Document:

Execution
Counterpart

 

Third
Amendment and Waiver to

Second
Amended and Restated Revolving Credit and Term Loan Agreement

 

This THIRD AMENDMENT
AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “Amendment”) is entered
into as of November 21, 2012, by and among: Centerline Holding Company and Centerline Capital Group LLC (collectively, the “Borrowers”);
those Persons listed as Guarantors on Schedule 1 hereto (each, a “Guarantor,” and, collectively, the
“Guarantors”); Bank of America, N.A., as the Administrative Agent (the “Administrative Agent”)
and, pursuant to Section 23.1 of the Loan Agreement (as defined below), those Lenders constituting the Required Lenders
as set forth on a counterpart signature page hereto, substantially in the form of Schedule 2 hereto.

 

RECITALS

 

Reference is made to
the following facts that constitute the background of this Amendment:

 

A.           The
parties hereto, among others, have entered into that certain Second Amended and Restated Revolving Credit and Term Loan Agreement,
dated as of March 5, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).
Capitalized terms used herein and not otherwise defined herein shall have the same meanings herein as ascribed to them in the Loan
Agreement.

 

B.           In
order to secure the Obligations under the Loan Agreement, Centerline Sponsor 2007-1 Securitization, LLC (“SPV I”)
and the Administrative Agent entered into that certain Collateral Assignment of Right to Receive Payments, dated as of December
19, 2008 (the “SPV I Collateral Assignment”), pursuant to which SPV I granted a continuing security interest
in, and collaterally assigned to the Administrative Agent, all of SPV I’s rights to (1) certain amounts due to be released
or paid on account of the B Bonds (the “B Piece Cash Flow”) and (2) a certain deposit account maintained at
the Administrative Agent by and in the name of SPV I, into which Freddie Mac had previously agreed to make all such payments with
respect to the B Piece Cash Flow (the “SPV I Collateral Account”).

 

C.           Similarly,
Centerline Stabilization 2007-1 Securitization, LLC (“SPV II”) and the Administrative Agent entered into that
certain Collateral Assignment of Right to Receive Payments, dated as of December 27, 2007 (the “SPV II Collateral Assignment”)
and that certain Security Agreement, dated as of December 27, 2007 (the “SPV II Security Agreement”), pursuant
to which SPV II granted a continuing security interest in, and collaterally assigned to the Administrative Agent, all of SPV II’s
rights to (1) certain amounts due to be released from the Stabilization Escrow (as such term is defined in that certain Stabilization
Guaranty, Escrow and Security Agreement, dated as of December 1, 2007, by and between SPV II and Freddie Mac, the “Stabilization
Escrow Releases”) and (2) a certain deposit account maintained at the Administrative Agent by and in the name of SPV
II, into which Freddie Mac had previously agreed to make all such Stabilization Escrow Releases (the “SPV II Collateral
Account”).

 

    	 

    	 

    

 

D.           Pursuant
to the terms of the SPV I Collateral Assignment, the SPV II Collateral Assignment and the SPV II Security Agreement, the Administrative
Agent has agreed that all of the funds deposited in the SPV I Collateral Account and the SPV II Collateral Account, respectively,
can be withdrawn by the Borrowers until such time as there is an Event of Default.

 

E.           The
Borrowers have notified the Administrative Agent that the Borrowers have mistakenly (1) caused the SPV I Collateral Account and
the SPV II Collateral Account to be closed and (2) instructed Freddie Mac to direct the payments made with respect to the B Piece
Cash Flow and the Stabilization Escrow Releases, respectively, to an account established and maintained at Wells Fargo Bank, N.A.,
in the case of (1) and (2), in violation of the terms of the SPV I Collateral Assignment, the SPV II Collateral Assignment and
the SPV II Security Agreement (collectively, the “SPV Collateral Events”).

 

F.           In
light of the foregoing, the Borrowers and the Guarantors have requested that the Required Lenders waive any and all Defaults resulting
solely from the SPV Collateral Events.

 

G.           The
Required Lenders are willing to grant such request solely upon the terms and conditions set forth in this Amendment.

 

NOW, THEREFORE, in
consideration of the foregoing recitals and of the representations, warranties, covenants and conditions set forth herein and in
the Loan Agreement, and for other valuable consideration the receipt and adequacy of which is hereby acknowledged, the parties
hereto agree as follows:

 

Section 1.          Conditions
to Effectiveness of Amendment.

 

Section 1.1.          Conditions
Precedent. The execution and delivery of this Amendment by the Required Lenders is conditioned upon (a) the execution and delivery
of this Amendment by the Borrowers and the Guarantors and (b) the execution, delivery and/or completion by the Borrowers and the
Guarantors of the following documents and/or actions, as applicable:

 

(i)          Payment
of Legal and Other Fees. Simultaneously with the execution and delivery of this Amendment, the Borrowers shall pay, or cause
to be paid, (A) all of the Administrative Agent’s reasonable costs, fees and expenses incurred through the date hereof in
connection with the administration of the Loan Agreement and for which a reasonably detailed invoice has been provided, including,
without limitation, all reasonable outstanding fees and disbursements owed to the Administrative Agent’s legal counsel, Nutter,
McClennen & Fish LLP (“Nutter”) and Nutter’s consultant, Loughlin Management Partners + Co. (“LM+Co”)
and, (B) without duplication, all of the reasonable costs, fees and expenses incurred by Lenders’ counsel in connection with
the preparation, negotiation, execution, interpretation and delivery of this Amendment, for which a reasonably detailed invoice
has been provided.

 

    	- 2 -

    	 

    

 

Section 1.2.          Conditions
Subsequent. The Borrowers shall deliver and/or comply with, on or before December 1, 2012, to the reasonable satisfaction of
the Administrative Agent, each of the conditions subsequent set forth in the closing checklist attached hereto as Annex A,
which will provide, among other things, that (a) new deposit accounts into which the B Piece Cash Flow and Stabilization Escrow
Releases will be deposited will be opened at the Administrative Agent in the name of “Bank of America, N.A. for the benefit
of Centerline Sponsor 2007-1 Securitization, LLC” and “Bank of America, N.A. for the benefit of Centerline Stabilization
2007-1 Securitization, LLC,” and, (b) so long as no Event of Default has occurred and is continuing, the Administrative Agent
will agree to automatically release the funds deposited into such accounts into certain other deposit accounts established solely
in the name of CCG on the same Business Day when such funds are deposited by 2:00 p.m. on such Business Day, and on the next Business
Day when such funds are deposited after 2:00 p.m. on a Business Day or on a day that is not a Business Day.

 

Section 2.          Waiver.
In accordance with Section 23.1 of the Loan Agreement, notwithstanding anything in this Amendment or in any other Loan Document
to the contrary, and in reliance upon the satisfaction in full of the terms, conditions, covenants, representations and warranties
set forth in this Amendment, the Required Lenders hereby unconditionally waive all existing Defaults under any Loan Document which
may have resulted solely from the SPV Collateral Events.

