Exhibit 10.3

 

BOND EXCHANGE,

REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT

 

 

between

 

 

FEDERAL HOME LOAN MORTGAGE CORPORATION

 

 

 

and

 

 

 

ATAX TEBS IV, LLC

as Sponsor

 

 

Relating to

 

 

Freddie Mac

Multifamily M Certificates

Series M-045

 

 

 

Dated as of August 1, 2018

 

 

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TABLE OF CONTENTS

 

 

 

Page

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

 

 

Section 1.1

Definitions

2

Section 1.2

Interpretation

9

 

 

 

ARTICLE II

REPRESENTATIONS, COVENANTS, WARRANTIES AND CONDITIONS

 

 

 

Section 2.1

Representations and Warranties

10

Section 2.2

Other Representations and Warranties by the Sponsor and Representations and
Warranties by Freddie Mac.

23

Section 2.3

Conditions

26

Section 2.4

Breach of Representations and Warranties

29

 

 

 

ARTICLE III

COVENANTS OF THE SPONSOR

 

 

 

Section 3.1

Freddie Mac Closing Fee and Closing Expenses; Other Closing Costs and Initial
Deposits

31

Section 3.2

Reimbursement of Credit Advances

31

Section 3.3

Scheduled Payments and Deposits

31

Section 3.4

[Reserved]

31

Section 3.5

Payment of Costs, Fees and Expenses

32

Section 3.6

Application and Timing of Payments

33

Section 3.7

[Reserved]

34

Section 3.8

Payment of Prepayment/Substitution Premium

34

Section 3.9

Substitution of Credit Enhancement

35

Section 3.10

Additional Provisions Regarding Prepayment/Substitution Premium

35

Section 3.11

[Reserved]

35

Section 3.12

Indemnification

35

Section 3.13

Freddie Mac Not Liable

36

Section 3.14

[Reserved]

36

Section 3.15

Other Covenants of Sponsor

36

Section 3.16

Liability of the Sponsor

38

Section 3.17

Waivers and Consents

38

Section 3.18

Subrogation

39

Section 3.19

Substitution

39

Section 3.20

[Reserved].

42

Section 3.21

Optional Series Termination Date..

42

Section 3.22

CRA Credit

42

Section 3.23

Release Event Upon Bond Event of Default

42

Section 3.24

Loans by Guarantor or Its Affiliates

43

Section 3.25

Credit Advances; Real Estate Taxes

43

Section 3.26

Substitution Upon Sale of Pre-Selected Mortgaged Property

43

Section 3.27

[Reserved]

44

Section 3.28

Common Owner Mortgaged Properties

44

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ARTICLE IV

AGREEMENT TO EXCHANGE

 

 

 

Section 4.1

Exchange

44

Section 4.2

Mandatory Delivery; Ownership; Registration of Transfer

44

Section 4.3

Failure to Deliver

45

 

 

 

ARTICLE V

[RESERVED]

 

 

 

ARTICLE VI

UNIFORM COMMERCIAL CODE SECURITY AGREEMENT

 

 

 

ARTICLE VII

EVENTS OF DEFAULT; REMEDIES

 

 

 

Section 7.1

Events of Default

45

Section 7.2

Remedies; Waivers

47

Section 7.3

Rights with Respect to Defaults under Bond Mortgages; Bond Purchase Loan

48

Section 7.4

No Remedy Exclusive

50

 

 

 

ARTICLE VIII

PLEDGE, SECURITY AND CUSTODY OF PLEDGED SECURITY COLLATERAL

 

 

 

Section 8.1

Pledged Security Collateral

50

Section 8.2

Delivery of Pledged Security Collateral

51

Section 8.3

[Reserved]

51

Section 8.4

Amounts Received on Purchased Bonds

51

Section 8.5

Release of Purchased Bonds

51

Section 8.6

[Reserved]

51

Section 8.7

Loss to Pledged Security Collateral

51

Section 8.8

[Reserved]

51

Section 8.9

Ownership Restrictions

51

Section 8.10

Representations and Warranties of the Sponsor to the Pledge Custodian

51

Section 8.11

Custody Account

52

Section 8.12

Appointment and Powers of the Pledge Custodian

52

Section 8.13

Successor Pledge Custodian

53

Section 8.14

Qualifications of Pledge Custodian

54

Section 8.15

Application of Proceeds

54

Section 8.16

No Additional Waiver Implied by One Waiver

54

Section 8.17

Cooperation

55

Section 8.18

Termination

55

Section 8.19

Representations and Warranties of the Pledge Custodian

55

 

 

 

ARTICLE IX

MISCELLANEOUS

 

 

 

Section 9.1

Counterparts

55

Section 9.2

Amendments, Changes and Modifications

56

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Section 9.3

Payment Procedure

56

Section 9.4

Payments on Business Days

56

Section 9.5

Governing Law; Severability

56

Section 9.6

Notices

56

Section 9.7

Further Assurances and Corrective Instruments

58

Section 9.8

Term of this Agreement

58

Section 9.9

Assignments; Transfers; Third-Parties Rights

58

Section 9.10

Headings

58

Section 9.11

Limitation on Personal Liability

58

Section 9.12

Consent of Freddie Mac

59

Section 9.13

Disclaimer; Acknowledgments

59

Section 9.14

Entire Agreement

59

Section 9.15

Survival of Representation and Warranties

59

Section 9.16

Waiver of Claims

59

Section 9.17

Waivers of Jury Trial

60

 

 

 

Schedule A:

Mortgaged Properties and Yield Maintenance Period

 

Schedule A-1:

Bonds

 

Schedule A-2:

Pre-Selected Bonds

 

Schedule B:

Qualifications to Representations and Warranties

 

Exhibit I:

Mortgaged Properties with State Agency Letters

 

Exhibit II:

Mortgaged Properties and First Optional Redemption Dates

 

 

 

 

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BOND EXCHANGE, REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT

THIS BOND EXCHANGE, REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT dated as of
August 1, 2018 (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 IV,
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 various series of multifamily housing revenue bonds 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-1, the “Bonds”).

2.Freddie Mac will deposit and pool the Bonds 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.  

3.Pursuant to the Series Certificate Agreement, Freddie Mac has agreed to
provide credit enhancement with respect to the Bonds and the related
Certificates issued thereunder.

4.The Sponsor will arrange for the initial placement of the Class A Certificates
and the subordinate Class B Certificates will be initially registered in the
name of and retained by the Sponsor, subject to transfer in accordance with
Section 3.15 hereof.

