Exhibit 10.27

 
BOND EXCHANGE,
REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT

between

FEDERAL HOME LOAN MORTGAGE CORPORATION

and

ATAX TEBS I, LLC
as Sponsor

Relating to

Freddie Mac
Multifamily Variable Rate Certificates
Series M024

Dated as of September 1, 2010

 
 

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TABLE OF CONTENTS
Page
 
ARTICLE I
DEFINITIONS AND INTERPRETATION
 
Section 1.1
Definitions 
2

Section 1.2
Interpretation 
12

 
ARTICLE II
REPRESENTATIONS, COVENANTS, WARRANTIES AND CONDITIONS
 
Section 2.1
Representations and Warranties 
12

Section 2.2
Other Representations and Warranties by the Sponsor and Representations and
Warranties by Freddie Mac. 
24

Section 2.3
Conditions 
27

Section 2.4
Breach of Representations and Warranties 
31

 
ARTICLE III
COVENANTS OF THE SPONSOR
 
Section 3.1
Freddie Mac Closing Fee and Closing Expenses; Other Closing Costs and Initial
Deposits 
32

Section 3.2
Reimbursement of Credit Advances 
32

Section 3.3
Scheduled Payments and Deposits 
32

Section 3.4
Reimbursement of Liquidity Advances 
33

Section 3.5
Payment of Costs, Fees and Expenses 
33

Section 3.6
Application and Timing of Payments 
35

Section 3.7
[Reserved] 
36

Section 3.8
Payment of Prepayment/Substitution Premium 
36

Section 3.9
Substitution of Credit Enhancement or Liquidity Facility 
37

Section 3.10
Additional Provisions Regarding Prepayment/Substitution Premium 
37

Section 3.11
Remarketing Agent for the Class A Certificates 
37

Section 3.12
Indemnification 
37

Section 3.13
Freddie Mac Not Liable 
38

Section 3.14
Pledged Class A Certificates and Class B Certificates 
39

Section 3.15
Other Covenants of Sponsor 
39

Section 3.16
Liability of the Sponsor 
40

Section 3.17
Waivers and Consents 
41

Section 3.18
Subrogation 
41

Section 3.19
Substitution 
41

Section 3.20
Release Event Upon Sale of Pre-Selected Mortgaged Property 
44

Section 3.21
Optional Series Pool Release Date 
45

Section 3.22
Rights of Sponsor Upon Freddie Mac Downgrade 
45

Section 3.23
Release Event Upon Bond Event of Default 
46

Section 3.24
Release of the Villages at Lost Creek Senior Custodial Receipt
RA-7-2.                                                                                                                                                                                                                                              
46

Section 3.25
Loans by Guarantor or Its Affiliates 
47

Section 3.26
Credit Advances; Real Estate Taxes 
47

 
i
 

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ARTICLE IV
AGREEMENT TO EXCHANGE
 
Section 4.1
Exchange 
47

Section 4.2
Mandatory Delivery; Ownership; Registration of Transfer 
48

Section 4.3
Failure to Deliver 
48

 
ARTICLE V
INTEREST RATE PROTECTION
 
Section 5.1
Hedge Requirement 
48

Section 5.2
Hedge Agreement Terms 
49

Section 5.3
Failure to Deliver Subsequent Hedge 
52

Section 5.4
[Reserved] 
52

Section 5.5
Pledge and Assignment of  Security Interest in Hedge Collateral 
52

Section 5.6
Obligations Remain Absolute 
53

Section 5.7
Swap Option 
53

 
ARTICLE VI
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
 
 
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
 
Section 7.1
Events of Default 
54

Section 7.2
Remedies; Waivers 
55

Section 7.3
Rights with Respect to Defaults under Bond Mortgages; Bond Purchase Loan 
57

Section 7.4
No Remedy Exclusive 
59

 
ARTICLE VIII
PLEDGE, SECURITY AND CUSTODY OF PLEDGED SECURITY COLLATERAL
 
Section 8.1
Pledged Security Collateral 
59

Section 8.2
Delivery of Pledged Security Collateral 
59

Section 8.3
Amounts Received on Class B Certificates and Pledged Class A Certificates 
60

Section 8.4
Amounts Received on Purchased Assets 
61

Section 8.5
Release of Purchased Assets 
61

Section 8.6
Release of Class B Certificates and Pledged Class A Certificates 
61

Section 8.7
Loss to Pledged Security Collateral 
62

Section 8.8
[Reserved] 
62

Section 8.9
Ownership Restrictions 
62

Section 8.10
Representations and Warranties of the Sponsor to the Pledge Custodian 
62

Section 8.11
Custody Account 
62

Section 8.12
Appointment and Powers of the Pledge Custodian 
63

Section 8.13
Successor Pledge Custodian 
64

Section 8.14
Qualifications of Pledge Custodian 
65

Section 8.15
Application of Proceeds 
65

Section 8.16
No Additional Waiver Implied by One Waiver 
65

Section 8.17
Cooperation 
65

Section 8.18
Termination 
65

Section 8.19
Transfers 
66

Section 8.20
Representations and Warranties of the Pledge Custodian 
66

 
ii
 

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ARTICLE IX
MISCELLANEOUS
 
Section 9.1
Counterparts 
67

Section 9.2
Amendments, Changes and Modifications 
67

Section 9.3
Payment Procedure 
67

Section 9.4
Payments on Business Days 
67

Section 9.5
Governing Law; Severability 
67

Section 9.6
Notices 
68

Section 9.7
Further Assurances and Corrective Instruments 
69

Section 9.8
Term of this Agreement 
69

Section 9.9
Assignments; Transfers; Third-Parties Rights 
69

Section 9.10
Headings 
69

Section 9.11
Limitation on Personal Liability 
69

Section 9.12
Consent of Freddie Mac 
70

Section 9.13
Disclaimer; Acknowledgments 
70

Section 9.14
Entire Agreement 
70

Section 9.15
Survival of Representation and Warranties 
70

Section 9.16
Waiver of Claims 
71

Section 9.17
Waivers of Jury Trial 
71

Schedule A:
Mortgaged Properties and Yield Maintenance Period

Schedule A-1:
Bonds

Schedule A-2
Enhanced Bonds and Enhanced Custodial Receipts

Schedule A-3
Subordinate Custodial Receipts and Related Bonds

Schedule A-4
Pre-Selected Deposited Assets

Schedule B:
Qualifications to Representations and Warranties

Schedule C:
Bond Mortgage Note Rates

Exhibit I:
Tax Credit Agency Letters Applicable to Mortgaged Properties

Exhibit II:
Amortization Schedules

Exhibit III:
Prepayment Schedule

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BOND EXCHANGE, REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT
 
THIS BOND EXCHANGE, REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT dated as of
September 1, 2010 (this “Agreement”) by and between the FEDERAL HOME LOAN
MORTGAGE CORPORATION (“Freddie Mac”), a shareholder-owned government-sponsored
enterprise organized and existing under the laws of the United States, and ATAX
TEBS I, LLC, a limited liability company organized and existing under the laws
of the State of Delaware, as Sponsor (the “Sponsor”).
 
R E C I T A L S:
 
1. Freddie Mac has agreed with the Sponsor to exchange certain Certificates
described below for (i) various series of multifamily housing revenue bonds (or
in the case of the Fairmont Oaks Mortgaged Property, beneficial ownership
certificates therein) owned by the Sponsor, the interest on which is excludable
from the gross income of certain holders for federal income tax purposes and
which have been issued by various state and local governmental entities (as
further identified on Schedule A-2, the “Enhanced Bonds”) and (ii) various
series of senior custodial receipts (as further identified on Schedule A-2, the
“Enhanced Custodial Receipts” and together with the Enhanced Bonds, the
“Deposited Assets”) issued pursuant to the terms of the Custody Agreement dated
as of the date hereof (the “Custody Agreement”) between the Sponsor and The Bank
of New York Mellon Trust Company, N.A., as custodian (the “Custodian”).
 
2. The Enhanced Custodial Receipts represent senior beneficial ownership
interests in various other series of multifamily housing revenue bonds (or in
the case of the Lake Forest Mortgaged Property, beneficial ownership
certificates therein) to be deposited by the Sponsor and held pursuant to the
Custody Agreement, the interest on which is excludable from the gross income of
certain holders for federal income tax purposes and which have been issued by
various state and local governmental entities (as further identified on Schedule
A-2, the “Custodian-Held Bonds” and together with the Enhanced Bonds, the
“Bonds”).  Pursuant to the Custody Agreement, there will also be issued various
related series of subordinate custodial receipts representing a subordinate
beneficial ownership interest in the portion of the Custodian-Held Bonds not to
be credit enhanced by Freddie Mac (the “Subordinate Custodial Receipts”), as
such Subordinate Custodial Receipts are listed on Schedule A-3 hereof.
 
3. Freddie Mac will deposit and pool the Deposited Assets pursuant to a Series
Certificate Agreement dated as of the date hereof (together with the Standard
Terms attached thereto, the “Series Certificate Agreement”) between Freddie Mac,
in its corporate capacity, and Freddie Mac, as Administrator.
 
4. Pursuant to the Series Certificate Agreement, Freddie Mac has agreed to
provide credit enhancement with respect to the Deposited Assets and the related
Certificates issued thereunder and to provide liquidity support for Class A
Certificates issued thereunder.
 
5. The Sponsor will arrange for the initial public sale of the Class A
Certificates and will pledge the Class B Certificates to Freddie Mac as a
portion of the security for its obligations to Freddie Mac hereunder.
 
 
 

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6. The Sponsor’s obligations under this Agreement are secured by (i) a pledge of
the Class B Certificates and any Pledged Class A Certificates purchased pursuant
to Section 6.06 of the Series Certificate Agreement to be held for the benefit
of Freddie Mac pursuant to Article VIII, (ii) a pledge of any Purchased Assets
held for the benefit of Freddie Mac pursuant to Article VIII, (iii) a pledge of
the Hedge Collateral pursuant to Section 5.5, and (iv) a pledge of the amounts
held pursuant to the Repair Escrow Agreement, the Ohio Portfolio Escrow
Agreement and the Villages at Lost Creek Escrow Agreement.  In addition, in
order to vest in Freddie Mac the right to control remedies with respect to the
Bonds, the Sponsor will cause Freddie Mac to be appointed or otherwise hold all
rights as Bondholder Representative under the Bond Documents and the Bond
Mortgage Documents contemporaneously with the execution hereof for all Bonds.
 
7. The Guarantor is providing the Guaranty to guaranty certain of the Sponsor’s
obligations hereunder.
 
8. Contemporaneously with the execution and delivery of this Agreement, the
Class B Certificates are being transferred, subject to the terms of the Series
Certificate Agreement, to Freddie Mac as Pledge Custodian to be held in the
Custody Account as provided in Article VIII.
 
9. The Class A Certificates will initially be issued bearing a variable interest
rate to be reset on a weekly basis.
 
NOW, THEREFORE, in consideration of the Recitals and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Freddie Mac and the Sponsor do hereby agree as follows:
 
ARTICLE I 
DEFINITIONS AND INTERPRETATION
 
Section 1.1 Definitions.  All initially capitalized terms included in the
Recitals above and not specifically defined in this Agreement shall have the
meanings therefor contained in Exhibit A to the Series Certificate
Agreement.  Unless otherwise expressly provided in this Agreement or unless the
context clearly requires otherwise, the following terms shall have the
respective meanings set forth below for all purposes of this Agreement.
 
“Administrator” means Freddie Mac in its capacity as Administrator under the
Series Certificate Agreement and its successors or assigns in such capacity.
 
“Advance” means either a Credit Advance or a Liquidity Advance.
 
“Agreement” means this Bond Exchange, Reimbursement, Pledge and Security
Agreement, as the same may be amended, modified or supplemented from time to
time.
 
“Allocable Expense Amount” has the meaning set forth in Section 8.3(c).
 
“Bond Documents” means, with respect to any Bond, the trust indenture,
ordinance, resolution and any other agreements or instruments pursuant to which
such Bond has been issued or secured (including any loan agreement, note,
mortgage, deed of trust or any rate cap or interest rate protection agreement
delivered to the applicable Bond Trustee) or governing the operation of the
Project financed by such Bond, as the same may be amended or supplemented from
time to time.
 
 
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“Bondholder Representative” means Freddie Mac as assignee or holder, as
applicable, of all rights to control remedies (whether directly or indirectly
through the Custodian or another entity acting for such purpose) as “Bondholder
Representative”, “Controlling Party”, “Servicing Agent” or majority owner of the
Bonds, as applicable, under the Bond Documents.
 
“Bond Event of Default” means, with respect to an issue of Bonds, the occurrence
of a default under the related Bond Documents (following any applicable grace
period or notice and cure period but only to the extent provided in the related
Bond Documents).
 
“Bond Mortgage Documents” means, with respect to each Bond Mortgage Loan, the
Bond Mortgage, the Bond Mortgage Note, the LURA, the Loan Agreement and any
related documents evidencing the obligations of the Owner under the Bond
Mortgage Note or securing payment or performance of such obligations or
otherwise pertaining to such obligations, including any HUD Document, as each
such document, agreement or instrument may be amended, modified or supplemented
from time to time.
 
“Bond Purchase Loan” shall have the meaning set forth in Section 7.3(b).
 
“Bonds” means the Custodian-Held Bonds and the Enhanced Bonds, as listed
together on Schedule A-1 hereto.
 
“Breach” shall have the meaning set forth in Section 2.4(a).
 
“Cap” or “Cap Agreement” means an interest rate cap agreement delivered pursuant
to and satisfying the requirements of Article V as the same may be amended,
supplemented or restated, including any renewal or replacement thereof.
 
“Cap Documents” means each Cap Agreement and any and all other agreements
evidencing the Cap and the obligations of the Counterparty and the Sponsor
thereunder.
 
“Cap Fee Escrow” means the escrow account to be held by the Servicer in
accordance with the terms hereof to provide for payments made or caused to be
made by the Sponsor as required by Section 5.1 for the purchase of a Subsequent
Hedge.
 
“Cap Payments” shall have the meaning provided in Section 5.5.
 
“Certificates” means the Class A Certificates and the Class B Certificates, as
applicable.
 
“Class A Certificates” means the Class A Certificates designated as such and
issued pursuant to the Series Certificate Agreement.
 
“Class B Beneficial Owners” means the Sponsor, any transferee from the Sponsor
or any other Person so long as it owns a beneficial interest in any Class B
Certificate.
 
 
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“Class B Certificates” means the Class B Certificates designated as such and
issued pursuant to the Series Certificate Agreement.
 
“Closing Date” means the date the Series Certificate Agreement is delivered by
Freddie Mac in its corporate capacity and as Administrator thereunder.
 
“Counterparty” means the counterparty approved in writing by Freddie Mac as
being one of the parties on its approved list of counterparties not more than 15
days prior to the Closing Date or the date of delivery of a Subsequent Hedge, as
applicable, named in the Hedge Agreement (or a Subsequent Hedge) that is
obligated to make payments in accordance with the terms thereof.
 
“Credit Advance” means any advance by Freddie Mac under this Agreement or the
Series Certificate Agreement (other than a Liquidity Advance), including but not
limited to (i) an advance to pay principal or interest distributable with
respect to any Class A Certificates or Deposited Asset, (ii) any advance to cure
a Breach, (iii) an advance by Freddie Mac pursuant to the terms of this
Agreement to purchase a Subsequent Hedge, (iv) any advance in connection with a
Mandatory Tender Event pursuant to Section 6.04 of the Series Certificate
Agreement or an Optional Disposition Right pursuant to Section 7.05 of the
Series Certificate Agreement, (v) an advance in connection with a Release Event
pursuant to Section 3.08 of the Series Certificate Agreement, (vi) an advance to
pay any portion of the Fee Component or any other fee due and owing that the
Sponsor fails to cause to be paid in accordance with the Sponsor Documents, the
non-payment of which jeopardizes the security pledged hereunder, (viii) any
advance to pay property taxes due but unpaid or any other unpaid assessments or
impositions with respect to a Mortgaged Property and (ix) any advance in
connection with an Enforcement Action.
 
“Credit Enhancement” has the meaning set forth in the Series Certificate
Agreement.
 
“Custodial Receipts” means, together, the Enhanced Custodial Receipts and the
Subordinate Custodial Receipts.
 
“Custodian” means The Bank of New York Mellon Trust Company, N.A., as custodian
under the Custody Agreement, and any successor in such capacity.
 
“Custodian-Held Bonds” means the tax exempt multifamily housing revenue bonds
deposited and held pursuant to the terms of the Custody Agreement of which the
Custodial Receipts represent a beneficial ownership interest therein, as further
identified on Schedule A-2.
 
“Custody Account” means a trust account in the name of the Pledge Custodian, as
collateral agent for Freddie Mac, as further described in Section 8.11.
 
“Custody Agreement” means the Custody Agreement dated as of the date hereof by
and between the Sponsor and the Custodian, as the same may be amended,
supplemented or restated from time to time.
 
“Data Tape” means the data tape dated August 27, 2010 submitted by or on behalf
of the Sponsor to Freddie Mac with respect to the Bonds and the Mortgaged
Property.
 
 
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“Default Rate” means the base rate or prime rate of Citibank, N.A. until such
time as another “Money Center” bank is designated by Freddie Mac in its
discretion by notice to the Sponsor, plus four percent (4%).
 
“Deposited Assets” means, together, the Enhanced Bonds and the Enhanced
Custodial Receipts deposited and pooled pursuant to the Series Certificate
Agreement.
 
“Discount Rate” means, for purposes of calculating the Prepayment/Substitution
Premium under Section 3.8(a), the interest rate, as of the date which is five
Business Days prior to the applicable Yield Maintenance End Date for the
applicable Deposited Asset, which shall be found among the Daily Treasury Yield
Curve Rates (commonly known as “Constant Maturity Treasury” rates) for an
obligation with a maturity date corresponding to the applicable Yield
Maintenance End Date, as reported on the U.S. Department of the Treasury
website, expressed as a decimal to two digits.  If no published Constant
Maturity Treasury rate matches the remaining applicable Yield Maintenance
Period, Freddie Mac shall interpolate as a decimal to two digits the interest
rate between (a) the Constant Maturity Treasury rate with a maturity closest to,
but shorter than, the expiration date of the applicable Yield Maintenance
Period, and (b) the Constant Maturity Treasury rate with a maturity closest to,
but longer than, the expiration date of the applicable Yield Maintenance Period,
as follows:
 
 
A = the Treasury Constant Maturity rate with a maturity closest to, but shorter
than, the expiration date of the Yield Maintenance Period

 
B = the Treasury Constant Maturity rate with a maturity closest to, but longer
than, the expiration date of the Yield Maintenance Period

 
C = number of months to maturity for the Treasury Constant Maturity rate with a
maturity closest to, but shorter than, the expiration date of the Yield
Maintenance Period

 
D = number of months to maturity for the Treasury Constant Maturity rate with a
maturity closest to, but longer than, the expiration date of the Yield
Maintenance Period

 
E = number of months remaining in the Yield Maintenance Period

 
 

In the event the U.S. Department of the Treasury ceases publication of the
Constant Maturity Treasury rates, the Discount Rate shall equal the yield on the
first U.S. Treasury security that is not callable or indexed to inflation, which
matures after the expiration date of the applicable Yield Maintenance Period.
 
“Enforcement Action” means, with respect to any Mortgaged Property, the
advertising of or commencement of any foreclosure or trustee’s sale proceedings,
the exercise of any power of sale, the obtaining of or seeking of the
appointment of a receiver, the taking of possession or control or the collecting
of rents, the commencement of any suit or other legal, administrative, or
arbitration proceeding against the Mortgaged Property or the Owner based upon
any of the Bond Mortgage Documents, or the taking of any other enforcement or
remedial action against the Owner arising under or connected with the Mortgaged
Property.
 
 
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“Enhanced Bonds” means the Bonds for which Freddie Mac is providing its Credit
Enhancement pursuant to the Series Certificate Agreement as listed on Schedule
A-2 hereto.
 
“Enhanced Custodial Receipts” means those senior custodial receipts
(representing an interest in the related underlying Bonds) for which Freddie Mac
is providing its Credit Enhancement pursuant to the Series Certificate Agreement
as indicated on Schedule A-2 hereto.
 
“Event of Default” means the occurrence of an event of default as described in
Section 7.1.
 
“Fee Component” means, with respect to each Bond Mortgage Loan, the regular,
ongoing fees due from time to time to the Issuer, the Bond Trustee and the
rebate analyst, as such fees are set forth in the applicable Indenture.
 
“Foreclosure” shall be deemed to have occurred when title to the Mortgaged
Property encumbered by a Bond Mortgage is acquired in the name of the Bond
Trustee, Freddie Mac, the Sponsor, the Bondholder Representative, or the
designee of any such party or in a third party purchaser’s name through
foreclosure or deed-in-lieu.
 
“Freddie Mac” means the Federal Home Loan Mortgage Corporation, a
shareholder-owned government-sponsored enterprise organized and existing under
the laws of the United States, and its successors.
 
“Freddie Mac Fee” means the fee payable to Freddie Mac for providing the Credit
Enhancement, the Liquidity Facility and for serving as Administrator and Pledge
Custodian.  Such fee shall be an amount equal to one-twelfth of 1.67% (one
hundred sixty-seven basis points) times the Current Class A Certificate Balance,
and shall be calculated on the basis of a 365/366 day year for the actual number
of days elapsed.  Such fee shall be payable as provided in Section 3.3 and shall
accrue monthly based upon the Current Class A Certificate Balance as of the
first day of each month.  If an Administrator or Pledge Custodian other than
Freddie Mac is appointed, Freddie Mac will allocate a portion of the Freddie Mac
Fee to the payment of the fees of such substitute Administrator or Pledge
Custodian.  The Freddie Mac Fee does not include fees for extraordinary services
of the Administrator or Pledge Custodian.
 
“Freddie Mac Purchase Notice” has the meaning set forth in Section 7.3(b).
 
“Freddie Mac Reimbursement Amount” means the amounts that the Sponsor is
required to cause to be paid to Freddie Mac pursuant to this Agreement to
reimburse Freddie Mac for any Advances, which amounts shall be equal to the sum
of all Advances not previously reimbursed on behalf of the Sponsor, together
with any interest thereon, late charges, default interest and other amounts
payable to Freddie Mac under this Agreement (except any share of collected late
charges that the Servicer is entitled to retain as additional servicing
compensation) as a result of a default under the Owner Documents, and shall be
paid as provided in Sections 3.2, 3.3 and 3.4 of this Agreement.
 
“Government Obligations” means direct and general obligations of the United
States of America or obligations of any agency or instrumentality of the United
States of the payment of the principal and interest of which are guaranteed by
the full faith and credit of the United States of America.
 
 
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“Guaranty” means the Limited Support Agreement dated as of the date hereof
between the Guarantor and Freddie Mac, as amended, supplemented or restated.
 
“Guarantor” means America First Tax Exempt Investors, L.P., a Delaware limited
partnership, and any permitted successor or assign thereof under the Guaranty.
 
“Guide” means the Freddie Mac Multifamily Seller/Servicer Guide, as amended from
time to time.
 
“Hedge” or “Hedge Agreement” means a Cap.
 
“Hedge Collateral” has the meaning set forth in Section 5.5.
 
“HUD Document” means, with respect to any Mortgaged Property, any interest rate
reduction payment agreement, housing assistance payment agreement or similar
document delivered by or on behalf of the Department of Housing and Urban
Development to provide support for rent or mortgage loan payments.
 
“Indenture” means, with respect to each issue of Bonds, the Trust Indenture or
the Indenture of Trust, as applicable, between the Issuer and Bond Trustee or
the Resolution of the Issuer pursuant to which the Bonds are issued and secured,
as the same may be amended, modified or supplemented from time to time.
 
“Index Rate” means a rate equal to the index of the weekly index rate resets of
tax exempt variable rate issues included in a database maintained by Municipal
Market Data, a Thomson Financial Services Company, or its successors, which meet
specific criteria established by The Securities Industry and Financial Markets
Association, such index currently known as The Securities Industry and Financial
Markets Association (SIFMA) Municipal Swap Index or any successor to such index.
 
“Initial Purchaser” means D.A. Davidson & Co., as initial purchaser of the Class
A Certificates under the Remarketing Agreement.
 
“Issuer” means, with respect to each issue of Bonds, the governmental entity
that issued such Bonds, and its successors.
 
“Liquidity Advance” means an advance by Freddie Mac pursuant to the terms of the
Series Certificate Agreement to pay the Purchase Price of any Class A
Certificates tendered optionally by Class A Certificateholders pursuant to
Section 6.03 of the Series Certificate Agreement that have not been remarketed
by the Remarketing Agent pursuant to the Remarketing Agreement and the Series
Certificate Agreement and therefore, with respect to which there are no proceeds
of remarketing.
 
“Liquidity Commitment Termination Date” means, with respect to the Class A
Certificates, the first to occur of (a) the date such Class A Certificates shall
have been redeemed in full, (b)  the termination of the Series Certificate
Agreement, (c) the conversion of the Reset Rate Method to a term interval that
extends to the last day on which such Class A Certificates will remain
outstanding and (d) a Tender Option Termination Event under the Series
Certificate Agreement.
 
 
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“Liquidity Facility” has the meaning set forth in the Series Certificate
Agreement.
 
“Liquidity Rate” means the base rate or prime rate of interest of Citibank, N.A.
until such time as another “Money Center” bank is designated by Freddie Mac in
its discretion by notice to the Sponsor, plus two percent (2%) per annum.
 
“Losses” shall have the meaning set forth in Section 3.12.
 
“LURA” shall have the meaning set forth in Section 2.1(gg).
 
“Mandatory Tender Event” shall mean each event defined as a "Mandatory Tender
Event" in Section 6.04 of the Series Certificate Agreement.
 
“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns, if such successors and assigns shall continue to perform the functions
of a securities rating agency.
 
“Mortgaged Property” means any of the properties listed as a Mortgaged Property
in Schedule A attached hereto.
 
“Obligations” means the obligations of the Sponsor (a) to pay or cause to be
paid all amounts, including fees, costs, charges and expenses payable under this
Agreement and (b) to observe and perform each of the terms, conditions and
provisions of the Sponsor Documents.
 
“Offering Circular” means in each case, the preliminary and final Offering
Circular (together with the related Offering Circular Supplement) related to the
sale of the Class A Certificates.
 
“Ohio Portfolio Escrow Agreement” means the Rehabilitation Escrow Agreement
(Ohio Portfolio) dated as of the date hereof among the Sponsor, the Servicer and
Freddie Mac, as amended, supplemented or restated.
 
“Optional Series Pool Release Date” means either (i) September 15, 2017 or (ii)
September 15, 2020.
 
“Owner” means, with respect to each Mortgaged Property, the owner of such
Mortgaged Property, and any successor owner of the Mortgaged Property.
 
“Owner Documents” means, with respect to each Bond Mortgage Loan, the Bond
Documents and the Bond Mortgage Documents.
 
“Person” means an individual, estate, trust, corporation, partnership, limited
liability company or any other organization or entity (whether governmental or
private).
 
“Pledge Custodian” means Freddie Mac, or any successor thereto as provided in
Article VIII.
 