 

Section 3.          Representations
and Warranties. The Borrowers and Guarantors, jointly and severally, represent and warrant to the Lenders, the Issuing Bank
and the Administrative Agent as of the date of this Amendment that: (a) other than to the extent described herein, no
Default is in existence on the date hereof, or will result from the execution and delivery of this Amendment or the consummation
of any transactions contemplated hereby; (b) each of the representations and warranties of the Borrowers and the Guarantors
in the Loan Agreement and the other Loan Documents is true and correct in all material respects on the effective date of this Amendment
(except for representations and warranties limited as to time or with respect to a specific event, which representations and warranties
shall continue to be limited to such time or event); and (c) this Amendment and the Loan Agreement are legal, valid and binding
agreements of the Borrowers and the Guarantors and are enforceable against them in accordance with their terms.

 

Section 4.          Ratification.
Except as hereby amended or waived, the Loan Agreement, all other Loan Documents and each provision thereof are hereby ratified
and confirmed in every respect and shall continue in full force and effect, and this Amendment
shall not be, and shall not be deemed to be, a waiver of any Default or of any covenant, term or provision of the Loan Agreement
or the other Loan Documents. In furtherance of the foregoing ratification, by executing this Amendment
in the spaces provided below, each of the Guarantors, on a joint and several basis, hereby absolutely and unconditionally (a) reaffirms
its obligations under the Guaranties, and (b) absolutely and unconditionally consents to (i) the execution and delivery by the
Borrowers of this Amendment, (ii) the continued implementation and consummation of arrangements
and transactions contemplated by the Loan Agreement (including, without limitation, as amended or waived hereby) and the other
Loan Documents, and (iii) the performance and observance by each Borrower and each Guarantor of all of its respective agreements,
covenants, duties and obligations under the Loan Agreement (including, without limitation, as amended hereby) and the other Loan
Documents.

 

    	- 3 -

    	 

    

 

Section 5.          Counterparts.
This Amendment may be executed and delivered in any number of counterparts with the same effect
as if the signatures on each counterpart were upon the same instrument. Any counterpart delivered by facsimile or by other electronic
method of transmission shall be deemed an original signature thereto.

 

Section 6.          Amendment
as Loan Document. Each party hereto agrees and acknowledges that this Amendment constitutes
a “Loan Document” under and as defined in the Loan Agreement.

 

Section
7.          Governing Law.
This AMENDMENT shall be deemed to constitute a
contract made under the laws of the State of New York, INCLUDING ARTICLE 5 OF THE UCC, and shall be governed by and construed in
accordance with the internal laws of the State of New York (INCLUDING SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW,
but otherwise without regard to its conflicts of law rules).

 

Section
8.          Successors and Assigns.
This Amendment shall be binding upon each of the Borrowers, the Guarantors, the Lenders, the
Issuing Bank, the Administrative Agent, and their respective successors and assigns, and shall inure to the benefit of each such
Person and their permitted successors and assigns.

 

Section
9.          Headings. Section
headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

 

Section
10.          Expenses. Each Borrower
jointly and severally agrees to promptly reimburse the Administrative Agent and any of the Lenders for all expenses, including,
without limitation, reasonable fees and expenses of Nutter, LM+Co and any Lenders’ counsel, that such Person has heretofore
or hereafter incurred or incurs in connection with the preparation, negotiation and execution of this Amendment and all other instruments,
documents and agreements executed and delivered in connection with this Amendment.

 

Section
11.          Integration. This
Amendment contains the entire understanding of the parties hereto and with any other Lenders and parties to the Loan Agreement
with regard to the subject matter contained herein. This Amendment supersedes all prior or contemporaneous negotiations, promises,
covenants, agreements and representations of every nature whatsoever with respect to the matters referred to in this Amendment,
all of which have become merged and finally integrated into this Amendment. Each of the parties hereto understands that in the
event of any subsequent litigation, controversy or dispute concerning any of the terms, conditions or provisions of this Amendment,
no party shall be entitled to offer or introduce into evidence any oral promises or oral agreements between the parties relating
to the subject matter of this Amendment not included or referred to herein and not reflected by a writing included or referred
to herein.

 

    	- 4 -

    	 

    

 

Section
12.          No Course of Dealing.
The Administrative Agent and the Required Lenders have entered into this Amendment on the express understanding with the Borrowers
and the Guarantors that, in entering into this Amendment, neither the Administrative Agent nor the Lenders are establishing any
course of dealing with the Borrowers or the Guarantors. The Administrative Agent’s and the Lenders’ rights to require
strict performance with all of the terms and conditions of the Loan Agreement and the other Loan Documents shall not in any way
be impaired by the execution of this Amendment. Neither the Administrative Agent nor the Lenders shall be obligated in any manner
to execute any further amendments or waivers and if such amendments or waivers are requested by the Borrowers and/or the Guarantors
in the future, assuming the terms and conditions thereof are satisfactory to the Administrative Agent and the Lenders, the Administrative
Agent and the Lenders may require the payment of fees in connection therewith. Each of the Borrowers and the Guarantors agree that
none of the waivers or amendments set forth herein constitute a course of dealing giving rise to any obligation on the part of
the Administrative Agent or the Lenders that requires a similar or any other waiver or amendment with respect to the Loan Agreement
or any other Loan Document.

 

Section
13.          Jury Trial Waiver.
THE BORROWERS, THE GUARANTORS, THE ADMINISTRATIVE AGENT AND THE LENDERS, BY ACCEPTANCE OF THIS AMENDMENT,
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT, THE LOAN AGREEMENT, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE
AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, ARISING OUT OF TORT, STRICT
LIABILITY, CONTRACT OR ANY OTHER LAW, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.

 

[Remainder of page
intentionally left blank; signature pages follow]

 

    	- 5 -

    	 

    

 

IN WITNESS WHEREOF,
the parties have caused this Amendment to be duly executed by their duly authorized officers or representatives, all as of the
date first above written.

