three (3) times the Base Management Fee;
(ii) in the case of a termination during the second calendar year of the Term, three (3) times the
sum of (A) the Base Management Fee and (B) the Incentive Fee earned by the Manager for the first
calendar year of the Term; and (iii) in the case of a termination during any calendar year after
the second calendar year of the Term, three (3) times the sum of (A) the Base Management Fee and
(B) the average annual Incentive Fee earned by the Manager for the two (2) calendar years
immediately preceding the calendar year in which the termination occurs.

(hhh) “Treasury Regulations” means the regulations promulgated under the Code, as
amended from time to time.

(iii) “Trustee” means a duly elected or appointed member of the Board of Trustees.

(jjj) “Unused Facility Fee” means fees paid by Company on any undrawn portion of full
commitment on its Corporate Debt.

(kkk) “Valuation Notice” shall have the meaning set forth in Section 7(d) of
this Agreement.

 

8

 

(lll) “Weighted Average Number of CSEs” means, with respect to any given period, the
weighted average number of Common Shares and Common Share Equivalents outstanding during such
period calculated in accordance with Financial Accounting Standards Board Accounting Standards
Codification Topic 260 — Earnings per Share.

(mmm) The words “hereof,” “herein” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section references are to this Agreement unless otherwise specified.

(nnn) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms. The words include, includes and including shall be deemed
to be followed by the phrase “without limitation.”

Section 2. Engagement and Duties of the Manager.

(a) The Company, on behalf of itself and its Subsidiaries, hereby engages the Manager, and
delegates all requisite power and authority to the Manager, to advise and assist the Company and
its Subsidiaries, subject to the terms and conditions set forth in this Agreement, and the Manager
hereby agrees to perform the duties of the Manager set forth on Schedule A. The engagement
of the Manager shall be exclusive to the Manager except to the extent that the Manager otherwise
agrees, in its sole and absolute discretion, and except to the extent that the Manager elects, in
accordance with the terms of this Agreement, to cause the duties of the Manager hereunder to be
provided by third parties.

(b) The Manager, in rendering its services and performing its duties under this Agreement to
the Company and its Subsidiaries, will at all times and with respect to all matters be subject to
the supervision and control of the Board of Trustees and senior management of the Company. The
Manager acknowledges: (i) that the management, policies and operations of the Company and its
Subsidiaries shall remain the ultimate responsibility of the Board of Trustees acting pursuant to
and in accordance with the Governing Instruments of the Company and its Subsidiaries, (ii) the
Board of Trustees and senior management of the Company may in their sole discretion decline to
follow, reject or reverse any advice or recommendations of the Manager with respect to the
administration, operations, investment activities and business and other affairs of the Company and
its Subsidiaries, and the Manager shall be bound by such a decision of the Company and the Board of
Trustees and (iii) that the Manager has no authority to bind the Company without the prior consent
of the Board of Trustees. If there is an inconsistency between this Section 2(b) and any
other provision of this Agreement (including Schedule A hereto), this Section 2(b)
shall control.

(c) The Manager or its Affiliates may provide other services to the Company and its
Subsidiaries not contemplated by this Agreement pursuant to written agreement(s) with terms that
are then customary for agreements regarding the provision of services to companies that have assets
similar in type, quality and value to the assets of the Company and its Subsidiaries; provided,
however, that any such agreements entered into with the Manager or such Affiliate shall be (i) on
terms no more favorable to the Manager or such Affiliate than would be obtained from a third party
on an arm’s length basis and (ii) approved by the Board of Trustees.

 

9

 

(d) The Manager may recommend that the Company and its Subsidiaries to retain, at the sole
cost and expense of the Company, accountants, legal counsel, appraisers, insurers, brokers,
transfer agents, registrars, investment banks, financial advisors, due diligence firms, banks and
other lenders and others to provide services to the Company, its Subsidiaries and the Manager in
connection with the businesses and affairs of the Company and its Subsidiaries, including those
that have rendered, then are rendering, or may in the future render services to the Company, its
Subsidiaries and the Manager, as the Manager deems necessary or advisable.

(e) In performing its duties under this Section 2, the Manager shall be entitled to
rely on qualified experts and professionals (including accountants, legal counsel and other service
professionals) hired by the Company or by the Manager on its own behalf in connection with its
services under this Agreement.

(f) Notwithstanding the other terms this Agreement, all matters related to (i) the
transactions contemplated by the Purchase Agreement and ancillary agreements (including
indemnification claims and other post-closing matters) and (ii) any conflict related to
compensation, indemnification or exculpation of the Manager pursuant to this Agreement, shall each
be subject to the reasonable approval of the Board of Trustees.

Section 3. Devotion of Time; Additional Activities.

(a) During the Term, the Manager shall assign to work with the Company and its Subsidiaries
personnel of the Manager and its Affiliates with suitable qualifications and experience to perform
the Manager’s duties and responsibilities under this Agreement and cause such personnel to dedicate
such time as may reasonably be required to perform the Manager’s duties. None of the officers or
employees of the Manager will be dedicated exclusively to the Company and its Subsidiaries, unless
otherwise agreed by the Manager and the Board of Trustees.

(b) The Company and its Subsidiaries (including the Board of Trustees) agree to take, or cause
to be taken, all actions reasonably required to permit and enable the Manager to carry out its
duties and obligations under this Agreement.

(c) Except as provided in Section 25, nothing in this Agreement shall (i) prevent the
Manager, any of its Affiliates, or any of their respective officers, directors, managers,
investors, partners, principals, employees, controlling Persons or other personnel, from engaging
in other businesses or from rendering services of any kind to any other Person, including investing
in, or rendering advisory services to others investing in, any type of business (including
investments that meet the principal investment objectives of the Company or any Subsidiary),
whether or not the investment objectives or policies of any such other Person are similar to those
of the Company or any Subsidiary (“Outside Activities”) or (ii) in any way bind or restrict
the Manager, any of its Affiliates, or any of their respective officers, directors, managers,
investors, partners, principals, employees, controlling Persons or other personnel from buying,
selling or trading any securities or investments for their own accounts or for the account of
others for whom the Manager, any of its Affiliates, or any of their respective officers, directors,
managers, investors, partners, principals, employees, controlling Persons or other personnel may be
acting; provided, however, that the Manager acknowledges and agrees that all
Manager Representatives

 

10

 

shall be subject to the Company’s insider trading policies and procedures in effect from time
to time. The Manager shall not assign any Manager Representative to provide services to the
Company or any of its Subsidiaries pursuant to the terms of this Agreement, and shall remove him
from such assignment, if his Outside Activities materially impair his ability to carry out the
services the Manager has assigned to him.

Section 4. Confidentiality. The Manager shall keep confidential any and all
information obtained in connection with the services rendered under this Agreement and shall not
disclose any such information (or use the same except in furtherance of its duties under this
Agreement) to unaffiliated third parties, except: (i) with the prior written consent of the Board
of Trustees; (ii) to the Company’s or the Manager’s legal counsel, accountants and other
professional advisors on a need to know basis; (iii) to financing sources in the ordinary course of
the Company’s and its Subsidiaries’ businesses, subject to the execution of customary
confidentiality agreements by any such financing source; (iv) to governmental officials having
jurisdiction over the Company or any Subsidiary; (v) in connection with any governmental or
regulatory filings of the Company or any Subsidiary, or disclosure or presentations to Company
investors in compliance with the Company’s Regulation FD disclosure policies and procedures; (vi)
as required by law or legal process to which the Manager or any Person to whom disclosure is
permitted hereunder is a party; (vii) to the extent such information is otherwise publicly
available through the actions of a Person other than the Manager not resulting from the Manager’s
violation of this Section 4 or, to the Manager’s knowledge, a violation of a legal or
contractual obligation to the Company that would prohibit the disclosure of such information; or
(viii) in the ordinary course of business, which the Manager, acting prudently, deems in its
reasonable discretion, necessary or appropriate in connection with carrying out its duties under
this Agreement, but subject to compliance with the Company’s Regulation FD disclosure policies and
procedures.

Section 5. Obligations of Manager; Restrictions.

(a) The Manager shall refrain from any action that, in its good faith judgment:

(i) would adversely and materially affect the Company’s or any Subsidiary’s status as an
entity intended to be exempted or excluded from registration under the Investment Company Act;

(ii) would knowingly violate any law, rule or regulation of any governmental body or agency
having jurisdiction over the Company or any Subsidiary or that would otherwise not be permitted by
the Company’s or any of its Subsidiaries’ Governing Instruments, code of conduct or other
compliance or governance policies and procedures;

(iii) would result in a material default under any contract to which the Company is a party,
including the Company’s credit facilities; or

(iv) would knowingly violate a policy or directive of the Company or any Subsidiary or any or
resolution of the Board of Trustees.

 

11

 

If the Manager is ordered to take any such action by the Board of Trustees, the Manager shall
promptly notify the Board of Trustees of the Manager’s judgment that such action would adversely
and materially affect the Company’s or any Subsidiary’s status as an entity intended to be exempted
or excluded from registration under the Investment Company Act, or violate any such law, rule or
regulation, the Company’s or any of its Subsidiaries’ Governing Instruments, code of conduct or
other compliance or governance and procedures, or any such contract. Notwithstanding the
foregoing, the Manager, its Affiliates, their respective controlling Persons, directors, officers,
members, managers, partners, owners and employees shall not be liable to the Company or any of its
Subsidiaries, or any of their respective trustees, directors, managers officers, or security
holders for acts or omissions performed in accordance with and pursuant to this Agreement, except
as provided in Section 10 of this Agreement. The Manager shall be permitted to rely in
good faith upon any written communication from the Secretary of CHC to evidence the approval of the
Board of Trustees with respect to any matter.

(b) The Manager agrees that any of its Manager Representatives who provide services to the
Company or any of its Subsidiaries pursuant to the terms of this Agreement shall be bound by all
rules, policies and procedures, including the Company’s code of conduct and other compliance and
governance policies and procedures applicable to all officers, directors, employees, agents and
other representatives of the Company and its Subsidiaries that are adopted by the Board of
Trustees, from time to time, including those required under the Exchange Act, the Securities Act,
or any national securities exchange on which any of CHC’s securities are listed, and the Manager
agrees to take, or cause to be taken, all actions reasonably required to cause such Manager
Representatives to be bound by such rules, policies and procedures to the extent applicable to such
Persons.

(c) The Manager shall provide the Board of Trustees such periodic and other reports concerning
the services rendered hereunder and the Manager’s performance of its obligations hereunder as may
be reasonably requested by the Board of Trustees.

(d) The Company shall name the Manager and its principals, officers, directors, members,
managers and employees as additional insureds under its directors’ and officers’ liability
insurance, investment advisor insurance, fidelity insurance and/or errors, omissions and liability
policies with respect to the services provided under this Agreement at the sole cost and expense of
the Company; provided, however, that the Manager may elect by written notice to the
Company to suspend the Company’s obligation to provide such insurance coverage for a period
specified in such notice, and upon the expiration of such period such obligation shall be
automatically reinstated.

Section 6. Fees and Payments.

(a) Base Management Fee. The Company shall pay the Manager an annual base management
fee (the “Base Management Fee”) for each calendar year (or portion thereof, in the case of
the first and last years of the Term) during the Term in an amount equal to $5,000,000. The Base
Management Fee shall be payable in cash in quarterly installments, due in advance on the first day
of each calendar quarter that this Agreement is in effect. The first installment shall be due on
the Effective Date and shall be pro rated based on the number of days remaining in the

 

12

 

first quarter from and after the Effective Date. The Base Management Fee shall be payable
independent of the performance of the Company and its Subsidiaries.

(b) Procedures Review Payments. During the first year of the Term of this Agreement
only, the Company shall pay the Manager restructuring advisory payments totaling $5,000,000 (the
“Procedures Review Payments”). In exchange for the Procedures Review Payments, the Manager
shall advise and assist the Audit Committee of the Board of Trustees in organizing and conducting a
comprehensive review of all of its internal policies, procedures and controls relating to fund
administration and management (including matters relating to Centerline High Yield CMBS Fund II LLC
and Centerline Diversified Risk CMBS Fund II LLC), and in connection therewith, subject to the
oversight of the Audit Committee of the Board of Trustees, shall consult with and make
recommendations to third party accountants and others engaged by the Audit Committee of the Board
of Trustees to assist in such review and establish, to the extent necessary or appropriate, new or
revised policies, procedures and controls (the “Procedures Review”). In connection with
the Procedures Review, the Manager shall also advise the Company with regards to retention of third
party professionals, including counsel, and shall assist with communications with investors and
advise the Company with regards to any discussions with investors involving resolution or
remediation of any errors that may be discovered that resulted in losses to such investors. The
Procedures Review Payments shall be payable in cash in monthly installments, commencing on the
Effective Date and continuing on the first Business Day of each of the next twelve (12) calendar
months (appropriately pro rated in the case of the first and last payments).

Section 7. Incentive Fee.

(a) The Company shall pay the Manager an annual incentive fee (an “Incentive Fee”) in
respect of each calendar year during which this Agreement was in effect for at least one day during
the Term in an amount, not less than zero, equal to the product of (x) the amount by which CHC’s
Fully-Diluted Adjusted EBITDA Per Share for such calendar year exceeds Target Adjusted EBITDA Per
Share, multiplied by (y) the Weighted Average Number of CSEs outstanding during such calendar year,
multiplied by (z) ten percent (10%). The Incentive Fee payable in respect of the first and, if
applicable, the last calendar year during which this Agreement is in effect shall be prorated,
based on the number of days in such year that this Agreement is in effect divided by 365. The
Incentive Fee shall be due and payable with respect to each calendar year annually (and following
the expiration or termination of this Agreement) in arrears, not later than March 31 for the
following year.

(b) The Incentive Fee for any calendar year shall be paid, at the election of the Board of
Trustees, in cash or in Common Shares (valued as provided in Section 7(c)), as indicated in
a written notice delivered to the Manager no fewer than ten (10) days prior to its payment;
provided, however, that if such notice from the Board of Trustees states that more
than fifty percent (50%) of the Incentive Fee is to be paid in Common Shares, then the Manager may
provide a written notice to the Company requesting that the portion of the Incentive Fee to be paid
in Common Shares be reduced to a different percentage, but not less than 50%, in which case the
Company shall pay the reduced portion in cash instead of in Common Shares.

 

13

 

(c) The number of Common Shares to be issued to the Manager as payment of all or a portion of
the Incentive Fee shall equal the dollar amount of the Incentive Fee (or portion thereof) payable
in Common Shares divided by a value determined as follows:

(i) if the Common Shares are traded on a securities exchange, then the value shall be deemed
to be the average of the closing prices of the Common Shares on such exchange during the ten (10)
Business Days prior to the date on which the Incentive Fee is paid;

(ii) if the Common Shares are not traded on a securities exchange but are actively traded
over-the-counter, then the value shall be deemed to be the average of the closing bids or sales
prices, as applicable, during the ten (10) Business Days prior to the date on which the Incentive
Fee is paid; and

(iii) if the Common Shares are not traded on a securities exchange or in the reasonable
judgment of the Board of Trustees are not actively traded over-the-counter, then the value shall be
the fair market value thereof, as reasonably determined in good faith by the Board of Trustees.

(d) If at any time the Manager shall, in connection with a determination of the value of the
Common Shares made by the Board of Trustees pursuant to Section 7(c)(iii) hereof, (i)
dispute such determination in good faith by more than five percent (5%), and (ii) such dispute
cannot be resolved between the Board of Trustees and the Manager within ten (10) Business Days
after the Manager provides written notice to CHC of such dispute (the “Valuation Notice”),
then the matter shall be resolved by an independent appraiser of nationally recognized standing
selected jointly by the Board of Trustees and the Manager within not more than twenty (20) days
after CHC’s receipt of the Valuation Notice. In the event the Board of Trustees and the Manager
cannot agree with respect to such selection within the aforesaid twenty (20)-day period, the Board
of Trustees shall select one such independent appraiser and the Manager shall select one such
appraiser within five (5) Business Days after the expiration of the twenty (20)-day period, with
one additional such appraiser (the “Last Appraiser”) to be selected by the appraisers so
designated within five (5) Business Days after their selection. Any valuation decision made by the
Last Appraiser shall be deemed final and binding upon the Board of Trustees and the Manager and
shall be delivered to the Manager and the Board of Trustees within not more than fifteen (15) days
after the selection of the Last Appraiser. All fees and expenses of any such appraiser shall be
borne by the party to this Agreement whose calculation of the value of the Common Shares, as
submitted to such appraiser, differs most from the determination of such amount by such appraiser.

(e) Notwithstanding any dispute between the Manager and CHC as to the amount of the value of
the Common Shares, the Company shall pay the Incentive Fee, which if any portion of such payment is
to be in Common Shares, is valued at a share value reasonably determined by the Board of Trustees
not later than March 31 of the year following the calendar year for which such payment is due. In
such event, following the determination of the amount of the value of the Common Shares in
accordance with the provisions of this Section 7, then (i) the Manager shall promptly repay
to the Company any amount it received but was not entitled to receive or (ii) the Company shall pay
to the Manager any additional amount to which the Manager was entitled but was not paid.

 

14

 

Section 8. Company and Subsidiary Expenses. The Company shall pay directly all or, if
and to the extent paid by the Manager or any of its Affiliates, shall reimburse the Manager and its
Affiliates, in accordance with Section 9, for all documented Company and Subsidiaries
Expenses reasonably incurred by the Manager or any of its Affiliates.

Section 9. Reimbursable Manager Expenses.

(a) The Company shall reimburse the Manager and its Affiliates for all Reimbursable Manager
Expenses, as provided in this Section 9.

(b) The Manager shall prepare reasonably detailed invoices documenting the Reimbursable
Manager Expenses incurred during each calendar quarter, and shall deliver such invoices and
appropriate supporting documentation (receipts, etc.) to the Company within forty-five (45) days
after the end of each calendar quarter. Reimbursable Manager Expenses shall be reimbursed by the
Company to (or as directed by) the Manager no later than the twentieth (20th) day following the
date of delivery of an invoice therefor.

(c) The Manager may, at its option, elect not to seek reimbursement for certain expenses
during a given quarterly period, which determination shall not be deemed to construe a waiver of
reimbursement for similar expenses in future periods.