“Pledged Class A Certificate” means (a) any Class A Certificate following an
optional tender by its Holder or the exercise by such Holder of its Optional
Disposition Right during the period from and including the date of its purchase
by the Administrator on behalf of and as agent for the Sponsor with an Advance
under Section 6.01(b) of the Series Certificate Agreement but excluding the date
on which such Class A Certificate is remarketed to any person other than Freddie
Mac, the Sponsor or any Affiliate of the Sponsor and (b) any Class A Certificate
purchased by the Administrator on behalf of and as agent for the Sponsor from
monies paid by Freddie Mac pursuant to the Liquidity Facility following the
occurrence of a Mandatory Tender Event.
 
 
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“Pledged Security Collateral” has the meaning set forth in Section 8.1
 
“Prepayment/Substitution Premium” means, when such premium is due and payable
pursuant to Sections 2.4(c), 3.8, 3.19, 3.21, 3.23 or 3.24 hereof, an amount
equal to the present value (discounted at the applicable Discount Rate) of the
monthly payments of the Freddie Mac Fee that would have been earned assuming
scheduled principal payments of the Deposited Asset(s) during the remainder of
the applicable Yield Maintenance Period for the applicable Deposited Asset(s)
had the redemption, funding, Release Event, substitution or mandatory tender not
occurred.
 
“Pre-Selected Deposited Asset” means the four (4) Deposited Assets indicated on
Schedule A-4 that have been pre-selected by the Sponsor as of the Closing Date
as being eligible for substitution and release from the Series Pool pursuant to
Sections 3.19 and 3.20 due to the sale of the related Pre-Selected Mortgaged
Property to an unrelated third party.  Only two of such four Pre-Selected
Deposited Assets may actually be substituted and released based on such
circumstances.
 
“Pre-Selected Mortgaged Property” means a Mortgaged Property related to an
Pre-Selected Deposited Asset.
 
“Purchase Date” means (a) during the Weekly Reset Period, any Business Day
specified by a Class A Certificateholder as the date on which Class A
Certificates owned by such Class A Certificateholder are to be purchased in
accordance with the provisions of Section 6.03 of the Series Certificate
Agreement, (b) any date on which the Class A Certificates are subject to
mandatory tender in accordance with the provisions of Section 6.04 of the Series
Certificate Agreement and (c) any date on which the Class A Certificates are
subject to optional disposition in accordance with the provisions of
Section 7.05 of the Series Certificate Agreement.
 
“Purchase Price” means, with respect to any Class A Certificate required to be
purchased pursuant to Section 6.06 of the Series Certificate Agreement, the
balance of such Class A Certificate plus interest accrued thereon to the
Purchase Date.
 
“Purchased Asset” means a Deposited Asset purchased by Freddie Mac on behalf of
the Sponsor from monies paid by Freddie Mac pursuant to the Credit Enhancement
following the occurrence of a Release Event.
 
“Rating Agency” has the meaning provided in the Series Certificate Agreement.
 
“Released Asset” has the meaning set forth in Section 3.19 hereof.
 
 
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“Remarketing Agent” means D.A. Davidson & Co., as remarketing agent under the
applicable Remarketing Agreement, and any successor in such capacity.
 
“Remarketing Agent Fee” has the meaning set forth in the Remarketing Agreement
with respect to the Class A Certificates.
 
“Remarketing Agreement” means the Certificate Purchase and Remarketing Agreement
dated as of the date hereof among the Sponsor, Freddie Mac, the Initial
Purchaser and the Remarketing Agent as amended, supplemented or restated.
 
“Repair Escrow Agreement” means the Repair Escrow Agreement dated as of the date
hereof by and among Freddie Mac, the Servicer and the Sponsor with respect to
the repairs required to be completed at the Mortgaged Properties during the time
period(s) established therein, as the same may be amended, supplemented or
restated.
 
“Release Purchase Price” means, with respect to any Deposited Asset, an amount
equal to the then outstanding principal amount of such Deposited Asset plus
accrued interest on such Deposited Asset to, but not including, the Release
Event Date.
 
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.
 
“Series Certificate Agreement” means the Series Certificate Agreement as defined
in Recital 2 hereof, as amended, restated or supplemented.
 
“Series Pool” means a discrete pool formed by Freddie Mac consisting of
Deposited Assets and other Assets therein described with respect to which
Freddie Mac has elected partnership status, as set forth in the Series
Certificate Agreement.
 
“Servicer” means the eligible servicing institution designated by Freddie Mac,
or its successor, as servicer of each Bond Mortgage Loan.  Initially, NorthMarq
Capital, LLC shall act as the Servicer.
 
“Servicing Agreement” means the Servicing Agreement dated as of the date hereof
between the Servicer and Freddie Mac concerning the servicing of the Bond
Mortgage Loans, the Bonds and each Hedge, as the same may be amended from time
to time, including any replacement Servicing Agreement entered into with a
successor servicer.
 
“Servicing Fee” means the monthly fee due the Servicer under the Servicing
Agreement in an amount equal to one-twelfth of 0.08% (eight basis points) times
the outstanding principal balance of each Bond Mortgage Loan, calculated on the
basis of a 365/366 day year for the actual number of days elapsed.
 
“Sponsor Documents” means this Agreement, the Series Certificate Agreement, the
Servicing Agreement, the Remarketing Agreement, the Repair Escrow Agreement, the
Guaranty, each Hedge Agreement, the Custody Agreement, the Ohio Portfolio Escrow
Agreement, the Villages at Lost Creek Escrow Agreement and any other agreement,
instrument or certificate executed by the Sponsor or by the Guarantor in
connection with the transactions contemplated thereby.
 
 
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“Sponsor Paid Expenses” has the meaning set forth in Section 8.3(c).
 
“Strike Rate” shall have the meaning set forth in Section 5.2.
 
“Subordinate Custodial Receipts” means those subordinate Custodial Receipts
issued pursuant to the Custody Agreement representing subordinate ownership
interest in the portion of Custodian-Held Bonds not credit enhanced by Freddie
Mac, as indicated on Schedule A-3 hereto.
 
“Subsequent Hedge or Subsequent Hedge Agreement”  shall mean a Hedge Agreement
in place during any Subsequent Hedge Period.
 
“Subsequent Hedge Period” means a period during which a Subsequent Hedge
Agreement is provided as required by the provisions of Article V.
 
“Substitute Asset” means an issue of multifamily housing revenue bonds, or
senior custodial receipts evidencing a senior ownership interests in such bonds,
substituted for an issue of Enhanced Bonds or Enhanced Custodial Receipts
pursuant to Section 3.19.
 
“Substitute Property” means a multifamily housing project that is substituted
for a Project pursuant to Section 3.19.
 
“Tax Certificate” means the Tax Certificate, the Non-Arbitrage Certificate and
Tax Agreement or any similar agreement or certificate executed by the Owner
certifying to or agreeing to comply with the requirements of Section 103 of the
Internal Revenue Code of 1986, as amended, in connection with the issuance of
the related Bonds.
 
“Term” has the meaning set forth in Section 9.8.
 
“Terminating Mandatory Tender Date” shall have the meaning set forth in the
Series Certificate Agreement.
 
“Title Insurance Policy” means, with respect to any Mortgaged Property, the
title insurance policy insuring the lien of the related Bond Mortgage.
 
“Total Release Price” means an amount equal to the Release Purchase Price plus
Hypothetical Gain Share, if any.
 
“Underwriting Package” means the documents and reports submitted by the Sponsor
to Freddie Mac and relied upon by Freddie Mac in its decision to execute and
deliver the Series Certificate Agreement.
 
“UCC Collateral” has the meaning set forth in Article VI hereof.
 
“Uniform Commercial Code” or “U.C.C.” means the Uniform Commercial Code as from
time to time in effect in each applicable jurisdiction.
 
 
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“Villages at Lost Creek Escrow Account” means the Villages at Lost Creek Escrow
Account established and held by The Bank of New York Mellon Trust Company, N.A.
for the benefit of Freddie Mac pursuant to the Villages at Lost Creek Escrow
Agreement.
 
“Villages at Lost Creek Escrow Agreement” means the Escrow Agreement (Villages
at Lost Creek) dated as of the date hereof by and among the Sponsor, Freddie
Mac, the Servicer and The Bank of New York Mellon Trust Company, N.A., as
collateral agent for Freddie Mac, as the same may be amended, supplemented or
restated.
 
“Yield Maintenance Period” means, with respect to each Deposited Asset, the
period beginning on the Closing Date and ending on the applicable Yield
Maintenance End Date.
 
“Yield Maintenance End Date” means, either (a) September 1, 2020 with respect to
events of the type set forth in Sections 3.8(a)(i), 3.8(a)(iv), 3.8(a)(v) and
3.8(a)(vi) or (b) the applicable date indicated on Schedule A with respect to
each Deposited Asset with respect to events of the type set forth in Sections
3.8(a)(ii) and 3.8(a)(iii).
 
Section 1.2 Interpretation.  In this Agreement, unless the context otherwise
requires, words of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders.  Unless the context shall
otherwise indicate, words importing the singular number shall include the plural
number and vice versa, and words importing persons shall include partnerships,
corporations and associations, including public bodies, as well as natural
persons.  The terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder”, and any
similar terms, as used in this Agreement, refer to this Agreement.  Any
reference in this Agreement to an “Exhibit”, a “Section”, a “Subsection”, a
“Paragraph” or a “subparagraph” shall, unless otherwise explicitly provided, be
construed as referring, respectively, to an Exhibit attached to this Agreement,
a section of this Agreement, a subsection of the section of this Agreement in
which the reference appears, a paragraph of the subsection within this Agreement
in which the reference appears, or a subparagraph of the paragraph within which
the reference appears.  All Recitals set forth above and all Exhibits attached
to or referred to in this Agreement are incorporated by reference into this
Agreement.  Any reference to an executed agreement or instrument herein shall be
to such agreement or instrument as amended, supplemented or restated in
accordance with its terms.
 
ARTICLE II 
REPRESENTATIONS, COVENANTS, WARRANTIES AND CONDITIONS
 
Section 2.1 Representations and Warranties.  As of the Closing Date, the Sponsor
represents and warrants the following as to each Bond Mortgage and, as
applicable, the related Bond Documents with respect to the Bonds.  The Sponsor
acknowledges that such representations and warranties (as qualified by Schedule
B hereto), together with the other representations, covenants, warranties and
agreements of the Sponsor contained in this Agreement, are relied upon by
Freddie Mac and serve as a basis for the agreement of Freddie Mac to exchange
the Certificates for the Deposited Assets, and the undertakings of Freddie Mac
contained in the Series Certificate Agreement with respect to the Credit
Enhancement and the Liquidity Facility.  Freddie Mac acknowledges that, except
for the representations and warranties contained in Subsections 2.1(uu),
2.2(a)(iii), 2.2(a)(iv), 2.2(a)(v), 2.2(a)(vi) and 2.2(a)(vii), although the
Sponsor has undertaken such review of each Bond Mortgage and Bond Documents with
respect to the Bonds as it deems appropriate, the warranties and representations
set forth in this Agreement are intended solely to allocate risk between the
Sponsor and Freddie Mac and to establish the circumstances under which Freddie
Mac may exercise certain remedies under this Agreement, are not personal
assurances by the Sponsor that all matters represented and warranted to are
factually correct or true as to each such Bond or Bond Mortgage, as applicable,
and may not be the basis for a claim of personal liability, except as otherwise
provided in Section 9.11(b) herein.  The representations and warranties
contained in Subsections 2.1(uu), 2.2(a)(iii), 2.2(a)(iv), 2.2(a)(v), 2.2(a)(vi)
and 2.2(a)(vii) are intended to be personal assurances that the matters
warranted to in those Subsections are factually correct, and any breach thereof
may be the basis for a claim of personal liability against the Sponsor.
 
 
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For the purposes of the representations and warranties made by the Sponsor in
this Article II:  (i) “diligent inquiry” and “due diligence” shall mean that the
Sponsor has conducted such inquiry and diligence as would customarily be
conducted by a Freddie Mac approved “Delegated Lender” contemplating making or
purchasing mortgage loans on properties comparable to the properties securing
the Bond Mortgage Loans, determined at the time the inquiry or diligence in
question was conducted or should have been conducted; (ii) “constructive
knowledge” shall mean knowledge obtainable (even if not actually obtained),
assuming the exercise of either (a) reasonable care or diligence, or (b)
diligent inquiry and due diligence in accordance with (i) above, as applicable;
(iii) “employees” of the Sponsor shall include any employees of the Sponsor and
of any Affiliates who have provided services to the Sponsor in connection with
the transaction contemplated by this Agreement; (iv) “best knowledge” shall mean
the best knowledge (which shall include actual knowledge and constructive
knowledge in accordance with (ii) above) of the employees of the Sponsor and
attorneys for the Sponsor working on the transaction contemplated by this
Agreement; (v) “actual knowledge” shall mean the actual knowledge (excluding
constructive knowledge) of the employees of the Sponsor and attorneys for the
Sponsor working on the transaction contemplated by this Agreement; and (vi)
“Sponsor Affiliates” means the Guarantor, and any other entity controlled by, or
under common control with, any of them.
 
(a) Rent Schedule; Data Tape.  The rent schedules submitted to Freddie Mac
contain no material errors of which the Sponsor has knowledge, and accurately
states the gross potential rents, the actual leased rents, the rent concessions
provided (if any), and the rent subsidies (if any) for each Mortgaged Property
as of the effective date thereof, and all other information regarding the
Mortgaged Property contained in the Data Tape provided to Freddie Mac regarding
the Mortgaged Property is true, complete and correct in all material respects.
 
(b) Location of Improvements.  All improvements to the Mortgaged Property that
have been included in its appraised value lie within the boundaries of the land
as described in the legal description attached to the related Bond Mortgage, or
to the extent that any such improvements encroach onto any adjoining land, each
such encroachment falls within the exceptions for encroachments set forth in
Guide Chapter 16 except as set forth on Schedule B.  No improvements on
neighboring properties encroach onto the Mortgaged Property, or all such
encroachments fall within the exceptions for encroachments set forth in Guide
Chapter 16.
 
 
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(c) No Damage.  There exists no unrepaired or unrestored damage to the Mortgaged
Property from fire or other casualty since the date of the Bond Mortgage that
would materially and adversely affect its value as security for the Bond
Mortgage, or, if such damage exists, sufficient funds have been escrowed to
fully restore the Mortgaged Property to the same size and density as existed
prior to such casualty, and such restoration is permitted under all applicable
building and zoning laws and regulations.
 
(d) Mortgaged Property Condition and Operation.
 
(i) The Mortgaged Property is in good and habitable condition except as noted on
Schedule B.
 
(ii) To Sponsor’s best knowledge, there is no material uncured violation at the
Mortgaged Property of any building or housing code or similar law or ordinance.
 
(iii) Except for the Mortgaged Properties listed on Schedule B which are
currently undergoing rehabilitation, all repairs and improvements to the
Mortgaged Property required by the related Repair Escrow Agreement have been
completed in accordance with the terms thereof.
 
(iv) Sponsor has completed a site inspection of the Mortgaged Property on or
after January 1, 2010.  Sponsor’s inspection of the Mortgaged Property did not
disclose any conditions that would materially adversely affect the value of the
Mortgaged Property, which were not taken into account in the appraisal of the
Mortgaged Property, including, but not limited to, environmental hazards, needed
repairs, tenancy issues, the condition of adjoining properties and other similar
matters.
 
(v) The Mortgaged Property is adequately served by public water and sewer
systems and all necessary public utilities.
 
(vi) The Mortgaged Property is in material compliance with all applicable
statutes, rules and regulations, including, but not limited to, subdivision,
health, safety, fire and building codes.  The Mortgaged Property is in material
compliance with all regulatory agreements and restrictive covenants which affect
the Mortgaged Property.  The physical configuration of the Mortgaged Property is
not in material violation of the Americans with Disabilities Act.
 
(vii) The Mortgaged Property is located in one of the fifty (50) states, the
District of Columbia, the Commonwealth of Puerto Rico, Guam, the U.S. Virgin
Islands or other territories or possessions of the United States.
 
(viii) The Mortgaged Property consists of five (5) or more dwelling units.  (For
the purposes of this representation and warranty, a “dwelling unit” must include
both a kitchen and a bathroom.)
 
 
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(ix) No Mortgaged Property is operated as a manufactured housing park.
 
(x) If the Mortgaged Property includes any retail, commercial or other
non-residential units (“mixed uses”), (A) (1) it is a single structure; or (2)
it consists of multiple structures, some of which contain mixed uses, but none
of which are exclusively retail or commercial; or (3) it consists of multiple
structures, most of which are entirely residential, but one (or a small number)
of which consists of retail stores primarily intended to serve residents of the
Mortgaged Property; and (B) gross income from non-residential uses does not
exceed 20% of the Mortgaged Property’s gross income; and (C) the area devoted to
non-residential uses does not exceed 20% of the Mortgaged Property.
 
(xi) No Mortgaged Property is a Seniors Housing Property (as defined in the
Guide).
 
(e) Condemnation.  No part of the Mortgaged Property has been taken by
condemnation or any similar proceeding since the date of the Bond Mortgage, and,
to the best of Sponsor’s knowledge, there is no pending or threatened (in
writing) condemnation or similar proceeding with respect to all or any part of
the Mortgaged Property.
 
(f) Authorization and Execution of Documents.  The Bond Mortgage and all
documents delivered in connection with the Bond Mortgage have been validly
authorized and executed by the parties thereto.  With respect to each Mortgaged
Property, all documents delivered in connection with the Bond Mortgage and the
related issue of Bonds have been validly authorized and executed by the parties
thereto.
 
(g) Loan Proceeds; Settlement Statement.  To Sponsor’s best knowledge, all
proceeds of the Bond Mortgage for any Mortgaged Property have been disbursed
directly to, or for the account of, the Owner in a manner that satisfied the
requirements of the Bond Documents other than the Mortgaged Properties set forth
on and as described on Schedule B.
 
(h) Insurance.  The Mortgaged Property is covered by hazard, flood, liability
and rent loss insurance that meets the requirements of the Guide as of the
applicable Closing Date except as set forth on Schedule B.  Without limiting the
generality of the foregoing, for any Bond Mortgage secured by a Mortgaged
Property located in whole or in part in a Special Flood Hazard Area (“SFHA”)
identified by the Federal Emergency Management Agency, (i) each building that
lies within the SFHA is covered by flood insurance in an amount at least equal
to the least of (A) its insurable replacement cost, (B) its prorated portion of
the unpaid principal balance of the related Bonds as of the Closing Date in the
case of a Mortgaged Property, or (C) the maximum limit of coverage available
under the National Flood Insurance Program, and (ii) the community where the
Mortgaged Property is located participates in the National Flood Insurance
Program.
 
(i) Delinquencies and Defaults.  Except as described on Schedule B, (i) all
payments due under the terms of the Bond Mortgage Documents have been made, and
there have been no delinquencies of 30 days or more since the origination of the
Bond Mortgage, (ii) there are no material non-monetary defaults under the terms
of the Bond Mortgage Documents, and (iii) there have been no material
non-monetary defaults which have remained uncured for 30 days or more since the
date of the origination of the Bond Mortgage.  No Bond Mortgage Document is
cross-defaulted, and no Bond Mortgage is cross-collateralized, with any other
transaction, except as disclosed to, and approved by, Freddie Mac prior to the
date hereof.
 
 
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(j) Form 8038.  Form 8038 relating to each series of Bonds that was “reissued”
(for federal tax purposes) or is a new issue with respect to the Mortgaged
Property has been or will be timely filed with the Internal Revenue Service.
 
(k) Bond Mortgage Ownership.  Each Bond Trustee is the sole owner and holder
(except for certain reserved rights of the Issuer) of the Bond Mortgage related
to the issue of Bonds for which it is the Bond Trustee.  The Bond Trustee’s
interest in each such Bond Mortgage is free and clear of any third party
security interests, claims and encumbrances of any kind (except for certain
reserved rights of the Issuer).
 
(l) Third-Party Reports.  The Sponsor has provided or caused to be provided to
Freddie Mac all third party reports in its possession relating to the Mortgaged
Property or the Owner, including, without limitation, any credit report,
appraisal, engineering report, environmental report or audit, title insurance
policy, flood zone determinations and surveys.  With respect to each such
report, the Sponsor represents and warrants that (i) a Sponsor Affiliate has
examined the report, (ii) the preparer of the report is appropriately qualified
and (iii) to the Sponsor’s best knowledge, the report is complete and accurate.
 
(m) Undisclosed Information about Owner.  Except as disclosed to Freddie Mac in
writing, the Sponsor has no actual knowledge of any fact or circumstance
affecting the Owner or the Mortgaged Property that materially and adversely
affects the Owner’s ability to meet its obligations under the Bond Mortgage in a
timely manner.
 
(n) Insolvency.  Except as specifically described on Schedule B, no bankruptcy,
insolvency, reorganization or comparable proceeding has ever been instituted by
or against the Owner or any guarantor or indemnitor of the Owner’s obligations
at any time during the last seven (7) years, and no such proceeding is now
pending against any such party.
 
(o) Information from Owner.  No information provided by the Owner or any
guarantor is untrue, inaccurate or misleading in any material and adverse
respect, and the description of the Owner, and each principal of the Owner,
contained in the Data Tape is true, complete and correct in all material
respects.
 
(p) Negligence.  To Sponsor’s best knowledge, there has been no negligent act or
omission by the Sponsor, any principal of the Sponsor, any Sponsor Affiliate or
any employee of the Sponsor or Sponsor Affiliate that has a material adverse
effect on the value of the Bond Mortgage.
 
(q) Enforceability.  The Bond Mortgage and the related Bond Mortgage Documents
are enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the enforcement of creditors,
rights generally, and general principles of equity (whether such enforcement is
considered in a proceeding at law or in equity) and any other qualifications set
forth in any legal opinion delivered at the closing of the Bond Mortgage
relating to such enforceability.  The Owner has no rights of offset, defense,
counterclaim or rescission with respect to the Bond Mortgage Documents.  The
Sponsor has complied with all applicable laws, regulations and administrative
requirements, state, local and federal, which would affect in any material
respect the enforceability of the Bond Mortgage Documents against the Owner, and
the Bond Mortgage Documents comply with all applicable laws, regulations and
requirements with respect to usury.
 
 
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(r) Title; First Lien.  Except as indicated on Schedule B, the Owner holds its
interest in the Mortgaged Property in fee simple.  The lien of each Bond
Mortgage is insured by one or more lender’s title insurance policies insuring
the applicable Bond Trustee, and its successors and assigns, as to the first
priority lien (except as noted on Schedule B with respect to the Bonds of a
subordinate series) of such Bond Mortgage in the aggregate principal amount of
the Bonds to which it relates, subject only to: (i) the lien of current real
property taxes, ground rents, water charges, sewer rents and assessments not yet
due and payable; and (ii) the exceptions (general and specific) set forth in
such title policies, including all covenants, conditions and restrictions,
rights of way, easements and other matters of public record, none of which,
individually or in the aggregate, materially interferes with (A) the current use
of the Mortgaged Property or the security intended to be provided by such Bond
Mortgage, (B) the Owner’s ability to pay its obligations when they become due,
or (C) the value of the Mortgaged Property.  No new liens or other matters of
record have been filed against the Mortgaged Property since the date of the
applicable title insurance policy that would not be insured by the title
insurance policy as being subordinate to the lien of the Bond Mortgage, and no
such lien, individually or in the aggregate, materially interferes with (A) the
current use of the Mortgaged Property or the security intended to be provided by
such Bond Mortgage, (B) the Owner’s ability to pay its obligations when they
become due, or (C) the value of the Mortgaged Property or such lien has been
released.  Each such title policy contains all endorsements as are required as
of the date hereof by Section 29.1(g) of the Guide, or equivalent affirmative
insurance, and otherwise conforms in all respects with the Guide except as set
forth on Schedule B.  The Sponsor has made no claims under any of such title
insurance policies.
 
(s) Taxes Paid.  All taxes, water and sewer charges, ground rents, governmental
assessments and other similar charges having a lien, or which would create a
lien upon the Mortgaged Property if unpaid by their payment due date, have been
paid, or amounts sufficient to cover the same in the ordinary course have been
escrowed under the Bond Mortgage Documents consistent with the requirements of
such Bond Mortgage Documents.
 
 
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(t) Equal Opportunity.  The origination of each Bond Mortgage by the Sponsor or
its Affiliates did not violate any applicable federal, state and local laws and
regulations, which if violated would materially and adversely affect the
enforceability of the Bond Mortgage, including but not limited to each of the
following and regulations issued under each of the following:
 
(i) Title VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. §§3601 et
seq.  (1996).
 
(ii) Title VII of the Consumer Credit Protection Act, as amended, 15 U.S. C.
§§1691 - 1691f (1996).
 
(iii) Section 527 of the National Housing Act, as amended, 12 U.S.C. §1735f-5
(1996).
 
(u) Status.  The Sponsor has complied with all laws relating to licensing,
qualification to do business and approval to originate mortgages in the state in
which the Mortgaged Property is located to the extent necessary to ensure the
validity and enforceability of the Bond Mortgage Documents and performance of
the Sponsor’s obligations under this Agreement.
 
(v) Environmental.  Except as disclosed to Freddie Mac in environmental reports
delivered to Freddie Mac or as listed on Schedule B, there is not now nor has
there ever been:
 
(i) any storage, disposal or discharge of hazardous materials or substances on
or affecting the Mortgaged Property,
 
(ii) any event or condition with respect to the Mortgaged Property, that
constitutes a material violation of any applicable local, state, or federal
environmental or public health law, or
 
(iii) any pending or threatened (in writing) environmental or public health
litigation or administrative action by any private party or public authority
with respect to the Mortgaged Property.
 
(w) Interest Computation.  Each Indenture with respect to the related Bonds
provides for computation of interest on the basis of a 360-day year comprised of
twelve 30-day months to the maturity date of the Bonds.  Each Bond Mortgage Note
provides for computation of interest on the basis of a 360-day year comprised of
twelve 30-day months to the maturity date of the Bond Mortgage Note.
 
(x) Bond Requirements.  Except as indicated on Schedule B:
 
(i) any Bonds originally issued as “draw-down” Bonds have been completely drawn
down;
 
 
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(ii) all Bonds are secured by a recorded mortgage or deed of trust granted by
the related Owner in favor of the related Bond Trustee (or granted to the Issuer
and then assigned to the related Bond Trustee);
 
(iii) all Bonds bear interest at fixed rate to maturity or an earlier reset date
(and in the case of any earlier reset date, will bear interest at a fixed rate
thereafter to be determined in accordance with the related Bond Documents);
 
(iv) with respect to each series of Bonds, neither the Issuer nor the Trustee
nor any other third party may direct or cause an acceleration or redemption of
the Bonds or the related Bond Mortgage Loan or a foreclosure of the lien of the
related Bond Mortgage pursuant to the terms of the related Bond Documents or
Bond Mortgage Documents based on a failure to pay the fees or expenses or any
other amounts owed to the Issuer, the Trustee or any such third party without
the prior consent of the Bondholder Representative;
 
(v) no third-party credit facility (other than the Freddie Mac Credit
Enhancement) or liquidity facility is in effect with respect to any series of
Bonds;
 
(vi) no interest rate swap or cap or other interest rate hedge is in effect with
respect to any series of Bonds; and
 
(vii) no forward or standby bond purchase agreement is in effect with respect to
any series of Bonds.
 
