Document:

Exhibit 10.12

Exhibit 10.12

EXECUTION COPY

Paragraph 13. Elections and Variables

(a) Security Interest for “Obligations.” The term “Obligations” as used in this Annex
includes the following additional obligations: None.

(b) Credit Support Obligations.

(i) Delivery Amount, Return Amount and Credit Support Amount.

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

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

(C) “Credit Support Amount” means, for any Valuation Date, (1) Party
A’s Exposure for that Valuation Date plus (2) the aggregate of all
Independent Amounts applicable to Party B, if any, minus (3) Party B’s
Threshold; provided, however, that (x) in the case where the sum of the
Independent Amounts applicable to Party B exceeds zero, the Credit Support
Amount will not be less than the sum of all Independent Amounts applicable
to Party B and (y) in all other cases, the Credit Support Amount will be
deemed to be zero whenever the calculation of Credit Support Amount yields
an amount less than zero.

(ii) Eligible Collateral. The following items will qualify as “Eligible
Collateral”:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Valuation	 
	 	 	 	 	 	 	Percentage	 
	 	(A	)	 	Cash
	 	 	100	%
	 	(B	)	 	Negotiable debt obligations issued by the U.S. Treasury
Department having an original maturity at issuance of not more
than one year.
	 	 	99	%

(iii) Other Eligible Support. “Other Eligible Support” shall not apply to
Party A and for Party B shall mean such other types of collateral (including letters
of credit or insurance bonds) as are in form and substance satisfactory to Party A.
No value shall be given hereunder to any collateral pledged under or obligation
under any Credit Support Document except for Eligible Collateral or Other Eligible
Support delivered pursuant to the preceding sentence (e.g. no value shall be given
to the Pledge Agreements or the Guarantee for purposes of determining Party B’s
posting obligation hereunder); provided, however, such

 

 

 

Pledge Agreements and the collateral pledged thereunder shall be given value
for purposes of determining the amount of the Assumption Fee due under Part V(L)(4)
of the Schedule.

(iv) Thresholds.

(A) “Independent Amount” is not applicable to Party A and means with
respect to Party B the amount specified below under “Other Provisions”
together with any other Independent Amounts set forth in any Confirmation.

(B) “Threshold” means with respect to Party A: Not Applicable.

(C) “Threshold” means with respect to Party B: Zero.

(D) “Minimum Transfer Amount” means with respect to Party A and Party
B, $10,000.

(E) Rounding. The Delivery Amount and the Return Amount will be
rounded up and down to the nearest integral multiple of $5,000 respectively.

(c) Valuation and Timing.

(i) “Valuation Agent” means Party A.

(ii) “Valuation Date” means (A) the Effective Date of each Transaction, (B) any
Local Business Day elected by Valuation Agent (but not more than one such day in
each calendar week) (each, a “Weekly Valuation Date”) and on the 15th day
of each calendar month (or any other day of the month selected by Party A, but not
more than one such day in each calendar month) (each, a “Monthly Valuation Date”)
(or if such day is not a Local Business Day, then the immediately preceding Local
Business Day) and (C) each other Local Business Day designated as a Valuation Date
by notice given to Party B no later than the Notification Time on the Local Business
Day before the Valuation Date so designated.

(iii) “Valuation Time” means the close of business in the city of the Valuation
Agent on the Valuation Date or date of calculation, as applicable, provided that the
calculations of Value and Exposure will be made as of approximately the same time on
the same date.

(iv) “Notification Time” means 10:00 a.m., New York time, on a Local Business
Day.

 

2

 

(v) Transfer Timing. Notwithstanding Paragraph 4(b), the Transfer of Delivery
Amounts by Party B will be made not later than the fifth Local Business Day
following the delivery of the calculation of Value and Exposure to Party B.

(d) Conditions Precedent and Secured Party’s Rights and Remedies. The following
Termination Event(s) will be a “Specified Condition” for Party B:

	 	 	 
	Illegality

	 	þ
	Tax Event

	 	þ
	Tax Event Upon Merger

	 	þ
	Credit Event Upon Merger

	 	þ
	Additional Termination Event(s)

	 	þ

(e) Substitution.

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

(ii) Consent. If specified here as applicable, then the Pledgor must obtain
the Secured Party’s consent for any substitution pursuant to Paragraph 4(d):
Applicable with respect to any proposed substitution of Other Eligible Support.

(f) Dispute Resolution.

(i) “Resolution Time” means 1:00 p.m., New York time, on the third Local
Business Day following the date on which notice of the dispute is given under
Paragraph 5.

(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Eligible Collateral and Other Eligible Support other than Cash will be calculated as
follows.

(A) With respect to Eligible Collateral, the sum of (1) (x) the
arithmetic mean of the closing bid prices quoted on the relevant date of
three nationally recognized principal market makers (one of which may
include an Affiliate of Party A) for such security chosen by the Valuation
Agent multiplied by the applicable Valuation Percentage or (y) if fewer than
three quotations are available from such principal market makers on the
relevant date, the arithmetic mean of the closing bid prices on the next
preceding date multiplied by the applicable Valuation Percentage, plus (2)
the accrued interest on such security (except to the extent Transferred to a
party pursuant to any applicable provision of this Agreement or

 

3

 

included in
the applicable price referred to in (1) of this clause) as of such date;

(B) With respect to Other Eligible Support, the process agreed to by
Party A and Party B at the time such Other Eligible Support is accepted by
Party A.

(iii) Alternative. Not Applicable.

(g) Holding and Using Posted Collateral.

(i) Eligibility to Hold Posted Collateral; Custodians. Party A and its
Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b);
provided that the following conditions applicable to it are satisfied:

(A) Party A is not a Defaulting Party.

(B) The Custodian: The Custodian is (1) Party A or a wholly owned,
direct or indirect, subsidiary of ML & Co. or (2) a bank or trust company
located in the State of New York having total assets of at least
$10,000,000,000; provided, however, if the rating of such Custodian (other
than a subsidiary of ML & Co.) is less than A by S&P and A2 by Moody’s, both
Party A and Party B must consent to such entity serving as Custodian
hereunder with such consent not to be unnecessarily withheld.

(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will apply to
Party A with respect to Posted Collateral, except as otherwise provided to the
contrary in Paragraph 13(m)(x).

(h) Distributions and Interest Amount.

(i) Interest Rate. The “Interest Rate” with respect to cash held by Party A
will be the rate per annum equal to the overnight Federal Funds Rate as reported in
the Federal Reserve Publication H.15-519.

(ii) Transfer of Interest Amount. The Interest Amount shall not be
Transferred, but shall be retained as collateral held by Party A and shall
constitute an Additional Independent Amount in accordance with the definition of
Additional Independent Amounts under Paragraph 13(m)(vi).

(iii) Alternative to Interest Amount. Not Applicable.

(i) Additional Representation(s). Not Applicable.

(j) Other Eligible Support and Other Posted Support.