Section 10. Limits of the Manager’s Responsibility; Exculpation; Indemnification.

(a) The Manager assumes no responsibility under this Agreement other than to comply with the
terms of this Agreement and render the services called for under this Agreement in good faith and
in the best interests of the Company and its shareholders. The Manager shall not be responsible
for any actions of the Company and its Subsidiaries in following or declining to follow any advice
or recommendations of the Manager, including as set forth in Section 5 of this Agreement,
except as set forth in this Section 10. The Manager, its Affiliates and their respective
controlling Persons, directors, officers, members, managers, partners, owners and employees will
not be liable to the Company or any of its Subsidiaries, or any of their respective controlling
Persons, trustees, directors, officers, members, managers, partners, security holders or employees
for any acts or omissions by any such Person (including errors that may result from ordinary
negligence, such as errors in the investment decision making process or in the trade process)
performed in accordance with and pursuant to this Agreement, except by reason of acts or omissions
found by a court of competent jurisdiction in a final, non-appeasable judgment to be attributable
to: (i) any such Person acting or omitting to act with deliberate dishonesty; (ii) any such Person
receiving an improper personal benefit in money, property or services; (iii) in the case of a
criminal proceeding, any such Person having had reasonable cause to believe that the act or
omission was unlawful; or (iv) the gross negligence, willful misconduct, fraud or bad faith on the
part of any such Person.

(b) The Company to the fullest extent permitted by law shall indemnify and hold harmless the
Manager, its Affiliates and their respective controlling Persons, directors, officers, members,
managers, partners, owners and employees, (each, a “Manager Indemnified Person”), from and
against any and all losses, claims, damages, liabilities, fees and expenses (including reasonable
attorneys’ fees and expenses) (collectively, “Losses”), whether or not involving a

 

15

 

third party, arising out of or in connection with or resulting from any Covered Event (as
defined below) or alleged Covered Event. The term “Covered Event” shall mean (a) any
action taken or omitted to be taken, or services performed or omitted to be performed, by a Manager
Indemnified Person, in accordance with the terms of this Agreement, or (b) any action taken, or
omitted to be taken, by the Company, any Subsidiary, any of their Affiliates or any of their
respective officers, directors, members, managers, advisors, agents, consultants, fiduciaries,
investors, lenders, partners, principals, employees, controlling Persons or professionals in
connection with any matter in which a Manager Indemnified Person has been involved pursuant to this
Agreement; provided, however, that the term “Covered Event,” with respect to a
Manager Indemnified Person, shall exclude any Losses to the extent determined by a court of
competent jurisdiction in a final, non-appealable judgment to be attributable to: (A) any such
Person acting or omitting to act with deliberate dishonesty; (B) any such Person receiving an
improper personal benefit in money, property or services; (C) in the case of a criminal proceeding,
any such Person having had reasonable cause to believe that the act or omission was unlawful; or
(D) the gross negligence, willful misconduct, fraud or bad faith on the part of any such Manager
Indemnified Person. In the event that any Manager Indemnified Person becomes involved in any
capacity in any suit, action, proceeding or investigation (a “Claim”) in connection with
any matter arising out of or in connection with the Manager’s duties hereunder (including a Covered
Event), the Company will periodically reimburse such Manager Indemnified Person for its reasonable
legal and other expenses (including the cost of any investigation and preparation) incurred in
connection therewith; provided, however, that prior to any such advancement of
expenses (i) such Manager Indemnified Person shall provide the Company with an undertaking (in form
and substance reasonably acceptable to the Board of Trustees) to promptly repay to the Company the
amount of any such expenses paid to such Manager Indemnified Person if it shall ultimately be
determined that such Manager Indemnified Person is not entitled to be indemnified by the Company as
herein provided in connection with any such Losses and (ii) such Manager Indemnified Person shall
provide the Company with a written affirmation that such Manager Indemnified Person in good faith
believes that it has met the standard of conduct necessary for indemnification hereunder; and
further provided, that the failure for any reason of the Company to advance funds to any Manager
Indemnified Person shall in no way affect such Manager Indemnified Person’s right to reimbursement
of such costs if it is ultimately determined that such Manager Indemnified Person was entitled to
indemnification pursuant to the terms hereof. If a Manager Indemnified Person is successful (in
whole or in part) in any Claim brought by such Manager Indemnified Person against the Company to
recover an advancement of expenses or indemnification, or if a Manager Indemnified Person is
successful (in whole or in part) in defending any Claim brought by the Company to recover advances
pursuant to an undertaking, then the Company shall indemnify such Manager Indemnified Person for
the fees and other expenses (including attorneys’ fees) incurred by such Manager Indemnified Person
in connection with such Claim to the fullest extent permitted by law.

(c) Any Manager Indemnified Person entitled to indemnification from the Company hereunder
shall first seek recovery under any insurance policies not maintained by the Company or its
Subsidiaries by which such Manager Indemnified Person is covered and any Manager Indemnified Person
shall obtain the written consent of the Company prior to entering into any compromise or settlement
which would result in an obligation of the Company to indemnify such Manager Indemnified Person;
provided, however, that the possibility of recovery under any such

 

16

 

insurance policies shall not preclude a Manager Indemnified Person from seeking
indemnification pursuant to this Section 10. If such Manager Indemnified Person shall
actually recover any amounts under any applicable insurance policies, it shall offset the net
proceeds so received against any amounts owed by the Company by reason of the indemnity provided
hereunder or, if all such amounts shall have been paid by the Company in full prior to the actual
receipt of such net insurance proceeds, such Manager Indemnified Person shall be subrogated, to the
extent of such payment, to any rights which such Manager Indemnified Person may have against any
applicable insurer with respect to the subject matter underlying such indemnification claim and
such Manager Indemnified Person shall assign any such rights to the Company. If the amounts in
respect of which indemnification is sought arise out of the conduct of the business and affairs of
the Company and also of any other Person for which the Manager Indemnified Person hereunder was
then acting in a similar capacity (other than acting on behalf of the Manager in connection with
providing services to the Company), then the amount of the indemnification to be provided by the
Company shall be limited to the Company’s proportionate share thereof if so determined by the Board
of Trustees acting in good faith.

(d) The Company hereby acknowledges that certain Manager Indemnified Persons have or may in
the future have certain rights to indemnification, advancement of expenses and/or insurance
provided by one or more other Manager Indemnified Persons (each, a “Manager Indemnitor” and
collectively the “Manager Indemnitors”). Without limiting the provisions of the Company in
Section 10(c), the Company hereby agrees that (i) it is the indemnitor of first resort
(i.e., its obligations to a Manager Indemnified Person are primary and any obligation of any
Manager Indemnitor to advance expenses or to provide indemnification for the same expenses or
liabilities incurred by such Manager Indemnified Person are secondary), (ii) it shall be required
to advance the full amount of expenses incurred by a Manager Indemnified Person and shall be liable
for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement, in
each case, to the extent required by this Agreement, without regard to any rights such Manager
Indemnified Person may have against any Manager Indemnitor, but only if the Manager Indemnified
Person provides an undertaking to repay such amount if it is ultimately determined that such
Manager Indemnified Person is not entitled to be indemnified by the Company, and (iii) it
irrevocably waives, relinquishes and releases the Manager Indemnitors from any and all claims
against the Manager Indemnitors for contribution, subrogation or other recovery with respect to
amounts for which the Company is liable pursuant to this Agreement. The Company further agrees
that no advancement or payment by a Manager Indemnitor on behalf of a Manager Indemnified Person
with respect to any claim for which such Manager Indemnified Person has sought indemnification from
the Company shall affect the foregoing and such Manager Indemnitor shall be subrogated to the
extent of such advancement or payment to all of the rights of recovery of such Manager Indemnified
Person against the Company. The Company and each Manager Indemnified Person agree that the Manager
Indemnitors are express third party beneficiaries of this Section 10(d).

(e) The Manager to the fullest extent permitted by law shall indemnify and hold harmless the
Company, its Subsidiaries and Affiliates and their respective trustees, directors, officers and
employees and the members, managers, partners and owners of the Company’s wholly owned Subsidiaries
(each, a “Company Indemnified Person” and together with the Manager Indemnified Persons,
the “Indemnified Persons”) from and against (i) any and all

 

17

 

Losses, whether or not involving a third party, which may be incurred arising out of or
resulting from acts or omissions of the Manager or any Manager Representative providing services
pursuant to this Agreement found by a court of competent jurisdiction in a final, non-appealable
judgment to be attributable to: (A) any such Person acting or omitting to act with deliberate
dishonesty; (B) any such Person receiving an improper personal benefit in money, property or
services; (C) in the case of a criminal proceeding, any such Person having had reasonable cause to
believe that the act or omission was unlawful; or (D) the gross negligence, willful misconduct,
fraud or bad faith on the part of any such Person, and (ii) any claims by any of the Manager’s or
its Affiliates’ employees relating to the terms and conditions of their employment by the Manager
or any of its Affiliates, as applicable.

(f) Any Company Indemnified Person entitled to indemnification from the Manager hereunder
shall first seek recovery under any insurance policies by which such Company Indemnified Person is
covered and any Company Indemnified Person shall obtain the written consent of the Manager prior to
entering into any compromise or settlement which would result in an obligation of the Manager to
indemnify such Company Indemnified Person; provided, however, that the possibility
of recovery under any such insurance policies shall not preclude a Company Indemnified Person from
seeking indemnification pursuant to this Section 10. If such Company Indemnified Person
shall actually recover any amounts under any applicable insurance policies, it shall offset the net
proceeds so received against any amounts owed by the Manager by reason of the indemnity provided
hereunder or, if all such amounts shall have been paid by the Manager in full prior to the actual
receipt of such net insurance proceeds, such Company Indemnified Person shall be subrogated, to the
extent of such payment, to any rights which such Company Indemnified Person may have against any
applicable insurer with respect to the subject matter underlying such indemnification claim and
such Company Indemnified Person shall assign any such rights to the Manager. If the amounts in
respect of which indemnification is sought arise out of the conduct of the business and affairs of
the Manager and also of any other Person for which the Company Indemnified Person hereunder was
then acting in a similar capacity, then the amount of the indemnification to be provided by the
Manager shall be limited to the Manager’s proportionate share thereof if so determined by the
Manager acting in good faith.

(g) In case any Claim is brought against any Indemnified Person in respect of which
indemnification may be sought by such Indemnified Person pursuant hereto, the Indemnified Person
shall give prompt written notice thereof to the indemnifying party, which notice shall include all
documents and information in the possession of or under the control of such Indemnified Person
reasonably necessary for the evaluation and/or defense of such Claim and shall specifically state
that indemnification for such Claim is being sought under this Section 10;
provided, however, that the failure of the Indemnified Person to so notify the
indemnifying party shall not limit or affect such Indemnified Person’s rights other than pursuant
to this Section 10 unless the failure to provide such notice results in material prejudice
to the indemnifying party. Upon receipt of such notice of Claim (together with such documents and
information from such Indemnified Person), the indemnifying party shall, at its sole cost and
expense, in good faith defend any such Claim with counsel reasonably satisfactory to such
Indemnified Person, which counsel may, without limiting the rights of such Indemnified Person
pursuant to the next succeeding sentence of this Section 10, also represent the
indemnifying party in such

 

18

 

investigation, action or proceeding. In the alternative, such Indemnified Person may elect to
conduct the defense of the Claim, if (i) such Indemnified Person reasonably determines that the
conduct of its defense by the indemnifying party could be materially prejudicial to its interests,
(ii) the indemnifying party refuses to assume such defense (or fails to give written notice to the
Indemnified Person within ten (10) days of receipt of a notice of Claim that the indemnifying party
assumes such defense), or (iii) the indemnifying party shall have failed, in such Indemnified
Person’s reasonable judgment, to defend the Claim in good faith. In no event shall the indemnifying
party be liable for fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all Indemnified Persons in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. The indemnifying party may settle any Claim against such Indemnified
Person without such Indemnified Person’s consent, provided (i) such settlement is without any
Losses whatsoever to such Indemnified Person, (ii) the settlement does not include or require any
admission of liability or culpability by such Indemnified Person and (iii) the indemnifying party
obtains an effective written release of liability for such Indemnified Person from the party to the
Claim with whom such settlement is being made, which release must be reasonably acceptable to such
Indemnified Person, and a dismissal with prejudice with respect to all claims made by the party
against such Indemnified Person in connection with such Claim. The applicable Indemnified Person
shall reasonably cooperate with the indemnifying party, at the indemnifying party’s sole cost and
expense, in connection with the defense or settlement of any Claim in accordance with the terms
hereof. If such Indemnified Person is entitled pursuant to this Section 10 to elect to
defend such Claim by counsel of its own choosing and so elects, then the indemnifying party shall
be responsible for any good faith settlement of such Claim entered into by such Indemnified Person.
Except as provided in the immediately preceding sentence, no Indemnified Person may pay or settle
any Claim and seek reimbursement therefor under this Section 10.

Section 11. Term. Until this Agreement is terminated in accordance with its terms,
(i) this Agreement shall be in effect for an initial term commencing on the Effective Date and
expiring on the fifth (5th) anniversary of the Effective Date (the “Initial
Term”) and (ii) this Agreement shall automatically renew for a one-year term on each
anniversary date thereafter (each, a “Renewal Term” and, together with the Initial Term,
the “Term”), unless: (a) the Manager gives the Company not less than (90) days’ written
notice prior to expiration of the Initial Term, or, in the case of the expiration of the Renewal
Term, prior to the expiration of such Renewal Term, that it elects not to have this Agreement
automatically renew; or (b) the Company gives the Manager not less than ninety (90) days’ prior
written notice that it elects not to have this Agreement automatically renew and either (i) at the
time such notice is given the Company would have the right to terminate this Agreement pursuant to
Section 12 (in which case the notice shall specify the reason for such right) or (ii) the
Board of Trustees has made a determination in its good faith and reasonable judgment, based on
consultation with and advice from its financial advisor, that the total compensation payable to the
Manager pursuant to this Agreement is materially unfair to the Company and its Subsidiaries (taken
as a whole); provided, however, that the Company shall not have the right to elect
not to renew this Agreement pursuant to the foregoing clause (ii) unless (x) at least forty-five
(45) days prior to the delivery of the non-renewal notice the Company shall have delivered to the
Manager in writing a proposed fee arrangement that the Board of Trustees believes in its good faith
and reasonable judgment is fair

 

19

 

to both the Manager and the Company and its Subsidiaries and is supported by relevant
market-based benchmarks or other objective, reliable indicators of fairness and (y) the Manager
shall not have agreed to continue to provide the services under this Agreement pursuant to a
mutually agreeable revised fee arrangement prior to the time such non-renwal notice is delivered by
the Company. The Company and the Manager agree to negoatiate with one another in good faith in the
event that the Company proposes a revised fee arranagement pursuant to this Section 11.

Section 12. Termination.

(a) The Company may terminate this Agreement at any time, including during the Initial Term,
upon at least thirty (30) days’ prior written notice of termination from the Board of Trustees to
the Manager specifying the reason for termination as provided below, only if:

(i) the Manager engages in any act or omission that shall involve: the Manager acting or
omitting to act with deliberate dishonesty; the Manager receiving an improper personal benefit in
money, property or services; in the case of a criminal proceeding, the Manager having had
reasonable cause to believe that such act or omission was unlawful; or gross negligence, willful
misconduct, fraud or bad faith on the part of the Manager;

(ii) the Manager breaches or fails to perform under this Agreement in any material respect and
such breach or failure to perform shall continue unremedied for a period of thirty (30) days after
written notice thereof specifying such breach or failure to perform and requesting that the same be
remedied in such thirty (30)-day period unless such breach is not curable with such time frame and
the Manager shall have within such 30 day period diligently commenced efforts to remedy such breach
and such effort shall be continuing;

(iii) there is a commencement of any proceeding relating to the Bankruptcy or insolvency of
the Manager, including an order for relief in an involuntary Bankruptcy case or the authorization
or filing by the Manager of a voluntary Bankruptcy petition;

(iv) the Board of Trustees shall have determined, in its good faith judgment based on a
written opinion of outside legal counsel, that the failure to terminate this Agreement violates its
fiduciary duties to CHC and its shareholders under applicable law;

(v) a Manager Change of Control has occurred and the Board of Trustees reasonably determines
that such Manager Change of Control is materially detrimental to the Company and its Subsidiaries;

(vi) Andrew Farkas ceases to be involved in the active management and operations of the
Manager and, at such time or at any time thereafter, fewer than three of Jeffrey Cohen, Frank
Garrison, James Aston, George Carleton and Paul Hughson (or fewer than three other individuals
reasonably approved by the Board of Trustees to replace such individuals) are involved in the
active management and operations of the Manager;

(vii) the Manager or any Person who beneficially owns 50% or more of the outstanding equity
interests in the Manager is convicted (including a plea of nolo contendere) of a felony for conduct
involving the Company’s assets, business or affairs;

 

20

 

(viii) the Manager is unable to perform its obligations under this Agreement;
provided, however, that the unavailability of any specific individual to serve as
an employee or officer of the Manager shall not be deemed to render the Manager unable to perform
its obligation under this Agreement; or

(ix) there is a dissolution of the Manager.

(b) The Company may also terminate this Agreement at any time at the election of the Board of
Trustees, for any reason not specified in Section 12(a) or for no reason, upon not less
than ninety (90) days’ prior written notice to the Manager, provided that (in addition to
amounts payable to the Manager through the date of termination pursuant to Section 13)
simultaneously with, and as a condition to the effectiveness of, such termination the Company shall
pay the Termination Fee to the Manager, in cash by wire transfer to an account of the Manager
designated in writing by the Manager.

(c) The Company may terminate this Agreement, immediately upon, and within the six (6) month
period following, a Company Change of Control, by providing written notice of such termination to
the Manager, and such termination shall be effective upon the date such notice is delivered to the
Manager, provided that (in addition to amounts payable to the Manager through the date of
termination pursuant to Section 13) simultaneously with, and as a condition to the
effectiveness of, such termination the Company shall pay the Termination Fee to the Manager, in
cash by wire transfer to an account of the Manager designated in writing by the Manager.

