AMENDMENT NO. 1 TO AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY AGREEMENT

This Amendment No. 1 to Amended and Restated Warehousing Credit and Security Agreement (this “Amendment”), is dated as of May 29, 2009, by and among Centerline Mortgage Capital Inc., a Delaware corporation (“CMC”), Centerline Mortgage Partners Inc., a Delaware corporation (“CMP,” and, collectively with CMC, the “Borrowers”), the lenders from time to time party to the Credit Agreement (as defined below) and Bank of America, N.A., as agent for the Lenders (in such capacity, the “Agent”).

A.           The Agent, the Lenders, and the Borrowers are parties to that certain Amended and Restated Warehousing Credit and Security Agreement, dated as of May 30, 2008 (as amended and/or restated from time to time, the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined herein shall have the same meanings herein as ascribed to them in the Credit Agreement.

B.           Pursuant to the terms of that certain Assignment and Acceptance, dated as of the date hereof, between SunTrust Bank (“SunTrust”) and Bank of America, N.A. (“BofA”), SunTrust irrevocably sold and assigned to BofA, and BofA irrevocably purchased and assumed from SunTrust, 100% of SunTrust’s Commitment under the Credit Agreement and 100% of the aggregate principal balance of all Obligations owed to SunTrust under the Credit Agreement as of the date hereof (the “Assignment”).

C.           The Borrowers have requested that the Agent and the Lenders extend the stated Maturity Date of the Credit Agreement until June 30, 2009 and make certain other amendments to the Credit Agreement as herein described; and

D.           In response to such request, the Agent and the Lenders have agreed to amend the Credit Agreement solely upon the terms and conditions set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Agent, the Lenders, and the Borrowers, the parties hereto agree as follows:

Section 1 .                                 Extension of Maturity Date .  The definition of “Maturity Date” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“ ‘ Maturity Date ’ means the earlier of June 30, 2009 or the date upon which the whole of the Commitments are terminated or the Loan is accelerated in accordance with the applicable provisions of this Agreement.”

Section 2 .                                 Reduction of Commitment .  In connection with the Assignment, the parties hereby agree that the total Commitment under the Credit Agreement shall hereby be reduced to $100,000,000.  In furtherance of the foregoing, the Credit Agreement is hereby amended as follows:

(a)            Amendment to Commitment .  The definition of “Commitment” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“ ‘ Commitment ’ means the commitment of the Lenders to make Advances hereunder in an aggregate principal amount at any time outstanding that shall not exceed an amount equal to ONE HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000), subject to any increases or decreases of such amount pursuant to the terms of this Agreement; provided , however , that no Lender’s portion of such Advances may ever exceed its Commitment Amount.”

(b)            Amendment to Schedule 1 .  To reflect the Assignment and the reduction of the Commitment hereunder, Schedule 1 to the Credit Agreement is hereby amended by deleting it in its entirety and replacing in its stead the revised Schedule 1 attached to this Amendment.

Section 3 .                                 Amendments to Credit Agreement .  In accordance with Section 11.4 of the Credit Agreement, the Agent and the Lenders hereby agree that the Credit Agreement is amended as follows:

(a)            Amendment to Applicable Rate .  The definition of “Applicable Rate” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“ ‘ Applicable Rate ’ means, for any day, either (a) the Daily Floating LIBOR Rate for such day, plus two and three-quarters percent (2.75%), or (b) if the Daily Floating LIBOR Rate is unavailable (as described in the definition thereof), then the Prime Rate for such day plus two and three-quarters percent (2.75%).”

(b)            Amendment to definition of FHA Construction Mortgage Loan .  The definition of “FHA Construction Mortgage Loan” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“ ‘ FHA Construction Mortgage Loan ’ means a FHA fully insured Mortgage Loan for the construction or rehabilitation of either (a) a Multifamily Property or other Mortgaged Property, or (b) as described in Section 232 of the National Housing Act (12 U.S.C. 1715w), a nursing home, intermediate care facility, board and care home, or assisted-living facility, in either case, originated in compliance with FHA requirements applicable to such Mortgage Loan.”

(c)            Amendment to definition of Investor .  The definition of “Investor” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“ ‘ Investor ’ means Fannie Mae, Freddie Mac, or any of the entities listed on Exhibit G attached hereto, which list may be amended from time to time by the Agent to reflect the elimination or addition of certain approved Investors.  Absent manifest error, the Agent’s records indentifying these Investors and reflecting those Investors which have, from time to time, been removed from, or added to, Exhibit G shall be conclusive.  The Agent may from time to time, and, at the reasonably request of the Borrower, shall, create an updated Exhibit G reflecting the then current Investors and furnish such updated list to the Borrowers at the address provided in Section 9 of the Agreement.”