5.The Class B Certificates will provide first loss support for Freddie Mac, as
Freddie Mac shall have the right to receive and reimburse itself from Available
Funds under the Series Certificate Agreement prior to the distribution of any
such funds to the Holders of Class B Certificates.  Freddie Mac will
additionally be secured by the Sponsor's pledge of any Purchased Bonds held for
the benefit of Freddie Mac pursuant to Article VIII.  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.

6.The Guarantor is providing the Guaranty to guaranty certain of the Sponsor’s
obligations hereunder.

7.The Class A Certificates will be issued at the Term Extended Rate as set forth
in the Series Certificate Agreement.

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:

 

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Article I

DEFINITIONS AND INTERPRETATION

Section 1.1Definitions.  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.

“Agreement” means this Bond Exchange, Reimbursement, Pledge and Security
Agreement, as the same may be amended, modified or supplemented from time to
time.

"Agreement Regarding Financial Monitors" means the Agreement dated as of the
date hereof by and between Freddie Mac and Burlington Capital Real Estate, LLC,
as financial monitor with respect to certain of the Bonds, and acknowledged and
agreed to by the Sponsor, as the same may be amended, modified or supplemented
from time to time.

"Berrendo Bonds" means Public Finance Authority Multifamily Housing Revenue
Bonds (Berrendo Square Apartments Project) Series 2015A.

"Bond Custody Agreement" means the Custody Agreement dated as of the date hereof
by and among U.S. Bank National Association, as custodian and America First
Multifamily Investors, L.P., as depositor thereunder, as the same may be
amended, modified or supplemented from time to time.

“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.

“Bondholder Representative” means Freddie Mac as assignee or holder, as
applicable, of all rights to control remedies as “Bondholder Representative”,
“Controlling Party”, “Servicing Agent”, “Significant Bondholder” 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,

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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 tax-exempt multifamily housing revenue bonds listed on
Schedule A-1 hereto.  Where the context requires, "Bonds" also means the related
Custodial Receipts representing beneficial ownership in such tax-exempt
multifamily housing revenue bonds which have been deposited into the Series Pool
in exchange for the related Certificates.

“Breach” shall have the meaning set forth in Section 2.4(a).

“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 Certificates” means the Class B Certificates designated as such and
issued pursuant to the Series Certificate Agreement.

“Class B Owners” means the Sponsor, any transferee from the Sponsor or any other
Person so long as it owns an interest in any Class B Certificate.

“Closing Date” means the date the Series Certificate Agreement is delivered by
Freddie Mac in its corporate capacity and as Administrator thereunder.

"Concord at Little York Bonds" means the Public Finance Authority Multifamily
Housing Revenue Bonds (Concord at Little York Apartments Project) Series 2015A.

"Concord at Williamcrest Bonds" means the Public Finance Authority Multifamily
Housing Revenue Bonds (Concord at Williamcrest Apartments Project) Series 2015A.

“Credit Advance” means any advance by Freddie Mac under this Agreement or the
Series Certificate Agreement, including but not limited to (i) an advance to pay
principal or interest distributable with respect to any Class A Certificates or
Bond, (ii) any advance to cure a Breach, (iii) any advance in connection with a
Mandatory Tender Event pursuant to Section 6.04 of the Series Certificate
Agreement, (iv) an advance in connection with a Release Event pursuant to
Section 3.08 of the Series Certificate Agreement, (v) 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, (vi) any
advance to pay property taxes due but unpaid or any other unpaid assessments or
impositions with respect to a Mortgaged Property and (vii) any advance in
connection with an Enforcement Action.

“Credit Enhancement” has the meaning set forth in the Series Certificate
Agreement.

"Custodial Receipts" means the custodial receipts issued pursuant to the Bond
Custody Agreement.

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“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 Documents" means the Bond Custody Agreement and the Custodial Receipts.

“Data Tape” means the data tape dated August 2, 2018 submitted by or on behalf
of the Sponsor to Freddie Mac with respect to the Bonds and the Mortgaged
Property.

“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%).

“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 Bond, 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

[ggi42traypsb000001.jpg]

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

4

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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.

“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, and for serving as Administrator and Pledge Custodian.  Such fee
shall be an amount equal to one-twelfth of 0.70% (seventy basis points) times
the Current Class A Certificate Balance, and shall be calculated on the basis of
a 360-day year consisting of twelve (12) thirty (30) day months.  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 Credit Advances, which amounts shall be equal to
the sum of all Credit 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 and 3.3 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 Multifamily 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.

“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.

“Issuer” means, with respect to each issue of Bonds, the governmental entity
that issued such Bonds, and its successors.

"Laurel Bonds" means the Public Finance Authority Multifamily Housing Revenue
Bonds (Laurel Crossings Apartments Project) Series 2015A.

“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 pay or cause to be paid all amounts, and 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.

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"Optional Series Termination Date" means August 15, 2029, or the 15th day of any
August thereafter (or if such date is not a Business Day, the immediately
succeeding Business Day).

“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 Security Collateral” has the meaning set forth in Section 8.1.

“Prepayment/Substitution Premium” means, when such premium is due and payable
pursuant to Section 3.8(a) 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 Bond(s) during the remainder of the applicable Yield Maintenance
Period for the applicable Bond(s) had the redemption, funding, Release Event,
substitution or mandatory tender not occurred.

“Pre-Selected Bonds” means the Bonds indicated on Schedule A-2 that have been
pre-selected by the Sponsor as of the Closing Date as being eligible for
substitution from the Series Pool pursuant to Sections 3.19 and 3.26 due to the
sale of the related Pre-Selected Mortgaged Property to an unrelated third
party.  Only four of such 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 Bond.

“Purchase Date” means 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.

“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 Bond” means a Bond 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 Bond” has the meaning set forth in Section 3.19 hereof.

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“Release Purchase Price” means, with respect to any Bond, an amount equal to the
then outstanding principal amount of such Bond plus accrued interest on such
Bond 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 the
Bonds 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 and the Bonds, 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 0.04% (four basis points) times
the outstanding principal balance of each Bond Mortgage Loan, calculated on the
basis of a 360-day year consisting of twelve (12) thirty (30) day months.

“Sponsor Documents” means this Agreement, the Series Certificate Agreement, the
Servicing Agreement, the Remarketing Agreement, the Guaranty, the Custody
Documents, the Subordinate Bonds Custody Agreement, Agreement Regarding
Financial Monitors, and any other agreement, instrument or certificate executed
by the Sponsor or by the Guarantor in connection with the transactions
contemplated thereby.

“Sponsor Paid Expenses” has the meaning set forth in Section 8.3(c).