(d) The Manager may terminate this Agreement for any reason or for no reason at any time,
including during the Initial Term or prior to any Renewal Term, upon not less than thirty (30) days
prior written notice to the Company during the first year of the Initial Term, and thereafter upon
not less than one hundred twenty (120) days’ prior written notice to the Company.

(e) The Manager may terminate this Agreement in the event the Company becomes regulated as an
“investment company” under the Investment Company Act, with such termination deemed to have
occurred immediately prior to such event.

(f) The Manager may terminate this Agreement for Good Reason upon at least thirty (30) days’
prior written notice to the Company, which notice shall provide a reasonably detailed description
of the actions or failures to act by the Company and/or the Board of Trustees that the Manager
determined to constitute Good Reason. If the Manager terminates this Agreement pursuant to this
Section 12(f), then (in addition to amounts payable to the Manager through the date of
termination pursuant to Section 13) within five (5) Business Days following the effective
date of such termination, the Company shall pay the Termination Fee to the Manager, in cash by wire
transfer to an account of the Manager designated in writing by the Manager.

(g) The Manager may terminate this Agreement immediately upon, and within the six month period
following, the consummation of a Company Change of Control by providing written notice of such
termination to the Company, and such termination shall be effective upon the date such notice is
delivered to the Company. If the Manager terminates this Agreement

 

21

 

pursuant to this Section 12(g), then (in addition to amounts payable to the Manager
through the date of termination pursuant to Section 13) within five (5) Business Days
following the effective date of such termination, the Company shall pay the Termination Fee to the
Manager, in cash by wire transfer to an account of the Manager designated in writing by the
Manager.

(h) This Agreement shall automatically terminate upon an assignment by the Manager not in
accordance with Section 14 of this Agreement.

Section 13. Survival; Action Upon Termination. From and after the effective date of
termination of this Agreement pursuant to Section 11 or 12 of this Agreement, the
Manager shall not be entitled to compensation for further services under this Agreement, but shall
be paid all compensation and reimbursements accruing to the date of termination (including the Base
Management Fee and the Incentive Fee, if any). Upon such termination, the Manager shall (i)
promptly deliver to the Board of Trustees all property and documents of the Company then in the
custody of the Manager and (ii) otherwise cooperate with the Company, as reasonably requested by
the Company and at the Company’s sole cost and expense, in the orderly transition of the duties of
the Manager from the Manager to another external manager of the Company or to employees of the
Company. Sections 4, 8, 9, 10, 11, 12, 13,
16, 17, 18, 19, 20, 21, 23 and 25
shall survive the termination of this Agreement.

Section 14. Assignment. The Manager may not assign this Agreement, in whole or in
part, without the prior written consent of CHC after the approval of the Board of Trustees, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, that the Manager may assign this Agreement to any Majority-Owned Affiliate of
Island Capital Group or Andrew L. Farkas without the consent of CHC and the approval of the Board
of Trustees, provided that such assignee shall have the capacity and ability to provide the
services to be provided by the Manager. The assignee shall execute and deliver to the Company a
counterpart of this Agreement naming such assignee as Manager, and shall agree in writing to be
bound by the obligations hereunder. The Company may not assign this Agreement, in whole or in
part, without the prior written consent of the Manager in its sole discretion; provided,
however, that, subject to the Manager’s termination rights under Section 12, this
Agreement may be assigned to any successor entity in a Company Change of Control transaction, in
which case such successor entity shall agree to be bound by all of the terms of this Agreement and
by the terms of such assignment in the same manner as the Company is bound under this Agreement.

Section 15. Representations and Warranties.

(a) CHC and CCG, jointly and severally, hereby make the following representations and
warranties to the Manager:

(i) CHC is a statutory trust duly created, validly existing and in good standing under the
laws of the State of Delaware. CCG is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of CHC and CCG has all power and authority
required to execute and deliver this Agreement and to perform all of its duties and obligations
hereunder.

 

22

 

(ii) The execution, delivery, and performance of this Agreement by CHC and CCG have been duly
authorized by all necessary action on the part of CHC and CCG.

(iii) This Agreement constitutes a legal, valid, and binding agreement of CHC and CCG and is
enforceable against each of them in accordance with its terms.

(b) The Manager hereby makes the following representations and warranties to the Company:

(i) The Manager is a limited liability company duly formed, validly existing, and in good
standing under the laws of the State of Delaware. The Manager has all power and authority required
to execute and deliver this Agreement and to perform all of its duties and obligations hereunder.

(ii) The execution, delivery, and performance of this Agreement by the Manager have been duly
authorized by all necessary action on the part of the Manager.

(iii) This Agreement constitutes a legal, valid, and binding agreement of the Manager
enforceable against the Manager in accordance with its terms.

Section 16. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and delivered personally or by courier, overnight delivery service,
certified or registered mail with postage prepaid, if such notice is addressed to the party to be
notified at such party’s address as set forth below, or as subsequently modified by written notice
in accordance with this Section 16. All such notices shall be duly given and effective
upon receipt (or refusal of receipt):

(a) If to the Company, to:

Centerline Holding Company

625 Madison Avenue

New York, New York 10022

Attention: Secretary

(b) If to the Manager:

Island Centerline Manager LLC

c/o Island Capital Group LLC

717 Fifth Avenue, 18th Floor

New York, New York 10022

Attention: President

Section 17. Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this Agreement or the
application thereof to any Person or circumstance is found to be invalid or unenforceable in any
jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to
carry

 

23

 

out, so far as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application thereof, in any other jurisdiction.

Section 18. Entire Agreement; No Third Party Beneficiaries. This Agreement, including
the schedule attached hereto, constitutes the entire agreement of the parties and supersedes any
and all other prior agreements and undertakings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof. This Agreement does not, and is not intended
to, confer upon any other Person any right, benefit or remedy hereunder (other than as provided
expressly in Section 10 regarding indemnification, which is intended to be for the benefit
of the Persons covered thereby).

Section 19. Amendment; Waiver. This Agreement may be amended only in a writing signed
by all parties. Any waiver of rights hereunder must be set forth in writing and signed by the
party against whom the waiver is to be effective. A waiver of any breach or failure to enforce any
of the terms or conditions of this Agreement shall not in any way affect, limit or waive either
party’s rights at any time to enforce strict compliance thereafter with every term or condition of
this Agreement.

Section 20. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York without regard to the conflict of
laws provisions thereof

Section 21. Dispute Resolution; Mediation; Jurisdiction.

(a) Except as provided for in Section 7(d), in the event of any dispute, controversy
or claim arising out of or relating to this Agreement or the breach, termination or validity hereof
(each a “Dispute”), upon the written notice of any party, the other parties shall attempt
in good faith to negotiate a resolution of the Dispute. If the other parties are unable for any
reason to resolve a Dispute within 30 days after the receipt of such notice, the Dispute shall be
submitted to mediation in accordance with Section 21(b).

(b) Any Dispute not resolved pursuant to Section 21(a) shall, at the request of either
party (a “Mediation Request”), be submitted to non-binding mediation in accordance with the
then current International Institute for Conflict Prevention and Resolution Mediation Procedure
(the “Procedure”), except as modified herein. The mediation shall be held in New York, New
York. The parties shall have 20 days from receipt by a party of a Mediation Request to agree on a
mediator. If no mediator has been agreed upon by the parties within 20 days of receipt by a party
(or parties) of a Mediation Request, then any party may request (on written notice to the other
parties), that the International Institute for Conflict Prevention and Resolution appoint a
mediator in accordance with the Procedure. All mediation pursuant to this clause shall be
confidential and shall be treated as compromise and settlement negotiations, and no oral or
documentary representations made by the parties during such mediation shall be admissible for any
purpose in any subsequent proceedings. No party shall disclose or permit the disclosure of any
information about the evidence adduced or the documents produced by the other parties in

 

24

 

the mediation proceedings or about the existence, contents or results of the mediation without
the prior written consent of such other parties except in the course of a judicial or regulatory
proceeding or as may be required by law or requested by a governmental authority or securities
exchange. Before making any disclosure permitted by the preceding sentence, the party intending to
make such disclosure shall give the other parties reasonable written notice of the intended
disclosure and afford the other parties a reasonable opportunity to protect their interests. If
the Dispute has not been resolved within 60 days of the appointment of a mediator, or within 90
days of receipt by a party of a Mediation Request (whichever occurs sooner), or within such longer
period as the parties may agree to in writing, then any party may file an action on the Dispute in
any court having jurisdiction in accordance with Section 21(c).

(c) Each of the parties hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and the courts of the United States
of America located in the City, County and State of New York for any litigation arising out of or
relating to this Agreement (and agrees not to commence any litigation relating hereto except in
such courts), and further agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in Section 16, shall be effective
service of process for any litigation brought against it in any such court. Each of the parties
hereby irrevocably and unconditionally waives any objection to the laying of venue of any
litigation arising out of this Agreement in the courts of the State of New York or the courts of
the United States of America located in the City, County and State of New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any
such litigation brought in any such court has been brought in an inconvenient forum. Each of the
parties hereby irrevocably and unconditionally waives any right it may have to trial by jury in
connection with any litigation arising out of or relating to this Agreement.

Section 22. Availability of Equitable Remedies. Since a breach of the provisions of
this Agreement or any transaction contemplated hereby could not adequately be compensated by money
damages, a party shall be entitled, in addition to any other right or remedy available to it, to an
injunction restraining such breach or a threatened breach and to specific performance of any such
provision of this Agreement and no bond or other security shall be required in connection
therewith, and the parties hereby consent to the issuance of such an injunction and to the ordering
of specific performance.

Section 23. Joint and Several Obligations; Failure to Pay. CHC and CCG shall be
jointly and severally liable for the obligations of either of them under this Agreement. If for
any reason the Company does not pay the Base Management Fee, the Incentive Fee or any other amount
due under this Agreement when due, then such amount shall accrue interest at a rate of 1% per month
and shall continue to be payable and shall be paid by the Company as soon as reasonably
practicable; provided, however, that the foregoing shall not apply to any amount
that shall have become due hereunder which is then the subject of a dispute between the parties
acting in good faith and, in any such case, no interest shall accrue on any such amount and no such
amount shall be payable hereunder until such dispute has been finally resolved in accordance with
the terms hereof. The preceding sentence shall not limit any other remedies of the Manager in the
event the amounts are not paid when due.

 

25

 

Section 24. Construction. The headings of the Sections in this Agreement are provided
for convenience only, are not part of the agreement of the parties and shall not affect the
construction or interpretation of this Agreement. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of strict construction
shall be applied against any party. This Agreement was negotiated by the parties with the benefit
of legal representation. If an ambiguity or question or intent or interpretation arises, the
Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring and or disfavoring a party by virtue of the authorship of any of the
provisions of this Agreement.

Section 25. Non-Compete. During the term of this Agreement and during the one (1)
year period following the termination of this Agreement, the Manager shall not, and shall not cause
or permit any of its Affiliates to, directly or indirectly, engage in the LIHTC Business or the
Agency Lending Business; provided, however, that this Section 25 shall
immediately cease to apply: (i) with respect to any lending program of any Agency Lender, from and
after the time that the Company ceases to participate in such program for any reason; and (ii) in
its entirety, from and after any termination of this Agreement by the Manager pursuant to
Section 12(f) (Good Reason) or Section 12(g) (Company Change of Control) or by the
Company pursuant to Section 12(b) (No Reason) or Section 12(c) (Company Change of
Control). This Section 25 shall not prohibit the ownership by the Manager and/or its
Affiliates, collectively, of less than five percent (5%) of any class of publicly-traded security
of any company.

Section 26. Section 409A. Notwithstanding anything to the contrary in this Agreement,
in the event that one or more payments under this Agreement are subject to Section 409A of the Code
and would cause the Manager to incur any additional tax or interest under Section 409A of the Code
or any Treasury Regulations thereunder, the Company and the Manager shall, at no additional cost to
the Company, mutually amend such provision, provided that such amendment shall maintain, to the
extent practicable without any additional cost to the Company, the original intent and economic
benefit to the Manager of the applicable provision without violating the provisions of Section 409A
of the Code.

Section 27. Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile or electronic pdf submission), each of which when executed shall be deemed
to be an original, but all of which shall together constitute one and the same instrument.

Section 28. Further Actions. At any time and from time to time, each party agrees, at
its expense (except as otherwise provided for herein), to take such actions and to execute and
deliver such documents as reasonably may be necessary to effectuate the purposes of this Agreement
and any transaction contemplated hereby.

Section 29. Independent Contractor; Ownership and Control. The parties hereto
expressly acknowledge and agree that the Manager is at all times acting and performing under this
Agreement as an independent contractor, retaining control over and responsibility for its own
operations and personnel, and that no act or omission by either the Company or the Manager shall be
construed to make or constitute the other its partner, member, principal, agent, joint venturer or
associate and the parties agree to report the forgoing treatment of the Manager for tax

 

26

 

purposes in any applicable tax filing. The Company shall at all times retain and exercise
complete dominion and control over the assets and operations of the Company and its Subsidiaries.
The Company shall own and/or hold all licenses, permits and contracts obtained by it with respect
to the business of the Company.

[SIGNATURE PAGE FOLLOWS]

 

27

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
representatives on the date first written above.

	 	 	 	 	 
	 	COMPANY
 
CENTERLINE HOLDING COMPANY,
a Delaware statutory trust

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	President & CEO 	 
	 
	 	CENTERLINE CAPITAL GROUP INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	President & CEO 	 
	 
	 	MANAGER
 
ISLAND CENTERLINE MANAGER LLC,
a Delaware limited liability company

 	 
	 	By:  	/s/ Jeffrey Cohen
 	 
	 	 	Name:  	Jeffrey Cohen 	 
	 	 	Title:  	PresidentExhibit 10.3

MASTER NOVATION, STABILIZATION, CONTRIBUTION, ALLOCATION,

SERVICING AND ASSET MANAGEMENT AGREEMENT

DATED AS OF MARCH 5, 2010

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION
	 	 	2	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	2	 
	 
	 	 	 	 
	1.2 Rules of Interpretation
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 2 NOVATION OF CCG SWAP AGREEMENTS, TERMINATION OF CHC GUARANTIES; ISSUANCE OF REPLACEMENT
SWAP CONFIRMATIONS AND CFIN GAP CONFIRMATIONS
	 	 	17	 
	 
	 	 	 	 
	2.1 Novation of CCG Swaps, Termination of Amendment and Inducement
Agreement and CHC Guaranties, Issuance of Confirmations
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 3 STABILIZATION OF THE BONDS; DEBT SERVICE SHORTFALL PAYMENTS AND B CERTIFICATE WRITE-DOWNS
	 	 	18	 
	 
	 	 	 	 
	3.1 Work-Out Agreements
	 	 	18	 
	 
	 	 	 	 
	3.2 Conditions to Advances by CFin Holdings
	 	 	23	 
	 
	 	 	 	 
	3.3 Overriding Limit on Use of Credit Agreement Proceeds
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 4 BOND SERVICER AND ASSET MANAGER; RECEIVABLES ASSIGNMENT; AND REIMBURSEMENT FOR EXPENSES
	 	 	24	 
	 
	 	 	 	 
	4.1 Bond Servicer
	 	 	24	 
	 
	 	 	 	 
	4.2 Asset Manager and Management of Credit Enhanced Funds and Credit Enhanced Partnerships 24
	 	 	 	 
	 
	 	 	 	 
	4.3 Receivables Assignment
	 	 	25	 
	 
	 	 	 	 
	4.4 Credit Enhanced Fund Expenses
	 	 	26	 
	 
	 	 	 	 
	4.5 Payment Direction and Assignment of Receivables
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 5 TERMINATION OR AMENDMENT OF EXISTING DOCUMENTS AND ONGOING AGREEMENTS
	 	 	28	 
	 
	 	 	 	 
	5.1 Amendment of CFin Holdings Limited Liability Company Agreement
	 	 	28	 
	 
	 	 	 	 
	5.2 Capital Contributions to the Credit Enhanced Funds and Credit Enhanced Partnerships 28
	 	 	 	 
	 
	 	 	 	 
	5.3 Approval of Key Decisions
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 6 CONDITIONS PRECEDENT
	 	 	29	 
	 
	 	 	 	 
	6.1 Effectiveness
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 7 REPRESENTATIONS AND WARRANTIES
	 	 	31	 
	 
	 	 	 	 
	7.1 Representations and Warranties to Natixis
	 	 	31	 
	 
	 	 	 	 
	7.2 Representations and Warranties to Centerline Parties
	 	 	35	 
	 
	 	 	 	 
	ARTICLE 8 COVENANTS
	 	 	36	 

 

-i- 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	8.1 Management of Investments
	 	 	36	 
	 
	 	 	 	 
	8.2 Information with Respect to Bonds
	 	 	36	 
	 
	 	 	 	 
	8.3 Fees and Loans
	 	 	36	 
	 
	 	 	 	 
	8.4 Removal of Agents
	 	 	36	 
	 
	 	 	 	 
	8.5 Modification of Primary Agreements
	 	 	36	 
	 
	 	 	 	 
	8.6 Use of Master Note
	 	 	37	 
	 
	 	 	 	 
	8.7 Update of Information
	 	 	37	 
	 
	 	 	 	 
	8.8 Disclosure of Local General Partner Information
	 	 	37	 
	 
	 	 	 	 
	8.9 Access to Information
	 	 	37	 
	 
	 	 	 	 
	8.10 Books and Records
	 	 	37	 
	 
	 	 	 	 
	8.11 Debt
	 	 	37	 
	 
	 	 	 	 
	8.12 Subordination
	 	 	37	 
	 
	 	 	 	 
	8.13 Costs and Expenses
	 	 	37	 
	 
	 	 	 	 
	8.14 Cooperation with Advisors
	 	 	38	 
	 
	 	 	 	 
	8.15 Determination of Taxability
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 9 MISCELLANEOUS
	 	 	38	 
	 
	 	 	 	 
	9.1 Amendments and Waivers
	 	 	38	 
	 
	 	 	 	 
	9.2 Notices and Other Communications; Facsimile Copies
	 	 	38	 
	 
	 	 	 	 
	9.3 Survival of Representations and Warranties
	 	 	39	 
	 
	 	 	 	 
	9.4 Successors and Assigns
	 	 	39	 
	 
	 	 	 	 
	9.5 Counterparts
	 	 	40	 
	 
	 	 	 	 
	9.6 Severability
	 	 	40	 
	 
	 	 	 	 
	9.7 No Petition
	 	 	40	 
	 
	 	 	 	 
	9.8 Third Party Beneficiary
	 	 	40	 
	 
	 	 	 	 
	9.9 Arm’s-Length Transaction
	 	 	41	 
	 
	 	 	 	 
	9.10 GOVERNING LAW
	 	 	41	 
	 
	 	 	 	 
	9.11 Submission to Jurisdiction; Waivers
	 	 	41	 

 