(y) Ineligible Bond Mortgages.  The Bond Mortgage and the Bond Mortgage
Documents include none of the following features that would be applicable during
the term of this Agreement, except as described on Schedule B:
 
(i) A principal balance that includes capitalization of interest, taxes, hazard
insurance premiums or late charges.
 
(ii) [Reserved].
 
(iii) A Mortgaged Property in which any of the residential space is master
leased to a single lessee or is master leased for military housing.
 
(iv) A Mortgaged Property more than 20 percent of which is used for student
and/or military housing.
 
(v) A lender equity participation feature.
 
(vi) A Mortgaged Property with physical occupancy below 90 percent.
 
(vii) A ground lease.
 
(viii) A Mortgaged Property that is encumbered by financing that is subordinate
to the Bond Mortgage, which subordinate financing does not meet the requirements
of the Guide for “soft” subordinate financing.
 
 
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(z) Title Insurance.  Each Title Insurance Policy in effect with respect to the
related Bond Mortgage is identical to the policy previously submitted to Freddie
Mac by the Sponsor.  There are no conditions or encumbrances that have not been
disclosed to the title insurer and that would provide a reasonable basis for the
title company refusing to honor a claim.  To the knowledge of Sponsor, there are
no liens or encumbrances affecting the Bond Mortgage or the Mortgaged Property
that are not identified in Section 2.1(r), in Schedule B to the Title Insurance
Policy or in the title report delivered to Freddie Mac in connection with this
transaction arising during the period from the effective date of the Title
Insurance Policy to the Closing Date.
 
(aa) Survey.  Except as set forth on Schedule B, the survey delivered to Freddie
Mac as part of the Underwriting Package correctly depicts for the Mortgaged
Property the boundary lines, improvements and exceptions to title that can be
shown on a survey required to be shown on a survey under the ALTA/ACSM
requirements for urban surveys, and otherwise meets the requirements of the
Guide.
 
(bb) Single Tax Parcel.  The Mortgaged Property consists of property identified
as all of a single tax parcel or, if identified as multiple tax parcels, the
Mortgaged Property constitutes the entirety of those tax parcels.  Any tax
parcel or parcels within which the Mortgaged Property is located does not
include property that is not subject to the Bond Mortgage.
 
(cc) Access.  Except as set forth on Schedule B, the Mortgaged Property does not
share ingress and egress through an easement or private road, or share on-site
or off-site recreational facilities and amenities that are not located on the
Mortgaged Property and under the exclusive control of the Owner; or where there
is shared ingress and egress or amenities, there exists an easement or joint use
and maintenance agreement, such agreement meets the requirements of the Guide,
and such agreement (i) provides that access to and use and enjoyment of the
easement or private road and/or recreational facilities and amenities is
perpetual, (ii) specifies the Owner’s responsibilities and share of expenses,
and (iii) states that the failure to pay any maintenance fee will not result in
a loss of usage of the easement.
 
(dd) Zoning.  The overall character of the existing use of the Mortgaged
Property is consistent with the zoning classification of the Mortgaged Property,
except to the extent such use may constitute a legal nonconforming use.  Except
as disclosed to Freddie Mac in writing, the Mortgaged Property does not violate
any density or building setback requirements of the applicable zoning law, and
reconstruction of the Mortgaged Property in its current configuration would be
permitted by applicable zoning laws following destruction of part or all of the
Mortgaged Property by fire or other casualty or, in lieu thereof, building law
and ordinance insurance coverage satisfying the requirements of the Guide as of
the Closing Date has been provided.  The Mortgaged Property otherwise meets the
requirements of the Guide relating to zoning, and no proceedings are pending or,
to the best of Sponsor's knowledge, threatened that would result in a change of
the zoning of the Mortgaged Property.
 
 
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(ee) Bond Information.  The information with respect to the Bonds and the
Enhanced Custodial Receipts set forth on Schedule 1 to the Series Certificate
Agreement and Appendix A to the Offering Circular Supplement is true and correct
in all material respects.
 
(ff) Owner Liability.  Except as set forth in the Bond Mortgage and the
documents related thereto, the Owner of the Mortgaged Property has no
outstanding or continuing payment obligations to the Sponsor, the Issuer or the
Bond Trustee, and, to Sponsor’s knowledge, the Sponsor, the Issuer and the Bond
Trustee have not breached any obligation or duty owed to the Owner under the
Bond Mortgage Documents or at law or in equity the Regulatory Agreement or other
similar agreement imposing operating restrictions on the Mortgaged Property.
 
(gg) LURA and Bond Documents.  (i) The use and operation of the Mortgaged
Property is currently in compliance with the provisions of the Land Use
Restriction Agreement, the Regulatory Agreement or other similar agreement
(including any such agreement constituting or executed in connection with a
Housing Assistance Payment contract from the U.S. Department of Housing and
Urban Development) imposing operating restrictions on the Mortgaged Property
executed in connection with the Bonds (the “LURA”), and no prior violations have
occurred that would result in any related tax exempt bonds becoming taxable,
loss or material diminution in value of the tax credits, forfeiture or reversion
of title to the Mortgaged Property or other material loss or risk of loss on the
part of the Owner or the Mortgaged Property; (ii) to the best of Sponsor’s
knowledge, there have been no actions, claims, demands or proceedings brought
against the Owner or related to the Mortgaged Property arising out of any
violations or claimed violations of any Tax Regulatory Agreement; (iii) no
circumstances exist which, with the giving of notice or the expiration of any
applicable grace or cure period, would constitute an event of default under the
Bond Documents; (iv) there are no fees currently due and owing under the Bond
Documents which have not been paid; and (v) no claims for indemnification under
the Bond Documents have been made or are pending, and no basis for such a claim
for indemnification exists.
 
(hh) Nonexistent Documents.  Except as indicated on Schedule B, none of the
following documents is currently in effect with respect to the Bond Mortgage or
the Mortgaged Property:
 
(i) A mortgage note or any other obligation payable to the Sponsor or any its
Affiliates.
 
(ii) Except as disclosed in writing to Freddie Mac, an assignment of rents or
leases in favor of the Sponsor or its Affiliates.
 
(iii) An escrow agreement for the benefit of the Sponsor or its Affiliates
creating or governing the tax and insurance escrow, any repair escrow or any
other escrow fund with respect to the Bond Mortgage (except pursuant to the
Sponsor Documents) or the Mortgaged Property (other than the Mortgaged
Properties set forth on Schedule B and in the amounts set forth on Schedule B).
 
 
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(ii) Perfection of Security Interest.  Financing statements have been filed in
all locations necessary to perfect a security interest in all of the Mortgaged
Property described in the financing statements, including all furniture,
fixtures, equipment, accounts, contracts rights, condemnation and casualty
proceeds, general intangibles and all other personal property related to the
ownership or operation of the Mortgaged Property, described in those financing
statements, to the extent that applicable law permits a security interest in
such collateral to be perfected by filing.
 
(jj) Single Asset Requirements.  In the case of each of the Mortgaged
Properties, except as disclosed to Freddie Mac on Schedule B, the Bond Mortgage
prohibits the applicable Owner from owning substantial assets other than its
Mortgaged Property and prohibits the applicable Owner from engaging in any
business enterprises other than the operation of its Mortgaged Property.  To the
Sponsor’s best knowledge, each Owner is in compliance with the above-described
provision of its Bond Mortgage.
 
(kk) Flood Zone Determination.  The Flood Zone Determination form for the
Mortgaged Property was prepared on the basis of the legal description of the
Mortgaged Property and, notwithstanding any street address specified on the
form, the determination evidenced by the form is applicable to all buildings
comprising the Mortgaged Property.
 
(ll) Federal Income Tax Matters.  To Sponsor’s best knowledge, (1) no Owner has
taken any action, omitted to take any action, or permitted any action to be
taken that would impair the exclusion from gross income for federal income tax
purposes of the interest payable on any of the Bonds, and (2) no Owner is in
violation of any material requirement of any tax certificate relating to the
Bonds.
 
(mm) Payment of Fee Component.  Payment of the Fee Component with respect to
each Bond Mortgage Loan is current and no such fees are currently due and
payable.
 
(nn) State Allocating Agency Requirements.  The only operating restrictions
imposed on any Mortgaged Property by any state tax credit allocating agency not
reflected in the regulatory agreements, restrictive covenants or similar
instruments recorded against the Mortgaged Properties are those reflected in the
letters attached hereto as Exhibit I.
 
(oo) Rebate.  No rebate is due and owing with respect to the Bonds related to
any Mortgaged Property.
 
(pp) Exemption from Real Property Taxes.  Except as indicated on Schedule B, the
Mortgaged Property has qualified for an exemption from, and has not been subject
to, payment of real property taxes since the date the Owner acquired the
Mortgaged Property and to Sponsor’s best knowledge (i) the Owner is in
compliance with the requirements of the Regulatory Agreement applicable to the
Mortgaged Property, (ii) the Mortgaged Property qualifies for exemption from
real property taxes for the current real property tax year and (iii) no event
has occurred which would cause the Mortgaged Property to lose its current
exemption from real property taxes.
 
 
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(qq) Amortization Schedules.  The amortization schedules attached as Exhibit II
do not contain material errors of which the Sponsor has knowledge, and
accurately state the maturity and the principal and interest payments for the
applicable Bond Mortgage Loan and related Bond as of each monthly payment date.
 
(rr) Prepayment Schedule.  The first date on which the Bonds are permitted to be
redeemed at par is set forth in Exhibit III.
 
(ss) Tax Credit Matters.  Except as indicated on Schedule B, a Form 8609 has
been issued by the applicable tax credit allocating agency with respect to each
Mortgaged Property evidencing the final allocation of tax credits with respect
thereto in an amount such that no adjustment to or repayment of any tax credit
investor’s capital contribution is necessary, and all tax credit investor
capital contributions have been fully funded to the Owner.
 
(tt) Laundry and Other Leases.  Each laundry or telecommunications lease in
effect with respect to a Mortgaged Property is in compliance with applicable
requirements of the Guide, or the nature of any noncompliance is such that it
would neither materially interfere with the security provided by the related
Bond Mortgage, nor materially impair the value of the Mortgaged Property.
 
(uu) Ownership of Bonds and Custodial Receipts.  (1) The Bonds are genuine and
outstanding.  The Sponsor has all necessary power and authority to transfer, and
has duly authorized by all necessary action the transfer of, the Enhanced Bonds
to Freddie Mac and the Custodian-Held Bonds pursuant to the Custody
Agreement.  Immediately prior to such transfers, the Sponsor owned the Bonds
free and clear of any lien, pledge, encumbrance or other security interest, and
has not sold, assigned or pledged any of its interest in the Bonds to any Person
except in accordance with the Sponsor Documents, and has not entered into any
agreement to effect such a sale, assignment or pledge except as contemplated
hereby.  Upon such transfers, the Sponsor releases all right, title and interest
in and to the Bonds (such release by the Sponsor in connection with its transfer
of ownership of the Bonds in no way limits its rights to direct the funding of
Release Events in certain cases or take other actions with respect to the Bonds
as described in the Sponsor Documents).
 
(2)  The Custodial Receipts are genuine and outstanding.  The Sponsor has all
necessary power and authority to transfer, and has duly authorized by all
necessary action the transfer of, the Enhanced Custodial Receipts to Freddie
Mac.  Immediately prior to such transfers, the Sponsor owned the Enhanced
Custodial Receipts free and clear of any lien, pledge, encumbrance or other
security interest, and has not sold, assigned or pledged any of its interest in
the Enhanced Custodial Receipts to any Person other than Freddie Mac, and has
not entered into any agreement to effect such a sale, assignment or pledge
except as contemplated hereby.  Upon such transfers, the Sponsor releases all
right, title and interest in and to the Enhanced Custodial Receipts (such
release by the Sponsor in connection with its transfer of ownership of the
Enhanced Custodial Receipts in no way limits its rights to direct the funding of
Release Events in certain cases or take other actions with respect to the
Enhanced Custodial Receipts as described in the Sponsor Documents).
 
 
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(vv) Earthquake Insurance.  With respect to each Mortgaged Property located in
Seismic Risk Zone 3 or 4, a seismic analysis has been conducted by a recognized
firm experienced in conducting such analyses, and no such analysis showed a
Mortgaged Property with a probable maximum loss of greater than 40%.  For each
such Mortgaged Property with respect to which the applicable seismic analysis
shows a probable maximum loss of greater than 20%, but not greater than 40%,
earthquake insurance is currently maintained by the related Owner with a
deductible not in excess of $50,000 from an insurance company with a rating
meeting the requirements of the Guide for the applicable size of the Bond
Mortgage Loan related to the Mortgaged Property with Freddie Mac named as a loss
payee or additional insured.
 
(ww) Owner Status.  Neither the Owner nor any principal of an Owner is a person
or entity that is named as a “specially designated national and blocked person”
on the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website,
http://www.treas.gov/ofac/t11sdn.pdf.
 
(xx) Replacement Reserves.  The replacement reserve requirements with respect to
each Mortgaged Property as set forth in the related Bond Documents and Bond
Mortgage Loan Documents, are fully funded.
 
Section 2.2 Other Representations and Warranties by the Sponsor and
Representations and Warranties by Freddie Mac.
 
(a) The Sponsor represents and warrants as of the Closing Date with respect to
each Bond Mortgage Loan and Mortgaged Property related to the Bonds and the
Sponsor Documents, as follows:
 
(i) To Sponsor’s best knowledge, the information contained in the Underwriting
Package is true and accurate in all material respects and does not omit
information in the possession of the Sponsor to make the provided information
complete and accurate.
 
(ii) All copies of documents delivered to Freddie Mac under Section 2.3 of this
Agreement are true and accurate copies of the originals.  The Sponsor has in its
possession no documents described in Section 2.3 of this Agreement for which
either originals or copies have not been delivered to Freddie Mac.
 
(iii) The Sponsor Documents to which it is a party have been duly authorized by
the Sponsor, are valid and binding agreements of the Sponsor, and are
enforceable against the Sponsor in accordance with their terms except as may be
limited by bankruptcy, insolvency, reorganization, moratoria, liquidation or
readjustment of debt or similar laws now or hereafter affecting the enforcement
of creditors’ rights generally, and as may be limited by the effect of general
principles of equity regardless of whether such enforcement is considered in a
proceeding at law or in equity.  The Guaranty has been duly authorized by the
Guarantor, is a valid and binding agreement of the Guarantor, and is enforceable
against the Guarantor in accordance with its terms except as may be limited by
bankruptcy, insolvency, reorganization, moratoria, liquidation or readjustment
of debt or similar laws now or hereafter affecting the enforcement of creditors’
rights generally, and as may be limited by the effect of general principles of
equity regardless of whether such enforcement is considered in a proceeding at
law or in equity.
 
 
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(iv) Since June 30, 2010, which is the date of the Guarantor’s most recent
financial statements submitted to Freddie Mac, there has been no material
adverse change in the general financial position of the Guarantor.  For the
purposes of this representation and warranty, the “general financial position of
the Guarantor” shall be deemed to exclude any short-term adverse changes that
occur solely as a result of daily interest rate fluctuations.
 
(v) The Sponsor (A) is a limited liability company duly organized and existing
pursuant to the laws of the State of Delaware, (B) has the power and authority
to own its properties and to carry on its business as now being conducted and as
contemplated by the Sponsor Documents and (C) has the power and authority to
execute and perform all the undertakings in the Sponsor Documents and the other
transactions and agreements contemplated by the Sponsor Documents.  The
Guarantor (1) is a limited partnership duly organized and existing pursuant to
the laws of Delaware, (2) has the power and authority to own its properties and
to carry on its business as now being conducted and as contemplated by the
Guaranty and (3) has the power and authority to execute and perform all the
undertakings in the Guaranty.
 
(vi) The execution and performance by the Sponsor of the Sponsor Documents to
which it is a party and other agreements required pursuant to such agreements,
and by the Guarantor of the Guaranty (A) will not violate in any material
respect or, as applicable, have not violated in any material respect any
provision of any law, rule or regulation or any order of any court or other
agency or government applicable to the Sponsor or the Guarantor and (B) will not
violate in any material respect, or as applicable, have not violated in any
material respect any provision of any indenture, agreement or other instrument
to which the Sponsor or Guarantor, as applicable, is a party or is otherwise
subject, or, except as otherwise provided in the Sponsor Documents, result in
the creation or imposition of any material lien, charge or encumbrance of any
nature.
 
(vii) Neither the Sponsor nor the Guarantor is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party which default
would in Sponsor’s good faith and reasonable judgment materially adversely
affect the transactions contemplated by the Sponsor Documents or the
Guaranty.  There is no action, suit or proceeding at law or in equity or by or
before any governmental instrumentality or other agency now pending or
threatened in writing against or affecting the Sponsor or the Guarantor or any
of its properties or rights, which, if adversely determined, would in Sponsor’s
good faith and reasonable judgment (A) materially impair the right of the
Sponsor or the Guarantor to carry on its business as now conducted or (B) have a
material adverse effect on the financial condition of the Sponsor or the
Guarantor.
 
(viii) Neither Sponsor nor any applicable Sponsor Affiliate, with respect to any
period during which it has acted as Bondholder Representative under the Bond
Documents, has taken, or omitted to take, any action that, if taken or omitted,
would jeopardize or adversely affect the tax-exempt status of the interest
payable on the Bonds.
 
 
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(ix) Guarantor, as Bondholder Representative, is authorized under the Bond
Documents to assign its rights, privileges and obligations as Bondholder
Representative to Freddie Mac (whether directly or indirectly through the
Custodian).
 
(x) None of the Bond Documents requires or obligates the Bondholder
Representative to pay the fees and expenses of any party, including any
obligations of the Owner, or to pay capitalized interest or any other costs
during any construction rehabilitation period for any Mortgaged Property.
 
(xi) Each Owner has established all escrows and reserves required by the Bond
Mortgage and the Owner Documents.
 
(xii) None of the Sponsor or the Guarantor nor the individuals who work for
them, whether as employees, agents or independent contractors who have been,
prior to the Closing Date, actively engaged in conducting Sponsor’s or
Guarantor’s operations with the Owner, has:
 
(A) made any written representation to Freddie Mac or the Servicer respecting
the Owner, the Bond Mortgage or the Mortgaged Property that it knew or now knows
is materially untrue or misleading and that has a materially adverse effect on
the value of the Bond Mortgage or the Mortgaged Property, or
 
(B) omitted to provide any written information to Freddie Mac or the Servicer
that it knew or now knows, which omission renders the written information
provided to Freddie Mac or the Servicer in connection with the Owner, the Bond
Mortgage or the Mortgaged Property materially untrue or misleading and that has
a materially adverse effect on the value of the Bond Mortgage or the Mortgaged
Property.
 
The Sponsor and Freddie Mac agree that the individuals who provided such written
information to them shall not incur personal liability arising from providing
such written information.
 
(b) By its execution and delivery of the Series Certificate Agreement, Freddie
Mac will be deemed to have represented and warranted as of the Closing Date as
follows:
 
(i) It is a shareholder-owned government-sponsored enterprise organized and
existing under the laws of the United States of America.
 
(ii) Each of this Agreement and the Series Certificate Agreement (the “Freddie
Mac Documents”) is a valid and binding obligation of Freddie Mac, the making and
performance of which by Freddie Mac have been duly authorized by all necessary
corporate and other action, and neither the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of the Freddie Mac Documents by Freddie Mac, conflicts with, results
in a breach of, or is a default under, in any material respect, any of the
terms, conditions or provisions of any legal restriction or any instrument to
which Freddie Mac is now a party or by which Freddie Mac is bound, or
constitutes a violation of any law regulating the affairs of Freddie Mac or
internal governing documents of Freddie Mac, and will not result in the creation
of any prohibited encumbrance upon any of its assets.
 
 
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Section 2.3 Conditions.  The obligation of Freddie Mac to exchange the
Certificates for the Deposited Assets, execute and deliver the Series
Certificate Agreement and provide the Credit Enhancement and the Liquidity
Facility is subject to the satisfaction of the following conditions precedent on
or prior to the Closing Date:
 
(a) Final Documentation Delivery with respect to each Bond Mortgage on a
Mortgaged Property.  The Sponsor has completed final delivery of the
documentation in respect of each Bond Mortgage on a Mortgaged Property that
relates to the Bonds by delivering the following (to the extent not previously
delivered) to Freddie Mac, Legal Division, 8200 Jones Branch Drive, Mail Stop
204, McLean, VA 22102 Attention:  Associate General Counsel, an accurate,
complete and legible copy of the following documents, including all assignments
of such documents:
 
(i) The Bond Mortgage.
 
(ii) The closing transcript from the original issue of the related Bonds and
from any subsequent refunding issue, if applicable.
 
(iii) Each financing statement that purports to perfect a security interest
related to the Bond Mortgage or the related Bonds.
 
(iv) The Title Insurance Policy insuring the Bond Mortgage and naming the
applicable Bond Trustee as the insured, in a form approved by Freddie Mac.
 
(v) Each document listed as an exception to coverage in Schedule B to the title
insurance policy to the extent requested by Freddie Mac.
 
(vi) A survey approved by Freddie Mac.
 
(vii) Each legal opinion received by the Sponsor and the Issuer from counsel to
the Owner and the guarantor(s), if any, in a form acceptable to Freddie Mac.
 
(viii) All laundry leases and commercial leases and copies of all related
subordination agreements.
 
(ix) Evidence satisfactory to Freddie Mac of insurance coverage including, as
determined to be applicable by Freddie Mac, hazard, earthquake (unless waived by
Freddie Mac), rent loss or business interruption, building ordinance, liability
and (if any structure forming part of the Mortgaged Property is located in a
special flood hazard area identified by the Federal Emergency Management Agency)
flood insurance coverage.
 
 
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(x) If a flood zone determination has been made by a third party on or after
January 2, 1996, a copy of the flood zone determination, which must be on the
Standard Flood Hazard Determination Form issued by the Federal Emergency
Management Agency.
 
(xi) The rent schedule certified by the Owner as true and correct, most recently
received by the Sponsor and acceptable to Freddie Mac.
 
(xii) Any separate assignment of leases and rents related to the Bond Mortgage,
if any.
 
(xiii) Each guaranty of the obligations of the Owner under the related
Exceptions to Non Recourse Guaranty.
 
(xiv) To the extent obtained by the Sponsor or applicable Sponsor Affiliate,
each replacement reserve agreement and repair escrow agreement or comparable
agreements, relating to the Mortgaged Property.
 
(xv) A completed questionnaire by the Bond Trustee in form and scope
satisfactory to Freddie Mac.
 
(b) Final Documentation and Fee Delivery with Respect to this Agreement.  On or
prior to the Closing Date, the following conditions precedent shall be satisfied
prior to delivery by Freddie Mac of the Series Certificate Agreement:
 
(i) payment made or caused to be made by the Sponsor of (x) Freddie Mac’s fees,
costs and expenses and (y) all other initial deposits, fees, costs and expenses
which are due and payable by the Sponsor on or before the Closing Date in
accordance with this Agreement and the other Sponsor Documents;
 
(ii) delivery to the title insurance company for filing and/or recording in all
applicable jurisdictions (or such filing and/or recording having been provided
for in a manner satisfactory to Freddie Mac) of all documents, including,
without limitation, duly executed and acknowledged copies of each Bond Mortgage,
UCC-1 financing statements and other appropriate instruments, in form and
substance satisfactory to Freddie Mac and in proper form for recordation as may
be necessary, in the opinion of Freddie Mac, to perfect the lien created by the
foregoing, and each applicable Owner Document (or evidence of the prior
recordation of such documents) and the payment of all taxes, fees and other
charges payable in connection with such execution, delivery, recording and
filing;
 
(iii) there shall have occurred no material adverse change in the financial
condition, business or prospects of any Owner, or in the physical condition,
operating performance or value of the Owner’s Mortgaged Property from that shown
in the Underwriting Package for the Bonds delivered to Freddie Mac by the
Sponsor;
 
(iv) there shall exist no default or “Event of Default” under any of the Owner
Documents with respect to any Mortgaged Property; and
 
 
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(v) receipt by Freddie Mac, on or prior to the Closing Date, of the following,
each dated as of the Closing Date, except as otherwise agreed to in form and
substance satisfactory to Freddie Mac in all respects:
 
(A) an executed copy of the Series Certificate Agreement, the Remarketing
Agreement, the Custody Agreement and the satisfaction of all conditions
precedent set forth in such documents;
 
(B) an executed counterpart of this Agreement;
 
(C) an executed copy of the Servicing Agreement and copies of any other
servicing agreements or sub-servicing agreements applicable to the Bond Mortgage
Loans;
 
(D) a pass-through opinion of Shearman & Sterling LLP to the effect that the
interest on the Class A Certificates and the Class B Certificates are not
includable in gross income to the holders thereof for federal income tax
purposes to the same extent as though the holders of such certificates owned the
Bonds;
 
(E) an opinion of counsel to the Sponsor with respect to the due authorization,
execution and delivery of the Custodial Receipts and the Custody Agreement and
the pass-through nature of interest on the Custodial Receipts in form and
substance acceptable to Freddie Mac;
 
(F) an opinion of special counsel to Freddie Mac with respect to the treatment
of the Series Pool under applicable tax laws of the Commonwealth of Virginia, in
form and substance acceptable to Freddie Mac;
 
(G) opinions of counsel to the Sponsor, the Guarantor and the Servicer dated the
Closing Date and addressed to Freddie Mac, in form and substance acceptable to
Freddie Mac;
 
(H) the most recent environmental report pertaining to the Mortgaged Property,
and all related due diligence completed to Freddie Mac’s satisfaction;
 
(I) the most current survey relating to the Mortgaged Property in form and
substance acceptable to Freddie Mac;
 
(J) such opinions of Bond Counsel and counsel to the Remarketing Agent as
Freddie Mac shall require in form and substance satisfactory to Freddie Mac;
 
(K) the initial Hedge Agreement(s), containing terms and conditions consistent
with this Agreement and in form and substance satisfactory to Freddie Mac;
 
 
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(L) an ACCORD 28, Evidence of Policy naming the Bond Trustee as loss payee and
mortgagee under each fire or casualty insurance policy covering the Mortgaged
Property and a certified copy of all such policies;
 
(M) to the extent not previously received by Freddie Mac, a certificate from the
Bond Trustee of each series of Bonds that were reissued prior to the Closing
Date, stating that arbitrage calculations to be done in connection with
reissuance of the Bonds for each Mortgaged Property have been completed, and any
amounts due and payable to the United States Treasury in connection therewith
have been paid;
 
(N) the Guaranty;
 
(O) true and correct copies of rating letters from each Rating Agency rating the
Class A Certificates;
 
(P) executed copies of each of the Repair Escrow Agreement, the Ohio Portfolio
Escrow Agreement and the Villages at Lost Creek Escrow Agreement;
 
(Q) evidence of the transfer to, or delegation of, all the servicing
arrangements applicable to the Bonds to the Servicer;
 
(R) evidence that any bond-level replacement reserves and tax and insurance
escrows held by an Owner or other third party (including but not limited to
those related to the South Park and Cross Creek Mortgaged Properties) have been
transferred to either the applicable Bond Trustee or to the Servicer;
 
(S) executed copies of subordination agreements with respect to all subordinate
loans or other debt made to the Owner of the Mortgaged Properties by the
Guarantor or any Affiliate thereof or currently held thereby; and
 
(T) such other documents, instruments, certificates, approvals (and, if
requested by Freddie Mac, certified duplicates of executed copies thereof) or
opinions as Freddie Mac may request.
 