 

	BORROWERS:	CENTERLINE HOLDING COMPANY
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE CAPITAL GROUP LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 

 

(Signatures continued on next page)

 

S-Borrowers

Signature page to Third Amendment and Waiver to Second Amended
and Restated Revolving Credit and Term Loan Agreement

 

    	 

    	 

    

 

	GUARANTORS:	CENTERLINE CAPITAL COMPANY LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE AFFORDABLE HOUSING ADVISORS LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE HOLDING TRUST
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE HOLDING TRUST II
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE AREA LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 

 

(Signatures continued on next page)

 

S-Guarantors

Signature page to Third Amendment and Waiver
to Second Amended and Restated Revolving Credit and Term Loan Agreement

 

    	 

    	 

    

 

	GUARANTORS (CONT.):	CENTERLINE FINANCE CORPORATION
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE INVESTOR LP LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE INVESTOR LP II LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE INVESTOR LP III LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CM INVESTOR LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 
	 	 	 	 	 
	 	CENTERLINE MANAGER LLC
	 	 	 	 	 
	 	By:	/s/ Robert L. Levy	 
	 	 	Name:	Robert L. Levy	 
	 	 	Title:	 	 

 

S-Guarantors

Signature page to Third Amendment and Waiver
to Second Amended and Restated Revolving Credit and Term Loan Agreement

 

    	 

    	 

    

 

Schedule
1

 

Guarantors

 

		1.	CCC

		2.	CAHA

		3.	Holding Trust

		4.	Holding Trust II

		5.	Centerline AREA LLC

		6.	Centerline Finance Corporation

		7.	Centerline Investor LP

		8.	Centerline Investor LP II

		9.	Centerline LIHTC Sub

		10.	CM Investor LLC

		11.	Centerline Manager LLC

 

    	 

    	 

    

 

Schedule 2

 

Form of Signature Page for Lenders included
in Required Lenders for purposes of approving THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT:

 

The undersigned hereby evidences its agreement
to the terms of that certain THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT,
dated as of November 20, 2012, and the consummation of the transactions contemplated thereby, amending that certain Second Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and Centerline
Capital Group LLC, as the Borrowers, the Guarantors described therein, the Lenders described therein, and Bank of America, N.A.,
as the Administrative Agent and the Issuing Bank, as such agreement is amended, restated, supplemented or otherwise modified from
time to time.

 

	 	BANK OF AMERICA, N.A.
	 	 	 	 
	 	By:	/s/ John F. Simon	 
	 	Name:	John F. Simon	 
	 	Title:	SVP	 

 

Representing 40.816326532% of all Revolving Loan Commitments
and Term Loan Commitments

 

    	 

    	 

    

 

Schedule 2

 

Form of Signature Page for Lenders included
in Required Lenders for purposes of approving THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT:

 

The undersigned hereby evidences its agreement
to the terms of that certain THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT,
dated as of November 16, 2012, and the consummation of the transactions contemplated thereby, amending that certain Second Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and Centerline
Capital Group LLC, as the Borrowers, the Guarantors described therein, the Lenders described therein, and Bank of America, N.A.,
as the Administrative Agent and the Issuing Bank, as such agreement is amended, restated, supplemented or otherwise modified from
time to time.

 

	 	CITICORP USA
	 	 	 	 
	 	By:	/s/ William T. Cahill	 
	 	Name:	William T. Cahill	 
	 	Title:	Vice President	 

 

Representing 20.408% of all Revolving Loan Commitments and Term
Loan Commitments

 

    	 

    	 

    

 

Schedule 2

 

Form of Signature Page for Lenders included
in Required Lenders for purposes of approving THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT:

 

The undersigned hereby evidences its agreement
to the terms of that certain THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT,
dated as of November 20, 2012, and the consummation of the transactions contemplated thereby, amending that certain Second Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and Centerline
Capital Group LLC, as the Borrowers, the Guarantors described therein, the Lenders described therein, and Bank of America, N.A.,
as the Administrative Agent and the Issuing Bank, as such agreement is amended, restated, supplemented or otherwise modified from
time to time.

 

	 	MLBUSA COMMUNITY DEVELOPMENT CORP.
	 	 	 	 
	 	By:	/s/ John F. Simon	 
	 	Name:	John F. Simon	 
	 	Title:	Authorized Signatory	 

 

Representing 10.204081632% of all Revolving Loan Commitments
and Term Loan Commitments

 

    	 

    	 

    

 

Schedule 2

 

Form of Signature Page for Lenders included
in Required Lenders for purposes of approving THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT:

 

The undersigned hereby evidences its agreement
to the terms of that certain THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT,
dated as of November 16, 2012, and the consummation of the transactions contemplated thereby, amending that certain Second Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and Centerline
Capital Group LLC, as the Borrowers, the Guarantors described therein, the Lenders described therein, and Bank of America, N.A.,
as the Administrative Agent and the Issuing Bank, as such agreement is amended, restated, supplemented or otherwise modified from
time to time.

 

	 	Morgan Stanley Senior Funding, Inc
	 	 	 	 
	 	By:	/s/ Su Yeo	 
	 	Name:	Su Yeo	 
	 	Title:	Vice President	 

 

Representing 16.3265% of all Revolving Loan Commitments and
Term Loan Commitments

 

    	 

    	 

    

 

Schedule 2

 

Form of Signature Page for Lenders included
in Required Lenders for purposes of approving THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT:

 

The undersigned hereby evidences its agreement
to the terms of that certain THIRD AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT,
dated as of November 16, 2012, and the consummation of the transactions contemplated thereby, amending that certain Second Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of March 5, 2010, by and among Centerline Holding Company and Centerline
Capital Group LLC, as the Borrowers, the Guarantors described therein, the Lenders described therein, and Bank of America, N.A.,
as the Administrative Agent and the Issuing Bank, as such agreement is amended, restated, supplemented or otherwise modified from
time to time.

 

	 	CIBC INC.
	 	 	 	 
	 	By:	/s/ Charles D. Mulkeen	 
	 	Name:	Charles D. Mulkeen	 
	 	Title:	Executive Director	 

 

Representing 8.1632% of all Revolving Loan Commitments and Term
Loan Commitments

 

    	 

    	 

    

 

Annex A

 

Conditions Subsequent Closing Checklist

 

	DOCUMENT/ACTION	 	
        RESPONSIBLE

        PARTY
	 	STATUS
	 	 	 	 	 
	Post-closing Deliverables	 	 	 	 
	 	 	 	 	 
	On or before December 1, 2012:	 	 	 	 
	 	 	 	 	 
	Opening of deposit account at the Administrative Agent, in the name of “Bank of America, N.A. for the benefit of Centerline Sponsor 2007-1 Securitization, LLC,” into which all payments with respect to B Piece Cash Flow are to be deposited for the benefit of SPV I (the “Sponsor Account”)	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	Opening of deposit account at the Administrative Agent, in the name of “Bank of America, N.A. for the benefit of Centerline Stabilization 2007-1 Securitization, LLC,” into which all Stabilization Escrow Releases are to be made for the benefit of SPV II (the “Stabilization Account”)	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	Amended Irrevocable Payment Notice, to be signed by Freddie Mac and Deutsche Bank, acknowledging that B Piece Cash Flow shall be paid into the Sponsor Account until revoked in a writing signed by the Administrative Agent	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	Amended Irrevocable Payment Notice, to be signed by Freddie Mac and Deutsche Bank, acknowledging that Stabilization Escrow Releases shall be paid into the Stabilization Account until revoked in a writing signed by the Administrative Agent	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	Amendment to SPV I Collateral Assignment, updating references to the Sponsor Account and mechanics for providing automatic instructions (revocable during the existence of an Event of Default) directing B Piece Cash Flow received in such account to Borrowers	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	Amendment to SPV II Collateral Assignment, updating references to the Stabilization Account and mechanics for providing automatic instructions (revocable during the existence of an Event of Default) directing Stabilization Escrow Releases received in such account to Borrowers	 	Borrowers/ Administrative Agent	 	 