"Subordinate Bonds Custody Agreement" means the Subordinate Bonds Custody
Agreement dated as of the date hereof by and between the Guarantor and U.S. Bank
National Association, as custodian, and acknowledged by the Sponsor, with
respect to the Subordinate Bonds, as the same may be amended, supplemented or
restated from time to time.

"Subordinate Bonds" means the subordinate bonds listed on Exhibit A to the
Subordinate Bonds Custody Agreement.

“Substitute Bond” means an issue of multifamily housing revenue bonds
substituted for an issue of Bonds pursuant to Section 3.19.

“Substitute Property” means a multifamily housing project that is substituted
for a Project pursuant to Section 3.19.

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“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.

“Yield Maintenance End Date” means, either (a) August 15, 2028 with respect to
events of the type set forth in Sections 3.8(a)(i), 3.8(a)(iv) and 3.8(a)(v) or
(b) the applicable date indicated on Schedule A with respect to each Bond with
respect to events of the type set forth in Sections 3.8(a)(ii) and 3.8(a)(iii).

“Yield Maintenance Period” means, with respect to each Bond, the period
beginning on the Closing Date and ending on the applicable Yield Maintenance End
Date.

Section 1.2Interpretation.  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.

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Article II

REPRESENTATIONS, COVENANTS, WARRANTIES AND CONDITIONS

Section 2.1Representations 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 Bonds, and the undertakings of Freddie Mac contained in
the Series Certificate Agreement with respect to the Credit
Enhancement.  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.

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

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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.

(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 within 6
months of the Closing Date.  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

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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.)

(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

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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.

(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,
(iii) to the Sponsor’s best knowledge, the report is complete and accurate, and
(iv) to the extent the report is being obtained by the Sponsor in connection
with the Closing Date, is prepared in the manner and obtained from a qualified
source as required by the Guide.

(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

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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.

(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

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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.

(t)Equal Opportunity.  The purchase of the Bonds 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.

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(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;

(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), and
there are no other interest rate modes under the related Bond Documents or if
there are other interest rate modes the Bonds can only be converted to such mode
with the prior written consent of the Bondholder Representative;

(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, the Bond Mortgage Documents
and the Mortgaged Properties 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].

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(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 on a parity
with, or subordinate to, the Bonds or the Bond Mortgage (including any separate
series of parity or subordinate bonds), except for subordinate financing which
meets the requirements of the Guide for “soft” subordinate financing.  Except
for the Subordinate Bonds, no other subordinate bonds are outstanding with
respect to a Mortgaged Property.

(ix)A Mortgaged Property that has not converted to the permanent phase or
otherwise stabilized under the related Bond Mortgage Documents.

(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

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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.

(ee)Bond Information.  The information with respect to the Bonds 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 or the Custody Documents; (iv) there are no fees currently due
and owing under the Bond Documents or the Custody Documents which have not been
paid; and (v) no claims for indemnification under the Bond

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Documents or the Custody 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).

(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.

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(nn)State Allocating Agency Requirements.  The only operating restrictions
imposed on any Mortgaged Property by any state tax credit or volume cap
allocating agency not reflected in the regulatory agreements, restrictive
covenants or similar instruments recorded against the Mortgaged Properties are
the California Debt Limit Allocation Committee's letters related to the
Mortgaged Properties listed on Exhibit I, complete and accurate copies of which
have been provided to Freddie Mac.

(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, (iii) no event has
occurred which would cause the Mortgaged Property to lose its current exemption
from real property taxes, and (iv) the exemption from real property taxes is in
effect through the maturity date of the related Bonds.

(qq)Amortization Schedules.  The amortization schedules included in the Data
Tape 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)Optional Redemption at Par.  The first date on which the Bonds are permitted
to be redeemed at par is set forth in Exhibit II.

(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.  (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 Bonds to the Custodian 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

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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 Custodial Receipts to Freddie
Mac.  Immediately prior to such transfers, the Sponsor owned the 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
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 has released all right,
title and interest in and to the Custodial Receipts (such release in connection
with the transfer of ownership of the Custodial Receipts in no way limits the
Sponsor's rights to direct the funding of Release Events in certain cases or
take other actions with respect to the Custodial Receipts as described in the
Sponsor Documents).

(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.

(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.  All bond-level replacement reserves
and tax and insurance escrows are held by the applicable Bond Trustee.

(yy)Condominium.  Each Mortgaged Property which is subject to a condominium
regime 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.

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(zz)Owner Principals.  Sponsor has performed due diligence on the Owner
Principals and based on such due diligence:

(i)No Owner Principal (A) is on any Prohibited Parties Lists, (B) has been
convicted of any violation of the AML Laws, or (C) has been the subject of a
final enforcement action relating to the AML Laws.

(ii)No Non-U.S. Equity Holder (A) is on the OFAC Lists, (B) has been convicted
of a violation of the AML Laws, or (C) has been the subject of a final
enforcement action relating to the AML Laws.

For purposes of the foregoing representation the following definitions apply:

“AML Laws” means applicable federal anti-money laundering laws and regulations
including 18 U.S.C. §§ 1956 and 1957, as amended.

“FHFA” means the Federal Housing Finance Agency.

“Non-U.S. Equity Holder” means any Person with a collective equity interest,
whether direct or indirect of 10% or more in Owner, and which is either (a) an
individual who is not a citizen of the United States, or (b) an entity formed
outside the United States).

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“OFAC Lists” means either one of the following:

 

(i)The OFAC Specially Designated Nationals and Blocked Persons List.

 

(ii)The OFAC Consolidated Sanctions List.

 

“Owner Principal” means any of the following:

(i)Any general partner of Owner (if Owner is a partnership).

(ii)Any manager or managing member of Owner (if Owner is a limited liability
company).

(iii)Any Person (limited partner, member or shareholder) with a collective
direct or indirect equity interest in Owner equal to or greater than 25%.

(iv)Any guarantor of all or any portion of the Bonds or of any obligations of
Owner under the Bond Mortgage Documents.

(v)Any direct owner of the Owner or if such owner is a pass-through entity, then
the first Person that is not a pass-through entity.

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(vi)The ultimate individuals or entities that directly or indirectly own or
control the Owner.

“Prohibited Parties List” means any one or more of the following:

(i)The OFAC Specially Designated Nationals and Blocked Persons List.

(ii)The OFAC Consolidated Sanctions List.

(iii)FHFA Suspended Counterparty Program List.

Section 2.2Other 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.

(iv)Since December 31, 2017, 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.

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(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.