Where subsection (a) requires delivery of a copy of a Bond Mortgage, the related
financing statement or other filed or recorded document, the copy must show the
recorder’s stamp, book and page number, or instrument number.
 
(c) Document Deliveries.  The delivery of copies required by Sections 2.3(a) and
2.3(b)(ii) above shall be carried out by or on behalf of the Sponsor, at no
expense to Freddie Mac.  If the Sponsor fails to deliver to Freddie Mac any
above-required documentation, Freddie Mac may order recorder-certified copies of
the missing items that are recorded items, and the Sponsor shall reimburse
Freddie Mac upon demand for all costs and expenses incurred by Freddie Mac in
doing so.
 
 
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Section 2.4 Breach of Representations and Warranties.
 
(a) The Sponsor shall notify Freddie Mac within 15 days following a discovery by
the Sponsor of a breach of any representation or warranty made by the Sponsor
under this Agreement that materially and adversely affects the value of a
Deposited Asset (a “Breach”).  Freddie Mac agrees to use its best efforts to
provide notice to the Sponsor within 30 days following a discovery by Freddie
Mac of a Breach; provided, however, that the failure of Freddie Mac to so notify
the Sponsor of such a Breach shall not relieve the Sponsor of its obligation to
cure such Breach upon receiving notice from Freddie Mac or obtaining knowledge
thereof.
 
(b) Within 60 days after the earlier of (i) discovery by the Sponsor of a
Breach, or (ii) the Sponsor’s receipt of notice from Freddie Mac of such Breach,
the Sponsor shall (x) commence commercially reasonable efforts to cure such
Breach in all material respects or (y) solely in the event such Breach cannot be
cured by the Sponsor’s commercially reasonable efforts in accordance with the
terms of this Section 2.4, provide a Substitute Asset for a Deposited Asset with
respect to which a Breach has occurred, but only in accordance with the terms of
Section 3.19 hereof.
 
(c) Subject to the last sentence of this subsection (c), if a Breach is not
cured by the Sponsor within 60 days after the discovery or receipt of notice of
such Breach or a Substitute Asset is not provided, in each case as set forth in
subsection (b) above, Freddie Mac shall have the right to pursue all remedies
specified in this Section including, but not limited to, (i) the right to
require the Sponsor to fund or cause the funding of the purchase from the
Administrator of the series of Deposited Assets related to the Breach, to the
extent that Freddie Mac may exercise its purchase right following the occurrence
of a Release Event with respect to the same (which funding by, or caused by, the
Sponsor shall be accomplished via the exercise of such right of the Sponsor’s in
accordance with Section 7.3(a) hereof and applicable provisions of the Series
Certificate Agreement), and (ii) the right to require payment by the Sponsor of
a Prepayment/Substitution Premium in connection with any such Release Event,
which remedies in addition to the recovery of enforcement costs from the
Sponsor, proceeding under the Guaranty, and taking action as provided in
subsection (d) below shall be the sole rights and remedies available to Freddie
Mac as the result of a Breach.  In the event the Breach is non-monetary and such
that it can be corrected, but not within 60 days, Freddie Mac shall not pursue
any remedies hereunder if corrective action is instituted by the Sponsor within
such 60 days and diligently pursued until the Breach is cured, provided such
Breach must be cured not later than the earlier of 90 days after the discovery
or receipt of notice of such Breach as set forth in subsection 2.4(b) above.
 
(d) If Sponsor fails to cure a Breach, or provide a Substitute Asset as set
forth in subsection (b) above, within the time provided in subsection (c) above,
or fails to diligently prosecute the cure of such Breach, in Freddie Mac’s
reasonable judgment, Freddie Mac, after written notice to the Sponsor, shall
have the right, but not the obligation, to cure any such Breach, and any costs,
fees or expenses so incurred by Freddie Mac shall be a Credit Advance and shall
be paid by the Sponsor in accordance herewith.  Amounts expended by the Sponsor
to cure a Breach shall be at the sole cost and expense of the Sponsor.
 
 
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(e) The representations and warranties in this Agreement, Freddie Mac’s right to
rely on them, and the Sponsor’s liability for a Breach, shall not be affected or
limited by any investigation (including any pre-purchase review of
documentation) made by, or on behalf of, Freddie Mac, except to the extent that
the Sponsor can establish that one or more of the following Freddie Mac
employees had actual knowledge (as opposed to imputed knowledge arising from the
receipt of the documents required to be delivered by the Sponsor hereunder) of
such Breach prior to the Closing Date and did not inform the Sponsor of such
Breach prior to the Closing Date:
 
Clayton A. Davis, Christopher B. Propert, Filiz Unal, John Maalouf and Shaun
Smith
 
provided that the inclusion of Christopher B. Propert in the list of Freddie Mac
employees shall not imply a waiver of the attorney-client privilege, which may
be asserted by Freddie Mac.
 
ARTICLE III 
COVENANTS OF THE SPONSOR
 
Section 3.1 Freddie Mac Closing Fee and Closing Expenses; Other Closing Costs
and Initial Deposits.  The Sponsor shall pay, or cause to be paid, to Freddie
Mac on the Closing Date a closing fee in the amount of $150,000 together with
Freddie Mac's expenses (including but not limited to printing costs in
connection with the Offering Circular and the auditor’s fee in connection with
the delivery of the comfort letter(s)), and the Sponsor shall also pay the fees
and expenses of Freddie Mac’s outside counsel in accordance with the
instructions of such counsel on the Closing Date.  The Sponsor shall also pay,
or cause to be paid or funded, as applicable, on or before the Closing Date, all
other fees, costs, expenses and initial deposits required to be paid or funded
by the Sponsor under any other Sponsor Documents.
 
Section 3.2 Reimbursement of Credit Advances.  The Sponsor shall reimburse
Freddie Mac the amount of each Credit Advance on the date such Credit Advance
was made by Freddie Mac, together with interest on the Credit Advance that has
accrued but has not been paid on the fifteenth day of the month in which such
Credit Advance occurs, from the sources and in the priority established in
accordance with the provisions of this Agreement and Section 4.03 of the Series
Certificate Agreement or from the Pledged Security Collateral hereunder;
provided, however, a Credit Advance that funded a Bond Purchase Loan pursuant to
Section 7.3 shall be paid in accordance with the provisions thereof.
 
Section 3.3 Scheduled Payments and Deposits.
 
(a) Monthly Payments.  The Sponsor shall pay, from the sources and in the
priority established in accordance with the provisions of this Agreement and
Section 4.03 of the Series Certificate Agreement, the following amounts on the
fifteenth day of each month beginning on the fifteenth day of the first month
following the Closing Date:
 
(i) Interest on Credit Advances.  Accrued but unpaid interest on any outstanding
Credit Advances from the date such Credit Advance was made by Freddie Mac to the
date on which the Credit Advance is reimbursed at the Default Rate; provided,
however, that interest on a Credit Advance that funded a Bond Purchase Loan
pursuant to Section 7.3 shall be accrued in accordance with the provisions
thereof.
 
 
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(ii) Interest on Liquidity Advances.  Accrued but unpaid interest on each
outstanding Liquidity Advance, from the date such Liquidity Advance was made, at
the Liquidity Rate, to the date on which reimbursement of such Liquidity Advance
is due pursuant to Section 3.4 below, and thereafter at the Default Rate until
such Liquidity Advance is reimbursed.
 
(iii) Freddie Mac Fee.  The accrued but unpaid Freddie Mac Fee.
 
(iv) Remarketing Agent Fee.  The accrued but unpaid Remarketing Agent Fee.
 
(v) Cap Fee Escrow Payment.  The applicable monthly payment to fund the Cap Fee
Escrow as required by Section 5.1.
 
(vi) Servicing Fee.  The accrued but unpaid Servicing Fee.
 
(b) Certain Third Party Fees.  To the extent not paid by the Owner with respect
to any Bond Mortgage Loan, the Sponsor shall pay from the sources and in the
priority established in accordance with the provisions of this Agreement and
Section 4.03 of the Series Certificate Agreement the regular, ongoing fees due
from time to time to the Bond Trustee and the rebate analyst appointed under the
Indenture, as applicable, to the party entitled to payment thereof when such
payment is due.
 
Section 3.4 Reimbursement of Liquidity Advances.  The Sponsor shall reimburse or
cause to be reimbursed Freddie Mac for each Liquidity Advance, from the sources
and in the priority established in accordance with the provisions of this
Agreement and Section 4.03 of the Series Certificate Agreement (except to the
extent that remarketing proceeds have already become available for application
to such reimbursement), together with interest on the Liquidity Advance that has
accrued but has not been paid, under Section 3.3(a) on the first to occur of:
 
(a) 60 days following the Liquidity Advance.
 
(b) if the related Pledged Class A Certificates are remarketed by the
Remarketing Agent, the date on which the proceeds of that remarketing are
delivered to the Administrator;
 
(c) the date on which the related Pledged Class A Certificates are redeemed or
otherwise paid in full and canceled;
 
(d) the Liquidity Commitment Termination Date; or
 
(e) the date on which the Series Certificate Agreement terminates.
 
Section 3.5 Payment of Costs, Fees and Expenses.  In addition to the Sponsor’s
other obligations set forth in this Article III and in the other Sponsor
Documents, the Sponsor shall pay, upon written demand, to Freddie Mac (from the
sources and in the priority established in accordance with the provisions of
this Agreement and Section 4.03 of the Series Certificate Agreement) all of the
following:
 
 
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(a) all fees, costs, charges and expenses (including the reasonable fees and
expenses of attorneys, and the fees and expenses of accountants and other
experts) incurred by Freddie Mac in connection with, or related to, the
execution and delivery of the Series Certificate Agreement, the deposit of the
Deposited Assets with the Administrator, the deposit of the Custodian-Held Bonds
under the Custody Agreement, the issuance of the Custodial Receipts, the sale of
the Class A Certificates, and the preparation and review of the Sponsor
Documents and all other documents related to the transactions contemplated by
the Sponsor Documents, and the consummation of the transactions contemplated
hereby and thereby and any tax or governmental charge imposed in connection with
the execution and delivery of the Series Certificate Agreement;
 
(b) any and all fees, costs, charges and expenses incurred by Freddie Mac
(including the reasonable fees and expenses of attorneys, and the fees and
expenses of accountants and other experts) in connection with (i) any
amendments, consents or waivers to this Agreement, the Sponsor Documents and any
other documents related to the transactions contemplated by the Sponsor
Documents (whether or not any such amendments, consents or waivers are entered
into), (ii) any requests by the Sponsor for Freddie Mac to consider providing
credit enhancement for any other certificate issue, (iii) any proposed Hedge
arrangement or proposed investments under the Series Certificate Agreement, (iv)
any adjustment or conversion of the interest rate on the Class A Certificates,
(v) any tender, purchase, refunding, reoffering or remarketing of the Bonds, the
Custodial Receipts or the Certificates, (vi) any collection, disbursement or
application of insurance or condemnation awards, proceeds, damages or other
payments including, without limitation, all costs incurred in connection with
the application of insurance or condemnation awards to restore or repair the
Mortgaged Property, including, reasonable appraiser fees, (vii) the transfer,
assignment and re-registration of the Bonds or the Custodial Receipts to Freddie
Mac and (viii) any audit of any Mortgaged Property, the Bonds, the Custodial
Receipts or the Certificates by the Internal Revenue Service;
 
(c) interest, fines and penalties, any and all documentary stamp, recording,
transfer, mortgage, intangible, filing or other taxes (other than income taxes)
or fees and any and all liabilities incurred by Freddie Mac or the Servicer with
respect to or resulting therefrom which may be payable in connection with the
execution and delivery of, or the consummation or administration of any of the
transactions contemplated by, or any amendment, supplement, or modification of,
or any waiver or consent under or in respect of, or any filing of record,
recordation, release or discharge of, this Agreement, the Sponsor Documents, the
Owner Documents and any other documents related to the transactions contemplated
by the Sponsor Documents or the Owner Documents;
 
(d) any and all fees, costs, charges and expenses (including the reasonable fees
and expenses of attorneys, and the fees and expenses of accountants and other
experts) which Freddie Mac may pay or incur in connection with any payment under
the Series Certificate Agreement, including payments of any fees and charges in
connection with any accounts established to facilitate payments under the Series
Certificate Agreement, or the performance of Freddie Mac’s obligations under the
Series Certificate Agreement;
 
 
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(e) any payments or advances made by Freddie Mac or the Servicer on behalf of
the Sponsor pursuant to this Agreement, the other Sponsor Documents, the Owner
Documents and any other documents related to the transactions contemplated by
the Sponsor Documents or the Owner Documents;
 
(f) any and all fees, costs, or charges and expenses (including the reasonable
fees and expenses of attorneys, and the fees and expenses of accountants and
other experts) incurred by Freddie Mac or the Servicer in connection with the
administration or enforcement or preservation of rights or remedies under the
Sponsor Documents, the Owner Documents and any other documents related to the
transactions contemplated by the Sponsor Documents or the Owner Documents or in
connection with the foreclosure upon, sale of or other disposition of any
security granted pursuant to the Sponsor Documents or the Owner Documents and
any other documents related to the transactions contemplated by the Sponsor
Documents or the Owner Documents;
 
(g) all out-of-pocket expenses (including reasonable expenses for legal
services) of, or incident to, the preservation of rights under, or enforcement
of, any of the provisions of this Agreement, or performance by Freddie Mac of
any obligations of the Sponsor in respect of the Hedge Collateral which the
Sponsor shall have failed or refused to perform, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement of
Collateral, and defending or asserting rights and claims of Freddie Mac in
respect thereof, by litigation or otherwise;
 
(h) all reasonable out-of-pocket costs and expenses incurred by the Pledge
Custodian in connection with the administration and enforcement of Article VIII
of this Agreement; and
 
(i) interest at the Default Rate on any and all amounts referred to in
Subsections (a) through (h) above from the date which is five (5) days following
the date when due until payment of all such amounts in full,
 
provided, however, that the Freddie Mac Fee will compensate the Administrator
for its fees (but not out of pocket expenses) for the performance of the
Administrator’s duties pursuant to the Series Certificate Agreement.
 
Section 3.6 Application and Timing of Payments.
 
(a) Application of Payments.  If the Servicer or Freddie Mac receives on any
date less than the full amount that is due and payable on or before that date
under Sections 3.2 through 3.5 of this Agreement, the amount received shall be
applied in such order as Freddie Mac may, in its sole discretion, determine.
 
(b) Timing of Payments.  Any amount payable to Freddie Mac hereunder shall be
deemed paid only to the extent immediately available funds for that purpose are
received by Freddie Mac (in any capacity) by 2:00 p.m., Washington, D.C. time,
on the due date.  Any such amount received after 2:00 p.m., Washington, D.C.
time, on its due date shall be treated, and shall accrue interest, as if it were
paid at 9:00 a.m., Washington, D.C. time, on the next Business Day.
 
 
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Section 3.7 [Reserved].
 
Section 3.8 Payment of Prepayment/Substitution Premium.  (a) If the applicable
Yield Maintenance Period has not expired, the Sponsor shall pay a
Prepayment/Substitution Premium by remitting to Freddie Mac funds in the amount
of such Prepayment/Substitution Premium from the sources and in the priority
established in accordance with the provisions of this Agreement and Section 4.03
of the Series Certificate Agreement upon any of the following events:
 
(i) A redemption of a portion of the Class A Certificates as a result of a
Release Event pursuant to Section 2.4(c) hereof or Section 3.24 hereof.
 
(ii) A redemption of any of the Certificates during the Yield Maintenance
Period, due to an involuntary prepayment upon acceleration of the Bond Mortgage
Note and mandatory redemption of the Bonds under the terms of the applicable
Indenture after a Bond Event of Default thereunder but only if and to the extent
that a prepayment premium is paid by the Owner in connection with such
prepayment of the Bond Mortgage Note;
 
(iii) The occurrence of (A) a Release Event of an Enhanced Custodial Receipt
directed by the Sponsor pursuant to Section 3.23 resulting from a material
payment Bond Event of Default under a Bond Mortgage Loan but where there was no
contemporaneous payment deficiency on the released Enhanced Custodial Receipt or
(B) a substitution of a Substitute Asset due to a Bond Event of Default at the
direction of the Sponsor in accordance with Section 3.19 hereof;
 
(iv) The mandatory tender of the Class A Certificates pursuant to Section
6.04(a) or (b) of the Series Certificate Agreement relating to a Mandatory
Tender Event as a result of a Liquidity Provider Termination Event or (if
applicable) a Sponsor Act of Bankruptcy;
 
(v) Upon the substitution of a Substitute Asset for a Pre-Selected Deposited
Asset in connection with a sale of the related Mortgaged Property as directed by
the Sponsor in accordance with Sections 3.19 and 3.20 hereof; or
 
(vi) A redemption in whole of the Class A Certificates as a result of a Release
Event pursuant to Section 3.21 hereof which occurs on September 15, 2017.
 
(b) Premium Not Payable.  Except under the circumstances described in Sections
2.4(c), 3.8(a), 3.19, 3.20, 3.21, 3.23 and 3.24 hereof, no
Prepayment/Substitution Premium shall be payable, including without limitation
under the following circumstances:  any prepayment occurring as a result of (i)
the application of any insurance proceeds or condemnation award under the Bond
Mortgage, (ii) a voluntary prepayment of any Bond Mortgage Loan,
(iii) redemption or other mandatory prepayment of any Bonds or the Class A
Certificates as a result of the entry of any decree or judgment by a court of
competent jurisdiction or the taking of any official action by the Internal
Revenue Service or the Department of the Treasury, which decree, judgment or
action shall be deemed to be final under applicable procedural law, which has
the effect of a determination that the interest on such Bonds is includable in
the gross income of the recipients thereof for Federal income tax purposes, (iv)
exercise by any Class A Certificateholder of its Optional Disposition Right in
accordance with Section 7.05 of the Series Certificate Agreement provided that
the Class A Certificates so tendered are remarketed and the Sponsor pays the
Hypothetical Gain Share related to the exercise of such right, (v) a redemption
of Class A Certificates in connection with a Clean-Up Event, or (vi) a Release
Event pursuant to Section 3.22 hereof.
 
 
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Section 3.9 Substitution of Credit Enhancement or Liquidity Facility.  The
Sponsor acknowledges that it does not have the right to substitute credit
enhancement or liquidity for the Class A Certificates.
 
Section 3.10 Additional Provisions Regarding Prepayment/Substitution
Premium.  The Sponsor recognizes that any prepayment of the unpaid principal
balance of the Class A Certificates for any reason set forth in Section 3.8(a)
hereof will result in Freddie Mac’s incurring loss, including loss of income,
additional expense and frustration or impairment of Freddie Mac’s ability to
meet its commitments to third parties.  The Sponsor agrees to pay from the
sources and in the priority established in accordance with the provisions of
this Agreement and Section 4.03 of the Series Certificate Agreement, upon
demand, damages for the loss caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such
damages.  The Sponsor therefore acknowledges and agrees that the formula for
calculating the Prepayment  Premium represents a reasonable estimate of the
damages Freddie Mac will incur because of a prepayment.  The Sponsor further
acknowledges that the Prepayment/Substitution Premium provisions of this
Agreement are a material part of the consideration for the Series Certificate
Agreement and the Credit Enhancement and Liquidity Facility provided thereunder,
and acknowledges that the terms of this Agreement are in other respects more
favorable to the Sponsor as a result of the Sponsor’s voluntary agreement to the
Prepayment/Substitution Premium provisions.  Freddie Mac acknowledges and agrees
that the Prepayment/Substitution Premium shall be Freddie Mac’s sole
compensation and remedy for such loss and damage.
 
Section 3.11 Remarketing Agent for the Class A Certificates.  The Sponsor
acknowledges that Freddie Mac shall retain, and shall have the ability, in its
sole discretion, to remove or replace, the Remarketing Agent.  The Sponsor shall
not remove or replace the Remarketing Agent without Freddie Mac’s prior written
consent, which consent shall not be unreasonably withheld.
 
Section 3.12 Indemnification.  The Sponsor shall indemnify and hold harmless
Freddie Mac, in its corporate capacity and in its capacity as Pledge Custodian,
and its officers, directors, officials, employees, agents, attorneys,
accountants, advisors, consultants and servants, past, present or future (each,
an “Indemnified Party”), from and against any and all claims, losses,
liabilities, damages, penalties, judgments, costs or expenses (including court
costs and reasonable attorneys’ fees) (collectively, “Losses”) arising from any
act or omission of the Sponsor, any Sponsor Affiliate, the Remarketing Agent (if
an Affiliate of Sponsor) or any of their respective agents, contractors,
servants, employees or licensees in connection with any of the Bond Mortgage
Loans, the Bond Mortgages, Mortgaged Properties, the Owner Documents, the
Sponsor Documents, the Offering Circular, the Series Certificate Agreement in
connection with the issuance of the Custodial Receipts, the Certificates or the
remarketing of the Class A Certificates; together with all costs, reasonable
counsel fees, expenses or liabilities incurred in connection with any such claim
or proceeding brought thereon; except that the Sponsor shall not be required to
indemnify any Indemnified Party for damages caused by the willful misconduct,
negligence or unlawful acts of such Indemnified Party or for any claims, costs,
counsel fees, expenses or liabilities incurred by an Indemnified Party as a
result of any action taken by an Indemnified Party at the direction of Freddie
Mac.  In the event that any action or proceeding is brought, or claim made,
against any Indemnified Party, with respect to which indemnity may be sought
hereunder, the Sponsor, upon written notice thereof from the Indemnified Party,
shall assume the investigation and defense thereof, including the employment of
counsel reasonably acceptable to Freddie Mac and the payment of all expenses
associated therewith.  The Indemnified Party shall have the right to approve a
settlement to which it is a party and if the named parties to any such action
include both the Sponsor and the Indemnified Party and the Indemnified Party has
been advised by counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the Sponsor,
to employ separate counsel in any such action or proceedings and to participate
in the investigation and defense thereof, and the Sponsor shall pay or cause to
be paid the reasonable fees and expenses of such separate counsel.  The
provisions of this Section shall survive the termination of this Agreement.
 
 
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Section 3.13 Freddie Mac Not Liable.  None of Freddie Mac’s officials, officers,
directors, members, shareholders, agents, attorneys, independent contractors or
employees shall be responsible for, or liable to, the Sponsor or any of its
officials, officers, directors, shareholders, members, partners, affiliates,
independent contractors or employees for (a) any act or omission of Freddie Mac
or any other Person made in good faith with respect to the validity,
sufficiency, accuracy or genuineness of documents, or of any endorsement(s)
thereon (except for documents and endorsements provided by Freddie Mac), even if
such documents should be in fact, or prove to be in any or all respects,
invalid, insufficient, fraudulent or forged; (b) the validity or sufficiency of
any instrument transferring or assigning, or purporting to transfer or assign
the Series Certificate Agreement or the rights or benefits under the Series
Certificate Agreement or proceeds under the Series Certificate Agreement, in
whole or in part, that may prove to be invalid or ineffective for any reason;
(c) failure of the Administrator to comply fully with all conditions required in
order to effect any applicable Advance; (d) errors, omissions, interruptions or
delays in transmission or delivery of any messages by the Administrator, by
mail, cable, telegraph, telex, telecopier or otherwise that may be required
under the Series Certificate Agreement; (e) any loss or delay by the
Administrator in the transmission or otherwise of any document or draft required
in order to make any Advance; (f) failure of any trustee with respect to the
Bonds to comply fully with all terms of the related Bond Documents; or (g) any
consequences arising from causes beyond the control of Freddie Mac.  In
furtherance, and not in limitation of the foregoing, Freddie Mac may accept
documents that appear on their face to be valid and in order, without any
responsibility for further investigation. None of the above shall affect,
impair, or prevent the vesting of any rights or powers of Freddie Mac under this
Agreement.
 
In furtherance and extension, and not in limitation, of the specific provisions
set forth above, any action taken or omitted by Freddie Mac (including in its
capacity as Bondholder Representative) under or in connection with the Sponsor
Documents or any Owner Document, or any related certificates or other documents,
if taken or omitted in good faith and not in contravention of the terms hereof,
shall be binding upon the applicable Owner, the Bond Trustee, the Issuer, the
Sponsor, any Sponsor Affiliate, the Remarketing Agent, the Administrator and the
Pledge Custodian, and shall not, under any circumstance, put Freddie Mac under
any resulting liability to any of them.
 
 
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Section 3.14 Pledged Class A Certificates and Class B Certificates.
 
(a) The Sponsor acknowledges that Pledged Class A Certificates will be purchased
by the Administrator on behalf of the Sponsor, and registered in the name of the
Pledge Custodian; provided that, to the extent that Freddie Mac has made a
Liquidity Advance to purchase such Pledged Class A Certificates, such Pledged
Class A Certificates will be pledged to Freddie Mac pursuant to Article VIII of
this Agreement.
 
(b) As a condition to delivery by Freddie Mac of the Series Certificate
Agreement, the Sponsor will deliver the Class B Certificates to Freddie Mac, as
Pledge Custodian under this Agreement, to be held in the name of the Sponsor for
the benefit of Freddie Mac as security for the Obligations of the Sponsor
hereunder.  Any transfer, pledge or assignment of the Class B Certificates shall
be subject to the lien and covenants set forth in Article VIII of this
Agreement.
 
Section 3.15 Other Covenants of Sponsor.
 
(a) Sponsor Documents.  Each of the covenants of the Sponsor set forth in the
Sponsor Documents is hereby incorporated in this Agreement by this reference as
if fully set forth herein.  The Sponsor shall comply with all material terms and
conditions of each Sponsor Document to which it is a party or by which it is
bound and shall not, without the prior consent of Freddie Mac, provide
directions or consents to the Bond Trustee or the Issuer except as otherwise
permitted pursuant to the terms hereof and of the Servicing Agreement.
 
(b) Transfer of Project Ownership.  The Sponsor shall not consent to any
transfer of ownership of any Mortgaged Property without the prior written
consent of Freddie Mac.
 
(c) Tax–Exempt Status of the Certificates.  The Sponsor shall not take, or omit
to take, any action within its power to take that, if taken or omitted, would
jeopardize or adversely affect the exclusion of interest on the Certificates
from gross income of the holders thereof for federal income tax purposes.
 
(d) Securities Acts.  The Sponsor shall not take, or omit to take, any action
within its power to take that, if taken or omitted, would subject the
Certificates to registration under the Securities Act of 1933, or the Series
Certificate Agreement to registration under the Trust Indenture Act of 1939 or
the Investment Company Act of 1940.
 
(e) Certain Actions With Respect to the Certificates.  The Sponsor shall not,
without the prior written consent of Freddie Mac:
 
(i) appoint a “Successor Sponsor” (as defined in the Series Certificate
Agreement);
 
 
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(ii) provide its consent or waive any rights under the Series Certificate
Agreement or any consents or waivers under the Bond Documents, the rights to
which are granted to the Bondholder Representative or the Servicer except as
otherwise permitted pursuant to the terms hereof and of the Servicing Agreement;
 
(iii) consent to amendment to any partnership agreement or other applicable
organizational document of an Owner to allow such Owner to own substantial
assets other than its Mortgaged Property or to engage in any business activities
other than activities related to the ownership and operation of its Mortgaged
Property; or
 
(iv) permit any change in the ownership or control of the Sponsor from the
ownership structure in place on the Closing Date, or permit any corporate
reorganization to occur that would result in the Sponsor and the Guarantor not
being under common control.
 