 

    	 

    	 

    

 

	DOCUMENT/ACTION	 	
        RESPONSIBLE

        PARTY
	 	STATUS
	 	 	 	 	 
	Amendment to SPV II Security Agreement, updating references to the Stabilization Account and mechanics for providing automatic instructions (revocable during the existence of an Event of Default) directing Stabilization Escrow Releases received in such account to Borrowers	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	UCC-3 Financing Statement Amendment for SPV I, updating references to the Sponsor Account and Amended Irrevocable Payment Notice to Freddie Mac	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	UCC-3 Financing Statement Amendment for SPV II, updating references to the Stabilization Account and Amended Irrevocable Payment Notice to Freddie Mac	 	Borrowers/ Administrative Agent	 	 
	 	 	 	 	 
	Copies of monthly trustee statements from Deutsche Bank for January 2012 through November 2012, with respect to each of SPV I and SPV II	 	Borrowers	 	 
	 	 	 	 	 
	Copies of deposit account statements with respect to B Piece Cash Flows for June 2012 through October 2012	 	BorrowersFACTORING AGREEMENT

 

STAR FUNDING, INC.

237 W. 37th Street,
5th Floor

NEW YORK, NY 10018

 

October
17, 2012

 

[NAME OF BOLDFACE ENTITY]

1309 Pico Blvd, Suite A

Santa Monica, CA 90405

 

Attention: Nicole Ostoya, Chief Executive Officer

 

THE FOLLOWING IS THE AGREEMENT UNDER WHICH
WE ARE TO ACT AS YOUR FACTOR WITH RESPECT TO ALL ACCOUNTS RECEIVABLE FROM YOUR PRESENT AND FUTURE CUSTOMERS ARISING FROM THE SALE
AND DELIVERY OF MERCHANDISE OR THE RENDITION OF SERVICES BY YOUR COMPANY.

 

1.          You
hereby sell and assign to us, making us absolute owner thereof, all of your accounts, contract rights, and other obligations to
you for the payment of money, whether now existing or hereafter arising (each a “Receivable” and collectively
the “Receivables”), irrespective of whether arising out of the sale of goods (the “Goods”)
supplied by us, or with respect to which we have provided financial accommodations to you under, the Supply Agreement dated as
of the date hereof between you and us (as it may be amended, the “Supply Agreement”), together with all
proceeds thereof, all security and guarantees thereof, and all of your rights to any goods and property represented thereby. We
shall have all the rights of an unpaid seller of any goods, the sale of which gives rise to each Receivable, including, without
limitation, the right of stoppage in transit, reclamation and replevin. Upon each purchase of a Receivable from you, you shall
execute and deliver to us such further and confirmatory assignments of the Receivable as we may require, all of which shall be
in form and manner satisfactory to us (including, without limitation, in the case of Receivables due from the U.S. Government or
any department or agency thereof, such assignments and notices of assignment as may be necessary to comply with 41 U.S.C. §15,
31 U.S.C. §3727, and the regulations adopted thereunder (collectively, the “Assignment
of Claims Act”)), together with copies of invoices and all shipping or delivery receipts and such other proof of
sale and delivery or performance as we from time to time may require. You will make appropriate notations upon your books and ledgers
indicating the sale and assignment of the Receivables to us. All invoices or other statements to customers evidencing Receivables
shall be mailed at your expense whether mailed by you or at our option by us and shall clearly state in a manner satisfactory to
us that each such Receivable has been assigned to us or our assignees and is payable to us or our assignees. Without limiting the
foregoing, you agree and acknowledge that (i) we have the right to sell, assign, transfer and/or re-factor the Receivables to any
entity or entities; (ii) we may in connection with such sale, assignment transfer and/or re-factoring, from time to time, request
that any such entity or entities make advances to us and advance payments of the purchase price of and/or secured by the Receivables,
(iii) we may purchase insurance against credit losses arising on Receivables (“Credit Insurance”); (iv)
we may assign any or all of our rights under this Agreement or with respect to any of the Receivables to any issuer of Credit Insurance
on Receivables, and any entity or entities to which we sell, assign, transfer and/or re-factor Receivables; and (v) we may sell
participations in this Agreement, or in any of your obligations to us hereunder, to any person or entity.

 

    	 

    	 

    

 

2.          (a)          We
shall not assume the credit risk on any Receivable purchased by us hereunder unless (i) it arises out of a specific sale to a customer
of yours that has been submitted to us for credit approval and has been approved by us in writing (an “Approved Sale”)
or (ii) it arises out of a sale to a customer of yours with respect to whom we have approved a credit limit (an “Approved
Credit Limit”) in writing, the sale meets all of the terms and conditions of our approval, the goods are shipped
or the services are provided to the customer during the period specified in our approval, and the resulting Receivable, when added
to all other outstanding Receivables from such customer, does not exceed the Approved Credit Limit for such customer. Any approval
provided by us hereunder (whether of a particular sale or a credit limit to a particular customer) must be in writing and shall
be limited to the specific terms and conditions listed therein. In no event shall we have any credit risk on any Receivable, whether
or not approved by us, if the net amount of such Receivable is less than $250.00.

 

(b)          On
Approved Sales and sales under Approved Credit Limits we shall assume the credit risk, being responsible only for the financial
inability of your customers with respect to Receivables we have purchased (such customers herein referred to as “Customers”)
to pay at maturity, such assumption of credit risk going into effect upon delivery or performance, and acceptance of the goods
or services by such Customer, without dispute. We shall not be responsible for any nonpayment of a Receivable because of the assertion
of any claim or dispute by a Customer or the exercise of any counterclaim or offset (whether or not such claim, dispute, counterclaim
or offset relates to the specific Receivable) or where nonpayment is a consequence of enemy attack, civil commotion, the acts or
restraint of public authorities, acts of God or force majeure, or if any warranty made by you to us in respect of such Receivable
has been breached, or if you fail to provide us upon our written request, with copies of invoices and shipping or delivery receipts
or such other proof of sale and delivery or performance as we may from time to time require. We shall have no liability of any
kind for refusing to give or for withdrawing credit approval pursuant to the terms of this Agreement, or for exercising or refusing
to exercise any rights or remedies we have under this Agreement or otherwise.