-ii- 

 

TABLE OF CONTENTS

(continued)

	 	 	 
	SCHEDULE A

	 	List Of Credit Enhanced Partnerships, Credit Enhanced Partnership GPs, Credit Enhanced Funds, Credit Enhanced Fund GPs And Investor Return Floor Agreements
	SCHEDULE B

	 	Credit Enhanced Fund Bonds
	SCHEDULE B-1

	 	Schedule B-1 Bonds
	SCHEDULE B-2

	 	Schedule B-2 Bonds
	SCHEDULE C

	 	CHC Guaranties
	SCHEDULE D

	 	Properties Owned by the Credit Enhanced Local Partnerships
	SCHEDULE E

	 	Centerline Controlled General Partners
	EXHIBIT 2.1(a)

	 	Form of Novation Agreement
	EXHIBIT 2.1(b)

	 	Form of CFin Holdings BTB Swap Agreement
	EXHIBIT 2.1(h)

	 	Form of CFin Holdings Gap Confirmations
	EXHIBIT 3.1.1

	 	Form of Schedule B-1 Work-Out Agreement
	EXHIBIT 3.2

	 	Form of Advance Certification
	EXHIBIT 4.1

	 	Bond Servicing Agreement
	EXHIBIT 4.2

	 	Asset Management Services
	EXHIBIT 4.3

	 	Receivables Assignment
	EXHIBIT 4.4

	 	Credit Enhanced Fund Expenses Amounts
	EXHIBIT 7.1.10

	 	Entity Ownership Chart
	EXHIBIT 7.1.15

	 	UCC Financing Statement

 

-iii-

 

Exhibit 10.3

MASTER NOVATION, STABILIZATION, ASSIGNMENT, ALLOCATION,

SERVICING AND ASSET MANAGEMENT AGREEMENT

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

HABENDUM

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

WHEREAS, Natixis has entered into Investor Return Floor Agreements with each of the Credit
Enhanced Partnerships, which Investor Return Floor Agreements are identified on Schedule A; and

WHEREAS, CCG and Natixis are each members of CFin Holdings and CFin Holdings is the sole
member of Centerline Financial LLC (“CFin”); and

WHEREAS, CFin has entered into back-to-back swap agreements with Natixis with respect to the
Investor Return Floor Agreements (the “Existing CFin BTB Swap Agreements”) for the
respective Credit Enhanced Partnerships designated on Schedule A as the CFin BTB Credit Enhanced
Partnerships; and

WHEREAS, CCG has entered into back-to-back swap agreements with Natixis with respect to the
Investor Return Floor Agreements (the “Existing CCG Primary BTB Agreements”) for the
respective Credit Enhanced Partnerships designated on Schedule A as the CCG BTB Credit Enhanced
Partnerships and additionally has entered into certain other agreements obligating CCG to reimburse
Natixis or otherwise pay for obligations of Natixis under the Investor Return Floor Agreements
associated with the CFin BTB Credit Enhanced Partnerships (the “Existing CCG Ancillary BTB Swap
Agreements” and together with the Existing CCG Primary BTB Agreements, the “Existing CCG
BTB Swap Agreements”), which Existing CCG BTB Swap Agreements have been guaranteed by CHC
pursuant to the guaranty agreements listed on Schedule C (the “CHC Guaranties”); and

WHEREAS, each of the Credit Enhanced Funds has acquired Tax Credit Investments in certain
Local Partnerships whose Properties are financed by tax-exempt and taxable bond obligations in
which CHC holds a continuing interest through the indirect ownership in the

 

 

 

B Certificates that were issued as part of the Bond Transaction, which obligations are listed
on Schedule B annexed hereto (the “Credit Enhanced Fund Bonds”); and

WHEREAS, CMC is the primary servicer with respect to the Credit Enhanced Fund Bonds and, as of
the date hereof, Centerline Servicing, Inc. (“CSI”) is the subservicer with respect to the
Credit Enhanced Fund Bonds and CAHA is the special subservicer with respect to the Credit Enhanced
Fund Bonds; and

WHEREAS, the continued performance by those Local Partnerships whose Properties are financed
by the Credit Enhanced Fund Bonds is necessary in order to reduce potential obligations to make
payments under the Investor Return Floor Agreements and accordingly the obligations under the
Existing BTB Swap Agreements; and

WHEREAS, the parties hereto desire that in exchange for CCG entering or causing its Affiliated
entities to enter into the agreements and covenants contained herein and performing the obligations
contemplated in this Agreement and the other agreements to be entered into pursuant hereto, Natixis
will (i) agree to enter into the agreements and covenants contained herein, including a novation of
the transactions entered into under the Existing CCG BTB Swap Agreements (the “Novated BTB
Transactions”), which Novated BTB Transactions will be novated to and assumed by CFin Holdings,
and (ii) release CHC from its obligations under the CHC Guaranties; and

WHEREAS, the parties desire to provide for sources to mitigate the risk of payments on the
remaining outstanding obligations of Natixis under the Investor Return Floor Agreements, CFin under
the Existing CFin BTB Swap Agreements and CFin Holdings under the Novated BTB Transactions and to
provide for the future management of such risks; and

WHEREAS, in order to provide funding for the obligations assumed and created by CFin Holdings
pursuant to and as contemplated by this Agreement, CFin Holdings shall enter into the Credit
Agreement with Natixis as the Administrative Agent and the Lender.

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

ARTICLE 1

DEFINITIONS AND RULES OF INTERPRETATION

1.1 Definitions. Terms not otherwise defined herein shall have the meaning as set
forth in the Credit Agreement.

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

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

 

2

 

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

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

Centerline Controlled General Partners. Collectively, those Local General Partners
that are Affiliates of CCG. As of the Closing Date, the Centerline Controlled General Partners are
those Persons listed in Schedule E as Centerline Controlled General Partners.

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

Centerline Global Entities. Collectively, CHC, CCG, CAHA, GP Holdings, Guaranteed
Manager, the Credit Enhanced Entities, the Middle-Tier Entities and the Local Partnerships.

CFin. Centerline Financial LLC, a Delaware limited liability company.

CFin Holdings. Centerline Financial Holdings LLC, a Delaware limited liability
company.

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

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

CSI. Centerline Servicing Inc., a Delaware corporation.

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

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

Natixis. Natixis Financial Products Inc. (formerly known as IXIS Financial Products
Inc.)

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

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

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

 

3

 

Administrative Agent. The Administrative Agent as defined in the Credit Agreement.

Advance Certification. The term as defined in Section 3.2.

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

Amended and Restated Credit Enhanced Partnership GP Agreements. Those agreements as
defined in Section 2.1(f).

Amendment Inducement Agreement. That certain Amendment Inducement Agreement, dated as
of December 14, 2007 by CFin Holdings and CCG for the benefit of Natixis.

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

Application. Any payment by CFin Holdings (directly or indirectly) of Debt Service
Shortfall Payments, Credit Enhanced Fund Expenses, Stabilization Payments, and Fund Voluntary Loans
and any action by CFin Holdings intended to cause Stabilization or any other payment by CFin
Holdings to or in respect of any Tax Credit Investment, other than a Stabilization Payment made
from Unrestricted Stabilization Sources after the Required Stabilization Date unless a Cash Freeze
Event has occurred.

Approval Conditions. The term as defined in the definition of Natixis Approved
Properties.

Asset Management Fees. The Asset Management Fees payable pursuant to Section 6.8.E of
the respective Credit Enhanced Fund Agreement.

Asset Management Services. Those services set forth in Exhibit 4.2.

Asset Manager. Guaranteed Manager.

Assignment and Subrogation Agreements. Those Assignment and Subrogation Agreements
delivered by Guaranteed Manager to Natixis with respect to each Credit Enhanced

 

4

 

Fund, pursuant to which Guaranteed Manager pledged to Natixis its interest as managing member
of the respective Credit Enhanced Fund GPs and Credit Enhanced SLPs.

Available Receivables. The term as defined in Section 3.1.3(a)(vi).

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

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

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

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

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

Bond Special Servicer. CAHA, as special subservicer to Bond Servicer, or any
successor thereto as sub-special servicer.

Bond Servicing Agreement. That certain Servicing Agreement dated as of December 1,
2007 between Freddie Mac and CMC, relating to the Bond Transaction, attached hereto as Exhibit 4.1

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

BTB Swap Agreements. Collectively, the Existing CCG BTB Swap Agreements, the Existing
CFin BTB Swap Agreements and the CFin Holdings BTB Swap Agreement.

 

5

 

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

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

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

Cash Freeze Event. Any of the following:

(a) any representation or warranty made or deemed made by or on behalf of any Centerline Party
or Centerline Controlled Entity in or in connection with this Agreement, the Work-Out Agreements or
the Subscription Agreement (collectively, the “Subject Agreements”) or any amendment or
modification thereof, or any waiver thereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with any Subject Agreement or any
amendment or modification thereof, or any waiver or thereunder, shall be incorrect when made or
deemed made in any material respect (it being agreed that at any time under this Agreement there
shall be a requirement that any Property be a Natixis Approved Property, the Centerline Parties
shall be deemed to have represented and warranted to Natixis at such time that such Property is a
Natixis Approved Property);

(b) any Centerline Party or Centerline Controlled Entity shall fail to observe or perform any
covenant, condition or agreement contained in any Subject Agreement and such failure shall continue
unremedied for a period of 15 or more days;

(c) Stabilization shall not have occurred with respect to the Schedule B-1 Bonds in accordance
with and by the date set forth in Section 3.1.1;

(d) the failure by Bond Servicer to enter into Schedule B-1 Work-Out Agreements or Schedule
B-2 Preliminary Work-Out Agreements within thirty days of the Closing Date; or

(e) failure to achieve Stabilization with respect to the Schedule B-1 Bonds within nine months
following the Closing Date (other than with respect to the Walton Trails Project) and within two
years following the Closing Date with respect to the Walton Trails Project.

CCG BTB Credit Enhanced Funds. Those partnerships listed on Schedule A and designated
as the CCG BTB Credit Enhanced Funds.

CCG BTB Credit Enhanced Partnerships. Those partnerships listed on Schedule A and
designated as the CCG BTB Credit Enhanced Partnerships.

Centerline Stabilization Cap. The term as defined in Section 3.1.1(a)(iii).

 

6

 

CFin BTB Credit Enhanced Funds. Those partnerships listed on Schedule A and
designated as the CFin BTB Credit Enhanced Funds.

CFin BTB Credit Enhanced Partnerships. Those partnerships listed on Schedule A and
designated as the CFin BTB Credit Enhanced Partnerships.

CFin Distributions. Term as defined in Section 3.1.3(a)(vii).

CFin Holdings Agreement. The First Amended and Restated Limited Liability Company
Agreement of CFin Holdings dated as of the date hereof.

CFin Holdings BTB Agreements. Each of the CFin Holdings BTB Swap Agreement, the
Novated BTB Transactions and the CFin Holdings Gap Confirmations.

CFin Holdings BTB Swap Agreement. Has the meaning set forth in Section 2.1(b).

CFin Holdings Gap Confirmations. Has the meaning set forth in Section 2.1(h)

CHC Guaranties. Those guaranties as defined in the fifth paragraph of the Habendum
and set forth on Schedule C hereto.

Closing Date. The term as defined in Section 6.1.

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

Collateral Release Capital. The term as defined in Section 3.1.3(a)(v).

Credit Agreement. That certain loan agreement dated as of the date hereof between the
Administrative Agent, the Lender and CFin Holdings, as borrower.

Credit Agreement Draws. The term as defined in Section 3.1.3(a)(viii).

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

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

Credit Enhanced Fund Bonds. Those bonds as defined in the sixth paragraph of the
Habendum.

Credit Enhanced Fund Expenses. Has the meaning set forth in Section 4.4.1.

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

 

7

 

Credit Enhanced Fund Group. Each of the Credit Enhanced Entities that have been formed
in connection with the formation of a Credit Enhanced Fund, together with any Centerline Controlled
General Partners.

Credit Enhanced Funds. Each of the limited partnerships listed on Schedule A under
the heading CCG BTB Credit Enhanced Funds and CFin BTB Credit Enhanced Funds.

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

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

Credit Enhanced Partnerships. Each of the limited partnerships listed on Schedule A
under the heading CCG BTB Credit Enhanced Partnerships or CFin BTB Credit Enhanced Partnerships.

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

Credit Enhanced SLPs. The special limited partners or special members of the Credit
Enhanced Local Partnerships, as defined in the respective Credit Enhanced Fund Agreement.

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

(a) the amount of funds needed by such Credit Enhanced Local Partnership to enable it to pay
the full amount of such scheduled principal and/or interest payment on such scheduled payment date
in accordance with the documents governing the relevant Credit Enhanced Fund Bond (after taking
into account all other sources of funds available to such Credit Enhanced Local Partnership in
accordance with such governing documents if such governing documents provide for prioritization of
operating expense payments); and

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

Disposition Fee. The Disposition Fee payable to a Credit Enhanced Fund GP or any
other Centerline Controlled Entity pursuant to the respective Credit Enhanced Fund Agreement or any
other similar or analogous fee.

Drawdown Date. The date on which any loan is made or is to be made pursuant to the
Credit Agreement.

Excluded Fee Rights. The term as defined in Section 4.3.1.

 

8

 

Existing CCG Ancillary BTB Swap Agreements. The agreements as defined in the fifth
paragraph of the Habendum.

Existing BTB Swap Agreements. Collectively, the Existing CCG BTB Swap Agreements and
the Existing CFin BTB Swap Agreements.

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

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

Existing CFin Holdings Capital. The amount as set forth in Section 3.1.3(a)(iv).

Existing CCG Primary BTB Agreements. The agreements as defined in the fifth paragraph
of the Habendum.

Extended Schedule B-2 Stabilization Date. The term as defined in Section 3.1.2(a)

Fee Rights. The term as defined in Section 4.3.

Forbearance Election. The term as defined in Section 3.1.1(b).

Forbearance Election Termination Date. The term as defined in Section 3.1.1(b).

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

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

Full Distribution Date. The earliest date as of which each of the following has
occurred:

(a) the payment in full of all principal, interest and other amounts owing to the Lender and
Administrative Agent under the Credit Agreement, Security Agreement and other Loan Documents
referred to in the Credit Agreement, and the termination of the commitments under the Credit
Agreement; and

(b) the payment in full of all amounts owing to Natixis under the BTB Swap Agreements and the
termination of Natixis’ obligations under the Investor Return Floor Agreements.

Fund Management Agreement. The Amended and Restated Fund Management Agreement between
Guaranteed Manager and the Credit Enhanced Fund GPs as listed on Schedule A hereto dated as of
October 1, 2009, but effective as of November 17, 2003.

 

9

 

Fund Voluntary Loans. Loans made by the partners or other lenders permitted to make
loans to either the Credit Enhanced Funds or the Credit Enhanced Partnerships in order to pay
expenses of the Credit Enhanced Funds or Credit Enhanced Partnership or to advance funds to the
Credit Enhanced Local Partnerships pursuant to and as more fully defined in the Credit Enhanced
Fund Agreements and Credit Enhanced Partnership Agreements and referred to therein as “Voluntary
Loans,” together with any other obligation evidenced by a Master Note.

GAAP. Principles that are (i) consistent with the principles promulgated or adopted
by the Financial Accounting Standards Board and its predecessors and successors, as in effect from
time to time, and (ii) consistently applied with past financial statements of each Person adopting
the same principles, provided that in each case referred to in this definition of “GAAP” a
certified public accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than qualifications regarding changes in
GAAP and as to normal year-end adjustments) as to financial statements in which such principles
have been properly applied.

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

Guarantee Fees. Those guarantee fees as defined in each of the respective Credit
Enhanced Partnership Agreements.

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

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

Investor Return Floor Agreements. Each Natixis Investor Return Floor Agreement as
defined in each of the Credit Enhanced Partnership Agreements and as set forth on Schedule A under
the heading Investor Return Floor Agreements.

Investor Services Agreement. That certain Investor Services Agreement dated as of
December 14, 2007 by and among CHC, CSI and CFin,

ISDA. The International Swaps and Derivatives Association, Inc.

Island. Island Capital Company LLC, and its Subsidiaries.

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

Island Recapitalization. The transaction being consummated, the actions being taken
and the conditions being satisfied under or in connection with (x) the Purchase and Sale Agreement
by and among Island Purchaser, CHC, CCG, ARcap 2004-RR3 Resecuritization, Inc., ARcap 2005-RR5
Resecuritization, Inc, Centerline Fund Management LLC, Centerline CMBS Fund II Management LLC,
Centerline REIT Inc., CM Investor LLC, CMC and

 

10

 

Centerline Mortgage Partners Inc., contemporaneously with closing of this Agreement, and (y)
the amendment and restatement of the BOA Credit Agreement.

Last Compliance Period Year. The last taxable year of the 15-year Compliance Period
for Properties owned by each of the Credit Enhanced Local Partnerships.

Lender. Collectively, the Lenders party to the Credit Agreement.

Limited Support Guaranty. The term as defined in Section 3.1.5.

Loan Receivables. The term as defined in Section 4.3.

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

Local Partnership Agreements. The agreements of limited partnership or operating
agreements, as may be amended, of the Local Partnerships.

Local Partnership Guaranties. The term as defined in Section 3.1.1(a)(i).

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

Master Note. The promissory note issued by each Credit Enhanced Fund to evidence,
inter alia, Fund Voluntary Loans.

Material Adverse Effect. (A) An effect that results in or causes, or could reasonably
be expected to result in or cause, a material adverse effect on the business, operations, results
of operations, assets, liabilities or condition (financial or otherwise) of any Person and its
Subsidiaries taken as a whole; or (B) a material adverse effect on (i) the ability of a Centerline
Party to perform any of its obligations under any Transaction Document (as defined in the Credit
Agreement) or (ii) the rights or benefits available to Natixis or the Lenders under any such
Transaction Document.

