Hi Vivek,
According to your description, the issue occurs after you assign the certificate to the Exchange servers. At the same time, you haven't deployed the Office 365 Hybrid. The issue should be related to the on-premise Exchange server.
In this situation, I recommend you try to post this question with the detailed information in the Exchange 2010 forum and Outlook for Mac forum below for dedicated assistance:
https://social.technet.microsoft.com/Forums/office/en-us/home?category=exchangeserver%2Cexchangeserverlegacy
http://answers.microsoft.com/en-us/mac/forum/macoffice2011-macoutlook?sort=lastreplydate&dir=desc&tab=Threads&status=&mod=&modAge=&advFil=&postedAfter=&postedBefore=&threadType=All&tm=1416727742862
Your time and understanding are appreciated.
Best regards,
Kid Yang
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RE: MAC Outlook 2011 keeps asking for my password after certificate change
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