 

(c)          We
reserve the right to withdraw credit approval of an Approved Sale at any time before delivery or performance and, in any event,
such credit approval shall be deemed to be withdrawn if full delivery or performance is not made within 30 days after the delivery
or shipment date specified in the terms of sale submitted to us for approval, or, if no such delivery or shipment date is specified,
within 30 days of the date of such credit approval, or as may be otherwise stated in such credit approval.

 

    	2

    	 

    

 

(d)          We
reserve the right to reduce or cancel an Approved Credit Limit for a Customer by giving you written notice to that effect. If we
reduce or cancel the Approved Credit Limit for a Customer (i) such reduction or cancellation shall take effect immediately and
(ii) any Receivables arising out of sales you make to such customer after receipt of such notice shall be CR Receivables (as defined
below) to the extent that they exceed the Approved Credit Limit as so reduced or cancelled.

 

(e)          Any
purchase of Receivables from you which is not approved in writing by us as to credit shall be known as a C.R. (Clients Risk) Receivable
(each a “CR Receivable” and collectively the “CR Receivables”). All CR Receivables
are assigned to and purchased by us with full recourse to you and at your credit risk, but are otherwise subject to the covenants,
terms and conditions provided herein in respect of approved Receivables on which we have assumed the credit risk. We shall have
the right to charge back to your account the amount of CR Receivables at any time either before or after their maturity and you
agree to pay us upon demand the amount thereof, together with all expenses including, without limitation, collection charges and
other collection and attorneys’ fees incurred by us up to the date of such payment in attempting to collect or enforce any
such payment and in attempting to collect or enforce any such Receivable. In addition, if we, at your request, but subject to our
discretion, file a proof of claim in any insolvency proceeding with respect to a CR Receivable and/or forward such CR Receivable
to an attorney or agency for collection, we shall charge your account, at the time such CR Receivable or claim is so filed or forwarded,
with an amount equal to 15% of the CR Receivable. In addition, (whether or not such CR Receivable or claim is filed or submitted
at your request) any other charges incurred by us thereafter shall be charged to your account.

 

(f) Any payments received by us
from or for the account of a Customer that is the account debtor with respect to both CR Receivables and Receivables as to which
we have assumed the credit risk (“Factor Risk Receivables”) shall be applied, first, to Factor Risk Receivables
until all such Receivables have been paid in full and then to CR Receivables, irrespective of any instructions to the contrary
from the person or entity that made such payment.

 

3.          Any
goods rejected or returned by any Customer shall be our property held by you in trust for us separate and apart from any other
goods, and upon demand shall forthwith be delivered to us or disposed of by you at our direction and without charge to us. You
shall report to us in writing all disputes and claims made by any Customers, and the return of or offer to return any goods, and
you will promptly settle all such claims and disputes at your expense. As absolute owner of each Receivable, we may in our sole
discretion enforce, effect any compromise, settle and adjust any Receivable, in our name or yours, without affecting or limiting
your obligation to us under this Agreement, and whether or not any such Receivable shall have been charged back. We reserve the
right at any time to charge back to your account the full amount of the Receivable involved in any claim, dispute or return asserted
by your Customer, and you agree to pay us upon demand the full amount thereof. The charge back to your account of the amount of
any Receivable shall not be deemed a reassignment thereof to you and title thereto, to the proceeds thereof, to all security and
guarantees therefor and to your interest in the goods represented thereby, shall remain in us. You shall indemnify us for, and
hold us harmless against, any loss, liability, claim or expense of any kind arising from any claims of, or disputes with any Customer
as to terms, price, quality, or otherwise, with respect to any Receivable, including, without limitation, any claim for a return
of any payments thereunder and any and all expenses and attorney’s (whether in-house or outside) fees incurred by us in collecting
or attempting to collect any Receivables charged back to you.

 

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4.          If
any checks, drafts, notes, acceptances, cash collections or payments in any form shall be received by you on any Receivable, you
will immediately transmit and deliver them to us or to our assignees in the identical form received. You agree that we and any
such person or entity as we may from time to time designate, shall have the right to sign and/or endorse your name on all remittances
and all papers, bills of lading, receipts, instruments and documents relating to Receivables and the transactions between us. We
shall have the right to deposit any checks or other remittances received on any Receivable regardless of notations or conditions
placed thereon by any Customer or deductions reflected thereby and to charge the amount of any such deductions to your account.

 

5.          As
to each Receivable assigned to us, you hereby warrant that (i) it is a bona fide existing obligation created by the sale and actual
delivery of goods or the rendition of services to a Customer in the ordinary course of business and in compliance with such Customer’s
purchase order and all applicable procurement regulations, which you then own free of liens and encumbrances, and which is then
unconditionally owing to you without defense, offset or counterclaim; and (ii) the Customer has received and will accept the goods
or services, and the invoices therefor, without dispute or claim of any kind. Nothing contained in the previous sentence shall
reduce, affect or limit in any way your responsibility to assure us (or your civil liability to us in connection therewith) that
each Receivable assigned to us by you will be paid in the ordinary course of business regardless of your knowledge of any irregularity,
defense, offset or counterclaim in connection with any such Receivable or our ability to rely on such assurances. You hereby represent
and warrant that you have full right and authority to sell and assign to us and to grant to us a security interest in the Receivables,
that you have not granted a security interest therein or in any of your inventory to any party other than us and the holders of
the promissory notes listed in Exhibit A hereto (whose security interest has been subordinated to our security interest therein
on terms and conditions satisfactory to us) and that you will not hereafter grant any security interest therein or in any of your
inventory to anyone other that us at any time during the term of this Agreement and until the security interests granted hereunder
have been terminated. You further represent and warrant that your name, place of business, chief executive office and location
of your books and records relating to the Receivables are as indicated on the first page hereof and you agree to notify us promptly
of any change in such or in your corporate or business structure or your state of organization. You further represent and warrant
that (i) you have identified to us all tradenames, tradestyles or other assumed or fictitious business names (sometimes referred
to as “DBA” or “doing business as” names) that you use; (ii) you will advise us in writing if you commence
using any other such names in the future; and (iii) upon our request therefor, you will provide to us evidence of your registration
of all such names in all jurisdictions in which such registration is required by law. You hereby covenant that you will not change
your name or jurisdiction of organization without giving us at least 30 days prior written notice thereof.

