CENTERLINE HOLDING COMPANY
ROSS NON-QUALIFIED SHARE OPTION AGREEMENT
THIS
NON-QUALIFIED
SHARE OPTION AGREEMENT (this “
Agreement ”) is made as of
July 13, 2007 (the “ Grant
Date ”), by and between Centerline Holding
Company, a Delaware statutory trust (the “
Company ”), and Stephen M.
Ross (the “ Optionee
”).
WHEREAS,
in consideration of the Optionee agreeing to serve as
Non-Executive Chairman of the Board of Trustees of the Company
( “Non-Executive
Chairman” ), the Company has undertaken to
issue to the Optionee an option to purchase common shares of
beneficial interest of the Company (the “
Company Shares ”) in
accordance with the further terms of this
Agreement.
NOW,
THEREFORE, the parties hereto agree as follows:
Section
1.
Grant of Option .
The
Company hereby grants to the Optionee the right and option
(the “ Option ”) to
purchase all or any part of an aggregate of 800,000 common
shares of beneficial interest of the Company (the “
Option Shares ”), subject to,
and in accordance with, the terms and conditions set forth in
this Agreement. The Option is not intended to
qualify as an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as
amended.
Section
2.
Purchase Price .
The
price at which the Optionee shall be entitled to purchase
Option Shares upon the exercise of the Option shall be $17.78
per Option Share.
Section
3.
Shares Subject to this Agreement .
The
Company shall reserve for issuance, for the purposes of this
Agreement, out of its authorized but unissued Company Shares,
or out of Company Shares held in the Company’s treasury,
or partly out of each, the Option Shares. If the
Option expires or terminates, according to the applicable
provisions hereunder, for any reason without having been
exercised in full, the Optionee shall not have any rights with
respect to the Company Shares subject to the unexercised
portion of the Option.
Section
4.
Duration of the Option .
The
Option shall be exercisable to the extent and in the manner
provided herein to and including November 17, 2013 (the
“ Exercise Term ”);
provided , however , that the Option may be
terminated earlier as provided in Section 5(b), 7(a), 7(b),
11(a) or 11(b). Any unexercised portion of the
Option that is not exercised during the Exercise Term shall be
deemed
terminated
at the end of the Exercise Term (or at such earlier time as
provided in Section 5(b), 7(a), 7(b), 11(a) or
11(b)).
Section
5.
Exercisability of Option .
(a) Unless
otherwise provided in this Agreement, the Option shall entitle
the Optionee to purchase, in whole at any time, or in part
from time to time, 400,000 of the total number of Option
Shares covered by the Option on and after the date hereof, an
additional 200,000 Option Shares on and after November 17,
2007, and the remaining 200,000 Option Shares on and after
November 17, 2008, and each such right of purchase shall be
cumulative and shall continue, unless sooner exercised or
terminated as herein provided, during the remaining period of
the Exercise Term.
(b) If
the Optionee dies during the Exercise Term and the Option has
not otherwise terminated in accordance with the terms of this
Agreement, all Option Shares covered by the Option that have
not already vested pursuant to Section 5(a) shall vest upon
the death of the Optionee and the unexercised portion of the
Option may be exercised during the Exercise Term by the
executor or administrator of the Optionee’s estate, or
by the person(s) to whom the unexercised portion of the Option
is transferred by will or the laws of decent and
distribution.
Section
6.
Manner of Exercise and Payment .
(a) Subject
to the terms and conditions of this Agreement, the Option may
be exercised by delivery of written notice to the Company, in
substantially the form attached hereto as Appendix I ,
at its principal executive office. Such notice
shall state that the Optionee is electing to exercise the
Option and the number of Option Shares to be exercised under
the Option and shall be signed by the Optionee. If
requested by the Company, the Optionee shall (i) deliver this
Agreement to the Company which shall endorse thereon a
notation of such exercise and (ii) provide satisfactory proof
as to the right of the Optionee to exercise the
Option.