(f) Amendment of Organizational Documents Of Sponsor.  The Sponsor agrees not to
amend its organizational documents without the prior consent of Freddie Mac.
 
Section 3.16 Liability of the Sponsor.  The obligation of the Sponsor to cause
the Administrator and the Pledge Custodian, as applicable, to make any and all
payments to Freddie Mac required by this Agreement  or any other Sponsor
Document shall not be subject to diminution by set-off, recoupment,
counterclaim, abatement or otherwise.  Until the latest of the date on which (i)
all the  Class A Certificates have been fully paid in accordance with the Series
Certificate Agreement, (ii) the Series Certificate Agreement has been terminated
in accordance with its terms and (iii) all amounts due and owing to Freddie Mac
under this Agreement or any other Sponsor Document shall have been paid, the
Sponsor shall continue to have the obligation to perform and observe all of its
obligations contained in this Agreement, the Sponsor Documents and all other
documents contemplated hereby or thereby.
 
The obligations of the Sponsor under this Agreement shall be absolute,
unconditional and irrevocable, and shall be paid and performed in accordance
with the terms of this Agreement under all circumstances whatsoever, including,
without limitation, the following circumstances: (a) any invalidity or
unenforceability of any of the Owner Documents, the Sponsor Documents (other
than the Series Certificate Agreement) or any other agreement or instrument
related to the Owner Documents or the Sponsor Documents (other than the Series
Certificate Agreement); (b) any waiver of, or any consent to or departure from,
the terms of a Series Certificate Agreement, any of the Owner Documents or the
Sponsor Documents, or any other agreement or instrument related to the Owner
Documents or the Sponsor Documents, or any extensions of time or other
modifications of the terms and conditions for any act to be performed in
connection with the Series Certificate Agreement; (c) the existence of any
claim, set-off, defense or other right that the Sponsor may have at any time
against Freddie Mac, the Servicer, any Issuer, any Bond Trustee, the Guarantor,
any Sponsor Affiliate, the Administrator, the Pledge Custodian, the Remarketing
Agent or any other Person, whether in connection with this Agreement, any of the
other Owner Documents, the Sponsor Documents, the Guaranty, any Mortgaged
Property, or any unrelated transaction; (d) the surrender or impairment of any
security for the performance or observance of any of the terms of this
Agreement, the Owner Documents or the Sponsor Documents; (e) any defect in title
to any Mortgaged Property, any acts or circumstances that may constitute failure
of consideration, destruction of, damage to or condemnation of any Mortgaged
Property, commercial frustration of purpose, or any change in the tax or other
laws of the United States of America or of any state or any political
subdivision of the same, (f) the breach by Freddie Mac, the Servicer, any
Issuer, any Bond Trustee, the Administrator, the Sponsor, any Sponsor Affiliate,
the Pledge Custodian, the Remarketing Agent or any other Person of its
obligations under any Owner Document, the Guaranty or any Sponsor Document; or
(g) any other circumstance, happening or omission whatsoever.
 
 
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Section 3.17 Waivers and Consents.  THE SPONSOR AGREES TO BE BOUND BY THIS
AGREEMENT AND, TO THE EXTENT PERMITTED BY LAW, (A) WAIVES AND RENOUNCES ANY AND
ALL REDEMPTION AND EXEMPTION RIGHTS AND THE BENEFIT OF ALL VALUATION AND
APPRAISAL PRIVILEGES (EXCEPT AS EXPRESSLY PROVIDED IN THE SPONSOR DOCUMENTS)
AGAINST THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THIS AGREEMENT AND THE
OTHER SPONSOR DOCUMENTS OR BY ANY EXTENSION OR RENEWAL OF THIS AGREEMENT AND THE
OTHER SPONSOR DOCUMENTS; (B) WAIVES PRESENTMENT AND DEMAND FOR PAYMENT, NOTICES
OF NONPAYMENT AND OF DISHONOR, PROTEST OF DISHONOR AND NOTICE OF PROTEST; (C)
WAIVES ALL NOTICES IN CONNECTION WITH THE DELIVERY AND ACCEPTANCE OF THIS
AGREEMENT AND THE OTHER SPONSOR DOCUMENTS AND ALL OTHER NOTICES IN CONNECTION
WITH THE PERFORMANCE, DEFAULT OR ENFORCEMENT OF THE PAYMENT OF ANY OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS EXCEPT AS REQUIRED BY THIS
AGREEMENT OR THE OTHER SPONSOR DOCUMENTS; (D) AGREES THAT ITS LIABILITIES UNDER
THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS SHALL BE UNCONDITIONAL AND
WITHOUT REGARD TO THE LIABILITY OF ANY OTHER PERSON AND (E) AGREES THAT ANY
CONSENT, WAIVER OR FORBEARANCE UNDER THIS AGREEMENT AND THE OTHER SPONSOR
DOCUMENTS WITH RESPECT TO AN EVENT SHALL OPERATE ONLY FOR SUCH EVENT AND NOT FOR
ANY SUBSEQUENT EVENT.
 
Section 3.18 Subrogation.  The Sponsor acknowledges that, to the extent of any
payment made by Freddie Mac in accordance with the Series Certificate Agreement
pursuant to the Credit Enhancement or the Liquidity Facility and for which
Freddie Mac has not been reimbursed, Freddie Mac is to be fully subrogated, to
the extent of such payment and any additional interest due on any late payment,
to the rights of the Sponsor to any moneys paid or payable under the applicable
Enhanced Bonds, the Enhanced Custodial Receipts, the Certificates or the related
Hedge and all security therefor under the Owner Documents and the Sponsor
Documents, including the Bond Mortgage.  The Sponsor agrees to such subrogation
and further agrees to execute such instruments and to take such actions as, in
the judgment of Freddie Mac, are necessary to evidence such subrogation and to
perfect the rights of Freddie Mac to the extent necessary to provide
reimbursement hereunder.
 
Section 3.19 Substitution.  The Sponsor may at its option (subject to the
conditions set forth below) substitute at any time, and from time to time, one
or more issues (but not more than two issues with respect to each Released Asset
(defined below)) of multifamily housing revenue bonds or senior custodial
receipts evidencing such bonds (each, a “Substitute Asset”) for (a) (i) an
Enhanced Custodial Receipt if there exists with respect to the underlying
Custodian-Held Bonds a Bond Event of Default (provided that in the event the
Bond Event of Default arises from a payment default on the underlying
Custodian-Held Bond the Sponsor may only request release of such Enhanced
Custodial Receipt and provide a Substitute Asset pursuant to this Section 3.19
if such payment default causes the Enhanced Custodial Receipts to not receive
full and current payment) or (ii) for an issue of Enhanced Bonds with respect to
which a Bond Event of Default exists, or (b) a Pre-Selected Deposited Asset,
solely if the Sponsor has elected to effect a substitution of such Pre-Selected
Deposited Asset in connection with the sale of the related Pre-Selected
Mortgaged Property pursuant to Section 3.20 hereof.  The Enhanced Custodial
Receipts or Enhanced Bonds available to be substituted for in accordance with
the foregoing sentence (each, a “Released Asset”) shall be released from the
Series Certificate Agreement in accordance with the terms thereof, and the
Substitute Asset(s) shall be deposited with the Administrator pursuant to the
terms of the Series Certificate Agreement in accordance with the terms thereof,
if each of the following conditions is met:
 
 
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(a) The Substitute Property meets all of Freddie Mac’s then applicable
underwriting criteria, program, policy and documentation requirements unless
waived in writing by Freddie Mac.  In furtherance and not in limitation of the
foregoing, Freddie Mac in considering the eligibility of the Substitute Property
under such criteria and requirements may take into account a variety of factors,
including, but not limited to, local market conditions, portfolio concentration
in the market where the Substitute Property is located, the condition and
quality of the Substitute Property (which condition and quality shall not be
less than the Mortgaged Property to be released (the “Released Project”)), the
type of Substitute Property (which shall be of the same type as the Released
Project), the internal risk rating for such Substitute Property as determined by
Freddie Mac (which risk rating as so determined shall be equal to or better than
the risk rating (as determined by Freddie Mac) for the Released Project) and
pool diversification (the determination of any proposed Substitute Property’s
eligibility under such criteria and requirement to be in Freddie Mac’s sole and
absolute discretion);
 
(b) Freddie Mac shall have been provided by the Servicer (or otherwise) all
applicable third party reports required pursuant to the Guide or otherwise
required by Freddie Mac, in its sole and absolute discretion, to evaluate the
proposed Substitute Property including but not limited to:
 
(i) An environmental report on the proposed Substitute Property in all respects
reasonably satisfactory to Freddie Mac;
 
(ii) An engineering report on the proposed Substitute Property in all respects
reasonably satisfactory to Freddie Mac;
 
(iii) A survey of the Substitute Property, in all respects reasonably
satisfactory to Freddie Mac; and
 
(iv) An appraisal on the Substitute Property in all respects reasonably
satisfactory to Freddie Mac;
 
 
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(c) Sponsor shall pay all out of pocket fees and expenses of Freddie Mac,
including the reasonable costs and expenses of outside counsel in connection
with such substitution;
 
(d) The Substitute Property shall be subject to satisfactory inspection by
Freddie Mac;
 
(e) The underlying bond documents related to the Substitute Property meet
Freddie Mac’s then-applicable program requirements in all material respects or
are otherwise waived by Freddie Mac;
 
(f) Unless waived by Freddie Mac, the terms of the Substitute Asset, including
tax status, maturity, interest rate and interest mode, are substantially
consistent with the terms of the Released Asset;
 
(g) After giving effect to such substitution, the geographic concentration of
the Mortgaged Properties is not greater than that prior to the substitution;
 
(h) The ratio of the unpaid principal balance of the Substitute Asset to the
value of the Substitute Property (the “Loan to Value Ratio” or “LTV”) at the
time of the proposed substitution, as determined by Freddie Mac in accordance
with its then current underwriting methodology, is less than or equal to the
lesser of (i) the loan to value ratio of the Released Project as of the Closing
Date or (ii) the loan to value ratio of the Released Project as of the date of
the proposed release of the Released Project as determined by Freddie Mac in
accordance with its then existing underwriting methodology and in all events the
Loan to Value Ratio does not exceed 85%;
 
(i) The ratio of the net operating income and the annual debt service (the “Debt
Service Coverage” or “DCR”) for the Substitute Property for the last twelve (12)
calendar months preceding the proposed substitution, calculated in accordance
with Freddie Mac’s then-existing underwriting methodology, is greater than or
equal to the greater of (i) the Debt Service Coverage for the Released Project
as of the Closing Date for the Released Project or (ii) the current Debt Service
Coverage for the Released Project for the prior twelve (12) calendar months,
calculated in accordance with Freddie Mac’s underwriting methodology employed by
Freddie Mac in determining the Debt Service Coverage for the Substitute Property
and in all events the Debt Service Coverage is not less than 1.15%;
 
(j) If the proposed Substitute Asset is a custodial receipt relating to a series
bonds and/or a mortgaged project that would not otherwise meet Freddie Mac’s
underwriting criteria and requirements but for the delivery of the bonds into a
custodial receipt arrangement, the DCR/LTV of such bonds and mortgaged project
prior to such delivery must equal at least a DCR/LTV of 1.05x/95%, as determined
by Freddie Mac, in addition to the Substitute Asset meeting all other
substitution requirements;
 
(k) No Event of Default shall exist and there shall have been no related Bond
Event of Default with respect to such Substitute Asset during the immediately
preceding twelve (12) month period;
 
 
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(l) Contemporaneously with the request for a substitution, Sponsor shall pay to
Freddie Mac a deposit to cover third party costs and fees and a mortgage review
fee of the greater of $5,000 per substituted property or .10% of the unpaid
principal balance of the Substitute Asset.  On or prior to the closing date for
the substitution, the Sponsor shall pay Freddie Mac a substitution fee (i) equal
to the greater of $5,000 or 0.25% of the unpaid principal balance of the
Substitute Asset(s) (with a credit for the mortgage review fee previously paid)
for a substitution relating to a Bond Event of Default or (ii) equal to the
greater of $50,000 or 0.50% of the unpaid principal balance of the Substitute
Asset(s) (with a credit for the mortgage review fee previously paid) for a
substitution relating to a substitution of a Pre-Selected Deposited Asset
pursuant to Section 3.20.  In addition, the Sponsor shall pay the reasonable
fees and out-of-pocket expenses of outside counsel, appraisers, environmental
professionals and engineers, plus all reasonable out-of-pocket costs and
expenses incurred by Freddie Mac in connection with the foregoing.  Such amounts
shall be paid on or prior to the closing date of such substitution.  If such
substitution fails to close, Sponsor shall pay Freddie Mac such reasonable fees
and out-of-pocket expenses within (30) days of Sponsor’s receipt of invoices
therefor;
 
(m) If the unpaid principal balance of the Substitute Asset is less than the
unpaid principal balance of the Released Asset (a “Contraction”) the Sponsor
shall pay any applicable Total Release Price with respect to the principal
portion of the Released Asset that is in excess of the principal amount of the
Substitute Asset(s) as and when required by the Series Certificate Agreement,
and if the Contraction is greater than 5%, then, in addition to the fees
required under Section 3.19(i) above, Sponsor shall pay or cause to be paid a
Prepayment/Substitution Premium to Freddie Mac on the amount by which the unpaid
principal balance of the Released Asset exceeds the unpaid principal balance of
the Substitute Asset(s) on the date of substitution;
 
(n) The Sponsor and Freddie Mac shall have executed an addendum to this
Agreement and any related agreements to reflect the substitution contemplated
hereby; and
 
(o) Freddie Mac shall have received an opinion of Bond Counsel acceptable to
Freddie Mac to the effect that such substitution does not adversely affect the
exclusion of interest accrued on the related Certificates from gross income of
the holders thereof for federal income tax purposes.
 
(p) If requested by Freddie Mac, Freddie Mac shall have received a 704(b)
analysis with respect to the ownership of the Substitute Property which is
satisfactory to Freddie Mac in its sole discretion.
 
Section 3.20 Release Event Upon Sale of Pre-Selected Mortgaged Property.  On or
after the date which is thirty-six (36) months after the Closing Date, the
Sponsor may elect, solely in connection with a sale of a Pre-Selected Mortgaged
Property to a party that is not a Sponsor Affiliate and which party does not
elect to assume the indebtedness of the related Bonds, to effect a substitution
of the related Pre-Selected Deposited Asset in accordance with Section 3.19 and
direct Freddie Mac to declare a Release Event for such purpose; provided,
however, the Sponsor shall only have the right to effect a substitution of up to
two Pre-Selected Deposited Asset pursuant to this Section 3.20.  In connection
with any election under this Section 3.20, the Sponsor shall also satisfy the
following conditions:
 
 
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(i) the Sponsor shall cause to be funded to Freddie Mac any applicable
Prepayment/Substitution Premium required under Sections 3.8(a) and 3.19 hereof;
 
(ii) the Sponsor shall provide reasonably satisfactory evidence to Freddie Mac
that the applicable Pre-Selected Mortgaged Property is under contract for sale,
the proposed purchaser of such Pre-Selected Mortgaged Property is not a Sponsor
Affiliate and the proposed purchase price is the market price for such
Pre-Selected Mortgaged Property;
 
(iii) the Sponsor shall provide satisfactory evidence to Freddie Mac that the
proposed purchaser is electing to payoff the related Bonds in connection with
the sale; and
 
(iv) the Sponsor shall cause to be provided to Freddie Mac all fees required
pursuant to Section 3.19 hereof.
 
Section 3.21 Optional Series Pool Release Date.  The Sponsor shall have the
right, subject to the following terms and provided no Event of Default has
occurred and is continuing, to direct Freddie Mac to exercise its right
(provided the Class A Certificates then bear interest at a Weekly Reset Rate or
Monthly Reset Rate) to cause a Release Event with respect to all (but not less
than all) Deposited Assets held under the Series Certificate Agreement on an
Optional Series Pool Release Date by giving written notice of such election to
Freddie Mac not less than ninety (90) days prior to such Optional Series Pool
Release Date.  Freddie Mac shall only exercise its right to cause such a Release
Event to occur on an Optional Series Pool Release Date if by no later than the
fifth (5th) Business Days prior to such Optional Series Pool Release Date the
Sponsor shall have either (i) caused to be deposited with Freddie Mac in
immediately available funds an amount necessary to pay in full the resulting
Total Release Price due under the terms of the Series Certificate Agreement,
together with amounts sufficient to pay all Obligations of the Sponsor due
hereunder (including any Prepayment/Substitution Premium due pursuant to Section
3.8(a) hereof if the Optional Series Pool Release Date occurs on September 15,
2017) and any obligations of the Sponsor due under any other Sponsor Document or
(ii) the Sponsor shall have provided evidence of the establishment of an escrow
arrangement for the payment of the same satisfactory to Freddie Mac, in its sole
discretion.  Such monies provided by the Sponsor to Freddie Mac shall be applied
as provided pursuant to the terms of the Series Certificate Agreement to effect
such Release Event and the terms hereof to reimburse Freddie Mac for any amounts
then due hereunder.
 
Section 3.22 Rights of Sponsor Upon Freddie Mac Downgrade. If the rating of the
long-term senior debt of Freddie Mac is reduced below “A-” by the Rating Agency
(which event shall constitute a material adverse credit condition under this
Agreement), the Sponsor shall have the right to direct Freddie Mac to exercise
its right (provided the Class A Certificates then bear interest at a Weekly
Reset Rate or Monthly Reset Rate) to cause a Release Event with respect to all
(but not less than all) Deposited Assets held under the Series Certificate
Agreement.  If the Sponsor elects to exercise such right by giving not less than
thirty (30) days written notice to Freddie Mac, Freddie Mac shall exercise its
right to cause such a Release Event to occur promptly following receipt by the
Administrator of immediately available funds from the Sponsor in an amount
necessary to pay in full the resulting Total Release Price due under the terms
of the Series Certificate Agreement, together with amounts sufficient to pay all
Obligations of the Sponsor due hereunder and any obligations of the Sponsor due
under any other Sponsor Document.  Such monies provided by the Sponsor to the
Administrator shall be applied as provided pursuant to the terms of the Series
Certificate Agreement and the terms hereof.
 
 
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Section 3.23 Release Event Upon Bond Event of Default.  In addition to the
Sponsor’s rights under Section 3.19 hereof, if a material monetary event of
default exists with respect to a series of Bonds and remains uncured for the
shorter of (i) sixty (60) days or (ii) two consecutive scheduled payment dates
(or such shorter period of time consented to by Freddie Mac), the Sponsor may
direct Freddie Mac to declare a Release Event with respect to the related
Deposited Asset and shall fund, or cause the funding of, the purchase of such
Deposited Asset (which funding by, or caused by, the Sponsor shall be
accomplished in accordance with Section 7.3(a) hereof and applicable provisions
of the Series Certificate Agreement); provided, however, the Sponsor shall only
have the right to cause a Release Event with respect to a Deposited Asset
pursuant to this Section 3.23 if the Sponsor has funded, or caused the funding
of, such Release Event within sixty (60) days of the date on which the right to
direct a Release Event with respect to such Deposited Asset first arises under
this Section 3.23.  In connection with any Release Event pursuant to this
Section 3.23 that involves an Enhanced Custodial Receipt and a situation where
the payment default on the underlying Bonds has not also resulted in a
contemporaneous payment deficiency with respect to such Enhanced Custodial
Receipt, the Sponsor shall also cause to be funded to Freddie Mac prior to the
release date the Prepayment/Substitution Premium required pursuant to Section
3.8(a)(iii) hereof.
 
Section 3.24 Release of the Villages at Lost Creek Senior Custodial Receipt
RA-7-2.  In the event the Sponsor shall fail to provide evidence satisfactory to
Freddie Mac that the Villages at Lost Creek Mortgaged Property has qualified for
and received a 100% real estate tax abatement prior to the date that is eighteen
(18) months following the Closing Date or if a non-appealable determination is
made prior to such time that the tax abatement does not apply or if Freddie Mac
otherwise determines in its reasonable discretion prior to such time that such
tax abatement will not be granted (any of which events shall constitute a
material adverse credit condition under this Agreement), Freddie Mac, in its
sole discretion, shall have the right to cause a Release Event of the Senior
Custodial Receipt designated RA-7-2 (the “RA-7-2 Senior Custodial Receipt”) and
the Sponsor shall fund, or cause the funding of, the Total Release Price of such
Release Event from amounts on deposit in the Villages at Lost Creek Escrow
Account or from other amounts provided by the Sponsor (which funding shall be
applied as provided in the Series Certificate Agreement).  Any amounts expended
by Freddie Mac in connection with a Release Event pursuant to this Section 3.24
and not reimbursed from amounts on deposit in the Villages at Lost Creek Escrow
Account (or otherwise funded by the Sponsor) shall be deemed a Credit Advance
for purposes of this Agreement and shall be reimbursed as provided in Section
3.2 hereof.  In connection with a Release Event pursuant to this Section 3.24,
the Sponsor shall cause to be funded to Freddie Mac on or prior to the release
date the Prepayment/Substitution Premium required pursuant to Section 3.8(a)(i)
hereof.  Upon release from the Series Pool pursuant to this Section 3.24, the
RA-7-2 Senior Custodial Receipt shall be delivered to the Custodian and
exchanged for a Subordinate Custodial Receipt to be designated RB-7-2 pursuant
to Section 2.11 of the Custody Agreement.
 
 
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Section 3.25 Loans by Guarantor or Its Affiliates. The Guarantor or an affiliate
of the Guarantor may make a subordinate loan or loans to an Owner and enforce
the terms of such loans if the such loan is made in accordance with the terms of
this Section 3.25.  Freddie Mac acknowledges that the making of such loan(s) by
the Guarantor and their enforcement is not a breach of a covenant or a
representation under this Agreement provided that:
 
(a) the Guarantor shall provide notice of such subordinate loan to Freddie Mac
and the Servicer no later than 30 days prior to the funding of such loan (each
notice shall include a representation as to the purpose of the subordinate
loan),
 
(b) such subordinate loan shall be made only to fund shortfalls in operating
expenses or to pay debt service on the related Bonds,
 
(c) the enforcement of remedies with respect to such subordinate loan(s) shall
be done solely with Freddie Mac’s prior consent, and
 
(d) such subordinate loan: (i) is not secured by the applicable Mortgaged
Property or an interest in the applicable Owner, (ii) is payable solely from 75%
of surplus cash with respect to the related Mortgaged Property (as determined in
accordance with Freddie Mac’s program standards), (iii) has a maturity date
which extends beyond the maturity date on the related Bonds, and (iv) otherwise
conforms to Freddie Mac’s then applicable program, policies and underwriting
criteria for soft subordinate debt.
 
Section 3.26 Credit Advances; Real Estate Taxes.  In the event any real estate
taxes are assessed on a Mortgaged Property (including, but not limited to, South
Park and Lost Creek) and are not timely paid when due by either the Owner or the
Sponsor (irrespective of whether the Owner or the Sponsor is contesting such
assessment), Freddie Mac shall have the right (but not the obligation) to pay
such taxes and such expenditure by Freddie Mac shall be treated as a Credit
Advance hereunder to reimbursed from the sources and in the priority established
in accordance with the provisions of this Agreement and Section 4.03 of the
Series Certificate Agreement.  The foregoing notwithstanding, any such real
estate taxes due but unpaid with respect to the Villages at Lost Creek Mortgaged
Property shall be paid first from amounts available therefor under the Villages
at Lost Creek Escrow Agreement, subject to and in accordance with the terms
thereof.
 
ARTICLE IV 
AGREEMENT TO EXCHANGE
 
Section 4.1 Exchange.  Freddie Mac agrees to exchange the Certificates for the
Deposited Assets in accordance with and subject to the terms and provisions of
this Agreement.  In consideration for the transfer of ownership and possession
of the Deposited Assets from the Sponsor to Freddie Mac, Freddie Mac shall
simultaneously deliver to the Sponsor the Class A Certificates issued pursuant
to the Series Certificate Agreement and deliver the Class B Certificates to the
Pledge Custodian for the benefit of the Sponsor, all of which Class B
Certificates shall be subject to the pledge described in Section 8.1 hereof, and
which shall be held in custody by the Pledge Custodian in accordance with the
terms of this Agreement.  With respect to the Deposited Assets, the Sponsor is
transferring and assigning to Freddie Mac all of its right, title and interest
in and to such Deposited Assets together with all interest due thereon from and
after September 1, 2010 (such transfer and assignment being intended as an
absolute assignment to Freddie Mac of all of the Sponsor’s ownership, right,
title and interest in such Deposited Assets from such date forward, and not as a
collateral assignment or pledge of such Deposited Assets).
 
 
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Section 4.2 Mandatory Delivery; Ownership; Registration of Transfer.  No later
than the Closing Date (the “Delivery Deadline”), the Sponsor shall complete the
delivery of the Deposited Assets to Freddie Mac in accordance with this
Agreement, and ownership of the Deposited Assets shall pass from the Sponsor to
Freddie Mac on the Closing Date as provided in Section 4.1.  The Sponsor shall
execute and deliver any instrument necessary or appropriate to effect or
evidence the transfer and delivery of all the Sponsor’s interest in and to the
Deposited Assets to Freddie Mac, and shall fully and promptly cooperate with
Freddie Mac, and take any necessary action, to cause the ownership of the
Deposited Assets to be registered in the name of Freddie Mac.
 
Section 4.3 Failure to Deliver.  If the Sponsor fails to deliver the Deposited
Assets to Freddie Mac or fails to comply fully with any precondition to Freddie
Mac’s obligation to exchange Certificates for the Deposited Assets on or before
the Closing Date, Freddie Mac shall have no obligation to exchange Certificates
for the Deposited Assets, and the Sponsor shall promptly reimburse Freddie Mac
for all of its out-of-pocket expenses in connection with the proposed
transaction, including, but not limited to, Freddie Mac’s legal and financial
modeling costs.
 
ARTICLE V 
INTEREST RATE PROTECTION
 
Section 5.1 Hedge Requirement.
 
(a) Hedge Requirement.  To protect against fluctuations in interest rates,
Sponsor shall deliver to Freddie Mac and shall make arrangements for third-party
Hedge Agreements to be in place and maintained at all times, with respect to the
Class A Certificates during any period in which the Class A Certificates bear
interest at a Weekly Reset Rate or Monthly Reset Rate.  The Hedge Agreement with
respect to the Class A Certificates shall take the form of one or more Caps that
meet the requirements of this Article V.  The initial Hedge Agreement with
respect to the Class A Certificates shall be three Caps with counterparties
acceptable to Freddie Mac.  Each initial Cap shall have a termination date of
September 15, 2017 and a Strike Rate of 3%.  The combined notional amount of the
initial Caps shall equal the Initial Certificate Balance of the Class A
Certificates on the Closing Date and shall decline based upon the scheduled
amortization of the Class A Certificates.  The initial Caps shall otherwise
satisfy the terms hereof.
 
(b) Expiration of Hedge.  Not later than the day following the expiration of the
term of any Hedge, if a Subsequent Hedge is required pursuant to Section 5.1(a),
the Sponsor shall deliver or cause to be delivered a Subsequent Hedge Agreement
from a Counterparty acceptable to Freddie Mac.
 