(d)            Amendment to definition of Material Adverse Change .  The definition of “Material Adverse Change” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting subsection (a) thereof in its entirety and replacing it with the following: “(a) in the financial condition, business, affairs or operations of the Borrower, or Centerline Holding Company, a Delaware statutory trust.”

(e)            Amendment to Section 2.5(c)(1) .   Section 2.5(c)(1) of the Credit Agreement is hereby amended by deleting subsection (y) thereof in its entirety and replacing it with the following:  “(y) the date which is sixty (60) days from the date of the funding of such Advance.”

(f)            Amendment to Section 2.5(c)(6) .   Section 2.5(c)(6) of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:  “6.  On the date the Pledged Loan or a Lien prior to the Pledged Loan is defaulted and, if the default is non-monetary, remains in default for a period of thirty (30) days or more.”

(g)            Amendment to Section 2.8(b) .   Section 2.8(b) of the Credit Agreement is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following: “An unused fee in the an amount equal to the Daily Unused Amount (if a positive number), multiplied by twenty-five (25) basis points per annum.”

(h)            Amendment to Section 2.8(c) .   Section 2.8(c) of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“(c)            Miscellaneous Fees .      The Borrower shall pay to the Agent, promptly following an invoice therefor,  miscellaneous fees including:

(i)           Wire transfer fees customarily charged by the Agent;

(ii)           Customary handling fees of $100 per transaction involving theCollateral;

(iii)           Customary handling fees of $50 per transaction involvingMortgage-backed Securities; and

(iv)           Custody account fees based on the Agent’s schedule of chargesand fees that are customary for similar services.”

(i)            Amendment to Section 6.2 .   Section 6.2 of the Credit Agreement is hereby amended by adding a new subsection (j) thereto as follows:

“(j)           Within three (3) Business Day of the Borrower’s receipt thereof, copies of any letters or communications from Freddie Mac or Fannie Mae informing the Borrower of events resulting in a reduction or dilution of business arrangements with such entity.”

(j)            Amendment to Section 8.1 .   Section 8.1 of the Credit Agreement is hereby amended by deleting the word “or” at the end of subsection (p) thereof in its entirety, deleting the period at the end of subsection (q) thereof and replacing it with “; or” and adding a new subsection (r) immediately thereafter as follows:

“(r)           Failure of Centerline Holding Company, a Delaware business trust, to pay, or any default in the payment of any principal or interest on, any indebtedness for borrowed money beyond any period of grace provided; or breach or default with respect to any other material term of any other indebtedness for money borrowed under the loan agreement, mortgage, indenture or other agreement relating thereto, if the effect of such failure, default or breach is to cause, or to permit the holder or holder thereof (or a trustee on behalf of such holder or holders) to cause, such indebtedness of Centerline Holding Company to become or be declared due prior to its stated maturity (upon the giving or receiving of Notice, lapse of time, both or otherwise).

(k)           Amendment to Exhibit A .   Exhibit A to the Credit Agreement is hereby amended by deleting it in its entirety and replacing in its stead the revised Exhibit A attached to this Amendment.

(l)            Amendment to Exhibit B .   Exhibit B to the Credit Agreement is hereby amended by deleting it in its entirety and replacing in its stead the revised Exhibit B attached to this Amendment.

(m)           Amendment to Exhibit C .   Exhibit C to the Credit Agreement is hereby amended by deleting it in its entirety and replacing in its stead the revised Exhibit C attached to this Amendment.

(n)            Amendment to Exhibit G .   Exhibit G to the Credit Agreement is hereby amended by deleting it in its entirety and replacing in its stead the revised Exhibit G attached to this Amendment.

(o)            Amendment to Disclosure Schedules of Borrowers .  The Borrowers’ disclosure schedules to the Credit Agreement, including, without limitation, Schedule 5.4 , Schedule 5.22 , Schedule 6.10 , Schedule 7.16 and Schedule 7.17 , are hereby amended by deleting them in their entirety and replacing in their stead the revised disclosure schedules attached to this Amendment as Attachment A .