(ix)Guarantor, as Bondholder Representative, is authorized under the Bond
Documents to assign its rights, privileges and obligations as Bondholder
Representative to Freddie Mac and in such capacity Freddie Mac is the sole party
authorized to exercise or direct remedies with respect to the Bond Mortgage.

(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

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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 2.3Conditions.  The obligation of Freddie Mac to exchange the
Certificates for the Bonds, execute and deliver the Series Certificate Agreement
and provide the Credit Enhancement 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 or causing to be delivered 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.

(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.

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(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 with respect to the Bond
Mortgage Loan.

(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)if applicable, 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, 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 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;

(F)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;

(G)the most recent environmental report pertaining to the Mortgaged Property,
and all related due diligence completed to Freddie Mac’s satisfaction;

(H)the most current survey relating to the Mortgaged Property in form and
substance acceptable to Freddie Mac;

(I)such opinions of Bond Counsel as Freddie Mac shall require in form and
substance satisfactory to Freddie Mac;

(J)[Reserved];

(K)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;

(L)to the extent not previously received by Freddie Mac and if applicable, a
certificate from the Bond Trustee of each series of Bonds that were reissued
prior to the Closing Date, stating that arbitrage calculations

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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;

(M)the Guaranty;

(N)true and correct copies of rating letters from each Rating Agency rating the
Class A Certificates;

(O)executed copies of each of the Custody Documents, the Subordinate Bonds
Custody Agreement and the Agreement Regarding Financial Monitors;

(P)evidence of the transfer to, or delegation of, all the servicing arrangements
applicable to the Bonds to the Servicer; and

(Q)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.

Section 2.4Breach 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 Bond
(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 Bond for a Bond with respect to which a
Breach has occurred, but only in accordance with the terms of Section 3.19
hereof.

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(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 Bond 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 Bonds 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 Bond 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.

(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:

Curtis Melvin and Christopher B. Propert

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.

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Article III

COVENANTS OF THE SPONSOR

Section 3.1Freddie 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 transaction fee of $150,000 together with Freddie Mac's
expenses (including but not limited to printing costs in connection with the
Offering Circular of $5,000 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 3.2Reimbursement 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 3.3Scheduled 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.

(ii)Freddie Mac Fee.  The accrued but unpaid Freddie Mac Fee.

(iii)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[Reserved]

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Section 3.5Payment 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:

(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
Bonds with the Administrator and deposit of the Subordinate Bonds pursuant to
the Subordinate Bonds Custody Agreement (including any fees, costs, charges or
expenses associated with the re-registration and delivery of the Bonds or the
Subordinate Bonds, or the review thereof, required pursuant to the Bond Custody
Agreement), 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 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 to Freddie Mac, (viii) any audit of any Mortgaged Property, the Bonds
or the Certificates by the Internal Revenue Service, and (ix) requests by the
Holder of the Class B Certificates for Freddie Mac's consent to transfer its
interest in the Class B Certificates;

(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;

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(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;

(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 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 3.6Application 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.

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(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.

Section 3.7[Reserved].

Section 3.8Payment 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.

(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 substitution of a Substitute Bond 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 Credit Provider Termination Event or (if applicable) a Sponsor
Act of Bankruptcy;

(v)Upon the substitution of a Substitute Bond for a Pre-Selected Bond in
connection with a sale of the related Mortgaged Property as directed by the
Sponsor in accordance with Sections 3.19 and 3.26 hereof.

(b)Premium Not Payable.  Except under the circumstances described in Section
3.8(a) 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

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income tax purposes, (v) a redemption of Class A Certificates in connection with
a Clean-Up Event, or (vi) a Release Event pursuant to Section 3.21 hereof.

Section 3.9Substitution of Credit Enhancement .  The Sponsor acknowledges that
it does not have the right to substitute credit enhancement for the Class A
Certificates.  

Section 3.10Additional 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/Substitution 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 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[Reserved].  

Section 3.12Indemnification.  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, 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 Certificates or the
remarketing of the Class A Certificates or in connection with any failure to
cause the re-registration of all of the Bonds in the name of Freddie Mac and the
delivery thereto as required pursuant to Section 4.2 hereof; 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

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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.

Section 3.13Freddie 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 Credit 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 Credit 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 Administrator and the Pledge Custodian, and
shall not, under any circumstance, put Freddie Mac under any resulting liability
to any of them.

Section 3.14[Reserved].  

Section 3.15Other 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

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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);

(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.

(g)Restriction on Transfer of Class B Certificates.  The Sponsor shall not,
without the prior written consent of Freddie Mac, in whole or in part, sell,
assign, pledge, hypothecate or otherwise transfer its ownership interest
(including any beneficial ownership interest) in the Class B Certificates or
grant any liens, security interests, options or other charges or encumbrances
with respect to the Class B Certificates.

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Section 3.16Liability 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, 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, 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.

Section 3.17Waivers 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

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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 3.18Subrogation.  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 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 Bonds or the
Certificates 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 3.19Substitution.  The Sponsor may at its option (subject to the
conditions set forth below) substitute at any time, and from time to time, one
issue of multifamily housing revenue bonds (each, a “Substitute Bond”) for (a)
an issue of Bonds with respect to which a Bond Event of Default exists, or (b) a
Pre-Selected Bond, solely if the Sponsor has elected to effect a substitution of
such Pre-Selected Bond in connection with the sale of the related Pre-Selected
Mortgaged Property pursuant to Section 3.26 hereof.  The Bonds available to be
substituted for in accordance with the foregoing sentence (each, a “Released
Bond”) shall be released from the Series Certificate Agreement in accordance
with the terms thereof, and the Substitute Bond(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:

(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

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(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;

(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 Bond, including tax
status, maturity, interest rate and interest mode, are substantially consistent
with the terms of the Released Bond;

(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 Bond 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)

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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)No Event of Default shall exist and there shall have been no related Bond
Event of Default with respect to such Substitute Bond during the immediately
preceding twelve (12) month period;

(k)Contemporaneously with the request for a substitution, Sponsor shall pay (A)
to the Servicer a $25,000 underwriting fee with respect to each new Bond to be
underwritten, and (B) to Freddie Mac a deposit to cover associated third party
costs and fees, as estimated by Freddie Mac, together with a mortgage review fee
equal to the greater of $5,000 per substituted property or 0.10% of the unpaid
principal balance of the Substitute Bond.  On or prior to the closing date for
the substitution, the Sponsor shall pay Freddie Mac the balance, if any, of any
third-party costs and fees incurred in excess of the initial deposit amount,
plus a substitution fee (i) equal to the greater of $5,000 or 0.25% of the
unpaid principal balance of the Substitute Bond(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 Bond(s) (with a credit for the mortgage
review fee previously paid) for a substitution relating to a substitution of a
Pre-Selected Bond pursuant to Section 3.26.  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;

(l)If the unpaid principal balance of the Substitute Bond is less than the
unpaid principal balance of the Released Bond (a “Contraction”) the Sponsor
shall pay any applicable Total Release Price with respect to the principal
portion of the Released Bond that is in excess of the principal amount of the
Substitute Bond(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(k) 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 Bond exceeds the unpaid principal balance of
the Substitute Bond(s) on the date of substitution;

(m)The Sponsor and Freddie Mac shall have executed an addendum to this Agreement
and any related agreements to reflect the substitution contemplated hereby; and

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(n)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.