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

Mission Del Rio Expiration Date. The term as defined in Section 3.1.2(a).

Mission del Rio Project. The property located in San Antonio, Texas, owned by Chicory
Court II LP and which is financed by a Schedule B-2 Bond.

Mission Del Rio Work-Out Agreement. The Schedule B-2 Preliminary Work-Out Agreement
for the Mission del Rio Project.

Modified Stabilization Resolution. The term as defined in Section 3.1.3.

Natixis Approval Rights. The term as defined in Section 5.3.

 

11

 

Natixis Approved Properties. Each of the Properties, provided that, at the time of
determination, such a Property shall only constitute a Natixis Approved Property if each of the
following conditions (the “Approval Conditions”) are satisfied at such time or the
Administrative Agent and Lenders have otherwise consented thereto:

(a) such Property complies with the requirements of Section 42 of the Code so that such
Property is entitled to claim Tax Credits or if such Property has not been placed in service and
commenced its first Credit Year (as defined in Section 42 of the Code), it is anticipated that such
Property will be entitled to claim Tax Credits, provided however that such condition shall not be
deemed to have been satisfied if at the time of determination:

(i) all Form 8609s with respect to such Property have not been duly completed and filed by the
date on which such completion and filing is required in order to claim Tax Credits provided,
however that such condition shall not apply to the Mission del Rio Project through December 31,
2010;

(ii) a Form 8823 (or other similar or analogous form) has been received with respect to such
Property but only if the conditions cited in the Form 8823 could reasonably be expected to cause
such Property to fail to be able to claim more than 95% of the Tax Credits anticipated to be
claimed with respect to such property in any year;

(iii) there is an audit by the IRS or any applicable state revenue or taxing authority that
is ongoing at the time of determination with respect to such Property which, could reasonably be
expected to cause such Property to fail to be able to claim at least 95% of the Tax Credits claimed
with respect to such Property or projected to be claimed in any year;

(iv) at the time of determination, any residential unit at such Property included in the
Property’s “qualified basis” as such term is defined in Section 42, is unavailable for leasing
because of casualty loss and such unit is not in the process of being restored and such inclusion
could reasonably be expected to cause such Property to fail to be able to claim at least 95% of the
Tax Credits claimed with respect to such Property or projected to be claimed in any year; or

(v) any other event or condition exists with respect to such Property that could reasonably be
expected to cause such Property to fail to be able to claim at least 95% of the Tax Credits claimed
with respect to such Property or project to be claimed in any year.

(b) the Investor Return Floor Agreement with the Credit Enhanced Partnership that is the
holder of the limited partnership interest in the applicable Credit Enhanced Fund investing in such
Property is outstanding at such time and the applicable 15-Year Compliance Period for such Credit
Enhanced Fund has not expired; and

(c) if historic Tax Credits have been or are projected to be claimed with respect to such
Property, all required historic tax credit forms (including, without limitation, NPS Part II and
Part III and any state historic tax forms) have been duly completed and filed when due in order to
claim historic Tax Credits

 

12

 

Non-Stabilized Bonds. Means each of the Schedule B-1 Bonds and Schedule B-2 Bonds.

Novated BTB Transactions. The transactions as defined in the ninth paragraph of the
Habendum and Section 2.1(a).

Novation Agreement. The Novation Agreement as defined in Section 2.1(a).

Operative Event. The term as defined in the respective Assignment and Subrogation
Agreements, as amended pursuant to Section 2.1(g) hereof.

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

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

Receivables. Each fee, receivable, “voluntary loan”, right to payment or
distribution or other economic right or entitlement held by or payable to the Receivable Assignors
that are, or are required to be, conveyed by them to CFin Holdings pursuant to the Receivables
Assignment and Assumption Agreement, provided that Receivables shall not include the Excluded Fee
Rights.

Receivables Assignment. The term as defined in Section 4.3.

Receivables Assignment and Assumption Agreement. The Receivables Assignment and
Assumption Agreement dated as of the date hereof, among CFin Holdings and the Receivables Assignors
party thereto.

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

Required Stabilization Date. December 1, 2012, or such later date that the Required
Stabilization Date may be extended to pursuant to the Bond Reimbursement Agreement.

Restructuring Documents. The meaning as defined in Section 7.1.5.

Schedule B-1 Bonds. The bonds as defined in Section 3.1.1.

 

13

 

Schedule B-1 Work-Out Agreements. The agreements as defined in Section 3.1.1.

Schedule B-1 Work-Out Sources. Those sources as defined in Section 3.1.1(a).

Schedule B-2 Bonds. The bonds as defined in Section 3.1.2.

Schedule B-2 Preliminary Work-Out Agreements. The agreements as defined in Section
3.1.2.

Schedule B-2 Stabilization Work-Out Agreements. The agreements as defined in Section
3.1.3.

Schedule B-2 Work-Out Agreements. The Schedule B-2 Preliminary Work-Out Agreement and
the Schedule B-2 Stabilization Work-Out Agreements.

Schedule B-2 Work-Out Sources. Those sources as defined in Section 3.1.3(a).

Secured Obligations. The term as defined in the Security Agreement.

Security Agreement. The Security Agreement dated as of the date hereof between CFin
Holdings and the Administrative Agent.

Series B Adjustments. The term as defined in Section 3.1.1(a)(iii).

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

Stabilization. With respect to each of the Non-Stabilized Bonds, the definition
attributable thereto as set forth in the Stabilization Escrow Agreement (or as otherwise determined
with respect to any Non-Stabilized Bond in accordance with the terms of this Agreement), the
determination of which shall be made by the Bond Servicer, acting in good faith.

Stabilization Escrow Account. That certain Stabilization Escrow Account as such term
is defined in the Stabilization Escrow Agreement.

 

14

 

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

Stabilization Payments. Those payments as defined in Section 5.3(f).

Stabilization Work-Out Bonds. Collectively, the Schedule B-1 Bonds and the Schedule
B-2 Bonds.

Stabilization Work-Out Properties. The Properties as defined in Section 3.1.

Subscription Agreement. That certain Subscription Agreement dated as of the date
hereof, between CHC and Natixis.

Stabilization Opinion. With respect to a Work-Out Agreement respecting each Local
Partnership and its related debt (including without limitation any tax exempt or taxable municipal
bonds) and the consummation of the transactions contemplated therein, an opinion of Paul, Hastings,
Janofsky & Walker LLP or other nationally recognized legal counsel reasonably acceptable to Natixis
stating that such actions should not: (i) result in the recognition by such Local Partnership of
any cancellation of indebtedness income pursuant to Section 108 of the Code; (ii) result in a
reallocation of tax credits and/or tax losses pursuant to Section 704(b) of the Code or a
reallocation of partnership debt pursuant to Section 752 of the Code; (iii) adversely impact the
amount or timing of the Tax Credits or tax benefits to be received during the 15-Year Compliance
Period; or (iv) in and of themselves, adversely affect the tax opinion previously rendered by
counsel at the time that the Fund was admitted as a limited partner in such Local Partnership.

Subject Agreements. The term as defined in the definition of Cash Freeze Event.

Success Fee Letter. The letter agreement entitled “Success Fee Letter” dated as of
the date hereof, between Natixis and CCG.

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

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

True-Up Guaranty Fee Payments. The term as defined in Section 3.1.3(a)(iii).

True-Up Payments. Any adjustments to the capital contributions payable by the limited
partners of the Credit Enhanced Partnerships pursuant to Section 3.4 of the respective Credit
Enhanced Partnership Agreements by reason of the projected benefits to the limited

 

15

 

partners as of the date that such adjustment is determined being different from the projected
benefits to the limited partner as of the date the capital contributions to be made were initially
determined or subsequently determined by reason of an amendment to the respective Credit Enhanced
Partnership Agreements).

Unaffiliated Local General Partners. Those Local General Partners as set forth in
Section 3.1.1(a)(i).

Unfunded Equity Payments. The term as defined in Section 3.1.3(a)(ii).

Unrestricted Stabilization Sources. The term as defined in Section 3.1.3(a)(v).

Walton Trails Project. The Property located in Atlanta, Georgia owned by Caswyck
Trail, LLC, and which is financed by a Schedule B-1 Bond.

Work-Out Agreements. The Schedule B-1 Work-Out Agreements and the Schedule B-2
Work-Out Agreements.

Work-Out Guaranty. The Additional Guaranty and Suretyship Agreements to be executed
by CFin Holdings in connection with Schedule B-2 Preliminary Work-Out Agreements providing for the
guaranty of Debt Service Shortfall Payments so long as the Property with respect to which such Debt
Service Shortfall Payments are made is a Natixis Approved Property.

1.2 Rules of Interpretation.

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

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

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

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

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

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

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

 

16

 

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

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

(j) This Agreement and the other documents delivered in connection herewith are the result of
negotiation among, and have been reviewed by counsel to, among others, the respective parties and
is the product of discussions and negotiations among all parties. Accordingly, this Agreement and
the other documents are not intended to be construed against a Person merely on account of such
Person’s involvement in the preparation of such documents.

ARTICLE 2

NOVATION OF CCG SWAP AGREEMENTS, TERMINATION OF CHC GUARANTIES;

ISSUANCE OF REPLACEMENT SWAP CONFIRMATIONS AND CFIN GAP CONFIRMATIONS

2.1 Novation of CCG Swaps, Termination of Amendment and Inducement Agreement and CHC
Guaranties, Issuance of Confirmations. On the Closing Date, the following actions will be
taken in order to (i) terminate the obligations of CCG and CHC under the Amendment Inducement
Agreement and of CHC under the CHC Guaranties, (ii) cause the novation from CCG and the assumption
by CFin Holdings of the obligations of CCG under the transactions under the Existing CCG BTB Swap
Agreements and (iii) the entry into CFin Holdings Gap Confirmations with respect to amounts paid by
Natixis that are not covered by the Existing CFin BTB Swap Agreements:

(a) On the Closing Date, each of Natixis, as remaining party, CCG, as transferor, and CFin
Holdings, as transferee, shall enter into a novation agreement in the form attached hereto as
Exhibit 2.1(a) (the “Novation Agreement”) pursuant to which the “Transactions” under (and
as defined in) the Existing CCG Primary BTB Swap Agreements will be novated to CFin Holdings (the
“Novated BTB Transactions”) and will constitute “Transactions” under (and as defined in)
the CFin Holdings BTB Swap Agreement referred to in paragraph (b) below.

(b) On or prior to the Closing Date, Natixis and CFin Holdings shall enter into an ISDA 1992
Master Agreement (Multicurrency-Cross Border), together with a Schedule thereto in the form of
Exhibit 2.1(b) (the “CFin Holdings BTB Swap Agreement”).

(c) On the Closing Date, CHC will, by the effectiveness of the Novation Agreement, be released
and discharged from its obligations under the Existing CCG BTB Swap Agreements, including, without
limitation, the CHC Guaranties, which shall be terminated.

 

17

 

(d) On the Closing Date, each of CCG and CHC will, by the effectiveness of the Novation
Agreement, be released and discharged from its obligations under the Amendment Inducement Agreement
and such agreement shall be terminated.

(e) Within three (3) Business Days of the Closing Date, and pursuant to the terms of the
Novation Agreement, Natixis shall return to CCG and CCG shall simultaneously transfer to CFin
Holdings all collateral posted to Natixis by CCG pursuant to the credit support annex to the
Existing CCG BTB Swap Agreements, it being agreed by CCG that Natixis is hereby authorized to
deposit directly such released collateral with CFin Holdings on behalf of CCG.

(f) Effective as of the Closing Date, each of the limited liability company agreements of each
of the Credit Enhanced Partnership GPs shall be amended and restated (the “Amended and Restated
Credit Enhanced Partnership GP Agreements”) pursuant to which (i) CCG shall assign to CFin
Holdings and CFin Holdings shall assume the obligations of CCG as a member of the Credit Enhanced
Partnership GPs; (ii) any Guarantee Fees received by each of the Credit Enhanced Partnership GPs
shall be transferred to CFin Holdings; and (iii) the rights of the Credit Enhanced Fund GPs, as the
managing member of the Credit Enhanced Partnership GPs, shall be modified as provided therein.

(g) Effective as of the Closing Date, the Assignment and Subrogation Agreements shall each be
amended and restated to, among other things, provide for the right of Natixis to foreclose upon the
interest of Guaranteed Manager in the event of a breach of the obligations of CFin Holdings under
the CFin Holdings BTB Agreements.

(h) On the Closing Date, CFin Holdings and Natixis shall enter into confirmations in the form
of Exhibit 2.1(h) (the “CFin Holdings Gap Confirmations”).

ARTICLE 3

STABILIZATION OF THE BONDS; DEBT SERVICE SHORTFALL PAYMENTS AND B

CERTIFICATE WRITE-DOWNS

3.1 Work-Out Agreements. In order to induce CFin Holdings to enter into the CFin
Holdings BTB Agreements set forth in Section 2.1, the parties hereto agree to take the actions set
forth in this Section 3.1 in order to cause Stabilization to occur with respect to the Schedule B-1
Bonds and to provide support to the Schedule B-2 Bonds (collectively, the “Stabilization
Work-Out Bonds”) issued in connection with the Properties owned by Credit Enhanced Local
Partnerships (the “Stabilization Work-Out Properties”).

3.1.1 Schedule B-1 Work-Out Agreements. Within thirty (30) days following the
Closing Date, CCG shall cause Bond Special Servicer to enter into work-out agreements in form and
substance satisfactory to Natixis (the “Schedule B-1 Work-Out Agreements”) with each of the
Credit Enhanced Local Partnerships whose Properties are financed by those Credit Enhanced Fund
Bonds listed on Schedule B-1 (the “Schedule B-1 Bonds”). The Schedule B-1 Work-Out
Agreements shall be such agreements as contemplated by Section 5.3(d) of the Bond Reimbursement
Agreement to enable the debt service coverage ratio requirements for the

 

18

 

Properties with respect to which the Schedule B-1 Bonds have been issued to meet the
requirements for Stabilization under the Bond Reimbursement Agreement, and shall be in
substantially the same form as attached hereto as Exhibit 3.1.1, with such changes thereto to which
Natixis has given its prior consent, which consent shall not be unreasonably withheld or delayed.

(a) Schedule B-1 Work-Out Sources. The sources to enable the conditions for
Stabilization to be met under the Schedule B-1 Work-Out Agreements shall consist of one or more of
the following (the “Schedule B-1 Work-Out Sources”):

(i) payments to be made by or on behalf of the respective Credit Enhanced Local Partnerships,
including amounts guaranteed for such purpose by the Local General Partners who are not Affiliated
with CCG (the “Unaffiliated Local General Partners”) or their respective Affiliates
pursuant to guaranties to cause Stabilization to occur and to fund, among other obligations, Debt
Service Shortfall Payments until Stabilization has occurred (the “Local Partnership
Guaranties”) that are applied to either pay off that portion of the principal amount of the
respective Schedule B-1 Bonds or to acquire subordinate debt;

(ii) capital held by the respective Credit Enhanced Funds (directly or through a Middle-Tier
Entity) that has not been contributed to the respective Credit Enhanced Local Partnerships in which
they have invested by reason of Stabilization not having occurred with respect to the Property of
such Credit Enhanced Local Partnership (the “Unfunded Equity Payments”) which is applied to
the partial mandatory redemption of the respective Schedule B-1 Bonds (which both CFin Holdings and
Natixis agree as of the date hereof may be applied for the purpose of achieving Stabilization
without further approval of Natixis or CFin Holdings unless a Cash Freeze Event has occurred); or

(iii) funds to be released (the “Series B Adjustments”) from either (x) the
Stabilization Escrow Account or (y) other adjustments to be made to the value of the B Certificates
including substitutions of existing obligations under the respective Schedule B-1 Bond with
subordinated debt; provided, however, that the amount of the Series B Adjustments required to be
made available by the Centerline Parties with respect to the Schedule B-1 Bonds shall be at least
Thirty Million Dollars ($30,000,000.00), but not greater than the aggregate amount set forth in
Schedule B-1 (the “Centerline Stabilization Cap”).

(b) The Schedule B-1 Work-Out Agreements shall be entered into within thirty (30) days
following the Closing Date and true, correct and complete copies thereof shall be delivered to
Natixis. The Centerline Parties agree to cause the transactions contemplated thereunder to be
completed within nine (9) months of the Closing Date (other than with respect to the Walton Trails
Project). Failure to complete such transactions, including the Stabilization of the Properties
related to the Schedule B-1 Bonds, shall constitute a Cash Freeze Event. For the purposes of this
Section 3.1.1, Stabilization with respect to any Property shall not have occurred until Freddie Mac
shall have delivered to the respective trustee under the bond indenture for such Stabilization
Work-Out Bond a notification that Stabilization has occurred. The amount and the allocation of the
respective Schedule B-1 Work-Out Sources to cause Stabilization to occur are set forth on Schedule
B-1 hereto. Natixis and CFin Holdings hereby consent to the use of the Schedule B-1 Work-Out
Sources as set forth in Schedule B-1, to the

 

19

 

extent that such consent is required under the respective agreements to which it is party.
Notwithstanding the foregoing, the Centerline Parties may, with respect to the Walton Trails
Project, agree, pursuant to the Schedule B-1 Work-Out Agreement for the Walton Trails Project, to
forebear from foreclosing on such Property for up to two years from the Closing Date (the
“Forbearance Election Termination Date”) and elect not to continue to make Debt Service
Shortfall Payments or cause Stabilization to occur for such Property (a “Forbearance
Election”). If a Forbearance Election is made then all amounts that were projected to be
applied to the Walton Trails Project as a Series B Adjustment which are not so applied shall be
applied to cause Stabilization to occur with respect to one or more Schedule B-2 Bonds within nine
months of the Forbearance Election Termination Date making the Forbearance Election, but in any
event prior to the Required Stabilization Date. No Series B Adjustments projected to be applied to
the Walton Trails Project shall be applied unless such Series B Adjustment causes Stabilization to
occur with respect to the Walton Trails Project. It shall be a condition to the consummation of
each Schedule B-1 Work-Out Agreement that the related Credit Enhanced Partnership shall have
received a Stabilization Opinion in form and substance reasonably acceptable to Natixis. It shall
be a condition to the entering into of each Schedule B-1 Work-Out Agreement that the related
Property be a Natixis Approved Property at the time that such agreement is entered into; provided
that it shall not be a condition to performance or consummation of such Schedule B-1 Work-Out
Agreement that such Property continue to be a Natixis Approved Property.