(i) “Value” with respect to Other Eligible Support means such amount as may be
determined pursuant to the valuation process Party A and Party B

 

4

 

agreed to at the
time such Other Eligible Support or Other Posted Support is accepted by Party A.

(ii) “Transfer” with respect to Other Eligible Support and Other Posted Support
shall, with respect to Other Eligible Support and Other Posted Support that is in
the form of cash, certificated securities and book-entry securities, have the same
meaning provided in subsections (i), (ii) and (iii), respectively, of the definition
of “Transfer,” and, with respect to other types of Other Eligible Support and Other
Posted Support, have the meaning agreed to by Party A and Party B at the time such
Other Eligible Support or Other Posted Support is accepted by Party A.

(k) Demands and Notices. All demands, specifications and notices under this Annex will
be made pursuant to the Notices Section of this Agreement, unless otherwise specified here:

	 	 	 
	Party A:

	 	Same as Notices Section
	Party B:

	 	Same as Notices Section

(l) Addresses for Transfers. To be advised.

(m) Other Provisions.

(i) Agreement as to Single Secured Party And Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to this Annex,
Paragraph (1)(b) or Paragraph 2 or the definitions in Paragraph 12, (A) the term
“Secured Party” as used in this Annex means only Party A, (B) the term “Pledgor” as
used in this Annex means only Party B, and (C) only Party B makes the pledge and
grant in Paragraph 2, the acknowledgment in the final sentence of Paragraph 8(a) and
the representations in Paragraph 9. Party A and Party B further agree that,
notwithstanding anything to the contrary in the recital to this Annex or Paragraph
7, this Annex will be considered a Credit Support Document only with respect to
Party B, and the Events of Default in Paragraph 7 will apply only to Party B.

(ii) The definition of “Posted Collateral” in this Annex shall also include any
and all accounts in which Cash Collateral is held.

(iii) Additions to Paragraph 3. The following subparagraph (c) is hereby added
to Paragraph 3 of this Annex:

(c) No offset. On any Valuation Date, if either (i) each party is
required to make a Transfer under Paragraph 3(a) or (ii) each party is
required to make a Transfer under Paragraph 3(b), then the amounts of those
obligations will not offset each other.

 

5

 

(iv) “Exposure” means, for any Valuation Date or other date for which Exposure
is calculated, the sum of Aggregate Monetary Liability Exposure (as defined below)
and Timber Oaks Exposure (as defined below).

        Definitions Used to Determine Exposure:

“Aggregate Monetary Liability Exposure” shall mean the aggregate sum of
Monetary Liability Exposure with respect to each IRFA, provided that any
Monetary Liability Exposure related to the Timber Oaks Property shall equal
the Timber Oaks Exposure with respect to any Exposure relating to events
covered thereby.

“Aggregate Monetary Liability Required Collateral Amount” shall mean
the aggregate sum of all Monetary Liability Required Collateral Amounts.

“Monetary Liability” shall mean all present and future amounts Party A
is, or may be, obligated to pay under each IRFA (as defined in the
Confirmations), collectively. Such amounts may occur for any of the
following reasons: (a) any expected delay or shortfall in the receipt of
anticipated Tax Benefits (as defined in the applicable Guaranteed
Partnership Agreement) to the Limited Partner (as defined in the applicable
Guaranteed Partnership Agreement) which would cause the calculated Internal
Rate of Return (as defined in the applicable Guaranteed Partnership
Agreement) to be less than the Guaranteed Return Rate (as defined in the
Guaranteed Partnership Agreement); (b) any potential recapture or loss of
Tax Benefits which would cause the calculated Internal Rate of Return to be
less than the Guaranteed Return Rate; or (c) to the extent not already
covered by (a) or (b), the occurrence of any event or circumstance that may
lead to an obligation of Party A to pay any amounts under the IRFA; in any
case, for which the General Partner (as defined in the applicable Guaranteed
Partnership Agreement) or a party on behalf of the General Partner has not
already paid or posted collateral so as to eliminate Party A’s risk under
the applicable IRFA with respect thereto.

“Monetary Liability Collateral Trigger Event” shall mean the occurrence
of any of the following events: (A) a monetary default or any other default
(but with respect to such other defaults, only after any applicable notice
and cure period has expired) with respect to any foreclosable debt secured
by any of the Properties which gives any person or entity the right to
accelerate the debt and/or initiate foreclosure proceedings (including
without limitation the failure by the Guarantor to fund the amounts set
forth in Section 7 of that certain Reaffirmation of Guarantee, dated as of
even date herewith); (B) any government authority challenges the past,
present, or future Tax Benefits of the Limited Partner; or (C) any event or
circumstance, not already covered by (A) through (B),

 

6

 

occurs (including lawsuits, etc.) which could in Party A’s reasonable opinion lead to Monetary
Liability.

“Monetary Liability Exposure” shall mean, with respect to each IRFA (as
defined in the Confirmations), 125% (100% at the end of the last day of the
Last Tax Credit Year, as defined in the applicable Guaranteed Partnership
Agreement with respect to the IRFAs as defined in the Confirmations for
Transaction Nos. 004 and 006, and at the end of the last day of the Last
Compliance Period Year with respect to the IRFAs as defined in the
Confirmations for Transaction Nos. 008, 010, 012 and 014), in either case,
after payment of the Final Guaranteed Benefit Deficiency Payment)) of (i)
the portion of the Aggregate Monetary Liability Required Collateral Amount
applicable to such IRFA, plus (ii) any deficiency claimed by the Internal
Revenue Service relating to amounts payable under such IRFA unless Party B
delivers an unqualified opinion of tax counsel acceptable to Party A in its
reasonable discretion to the effect any such claimed deficiency will not be
due.

“Monetary Liability Required Collateral Amount” shall mean, upon the
occurrence and continuance of any Monetary Liability Collateral Trigger
Event, the amount of Monetary Liability associated therewith calculated as
set forth below:

(A) Upon the occurrence of any Monetary Liability Collateral
Trigger Event, Party A shall have the right to request that Party B
deliver, within five (5) business days, certified calculations from
Reznick Group LLP, or any other firm of independent certified public
accountants acceptable to Party A (collectively, “Reznick”) setting
forth the amount of Monetary Liability that may result due to the
occurrence of such Monetary Liability Collateral Trigger Event. In
performing such calculations, Reznick shall assume that the Monetary
Liability Collateral Trigger Event will result in the maximum
Monetary Liability that could occur as a result thereof (e.g. if any
governmental authority claims that any Tax Benefits may be subject to
recapture, that such recapture will occur). Reznick shall use its
professional judgment to make assumptions necessary for the
calculation of Monetary Liability (except as otherwise provided
herein) and may engage such independent third-party experts to advise
on any assumptions beyond its expertise as it deems necessary. With
respect to any Monetary Liability Collateral Trigger Event set forth
in subsection (A) of the definition thereof, Reznick shall assume
that foreclosure of the first mortgages securing the Properties will
occur on the 120th day following the occurrence of the
applicable Monetary Liability Collateral Trigger Event. If any
assumed foreclosure date has already past, the assumed foreclosure
date shall be the date on which the