(b) The
notice of exercise described in Section 6(a) hereof shall
be accompanied by the full purchase price for the Option
Shares to be acquired under the Option by any one or a
combination of the following: (i) cash (by certified check or
wire transfer of immediately available funds), (ii) if
requested by the Optionee, to the extent permitted by
applicable law, transferring fully paid Company Shares held at
least six (6) months to the Company with a Fair Value (as
defined in Section 15(c) below) equal to the aggregate
purchase price (less any portion paid in cash pursuant to
clause (i) or by the surrender of a vested right to Option
Shares pursuant to clause (iii)) or (iii) if requested by the
Optionee, to the extent permitted by applicable law,
surrendering the vested right of the Optionee to exercise this
Option for Option Shares with a Fair Value in excess of the
Exercise Price for such Option Shares equal to the aggregate
purchase price (less any portion paid in cash pursuant to
clause (i) or by transfer of Company Shares pursuant to clause
(ii)). In addition, the Optionee may provide
instructions to the Company that upon receipt of the Option
purchase price in cash, by certified check or by wire transfer
of immediately available funds, from a broker or dealer acting
at the direction of the Optionee, in payment for any Option
Shares pursuant to the exercise of the Option, the Company
shall issue such Option Shares directly to the designated
broker or dealer. Any Company Shares to be valued
in connection with a transfer of Company Shares to the
Company
or
Option Shares to be valued in connection with a surrender of vested
rights to exercise this Option for Option Shares as payment of the
purchase price under the Option shall be valued at their Fair Value
on the day preceding the date of exercise of the
Option. No fractional Option Shares (or cash in lieu
thereof) shall be issued upon exercise of an Option and the number
of Option Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Option Shares.
(c) Upon
receipt of notice of exercise and full payment for the Option
Shares in respect of which the Option is being exercised, the
Company shall, subject to Section 9 of this Agreement, take
such action as may be necessary to effect the transfer to the
Optionee of the number of Option Shares as to which such
exercise was effective within five (5) Business Days thereof,
including, without limitation, issuing and delivering the
Option Shares to the Optionee and entering the
Optionee’s name as a shareholder of record on the books
of the Company with respect to the Option Shares
.
(d)
The Optionee
shall not be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any Option Shares subject
to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the
Optionee shall have paid the full purchase price for the
number of Option Shares to be acquired under the Option,
(ii) the Company shall have issued and delivered the
Option Shares to the Optionee, and (iii) the
Optionee’s name shall have been entered as a shareholder
of record on the books of the Company with respect to the
Option Shares, whereupon the Optionee shall have full voting
and other ownership rights with respect to such Option
Shares. Except as otherwise expressly
provided in this Agreement, no adjustment shall be made for
cash dividends or other distributions or rights for which the
record date is prior to the date on which any Option Shares
are issued.
Section
7.
Termination of Option .
(a)
Service as Non-Executive Chairman . Except
to the extent otherwise provided in Section 5(b), if the
Optionee resigns, retires or otherwise voluntarily ceases to
serve as Non-Executive Chairman or as a Managing Trustee of
the Company, the right to exercise the Option shall terminate
immediately on the date the Optionee resigns, retires or
otherwise voluntarily ceases to serve as Non-Executive
Chairman or as a Managing Trustee with respect to any Option
Shares that have not vested on such date. The
Optionee may exercise the Option with respect to any Option
Shares that have vested prior to such date during the Exercise
Period.
(b)
Breach of Future Relations Agreement . In
the event the Optionee or the Contributor Affiliated Parties
(as defined in the Future Relations Agreement, dated as of
November 17, 2003 (the “ Future Relations
Agreement ”), by and among Centerline
Capital Company LLC (“CCC”, formerly known as
CharterMac Capital Company, LLC), the Optionee, Related
General II L.P. and The Related Companies, L.P.) are in
material breach of the Future Relations Agreement and such
breach is not cured within thirty (30) days following the
giving by the Company of written notice of such breach,
specifying in reasonable detail the nature of such breach, to
the Optionee (or, if the breach is not capable of cure within
such thirty (30) day period and the Optionee is proceeding
diligently to cure such breach, within sixty (60) days
following
the
giving by the Company of written notice of such breach to the
Optionee), the Option shall terminate immediately upon the
expiration of the thirty (30) day (or, if applicable, sixty (60)
day) cure period with respect to any Option Shares that have not
vested on such date; provided, however, that the Opt