Section 4 .                                 Waiver of Compliance with Section 7.18 .  In accordance with Section 11.4 of the Credit Agreement, and notwithstanding anything in the Credit Agreement to the contrary, the Agent and the Lenders hereby agree to waive (i) compliance with Section 7.18 of the Loan Agreement and (ii) any Default under the Credit Agreement or any Loan Document which may have resulted or may result from the Borrowers’ non-compliance with Section 7.18 , solely to the extent that such non-compliance relates to the Borrowers’ grant of a security interest in existing and future Servicing Contracts to BofA in connection with that certain Amended and Restated Revolving Credit and Term Loan Agreement, dated as of December 19, 2008, by and among Centerline Holding Company and Centerline Capital Group Inc., as the borrowers, the guarantors and lenders party thereto from time to time and BofA, as agent on behalf of the lenders.  For the sake of clarity, the foregoing waiver does not and shall not create, give rise to or permit the grant of a security interest in any Servicing Contract if the grant of a security interest therein is prohibited thereby or would constitute a breach or default thereunder or would result in the termination thereof (including, by way of example, Servicing Contracts pursuant to which CMC or CMP service Mortgage Loans transferred to Freddie Mac or Fannie Mae). 

Section 5 .         Consent to Transfer of Assets from CMC to CMP .  In accordance with Section 7.12 of the Credit Agreement, and in reliance upon the description of such transaction provided to the Agent in that certain Letter Agreement re: Collateral for Reimbursement Obligations under Master Agreements with Freddie Mac, dated as of April 30, 2009, by and among Freddie Mac and CMC, a copy of which is attached hereto as Attachment B (the “Letter Agreement”), the Required Lenders hereby consent to CMC’s transfer of those certain mortgage servicing rights of CMC relating to its business with Freddie Mac, as set forth on Attachment C hereto (the “Freddie MSRs”), to CMP in connection with Freddie Mac permitting CMP to originate and service loans for Freddie Mac without obtaining additional letters of credit or third party guarantees in support of CMP’s credit.

Section 6 .          Representations and Warranties .  The Borrowers, jointly and severally, represent and warrant to the Lenders as of the effective date of this Amendment that, assuming the due execution and delivery of this Amendment: (a) no Default or Event of Default is in existence, from and after, 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 in the Credit 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 Credit Agreement (as amended by this Amendment) are legal, valid and binding agreements of the Borrowers and are enforceable against them in accordance with their terms.

Section 7 .          Ratification .  Except as hereby amended, the Credit 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 Event of Default or of any covenant, term or provision of the Credit Agreement or the other Loan Documents.

Section 8 .          Conditions Precedent .  The agreements set forth in this Amendment are conditional and this Amendment shall not be effective until receipt by the Agent of the following: (i) a fully-executed counterpart original of this Amendment and (ii) payment by the Borrowers of the fees referenced in the side letter of even date herewith between the Borrowers and the Agent, and all of the Agent’s other fees, costs and expenses associated with the preparation, negotiation, execution and delivery and administration of this Amendment and the Credit Agreement accrued through the date hereof, including, without limitation, the Agent’s attorneys’ fees.

Section 9 .           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.

Section 10 .         Amendment as Loan Document .  Each party hereto agrees and acknowledges that this Amendment constitutes a “Loan Document” under and as defined in the Credit Agreement.

Section 11 .         Governing Law .  This Amendment shall in all respects be governed, construed, applied and enforced in accordance with the internal laws of the State of New York without regard to principles of conflicts of laws.

Section 12 .         Successors and Assigns .  This Amendment shall be binding upon each of the Borrowers, the Lenders, the Agent and their respective successors and assigns, and shall inure to the benefit of each of the Borrowers, the Lenders and the Agent.

Section 13 .          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 14 .          Expenses .  Each Borrower jointly and severally agrees to promptly reimburse the Agent and the Lenders for all expenses, including, without limitation, reasonable fees and expenses of outside legal counsel, it 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 15 .          Integration .  This Amendment contains the entire understanding of the parties hereto 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.

Section 16 .           No Course of Dealing .  The Agent and the Lenders have entered into this Amendment on the express understanding with the Borrowers that in entering into this Amendment the Agent and the Lenders are not establishing any course of dealing with the Borrowers.  The Agent’s and the Lenders’ rights to require strict performance with all of the terms and conditions of the Credit Agreement and the other Loan Documents shall not in any way be impaired by the execution of this Amendment.  None of the Agent and the Lenders shall be obligated in any manner to execute any further amendments or waivers and if such waivers or amendments are requested in the future, assuming the terms and conditions thereof are satisfactory to them, the Agent and the Lenders may require the payment of fees in connection therewith.  Each of the Borrowers agrees that none of the ratifications and reaffirmations set forth herein, nor the Agent’s nor any Lender’s solicitation of such ratifications and reaffirmations, constitutes a course of dealing giving rise to any obligation or condition requiring a similar or any other ratification or reaffirmation from the Borrowers with respect to any subsequent modification, consent or waiver with respect to the Credit Agreement or any other Loan Document.