 

7

 

calculations are being made.
Further, in any case, if the calculation of Monetary Liability would
be higher assuming a later foreclosure date than those already set
forth in this subsection, the assumed
foreclosure date shall be such later foreclosure date. If at
any time Party A believes that there has been a change in
circumstances that would result in a higher amount of Monetary
Liability associated with a Monetary Liability Collateral Trigger
Event if such amount was recalculated, Party A shall have the right
to request that Party B deliver, within five (5) business days, new
certified calculations from Reznick setting for the amount of
Monetary Liability that may result due to the occurrence of such
Monetary Liability Collateral Trigger Event (but no more than twice
in any calendar year with respect to the same Monetary Liability
Collateral Trigger Event). If Party B fails to deliver to Party A
certified calculations from Reznick as to the amount of Monetary
Liability with respect to any Monetary Liability Collateral Trigger
Event within five (5) business days of receipt of Party A’s request
therefor (whether with respect to the initial calculation of Monetary
Liability associated with a Monetary Liability Collateral Trigger
Event, or with respect to any request for a recalculation pursuant to
this Section), Party A shall have the right to determine the amount
of Monetary Liability associated with the subject Monetary Liability
Collateral Trigger Event, in its sole and absolute discretion, which
amount shall be binding until certified calculations from Reznick
complying with this subsection are delivered. Notwithstanding
anything to the contrary contained herein, upon a failure by the
Guarantor to fund any amount required by Section 7 of that certain
Reaffirmation of Guarantee, dated as of even date herewith, the
Monetary Liability Required Collateral Amount as a result of such
failure shall equal the amount which Guarantor failed to fund.

(B) Party A shall reduce the amount of Monetary Liability
associated with a Monetary Liability Collateral Trigger Event to zero
upon the occurrence of any of the following events: (a) Party A is
satisfied that payments to the Limited Partner have been made by the
General Partner or other sources which eliminate Party A’s risk of
having any obligations under the applicable IRFA arising from such
Monetary Liability Collateral Trigger Event, (b) Party A is satisfied
that such Monetary Liability Collateral Trigger Event has been
resolved in such a manner which eliminates Party A’s risk of having
any obligations under the applicable IRFA arising from such Monetary
Liability Collateral Trigger Event (which may include the execution
of a forbearance agreement with the applicable lender satisfactory to
Party A), or (c) Party A receives a certificate from Reznick pursuant
to (i)

 

8

 

above, that there is no more Monetary Liability with respect
to the subject Monetary Liability Collateral Trigger Event.

(C) The cost of Reznick and any third-party experts shall be at
Party B’s expense.

“Timber Oaks Exposure” shall mean the potential financial impact
inclusive of penalties and interest which may be due, relating to the
failure to receive or late receipt of Form 8609, the failure to timely file
restriction agreements, or the receipt of Form 8823s, respecting the Timber
Oaks Property. On the date hereof, Party B shall deposit or cause to be
deposited, $1,000,000 with Party A respecting the Timber Oaks Exposure (the
“Deposit”). In accordance with its pledge of interests, Party B shall also
deposit an amount equal to the proceeds of any sale of general partnership
interests in Chapel Ridge of Cedar Rapids, Chapel Ridge and Bluff and
Brisben Johnston Commons Properties upon settlement of any such sale (which
sale must be approved by Party A) (the “Sale Proceeds”). Upon delivery on
or before September 15, 2010 by Party B to Party A of (i) copies of Form
8609s for all residential buildings, (ii) withdrawal/cancellation of Form
8823s previously issued, and (iii) a calculation by Reznick (the “Reznick
Calculation”), and based upon assumptions acceptable to Party A, of the
estimated incremental amount of the Timber Oaks Exposure (the “Required
Items”), Party B shall further deposit or cause to be deposited (each, an
“Additional Deposit”) the amount that the then cumulative estimated Timber
Oaks Exposure as calculated exceeds the sum of the Deposit and the Sale
Proceeds. If form 8609s are received and the sum of the Deposit and the
Sale Proceeds then equals the cumulative estimated Timber Oaks Exposure,
then Party B shall have no further liability respecting the Timber Oaks
Property. If the sum of the Deposit and the Sale Proceeds deposit exceeds
the actual Timber Oaks Exposure as calculated in the Reznick Calculation and
delivered on or before September 15, 2010, then Party A shall return to
Party B such excess, up to the amount of the amount of the Deposit
($1,000,000). If Party B fails to deliver the Reznick Calculation or before
September 15, 2010, Party A shall calculate Timber Oaks Exposure in its sole
discretion, Party B shall post as additional an amount equal to Timber
Oaks Exposure, as so calculated by Party A, less the sum of the Deposit and
Sales Proceeds. If a determination is made by the Texas housing credit
authority that it will not issue Form 8609s with respect to the Timber Oaks
Property, then the Timber Oaks Exposure shall include that no Tax Credits
were available with respect to the Timber Oaks Property from the initial
date in which such Tax Credits may have been claimed.

(v) Exposure will not be recalculated in connection with application of the
dispute resolution procedures of Paragraph 5 to the Confirmations for Transaction
Nos. 004, 006, 008, 010, 012 and/or 014.

 

9

 

(vi) “Independent Amount” shall mean, for all of the Confirmations,
$67,384,689.81, plus any Additional Independent Amounts (as defined below), less any
Independent Amount Reductions (as defined below and as specified in this
subparagraph (vi)).

“Additional Independent Amounts” shall mean the sum of all Transfers hereunder
(plus the Interest Amount referred to under Paragraph 13(h)(ii) hereof) by Party B
or from the Cash Management Account on and after March 5, 2010. Notwithstanding
anything to the contrary, to the extent Party B has an obligation to make a Transfer
relating to Exposure hereunder, such Transfer shall not also constitute an
Additional Independent Amount. Upon any subsequent reduction of Exposure, however,
the Return Amount due Party B shall constitute an Additional Independent Amount.

“Independent Amount Reductions” shall mean a reduction of the Independent
Amount as follows:

(A) The Independent Amount shall be reduced from time to time as
applicable upon the following events and in the following amounts:

(1) On any Business Day (but not more than once per month) by an
amount equal to amount set forth in a Collateral Account Release
Request in the form attached hereto as “Exhibit A.” Party B hereby
directs Party A to transfer any Return Amount related to such
Independent Amount Reduction to the Cash Management Account to be
applied pursuant to Section 6 thereof, which direction cannot be
changed without the consent of Party A;

(2) In an amount equal to $25,000,000 simultaneous with the
compliance with the conditions set forth in (A) — (H) below as
determined by Party A. Collateral relating to such $25,000,000
Independent Amount Reduction may be used to help fund (A) and (B)
below, provided Party A is satisfied in its sole discretion that all
of the conditions will be met upon such release:

(A) Reduction of principal on the debt secured by the
Non-Stabilized Properties listed on Annex B to achieve a
minimum 1.0x Debt Service Coverage Ratio, assuming a debt
service payment based on a reduction in the interest rate to
5.75% plus amortization, plus a contingent interest rate
component payable to the extent of property cash flow to
support the current interest rate to be funded from the Loan
Repayment Documents (as defined in (H) below).