(o)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[Reserved].

Section 3.21Optional Series Termination 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 to cause a Release
Event with respect to all (but not less than all) of the Bonds held under the
Series Certificate Agreement on the Optional Series Termination Date by giving
written notice of such election to Freddie Mac not less than ninety (90) days
prior to the Optional Series Termination Date.  Freddie Mac shall only exercise
its right to cause such a Release Event to occur on the Optional Series
Termination Date if by no later than the fifth (5th) Business Day prior to such
Optional Series Termination 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 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 3.22CRA Credit.  Freddie Mac is not allocating or recording, and will
not allocate or record, its investment in the Bonds for the purposes of the
Community Reinvestment Act of 1977 ("CRA").  Freddie Mac makes no representation
or warranty as to the eligibility for CRA treatment with respect to the
Certificates or the Bonds.

Section 3.23Release 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 (with respect to which the
Sponsor or an Affiliate does not control the related Owner) 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
Bond and shall fund, or cause the funding of, the purchase of such Bond (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 Bond 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 Bond first arises under this Section 3.23.  

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Section 3.24Loans 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 such loan is made in accordance with the terms of
this Section 3.24.  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 3.25Credit Advances; Real Estate Taxes.  In the event any real estate
taxes are assessed on a Mortgaged Property 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 be 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.  

Section 3.26Substitution 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 Bond 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 four
Pre-Selected Bond pursuant to this Section 3.26.  In connection with any
election under this Section 3.26, the Sponsor shall also satisfy the following
conditions:

(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;

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(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 3.27[Reserved].  

Section 3.28Common Owner Mortgaged Properties.  The parties acknowledge and
agree that:

(a)(i) The Concord at Williamcrest Apartments Mortgaged Property and the Concord
at Little York Apartments Mortgaged Property have the same Owner, and (ii)
notwithstanding anything to the contrary herein or in the Series Certificate
Agreement, upon the occurrence of a Release Event with respect to either the
Concord at Williamcrest Bonds or the Concord at Little York Bonds, both series
of Bonds will be subject to release from the Series Pool; and

(b)(i) The Berrendo Square Apartments Mortgaged Property and the Laurel
Crossings Apartments Mortgaged Property have the same Owner, and (ii)
notwithstanding anything to the contrary herein or in the Series Certificate
Agreement, upon the occurrence of a Release Event with respect to either the
Berrendo Bonds or the Laurel Bonds, both series of Bonds will be subject to
release from the Series Pool.

Article IV

AGREEMENT TO EXCHANGE

Section 4.1Exchange.  Freddie Mac agrees to exchange the Certificates for the
Bonds in accordance with and subject to the terms and provisions of this
Agreement.  In consideration for the transfer of ownership and possession of the
Bonds 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 Sponsor or
upon its order.  With respect to the Bonds, the Sponsor is transferring and
assigning to Freddie Mac all of its right, title and interest in and to such
Bonds together with all interest due thereon from and after August 1, 2018 (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 Bonds from
such date forward, and not as a collateral assignment or pledge of such
Bonds).  

Section 4.2Mandatory Delivery; Ownership; Registration of Transfer.  No later
than the Closing Date (the “Delivery Deadline”), the Sponsor shall complete the
delivery of the Bonds to Freddie Mac in accordance with this Agreement and the
Bond Custody Agreement, and beneficial ownership of the Bonds 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 Bonds to Freddie Mac, and shall fully and promptly cooperate with
Freddie Mac, and take any necessary action, to cause the ownership of the Bonds
to be registered in the name of Freddie Mac.

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Section 4.3Failure to Deliver.  If the Sponsor fails to deliver the Bonds to
Freddie Mac or fails to comply fully with any precondition to Freddie Mac’s
obligation to exchange Certificates for the Bonds on or before the Closing Date,
Freddie Mac shall have no obligation to exchange Certificates for the Bonds, 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

[RESERVED]

Article VI

UNIFORM COMMERCIAL CODE SECURITY AGREEMENT

This Agreement is also a security agreement under the Uniform Commercial Code
with respect to 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 Custody Account, 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.

Article VII

EVENTS OF DEFAULT; REMEDIES

Section 7.1Events 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, 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

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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 (or any Affiliate thereof who is a party to such Sponsor
Document) 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 (or any Affiliate thereof who is a party to such Sponsor Document) under
any of the other Sponsor Documents (taking into account any applicable cure
period);

(e)[Reserved];

(f)failure to pay principal of, and interest on, any Bond Purchase Loan when due
pursuant to Section 7.03(b) hereof;

(g)[Reserved];

(h)[Reserved];

(i)the Guarantor fails to perform its obligations when required under the
Guaranty;

(j)Article VIII of this Agreement, or the validity or enforceability thereof,
shall be contested by the Sponsor or any Class B Owner, or the Sponsor, or any
Class B 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;

(k)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

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(l)a subordinate loan is made by the Guarantor or an affiliate of the Guarantor
not in accordance with Section 3.24 hereof.

Section 7.2Remedies; 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) Freddie Mac may
direct the Administrator to deliver all amounts payable on the Class B
Certificates to the Pledge Custodian for deposit into the Custody Account (which
amounts shall be Pledged Security Collateral hereunder); (iii)  at the written
direction of a Freddie Mac Authorized Officer, the Pledge Custodian shall
deliver all Pledged Security Collateral to Freddie Mac; (iv) 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
(v) 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.

Freddie Mac shall also have the right to provide notice to the Administrator of
a Credit 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 Owners shall continue to be the owner(s) of all Class B
Certificates, and the Sponsor shall continue to be the

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beneficial owner of all Purchased Bonds and other Pledged Security Collateral,
subject to any and 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) the Sponsor, or (ii) 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.