For the avoidance of doubt, CFin Holdings shall have no obligations in respect of Debt Service
Shortfall Payments for any Schedule B-1 Bond.

3.1.2 Schedule B-2 Preliminary Work-Out Agreements. Within thirty (30) days following
the Closing Date, CCG shall cause CAHA in its capacity as Bond Special Servicer to enter into
work-out agreements in form and substance satisfactory to Natixis (the “Schedule B-2
Preliminary Work-Out Agreements”) with each of the Credit Enhanced Local Partnerships whose
Properties are financed by those Bonds listed on Schedule B-2 (the “Schedule B-2 Bonds”).
The Schedule B-2 Preliminary Work-Out Agreements shall be such agreements, as contemplated by
Section 5.3(d) of the Bond Reimbursement Agreement, that:

(a) extend the date of mandatory Stabilization for those Schedule B-2 Bonds to a date not
earlier than the Required Stabilization Date; provided, however, that the date for entry into the
Schedule B-2 Preliminary Work Out Agreement for the Mission del Rio Project shall be extended to
December 31, 2010 or such date as the Form 8609s with respect to the Mission del Rio Project have
been duly completed and filed (the “Mission del Rio Expiration Date”) (the “Extended
Schedule B-2 Stabilization Date”); and

(b) provide credit support to the Credit Enhanced Local Partnership for payment of (x) Debt
Service Shortfall Payments with respect to the period until Stabilization occurs but not later than
the Required Stabilization Date, which credit support shall be provided by CFin Holdings pursuant
to a Work-Out Guaranty, with the first source of funds to pay under such Work-Out Guaranty coming
from Loans borrowed under the Credit Agreement, and (y) amounts required to achieve Stabilization,
which credit support shall be exclusively provided in the form of a Limited Support Guaranty.

 

20

 

It shall be a condition to the consummation of each Schedule B-2 Preliminary Work-Out
Agreement that the related Credit Enhanced Partnership shall have received a Stabilization Opinion
in form and substance reasonably acceptable to Natixis. It shall be a condition to the entering
into of each Schedule B-2 Preliminary Work-Out Agreement that the related Property be a Natixis
Approved Property at the time that such agreement is entered into.

3.1.3 Schedule B-2 Stabilization Work-Out Agreements. Each of CCG and Natixis agree
that they will commence negotiations with Freddie Mac, in its capacity as majority owner of the
Schedule B-2 Bonds, to obtain relief from the Stabilization requirement with respect to the all of
Schedule B-2 Bonds, which relief may consist, among other possible actions, of the reduction in
interest rate, provision for bifurcating debt service payments into “must-pay” and “cash flow only”
obligations, acceptance of a lower debt service coverage ratio for determining whether
Stabilization has been achieved and/or provision of subordinate debt, and which alternative
remedies may be applied to all or any of the Schedule B-2 Bonds (the “Modified Stabilization
Resolution”). Upon reaching such Modified Stabilization Resolution, CCG shall cause CAHA in
its capacity as Bond Special Servicer to enter into work-out agreements in form and substance
reasonably satisfactory to Natixis (the “Schedule B-2 Stabilization Work-Out Agreements”)
with each of the Credit Enhanced Local Partnerships whose Properties are financed by Schedule B-2
Bonds. The Schedule B-2 Stabilization Work-Out Agreements shall be such agreements that provide
for Stabilization upon the conditions of the Modified Stabilization Resolution with respect to a
particular Schedule B-2 Bond being achieved.

It shall be a condition to the consummation of each Schedule B-2 Stabilization Work-Out
Agreement that the related Credit Enhanced Partnership shall have received a Stabilization Opinion
in form and substance acceptable to Natixis. It shall be a condition to the entering into of each
Schedule B-2 Stabilization Work-Out Agreement that the related Property be a Natixis Approved
Property at the time that such agreement is entered; provided that it shall not be a condition to
performance or consummation of such Schedule B-2 Stabilization Work-Out Agreement that such
Property continue to be a Natixis Approved Property.

(a) Available Schedule B-2 Work-Out Sources. In addition to cash flows generated by
the respective Properties and amounts otherwise loaned, advanced or made available by the
Centerline Parties for such purpose (which, to the extent loaned or advanced, shall be deemed to be
a Receivable and which shall be assigned to CFin Holdings under the Receivables Assignment and
Assumption Agreement), the sources to enable the conditions for Stabilization to be met under the
Schedule B-2 Work-Out Agreements shall consist of one or more of the following (the “Schedule
B-2 Work-Out Sources”):

(i) payments by the Unaffiliated Local General Partners pursuant to the Local Partnership
Guaranties;

(ii) the Unfunded Equity Payments;

(iii) payments of Guarantee Fees made by the Credit Enhanced Partnerships to the respective
Credit Enhanced Fund GPs, and further distributed to CFin

 

21

 

Holdings (the “True-Up Guaranty Fee Payments”) which is applied to pay off the
principal amount of the respective Schedule B-2 Bonds or to acquire subordinate debt;

(iv) funds held by CFin Holdings other than amounts borrowed at any time under the Credit
Agreement, which capital is presently $4,878,487.92 (“Existing CFin Holdings Capital”);

(v) amounts paid to CFin Holdings by CCG (or paid directly by Natixis to CFin Holdings)
pursuant to Section 2.1(e) (the “Collateral Release Capital” and together with the
Unfunded Equity Payments, the True-Up Guaranty Fee Payments and Existing CFin Holdings Capital, the
“Unrestricted Stabilization Sources”);

(vi) amounts received by CFin Holdings from the Receivables Assignment made pursuant to the
Receivables Assignment and Assumption Agreement (“Available Receivables”);

(vii) excess cash held by CFin that is distributable to CFin Holdings (“CFin
Distributions”); and

(viii) with the consent of Natixis, and provided that Stabilization has occurred with respect
to all of the Schedule B-1 Bonds, amounts drawn or available to be drawn by CFin Holdings under the
Credit Agreement, as such amounts may be increased for such purpose (the “Credit Agreement
Draws”).

(b) Obligation to enter into Schedule B-2 Stabilization Work-Out Agreements. The
Schedule B-2 Stabilization Work-Out Agreements shall only be entered into if Natixis, CFin Holdings
and CCG shall have approved of such Schedule B-2 Stabilization Work-Out Agreements, which consent
shall not be unreasonably withheld or delayed and Freddie Mac shall have agreed that upon the
consummation of such Schedule B-2 Stabilization Work-Out Agreements it will have determined that
the conditions for satisfying Stabilization shall be deemed to have been met, and the allocation of
the Schedule B-2 Work-Out Sources that shall be applied to satisfy the obligations under such
Schedule B-2 Stabilization Work-Out Agreements shall be made as CFin Holdings, CCG and Natixis
shall agree. It shall be a condition to the consummation of each Schedule B-2 Stabilization
Work-Out Agreement that the related Credit Enhanced Partnership shall have received a Stabilization
Opinion in form and substance reasonably acceptable to Natixis. It shall be a condition to the
entering into of each Schedule B-2 Stabilization Work-Out Agreement that the related Property be a
Natixis Approved Property at the time that such agreement is entered; provided that it shall not be
a condition to performance or consummation of such Schedule B-2 Stabilization Work-Out Agreement
that such Property continue to be a Natixis Approved Property

(c) Failure to enter into Schedule B-2 Stabilization Work-Out Agreements. If by the
Required Stabilization Date, Modified Stabilization Resolutions are not reached with respect to any
one or more Schedule B-2 Bonds which Modified Stabilization Resolutions provide for the application
of all of the Unrestricted Stabilization Sources, then CCG shall have the right to cause CFin
Holdings and CAHA to enter into such Schedule B-2 Stabilization Work-Out Agreements as it, in its
discretion, shall determine. Unrestricted

 

22

 

Stabilization Sources may be applied to lend to the respective Credit Enhanced Funds, as Fund
Voluntary Loans, amounts that CCG determines in its sole discretion as being appropriate and,
notwithstanding anything to the contrary contained herein, including Section 3.2 hereof but subject
to Section 3.3 hereof, CCG, on behalf of CFin Holdings, and the Credit Enhanced Fund GP, on behalf
of the Credit Enhanced Funds, shall have the right to direct the use of such Unrestricted
Stabilization Sources so long as the relevant Property is a Natixis Approved Property at the time
such funds are applied.

(d) Termination of Obligations to Satisfy Schedule B-2 Obligations. Notwithstanding
the foregoing, each Work-Out Guaranty shall provide that CFin Holdings shall not be required to
make any further payments under such Work-Out Guaranty with respect to a specified Schedule B-2
Bond, and such Work-Out Guaranty shall terminate, upon the earlier of:

(i) the Stabilization of a Schedule B-2 Bond; or

(ii) the termination of the respective Investor Return Floor Agreement with the Credit
Enhanced Fund investing in the Property financed by the Schedule B-2 Bond; or

(iii) the Required Stabilization Date.

3.1.4 For the avoidance of doubt, CFin Holdings shall have no obligations in respect of Debt
Service Shortfall Payments for any Schedule B-2 Bond other than as provided in the related Work-Out
Guaranty.

3.1.5 The Work-Out Agreements provided with respect to one or more Schedule B-2 Bonds may
provide for a Work-Out Guaranty (a “Limited Support Guaranty”) that provides a pledge of
the Unrestricted Stabilization Sources to satisfy the obligation to cause Stabilization to occur,
provided that such pledge is subordinate to the assets pledged pursuant to the Credit Agreement or
limits recourse to the Unrestricted Stabilization Sources. In order to provide for the allocation
of the Unrestricted Stabilization Sources, with the consent of the Administrative Agent, such
assets may be segregated in a separate collateral account, junior to the lien of the Credit
Agreement.

3.2 Conditions to Advances by CFin Holdings. No Applications (nor any Stabilization
Payment made from Unrestricted Stabilization Sources after the Required Stabilization Date) may be
made by CFin Holdings unless CCG, as the managing member of CFin Holdings provides, to CFin
Holdings and to Natixis (as both Administrative Agent and as Special Member of CFin Holdings)
certification in the form of Exhibit 3.2 (the “Advance Certification”), at least six (6)
Business Days prior to making such Application or such Stabilization Payment. Any payments by CFin
Holdings of (w) Debt Service Shortfall Payments, except as provided in Section 3.1.2; (x)
Stabilization Payments made after the Required Stabilization Date from sources other than the
Unrestricted Stabilization Sources, (y) any Stabilization Payments from any sources prior to the
Required Stabilization Date or (z) after the occurrence of a Cash Freeze Event, shall require the
prior consent of Natixis to the making of such payment, as required by Section 5.3. With respect
to any Application for which consent is required, if the Advance Certification is delivered as
described in the first sentence of this

 

23

 

Section and no objection to the advance described in such Advance Certification is received by
the date that payment is to be made as set forth in the Advance Certification (provided that such
date of payment is at least six (6) business days after delivery to Natixis of the Advance
Certification) by CCG, such consent of Natixis shall be deemed to have been given.

3.3 Overriding Limit on Use of Credit Agreement Proceeds. Notwithstanding anything
else to the contrary contained herein or in any of the other Restructuring Documents to which the
parties hereto are a party, (i) proceeds of the Loans made on or about the Closing Date (whether
used on the Closing Date or thereafter) will be used (x) exclusively for Debt Service Shortfall
Payments on Natixis Approved Properties which loan proceeds shall be a first priority source for
such Debt Service Shortfall Payments, or (y) to the extent approved by the Administrative Agent, to
satisfy obligations to cause Stabilization to occur; (ii) proceeds of other Loans under the Credit
Agreement will only be used for Credit Enhanced Fund Expenses (unless otherwise approved by the
Lenders); (iii) no amounts on deposit in the Operating Account or the Wachovia Deposit Account or
any other funds of CFin Holdings shall be used without the consent of Natixis if a Cash Freeze
Event has occurred and is continuing; (iv) CFin Holdings shall not make any Application in respect
of Debt Service Shortfall Payments unless the related Property is a Natixis Approved Property; and
(v) any Application consisting of cash shall only be made directly to the applicable Credit
Enhanced Fund pursuant to its Master Note. In connection with the foregoing provisions of Section
3.3, CFin Holdings shall have no obligations under this Agreement to the extent such obligations
would violate the foregoing provisions of this Section 3.3, and CFin Holdings shall not enter into
any Work-Out Guaranty unless such Work-Out Guaranty gives effect to the foregoing limits and the
other limitations set forth herein.

ARTICLE 4

BOND SERVICER AND ASSET MANAGER; RECEIVABLES ASSIGNMENT; AND

REIMBURSEMENT FOR EXPENSES

4.1 Bond Servicer. Until the Full Distribution Date, CMC shall not take any
affirmative action to terminate its agreement with Freddie Mac as Bond Servicer with respect to the
Credit Enhanced Fund Bonds and CAHA shall continue to serve as Bond Special Servicer and shall use
reasonable commercial efforts to cause such agreement to be extended upon either the termination of
such agreement by its terms or events occurring that permit Freddie Mac to terminate such
agreement.

4.2 Asset Manager and Management of Credit Enhanced Funds and Credit Enhanced
Partnerships. Until the Full Distribution Date:

4.2.1 CAHA agrees that CAHA will continue to perform Asset Management Services for the
respective Credit Enhanced Fund so long as (i) Guaranteed Manager is the manager of the Credit
Enhanced Fund GP or an Affiliate of CAHA is the general partner of the Credit Enhanced Fund, (ii)
CAHA is in the business of providing such services to funds acquiring Tax Credit Investments and
(iii) CAHA is compensated for such services in amounts that are comparable to the amounts paid to
other market participants which provide similar asset management services.

 

24

 

4.2.2 CAHA shall perform the Asset Management Services (a) in accordance with (i) applicable
laws, (ii) the terms of the respective Credit Enhanced Fund Agreements and Credit Enhanced
Partnership Agreements; and (iii) the express terms of this Agreement; (b) using a degree of skill
and attention no less than that which CAHA presently provides to other funds with Tax Credit
Investments in which it serves as asset manager and (c) in a manner consistent with the practices
and procedures followed by reasonable and prudent managers of national standing relating to
investments similar to the Tax Credit Investments. Without limiting the foregoing, CAHA, in its
role as asset manager shall manage all Properties in respect of which Natixis has exposure under
the related Investor Return Floor Agreements with a degree of skill and attention that is no less
than that which CAHA provides with respect to Properties for which Natixis has no such exposure.

The failure of CAHA to perform in accordance with the standards set forth above in this
Section 4.2.2 shall constitute an Operative Event giving rise to the right to exercise rights under
the Assignment and Subrogation Agreements.

4.2.3 Unless Guaranteed Manager is an Affiliate of Natixis, Guaranteed Manager agrees that (i)
it will not take any affirmative action to cause the Credit Enhanced Fund GPs to withdraw as the
general partner of the Credit Enhanced Funds in which the respective Credit Enhanced Fund GP is the
general partner; (ii) it will not terminate the arrangements under the Fund Management Agreement,
to the extent such arrangements are with respect to the Credit Enhanced Funds and the Credit
Enhanced Funds have not removed the Credit Enhanced Fund GP.

4.2.4 Natixis agrees that it will not take any affirmative action to cause the Credit Enhanced
Fund GP to be removed as the general partner of any Credit Enhanced Fund or CAHA’s services as
asset manager of a Credit Enhanced Fund to be terminated so long as the Credit Enhanced Fund GP or
CAHA have not performed such services in a manner that constitutes gross negligence or willful
misconduct or willful malfeasance, so long as CAHA shall perform pursuant to Section 4.2.2 and so
long as neither the Credit Enhanced Fund GP, CAHA or CCG are Bankrupt. Without limiting the
foregoing, if any one or more actions taken, or failures to take action, by CAHA constitute (either
individually or in the aggregate) gross negligence or willful malfeasance or willful misconduct in
the performance of its duties hereunder or a material breach with respect to the Restructuring
Documents, then upon the request of Natixis, CAHA shall cause Guaranteed Manager to resign its
duties as manager under the Fund Management Agreement, and shall substitute therefor the
replacement manager nominated by Natixis, in respect of all related management functions.

4.2.5 Each of the Assignment and Subrogation Agreements shall be amended and restated as set
forth in Section 2.1(g) to reflect the matters set forth therein and in this Section 4.2.

4.3 Receivables Assignment. On the Closing Date, the Receivables Assignors shall
assign and convey to CFin Holdings all rights of each Receivables Assignor in and to all present
and future Receivables, all pursuant to the Receivables Assignment and Assumption Agreement (the
“Receivables Assignment”). A description of each of the items of the Receivables
Assignment, and the amount which is currently owed and being assigned is set forth on

 

25

 

Exhibit 4.3. Notwithstanding the specificity of Exhibit 4.3, it is the intent of the parties
hereto that the Receivables Assignment shall include (but not be limited to) the transfer of (x)
all present and future rights of the Receivable Assignors and their respective wholly owned
Subsidiaries to receive all accrued and unpaid fees, receivables, deferral fees, organization fees,
acquisition fees, partnership management fees, asset management fees, disposition fees, rights to
payment and payments in respect of any and all economic interests, rights and entitlement of every
kind and nature whatsoever, including all such amounts which have yet to accrue to the extent such
amounts are payable to the Receivable Assignors or their Affiliates from any other Receivables
Assignor or the Credit Enhanced Funds, Credit Enhanced Partnerships, any Middle-Tier Entity and
Credit Enhanced Local Partnerships, in each case other than the Excluded Fee Rights set forth in
Section 4.3.1 (such non-excluded items, collectively, the “Fee Rights”), and (y) all
“voluntary loans” and all rights to repayment of amounts advanced by the Centerline Parties
directly or indirectly to, or rights of reimbursement from, any other Receivables Assignor or the
Credit Enhanced Funds, Credit Enhanced Partnerships or Credit Enhanced Local Partnerships,
including all amounts to be evidenced by the Master Notes (collectively, the “Loan
Receivables”).