 
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(c) Terms of Subsequent Hedge.  Except as otherwise permitted by Sections 5.2,
5.7 or otherwise consented to by Freddie Mac, each Subsequent Hedge shall be a
Cap and shall have a term equal to the lesser of five (5) years or the remaining
term of the related Series Pool; provided, however, solely with respect to the
Cap to be provided by the Sponsor immediately following the expiration of the
initial Caps, the Sponsor may provide a Cap with a termination date of September
15, 2020, and in the event the Sponsor makes such election, amounts remaining in
the Cap Fee Escrow shall be credited in part towards the Sponsor's obligations
with respect to funding the Cap Fee Escrow for the term of such Cap.
 
(d) Documentation.  Each Hedge and Subsequent Hedge shall be with a Counterparty
acceptable to Freddie Mac.  Prior to seeking any bids from any Counterparty for
a Subsequent Hedge, the Sponsor shall obtain the prior written consent of
Freddie Mac.  Each Hedge shall be evidenced and governed by such documents (the
“Hedge Documents”) as shall be in form and content be acceptable to, Freddie
Mac.  Without limiting the generality of the foregoing, each Hedge Agreement
shall satisfy the requirements of Section 5.2.
 
(e) Performance Under Hedge Documents.  The Sponsor shall comply fully with, and
otherwise perform when due, its respective obligations under all Hedge
Documents.  The Sponsor shall not exercise without Freddie Mac’s prior written
consent, and shall exercise at Freddie Mac’s direction, any rights or remedies
under any Hedge Document.
 
(f) Termination; Transfer.  The Sponsor shall not terminate, transfer nor
consent to any transfer of any existing Hedge without Freddie Mac’s prior
written consent as long as the Sponsor is required to maintain a Hedge with
respect to the Class A Certificates pursuant to this Agreement.  Prior to
termination of an existing Hedge on a date prior to its scheduled termination
date, the Sponsor shall, so long as a Weekly Reset Rate or Monthly Reset Rate is
in effect, obtain a new Hedge satisfying the terms of this Agreement.  Any new
Hedge must be effective on or before or on the date immediately following the
last date on which the existing Hedge is in effect.  In no event shall the
Sponsor terminate the Hedge if in connection with such termination Freddie Mac
would be required to pay a termination fee pursuant to the Hedge, unless Freddie
Mac expressly consents to the payment of such termination fee.
 
(g) Hedge Assignment; Delivery of Payments.  The Sponsor shall assign to Freddie
Mac each Hedge in effect from time to time pursuant to this Agreement.  The
Counterparty shall make all its payments to Freddie Mac to be allocated to the
payment of fees, expenses, reimbursements and other Obligations of the Sponsor
hereunder, and in no event paid to Class A Certificates.  Any amounts received
by the Sponsor from the Counterparty pursuant to the Hedge Agreement shall be
paid by the Sponsor to Freddie Mac immediately and until paid to Freddie Mac,
shall be held in trust for the benefit of Freddie Mac until applied in
accordance with the terms of Article VIII hereof.
 
(h) Notice of Expiration.  Not less than six (6) months prior to the expiration
of each Hedge delivered hereunder, if a Subsequent Hedge will be required
pursuant to Section 5.1(a), the Sponsor shall provide Freddie Mac written notice
of the proposed terms of the Hedge expected to be delivered by the Sponsor to
replace the expiring Hedge.
 
Section 5.2 Hedge Agreement Terms.
 
 
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(a) Hedge Agreement Payment Terms.  For each Hedge related to the Class A
Certificates, the Counterparty shall pay a floating amount computed in
accordance with the Hedge Documents to the extent the Index Rate exceeds the
fixed cap rate (the “Strike Rate”).  For each Subsequent Hedge Agreement, the
Strike Rate must not exceed 4% per annum (and shall not exceed 3% per annum with
respect to the initial Caps) or shall otherwise be acceptable to Freddie
Mac.  Each Hedge must provide for monthly settlement on the fifteenth day of
each month with a grace period of no longer than three (3) Business Days.  If
the SIFMA Index Rate is not published on any reset date under the Hedge, the
Counterparty must determine an appropriate index as a substitute for the SIFMA
Index Rate on each such reset date.  The index so determined shall provide a
rate of interest that is equivalent to the prevailing rate of interest borne by
bonds that are rated in the highest short-term rating category by Moody’s and
S&P for issuers of not less than five “high grade” component issuers selected by
the Counterparty which shall include, without limitation, issuers of general
obligation bonds, and that are subject to tender by holders thereof for purchase
on not more than seven (7) days notice and the interest on which is (a)
variable, determined on a weekly basis, (b) excludable from gross income for
federal income tax purposes, and (c) not subject to a “minimum tax” or similar
tax unless all tax-exempt bonds are subject to such tax.
 
(b) Notional Principal Amount of Hedge.  The initial notional amount of any
Hedge shall be equal to the Current Class A Certificate Balance immediately
prior to the commencement of the applicable Hedge Period.
 
(c) [Reserved].
 
(d) Cap Fee Escrow.  From amounts received with respect to the Pledged Security
Collateral, the Pledge Custodian on behalf of the Sponsor shall pay to the
Servicer for deposit to a Cap Fee Escrow monthly on the fifteenth (15th) day of
each month (commencing on the fifteenth (15th) day of the month next preceding
the date that is sixty (60) months prior to the expiration of each existing
Hedge), an amount that will result in the accumulation by the expiration of the
existing Hedge, without regard to earnings from investments of amounts in the
Cap Fee Escrow, of funds estimated by Freddie Mac to be sufficient to pay the
cost of a Cap with a term of five years in a notional amount that will equal the
outstanding principal amount of the Class A Certificates at such time (provided,
if the Sponsor makes the election as provided in Section 5.1(c) to provide a
3-year cap upon expiration of the initial Caps provided hereunder, then payments
to the Cap Fee Escrow for the following escrow period shall begin 36 months
prior to the expiration thereof, but nevertheless the monthly deposits to the
Cap Fee Escrow shall be those estimated to be sufficient to pay the cost of a
Cap with a term of five years).  During the first twelve (12) months after the
commencement of deposits required hereunder, the monthly deposit shall be equal
to a fraction, the numerator of which is 125% of the estimated cost of the Cap
required hereunder and the denominator of which 60.  Thereafter, the amount of
the monthly deposit shall be recomputed by Freddie Mac annually based upon the
Freddie Mac’s estimation of the cost of such Cap times 125% minus amounts
already on deposit in the applicable Cap Fee Escrow divided by the number of
months remaining until to the related expiration date of the preceding Hedge.
 
 
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Amounts on deposit in the Cap Fee Escrow shall be invested and reinvested by the
Servicer only in the following, having maturities of no more than six months:
 
(i) Bank accounts or certificates of deposit that are fully insured by the
Federal Deposit Insurance Corporation.
 
(ii) Direct obligations of the U.S. Government, the Federal Home Loan Bank, the
Federal Home Loan Mortgage Corporation, Fannie Mae or the Federal Farm Credit
Bank.
 
(iii) Obligations, the interest on which is excludable from gross income for
federal income tax purposes, with a “Moody’s Investment Grade One” rating or
bonds the interest on which is excludable from gross income for purposes of
federal income taxation, that are rated not lower than “AA” or “Aa” by either
S&P or Moody’s respectively, if only one rating from those agencies has been
obtained, and if both agencies have rated the obligations or bonds, not lower
than “Aa” or “AA,” as applicable; provided, however, not more than 10% of the
total issue of any such obligations may be purchased and issues of at least
$20,000,000 in total issue size must be selected.
 
(iv) Commercial paper with a rating of at least “A-1” by S&P and at least P-1 by
Moody’s.
 
(v) Corporate notes and bonds with a rating of at least “AA” and “Aa” from S&P
and Moody’s.
 
(vi) Shares or other interests in mutual funds that invest exclusively in
(A) instruments the interest on which is exempt from federal income taxation and
which are rated by at least one nationally recognized statistical rating agency
in one of that agency’s two highest rating categories or (B) any of the
categories of investments described in paragraphs (i) through (v) above.
 
During any period the Class A Certificates have been converted with the prior
written consent of Freddie Mac to bear interest at a Term Reset Rate and no
Hedge is required to be maintained pursuant to Section 5.1 of this Agreement,
and provided no Event of Default is existing hereunder, any amounts then held on
deposit in the Cap Fee Escrow shall be distributed to the Sponsor upon a written
request therefor delivered to the Servicer and Freddie Mac.
 
(e) Additional Collateral.  Each Hedge Agreement shall provide that if the
long-term, unsecured and unsubordinated indebtedness of the Counterparty shall
cease to be rated at least A1 by Moody’s or A+ by S&P (or Aa1 by Moody’s or AA+
by S&P in the case of counterparties that are insurance companies) or such
indebtedness shall cease to be rated by Moody’s or S&P, then such party’s
obligations under the Hedge Agreement shall be required to be collateralized on
such terms and conditions as are acceptable to Freddie Mac including without
limitation the delivery of cash collateral to a Trustee.  If the Counterparty
fails to escrow collateral as provided in the Hedge Agreement, the Sponsor shall
enter into a Subsequent Hedge within thirty (30) days after such failure to
escrow collateral.
 
 
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Section 5.3 Failure to Deliver Subsequent Hedge.
 
If:
 
(a) the Sponsor fails to deliver a Subsequent Hedge as required by this
Agreement, or
 
(b) the Sponsor has indicated that it will obtain a Subsequent Hedge and has not
provided to Freddie Mac and the Servicer a copy of the executed and delivered
Subsequent Hedge when required by Section 5.1(b),
 
then Freddie Mac at its option, may
 
(i) purchase a Subsequent Hedge upon such terms as it deems satisfactory in its
own name or for the account of the Sponsor with funds on deposit in the Cap Fee
Escrow, and if funds in the Cap Fee Escrow are insufficient for that purpose,
Freddie Mac may advance the insufficient amount, which advance shall be deemed a
Credit Advance; or
 
(ii) treat such failure by the Sponsor as an Event of Default.
 
If Freddie Mac exercises its right under clause (i) and is reimbursed with
interest its Credit Advance within the time required by Section 3.2 hereof after
it gives notice to the Sponsor that Freddie Mac purchased the Subsequent Hedge,
the failure of the Sponsor to obtain the Hedge shall no longer constitute an
Event of Default.
 
The Sponsor hereby appoints Freddie Mac as its attorney-in-fact, with full
authority in the place and stead of the Sponsor and in the name of the Sponsor,
from time to time in Freddie Mac’s discretion, to take any action and to execute
any instrument which Freddie Mac may reasonably deem necessary or advisable to
accomplish the purposes of this Section 5.3. The power of attorney established
pursuant to this Section 5.3 shall be deemed coupled with an interest and shall
be irrevocable.
 
Section 5.4 [Reserved].
 
Section 5.5 Pledge and Assignment of  Security Interest in Hedge Collateral.  To
secure the Obligations, the Sponsor hereby assigns, pledges and grants a
security interest to Freddie Mac in and to all of its right, title and interest
in and to the following (collectively, the “Hedge Collateral”):
 
(a) the Hedge Agreement and any Subsequent Hedge Agreements;
 
(b) any and all moneys (collectively, “Hedge Payments”) payable to the Sponsor,
from time to time, pursuant to the Hedge Agreements or any Subsequent Hedge
Agreements by the Counterparty thereunder;
 
(c) the Cap Fee Escrow;
 
 
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(d) all rights of the Sponsor under any of the foregoing, including all rights
of the Sponsor to the Hedge Payments and all contract rights and general
intangibles now existing or hereafter arising with respect to any or all of the
foregoing;
 
(e) all rights, liens, security interests and guarantees now existing or
hereafter granted by the Counterparty, or any other person, to secure or
facilitate payment of the Hedge Payments;
 
(f) all documents, writings, books, files, records and other documents arising
from, or relating to, any of the foregoing, whether now existing or hereafter
created;
 
(g) all extensions, renewals and replacements of the foregoing; and
 
(h) all cash and non-cash proceeds and products of any of the foregoing,
including, without limitation, interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the other Hedge
Collateral.
 
Section 5.6 Obligations Remain Absolute.  Nothing contained herein shall relieve
the Sponsor of its primary obligation to pay or cause to be paid all amounts due
in respect of the Obligations, subject to Section 9.11.
 
Section 5.7 Swap Option.  The Sponsor may in the future request Freddie Mac’s
consent to the delivery of an interest rate swap agreement (a “Swap”) instead of
a Cap as an interest rate hedge to satisfy its obligations under this Article V;
provided, however, (a) the fixed interest rate to be paid by the Sponsor with
respect to such Swap shall not exceed the lesser of (i) 4% per annum or (ii) the
applicable market rate at the time of pricing the Swap and (b) any such Swap
shall meet all of Freddie Mac’s requirements for Swaps credit enhanced by
Freddie Mac.  Any such request shall be in writing delivered to Freddie Mac and
be accompanied by a review fee of $5,000 payable to Freddie Mac, which fee shall
be nonrefundable.  The granting of any such request shall be subject to Freddie
Mac’s re-pricing of the Freddie Mac Fee as determined by Freddie Mac in its sole
discretion at such time.  All documentation in connection with any such request
(including any amendment to this Agreement entered into by the parties in
connection with the granting of such request) shall be in form and substance
acceptable to Freddie Mac.  The Sponsor shall be responsible for paying any
reasonable legal fees or expenses incurred by Freddie Mac in connection with
such request, whether or not such request is approved.
 
ARTICLE VI 
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
 
This Agreement is also a security agreement under the Uniform Commercial Code
with respect to the Hedge Collateral as provided in Article V and the Pledged
Security Collateral as provided in Article VIII and all funds and accounts and
investments thereof now or hereafter held by the Administrator under the Series
Certificate Agreement (to the extent of any retained interested by the Sponsor
therein) and all funds and accounts and investments thereof now or hereafter
held for the benefit of Freddie Mac under the Repair Escrow Agreement, the Ohio
Portfolio Escrow Agreement and the Villages at Lost Creek Escrow Agreement and
all cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and the
Sponsor hereby grants to Freddie Mac a security interest in the UCC Collateral
as security for all Obligations due under this Agreement and under any of the
Sponsor Documents.  The Sponsor shall execute and deliver to Freddie Mac, upon
Freddie Mac’s request, financing statements, continuation statements and other
account agreements and amendments, in such form as Freddie Mac may require to
perfect or continue the perfection of this security interest.  The Sponsor shall
pay or cause to be paid all filing costs and all costs and expenses of any
record searches for financing statements that Freddie Mac may reasonably
require.  Except as otherwise permitted herein, without the prior written
consent of Freddie Mac, the Sponsor shall not create or permit to exist any
other lien or security interest in any of the UCC Collateral.  The Sponsor
covenants and agrees that it will defend Freddie Mac’s rights and security
interests created by this Article against the claims and demands of all
Persons.  If an Event of Default has occurred and is continuing, subject to
Article VII hereof, Freddie Mac shall have the remedies of a secured party under
the Uniform Commercial Code, in addition to all remedies provided by this
Agreement or existing under applicable law.  In exercising any remedies, Freddie
Mac may exercise its remedies against the UCC Collateral separately or together,
and in any order, without in any way affecting the availability of the other
remedies available to Freddie Mac.
 
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ARTICLE VII 
EVENTS OF DEFAULT; REMEDIES
 
Section 7.1 Events of Default.  The occurrence of any one or more of the
following events shall constitute an Event of Default hereunder:
 
(a) Freddie Mac, as provider of credit enhancement and as liquidity provider,
does not receive any amount payable under this Agreement when due, including,
without limitation, any fees, costs or expenses (provided that if the
Administrator or Pledge Custodian has such amounts in its possession pursuant to
the Series Certificate Agreement or this Agreement and is directed thereunder or
hereunder to pay such amounts to Freddie Mac, such occurrence will not be an
Event of Default);
 
(b) the Sponsor shall fail to perform its obligations under Section 3.15;
 
(c) the Sponsor shall fail to observe or perform in all material respects any
other term, covenant, condition or agreement set forth in this Agreement, and
such failure shall continue, and remain uncured, for a period of thirty (30)
days following notice to the Sponsor of such failure, or actual knowledge by the
Sponsor of such failure; provided, however, in the event such failure shall
relate to a non-monetary term, covenant, condition or agreement that can be
corrected but not within thirty (30) days, such failure shall not constitute an
Event of Default hereunder if corrective action is instituted by the Sponsor
within thirty (30) days and diligently pursued until such failure is cured,
provided such failure must be cured not later than ninety (90) days after the
initial date of such failure;
 
(d) the Sponsor shall fail to observe or perform in all material respects any
other term, covenant, condition or agreement set forth in any of the other
Sponsor Documents, or there shall otherwise occur an event of default caused by
the Sponsor under any of the other Sponsor Documents (taking into account any
applicable cure period);
 
 
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(e) Freddie Mac shall have given the Sponsor written notice that Pledged Class A
Certificates have not been remarketed as of the sixtieth (60th) day following
purchase by the Administrator on behalf of the Sponsor, and Freddie Mac has not
been reimbursed for the applicable Liquidity Advance, together with interest
thereon, or has not been paid in full all fees and other amounts due to Freddie
Mac under this Agreement;
 
(f) failure to pay principal of, and interest on, any Bond Purchase Loan when
due pursuant to Section 7.03(b) hereof;
 
(g) the interest rate on the Bonds shall be converted to a variable interest
rate mode without the prior written consent of Freddie Mac;
 
(h) failure of the Sponsor to deliver a Subsequent Hedge or replacement Hedge as
required under Article V;
 
(i) an “event of default” by the institution providing the Hedge occurs under
any Hedge Documents and the Sponsor does not provide a Subsequent Hedge within
10 Business Days;
 
(j) the Guarantor fails to perform its obligations when required under the
Guaranty;
 
(k) Article VIII of this Agreement, or the validity or enforceability thereof,
shall be contested by the Sponsor or any Class B Beneficial Owner, or the
Sponsor, or any Class B Beneficial Owner shall deny that it has any further
obligation under Article VIII of this Agreement or any instrument delivered
thereunder, or that its beneficial interest in the Class B Certificates is
subject to or subordinate to the terms of this Agreement, as applicable, prior
to the termination of this Agreement;
 
(l) any representation made by the Sponsor in Sections 2.1(uu), 2.2(a)(iii),
2.2(a)(iv), 2.2(a)(v), 2.2(a)(vi) or 2.2(a)(vii) or in Section 8.10 of this
Agreement shall prove to have been incorrect in any material respect when made
(the breach of other representations made by the Sponsor herein shall not
constitute an “Event of Default” but shall be dealt with pursuant to Section 2.4
hereof); or
 
(m)           a subordinate loan is made by the Guarantor or an affiliate of the
Guarantor not in accordance with Section 3.25 hereof.
 
Section 7.2 Remedies; Waivers.
 
(a) Remedies.  Upon the occurrence of an Event of Default, (i)  Freddie Mac may
declare all of the Obligations hereunder to be immediately due and payable, in
which case all such Obligations shall become due and payable, without
presentment, demand, protest or notice of any kind, including notice of default,
notice of intent to accelerate or notice of acceleration; (ii) at the written
direction of a Freddie Mac Authorized Officer, the Pledge Custodian shall
deliver all Pledged Security Collateral to Freddie Mac; (iii) Freddie Mac may,
or the Pledge Custodian at the written direction of a Freddie Mac Authorized
Officer shall, without further notice, exercise all rights, privileges or
options pertaining to the UCC Collateral as if Freddie Mac were the absolute
owner thereof, upon such terms and conditions as Freddie Mac may determine, all
without liability except to account for property actually received by Freddie
Mac or the Pledge Custodian (but neither Freddie Mac nor the Pledge Custodian
shall have any duty to exercise any of those rights, privileges or options and
shall not be responsible for any failure to do so or delay in so doing); and
(iv) Freddie Mac may, or the Pledge Custodian at the written direction of a
Freddie Mac Authorized Officer shall, exercise in respect of the UCC Collateral,
in addition to other rights and remedies provided for in this Agreement or
otherwise available to it, all of the rights and remedies of a secured party
under the Uniform Commercial Code and also may, without notice except as
specified below, sell the UCC Collateral at private sale, at any of the offices
of Freddie Mac or the Pledge Custodian or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as may be commercially
reasonable.  The Sponsor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days’ prior notice to the Sponsor of the time
after which any private sale is to be made shall constitute reasonable
notification.  Neither Freddie Mac nor the Pledge Custodian shall be obligated
to make any sale of UCC Collateral regardless of notice of sale having been
given.  Freddie Mac may, or the Pledge Custodian at the written direction of a
Freddie Mac Authorized Officer shall, 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.
 
 
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Freddie Mac shall also have the right to provide notice to the Administrator of
a Liquidity Provider Termination Event, in which event the funds advanced by
Freddie Mac to purchase Class A Certificates shall be a Credit Advance and
immediately due and payable hereunder.  In addition to the foregoing, Freddie
Mac shall have the right to take such action at law or in equity, without notice
or demand, as it deems advisable to protect and enforce the rights of Freddie
Mac against the Sponsor in and to the UCC Collateral, including, but not limited
to, (i) the exercise of any rights and remedies available to Freddie Mac under
any of the Sponsor Documents and (ii) the right to cause a mandatory tender of
all Certificates and to require that the Sponsor elect to fund or cause the
funding of the purchase of such Certificates.
 
Notwithstanding anything contained in this Section 7.2 to the contrary,
following an Event of Default and prior to any liquidation of the UCC
Collateral, the Class B Beneficial Owners shall continue to be the beneficial
owner(s) of all Class B Certificates, and the Sponsor shall continue to be the
beneficial owner of all Purchased Assets, Pledged Class A Certificates and other
Pledged Security Collateral, subject to all liens in favor of Freddie Mac
created by this Agreement.
 
(b) Application of Proceeds.  The Pledge Custodian shall apply the cash proceeds
actually received from any sale or other disposition of the Pledged Security
Collateral as follows: (a) first, to reimburse the Pledge Custodian for the
reasonable expenses of preparing for sale, selling and the like and to
reasonable attorneys’ fees and expenses and legal expenses incurred by the
Pledge Custodian in connection therewith, (b) second, to Freddie Mac to be
applied to the repayment of all amounts then due and unpaid on the Obligations
and (c) then, to pay the balance, if any, to (i) if the Pledged Security
Collateral being disposed of is a Class B Certificate, the Sponsor (or any
permitted transferee thereof under Section 8.19), or (ii) if the Pledged
Security Collateral being disposed of is Pledged Security Collateral other than
a Class B Certificate, the Sponsor, or (iii) as otherwise required by law.  The
Sponsor shall not be liable for any deficiency, subject to Section 9.11(b) of
this Agreement, which sets forth circumstances under which personal liability
applies to the Sponsor, if the proceeds of any final sale or other disposition
of the Pledged Security Collateral and any other security provided by the
Sponsor for its Obligations hereunder is insufficient to pay the Obligations.
 
 
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(c) Waivers.  Freddie Mac shall have the right, to be exercised in its
discretion, to waive any Event of Default under this Agreement.  Unless such
waiver expressly provides to the contrary, any waiver so granted shall extend
only to the specific event or occurrence which gave rise to the Event of Default
so waived and not to any other similar event or occurrence which occurs
subsequent to the date of such waiver.
 
Section 7.3 Rights with Respect to Defaults under Bond Mortgages; Bond Purchase
Loan.
 
(a) Exercise of Right of Sponsor to Fund or Cause Funding in Connection with
Release Event.  Upon the occurrence of a Release Event under the Series
Certificate Agreement and the exercise by Freddie Mac of its right to cause a
purchase of the related series of Deposited Assets, the Sponsor shall have the
right (or where the Sponsor directs Freddie Mac to cause a Release Event
pursuant to Sections 3.20, 3.21, 3.22 or 3.23 the obligation) economically to
fund or cause the funding of the purchase of such Deposited Assets as provided
in this Section 7.3(a).  If the Sponsor elects to exercise any such right by
giving notice to Freddie Mac, the Sponsor shall provide or cause to be provided
sufficient immediately available funds to Freddie Mac to fund the Total Release
Price of the affected Deposited Assets not later than 11:00 a.m. Washington,
D.C. time, on the Business Day prior to the Release Event Date designated by
Freddie Mac.  If the Sponsor makes such election or directs Freddie Mac to
declare a Release Event pursuant to the terms hereof and fails to provide or
cause to be provided such funds to Freddie Mac when required, such Release Event
shall be cancelled.  All moneys provided or caused to have been provided by the
Sponsor to Freddie Mac for the purchase of Deposited Assets, shall be applied as
provided in the Series Certificate Agreement.
 
(b) Exercise of Purchase Right by Freddie Mac.  Upon the occurrence of a Release
Event with respect to the Deposited Assets, Freddie Mac shall have the right to
fund the purchase of the related series of Deposited Assets if the Sponsor
declines or fails to exercise properly its right to fund or cause funding with
respect to the same.  Prior to any exercise of such right, Freddie Mac shall
provide written notice to the Sponsor (the “Freddie Mac Purchase Notice”) not
less than fifteen (15) days prior to the proposed Release Event Date (or such
lesser time period necessary for the Release Event under Section 13.04 of the
Series Certificate Agreement) identifying each series of Deposited Assets giving
rise to a Release Event, the circumstances giving rise to such Release Event and
the proposed purchase date and stating that the Sponsor may elect to fund or
cause the funding of such purchase of the affected series of Deposited Assets.
 
 
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In the event the Sponsor elects to fund or cause the funding of the purchase of
the affected series of Deposited Assets, the provisions of subsection (a) above
shall apply.
 
In the event the Sponsor does not elect to fund or cause the funding of the
purchase of the affected series of Deposited Assets, and Freddie Mac does not
decide to terminate the Release Event, the affected series of Deposited Assets
are required to be purchased with funds drawn pursuant to the Credit Enhancement
by Freddie Mac under the Series Certificate Agreement, and such Deposited Assets
shall be delivered to the Pledge Custodian and held in the name of the Pledge
Custodian as applicable for the benefit of the Sponsor subject to the lien in
favor of Freddie Mac.  All such moneys for the purchase of such Deposited Assets
shall be applied as provided in Series Certificate Agreement.
 
Any Credit Advance by Freddie Mac under this Section 7.3(b) to fund the purchase
of an affected series of Deposited Assets, shall be deemed to be a loan from
Freddie Mac to the Sponsor (a “Bond Purchase Loan”).  The maturity date of any
Bond Purchase Loan shall be the earliest of (1) two years from the date of
purchase, or (2) the sale or transfer of all of the affected series of Deposited
Assets, or the foreclosure, deed in lieu of foreclosure or comparable conversion
of the related Bond Mortgage, on which maturity date the outstanding principal
of such Bond Purchase Loan shall be due and payable in full, or (3) the date of
termination of the Series Pool in whole in accordance with Article XIII of the
Series Certificate Agreement.  (Any Bond Purchase Loan may be prepaid by the
Sponsor at any time.)  Interest on any Bond Purchase Loan shall accrue at a rate
of interest equal to the prime rate of interest of Citibank, N.A., until such
time as another “Money Center” bank is designated by Freddie Mac in its sole
discretion by notice to the Sponsor, plus two percent (2%) per annum, which
shall be payable on the fifteenth day of each calendar month.  The principal of
any Bond Purchase Loan shall be payable from amounts applied as provided in
Section 4.03(b) of the Series Certificate Agreement except, prior to the payment
in full of all Class A Certificates under the Series Certificate Agreement and
prior to the termination thereof, the principal of any outstanding Bond Purchase
Loan shall not be payable (nor be deemed due for payment) from amounts applied
pursuant to the aforementioned Section 4.03(b) if such amounts are derived from
a Credit Advance by Freddie Mac in connection with a subsequent Release
Event.  The principal of any outstanding Bond Purchase Loan shall also be
payable from any payments of principal in respect of a Purchased Asset pursuant
to Article VIII hereof.  At any time prior to the Sponsor's funding of the
purchase of such Deposited Assets or causing to fund the same, (i)  Freddie Mac
shall retain all rights and remedies with respect to any such Mortgaged Property
and the related Owner Documents and (ii) the Sponsor hereby acknowledges and
agrees that it has relinquished and has no rights to exercise remedies with
respect to the Mortgaged Property or the related Owner Documents except as
specifically provided under any Sponsor Documents and that with respect thereto
the Sponsor shall not exercise any such rights without the prior written consent
of Freddie Mac.
 