 

10

 

(B) Reduction of principal on the debt secured by the
Stabilized Properties listed on Annex B to achieve a minimum
1.0x Debt Service Coverage Ratio, assuming a debt service
payment based on a reduction in the interest rate to 5.75%
plus amortization, plus a contingent interest rate component
payable to the extent of property cash flow
to support the current interest rate to be funded from
the Loan Repayment Documents.

(C) Reduction of principal on the debt secured by the
Non-Stabilized Properties (as determined by Party B) up to a
minimum 1.1x Debt Service Coverage Ratio or such lower Debt
Service Coverage Ratio (but not less than 1.0x) so as to
satisfy the requirement set forth below in (G).

(D) Amounts used to fund (A) and (B) above may include
(i) Three Million Dollars ($3,000,000) from the release of
earn-out reserves on the Non-Stabilized Properties, (ii)
Eight Million Four Hundred Thousand Dollars ($8,400,000) from
the respective Funds from amounts withheld from the capital
contributions payable to the respective Local Partnerships
subject to the condition of stabilization being achieved, and
(iii) the Twenty-Five Million Dollar ($25,000,000) release of
Eligible Collateral upon Independent Amount Reduction in
this (A)(2) (assuming compliance of all other conditions as
determined by Party A).

(E) Reduction in the must-pay component of debt service
on both Stabilized and Non-Stabilized Properties to an
interest rate of 5.75% plus principal amortization based on
the reduced principal amounts (following any principal
reductions under (A) — (C) above).

(F) Evidence satisfactory to Party A (with Party B
hereby acknowledging that no such evidence delivered on or
before the date hereof is satisfactory to Party A),
including, without limitation, an opinion of Paul Hastings
and an analysis from Reznick, that there will be no potential
negative impact to the Investors (or to Party A under the
IRFA) other than a loss of interest deductions due to the
debt reduction in an amount not to exceed $5,500,000 per
annum.

(G) Evidence satisfactory to Party A in its reasonable
discretion that no further bond stabilization

 

11

 

payments or required principal reductions (other than scheduled
amortizations) are required for the Properties.

(H) Delivery of documentation of Party B to receive
repayment for any amounts paid in connection with the
reductions of principal (the “Loan Repayment
Documents”) with a collateral assignment of such rights
in a form acceptable to Party A.

This Independent Amount Reduction shall not be available on or
after January 12, 2012.

(3) Following the Independent Amount Reduction described in
subparagraph (2) above, Party A hereby agrees to reduce the
Independent Amount from time to time by an aggregate amount up to
$10,000,000 with any collateral released relating to such reduction
to fund proposed capital expenditures and meet debt service
shortfalls at the Properties which Party A approves following request
by Party B or its bank group. Party A shall have no obligation
whatsoever to release any collateral in excess of $10,000,000, which
shall include all amounts released for debt service shortfalls
pursuant to subparagraph (1) above or this subparagraph (3).

(B) The Independent Amount shall be reduced to $0 upon the replacement
of Party A as the obligor with respect to all the IRFAs, and Party A is
satisfied that it no longer has any liability thereunder and all amounts
owed to Party A by Party B in connection with the IRFAs, including under the
Agreement, have been paid in full.

        Definitions Used to Determine Independent Amount Reductions:

“Cash Management Account” shall mean the account established by and
described in that certain Cash Management Agreement, dated as of even date
herewith, among Party A, Party B, Centerline Guaranteed Manager II LLC and
Wachovia Bank, National Association.

All other capitalized terms used to determine Independent Amount Reductions not
otherwise defined in the Agreement, shall have the meanings set forth in that
certain Master Assignment, Stabilization, Assignment Allocation, Servicing and Asset
Management Agreement, dated as of even date herewith, among Party B and the other
parties hereto.

(vii) Bond Servicing. To the extent not otherwise provided under the terms of
the documents relating to and/or securing this Agreement, Party B or its Affiliates
shall provide or cause to be provided to MLCS, with respect to each of the
Properties, periodic servicing reports as reasonably requested by Party A.

 

12

 

(viii) Capitalized terms not otherwise defined herein, or in the Agreement,
shall have the meanings ascribed to them in that certain First Amended and Restated
Agreement of Limited Partnership of Related Capital Guaranteed Partnership II,
L.P.-Series A, Number 1 dated as of July 10, 2002 as amended, restated and/or
supplemented from time to time; that certain First Amended and Restated Agreement of
Limited Partnership of Related Capital
Partnership II, L.P.-Series B, Number 1 dated as of September 24, 2003, as
amended, restated and/or supplemented from time to time; that certain First Amended
and Restated Agreement of Limited Partnership of Related Capital Partnership II,
L.P.-Series C, Number 1 dated as of October 31, 2003, as amended, restated and/or
supplemented from time to time; that certain First Amended and Restated Agreement of
Limited Partnership of Related Capital Partnership II, L.P.-Series C, Number 2 dated
as of October 31, 2003; that certain First Amended and Restated Agreement of Limited
Partnership of Related Capital Guaranteed Partnership II, L.P. — Series D, Number 1
dated as of April 14, 2004, as amended, restated and/or supplemented from time to
time; that certain First Amended and Restated Agreement of Limited Partnership of
Related Capital Guaranteed Partnership II, L.P. — Series E, Number 1 dated as of
June 22, 2004, as amended, restated and/or supplemented from time to time; that
certain First Amended and Restated Agreement of Limited Partnership of Related
Capital Guaranteed Partnership II, L.P. — Series E, Number 2 dated as of June 22,
2004, as amended, restated and/or supplemented from time to time; or that certain
First Amendment and Restated Agreement of Limited Partnership of Related Capital
Guaranteed Partnership II, L.P. — Series F, Number 1 dated as of July 27, 2004, as
amended, restated and/or supplemented from time to time, as applicable (each a
“Guaranteed Partnership Agreement”).

(ix) “Property” or “Properties” shall mean each property individually and all
properties collectively, as applicable, as set forth in Annex A hereto.

(x) The investment of all collateral posted as Cash under this Annex shall be
controlled by Party A in its sole and absolute discretion exercised in a
commercially reasonable manner.

 

13

 

[Signature page to ISDA Credit Support Annex and Paragraph 13 thereto]

Please confirm your agreement to be bound by the terms of the foregoing by executing the copy
of this ISDA Credit Support Annex and Paragraph 13 thereto enclosed for that purpose and returning
it to us.