(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 7.3Rights 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 Bonds, the Sponsor shall have the right (or
where the Sponsor directs Freddie Mac to cause a Release Event pursuant to
Sections 3.21, 3.23 or 3.26, the obligation) economically to fund or cause the
funding of the purchase of such Bonds 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
Bonds 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
Bonds, 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 Bonds, Freddie Mac shall have the right to fund the
purchase of the related series of Bonds 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 Bonds giving rise to a Release Event, the
circumstances giving rise to such Release Event and

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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 Bonds.

In the event the Sponsor elects to fund or cause the funding of the purchase of
the affected series of Bonds, 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 Bonds, and Freddie Mac does not decide to
terminate the Release Event, the affected series of Bonds are required to be
purchased with funds drawn pursuant to the Credit Enhancement by Freddie Mac
under the Series Certificate Agreement, and such Bonds 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 Bonds 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 Bonds, 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 Bonds, 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 Bond pursuant
to Article VIII hereof.  At any time prior to the Sponsor's funding of the
purchase of such Bonds 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)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 Bond 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 Bonds specified in Section 3.19 hereof.

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Section 7.4No 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 8.1Pledged Security Collateral.  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 Bonds;

(b)all amounts deposited into the Custody Account;

(c)all interest and other amounts payable on, and all rights with respect to,
any Purchased Bonds, Class B Certificates, and all amounts on deposit in the
Custody Account (including, without limitation, all payments of principal and
interest thereon); and

(d)all proceeds of any of the foregoing.

Section 8.2Delivery of Pledged Security Collateral.  At such time as a Bond
becomes a Purchased Bond in accordance with the Series Certificate Agreement,
and this Agreement, the Sponsor shall be the beneficial owner of each of the
Purchased Bonds, 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 Bonds 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 Bonds for the benefit of Freddie Mac.

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Section 8.3[Reserved].  

Section 8.4Amounts Received on Purchased Bonds.  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 Bonds, for credit to the obligations of
the Sponsor hereunder, until such Purchased Bonds are released to the Sponsor in
accordance with the terms of Section 8.5 of this Agreement.

Section 8.5Release of Purchased Bonds.  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
Bond (and Freddie Mac agrees to give such notice promptly following full
reimbursement), that no Credit 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 Bond
together with the proceeds thereof remaining in the possession of the Pledge
Custodian, if any, to the Sponsor.  The release of such Purchased Bond shall be
free and clear of the security interest created by this Agreement.

Section 8.6[Reserved].  

Section 8.7Loss 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 8.9Ownership Restrictions.  Notwithstanding any provisions of this
Agreement, ownership by and release to the Sponsor 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 8.10Representations and Warranties of the Sponsor to the Pledge
Custodian.  The Sponsor represents and warrants to the Pledge Custodian on the
Closing Date and on each date that Purchased Bonds are delivered to the Pledge
Custodian hereunder with respect to such Purchased Bonds 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.

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Section 8.11Custody 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 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 Bonds and other property in the Custody
Account separately identifying such Purchased Bonds 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.

Section 8.12Appointment 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.

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(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.

(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 8.13Successor 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

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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.

(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 8.14Qualifications 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 8.15Application 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 8.16No 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.

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Section 8.17Cooperation.  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 8.18Termination.  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 execute and deliver to the Sponsor or Class B Owner(s), as
applicable, all Pledged Security Collateral and documents then in the custody or
possession of the Pledge Custodian, and, if requested by the Sponsor or Class B
Owner(s), shall execute and deliver to the Sponsor, Class B Owner(s) or their
order, as applicable, 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 or Class B Owner(s) may
reasonably request, all without recourse to or any warranty whatsoever by the
Pledge Custodian, and at the cost and expense of the Sponsor or Class B
Owner(s).  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.

Section 8.19Representations 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.

Article IX

MISCELLANEOUS

Section 9.1Counterparts.  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.

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Section 9.2Amendments, 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 9.3Payment 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 9.4Payments 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 9.5Governing 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.

Section 9.6Notices.  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.

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Freddie Mac:

Freddie Mac

Director of Multifamily Loan Servicing, Mail Stop B2E

8100 Jones Branch Drive

McLean, VA 22102

Facsimile:  703-714-3273

Telephone: 703-903-2000

E-mail:  

carl_mclaughlin@freddiemac.com, with a copy to

  mfla@freddiemac.com

with a copy to:

 

Freddie Mac

Director, Structured Transactions, Multifamily Asset Management, Mail Stop B4F
8100 Jones Branch Drive

McLean, VA 22102

Facsimile:  703-714-3003

Telephone: 703-714-3194

E-mail:  MF_Structured_Transactions@freddiemac.com.

 

with a copy to

 

Freddie Mac

Attention: Director, Multifamily Production, Mail Stop B4U

8100 Jones Branch Drive

McLean, VA 22102

Facsimile:  703-714-3003

Telephone: 703-903-2000

E-mail:  curtis_melvin@freddiemac.com

 

Sponsor:

ATAX TEBS IV, LLC

1004 Farnam Street, Suite 400

Omaha, NE 68102 

Attention: Andy Grier

Telephone:  (402) 930-3076

E-mail: agrier@burlingtoncapital.com

With a copy to:

Craig Allen

1004 Farnam Street, Suite 400

Omaha, Nebraska 68102 

Phone: 402.930.3018

E-mail: callen@burlingtoncapital.com

 

with a copy to:

Kutak Rock LLP

1650 Farnam Street 

Omaha, Nebraska 68102 

Attention:  Conal Hession

Telephone: (402) 346-1148

E-mail: conal.hession@kutakrock.com

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Section 9.7Further 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 9.8Term 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 9.9Assignments; 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 9.10Headings.  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 9.11Limitation 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.

(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

58

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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 9.12Consent 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 9.13Disclaimer; Acknowledgments.  Approval by Freddie Mac of the
Sponsor, any Sponsor Affiliate, the Sponsor Documents, any Owner Documents, any
Mortgaged Property, the Bonds, 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 9.14Entire 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 9.15Survival 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.

Section 9.16Waiver 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

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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 9.17Waivers 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, 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]

 

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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/ Curtis Melvin

 

 

Curtis Melvin

 

 

Multifamily, Production Director

 

 

 

 

 

 

 

 

 

 

 

 

[Signature page to ATAX TEBS IV Reimbursement Agreement]

 

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

ATAX TEBS IV, LLC, a Delaware limited liability company, as Sponsor

 

By:

AMERICA FIRST MULTIFAMILY INVESTORS, L.P., a Delaware limited partnership (f/k/a
America First Tax Exempt Investors, L.P.), its sole member

 

By:

AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited
partnership, its general partner

 

By:

BURLINGTON CAPITAL LLC, a Delaware limited liability company, its general
partner

 

By:

/s/ Craig S. Allen

 

Name:  Craig S. Allen

 

Title:    Chief Financial Officer

 

 

 

 

 

 

 

[Counterpart Signature page to ATAX TEBS IV Reimbursement Agreement]

 

 

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SCHEDULE A

MORTGAGED PROPERTIES AND YIELD MAINTENANCE PERIOD

 

 

Mortgaged Property, Location

Yield Maintenance End Date

1.