 

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6.          (a)
Subject to the other provisions of this Section, you shall pay us for our services hereunder a factoring commission (the “Initial
Factoring Commission”) equal to the Applicable Percentage of the gross invoice amount of each Receivable, which commission
shall be due and payable by you on the date such Receivable arises, and shall then be chargeable to your account. Our Initial Factoring
Commission is based upon maximum selling terms of 60 days, and no more extended terms or additional dating shall be granted by
you to any Customer without our prior written approval. If such approval is given by us, then for each 30-day period or part thereof
of such extended terms or additional dating our factoring commission with respect to any Receivable covered thereby shall be increased
by an amount equal to .25% of the gross invoice amount of such receivable, which commission shall be due and payable by you on
the date we approve such extended terms or additional dating and shall be chargeable to your account. For purposes of this Agreement,
the term “Applicable Percentage” shall mean (i) with respect to the first $5,000,000 in aggregate gross
invoice amount of Receivables purchased by us hereunder during any Contract Year (as defined below), 1.25%, (ii) with respect to
that portion of Receivables purchased by us hereunder during any Contract Year whose gross invoice amount exceeds $5,000,000 but
does not exceed $10,000,000, 1.125%, (iii) with respect to that portion of Receivables purchased by us hereunder during any Contract
Year whose gross invoice amount exceeds $10,000,000, 1.00%. Notwithstanding anything to the contrary contained herein, the minimum
commission with respect to each Receivable shall be $5.00.

 

(b)          The
factoring commission on Receivables due from a Customer (or any affiliates or subsidiaries thereof) listed on any schedule issued
by us from time to time which refers to this Agreement and is designated a Special Accounts Schedule, shall be equal to the rate
set forth above, plus an amount equal to the surcharge set forth on the such Special Accounts Schedule for such Customer. The surcharge
with respect to any Receivable shall be due and payable on the date on which the factoring commission for such Receivable is due
and payable, and shall be chargeable to your account.

 

(c)          You
have represented to us that you will have sufficient factored sales volume to pay us at least $31,250 in factoring commissions
(the "Minimum Annual Commissions") during each 12-month period commencing on the date hereof or any anniversary
of such date (each, a "Contract Year"). You hereby acknowledge that we have relied on that representation in deciding
to offer to you the discretionary factoring facility contemplated hereby, and that lower sales volumes would have a material adverse
effect on our projected profit margins hereunder. Accordingly, in order to induce us to enter into this Agreement and provide the
discretionary factoring facility contemplated hereby, you hereby agree that, notwithstanding anything to the contrary contained
herein, if the aggregate amount of factoring commissions payable by you under this Agreement for any calendar month during a Contract
Year is less than one-twelfth of the Minimum Annual Commissions for such Contract Year we may, at our option, charge the difference
to your account with us at the end of such month (it being understood that we will make subsequent adjustments if necessary to
ensure that you do not pay us with respect to any Contract Year more than the greater of (a) the total factoring commissions you
owe us under this Agreement for such Contract Year and (b) the Minimum Annual Commissions applicable to such Contract Year).

 

7.          (a)
The purchase price for each Receivable shall be the invoice amount of the Receivable, less returns (whenever made), selling discounts
(calculated at our option on shortest terms), credits or deductions of any kind allowed or granted to or taken by the Customer
at any time, and our commission provided for herein. No discount, credit or allowance with respect to any Receivable shall be granted
by you to any Customer, and no return of goods shall be accepted by you, without our prior written consent. A discount, credit
or allowance may be claimed only by the Customer. All amounts collected on the Receivables shall be credited to your account adding
five (5) business days for collection and clearance of remittances.

 

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(b)          If
you require funds from time to time, we may advance to you, at our discretion, up to the Applicable Percentage of the net amount
of Receivables purchased by us (other than CR Receivables) and not as yet collected (each such advance herein called an “Advance”
and, collectively, the “Advances”). You shall pay us interest upon the daily average outstanding principal
amount of the Advances at a rate (the “Interest Rate”) per annum equal to the greater of (i) the prime
rate of JPMorgan Chase Bank, N.A. (the “Bank”), as announced by the Bank from time to time (the “Prime
Rate”), plus 2.00% or (ii) a floor of 5.50%. The term “Applicable Percentage” as used in this
paragraph means 80%. That portion of Advances which is in excess of the above stated Applicable Percentage of the Receivables shall
bear interest at a per annum rate which is 2.00% in excess of the Interest Rate. The Prime Rate may not be the lowest or best rate
charged by the Bank. Notwithstanding the foregoing, in no event shall the rate of interest agreed to by or charged to you hereunder
exceed the maximum rate of interest permitted to be so agreed or charged under the law of the jurisdiction whose laws are applicable
to such rate of interest.

 

(c)          If,
on the day on which we purchase any Receivable from you hereunder, you owe any amount to the Supplier under the Supply Agreement,
you shall be deemed to have requested an Advance from us hereunder in an amount equal to the lesser of the Applicable Percentage
of the net amount of such Receivable or the amount you then owe to the Supplier.

 

(d)          We
shall remit the proceeds of any Advance made by us hereunder (whether pursuant to your request under Section 6(b) or your deemed
request under Section 6(c)) directly to the Supplier in accordance with its instructions to the extent of any amount then owed
by you to the Supplier (it being understood and agreed that we may rely on the Supplier’s representation to us of the amount
then owed to it); the excess, if any, of the principal amount of such Advance over the amount then owed to the Supplier shall be
remitted to you in accordance with the terms of this Agreement.

 

(e)          About
twenty (20) days after the end of each month, we will render to you a statement with respect to the Receivables purchased by us
during the previous month, together with advances and charges made to your account under this Agreement. In addition to any other
amounts chargeable to your account, your account shall be charged with all expenses and costs from time to time hereafter incurred
by us during the course of periodic examinations of your books and records, and operations, plus a per diem charge at our then
standard rate per person, per day, for our examiners in the field and office (collectively, “Exam Costs”) and our expenses
consisting of postage on invoices, bank wire and similar charges; provided, however, that so long as you haven’t
breached, and no default has occurred under, this Agreement, the Supply Agreement or any other agreement with us or any Obligations
to us, you shall not be responsible for any Exam Costs that exceed $15,000 in the aggregate in any given Contract Year. Our current
standard rate is $850 per person, per day. We may, at our discretion, charge your account with a fee for all trial balances and
sales summaries we prepare at your request. All statements, reports or accountings rendered or issued by us to you, including,
without limitation, such trial balances and sales summaries, shall be deemed accepted and be finally conclusive and binding upon
you unless you notify us to the contrary by registered or certified mail within thirty (30) days after the date such statement,
report or accounting is sent to you.