	 	 	 	 	 
	 	Very truly yours,

MERRILL LYNCH CAPITAL SERVICES, INC., a Delaware
corporation

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

[Signatures continued on following page]

 

 

 

[Signature page to ISDA Credit Support Annex and Paragraph 13 thereto]

	 	 	 	 	 
	 	CENTERLINE GUARANTEED

HOLDINGS LLC, a Delaware limited 

liability company

 	 
	 	By:  	Centerline Capital Group Inc., a Delaware
 	 
	 	 	corporation, its managing member 	 
	 	 	 	 
	 	By:  	/s/ Marc D. Schnitzer
 	 
	 	 	Name:  	Marc D. Schnitzer 	 
	 	 	Title:  	Chief Executive Officer and PresidentExhibit 10.13

Exhibit 10.13

EXECUTION COPY

REAFFIRMATION OF GUARANTEE

REAFFIRMATION OF GUARANTEE (this “Reaffirmation”), dated as of March 5, 2010, is executed by
CENTERLINE HOLDING COMPANY (formerly known as and successor to CharterMac), a Delaware business
trust (the “Guarantor”), in favor of MERRILL LYNCH CAPITAL SERVICES, INC., a Delaware corporation
(“MLCS”).

WHEREAS, Centerline Capital Group Inc. (formerly known as and successor to Charter Mac
Corporation), a Delaware corporation (“CCG”), and MLCS entered into that certain ISDA Master
Agreement, dated as of December 31, 2001 (the “Master Agreement”), together with the
Multicurrency-Cross Border Schedule to the Master Agreement (the “Schedule”), the ISDA Credit
Support Annex thereto (the “Annex”) and the confirmation letters identified on Schedule I to the
Transaction Assignment Agreements (as defined below) (such confirmation letters collectively being
referred to herein as the “Existing Confirmation Letters”) evidencing transactions between CCG and
MLCS with respect to certain payment obligations under various Investor Return Floor Agreements
(the “IRFAs”) (all such documents, as amended, restated and/or supplemented from time to time,
collectively, the “Existing Swap Agreement” and, together with all documents providing security
therefore or guaranteeing the same, the “Existing Swap Documents”);

WHEREAS, Guarantor executed that certain Seventh Amended and Restated Guarantee of CharterMac,
dated August 17, 2006 (the “Guarantee”), in favor of MLCS with respect to certain obligations of
CCG under the Existing Swap Agreement (a true and correct copy of the Guarantee is attached hereto
as Appendix A);

WHEREAS, on the date hereof, Guarantor, CCG, Centerline Affordable Housing Advisors LLC
(“CAHA”), Centerline Guaranteed Manager II LLC (“Guaranteed Manager”), Centerline Guaranteed
Holdings LLC (“Guaranteed Holdings”), Centerline Mortgage Capital Inc. (“CMC”) and Centerline
Guaranteed Manager LLC (“Former Guaranteed Manager”) are entering into that certain Master
Assignment, Stabilization, Assignment Allocation, Servicing and Asset Management Agreement (the
“Master Assignment Agreement”);

WHEREAS, capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Master Assignment Agreement or the Existing Swap Documents, as applicable;

WHEREAS, on the date hereof, (i) the Property Assignors are assigning and conveying to
Guaranteed Holdings all rights of each Property Assignor to certain payments, interests and other
rights; (ii) Former Guaranteed Manager is assigning and conveying to Guaranteed Manager all
interests of Former Guaranteed Manager as a non-member manager in each Guaranteed Fund GP,
Guaranteed SLP and Affiliated Local General Partner; (iii) Centerline Acquisitions II LLC and
Centerline Dispositions II LLC are assigning and conveying to Guaranteed LTGP all interests of
Centerline Acquisitions II LLC and Centerline Dispositions II LLC in each Affiliated

 

 

 

Local General Partner; and (iv) Guaranteed Holdings is being admitted in place of CCG as a
member of each Guaranteed Partnership GP (collectively, the “Assignments”);

WHEREAS, in connection with and in consideration, inter alia, for the Assignments, the rights
and obligations of CCG under the Existing Confirmation Letters are being assigned to and assumed by
Guaranteed Holdings pursuant to a Transaction Assignment Agreement, dated as of the date hereof
(the “Transaction Assignment Agreement”), among MLCS, CCG and Guaranteed Holdings (and with the
consent and acknowledgement of Guarantor), such that the Existing Confirmation Letters will be
governed by and subject to an ISDA Master Agreement, together with a Multicurrency-Cross Border
Schedule to the Master Agreement and an ISDA Credit Support Annex thereto, entered into on the date
hereof between MLCS and Guaranteed Holdings (collectively, as amended, restated and/or supplemented
from time to time, the “New Swap Agreement” and, together with all documents providing security
therefore or guaranteeing the same, as amended, restated and/or supplemented from time to time, the
“New Swap Documents,” and together with the Master Assignment Agreement, and the Assignments, the
“Restructuring Documents);

WHEREAS, in consideration of MLCS’s agreement to consent to the assignment of the obligations
of CCG to Guaranteed Holdings pursuant to the Transaction Assignment Agreement, MLCS’s agreement to
enter into the New Swap Agreement and MLCS’s agreement contained herein to release the Guarantor
from certain obligations pursuant to the terms hereof, the Guarantor has agreed to reaffirm its
obligations for the Ongoing Guarantee Liabilities hereunder;

WHEREAS, it is a condition precedent to MLCS’s agreement to enter into the Transaction
Assignment Agreement and the New Swap Agreement that the Guarantor execute and deliver this
Reaffirmation in favor of MLCS with respect to certain obligations relating to the Existing Swap
Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the parties
hereto agree as follows:

1. Representations and Warranties. THE PARTIES HERETO RECOGNIZE THAT SOME OF THE MATTERS AS
TO WHICH REPRESENTATIONS AND WARRANTIES ARE MADE BY GUARANTOR IN THIS REAFFIRMATION ARE OUTSIDE THE
KNOWLEDGE OF GUARANTOR AND THAT IN SOME INSTANCES SUCH REPRESENTATIONS AND WARRANTIES MAY NOT BE
KNOWN TO BE TRUE AND CORRECT IN EACH AND EVERY RESPECT WHEN MADE. THE PURPOSE OF THE
REPRESENTATIONS AND WARRANTIES IS TO (1) ALLOCATE THE RISK OF LOSS AS PROVIDED IN THIS
REAFFIRMATION IN THE EVENT OF ANY LOSS TO WHICH MLCS IS ENTITLED TO INDEMNIFICATION HEREUNDER
ARISING FROM ANY SUCH REPRESENTATION OR WARRANTY BEING UNTRUE AND (2) TO DEFINE THE RIGHTS OF THE
PARTIES IN SUCH EVENT. FOR CLARITY AND THE AVOIDANCE OF DOUBT, WHETHER GUARANTOR OR MLCS HAS
KNOWLEDGE THAT A REPRESENTATION OR WARRANTY IS OR MAY BE UNTRUE OR INACCURATE SHALL NOT ON THE ONE
HAND, BE A BAR OR DEFENSE TO OR OTHERWISE AFFECT MLCS’S RIGHT TO INDEMNIFICATION OR OFFSET AND
SHALL NOT, ON

 

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THE OTHER HAND, GIVE RISE TO A CLAIM BY MLCS AGAINST GUARANTOR FOR FRAUD, FRAUDULENT
INDUCEMENT, GROSS NEGLIGENCE OR THE LIKE.