(c) Certain Release Events Regarding Enhanced Custodial
Receipts.  Notwithstanding any other provision of this Agreement, a Release
Event with respect to an Enhanced Custodial Receipt attributable solely to a
payment default on the underlying series of Bonds may only be declared by
Freddie Mac if such payment default is to such an extent that the Enhanced
Custodial Receipt is not being paid in full.  Freddie Mac shall not declare a
Release Event, except at the direction of the Sponsor in accordance with
Section 3.23 hereof, if only the related Subordinate Custodial Receipt is not
being paid in full but the Enhanced Custodial Receipt is being so paid.
 
 
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(d) Material Adverse Credit Condition.  Freddie Mac hereby acknowledges that a
Release Event may not be declared solely because the DCR or LTV of a Mortgaged
Property (as defined in Section 3.19 hereof) related to a Deposited Asset
worsens following the Closing Date, and that any such event shall not in and of
itself be treated as a “material adverse credit condition” for such
purpose.  The foregoing statement does not in any way alter or change the DCR
and LTV requirements for Substitute Assets specified in Section 3.19 hereof.
 
Section 7.4 No Remedy Exclusive.  Unless otherwise expressly provided, no remedy
conferred upon or reserved in this Agreement is intended to be exclusive of any
other available remedy, but each remedy shall be cumulative and shall be in
addition to other remedies given under the Sponsor Documents or existing at law
or in equity.  No delay or omission to exercise any right or power accruing
under any Sponsor Document upon the happening of any event set forth in Section
7.1 shall impair any such right or power or shall be construed to be a waiver of
such event, but any such right and power may be exercised from time to time and
as often as may be deemed expedient.  In order to entitle Freddie Mac to
exercise any remedy reserved to Freddie Mac in this Article, it shall not be
necessary to give any notice, other than such notice as may be required under
the applicable provisions of any of the other Sponsor Documents.  The rights and
remedies of Freddie Mac specified in this Agreement are for the sole and
exclusive benefit, use and protection of Freddie Mac, and Freddie Mac is
entitled, but shall have no duty or obligation to the Sponsor, the Guarantor,
any Sponsor Affiliate, the Pledge Custodian, the Administrator or otherwise, (a)
to exercise or to refrain from any right or remedy reserved to Freddie Mac
hereunder, or (b) to cause the Pledge Custodian, the Administrator or any other
party to exercise or to refrain from exercising any right or remedy available to
it under any of the Sponsor Documents.
 
ARTICLE VIII 
PLEDGE, SECURITY AND CUSTODY OF PLEDGED SECURITY COLLATERAL
 
 
Section 8.1 Pledged Security Collateral.  To secure the payment to Freddie Mac
in full of all Obligations now or hereafter existing under this Agreement, the
Sponsor shall cause to be deposited with the Pledge Custodian all of the Class B
Certificates on the date of delivery of the Series Certificate
Agreement.  Subject to the provisions of Section 8.18, the Sponsor hereby
assigns and pledges to the Pledge Custodian, and grants to the Pledge Custodian,
for the benefit of Freddie Mac, a continuing security interest in, and a lien
on, all of the Sponsor’s right, title and interest in and to the following
property (collectively, the “Pledged Security Collateral”):
 
(a)           all Purchased Assets;
 
(b)           the Class B Certificates issued pursuant to the Series Certificate
Agreement;
 
(c)           all Pledged Class A Certificates;
 
(d)           all interest and other amounts payable on, and all rights with
respect to, any Purchased Assets, Class B Certificates and Pledged Class A
Certificates (including, without limitation, all payments of principal and
interest thereon); and
 
(e)           all proceeds of any of the foregoing.
 
Section 8.2 Delivery of Pledged Security Collateral.  On the Closing Date, and
at such time as a Class A Certificate becomes a Pledged Class A Certificate or a
Deposited Asset becomes a Purchased Asset in accordance with the Series
Certificate Agreement, and this Agreement, subject to and except as permitted by
the provisions of Section 8.19, the Sponsor shall be the beneficial owner of
each of the Class B Certificates, Pledged Class A Certificates and Purchased
Assets, as applicable, which, regardless of the identity of the beneficial owner
thereof, shall be held by the Pledge Custodian subject to the security interest
created by the terms of this Agreement.  All Pledged Security Collateral shall
be deposited in the Custody Account (as defined in Section 8.11 below).  The
Pledge Custodian shall cause the Purchased Assets, the Class B Certificates and
the Pledged Class A Certificates, as applicable, to be registered in the name of
the Pledge Custodian or, if transfers are recorded in book-entry form only,
cause the appropriate records of the applicable financial intermediary to
reflect that the Pledge Custodian holds a security interest in the Purchased
Assets, the Class B Certificates and the Pledged Class A Certificates, as
applicable, for the benefit of Freddie Mac.
 
 
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Section 8.3 Amounts Received on Class B Certificates and Pledged Class A
Certificates.
 
(a) Provided that (i) no Advance has been made pursuant to the Series
Certificate Agreement and remains unreimbursed, (ii) all fees and any other
amounts due and owing to Freddie Mac under this Agreement have been paid and
(iii) the Pledge Custodian has not received a written notice from Freddie Mac
that an Event of Default has occurred and is continuing under this Agreement,
subject to the provisions of Sections 8.3(b) and 8.3(c) and the Series
Certificate Agreement, then the Pledge Custodian shall pay to the Sponsor within
one (1) Business Day of receipt all amounts received by the Pledge Custodian
with respect to the Class B Certificates, and to the Sponsor all amounts
received by the Pledge Custodian with respect to any Pledged Class A
Certificates until the Class B Certificates and all Pledged Class A Certificates
are released in accordance with the terms of this Agreement.
 
(b) If an Advance has been made pursuant to the Series Certificate Agreement and
remains unreimbursed, or if all fees and any other amounts due and owing to
Freddie Mac under this Agreement have not been paid, or if the Pledge Custodian
receives a written notice from Freddie Mac that an Event of Default has occurred
and is continuing under this Agreement, the Pledge Custodian shall pay, first,
to Freddie Mac within one (1) Business Day of receipt such amounts received by
the Pledge Custodian with respect to the Class B Certificates and any Pledged
Class A Certificates as are equal to the amount of any such unreimbursed Advance
or other amounts due and owing to Freddie Mac under this Agreement and, second,
subject to the provisions of Section 8.3(c) and the Series Certificate
Agreement, the balance, if any, to the Sponsor (or permitted transferees as
provided in Section 8.19) or, with respect to Pledged Class A Certificates, the
Sponsor, as applicable, until the Class B Certificates and all Pledged Class A
Certificates are released from the Custody Account in accordance with the terms
of this Agreement.
 
(c) Before making any payments to the Sponsor (or permitted transferees as
provided in Section 8.19) pursuant to this Section 8.3, the Administrator shall
confirm the aggregate amounts of the Freddie Mac Fee, and the Remarketing Agent
Fee paid directly, or caused to be paid, by the Sponsor since the immediately
preceding date on which payments were made to the Sponsor (or permitted
transferees as provided in Section 8.19) pursuant to this Section 8.3 (the
“Sponsor Paid Expenses”).  For purposes of such confirmation, the Administrator
shall be entitled to rely on a statement setting forth such Sponsor Paid
Expenses (separately and in the aggregate) delivered by facsimile by the Sponsor
to the Pledge Custodian at least two (2) Business Days prior to the date
payments are to be made pursuant to this Section 8.3.  Notwithstanding any other
provision of this Agreement or the Series Certificate Agreement (including
without limitation Section 4.03(a)(viii) of the Series Certificate Agreement)
with respect to any Class B Certificate, distributions that would otherwise be
made to a permitted transferee of the Sponsor as provided in Section 8.19 shall
be reduced by an amount equal to the product of (i) the Sponsor Paid Expenses
and (ii) the ratio of the Current Certificate Balance of such Class B
Certificate held by the permitted transferee, to the Aggregate Outstanding Class
B Certificate Balance (the “Allocable Expense Amount”), and such Allocable
Expense Amount shall be paid by the Pledge Custodian to the Sponsor.
 
 
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Section 8.4 Amounts Received on Purchased Assets.  The Pledge Custodian shall
pay to Freddie Mac within one (1) Business Day all amounts received by the
Pledge Custodian with respect to any Purchased Assets, for credit to the
obligations of the Sponsor hereunder, until such Purchased Assets are released
to the Sponsor in accordance with the terms of Section 8.5 of this Agreement.
 
Section 8.5 Release of Purchased Asse.  If the Pledge Custodian has received
written notice from Freddie Mac that Freddie Mac (provided no written notice
shall be required when Freddie Mac is also acting as the Pledge Custodian) has
been fully reimbursed by the Sponsor for all Obligations relating to a Purchased
Asset (and Freddie Mac agrees to give such notice promptly following full
reimbursement), that no Advances remain unreimbursed, that all fees and other
amounts currently owing to Freddie Mac have been paid and that no Event of
Default exists hereunder, the Pledge Custodian shall release such Purchased
Asset together with the proceeds thereof remaining in the possession of the
Pledge Custodian, if any, to the Sponsor.  The release of such Purchased Asset
shall be free and clear of the security interest created by this Agreement.
 
Section 8.6 Release of Class B Certificates and Pledged Class A
Certificates.  If the Pledge Custodian has received written notice from Freddie
Mac (provided no written notice shall be required when Freddie Mac is also
acting as the Pledge Custodian) that Freddie Mac has been fully reimbursed by
the Sponsor for all Obligations relating to any Available Remarketing Class A
Certificate (and Freddie Mac agrees to give such notice promptly following full
reimbursement), the Pledge Custodian shall release such Available Remarketing
Class A Certificate to the Administrator for delivery to the Sponsor or, if
applicable, in connection with a remarketing to the purchasers of such Pledged
Class A Certificates; provided, however, that in no event will a Pledged Class A
Certificate that is not an Available Remarketing Class A Certificate be released
from the pledge of this Agreement until the date of termination of the pledge of
all Class B Certificates pursuant to Section 8.18.  The Pledge Custodian shall
not release any Class B Certificates to the Sponsor (or any permitted transferee
thereof under Section 8.19) until the date of termination of the pledge of the
Class B Certificates pursuant to Section 8.18 unless the Pledge Custodian
receives prior written direction from Freddie Mac with respect to the release of
all or a portion of the Class B Certificates.  The release of any Pledged Class
A Certificate or Class B Certificate, as applicable, shall be free and clear of
the security interest created by this Agreement.  If directed in writing by
Freddie Mac if an Event of Default exists, the Pledge Custodian shall deliver
Pledged Class A Certificates that are not Available Remarketing Class A
Certificates to the Administrator for cancellation in exchange for the Deposited
Assets related thereto as soon as such Deposited Assets have been received by
the Pledge Custodian from the Administrator.  Any such Deposited Assets so
received shall be held hereunder as Purchased Assets and notice thereof shall be
provided to the Sponsor.
 
 
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Section 8.7 Loss to Pledged Security Collateral.  The Pledge Custodian shall not
be liable for any loss with respect to any Pledged Security Collateral in its
possession (except for any loss resulting from the Pledge Custodian’s willful
misconduct or negligence), nor shall such loss diminish the Obligations.
 
Section 8.8 [Reserved].
 
Section 8.9 Ownership Restrictions.  Notwithstanding any provisions of this
Agreement, ownership by and release to the Sponsor (or any permitted transferee
thereof under Section 8.19) of any Pledged Security Collateral as described
hereunder shall be in all respects subject to the provisions of any documents
restricting or governing transfers and ownership of such Pledged Security
Collateral.
 
Section 8.10 Representations and Warranties of the Sponsor to the Pledge
Custodian.  The Sponsor represents and warrants to the Pledge Custodian on the
Closing Date, subject to and except as permitted by the provisions of Section
8.19, and on each date that Purchased Assets, Class B Certificates or Pledged
Class A Certificates are delivered to the Pledge Custodian hereunder with
respect to such Purchased Assets, Class B Certificates and Pledged Class A
Certificates that:
 
(a) it is the legal and beneficial owner of (and has full right and authority to
pledge and assign) the applicable Pledged Security Collateral, free and clear of
all liens, security interests, options or other charges or encumbrances
(collectively, “Liens”) except Liens granted pursuant to this Agreement; and
 
(b) upon delivery of the Pledged Security Collateral to the Pledge Custodian (or
notice to the financial intermediary, if applicable), the Pledge Custodian shall
have a valid, enforceable and first priority security interest in all of the
Pledged Security Collateral securing the Obligations.
 
Section 8.11 Custody Account.  On or prior to the Closing Date, the Pledge
Custodian shall establish on its books and in its records the Custody
Account.  The Pledge Custodian shall maintain the Custody Account until the
termination of this Agreement.  At no time shall the Custody Account be
maintained on behalf of, or be payable to, any person other than Freddie
Mac.  The Sponsor and any Class B Beneficial Owner shall not have any right of
withdrawal from the Custody Account.  No property other than Pledged Security
Collateral shall be deposited by the Pledge Custodian in the Custody
Account.  Segregation of the Pledged Security Collateral in the Custody Account
from other property maintained with the Pledge Custodian shall be accomplished
by appropriate identification on the Pledge Custodian’s books and records.  The
Pledge Custodian shall, at all times prior to the termination of this Agreement,
maintain a record of all Purchased Assets, Class B Certificates, Pledged Class A
Certificates and other property in the Custody Account separately identifying
such Purchased Assets, Class B Certificates, Pledged Class A Certificates, or
other property received with respect thereto as being subject to the security
interest granted to the Pledge Custodian on behalf of Freddie Mac in this
Agreement.  So long as the internal procedures set forth in this Section are met
by the Pledge Custodian, the Pledge Custodian may hold the Pledged Security
Collateral in its vaults or in a commingled account (whether book-entry or
otherwise) of the Pledge Custodian, as agent for its customers, with any bank,
central depository or clearing organization as the Pledge Custodian’s
subcustodian, in nominee name or otherwise.
 
 
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Section 8.12 Appointment and Powers of the Pledge Custodian.
 
(a) The Sponsor acknowledges the appointment of Freddie Mac in its capacity as
the Pledge Custodian as collateral agent for Freddie Mac in its corporate
capacity under this Agreement, and authorizes the Pledge Custodian to take such
actions on behalf of Freddie Mac, and to exercise such rights, remedies, powers
and privileges under this Agreement as are specifically authorized to be
exercised by the Pledge Custodian by the terms of this Agreement.  The Pledge
Custodian may execute any of its duties as collateral agent under this Agreement
by or through its agents (but only with the prior written consent of Freddie
Mac) or employees and shall be entitled to retain experts (including counsel)
and to act in reliance upon the advice of such experts concerning all matters
pertaining to the agencies created by this Agreement and its duties under this
Agreement, and shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the advice of such counsel selected by
it.  The Pledge Custodian agrees to perform only those duties specifically set
forth in this Agreement, and no implied duties or obligations shall be read into
this Agreement.  So long as Freddie Mac is acting as Pledge Custodian hereunder,
it shall have no duty to provide notice to, or seek the consent or direction of,
Freddie Mac in its corporate capacity.
 
(b) The Pledge Custodian shall have no duty to exercise any discretionary right,
remedy, power or privilege granted to it by this Agreement, or to take any
affirmative action under this Agreement, unless directed to do so by Freddie Mac
in writing, and shall not, without the prior written approval of Freddie Mac,
consent to any departure by the Sponsor from the terms of this Agreement, waive
any default on the part of the Sponsor under this Agreement or amend, modify,
supplement or terminate, or agree to any surrender of, this Agreement or the
Pledged Security Collateral; provided, that the Pledge Custodian shall not be
required to take any action that exposes the Pledge Custodian to personal
liability, or which is contrary to this Agreement or any other agreement or
instrument relating to the Pledged Security Collateral or applicable law.
 
(c) Neither the Pledge Custodian nor any of its directors, officers, employees
or agents, shall be liable for any action taken or omitted to be taken by it or
them under this Agreement, or in connection with this Agreement, except the
Pledge Custodian shall be responsible for its own negligence or willful
misconduct; nor shall the Pledge Custodian be responsible for the validity,
effectiveness, value, sufficiency or enforceability against the Sponsor of this
Agreement or any other document furnished pursuant to this Agreement or in
connection with this Agreement, or of the Pledged Security Collateral (or any
part thereof), or for the perfection or priority of any security interest
purported to be granted under this Agreement.
 
(d) The Pledge Custodian shall be entitled to rely on any communication,
instrument, paper or other document believed by it in good faith to be genuine
and correct and to have been signed or sent by the proper person or
persons.  The Pledge Custodian shall be entitled to assume that no Event of
Default shall have occurred and be continuing, unless the Pledge Custodian has
received written notice from Freddie Mac that such an Event of Default has
occurred and is continuing and specifying the nature of the Event of
Default.  The Pledge Custodian may accept deposits from, lend money to, and
generally engage in any kind of business with, the Sponsor and its Affiliates as
if it were not the agent of Freddie Mac.
 
 
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(e) None of the provisions contained in this Article VIII shall require the
Pledge Custodian to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers under this Article VIII except for any liability of the
Pledge Custodian arising from its own negligence or willful misconduct.
 
(f) Notwithstanding any other provisions in this Agreement to the contrary, in
no event shall the Pledge Custodian be liable for special, consequential or
punitive damages.
 
Section 8.13 Successor Pledge Custodian.
 
(a) If Freddie Mac no longer acts as Pledge Custodian, if required by the
successor pledge custodian or Freddie Mac, the Sponsor and the successor pledge
custodian shall execute a new pledge, security and custody agreement that
contains substantially the same terms as Article VIII of this Agreement and
which is in form and substance satisfactory to Freddie Mac.  The Pledge
Custodian acting under this Agreement may at any time resign by an instrument in
writing addressed and delivered to the Sponsor and, if applicable, Freddie Mac
(provided, however, that, if the Pledge Custodian (if other than Freddie Mac) is
Administrator under the Series Certificate Agreement, the Pledge Custodian must
have resigned as Administrator under the Series Certificate Agreement), and may
be removed at any time with or without cause by an instrument in writing duly
executed by or on behalf of Freddie Mac.
 
(b) Freddie Mac shall have the right to appoint a successor Pledge Custodian
upon any such resignation or removal by an instrument of substitution complying
with the requirements of applicable law, or, in the absence of any such
requirements, without formality other than appointment and designation in
writing (which appointment, provided no Event of Default exists hereunder, shall
be subject to the prior consent of the Sponsor, which consent shall not be
unreasonably withheld).  Upon the making and acceptance of such appointment, the
execution and delivery by such successor Pledge Custodian of a ratifying
instrument pursuant to which such successor Pledge Custodian agrees to assume
the duties and obligations imposed on the Pledge Custodian by the terms of this
Agreement, and the delivery to such successor Pledge Custodian of the
Pledged  Security Collateral and documents and instruments then held by the
retiring Pledge Custodian, such successor Pledge Custodian shall thereupon
succeed to and become vested with all the estate, rights, powers, remedies,
privileges, immunities, indemnities, duties and obligations by this Agreement
granted to or conferred or imposed upon the Pledge Custodian named in this
Agreement, and any such appointment and designation shall not exhaust the right
to appoint and designate further successor Pledge Custodians under this
Agreement.  No Pledge Custodian shall be discharged from its duties or
obligations under this Agreement until the Pledged Security Collateral and
documents and instruments then held by such Pledge Custodian shall have been
transferred or delivered to the successor Pledge Custodian, and until such
retiring Pledge Custodian shall have executed and delivered to the successor
Pledge Custodian appropriate instruments assigning the retiring Pledge
Custodian’s security or other interest in the Pledged Security Collateral to the
successor Pledge Custodian.  The retiring Pledge Custodian shall not be required
to make any representation or warranty in connection with any such transfer or
assignment.
 
 
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(c) If no successor Pledge Custodian shall be appointed, as provided above, or,
if appointed, shall not have accepted its appointment within thirty (30) days
after the resignation or removal of the retiring Pledge Custodian, then the
retiring Pledge Custodian may appoint a successor Pledge Custodian.  Each such
successor Pledge Custodian shall provide the Sponsor and Freddie Mac with its
address, to be used for purposes of Section 9.6, in a notice complying with the
terms of Section 9.6.  Notwithstanding the resignation or removal of any
retiring Pledge Custodian under this Agreement, the provisions of this Agreement
shall continue to inure to the benefit of such Pledge Custodian in respect of
any action taken or omitted to be taken by such Pledge Custodian in its capacity
as such while it was Pledge Custodian under this Agreement.
 
Section 8.14 Qualifications of Pledge Custodian.  Any Pledge Custodian at any
time acting under this Agreement must at all times be either Freddie Mac or a
bank or trust company organized under the laws of the United States of America
or any state of the United States, having a combined capital stock, surplus and
undivided profits aggregating at least $50,000,000 (or be the wholly-owned
subsidiary of a corporation or other entity meeting such requirement) or have at
least $500,000,000 in assets under trust management.
 
Section 8.15 Application of Proceeds.  The Pledge Custodian shall apply the cash
proceeds actually received from any sale or other disposition of the Pledged
Security Collateral following an Event of Default as provided in Section 7.2(b).
 
Section 8.16 No Additional Waiver Implied by One Waiver.  If any provision of
this Article VIII is breached by the Sponsor and thereafter waived by the Pledge
Custodian, such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach under this Article VIII; provided
that no waiver of any breach or default hereunder may be granted by the Pledge
Custodian without the prior written consent of Freddie Mac.  Any forbearance by
the Pledge Custodian to demand payment for any amounts payable under this
Article VIII shall be limited to the particular payment for which the Pledge
Custodian forbears demand for payment and will not be deemed a forbearance to
demand any other amount payable under this Article VIII.
 
Section 8.17 Cooperation.  At any time, and from time to time after the date of
this Agreement, the Sponsor shall, at the request of the Pledge Custodian or
Freddie Mac (if not serving as Pledge Custodian), execute and deliver any
instruments or documents, including U.C.C. financing and continuation statements
in favor of the Pledge Custodian, reflecting the Pledge Custodian’s security
interest in the Pledged Security Collateral, and shall take all such further
actions as such party may reasonably request in order to consummate and make
effective the transactions contemplated by this Agreement.
 
Section 8.18 Termination.  The assignments, pledges and security interests
created or granted by this Article VIII shall terminate contemporaneously with
the termination of this Agreement, at which time the Pledge Custodian shall
reassign, without recourse to, or any warranty whatsoever by the Pledge
Custodian, and deliver to the Sponsor (or permitted transferees thereof under
Section 8.19), as applicable, all Pledged Security Collateral and documents then
in the custody or possession of the Pledge Custodian, and, if requested by the
Sponsor, shall execute and deliver to the Class B Beneficial Owners in
accordance with Sections 8.5 and 8.6, all Pledged Security Collateral and
documents then in the custody or possession of the Pledge Custodian, and, if
requested by the Sponsor, shall execute and deliver to the Sponsor for recording
or filing in each office in which any assignment or financing statement relative
to the Pledged Security Collateral or the agreements relating thereto, or any
part thereof, shall have been filed or recorded, a termination statement or
release under applicable law (including, if relevant, the U.C.C.) releasing the
Pledge Custodian’s interest therein, and such other documents and instruments as
the Sponsor may reasonably request, all without recourse to or any warranty
whatsoever by the Pledge Custodian, and at the cost and expense of the
Sponsor.  Freddie Mac shall notify the Pledge Custodian in writing of any such
termination, and the Pledge Custodian shall be entitled to rely upon such
notice.
 
 
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Section 8.19 Transfers.  Notwithstanding any other provision of this Agreement
or any other Sponsor Document, subject to the provisions of the Series
Certificate Agreement regarding (i) the delivery of an investor letter and (ii)
the requirement that any transfer of a beneficial ownership interest in the
Class B Certificates shall be made only in accordance with or subject to an
exemption from, the Securities Act of 1933, as amended, the Sponsor and any
transferee thereof shall be permitted to transfer any portion of its beneficial
ownership interest in Class B Certificates (provided the Sponsor shall at all
times maintain the Minimum Sponsor Interest).  Any beneficial ownership interest
in a Class B Certificate transferred, and all proceeds thereof, shall
nonetheless remain Pledged Security Collateral subject to the security interest
created by this Agreement, and each transferee shall be deemed to have agreed to
each and every provision of this Agreement, including without limitation (a) the
assignment and pledge to the Pledge Custodian and grant to the Pledge Custodian,
for the benefit of Freddie Mac, of a continuing security interest in and a lien
on, all of its right, title and interest in and to the Class B Certificates
acquired and all proceeds thereof, pursuant to Section 8.1 and (b) the
appointment and powers of the Pledge Custodian as collateral agent for Freddie
Mac as set forth in this Article VIII.  In addition, the Pledge Custodian shall
have no duty to ascertain the identity of any transferee of a beneficial
ownership interest in the Class B Certificates, and shall make all payments with
respect to any Class B Certificate that is permitted to be paid to the Sponsor
only to the Sponsor or a single entity designated by the Sponsor in accordance
with the written instructions thereof.  The Pledge Custodian shall be permitted
to rely on and assume the accuracy of any such instructions.
 
Section 8.20 Representations and Warranties of the Pledge Custodian.  The Pledge
Custodian represents and warrants to the Sponsor that:
 
(i) it has the power and authority to execute and deliver, and perform its
obligations under, this Agreement;
 
(ii) all corporate action required to authorize the acceptance of its
appointment as Pledge Custodian hereunder and the execution, delivery and
performance of this Agreement and the effectuation of the transactions provided
for in this Agreement has been duly taken; and
 
(iii) this Agreement has been duly and validly executed by the Pledge Custodian
and constitutes the valid and binding obligation of the Pledge Custodian,
enforceable against the Pledge Custodian in accordance with its terms, subject
only to bankruptcy and other similar laws affecting creditors’ rights generally
and general principles of equity.
 
 
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ARTICLE IX 
MISCELLANEOUS
 
Section 9.1 Counterparts.  This Agreement may be executed in counterparts by the
parties hereto, and each such counterpart shall be considered an original, and
all such counterparts shall constitute one and the same instrument.
 
Section 9.2 Amendments, Changes and Modifications.  This Agreement may be
amended, changed, modified, altered or terminated only by a written instrument
or written instruments signed by the parties to this Agreement.  No course of
dealing among the Sponsor and Freddie Mac, nor any delay in exercising any
rights hereunder, shall operate as a waiver of any rights of Freddie Mac
hereunder.  Unless otherwise specified in such waiver or consent, a waiver or
consent given hereunder shall be effective only in the specific instance, and
for the specific purpose for which given.
 