 

    	6

    	 

    

 

8.          (a)          As
collateral security for any and all of your (and your subsidiaries’ and affiliates’) indebtedness and obligations to
us and to each of our subsidiaries and affiliates, whether matured or unmatured, absolute or contingent, now existing or that may
hereafter arise (including, without limitation, your obligations to us hereunder, under the Supply Agreement, under all guarantees
in our favor, under indemnity or reimbursement agreements or by subrogation), and howsoever acquired by us, whether arising directly
between us or acquired by us by assignment, whether relating to this Agreement or independent hereof, including, without limitation,
all obligations incurred by you to any other concern factored or financed by us (collectively, the “Obligations”),
you grant to us a security interest in all of your (i) accounts; (ii) cash and currency; (iii) chattel paper; (iv) registered United
States copyrights, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications
in connection therewith (including, without limitation, registrations, recordings and applications in the United States Copyright
Office), all renewals thereof and all licenses with respect thereto, (v) deposit accounts; (vi) documents; (vii) equipment; (viii)
financial assets; (ix) fixtures; (x) general intangibles; (xi) goods; (xii) instruments; (xiii) inventory; (xiv) investment property;
(xv) letter-of-credit rights; (xvi) letters patent of the United States or any other country and all reissues and extensions thereof,
applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part
thereof, and agreements, whether written or oral, providing for the grant by or to you of any right to manufacture, use or sell
any invention covered by a letter patent; (xvii) securities accounts and securities entitlements; (xviii) software; (xix) supporting
obligations; (xx) trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country
or any political subdivision thereof, or otherwise, all renewals thereof, and all agreements, written or oral, providing for the
grant by or to you of any right to use any such name, style, mark, logo or other source or business identifier; (xxi) other personal
property of whatever type and (xxii) all accessions and all proceeds of any and all of the foregoing (collectively, the “Collateral”).
All terms used in this section that are not defined herein shall have the respective meanings given to them in the Uniform Commercial
Code in effect from time to time in the State of New York (the “NYUCC”).

 

(b)          All
Obligations shall be due and payable on demand, and you hereby irrevocably authorize and direct us to charge at any time to your
account any Obligations, and to pay any Obligations owing to any of our subsidiaries or affiliates by so charging your account.
You agree to execute financing statements and any and all other instruments and documents that may now or hereafter by provided
for by the Uniform Commercial Code as adopted in the relevant jurisdiction or any other law applicable thereto reflecting the security
interests granted to us hereunder (collectively, the “Financing Statements”). You authorize us to file
the Financing Statements without your signature, signed only by us as a secured party, or unsigned, to perfect the security interests
granted to us hereunder. You shall be liable for, and we may charge your account with, all costs and expenses of any public record
filings (including, without limitation, any filing or recording taxes), the making of lien searches, and any attorneys’ (whether
in-house or outside) fees and expenses which may be incurred by us in the negotiation and documentation of this Agreement and related
documents and any amendments thereof, administering this Agreement and perfecting, protecting, preserving and enforcing all security
interests and rights provided to us hereunder, under any other agreement relating to the Obligations or by law.

 

    	7

    	 

    

 

(c)          We
shall have, in addition to the rights and remedies provided herein or in any other documents relating to the Obligations, or by
law (including, but not limited to, levy of attachment, garnishment and the rights and remedies set forth in the Uniform Commercial
Code of the jurisdiction applicable to the affected Collateral), the rights and remedies of a secured party under the NYUCC (regardless
of whether the NYUCC is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the NYUCC
applies to the affected Collateral), and further, we may, with or without judicial process or the aid and assistance of others,
(i) enter on any premises on which any of the Collateral may be located during normal business hours (or anytime, after the
occurrence and during the continuance of a default under this Agreement, the Supply Agreement, any of your other agreements with
us, or any Obligations to us) and, without resistance or interference by you or any of your subsidiaries or affiliates, take possession
of the Collateral, (ii) dispose of any Collateral on any such premises, (iii) require you and all of your subsidiaries
and affiliates to assemble and make available to us at your expense any Collateral at any place and time designated by us which
is reasonably convenient to both of us, (iv) remove any Collateral from any such premises for the purpose of effecting sale
or other disposition thereof, and/or (v) without demand and without advertisement, notice, hearing or process of law, all
of which you hereby waive to the fullest extent permitted by law, at any place and time or times, sell and deliver any or all Collateral
held by or for us at public or private sale, at any exchange or broker's board or elsewhere, by one or more contracts, in one or
more parcels, for cash, upon credit or otherwise, at such prices and upon such terms as we deem advisable, in our sole discretion
(subject to any and all mandatory legal requirements). You acknowledge that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which might have been obtained at a public sale and, notwithstanding
the foregoing, agree that such private sale shall be deemed to have been made in a commercially reasonable manner. Neither our
compliance with applicable law nor our disclaimer of warranties relating to the Collateral shall be considered to adversely affect
the commercial reasonableness of any sale. To the extent the rights of notice cannot be legally waived hereunder, you agree that
any requirement of reasonable notice shall be met if such notice, specifying the place of any public sale or the time after which
any private sale is to be made, is personally served on or mailed, postage prepaid, to you in accordance with the notice provisions
hereof at least 10 days before the time of sale or other event giving rise to the requirement of such notice. We may adjourn any
public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. We shall not be obligated to make any sale or other disposition
of the Collateral regardless of notice having been given. To the extent permitted by applicable law, any holder of Obligations
may be a purchaser at any such sale. To the extent permitted by applicable law, you hereby waive all of your rights of redemption
with respect to any such sale. Subject to the provisions of applicable law, we may postpone or cause the postponement of the sale
of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further
notice, to the extent permitted by law, be made at the time and place to which the sale was postponed, or we may further postpone
such sale by announcement made at such time and place.

 

    	8

    	 

    

 

(d)          In
addition to the rights and remedies hereunder, we shall have the right to enter and remain upon your various premises without cost
or charge to us, and use the same, together with your materials, supplies, books and records for the purpose of collecting and
liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction
or otherwise. In addition, we may remove Collateral, or any part thereof, from such premises and/or any records with respect thereto,
in order to effectively collect or liquidate such Collateral.

 

(e)          Failure
by us to exercise any right, remedy or option under this Agreement, any other document relating to the Obligations, or as provided
by law, or any delay by us in exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver
hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and
then only to the extent specifically stated, which in our case shall only be granted as provided herein. To the extent permitted
by law, neither we nor any party acting as attorney for us shall be liable hereunder for any acts or omissions or for any error
of judgment or mistake of fact or law other than their gross negligence or willful misconduct hereunder. Our rights and remedies
under this Agreement shall be cumulative and not exclusive of any other right or remedy which we may have.

 

(f)          In
addition to the rights and remedies hereunder, we may, in compliance with the NYUCC or otherwise complying with the requirements
of applicable law of the relevant jurisdiction, accept or retain the Collateral in satisfaction of the Obligations. Unless and
until we shall have provided specific notices to such effect, however, we shall not be deemed to have retained any Collateral in
satisfaction of any Obligations for any reason.

 

(g)        In the event
that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which we are legally entitled,
you shall be liable for the deficiency, together with interest thereon at the highest rate permitted by law, together with the
costs of collection and the fees, charges and disbursements of counsel. Any surplus remaining after the full payment and satisfaction
of the Obligations shall be returned to you or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.