Guarantor hereby represents and warrants to MLCS as of the Closing Date, as follows:

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.

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 the applicable Restructuring Documents and has taken all
necessary corporate or other organizational action to authorize the execution, delivery and
performance of such documents. Each of the Centerline Controlled Entities has duly executed and
delivered the applicable Restructuring Documents and such documents constitute the legal, valid and
binding obligation of such Person enforceable in accordance with its terms. Each of Centerline
Controlled Entities (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.

1.3. No Violation. None of (i) the execution, delivery and performance by any of
Centerline Controlled Entities of the applicable Restructuring Documents and compliance with the
terms and provisions therein, nor (ii) the consummation of the other transactions contemplated
thereby on the relevant dates therefor will (1) contravene any applicable provision of any
Applicable Law of any Governmental Authority, (2) result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any obligation under, or
result in the creation or imposition of (or the obligation to create or impose) any Lien upon any
of the property or assets of any of the Centerline Controlled Entities (other than Liens under any
security agreements contemplated herein) pursuant to, the terms of any indenture, loan agreement,
lease agreement, mortgage or deed of trust or any other contractual obligation to which the
Centerline Controlled Entities is a party or by which they or any of their property or assets is
bound, or (3) violate any provision of the Organizational Documents of the Centerline Controlled
Entities.

1.4 Governmental Approvals. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any Governmental
Authority is required to authorize or is required in connection with (a) the execution, delivery
and performance of the applicable Restructuring Documents or (b) the legality, validity, binding
effect or enforceability of the applicable Restructuring Documents.

1.5. Intentionally Omitted.

 

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1.6 Solvency. Taking into account the obligations hereunder, the Centerline
Controlled Entities, on a consolidated basis, taken as a whole, are Solvent, and will be Solvent
following the consummation of the transactions contemplated hereby. Taking into account the
transactions contemplated herein, each of the Guaranteed Entities and Guaranteed Holdings is
Solvent, and will be Solvent following the consummation of the transactions contemplated by the
applicable Restructuring Documents.

1.7 Liens. There are no Liens on the property or assets of any Guaranteed Fund, other
than (i) Liens on the limited partnership interests of the Guaranteed Funds interest in the Local
Partnerships securing the obligations of the Guaranteed Fund to make contributions to the Local
Partnerships, and (ii) Liens on the partnership interests of the Guaranteed Manager in each
Guaranteed Fund GPs and Guaranteed SLPs pursuant to the Assignment and Subrogation Agreements.

1.8 Ownership. Exhibit 7.1.8 to the Master Assignment Agreement 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.

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

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

None of the reports, financial statements, certificates or other information furnished or
given by CHC, CCG or CAHA on behalf of any Centerline Controlled Entity to MLCS in connection with
the negotiation of the Restructuring Documents or 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 and such assumptions have been updated to the extent such assumptions were
determined to be unreasonable, it being recognized by MLCS that such projections, estimates and
forward-looking information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such projections, estimates and
forward-looking information may differ from

 

4

 

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 (each of (i) and (ii) being the “Projection Exceptions”).

1.10 Guaranteed Holdings Assigned Rights. Exhibit 4.3 to the Master Assignment
Agreement sets forth a complete and accurate list, in all material respects, of all Guaranteed
Holdings Assigned Rights as of the date hereof, including a description of each of the items
assigned. All Guaranteed Holdings Assigned Rights are held by the parties that have assigned them
to Guaranteed Holdings pursuant to the Property Assignment Agreement and all present and rights to
future Guaranteed Holdings Assigned Rights have been transferred to Guaranteed Holdings pursuant to
such Property Assignment Agreement. Other than as disclosed on Exhibit 4.3 to the Master
Assignment Agreement, there are no other agreements, side letters, instruments or other legal
documents known to CHC, CCG and CAHA that will or could give rise to any Guaranteed Holdings
Assigned Rights. All rights of any Affiliate of Guarantor that has an equity or economic interest
in any entity involved in the transactions relating to the IRFAs have been assigned to Guaranteed
Holdings or an Affiliate thereof other than the interests of CAHA and Centerline Guaranteed
Holdings LLC.

1.11 Projections. The projections of the (i) current average amounts and the future
expected amounts of Guaranteed Fund Expenses, (ii) the required amounts to achieve Stabilization
for each of the Work-Out Bonds as set forth on Schedule B to the Master Assignment Agreement and
(iii) the amount of the Debt Service Shortfall Payments, delivered to MLCS 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, after due inquiry, is a reasonable approximation
of the amount of such obligations and assumptions believed by CHC, CCG and CAHA to be reasonable at
the time made; it being recognized by MLCS that such projections are subject to the Projection
Exceptions.

1.12 Local Partnership Voluntary Loans. As of the Closing Date, there are no direct
Voluntary Loans made by any of the Centerline Parties to any Local Partnership, except those set
forth on Exhibit 4.3 to the Master Assignment Agreement. There are no past due amounts on any
Bonds.

1.13 Taxes and Other Obligations. Each of the Guaranteed Funds and the Guaranteed
Partnerships has paid or caused to be paid all material payments, expenses and Taxes required to
have been paid by it, except where (i) such payments and expenses are Receivables Contributions,
(ii) the validity or amount thereof is being contested in good faith by appropriate proceedings,
and (iii) such Guaranteed Fund or Guaranteed Partnership has set aside on its books adequate
reserves with respect thereto in accordance with GAAP.

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

 

5

 

1.15 Disposition Fees. There have been no Disposition Fees (earned or accrued) on or
prior to the Closing Date with respect to any of the Centerline Global Entities.

1.16 Employees. None of the Guaranteed Funds nor the Guaranteed Partnerships have any
employees. No employees of CHC, CCG or CAHA hold any Guaranteed Holdings Assigned Rights.

1.17 Compliance with Laws. Each of CHC, CCG, CAHA, the Guaranteed Manager and CMC is
in compliance with all Applicable Laws binding upon it or its property, in each case. The
ownership and operation of the Properties have been conducted in accordance with all Applicable
Laws of all Governmental Authorities having jurisdiction over the Properties and/or the applicable
Centerline Controlled Entity.