(a)           The Borrowers acknowledge and agree that, to their knowledge, as of the date hereof:  (i) none of the Borrowers have any claim or cause of action against the Agent or the Lenders arising out of, under or in any way relating to the Credit Agreement or the Loan Documents (including this Amendment), any documents, instruments, agreements, dealings or other matters in connection with the Loan Documents, the transactions contemplated by the Loan Documents, or any actions taken or not taken by the Agent or the Lenders in connection therewith; (ii) none of the Borrowers have any offset rights, counterclaims or defenses of any kind against payment and performance of the obligations under the Loan Documents; and (iii) the Agent and the Lenders have heretofore properly performed and satisfied in a timely manner all of their obligations to the Borrowers under the Loan Documents.

(b)           In consideration of the amendments provided by and the covenants of the Agent and the Lenders herein, the Borrowers agree to eliminate any possibility that any past conditions, acts, omission, events, circumstances or matters, of which any of the Borrowers have knowledge as of the date hereof, would impair or otherwise adversely affect any of the rights, interests, contracts, collateral security or rights and remedies of the Agent or the Lenders under the Loan Documents.  Therefore, each of the Borrowers, on their own behalf and on behalf of each of their respective successors and assigns, hereby waives, releases and discharges the Agent and the Lenders, from any and all claims, demands, actions or causes of action of which any of the Borrowers have knowledge on or before the date hereof and arising out of, under or in any way relating to the Loan Documents (including this Amendment), any documents instruments, agreements, dealings or other matters connected with the Loan Documents, the transactions contemplated by the Loan Documents or any actions taken or not taken by the Agent or the Lenders in connection therewith, including, without limitation, all matters, claims, transactions or things occurring on or prior to the date hereof of which any of the Borrowers have knowledge.  The waivers, releases and discharges in this paragraph shall be effective regardless of any other event that may occur or not occur prior to, or on or after the date hereof.

Section 18 .            Jury Trial Waiver .  THE BORROWERS, THE 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 CREDIT AGREEMENT, OR ANY OTHER CREDIT DOCUMENT 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 AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, 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.

     □ OTHER FANNIE MAE MORTGAGE LOAN

     □ FREDDIE MAC MORTGAGE LOAN

     □ FHA CONSTRUCTION MORTGAGE LOAN

     □ FHA PROJECT MORTGAGE LOAN

     □ SECOND MORTGAGE LOAN (if permitted)

     □ THIRD MORTGAGE LOAN (if permitted)

As applicable, ______________________________ (the “Borrower”) hereby grants a security interest to Bank of America, N.A., as Agent (the “Agent”) for a syndicate of Lenders (the “Lenders”), in all of Borrower’s right, title and interest in and to the Mortgage Loan described above and all related Collateral pursuant to Section 3.1 of that certain Amended and Restated Warehousing Credit and Security Agreement, dated as of May 30, 2008, among the Borrower, the Agent and the Lenders (as amended, restated, renewed or replaced, the “Agreement”). Capitalized terms used in this Advance Request without further definition have the meanings set forth in the Agreement.

The undersigned represents and warrants as follows:

(a)           The Advance requested hereby complies with the requirements of the Agreement.

(b)           Each representation and warranty made under Section 5 of the Agreement is true and correct at and as of the date hereof and (except to the extent the undersigned gives Notice to the Agent to the contrary prior to 5:00 p.m. on the Business Day before the requested date for the making of the Advance) will be true and correct at and as of the time the Advance is made, in each case both with and without giving effect to the Advance and the application of the proceeds thereof, except to the extent of changes resulting from transactions contemplated and permitted by this Agreement and the other Loan Documents and changes occurring in the ordinary course of business that singly or in the aggregate could not reasonably be expected to result in a Material Adverse Change and except to the extent that such representations and warranties relate expressly to an earlier date.

(c)           No Default has occurred and is continuing as of the date hereof or would result from the making of the Advance or from the application of the proceeds thereof if the Advance was made on the date hereof, and (except to the extent the undersigned gives Notice to the Agent to the contrary prior to 5:00 p.m. on the Business Day before the requested date for the making of the Advance) no Default will have occurred and be continuing at the time the Advance is to be made or would result from the making of the Advance or from the application of the proceeds thereof.

(d)           Borrower agrees to cause the Mortgage Note(s) and all other required Collateral Documents to be delivered to the Agent no later than the first Business Day after the date of the Advance made to fund the Mortgage Loan or the second Business Day after the date of the Advance if delivery is not practical due to the time of the settlement; provided that the foregoing is not applicable where Freddie Mac is the Investor, as Freddie Mac requires the Mortgage Note and all required Collateral Documents to be delivered to their office on or before the delivery date.  The Mortgage Note will be forwarded to the Agent for endorsement immediately following closing.  The Agent will then forward the original Mortgage Note to Freddie Mac.