Section 9.3 Payment Procedure.  All amounts due to Freddie Mac under Article III
of this Agreement shall be paid to Freddie Mac.  All such payments shall be paid
in lawful currency of the United States of America and in immediately available
funds in accordance with instructions given to the Sponsor by Freddie Mac to an
account designated in writing by Freddie Mac before 2:00 p.m. (Washington, D.C.
time) on the date when due, unless the Sponsor is otherwise instructed in
writing by Freddie Mac.
 
Section 9.4 Payments on Business Days.  In any case where the date of payment to
Freddie Mac or the expiration of any time period hereunder occurs on a day which
is not a Business Day, then such payment or expiration of such time period need
not occur on such date but may be made on the next succeeding Business Day with
the same force and effect as if made on the day of maturity or expiration of
such period, except that interest shall continue to accrue for the period after
such date to the next Business Day.
 
Section 9.5 Governing Law; Severability.  This Agreement shall be construed, and
the rights and obligations of Freddie Mac and the Sponsor hereunder determined,
in accordance with federal statutory or common law (“federal law”).  Insofar as
there may be no applicable rule or precedent under federal law and insofar as to
do so would not frustrate the purposes of any provision of this Agreement and
the Freddie Mac Act, the local law of the State of New York shall be deemed
reflective of federal law.  The parties agree that any legal actions among
Freddie Mac and the Sponsor regarding each party hereunder shall be originated
in the United States District Court in and for the Eastern District of Virginia,
and the parties hereby consent to the jurisdiction and venue of said Court in
connection with any action or proceeding initiated concerning this Agreement.
 
The invalidity or enforceability of any provision of this Agreement shall not
affect the validity of any other provision, and all other provisions shall
remain in full force and effect.
 
 
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Section 9.6 Notices.  All notices, directions, certificates or other
communications hereunder to Freddie Mac or the Sponsor shall be deemed to be
given (unless another form of notice shall be specifically set forth in this
Agreement) on the Business Day following the date on which the same shall have
been delivered to a national overnight delivery service (receipt of which to be
evidenced by a signed receipt for overnight delivery service) with arrangements
made for payment of all charges, for next Business Day delivery, addressed as
set forth below.  All notices, directions, certificates or other communications
to the Pledge Custodian or the Administrator shall be given and addressed in
accordance with this Agreement and the Series Certificate Agreement.
 
Freddie Mac:                         Federal Home Loan Mortgage Corporation
8100 Jones Branch Drive
McLean, Virginia  22102-3110
Attention:  Director of Multifamily Management and Information Control
         Control
Facsimile:  (703) 714-3273
Telephone:  (703) 903-2000

with a copy to:                      Federal Home Loan Mortgage Corporation
8200 Jones Branch Drive
McLean, Virginia  22102-3110
Attention:  Associate General Counsel – Negotiated
        Transactions
Facsimile:  (703) 903-3693
Telephone:  (703) 903-2000

with a copy to:                      Federal Home Loan Mortgage Corporation
8100 Jones Branch Drive
McLean, Virginia  22102
Attention:  Director of Multifamily Loan Servicing
Facsimile:  (703) 714-3003
Telephone:  (703) 903-2000
 
Sponsor:                                ATAX TEBS I, LLC
1004 Farnam Street, Suite 400
Omaha, NE 68102
Attention: Chad L. Daffer
Facsimile:  (402) 930-3047
Telephone:  (402) 930-3085
 
With a copy to:
Thomas Mcleay, Esq., General Counsel
1004 Farnam Street, Suite 400
Omaha, Nebraska 68102
Attention: Chad L. Daffer
Phone: 402.930.3085
Fax: 402.930.3047

 
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with a copy to:
Kutak Rock LLP
1650 Farnam Street
Omaha, Nebraska 68102
Attention:  Patricia A. Burdyny
Facsimile:  (402) 346-1148
Telephone: (402) 346-6000
 
Section 9.7 Further Assurances and Corrective Instruments.  To the extent
permitted by law, the parties to this Agreement agree that they will, from time
to time, execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, such supplements to this Agreement and such further instruments
as Freddie Mac may request and as may be reasonably required in the opinion of
Freddie Mac or its counsel to effectuate the intention of or to facilitate the
performance of this Agreement or any other Sponsor Document.
 
Section 9.8 Term of this Agreement.  The term of this Agreement (the “Term”)
shall continue in full force and effect, and Sponsor shall not be released from
liability under this Agreement until the later of (a) the Terminating Mandatory
Tender Date, (b) the date on which Freddie Mac has no further liability (accrued
or contingent) under the Series Certificate Agreement and (c) the date on which
Freddie Mac has been paid all amounts due it under this Agreement, under the
other Sponsor Documents and otherwise with respect to the
Obligations.  Notwithstanding such termination, the provisions of Sections 2.1,
2.2, 2.4 and Section 3.12 hereof shall survive the expiration or termination of
this Agreement.
 
Section 9.9 Assignments; Transfers; Third-Parties Rights.  The Sponsor shall not
assign this Agreement, or delegate any of its obligations hereunder, without the
prior written consent of Freddie Mac.  This Agreement may not be transferred in
any respect without the prior written consent of Freddie Mac.  Nothing in this
Agreement shall confer any right upon the owner or holder of any Certificate or
upon any other Person other than the parties hereto and their successors and
permitted assigns.
 
Section 9.10 Headings.  Article and section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
 
Section 9.11 Limitation on Personal Liability.
 
(a) Except as otherwise provided in Section 9.11(b), neither the Sponsor nor its
officers, directors, partners, members, managers or employees, shall have
personal liability under this Agreement or any other Sponsor Document for the
payment of the payment Obligations or for the performance of any other
Obligations of the Sponsor under the Sponsor Documents, and Freddie Mac’s only
recourse for the satisfaction or performance of the Obligations shall be Freddie
Mac’s exercise of its rights and remedies with respect to the UCC Collateral and
any other collateral held by Freddie Mac as security for the Obligations.  The
foregoing notwithstanding, the Sponsor acknowledges that this Section 9.11(a)
shall not be construed as limiting the coverage of, or any of Freddie Mac’s
rights under, the Guaranty.
 
 
69

--------------------------------------------------------------------------------

 
(b) The Sponsor shall be personally liable to Freddie Mac for its damages,
losses or expenses, as applicable upon the occurrence of any of the following:
(1) fraud or written material misrepresentation by the Sponsor, or any Sponsor
Affiliate, or any officer, director, partner, member, manager or employee of the
Sponsor, or any Sponsor Affiliate, in connection with the application for or
creation of the Obligations or any request for any action or consent by Freddie
Mac, (2) any costs and expenses incurred by Freddie Mac in connection with the
collection of any amount for which the Sponsor is personally liable under this
Section, including fees and out of pocket expenses of attorneys and expert
witnesses and the costs of conducting any independent audit of the Sponsor’s and
any Sponsor Affiliate’s books and records to determine the amount for which the
Sponsor has personal liability; and (3) any Breach that is uncured by the
Sponsor in the event the Sponsor does not fulfill its obligations under
Section 2.4(c).  In addition, the Sponsor shall be personally liable to Freddie
Mac for indemnification obligations under Section 3.12.
 
(c) To the extent that the Sponsor has personal liability under this
Section 9.11, Freddie Mac may exercise its rights against the Sponsor personally
without regard to whether Freddie Mac has exercised any rights against the UCC
Collateral or any other security or pursued any rights against any guarantor or
pursued any other rights available to Freddie Mac under this Agreement, any
other Sponsor Document or applicable law.
 
Section 9.12 Consent of Freddie Mac.  Whenever Freddie Mac shall have any right
or option to exercise any  discretion, to determine any matter, to accept any
presentation or to approve any matter, such exercise, determination, acceptance
or approval shall, unless otherwise specifically provided, be in Freddie Mac’s
sole and absolute discretion.
 
Section 9.13 Disclaimer; Acknowledgments.  Approval by Freddie Mac of the
Sponsor, any Sponsor Affiliate, the Remarketing Agent, the Sponsor Documents,
any Owner Documents, any Mortgaged Property, the Bonds, the Custodial Receipts
or otherwise shall not constitute a warranty or representation by Freddie Mac as
to any matter.  Nothing set forth in this Agreement, in any of the other Sponsor
Documents or in the subsequent conduct of the parties shall be deemed to
constitute Freddie Mac as the partner or joint venturer of the Sponsor, any
Sponsor Affiliate, or any Person for any purpose whatsoever.
 
Section 9.14 Entire Agreement.  This Agreement and the Sponsor Documents
constitute the entire contract between the parties relative to the subject
matter hereof.  Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the Sponsor
Documents.  Nothing in this Agreement or the Sponsor Documents, expressed or
implied, is intended to confer upon any party, other than the parties hereto and
thereto, any rights, remedies, obligations or liabilities under or by reason of
this Agreement or the Sponsor Documents; provided, however, that as to Persons
other than Freddie Mac and the Sponsor that are parties to any of the Sponsor
Documents, such Persons shall not have any rights, remedies, obligations or
liabilities under this Agreement or any of the Sponsor Documents except under
such Sponsor Documents to which such Persons are directly parties.
 
Section 9.15 Survival of Representation and Warranties.  All statements
contained in any Sponsor Document, or in any certificate, financial statement or
other instrument delivered by or on behalf of the Sponsor pursuant to or in
connection with this Agreement (including but not limited to any such statement
made in or in connection with any amendment hereto or thereto) shall constitute
representations and warranties made under this Agreement.  All representations
and warranties made under this Agreement (a) shall be made and shall be true at
and as of the Closing Date and (b) shall survive the execution and delivery of
this Agreement, regardless of any investigation made by Freddie Mac or on its
behalf.
 
 
70

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Section 9.16 Waiver of Claims.  IN ORDER TO INDUCE FREDDIE MAC TO EXECUTE AND
DELIVER THE SERIES CERTIFICATE AGREEMENT, THE SPONSOR HEREBY REPRESENTS AND
WARRANTS THAT IT HAS NO CLAIMS, SET-OFFS OR DEFENSES AS OF THE CLOSING DATE IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR IN CONNECTION
WITH ANY OF THE OTHER SPONSOR DOCUMENTS.  TO THE EXTENT ANY SUCH CLAIMS,
SET-OFFS OR DEFENSES MAY EXIST, WHETHER KNOWN OR UNKNOWN, THEY ARE EACH HEREBY
WAIVED AND RELINQUISHED IN THEIR ENTIRETY.
 
Section 9.17 Waivers of Jury Trial.  THE SPONSOR AND FREDDIE MAC EACH (A)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE
ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP BETWEEN THE SPONSOR AND
FREDDIE MAC AS CREDIT FACILITY PROVIDER, LIQUIDITY FACILITY PROVIDER, PLEDGE
CUSTODIAN AND ADMINISTRATOR THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY
SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY
IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL.
 
[Signatures follow]
 

 
71

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IN WITNESS WHEREOF, the Sponsor and Freddie Mac have executed this Reimbursement
Agreement as of the day and year first above written.
 
FEDERAL HOME LOAN MORTGAGE
CORPORATION
 
By:             /s/ Clayton A.
Davis                                                              
Clayton A. Davis
Director, Multifamily Structured and
Affordable Executions
 
 

 

 

 

 

 

 

 

 

 

 

 
[Signature page to ATAX TEBS Reimbursement Agreement]

 
 

--------------------------------------------------------------------------------

 

ATAX TEBS I, LLC,  a Delaware limited liability company

 
By:
AMERICA FIRST TAX EXEMPT INVESTORS, L.P., a Delaware limited partnership, Member

 
 
By:
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited
partnership

 
Its:
General Partner

 
 
By:
THE BURLINGTON CAPITAL GROUP LLC, a Delaware limited liability company

Its:         General Partner
 
By:            /s/ Michael J.
Draper                                              
Michael J. Draper
Chief Financial Officer
 

 

 

 

 

 

 

 
[Counterpart Signature page to ATAX TEBS Reimbursement Agreement]

 
 

--------------------------------------------------------------------------------

 

SCHEDULE A
 

 
MORTGAGED PROPERTIES & YIELD MAINTENANCE PERIOD
 
Property Name and Location
Yield Maintenance End Date
Ashley Square (The Mill Apartments), Des Moines, Iowa
December 1, 2004
Bella Vista Apartments, Cooke County, Texas
April 1, 2016
Bent Tree Apartments, Columbia, South Carolina
Closing Date
Bridle Ridge Apartments, Greer, South Carolina
January 1, 2018
Brookstone Apartments, Waukegan, Illinois
November 1, 2024
Crescent Village, West Chester, Ohio
July 1, 2019
Cross Creek Apartments, Beaufort, South Carolina
September 1, 2022
Fairmont Oaks Apartments, Gainesville, Florida
April 1, 2008
Lake Forest Apartments, Daytona Beach, Florida
Closing Date
Post Woods, Reynoldsburg, Ohio
July 1, 2019
Runnymede Apartments, Travis County, Texas
October 1, 2017
Southpark Apartments, Austin, Texas
December 1, 2021
The Villages at Lost Creek Apartments, San Antonio, Texas
June 1, 2018
Willow Bend, Hilliard, Ohio
July 1, 2019
Woodlynn Village, City of Maplewood, Minnesota
November 1, 2017

A-1 
 

--------------------------------------------------------------------------------

 

SCHEDULE A-1
 

 
BONDS
 
Related Mortgaged Property
Bonds**
 
1. 
 
Ashley Square (The Mill Apartments)
$6,500,000 Iowa Finance Authority Multifamily Mortgage Revenue Refunding Bonds
(The Mill Apartments Project) Series 1999A
 
2. 
 
Bella Vista Apartments
$6,800,000 Texas Department of Housing and Community Affairs Multifamily Housing
Revenue Bonds (Bella Vista Apartments) Series 2006
 
3. 
 
Bent Tree Apartments
$11,130,000 South Carolina State Housing Finance and Development Authority
Multifamily Rental Housing Revenue Refunding Bonds (Bent Tree Apartments
Project) Series 2000H-1
 
4. 
 
Bridle Ridge Apartments
$7,885,000 South Carolina State Housing Finance and Development Authority
Multifamily Rental Housing Revenue Bonds (Bridle Ridge Apartments) Series 2008
 
5. 
 
Brookstone Apartments
$9,600,000 The County of Lake, Illinois Multifamily Housing Revenue Bonds
(Brookstone Apartments Project) Series 2007
 
6. 
 
Cross Creek Apartments
$8,850,000 South Carolina State Housing Finance and Development Authority
Multifamily Rental Housing Revenue Bonds (Cross Creek Apartments Project) Series
2005
 
7. 
 
Fairmont Oaks Apartments
Senior Beneficial Ownership Interest Certificate relating to $8,020,000 Florida
Housing Finance Corporation Multifamily Mortgage Revenue Refunding Bonds 2003
Series I (Fairmont Oaks Apartments)
 
8. 
 
Lake Forest Apartments
Senior Beneficial Ownership Interest Certificate relating to $10,620,000 Florida
Housing Finance Corporation Multifamily Housing Revenue Refunding Bonds 2001
Series G (Lake Forest Apartments)
 
9. 
 
Ohio Portfolio:
Crescent Village
Post Woods
Willow Bend
$14,708,000 Ohio Housing Finance Agency Multifamily Housing Revenue Bonds
(Foundation for Affordable Housing Portfolio Project) Series 2010A
 
10. 
 
Runnymede Apartments
$10,825,000 Austin Housing Finance Corporation Multifamily Housing Revenue Bonds
(Runnymede Apartments Project) Series 2007
 
11. 
 
Southpark Apartments
$14,175,000 Strategic Housing Finance Corporation of Travis County Multifamily
Housing Mortgage Revenue Bonds (Southpark Apartments) Series 2006
 
12. 
 
The Villages at Lost Creek Apartments
$18,500,000 Bexar County Housing Finance Authority Multifamily Housing Revenue
Bonds (The Villages at Lost Creek Apartments Project) Series 2006A-1
 
13. 
 
Woodlynn Village
$4,550,000 City of Maplewood, Minnesota Multifamily Housing Revenue Bonds
(Woodlynn Village Project) Series 2007

 
**Original principal amount at bond issuance shown; see Schedule A-2 for
principal amount deposited into Series Pool.

A-1-1 
 

--------------------------------------------------------------------------------

 

SCHEDULE A-2
 
ENHANCED BONDS AND ENHANCED CUSTODIAL RECEIPTS
 
I.           ENHANCED BONDS
 

 
 
Bond Designation
Principal
Amount Deposited
1.
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Bonds (Bridle Ridge Apartments) Series 2008
$ 7,865,000
2.
Senior Beneficial Ownership Interest Certificate relating to Florida Housing
Finance Corporation Multifamily Mortgage Revenue Refunding Bonds 2003 Series I
(Fairmont Oaks Apartments)
$ 7,610,000
3.
Ohio Housing Finance Agency Multifamily Housing Revenue Bonds (Foundation for
Affordable Housing Portfolio Project) Series  2010A
$14,708,000
4.
Austin Housing Finance Corporation Multifamily Housing Revenue Bonds (Runnymede
Apartments Project) Series 2007
$10,790,000
5.
Strategic Housing Finance Corporation of Travis County Multifamily Housing
Mortgage Revenue Bonds (Southpark Apartments) Series 2006
$14,175,000

 
II.           ENHANCED CUSTODIAL RECEIPTS AND RELATED BONDS
 
 
 
 
Underlying Bonds
 
Enhanced
Custodial Receipt
    Designation     
Original Principal Amount Deposited
Iowa Finance Authority Multifamily Mortgage Revenue Refunding Bonds (The Mill
Apartments Project) Series 1999A
RA-1
$4,805,000
Texas Department of Housing and Community Affairs Multifamily Housing Revenue
Bonds (Bella Vista Apartments) Series 2006
RA-2
$5,510,000
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Refunding Bonds (Bent Tree Apartments Project) Series
2000H-1
RA-3
$7,160,000
The County of Lake, Illinois Multifamily Housing Revenue Bonds (Brookstone
Apartments Project) Series 2007
RA-4
$6,763,000
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Bonds (Cross Creek Apartments Project) Series 2005
RA-5
$7,832,000
Senior Beneficial Ownership Interest Certificate relating to Florida Housing
Finance Corporation Multifamily Housing Revenue Refunding Bonds 2001 Series G
(Lake Forest Apartments)
RA-6
$8,930,000
Bexar County Housing Finance Authority Multifamily Housing Revenue Bonds (The
Villages at Lost Creek Apartments Project) Series 2006A-1
RA-7-1
$9,635,000
Bexar County Housing Finance Authority Multifamily Housing Revenue Bonds (The
Villages at Lost Creek Apartments Project) Series 2006A-1
RA-7-2
$6,420,000
City of Maplewood, Minnesota Multifamily Housing Revenue Bonds (Woodlynn Village
Project) Series 2007
RA-8
$3,933,000

 

A-2 
 

--------------------------------------------------------------------------------

 

SCHEDULE A-3
 
SUBORDINATE CUSTODIAL RECEIPTS AND RELATED BONDS
 
 
 
 
Underlying Bonds
 
Subordinate Custodial Receipt
    Designation    
Original Principal Amount
Deposited
Iowa Finance Authority Multifamily Mortgage Revenue Refunding Bonds (The Mill
Apartments Project) Series 1999A
RB-1
$563,000
Texas Department of Housing and Community Affairs Multifamily Housing Revenue
Bonds (Bella Vista Apartments) Series 2006
RB-2
$1,185,000
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Refunding Bonds (Bent Tree Apartments Project) Series
2000H-1
RB-3
$603,000
The County of Lake, Illinois Multifamily Housing Revenue Bonds (Brookstone
Apartments Project) Series 2007
RB-4
$2,814,794
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Bonds (Cross Creek Apartments Project) Series 2005
RB-5
$880,029
Senior Beneficial Ownership Interest Certificate relating to Florida Housing
Finance Corporation Multifamily Housing Revenue Refunding Bonds 2001 Series G
(Lake Forest Apartments)
RB-6
$388,000
Bexar County Housing Finance Authority Multifamily Housing Revenue Bonds (The
Villages at Lost Creek Apartments Project) Series 2006A-1
RB-7
$2,445,000
City of Maplewood, Minnesota Multifamily Housing Revenue Bonds (Woodlynn Village
Project) Series 2007
RB-8
$603,000

 

A-3 
 

--------------------------------------------------------------------------------

 

SCHEDULE A-4
 
PRE-SELECTED DEPOSITED ASSETS
 
(1)
Custodial Receipt No. RA-1 relating to:

Iowa Finance Authority Multifamily Mortgage Revenue Refunding Bonds
(The Mill Apartments Project) Series 1999A

(2)
Custodial Receipt No. RA-3 relating to:

South Carolina State Housing Finance and Development Authority
Multifamily Rental Housing Revenue Refunding Bonds
(Bent Tree Apartments Project) Series 2000H-1

(3)
Custodial Receipt No. RA-6 relating to:

Senior Beneficial Ownership Interest Certificate relating to Florida Housing
Finance
  Corporation
Multifamily Housing Revenue Refunding Bonds
2001 Series G (Lake Forest Apartments)

(4)
Senior Beneficial Ownership Interest Certificate relating to:

Florida Housing Finance  Corporation
Multifamily Mortgage Revenue Refunding Bonds
2003 Series I (Fairmont Oaks Apartments)

A-4 
 

--------------------------------------------------------------------------------

 

SCHEDULE B
 

 
QUALIFICATIONS TO REPRESENTATIONS AND WARRANTIES
 

§ 2.1(d)(iii):                      The following Mortgaged Properties are
undergoing rehabilitation:
·  
Crescent Village

·  
Post Woods

·  
Willow Bend

The following Mortgaged Properties  are subject to the requirements of the
Repair Escrow Agreement:  Ashley Square, Bent Tree, Bridle Ridge, Brookstone,
Fairmont Oaks, Lake Forest, Runnymede, South Park, Villages at Lost Creek,
Woodlynn Village.

§ 2.1(g):                      The proceeds of the Bonds relating to the
following Mortgaged Properties are subject to disbursement in accordance with
the related disbursing and servicing agreement.
·  
Crescent Village

·  
Post Woods

·  
Willow Bend

§ 2.1(i):                      The following Mortgaged Properties do not satisfy
the representations due to:
·  
Villages at Lost Creek:  Property taxes have been declared due and payable due
to loss of exemption.

·  
Crescent Village, Post Woods and Willow Bend have 3 Bond Mortgages but only one
Loan Agreement and Bond Mortgage Note

§ 2.1(r):                      The following Mortgaged Properties do not satisfy
the representations due to:
·  
Southpark Ranch:

The Borrower does not hold its interest in the Mortgaged Property in fee simple,
but pursuant to a ground lease.

·  
Fairmont Oaks:

Access Endorsement not issued.  This endorsement is unavailable in Florida.

·  
Lake Forest:

Access Endorsement not issued.  This endorsement is unavailable in Florida.

§ 2.1(s)
·  
Villages at Lost Creek:

Real estate taxes owing in the approximate amount of $409,000 (with accrued
interested the current amount is approximately $428,000 and will be
approximately $454,000 as of the Closing Date).

B-1
 

--------------------------------------------------------------------------------

 
§ 2.1(y)(vii):                      The following Mortgaged Property has a
ground lease:
·  
Southpark Ranch

§ 2.1(hh)(i) and (ii):                                           The following
Mortgaged Properties have subordinate mortgage notes, secured by mortgages,
payable to Sponsor Affiliate:
·  
Bella Vista

·  
Bent Tree

·  
Ashley Square

·  
Fairmont Oaks

·  
Lake Forest

·  
Woodlynn Village

§ 2.1(pp) :                      The following Mortgaged Properties have been
relying on exemptions from real estate taxes, but a recent Texas court holding
may result in loss of exemption:
·  
Bella Vista

·  
Runnymede

·  
South Park Ranch

·  
Villages at Lost Creek

 

 

B-2 
 

--------------------------------------------------------------------------------

 

SCHEDULE C
 

 
BOND MORTGAGE NOTE RATES
 
Bond Mortgage Mortgaged Property
Note Rate (%)
Ashley Square (The Mill Apartments), Des Moines, Iowa
6.25
Bella Vista Apartments, Cooke County, Texas
6.15
Bent Tree Apartments, Columbia, South Carolina
6.25
Bridle Ridge Apartments, Greer, South Carolina
6.00
Brookstone Apartments, Waukegan, Illinois
5.445
Crescent Village, West Chester, Ohio
7.00
Cross Creek Apartments, Beaufort, South Carolina
6.15
Fairmont Oaks Apartments, Gainesville, Florida
6.30
Lake Forest Apartments, Daytona Beach, Florida
6.25
Post Woods, Reynoldsburg, Ohio
7.00
Runnymede Apartments, Travis County, Texas
6.00
Southpark Apartments, Austin, Texas
6.125
The Villages at Lost Creek Apartments, San Antonio, Texas
6.25
Willow Bend, Hilliard, Ohio
7.00
Woodlynn Village, City of Maplewood, Minnesota
6.00

C-1 
 

--------------------------------------------------------------------------------

 

EXHIBIT I
 

 
TAX CREDIT AGENCY LETTERS APPLICABLE TO MORTGAGED PROPERTIES
 

None.

 
 

--------------------------------------------------------------------------------

 

EXHIBIT II
 

 
AMORTIZATION SCHEDULES
 
See Data Tape.

 
 

--------------------------------------------------------------------------------

 

EXHIBIT III
 

 
PREPAYMENT SCHEDULES
 
Bonds
First Optional Redemption at Par
Iowa Finance Authority Multifamily Mortgage Revenue Refunding Bonds (The Mill
Apartments Project) Series 1999A
Closing Date
Texas Department of Housing and Community Affairs Multifamily Housing Revenue
Bonds (Bella Vista Apartments) Series 2006
April 1, 2016
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Refunding Bonds (Bent Tree Apartments Project) Series
2000H-1
Closing Date
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Bonds (Bridle Ridge Apartments) Series 2008
January 1, 2018
The County of Lake, Illinois Multifamily Housing Revenue Bonds (Brookstone
Apartments Project) Series 2007
November 1, 2024
South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Bonds (Cross Creek Apartments Project) Series 2005
September 1, 2022
Senior Beneficial Ownership Interest Certificate relating to Florida Housing
Finance Corporation Multifamily Mortgage Revenue Refunding Bonds 2003 Series I
(Fairmont Oaks Apartments)
April 1, 2008
Senior Beneficial Ownership Interest Certificate relating to Florida Housing
Finance Corporation Multifamily Housing Revenue Refunding Bonds 2001 Series G
(Lake Forest Apartments)
Closing Date
Ohio Housing Finance Agency Multifamily Housing Revenue Bonds (Foundation for
Affordable Housing Portfolio Project) Series 2010A
July 1, 2019
Austin Housing Finance Corporation Multifamily Housing Revenue Bonds (Runnymede
Apartments Project) Series 2007
October 1, 2017
Strategic Housing Finance Corporation of Travis County Multifamily Housing
Mortgage Revenue Bonds (Southpark Apartments) Series 2006
December 1, 2021
Bexar County Housing Finance Authority Multifamily Housing Revenue Bonds (The
Villages at Lost Creek Apartments Project) Series 2006A-1
June 1, 2018
City of Maplewood, Minnesota Multifamily Housing Revenue Bonds (Woodlynn Village
Project) Series 2007
November 1, 2017