1.18 No Violation. None of (i) the execution, delivery and performance by any of any
Centerline Global Entity of the Restructuring Documents and compliance with the terms and
provisions therein, or (ii) the consummation of the other transactions contemplated thereby on the
relevant dates therefor will (1) result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or give rise to any right to accelerate or to require
the prepayment, repurchase or redemption of any obligation under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the property or assets
of any Centerline Global Entity pursuant to the BOA Credit Agreement or (2) violate any provision
of the Organizational Documents of any Centerline Global Entity.

1.19. Litigation. There is no action, suit, claim, proceeding, arbitration
governmental inquiry or investigation pending threatened against any Centerline Global Entity or
any Affiliate thereof, at law or in equity, before or by any Governmental Authority, which, if
adversely determined, would prevent the consummation of the this Reaffirmation or the transactions
contemplated by the Master Assignment Agreement, or materially and adversely affect the Assignments
or the transactions contemplated by the Master Assignment Agreement. There is no action or suit by
or against any Property Assignor pending or threatened by or against any other Person or entity
relating to the Assignments or the transactions contemplated by the Master Assignment Agreement.

1.20. LIHTC Matters. Except as set forth on Exhibit A, (i) each Property held by a
Guaranteed Local Partnership is a “qualified low-income housing project,” and (ii) each apartment
building at such Property is a “qualified low-income building,” (within the meaning of Section
42(c)(2) and Section 42(i)(3), of the Code respectively), and (iii) each Property has received
8609’s for all buildings in which Tax Credits have been claimed (except the Timber Oaks project).
Each Property has been operated in material compliance (“Compliance”) with all regulatory
agreements with the state agencies and each Guaranteed Local Partnership has complied in all
material respects with all applicable state and federal monitoring and reporting requirements with
respect to Tax Credits and the Properties, including, without limitation, all such requirements of
the state agency and of the IRS, whether in regulations, administrative rulings or other
promulgations, and each Guaranteed Local Partnership has fully satisfied all other material
ownership and operating restrictions contained in any restrictive covenants of record, loan
agreements, or otherwise, including tenant income and rent restrictions, applicable to the such
Property. No owner of any Property has received any notice that it was not in

 

6

 

Compliance. None of the Guaranteed Local Partnerships are currently a party to any legal,
administrative or regulatory proceeding in which, among other things, the IRS is seeking to
recapture or otherwise disallow any Tax Credit claimed in the current or prior years. The
applicable Centerline Global Entities have at all times been in compliance with the provisions of
Sections 6011, 6111 and 6112 of the Code relating to tax shelter disclosure, registration, list
maintenance and record keeping and with the Treasury Regulations thereunder (including any
predecessor or successor Code provisions or Treasury Regulations thereof, as applicable). No
Centerline Global Entity, as applicable, has at any time, engaged in or entered into a “listed
transaction” within the meaning of Treasury Regulation Sections 1.6011, 301.6111 or 301.6112 or
that would have been such a “listed transaction” if current tax law was in effect at the time the
transaction was entered into.

1.21. Capital Contributions. Schedule I attached hereto contains a true, accurate
and complete list of: (i) the amount of the Capital Contributions of the applicable Centerline
Controlled Entity to each Guaranteed Local Partnership as of the Closing Date; (ii) the amount of
the remaining Capital Contributions of the applicable Centerline Controlled Entity attributable to
each Guaranteed Local Partnership as of the Closing Date; and (iii) the amount of the Capital
Account Balance of the applicable Centerline Controlled Entity with respect to each Guaranteed
Local Partnership as of December 31, 2009.

2. Guarantor hereby acknowledges and agrees that the Guarantee shall continue in full force
and effect in accordance with its terms and is hereby ratified and confirmed, notwithstanding any
action or inaction of MLCS, and Guarantor hereby agrees to indemnify MLCS for any losses, expenses,
damages, claims and/or similar liabilities (a “Loss”) but only to the extent Guarantor and/or CCG
would have been obligated to MLCS for any such Loss assuming the Existing Swap Documents remained
in full force and effect (and had not been modified or supplemented), other than any obligation to
post Collateral for any Exposure or Independent Amount, on and after the date hereof with respect
to any of the following (collectively, the “Ongoing Guarantee Liabilities”):

	 	a.	 	The inaccuracy of any representations or warranties contained in Section 1
hereof.

	 
	 	b.	 	Relating to the Timber Oaks project; provided, however, that Guarantor shall be
released from any Ongoing Guaranteed Liability under this Section 2(b) upon receipt of
copies of all Form 8609’s for all residential units at the Timber Oaks project; the
withdrawal or cancellation of all Form 8823’s previously issued; an analysis of Reznick
or other accounting firm acceptable to MLCS, calculating the potential financial impact
to the investor due to the late delivery of the Form 8609’s; and payment by the
Centerline Controlled Entities of the amount of the potential financial impact
(inclusive of interest and penalties that may be due to the Internal Revenue Service)
as calculated by Reznick and agreed to by MLCS as such conditions are more fully
described in Paragraph 13 of the Credit Support Annex delivered on the date hereof;

	 
	 	c.	 	Any Local Partnership receiving notice of non-compliance from the Internal
Revenue Service under any federal tax laws or regulation relating to any period on or
before the date hereof;

 

7

 

	 	d.	 	Any non-compliance under federal tax laws or regulations by any third party
Local General Partner for any Property relating to any period on or before the date
hereof;

	 
	 	e.	 	Any non-compliance under federal tax laws or regulations by any Affiliated
Local General Partner for any Property relating to any period on or before the date
hereof;

	 
	 	f.	 	Any allocation of any Tax Credit to an investor in any Guaranteed Partnership
not entitled to receive such allocation relating to any period on or before the date
hereof;

	 
	 	g.	 	Any inaccuracy in, or non-compliance under any federal tax laws or regulations,
with respect to the historic components of current pro formas provided by any
Centerline Party to MLCS;

	 
	 	h.	 	Any inaccuracy in, or non-compliance under any federal tax laws or regulations,
with respect to the future components of current pro formas provided by any Centerline
Controlled Entity to MLCS;

	 
	 	i.	 	Any non-compliance under federal tax laws or regulations by any Guaranteed
Partnership, Guaranteed Fund or Guaranteed Local Partnership, or any member or partner
of any of the foregoing, relating to any period on or before the date hereof;

	 
	 	j.	 	Any revenues or expenses with respect to the Properties not being recorded in
accordance with federal tax laws or regulations or GAAP relating to any period before
the date hereof ;

	 
	 	k.	 	Failure for net income or loss to be have been properly allocated within any
Guaranteed Partnership, Guaranteed Fund and/or Guaranteed Local Partnership, or any
member or partner of any of the foregoing relating to any period on or before the date
hereof;

	 
	 	l.	 	Any Deficit Restoration Obligation resulting in future liability to any
investor in any Guaranteed Partnership, any Centerline Party and/or MLCS;

	 
	 	m.	 	Any rights of any Centerline Global Entity, Centerline Controlled Entity or an
Affiliate thereof as applicable to receive fees, payments or other receivables from the
Guaranteed Partnerships, Guaranteed Funds and/or Local Guaranteed Partnerships, or any
member or partner of any of the foregoing, not being assigned as contemplated by the
Master Assignment Agreement and/or the New Swap Agreement;

	 
	 	n.	 	Any equity interests in any Centerline Global Entity, Centerline Controlled
Entity or an Affiliate thereof as applicable not being assigned as contemplated by the
Master Assignment Agreement and/or the New Swap Agreement;

