CENTERLINE HOLDING CO
PARTICIPATION OPP LETTER BETWEEN CENTERLINE HOLDING COMPANY AND MARC D. SCHNITZE
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>ex10-4.htm
<DESCRIPTION>PARTICIPATION OPP LETTER BETWEEN CENTERLINE HOLDING COMPANY AND MARC D. SCHNITZER DATED AS OF AUGUST 10, 2007.
<TEXT>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><strong>Exhibit
      10.4</strong></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><img src="ex10-40.jpg" alt=""><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>CENTERLINE</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>2007
        SHARE INCENTIVE PLAN</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________</strong></font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>2007
        Outperformance Program</strong></font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">&#160;August
        10, 2007</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>CONFIDENTIAL</strong></font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">Mr.
        Marc
        Schnitzer</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">21
        Hampton Road</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">Scarsdale,
        NY&#160;&#160;10583</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;"><strong>Re:</strong></font></div>
              </td>
              <td align="left" valign="top" width="86%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;"><strong><u>&#160;Your
                  Participation Interest for the 2007 to 2009 Performance
                  Period</u></strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">Dear
        Marc:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">You
        have
        been selected by Centerline Holding Company to be a participant in the
        Centerline 2007 Outperformance Program (the &#8220;<u>OPP</u>&#8221;).&#160; Generally,
        under the OPP, in the event that the Company&#8217;s total return per share(as defined
        in the OPP)&#160;&#160;to its equity holders during a three-year performance
        period beginning on January 1, 2007 exceeds 37.5%, then an aggregate
        outperformance pool comprising eleven percent (11%) of such excess will be
        formed under the OPP (subject to a maximum pool of U.S.
        $25,000,000).&#160;&#160;If and to the extent that any provision contained in
        this Participation OPP Letter is inconsistent with the OPP, the OPP shall
        govern.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">The
        aggregate outperformance pool will be paid in the form of restricted common
        shares, which will vest 50% on each of the first two anniversaries of the
        end of
        the performance period, subject to continued employment, except as otherwise
        provided in the OPP.&#160;&#160;Special provisions will apply, and you may
        forfeit some or all of your award, in the event that your employment is
        terminated.&#160;&#160;Other special rules apply, such as in the event of a
        change in control of the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">Subject
        to your acceptance of the terms and conditions of the OPP (which is attached
        for
        your review and reference), your Participation Percentage in the
        OPP&#160;&#160;is 7.00%.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">Please
        acknowledge receipt of this letter and acceptance of the foregoing terms
        and
        conditions for your participation in the OPP by signing in the space provided
        below and return the signed letter to the attention of Kelly
        Schnur.</font></div>
      <div><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="bottom" width="51%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;Yours
                  truly,</font></div>
              </td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">ACKNOWLEDGED
                  BY:</font></div>
              </td>
            </tr>
            <tr>
              <td valign="middle" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="middle" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="middle" width="38%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;/s/&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">Nathan
                Gantcher</font></font></td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 0.75pt solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="37%" style="BORDER-BOTTOM: black 0.75pt solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;/s/
                  <font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">Marc
                  D. Schnitzer</font></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="51%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">Nathan
                  Gantcher</font></div>
              </td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">Marc
                  D. Schnitzer</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="middle" width="51%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">Chairman,
                  Compensation Committee</font></div>
              </td>
              <td colspan="2" valign="middle" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="middle" width="38%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman;">Date:</font></div>
              </td>
            </tr>

        </table>
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      <div><br></div>
      <div><br></div><br><img src="ex10-41.jpg" alt=""></div>
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