15 West Apartments, Vancouver, Washington

01/01/2032

2.

Berrendo Square Apartments, San Antonio, Texas

11/01/2029

3.

Bruton Apartments, Dallas, Texas

02/01/2032

4.

Columbia Gardens, Columbia, South Carolina

12/01/2027

5.

Companion at Thornhill, Lexington, South Carolina

02/01/2027

6.

Concord at Gulfgate Apartments, Houston, Texas

06/01/2030

7.

Concord at Little York Apartments, Houston, Texas

06/01/2030

8.

Concord at Williamcrest Apartments, Houston, Texas

06/01/2030

9.

Courtyard Apartments, Fullerton, California

12/01/2030

10.

Decatur-Angle Apartments, Fort Worth, Texas

02/01/2031

11.

Harmony Court Bakersfield, Bakersfield, California

12/01/2030

12.

Harmony Terrace Apartments, Simi Valley, California

01/01/2031

13.

Las Palmas II Apartments, Coachella, California

11/01/2030

14.

Laurel Crossings Apartments, San Antonio, Texas

11/01/2029

15.

Oaks at Georgetown Apartments, Georgetown, Texas

12/01/2030

16.

Palo Alto Apartments, San Antonio, Texas

07/01/2033

17.

San Vicente Townhomes, Soledad, California

11/01/2030

A-1

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18.

Seasons Lakewood Apartments, Lakewood, California

01/01/2031

19.

Seasons San Juan Capistrano Apartments, San Juan Capistrano, California

01/01/2031

20.

Simi Valley Apartments, Simi Valley, California

07/01/2029

21.

Summerhill Family Apartments, Bakersfield, California

12/01/2030

22.

Sycamore Walk, Bakersfield, California

01/01/2030

23.

Village at Madera Apartments, Madera California

12/01/2030

24.

Village at Rivers Edge, Columbia, South Carolina

06/01/2032

25.

Willow Run Apartments, Columbia, South Carolina

12/01/2027

 

 

2

 

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SCHEDULE A-1

BONDS

 

1.

15 West Apartments

Washington State Housing Finance Commission
Multifamily Housing Revenue Bonds (15 West Apartments Project), Series 2014A

2.

Berrendo Square Apartments

Public Finance Authority
Multifamily Housing Revenue Bonds
(Berrendo Square Apartments Project) Series 2015A

3.

Bruton Apartments

City of Dallas Housing Finance Corporation, Multifamily Housing Revenue Bonds
(Bruton Apartments) Series 2014

4.

Columbia Gardens

South Carolina State Housing Finance and Development Authority
Multifamily Housing Revenue Bonds
(Columbia Gardens) Series 2015

5.

Companion at Thornhill

Public Finance Authority
Multifamily Housing Revenue Bonds (Companion at Thornhill Apartments Project)
Series 2016

6.

Concord at Gulfgate Apartments

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Gulfgate Apartments Project) Series 2015A

7.

Concord at Little York Apartments

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Little York Apartments Project) Series 2015A

8.

Concord at Williamcrest Apartments

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Williamcrest Apartments Project) Series 2015A

9.

Courtyard Apartments

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Courtyard Apartments Project) 2016 Series G-1

A-1-1

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10.

Decatur-Angle Apartments

Texas Department of Housing and Community Affairs
Multifamily Housing Revenue Bonds (Decatur-Angle Apartments),
Series 2014

11.

Harmony Court Bakersfield

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Harmony Court Bakersfield Apartments Project) 2016 Series E-1

12.

Harmony Terrace Apartments

Golden State Finance Authority
Senior Housing Revenue Bonds
(Harmony Terrace Apartments Project) 2016 Series I-1

13.

Las Palmas II Apartments

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Las Palmas II Apartments Project) 2016 Series A-1

14.

Laurel Crossings Apartments

Public Finance Authority
Multifamily Housing Revenue Bonds
(Laurel Crossings Apartments Project) Series 2015A

15.

Oaks at Georgetown Apartments

Capital Area Housing Finance Corporation
Multifamily Housing Revenue Bonds
(Oaks at Georgetown Apartments Project),
2016 Series A-1

16.

Palo Alto Apartments

San Antonio Housing Trust Finance Corporation
Multifamily Housing Revenue Bonds
(Palo Alto Apartments) Series 2015

17.

San Vicente Townhomes

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(San Vicente Townhomes Project) 2016 Series C-1

18.

Seasons Lakewood Apartments

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons Lakewood Apartments Project) 2016 Series H-1

19.

Seasons San Juan Capistrano Apartments

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons San Juan Capistrano Apartments Project) 2016 Series F-1

A-1-2

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

20.

Simi Valley Apartments
Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons at Simi Valley Apartments Project) 2015 Series A-1

21.

Summerhill Family Apartments

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Summerhill Family Apartments Project) 2016 Series D-1

22.

Sycamore Walk
Golden State Finance Authority
Multifamily Housing Revenue Bonds (Sycamore Walk Project)
2015 Series B-1

23.

Village at Madera Apartments

Golden State Finance Authority Multifamily Housing Revenue Bonds (Village at
Madera Apartments Project) 2016 Series B-1

24. []

Village at River’s Edge

South Carolina State Housing Finance and Development Authority Multifamily
Rental Housing Revenue Bonds
(Village at River’s Edge) Series 2015

25. []

Willow Run Apartments

South Carolina State Housing Finance and Development Authority

Multifamily Housing Revenue Bonds (Willow Run Apartments)

Series 2015

 

 

 

 

A-1-3

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

 

SCHEDULE A-2

PRE-SELECTED BONDS

1.

Public Finance Authority
Multifamily Housing Revenue Bonds
(Berrendo Square Apartments Project) Series 2015A

2.

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Gulfgate Apartments Project) Series 2015A

3.

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Little York Apartments Project) Series 2015A

4.

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Williamcrest Apartments Project) Series 2015A

5.

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Courtyard Apartments Project) 2016 Series G-1

6.

Public Finance Authority
Multifamily Housing Revenue Bonds
(Laurel Crossings Apartments Project) Series 2015A

7.

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons Lakewood Apartments Project) 2016 Series H-1

8.