4.3.1 The “Excluded Fee Rights” are the following:

(a) Amounts payable to CCG pursuant to the Success Fee Letter;

(b) Amounts payable to the Centerline Parties for reimbursements of Credit Enhanced Fund
Expenses payable to the Centerline Parties pursuant to Section 4.4 hereof not exceeding the limits
set forth therein (including without limitation the proviso therein); and

(c) Any amounts receivable by the Centerline Parties or their Affiliates in connection with
the ownership of the B Certificate or pursuant to the Bond Servicing Agreement.

4.4 Credit Enhanced Fund Expenses. In consideration for the Receivables Assignors
agreeing to make the Receivables Assignment and the obligations of CAHA and Guaranteed Manager
under Sections 4.2.1, 4.2.2 and 4.2.3, CFin Holdings agrees that, commencing with the year ending
December 31, 2010 and so long as the obligation to pay Guaranteed Obligations are outstanding, it
will advance to each Credit Enhanced Fund amounts sufficient to cause the respective Credit
Enhanced Fund Expenses of each Credit Enhanced Entity to be paid if and to the extent that the
Credit Enhanced Fund does not have sufficient resources to cause such Credit Enhanced Fund Expenses
to be paid when such costs are due and payable. Credit Enhanced Fund Expenses required to be paid
by CFin Holdings in a calendar year with respect to any Credit Enhanced Fund shall not exceed, for
any given year the difference between (x) the amount set forth on Exhibit 4.4 with respect to each
Credit Enhanced Fund less (y) the amount of Credit Enhanced Fund Expenses paid by the respective
Credit Enhanced Fund with respect to such year; provided, however, that that aggregate amount of
Credit Enhanced Fund Expenses required to be paid by CFin Holdings shall not be more than
$1,000,000 in the aggregate per calendar year with respect to all Credit Enhanced Funds. The
parties hereto agree that the limits and thresholds set forth in the previous sentence shall be no
less favorable to CFin Holdings (or Natixis) than any similar limits and/or thresholds applicable
to any other similar guarantor of tax credit properties sponsored by the Centerline Parties
receiving similar release from repayment obligations, and

 

26

 

(x) to the extent that more favorable terms apply to such other guarantor, this Section 4.4
shall be deemed to be amended as if such more favorable terms were set forth herein mutatis
mutandis and (y) if such other guarantor does not provide for reimbursement or subsidies for asset
management expenses, the obligations of CFin Holdings under this Section. 4.4 shall terminate.

4.4.1 “Credit Enhanced Fund Expenses” shall be those bona fide, reasonable and customary
expenses (excluding any expenses not incurred on an arms’ length basis) incurred in any year,
consistent with past practices, commencing with the year ending December 31, 2010, by Guaranteed
Manager, CAHA, CCG or their Affiliates on behalf of the Credit Enhanced Entities, including without
limitation the Centerline Controlled General Partners related to a Credit Enhanced Fund, in
connection with the administration of such Credit Enhanced Fund Group or the asset management of
their respective investments. Subject to the foregoing, Credit Enhanced Fund Expenses shall
include, without limitation, (i) the actual cost to the Credit Enhanced Entities of goods, services
and materials supplied by Persons not Affiliated with the Credit Enhanced Entities or their
Affiliates used for or by the Credit Enhanced Entities; (ii) direct travel, reimbursable meal and
telephone expenses of employees of CCG who are not Controlling Persons on Credit Enhanced Entity
business; (iii) expenses incurred for the Credit Enhanced Entities’ legal, accounting, bookkeeping,
computer and printing services; (iv) the cost of preparing the information and the reports required
to be delivered to investors in the Credit Enhanced Entities; and (v) the costs to CCG of employing
or contracting the services of CCG personnel or third parties to perform administrative services
and asset management services on behalf of the Credit Enhanced Entities. Expenses incurred by CCG
or its Affiliates in connection with the administration of the Credit Enhanced Entities, including,
but not limited to, salaries, fringe benefits and travel expenses of controlling Persons of the
Credit Enhanced Fund GP, rent and such other items generally constituting Credit Enhanced Fund GP
overhead, shall not constitute Credit Enhanced Fund Expenses. For purposes of this Section 4.4.1,
“controlling Persons” shall include any Person who performs functions for a Credit Enhanced Entity
or its Affiliates similar to those performed by the chairman or member of the board of directors,
executive management, senior management or any Person who holds a 5% or more equity interest in
such entity or who has the power to direct or cause the direction of such entity. Credit Enhanced
Fund Expenses with respect to each of the Credit Enhanced Fund Groups shall be calculated in the
same manner as CCG allocates expenses to other privately issued multiple property funds with
corporate investors, which funds have been formed to invest in properties similar to the
Properties. The present methodology used by Centerline in allocating such expenses is set forth on
Exhibit 4.4 hereto.

4.5 Payment Direction and Assignment of Receivables. As consideration for the
obligation of the Receivables Assignors to make the Receivables Assignment:

(a) Guaranteed Manager shall enter into an assignment conveying to CFin Holdings all of its
rights to receive from the Credit Enhanced Funds payments of the fees agreed to be paid pursuant to
the Fund Management Agreement;

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

 

27

 

(c) all Fund Voluntary Loans shall be evidenced by promissory notes (including the Master
Notes), and CAHA shall endorse to CFin Holdings (for further endorsement to the Administrative
Agent) the promissory notes evidencing such Fund Voluntary Loans made prior to the date hereof;

(d) each Credit Enhanced Fund and Credit Enhanced Fund GP will acknowledge the granting of
such assignment and agree to make repayments of Fund Voluntary Loans when payable to CFin Holdings;
and

(e) each of the limited liability company agreements of each of the Credit Enhanced
Partnership GPs will be amended to provide that any payments of Guarantee Fee received by such
Credit Enhanced Partnership GPs shall be distributed to CFin Holdings, as a member and shall not be
distributed to Natixis or any other remaining member.

Notwithstanding the foregoing, all Guarantee Fees received by the Credit Enhanced Partnerships
shall be applied when received as contemplated by clause (e) of this Section 4.5.

ARTICLE 5

TERMINATION OR AMENDMENT OF EXISTING DOCUMENTS AND ONGOING AGREEMENTS

5.1 Amendment of CFin Holdings Limited Liability Company Agreement. The existing
Limited Liability Company Agreement of CFin Holdings shall be amended and restated in order to
reflect, among other things, CFin Holdings’ entering into of the Credit Agreement, and the
admission of independent managers.

5.2 Capital Contributions to the Credit Enhanced Funds and Credit Enhanced
Partnerships. If the Credit Enhanced Partnerships receive Capital Contributions from their
respective limited partners, such Capital Contributions shall only be used for the purpose of
contributing such funds to the respective Credit Enhanced Fund or payment of the Guarantee Fee,
which is to be applied as set forth in Section 2.1(f). To the extent consistent with the
obligations owed to the Credit Enhanced Partnership, all Capital Contributions received by the
Credit Enhanced Funds, whether such Capital Contributions are received from the Credit Enhanced
Partnerships or in the form of a return of capital (but only to the extent not required by a Credit
Enhanced Partnership to make True-Up Payments), are to be retained by the Credit Enhanced Fund
solely for the purpose of funding reserves to be applied to make advances to Credit Enhanced Local
Partnerships, or payment of Credit Enhanced Fund Expenses.

5.3 Approval of Key Decisions. Notwithstanding anything herein to the contrary, CFin
Holdings shall not do, nor shall it be required to do, any of the following without Natixis’ prior
written consent (“Natixis Approval Rights”), provided that, unless otherwise provided in
Section 3.2, if Natixis has not responded within ten (10) Business Days of any notice of the
following by CCG, the failure to so respond shall constitute approval of such action. The Natixis
Approval Rights shall be the following:

(a) Approval of the amount of any True-Up Payments or the amount of any payments due on a
Guarantee Payment Date;

 

28

 

(b) Any Capital Transactions with respect to the Credit Enhanced Local Partnerships;

(c) Any withdrawal or replacement of a Local General Partner, including the identity of any
replacement Local General Partner;

(d) Any payments of Capital Contributions by a Credit Enhanced Fund to a Credit Enhanced Local
Partnership if any material condition to such payment required under the respective Local
Partnership Agreement has not been materially satisfied;

(e) Making Debt Service Shortfall Payments with respect to any Credit Enhanced Local
Partnership, except as expressly provided in Section 3.1.2(b) of this Agreement;

(f) Making Stabilization payments (the “Stabilization Payments”) with respect to any
Credit Enhanced Local Partnership, except as expressly provided in Section 3.1.1 or Section 3.1.3
of this Agreement;

(g) The substitution of an investment by a Credit Enhanced Fund in a Local Partnership during
the term that the Natixis Investor Return Floor Agreement is outstanding;

(h) The retention by any Credit Enhanced Entity or Credit Enhanced Local Partnership of CCG or
its Affiliates to perform services which CCG or its Affiliates do not presently provide to such
entities;

(i) Making any Credit Enhanced Fund Expenses exceeding the limits set forth in Section 4.4
(including without limitation the proviso therein); and

(j) Making any other Application.

ARTICLE 6

CONDITIONS PRECEDENT

6.1 Effectiveness. The “Closing Date” shall be the earliest date as of which Natixis
shall have received evidence satisfactory to it, in its sole discretion, that each of the following
have occurred (and each document to be delivered, and each other event or condition to occur, shall
be in form and substance satisfactory to Natixis in its sole discretion):

6.1.1 Documents.

(a) This Agreement shall have been executed and delivered by duly authorized officers of each
of Natixis, and each of the Centerline Parties;

(b) The Novation Agreement shall have been executed and delivered by duly authorized officers
of each of Natixis, CCG and CFin Holdings;

(c) The CFin Holdings BTB Swap Agreement shall have been executed and delivered by duly
authorized officers of each of Natixis and CFin Holdings;

 

29

 

(d) The CFin Holdings Gap Confirmations shall have been executed and delivered by duly
authorized officers of Natixis and CFin Holdings;

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

(f) The Success Fee Letter shall have been executed and delivered by duly authorized officers
of Natixis;

(g) Natixis shall have received all required legal opinions from Paul, Hastings, Janofsky and
Walker LLP, including as to corporate, tax and security matters;

(h) the Credit Agreement and each of the other Loan Documents as defined therein shall have
been executed and delivered by duly authorized officers of the parties thereto, and all of the
conditions precedent set forth in Section 4 thereof shall have been satisfied; and

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

6.1.2 Terms of the Transactions.

(a) CCG shall have assigned, and CFin Holdings shall have assumed the obligations of CCG as a
member of the general partner of the respective CCG BTB Credit Enhanced Partnerships, and the
limited liability agreements of the respective general partners of the CCG BTB Credit Enhanced
Partnerships shall have been amended and restated to, among other things, reflect such assignment
and assumption.

(b) CCG shall have paid to CFin Holdings all collateral returned to it that was previously
posted to Natixis under the credit support annex to the Existing CCG BTB Swap Agreements.

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

(d) CAHA and CCG shall have entered into an assignment conveying to CFin Holdings all of their
rights to receive repayment of all Fund Voluntary Loans advanced to the Credit Enhanced Funds,
which shall have been acknowledged and agreed to by each Credit Enhanced Fund and Credit Enhanced
Fund GP and or delivered endorsed promissory notes evidencing the obligation to repay the Fund
Voluntary Loans.

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

 

30

 

(f) The operating agreement of CFin Holdings shall have been amended and restated as
contemplated herein.

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

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

6.1.3 Organizational Proceedings.

(a) Natixis shall have received a copy of the resolutions, in form and substance reasonably
satisfactory, of the board of directors, general partner, or other governing body, as applicable,
of each of the Centerline Parties authorizing the execution, delivery and performance of each of
the Restructuring Documents to which it is a party.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

7.1 Representations and Warranties to Natixis. In order to induce Natixis to enter
into this Agreement, (i) each Centerline Party makes the representations and warranties contained
in Section 7.1.1, 7.1.2, 7.1.3 and 7.1.4 with respect to such respective Centerline Party to
Natixis and (ii) each of CHC, CCG and CAHA make the representations and warranties contained in
Section 7.1.4 through Section 7.1.19: to Natixis:

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

7.1.2 Corporate Power and Authority; Enforceability. Each of the Centerline
Controlled Entities has the corporate or other organizational power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and has taken all necessary
corporate or other organizational action to authorize the execution, delivery and performance of
the Agreement. Each of CHC, CCG, CAHA, Guaranteed Manager, CFin Holdings and CMC has duly executed
and delivered this Agreement and such Agreement constitutes the legal, valid and binding obligation
of such Person enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting
creditors’ rights generally and general principles of equity (whether considered in a proceeding in
equity or law). Each of CHC, CCG, CAHA, Guaranteed Manager, CFin Holdings and CMC (i) is in
compliance with all Applicable Laws, and (ii) has all requisite governmental licenses,
authorizations, consents and approvals to operate its business as currently conducted except, in
each case to the extent that failure to be in compliance therewith or to have

 

31

 

all such licenses, authorizations, consents and approvals could not reasonably be expected to
have a Material Adverse Effect.

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

7.1.4 Debt of Centerline Entities. As of the Closing Date, none of the Centerline
Controlled Entities (other than CHC, CCG, CMC and GP Holdings) has any Debt other than (i) the Fee
Rights, (ii) the Loan Receivables, (iii) the Debt set forth in Section 6.01 of the Credit
Agreement and (iv) Debt of CAHA in respect of the BOA Credit Agreement. For purposes of this
clause, “Debt” means, with respect to any Person, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all Debt of others secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Debt secured thereby has been
assumed, and (d) any guarantees of the foregoing.

7.1.5 Disclosure. CHC, CCG and CAHA have disclosed to Natixis or its advisors,
including TCAM, all agreements, instruments and corporate or other restrictions (including under
their respective organizational documents) to which the Credit Enhanced Entities are subject or by
which any of their property or activities is bound or subject.

CHC, CCG and CAHA have disclosed to Natixis or its advisors, including TCAM all matters known
to it with respect to the Credit Enhanced Entities that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

None of the reports, financial statements, certificates or other information furnished or
given by CHC, CCG or CAHA on behalf of any Centerline Party to Natixis or its advisors, including
TCAM in connection with the negotiation of this Agreement, the Receivables Assignment and
Assumption Agreement, the Master Notes, the Novation Agreement, the CFin Holdings BTB Swap
Agreement, the Amended and Restated Credit Enhanced GP Agreements and the CFin Holdings Gap
Confirmations (collectively, the “Restructuring Documents”) or

 

32

 

delivered hereunder or thereunder (as modified or supplemented by other information so
furnished), when considered as a whole, contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, (i) with respect to projections,
estimates and forward-looking information, CHC, CCG and CAHA represent only that such information
was prepared in good faith based upon assumptions believed to be reasonable at the time, it being
recognized by Natixis that such projections, estimates and forward-looking information as it
relates to future events is not to be viewed as fact and that actual results during the period or
periods covered by such projections, estimates and forward-looking information may differ from the
projected results set forth therein, and such differences may be material, and (ii) such reports,
financial statements, certificates and other information were based upon financial information
provided by the Local General Partners and Local Partnerships and CHC, CCG and CAHA assume that
such financial information provided by the Local General Partners and Local Partnerships does not
contain any untrue statement of material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, provided that CHC, CCG and CAHA represent and warrant to Natixis that they, in good
faith, have no reason to believe that such information is materially incorrect.

7.1.6 Governmental Approvals. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any Governmental
Authority is required to authorize or is required in connection with (a) the execution, delivery
and performance of this Agreement or (b) the legality, validity, binding effect or enforceability
of this Agreement, except in the case of either clause (a) or (b), such as have been obtained or
made and are in full force and effect.

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

7.1.8 Liens. CHC, CCG and CAHA represent that there are no Liens on the property or
assets of any Credit Enhanced Entity, CAHA, and Guaranteed Manager other than (i) Liens on the Fee
Rights and the Loan Receivables in favor of CFin Holdings and Natixis, as Administrative Agent
under Credit Agreement, (ii) Liens on the limited partnership interests of the Credit Enhanced
Funds interest in the Local Partnerships securing the obligations of the Credit Enhanced Fund to
make contributions to the Local Partnerships, (iii) Liens on the partnership interests of the
Credit Enhanced Partnership GPs in each Credit Enhanced Fund GP pursuant to the Assignment and
Subrogation Agreements, (iv) the Liens set forth in Section 6.02 of the Credit Agreement; and (v)
with respect to CAHA, Liens pursuant to the BOA Credit Agreement. Notwithstanding the foregoing,
no representation is made with respect to any rights or liens with respect to any rights to Fee
Rights or Loan Receivables which have been obtained by the Centerline Parties from former Local
General Partners (or their Affiliates) not affiliated with any Centerline Party, including rights
to development fees or other fees, other than that the Centerline Parties have not affirmatively
agreed to any liens with respect to such rights.

 

33

 

7.1.9 Ownership. CHC, CCG and CAHA represent that Exhibit 7.1.10 sets forth a complete
and accurate chart, in all material respects, of each of the Centerline Global Entities (excluding
CHC and CCG) and their Subsidiaries, including (i) the legal name of each such Centerline Global
Entity, (ii) the jurisdiction of organization of each such Centerline Global Entity, (iii) each
Person that has an ownership interest (including minority interests) in each such Centerline Global
Entity, including (1) the percentage voting ownership and percentage economic ownership of each
such Centerline Global Entity, and (2) any unfunded equity commitments with respect to each such
Centerline Global Entity, and (iv) the manager and/or servicer with respect to each such Centerline
Global Entity.

7.1.10 Receivables. CHC, CCG and CAHA represent that Exhibit 4.3 sets forth a
complete and accurate list of all Fee Rights and Loan Receivables from the Credit Enhanced Local
Partnerships to the Credit Enhanced Funds and of all Fund Voluntary Loans from the Credit Enhanced
Funds to the Credit Enhanced Local Partnerships outstanding as of the date indicated on Exhibit
4.3, including with respect thereof (i) the name of the Payor, (ii) the obligor that is the payee,
(iii) the amount thereof, (iv) the legal document under which such Fee Right or Loan Receivable has
arisen, and (v) the type of such asset. All Fee Rights and Loan Receivables are held by the
parties that have assigned them to CFin Holdings pursuant to the Receivables Assignment and
Assumption Agreement and all present and future rights to all Fee Rights and Loan Receivables have
been transferred to CFin Holdings pursuant to such Receivables Assignment and Assumption Agreement.
Other than as disclosed on Exhibit 4.3, there are no other agreements, instruments or other legal
documents known to CHC, CCG and CAHA that will or could give rise to any Fee Rights and Loan
Receivables.