 

8

 

	 	o.	 	Any due and unpaid outstanding liabilities of the Guaranteed Partnerships,
Guaranteed Funds and/or Guaranteed Local Partnerships, or any member or partner of any
of the foregoing, to any Centerline Global Entity, Centerline Controlled Entity or any
third party relating to any period on or before the date hereof;

	 
	 	p.	 	Any True-Up Payments calculation prior to the date hereof not being performed
in accordance with the Organizational Documents of the Guaranteed Partnerships;

	 
	 	q.	 	Any claim by or liability to investors in the Guaranteed Partnerships against
the Guaranteed Funds, the Guaranteed Fund GPs or any Centerline Controlled Entity that
any True-Up Payments calculation prior the date hereof was not performed in accordance
with the Organizational Documents of the Guaranteed Partnerships;

	 
	 	r.	 	Any claim or liability resulting from consent not being obtained with respect
to any action taken by any general partner or manager of any Guaranteed Partnerships,
Guaranteed Fund and/or Guaranteed Local Partnerships on or before the date hereof;

	 
	 	s.	 	Any negative financial impact to the Guaranteed Partnerships, the Guaranteed
Funds and/or the Guaranteed Local Partnerships resulting from units at any of the
Properties having been taken out of service due casualty, fire or similar loss on or
before the date hereof;

	 
	 	t.	 	Any claim or liability resulting from actions taken by CMC or any Centerline
Controlled Entity under any Bond Transaction on or before the date hereof relating to,
among other things, debt forbearances, default waivers and/or stabilization extensions;

	 
	 	u.	 	Any claim against or liability to the Properties, the Local General Partners,
the Guaranteed Funds, the Guaranteed Local Partnerships or MLCS resulting from any
pending or threatened litigation existing on the date hereof relating to any of the
foregoing;

	 
	 	v.	 	Any claim against or liability to the Properties, the Local General Partners,
the Guaranteed Funds, the Guaranteed Local Partnerships or MLCS resulting from any
environmental condition existing on the date hereof at the Properties;

	 
	 	w.	 	Any claim against or liability to the Properties, the Local General Partners,
the Guaranteed Funds, the Guaranteed Local Partnerships or MLCS, relating to any period
on or before the date hereof, resulting from the expiration of any Section 8 Housing
Assistance Payment Contract at the Properties;

	 
	 	x.	 	Any non-compliance with any subsidy or financing program of any state that
provides direct or indirect assistance to any Property relating to any period on or
before the date hereof,

 

9

 

	 	y.	 	Any adverse financial impact to the capital accounts of any partner or member
in any Local General Partners, Guaranteed Fund and/or the Guaranteed Local Partnerships
relating to any period on or before the date hereof;

	 
	 	z.	 	Any claim or liability relating to insufficient reserves on the part of the
Guaranteed Partnerships, the Guaranteed Funds and/or the Guaranteed Local Partnerships
existing on the date hereof;

	 
	 	aa.	 	Non-compliance under any federal tax laws or regulations relating to any period
on or before the date hereof with respect to any bond financing applicable to any of
the Properties;

	 
	 	bb.	 	Any negative financial impact to the Guaranteed Partnerships, the Guaranteed
Funds and/or the Guaranteed Local Partnerships resulting from other subsidies providing
assistance directly or indirectly to the Properties existing on the date hereof;

	 
	 	cc.	 	Any bankruptcy of any Centerline Global Entity or Centerline Controlled Entity
that results in an adverse financial impact to any General Partnership, Guaranteed Fund
and/or Guaranteed Local Partnership, or any partner or member of any of the foregoing;
and

	 
	 	dd.	 	Any of the facts or circumstances listed on Exhibit A hereto;

provided, however, Guarantor shall only be liable to the extent any such Loss (i) relates to one of
the Properties listed on Exhibit B hereto and either Guarantor had knowledge of applicable facts or
circumstances or a prudent asset manager exercising appropriate care and due diligence should have
had knowledge of the applicable facts or circumstances, in each such case as of the date hereof,
(ii) relates to any Property other than those listed on Exhibit B; provided, however, Guarantor
shall not be liable for any Loss for which it can show it had no knowledge and with the care and
due diligence of a prudent asset manager would not have known and the facts or circumstances giving
rise to such Loss, and (iii) any such Losses relate to facts and circumstances in 2(l), (m) and (n)
regardless of who controls the Property.

3. Except with respect to the Ongoing Guarantee Liabilities set forth in Section 2 of this
Reaffirmation, MLCS agrees that the Guarantor shall be released from its obligations under the
Guarantee on the date hereof.

4. Guarantor hereby acknowledges and agrees that MLCS is relying upon this Reaffirmation in
conjunction with the execution of the Transaction Assignment Agreement and the New Swap Agreement.
The obligations of the Guarantor hereunder are only with respect to any Loss arising by reason of
the obligations under the Confirmations to the Existing Swap Agreements and that Guarantor shall
have no obligation to post Collateral relating to any Exposure or Independent Amount pursuant to
the Collateral Support Annex to the Existing Swap Agreement or otherwise.

5. Guarantor hereby represents and warrants to MLCS that it has no defenses to the enforcement
of any rights or remedies available to MLCS under the Existing Swap Agreement

 

10

 

and that it has no rights of offset or other claims against MLCS with respect to the Existing
Swap Agreement or enforcement of the rights and remedies under the Existing Swap Agreement.

6. Guarantor acknowledges receipt and approval of the Transaction Assignment Agreement and the
New Swap Agreement and further agrees to their acceptance and consents to the terms thereof.

7. Guarantor hereby agrees to fund up to $167,000 per month in debt service shortfalls
relating to the Bond financing at the Properties until the earlier of January 12, 2012 or receipt
of evidence satisfactory to MLCS pursuant to Paragraph 13(m)(vi)(2)(F) of the Credit Support Annex
of the New Swap Agreement.

8. This Reaffirmation shall inure to the benefit of MLCS and its respective heirs, successors
and assigns.

9. This Reaffirmation shall be governed by the laws of the State of New York.

 

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[Signature Page to Reaffirmation of Guarantee]

IN WITNESS WHEREOF, Guarantor has duly executed this Reaffirmation under seal as of the day
and year first above written.

	 	 	 	 	 
	 	“GUARANTOR”

CENTERLINE HOLDING COMPANY,

a Delaware business trust

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

Acknowledged and Consented To By:

	 	 	 	 	 
	MERRILL LYNCH CAPITAL SERVICES, INC.,

a Delaware corporation

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

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"}]]