 

9.          You
shall maintain your books, records and accounts in accordance with sound accounting practice. You agree to furnish us with balance
sheets, statements of profit and loss, interim financial statements and such other information in such detail and scope as we may
require regarding your business affairs and financial condition as we may from time to time reasonably request, prepared in accordance
with generally accepted accounting principles consistently applied and prepared internally or compiled, reviewed or certified by
a firm of certified public accountants acceptable to us, as we may require in our sole discretion. All such statements and information
shall fairly present your financial condition as of the dates, and the results of your operations for the periods, for which the
same are furnished.

 

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10.         This
Agreement shall commence on the date hereof and shall continue for one year from the date hereof and automatically continue from
year to year thereafter; provided that (a) we may terminate this Agreement at any time upon thirty days’ prior written
notice to you by registered or certified mail and (b) you may terminate this Agreement only at the expiration of the original term
hereof or any renewal term, by giving us written notice of your intention to do so by registered or certified mail at least sixty
days prior to such expiration. If you or any guarantor, endorser or other person liable on the Obligations (each a “Guarantor”)
becomes insolvent or unable to meet your or its debts as they mature, or fail, suspend or go out of business (or, in the case of
a Guarantor which is an individual, die) or apply for, consent to, or suffer the appointment of a receiver, trustee or custodian
(or similar person) for you or any Guarantor or any of your or any Guarantor’s property, make an assignment for the benefit
of creditors, or commence or become the subject of a case or proceeding under any federal bankruptcy law, or if you shall be in
default under this Agreement, the Supply Agreement or any other agreement with us or any Obligations to us, or if there is a change
(by voluntary transfer, death or otherwise) in your controlling stockholders or owners then, notwithstanding the foregoing, we
shall have the right to terminate this Agreement at any time without notice. Our rights and your Obligations arising out of transactions
having their inception prior to the termination date shall not be affected by any termination or notice thereof. Termination of
this Agreement shall not become effective in respect of the liens and security interests granted to us hereunder until you have
fully paid and discharged any and all of your Obligations to us, and you shall continue to furnish confirmatory assignments and
schedules of Receivables and all proceeds in respect thereof. From and after the effective date of termination, all amounts charged
or chargeable to your account hereunder, and all your Obligations to us, shall become immediately due and payable without further
notice or demand. After the giving of any notice of termination hereunder and until the full liquidation of your account and the
payment in full of all Obligations, you shall not be entitled to receive any payments from us.

 

11.         Notwithstanding
any provision to the contrary contained herein, if a court of competent jurisdiction should deem any commissions, costs, fees or
charges provided for in this Agreement to be interest and such interest is deemed by such court to be in excess of the maximum
contract rate permitted by the applicable usury law, neither you nor any guarantor shall be liable to pay the amount of such interest
to the extent that it is in excess of the maximum interest rate permitted by law, any such excess which may have been received
by us shall be either applied against your then unpaid obligations to us (other than any such obligations that are deemed to be
excessive interest as aforesaid) or at our option refunded to you, and any portion of any commissions, costs, fees or charges deemed
to be interest by such court shall be automatically reduced to the maximum interest rate allowed by law.

 

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This Agreement is deemed made in the
State of New York and shall be governed, interpreted and construed in accordance with the laws of the State of New York.  No
modification, waiver of discharge of this Agreement shall be binding upon us unless in writing and signed by us. If at any time
we should fail to exercise any right or remedy hereunder, it shall not constitute a waiver on our part of exercising the same or
any other right or remedy at any subsequent time. If any taxes are imposed upon, or if we shall be required to withhold or pay
any tax or penalty because of or in connection with any transactions between us under this Agreement, you agree to indemnify us
and hold us harmless in respect thereof. This Agreement and the Supply Agreement embody our entire agreement as to the subject
matter hereof and supersede all prior agreements (whether oral or written) as to said subject matter. Trial by jury is hereby
waived by each of us in any action, proceeding or counterclaim brought by either of us against the other on any matters whatsoever
arising out of or in any way connected with this Agreement or the relationship created hereby, and you hereby consent to the jurisdiction
of the Supreme Court of the State of New York and of any Federal Court in such State, for a determination of any dispute as to
any such matters.  In connection therewith, you hereby waive personal service of any summons, complaint or other process and
agree that service thereof may be made by registered or certified mail directed to you at your address set forth above or such
other address as shall have previously been communicated to us by registered or certified mail. Within thirty days after such mailing,
you shall appear or answer to such summons, complaint or other process. Should you fail to appear or answer within said thirty-day
period, you shall be deemed in default and judgment may be entered by us against you for the amount demanded in any summons, complaint
or other process so served. In the event we shall retain counsel for the purpose of enforcing the performance, payment or collection
of any of the Obligations, then and in that event you agree to pay the reasonable fees of our counsel, plus any and all expenses
and disbursements incurred in connection therewith and/or incidental thereto. Our books and records shall be admissible as prima
facie evidence of the status of the account between us. This Agreement shall be binding upon and inure to the benefit of each of
us and our respective heirs, executors, administrators, successors and assigns; provided, however, that you may not
assign any of your rights, interests or obligations hereunder without our prior written consent.

 

	 	 	Very truly yours,
	 	 	 	 
	 	 	STAR FUNDING, INC.
	 	 	 	 
	 	 	By:	/s/ Martin Weingarten
	 	 	 	Martin Weingarten
	 	 	 	Chief Executive Officer
	The foregoing is acknowledged,	 	 
	accepted and agreed to:	 	 

 

	[NAME OF BOLDFACE ENTITY]	 
	 	 	 
	By:	 	 
	 	Name: Nicole Ostoya	 
	 	Title: Chief Executive Officer	 

 

    	11

    	 

    

 

EXHIBIT A

 

TO

 

FACTORING AGREEMENT

 

	Instrument	 	Date	 	 	Payee	 	Principal Amount	 
	10% Senior Secured Promissory Note	 	September 7, 2012	 	 	Darien Ellul	 	$	100,000	 
	10% Senior Secured Promissory Note	 	September 7, 2012	 	 	Mark Tompkins	 	$	50,000	 
	10% Senior Secured Promissory Note	 	September 25, 2012	 	 	Solops LLC	 	$	150,000	 

 

    	12

    	 

    

 

Schedule of Omitted Documents in the
Form of

Exhibit 10.1, Including Material Detail
in

Which Such Documents Differ From Exhibit
10.1

  

 

 

The following documents
do not differ in material detail from the form of Exhibit 10.1, except with respect to the name of the BOLDFACE entity which entered
into the agreement:

 

1. Factoring Agreement,
dated as of October 17, 2012, entered into by and between Star Funding, Inc. and BOLDFACE Licensing + Branding

 

2. Factoring Agreement,
dated as of October 17, 2012, entered into by and between Star Funding, Inc. and BOLDFACE Group, Inc.

 

    	13

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