Each of the Fee Rights and Loan Receivables is properly recorded in all material respects on
the books and records of the applicable Credit Enhanced Entity.

7.1.11 Projections. The projections of the (i) current average amounts and the future
expected amounts of Credit Enhanced Fund Expenses, (ii) the required amounts to achieve
Stabilization for each of the Schedule B-1 Bonds as set forth on Schedule B-1 annexed, (iii)
required amounts to achieve Stabilization for each of the Schedule B-2 Bonds, and (iv) the amount
of the Debt Service Shortfall Payments, delivered to Natixis on or before the Closing Date were
prepared in good faith based upon current information available to the Bond Servicer and to the
best of each Centerline Party’s knowledge is a reasonable approximation of the amount of such
obligations and assumptions believed by CHC, CCG and CAHA to be reasonable at the time made;
provided that, (x) with respect to projections, estimates and forward-looking information, CHC, CCG
and CAHA represent only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time, it being recognized by Natixis that such projections,
estimates and forward-looking information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such projections, estimates
and forward-looking information may differ from the projected results set forth therein, and such
differences may be material, and (y) such reports, financial statements, certificates and other
information were based upon financial information provided by the Local General Partners and Local
Partnerships and CHC, CCG and CAHA assume that such financial information provided by the Local
General Partners and Local Partnerships does not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they

 

34

 

were made, not misleading, provided that CHC, CCG and CAHA represent and warrant to Natixis
that they, in good faith, have no reason to believe that such information is materially incorrect.

7.1.12 Local Partnership Voluntary Loans. CHC, CCG and CAHA represent that as of the
Closing Date, there are no direct “voluntary loans” or other loans or Fund Voluntary Loans made by
any of the Centerline Parties to any Centerline Party or Affiliate thereof, except those set forth
on Exhibit 4.3.

7.1.13 Taxes and Other Obligations. Each of the Credit Enhanced Entities and
Guaranteed Manager has paid or caused to be paid all material payments, expenses and Taxes required
to have been paid by it, except where such payments and expenses are Fund Voluntary Loans, Fee
Rights or Loan Receivables.

7.1.14 Uniform Commercial Code Financing Statements. CHC, CCG and CAHA represent that
Exhibit 7.1.15 sets forth a complete and accurate list, in all material respects, of each Uniform
Commercial Code financing statement filed against the entity listed thereon.

7.1.15 Disposition Fees. CHC, CCG and CAHA represent that there have been no
Disposition Fees on or prior to the Closing Date with respect to any of the Centerline Global
Entities.

7.1.16 Employees. CHC, CCG and CAHA represent that no employees of CHC, CCG or CAHA
or any Credit Enhanced Entity hold any Receivables.

7.1.17 Compliance with Laws. CHC, CCG and CAHA represent that each of the Controlled
Entities is in compliance with all Applicable Laws binding upon it or its property, in each case,
except to the extent any such failure to comply could not reasonably be expected to have a Material
Adverse Effect. No ERISA Event (as defined in the Credit Agreement and substituting CHC for each
reference to “Borrower” in such definition) has occurred.

7.1.18 Centerline Controlled Local Partnership GPs. For each of the Credit Enhanced
Local Partnerships where Centerline has replaced the general partner, it has disaffiliated its
entities from a tax perspective so as not to cause potential “partner non-recourse debt” issues.

7.2
Representations and Warranties to Centerline Parties. In order to induce each of
CHC, CCG, CAHA, Guaranteed Manager, CFin Holdings and CMC to enter into this Agreement,
Natixis makes the following representations and warranties to each of CHC, CCG, CAHA, Guaranteed
Manager, CFin Holdings and CMC:

7.2.1 Corporate Status. Natixis (a) is a duly organized and validly existing
corporation or other entity in good standing under the laws of the jurisdiction of its organization
and (b) has duly qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the failure to be so qualified
could not reasonably be expected to result in a Material Adverse Effect.

 

35

 

7.2.2 Corporate Power and Authority. Natixis has the corporate or other
organizational power and authority to execute, deliver and carry out the terms and provisions of
this Agreement and has taken all necessary corporate or other organizational action to authorize
the execution, delivery and performance of this Agreement. Natixis has duly executed and delivered
this Agreement.

ARTICLE 8

COVENANTS

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

8.2 Information with Respect to Bonds. The Centerline Parties shall promptly provide
to Natixis all amendments to the documents executed in connection with the Credit Enhanced Fund
Bonds when received.

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

8.4 Removal of Agents. No Centerline Controlled Entity will cause or permit the
removal of any Person controlling, or any manager, servicer, advisor or general partner in respect
of, any Subject Party without Natixis’ consent. As used in this Article 8, “Subject Party”
means each Credit Enhanced Entity and each Credit Enhanced Local Partnership.

8.5 Modification of Primary Agreements. No Centerline Controlled Entity will cause or
permit any amendment, supplement, waiver, consent or modification to any of the organizational
documents of any Subject Party, any debt or reimbursement agreement between a Credit Enhanced Local
Partnership (to the extent any Centerline Controlled Entity is the general partner in respect
thereof) and the issuer of the related Credit Enhanced Fund Bonds, or any other similar agreement
or any management, servicing or advisory agreement with any Subject Party. No Centerline
Controlled Entity will amend the Bond Reimbursement Agreement in any manner that would materially
reduce the rights of the Centerline Controlled Entity to perform its obligations contemplated under
this Agreement. No Centerline Controlled Entity will amend any Work-Out Agreement or Work-Out
Guaranty without the consent of Natixis. Notwithstanding any provision of this Section 8.5 that
may be deemed to limit the rights and obligations of the CMC, CSI or CAHA, in their capacities as
Bond Servicer, sub-servicer or special sub-servicer, each of CMC, CSI or CAHA are not constrained
by any provision of the first two sentences of this Section 8.5 to the extent such provision
relates to a Credit Enhanced Local Partnership and may be deemed to limit the potential actions
that they may make in their respective capacities of bond servicer, sub-servicer or special
sub-service of any debt securing the Properties or their fiduciary duties to others whom they have
a fiduciary relationship in such capacities.

 

36

 

8.6 Use of Master Note. No Centerline Party will make any Fund Voluntary Loan unless
(i) through the Master Note and (ii) through a Receivables Assignor, with respect to which CFin
Holdings is the payee thereof.

8.7 Update of Information. CHC, CCG and CAHA shall provide to Natixis an updated
Exhibit 4.3 each calendar quarter and shall certify that such updated Exhibit 4.3 is true and
correct in all material respects. Each of CHC, CCG and CAHA shall promptly provide to Natixis such
information related to the Subject Parties as Natixis shall reasonably request. In addition, each
of CHC, CCG and CAHA shall promptly provide to Natixis (i) copies of all notices delivered under
the “Investor Services Agreement” referenced in the operating agreement of CFin and (ii) copies of
all amendments, supplements, waivers or consents with respect to the documents executed in
connection with the Credit Enhanced Fund Bonds when received.

8.8 Disclosure of Local General Partner Information. CAHA shall provide to Natixis
for use only upon the removal or resignation of the Asset Manager, the names, addresses, contact
Person and contact information for each of the Local General Partners and the principals thereof.
Until such time as Guaranteed Manager shall cease to be the Asset Manager with respect to the
Credit Enhanced Funds, such information so delivered shall be kept confidential and shall not be
disclosed to any third party, including, without limitation, any competitor of Centerline.

8.9 Access to Information. CHC, CCG and CAHA will permit any representatives
designated by Natixis, upon reasonable prior notice and during normal business hours, to visit and
inspect the properties of any Subject Party, to examine and make extracts from the books and
records any information with respect to the Subject Parties (but, with respect to the Credit
Enhanced Local Partnerships, only if the Local General Partner is an Affiliate of CAHA), and to
discuss the affairs, finances and condition of the Subject Parties with the officers and
independent accountants of CHC, CCG and CAHA, all at such reasonable times during normal business
hours and as often as reasonably requested.

8.10 Books and Records. Each Subject Party (other than the Credit Enhanced Local
Partnerships) shall maintain its books and records, and report its financial results and results of
operations, in accordance with GAAP and in accordance with customary lower income tax credit
industry practice, in each case consistently applied.

8.11 Debt. No Centerline Controlled Entities (other than CHC, CAHA, CMC CCG and GP
Holdings) shall have any Debt (as defined above) other than (i) the Fee Rights, (ii) the Loan
Receivables and, the Debt set forth in Section 6.01 of the Credit Agreement.

8.12 Subordination. To the extent any Centerline Controlled Entity or its affiliates
holds any debt of any Subject Party, such Person hereby agrees to subordinate such debt to the Fee
Rights and the Loan Receivables under the Full Distribution Date.

8.13 Costs and Expenses. Each of CHC, CCG and CAHA will cause the Subject Parties to
pay only reasonable expenses and costs (other than Fee Rights and the Loan Receivables) in the
ordinary course of business consistent with past practice on an arm’s length basis and to parties
not affiliated with the Centerline Parties.

 

37

 

8.14 Cooperation with Advisors. CAHA and CCG shall (and CCG shall cause each of its
Subsidiaries to) comply with any request by Natixis to provide information to or otherwise
cooperate with any advisors appointed by Natixis in relation to the Properties and the Credit
Enhanced Entities, including without limitation, Tax Credit Asset Management, a division of R.J.
Finlay & Co.

8.15 Determination of Taxability. CHC and CCG hereby covenant and agree that (I) if
any Schedule B-2 Bond which financed a property in which a Credit Enhanced Partnership indirectly
has invested (a “Natixis Portfolio Bond”) owned by CHC or CCG or any affiliate thereof is
subject to a Determination of Taxability (as defined in the Indenture pursuant to which such
Natixis Portfolio Bond is issued), prior to Stabilization of such Schedule B-2 Bond CHC and CCG
shall not present such Natixis Portfolio Bond for mandatory redemption (irrespective of the right
to do so under the documents pertaining to such Stabilization Work-Out Bond), and (II) if Freddie
Mac is the owner of a Natixis Portfolio Bond that is subject to a Determination of Taxability, CHC
and CCG shall cause SPV I to acquire such Natixis Portfolio Bond by causing a Release Event (as
defined in the Bond Reimbursement Agreement) and, once acquired, such Natixis Portfolio Bond shall
not be presented for mandatory redemption (irrespective of the right to do so under the documents
pertaining to such Natixis Portfolio Bond).

ARTICLE 9

MISCELLANEOUS

9.1 Amendments and Waivers. Except as expressly set forth in this Agreement, neither
this Agreement, nor any terms hereof may be amended, supplemented, modified or waived except with
the written consent of each of the parties hereto.

9.2 Notices and Other Communications; Facsimile Copies.

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

If to a Centerline Party, to:

c/o Centerline Affordable Housing Advisors LLC

625 Madison Avenue

New York, New York 10022

Attention: Andrew J. Weil

Phone: (212) 521-6394

Fax: (212) 751-3550

with a copy to:

 

38

 

Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

First Floor

New York, New York 10022

Attention: Alan S. Cohen, Esq.

Phone: (212) 318-6075

Fax: (212) 230-5160

If to Natixis, to:

Natixis Financial Products Inc.

9 West 57th Street, 35th Floor

New York, NY 10019

Attention: Kevin Alexander

Phone: (212) 891-1943

Fax: (212) 891-6265

with a copy to:

Natixis Financial Products Inc.

9 West 57th Street, 35th Floor

New York, NY 10019

Attention: General Counsel

Phone: (212) 891-6191

Fax: (212) 891-1922

9.2.2 Effectiveness. All communications described in Section 9.2.1 above and all
other notices, demands, requests and other communications made in connection with this Agreement
shall be effective and be deemed to have been received (i) if delivered by hand, upon personal
delivery, (ii) if delivered by overnight courier service, one Business Day after delivery to such
courier service, (iii) if delivered by mail, when deposited in the mails, and (iv) if delivered by
facsimile, upon sender’s receipt of confirmation of proper transmission. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration or other
communication to any Person designated in Section 9.2.1 to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval, declaration or other
communication. The giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice.

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

9.4 Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) none of CHC, CCG, CAHA, Guaranteed Manager, CFin Holdings and CMC
may assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of Natixis (and any attempted assignment or transfer by such Person without such
consent shall be null and void) and (ii) Natixis may not assign or otherwise transfer its rights or
obligations hereunder without the prior written consent of CFin Holdings and CCG, which consent
shall not be unreasonably withheld, and no consent shall be required for a transfer

 

39

 

to an Affiliate or if an Event of Default or Cash Freeze Event has occurred. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

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

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

9.7 No Petition. Each Centerline Party hereby agrees (which agreement shall be
binding upon its successors, assigns and participants) that, notwithstanding any other provision of
this Agreement to the contrary, it shall not, prior to the date that is one year and one day (or,
if longer, one day longer than any applicable preference period then in effect) after the Full
Distribution Date, institute against, or join any other Person in instituting against, CFin
Holdings, any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings, or other proceedings under U.S. federal or state bankruptcy or similar laws. Nothing
in this Section 9.7 shall preclude, or be deemed to stop, such party (i) from taking any action
prior to the expiration of the aforementioned period in (A) any case or proceeding voluntarily
filed or commenced by CFin Holdings or (B) any involuntary insolvency proceeding filed or commenced
by a Person other than such party or any of its Affiliates or (ii) from commencing against CFin
Holdings or any of its properties any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceeding.

Each Centerline Party agrees that the terms of this Section 9.7 are for the benefit of the
Administrative Agent and the Lender (and their respective successors, assigns and participants)
under the Credit Agreement, and shall be directly enforceable by the Administrative Agent (on
behalf of itself and the Lender and their respective successors, assigns and participants),
including, without limitation, by injunctive relief and other specific performance, as if such
Persons were direct parties hereto.

CFin Holdings agrees that it shall not, after the date hereof, become party to any agreement
that does not include “non-petition” provisions therein that are substantively the same as the
provisions set forth above in this Section 9.7 (and shall not amend or eliminate any “non-petition”
provisions in any agreement to which it is party).

The provisions of this Section 9.7 shall survive termination of this Agreement.

9.8 Third Party Beneficiary. Notwithstanding anything herein to the contrary, the
parties hereto agree that the Administrative Agent shall be an express direct third party
beneficiary of all of the agreements, undertakings and obligations of the Centerline Parties, and

 

40

 

shall have all of the rights and benefits of CFin Holdings, contained in this Agreement as if
the Administrative Agent was a party hereto.

Each Centerline Party hereby acknowledges that all of CFin Holdings’ assets (including,
without limitation, its rights under this Agreement) have been pledged to the Administrative Agent
under the Credit Agreement to secure CFin Holdings’ obligations thereunder and the other Secured
Obligations under the Security Agreement referred to therein.

Each Centerline Party hereby acknowledges and agrees that the Administrative Agent shall have
the direct right to enforce any of the rights of and benefits granted to CFin Holdings under this
Agreement (but neither the Administrative Agent or the Lender (or any of their respective
successors, assigns or participants) shall assume or otherwise be obligated to perform any of CFin
Holding’s obligations hereunder). This Agreement shall not be amended, supplemented or modified,
nor shall any waiver with respect hereto be granted, without the prior written consent of the
Administrative Agent.

9.9 Arm’s-Length Transaction. The Parties hereto acknowledge and agree that the
transactions contemplated by this Agreement (including the exercise of rights and remedies
hereunder and thereunder) are arm’s-length commercial transactions between the Centerline Entities,
on the one hand, and CFin Holdings and Natixis on the other, and in connection therewith, (i)
Natixis has not assumed an advisory or fiduciary responsibility in favor of the Centerline Parties,
their Subsidiaries, equity holders or Affiliates with respect to the transactions contemplated
hereby (or the exercise of rights or remedies with respect thereto) or any other obligation to the
Centerline Parties except the obligations expressly set forth in or contemplated by this Agreement
and (ii) Natixis is acting solely as a principal and not as the agent or fiduciary of the
Centerline Parties, their Subsidiaries, equity holders, Affiliates, creditors or any other Person.
The Centerline Parties have consulted their own legal and financial advisors to the extent it
deemed appropriate and that it is responsible for making its own independent judgment with respect
to such transactions and the process leading thereto. The Centerline Parties agree that they will
not claim that Natixis has rendered advisory services of any nature or respect, or owes a fiduciary
or similar duty to the Centerline Parties or their Subsidiaries, in connection with such
transactions.

9.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

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

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

 

41

 

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

(c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the applicable party at its respective address set forth in Section 9.2 or at such
other address of the parties hereto shall have been notified pursuant thereto;

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

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section 9.11 any special, exemplary,
punitive or consequential damages.

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

[SIGNATURES FOLLOW ON NEXT PAGE]

 

42

 

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

	 	 	 	 	 
	 	CENTERLINE HOLDING COMPANY

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Marc D. Schnitzer 	 
	 	 	Chief Executive Officer and President 	 
	 
	 	CENTERLINE CAPITAL GROUP INC.

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Marc D. Schnitzer 	 
	 	 	Chief Executive Officer 	 
	 
	 	CENTERLINE AFFORDABLE HOUSING ADVISORS LLC

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

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

[SIGNATURES CONTINUE ON NEXT PAGE]

 

43

 

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

	 	 	 	 	 
	 	CENTERLINE FINANCIAL HOLDINGS LLC

 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Marc D. Schnitzer 	 
	 	 	Chairman 	 
	 
	 	CENTERLINE MORTGAGE CAPITAL INC.

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

[SIGNATURES CONTINUE ON NEXT PAGE]

 

44

 

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

	 	 	 	 	 
	 	NATIXIS FINANCIAL PRODUCTS INC.

 	 
	 	By:  	/s/ Kevin Alexander
 	 
	 	 	Name:  	Kevin Alexander 	 
	 	 	Title:  	MD 	 
	 
	 	By:  	/s/ Thomas Sharpe
 	 
	 	 	Name:  	Thomas Sharpe 	 
	 	 	Title:  	 	 

 

45

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]