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons San Juan Capistrano Apartments Project) 2016 Series F-1

 

 

 

 

A-2-1

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

 

SCHEDULE B

QUALIFICATIONS TO REPRESENTATIONS AND WARRANTIES

 

 

Mortgaged Property

Representation and Warranty

Issue

1

Landings at Marine Creek (aka Decatur Angle)

2.1(r) Title; First Lien

The Mortgaged Property is not owned by Owner in fee simple; Owner’s interest is
a ground leasehold interest.

2

15 West

2.1(pp) Exemption from Real Property Taxes

 

The Improvements located on the Mortgaged Property are currently exempt from
real property taxes; however the exemption expires January 1, 2029.

3

Sterlingshire (aka Bruton)

2.1(r) Title; First Lien

The Mortgaged Property is not owned by Owner in fee simple (other than the
improvements); Owner’s interest in the land is a ground leasehold interest.

4

Concord at Little York

2.1 (jj) Single Asset Requirements

 

 

 

 

 

 

2.1(pp) Exemption from Real Property Taxes

The Bond Mortgage Documents permit Owner to own Williamcrest Apartments and
personal property related to its operation and maintenance and to engage in
business activities related to Williamcrest Apartments.

 

The Mortgaged Property is exempt from real property taxes under current law and
subject to annual audits of continued eligibility.

5

Concord at Gulfgate

2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is exempt from real property taxes under current law and
subject to annual audits of continued eligibility.

B-1

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

 

6

Concord at Williamcrest

2.1 (jj) Single Asset Requirements

 

 

2.1(pp) Exemption from Real Property Taxes

The Bond Mortgage Documents permit Owner to own Little York Apartments and
personal property related to its operation and maintenance and to engage in
business activities related to Little York Apartments.

The Mortgaged Property is exempt from real property taxes under current law and
subject to annual audits of continued eligibility.

7

Village at River’s Edge

 

Section 2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is not exempt from real property taxes.

8

Sycamore Walk

2.1(pp) Exemption from Real Property Taxes

The tax abatement with respect to the Mortgaged Property is a PARTIAL abatement
for fiscal year 2017-2018 under current law, and subject to claims for exemption
being filed annually with the county assessor based upon a continued qualifying
ownership structure and use.  

9

Simi Valley

2.1(pp) Exemption from Real Property Taxes

 

The Mortgaged Property is exempt from real property taxes under current law and
subject to claims for exemption being filed annually with the county assessor
based upon a continued qualifying ownership structure and use.

10

Las Palmas

2.1(pp) Exemption from Real Property Taxes

The tax abatement with respect to the Mortgaged Property is a PARTIAL abatement
for fiscal year 2017-2018 under current law, and subject to claims for exemption
being filed annually with the county assessor based upon a continued qualifying
ownership structure and use.

11

Laurel Crossing

2.1 (jj) Single Asset Requirements

 

 

 

2.1 (pp) Exemption from Real Property Taxes

The Bond Mortgage Documents permit Owner to own Berrendo Square Apartments (the
“Berrendo Project”) and personal property related to the Berrendo Project and to
operate and manage the Berrendo Project.

The Mortgaged Property is exempt from real property taxes under current law and
subject to annual audits of continued eligibility.

B-2

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

 

12

Berrendo

2.1 (jj) Single Asset Requirements

 

 

 

2.1 (pp) Exemption from Real Property Taxes

The Bond Mortgage Documents permit Owner to own Laurel Crossing Apartments (the
“Laurel Project”) and personal property related to the Laurel Project and to
operate and manage the Laurel Project.

The Mortgaged Property is exempt from real property taxes under current law and
subject to annual audits of continued eligibility.

13

Thornhill

N/A

N/A

14

Columbia Gardens

2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is not exempt from real property taxes.

15

Willow Run

2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is not exempt from real property taxes.

16

Courtyard

2.1(pp) Exemption from Real Property Taxes

The tax abatement with respect to the Mortgaged Property is a PARTIAL abatement
for fiscal year 2017-2018 under current law, and subject to claims for exemption
being filed annually with the county assessor based upon a continued qualifying
ownership structure and use.

17

Seasons San Juan Capistrano

2.1(pp) Exemption from Real Property Taxes

The tax abatement with respect to the Mortgaged Property is a PARTIAL abatement
for fiscal year 2017-2018 under current law, and subject to claims for exemption
being filed annually with the county assessor based upon a continued qualifying
ownership structure and use.

18

Seasons Lakewood

2.1(r) Title

 

 

 

 

2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is not owned by Owner in fee simple; Owner’s interest is
a ground lease interest.

 

There is currently NO TAX ABATEMENT with respect to the Mortgaged Property for
fiscal year 2017-2018; however, the subject property previously qualified for a
one hundred percent (100%) abatement.  It is possible that no claim for
exemption was made for fiscal year 2017-2018.

B-3

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

 

19

San Vicente

Section 2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is exempt from real property taxes under current law and
subject to claims for exemption being filed annually with the county assessor
based upon a continued qualifying ownership structure and use.

20

Harmony Court

Section 2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is exempt from real property taxes under current law and
subject to claims for exemption being filed annually with the county assessor
based upon a continued qualifying ownership structure and use.

21

Summerhill

2.1(pp) Exemption from Real Property Taxes

 

The Mortgaged Property is exempt from real property taxes under current law and
subject to claims for exemption being filed annually with the county assessor
based upon a continued qualifying ownership structure and use

22

Oaks at Georgetown

2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is only 50% exempt from real property taxes and subject
to annual audits of continued eligibility.

23

Harmony Terrace

2.1(pp) Exemption from Real Property Taxes

The Mortgaged Property is exempt from real property taxes under current law and
subject to claims for exemption being filed annually with the county assessor
based upon a continued qualifying ownership structure and use.

24

Village at Madera

2.1(pp) Exemption from Real Property Taxes

 

The Mortgaged Property is exempt from real property taxes under current law and
subject to claims for exemption being filed annually with the county assessor
based upon a continued qualifying ownership structure and use.

25

Palo Alto

Section 2.1(r) Title; First Lien

The Mortgaged Property is not owned by Owner in fee simple (other than the
improvements).  Owner’s interest in the land is a ground leasehold interest.

 

[End of Schedule B]

 

 

B-4

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

 

EXHIBIT I

MORTGAGED PROPERTIES WITH STATE AGENCY LETTERS

 

1.Courtyard Apartments

Golden State Finance Authority

Multifamily Housing Revenue Bonds

(Courtyard Apartments Project) 2016 Series G-1

 

2.Harmony Court Bakersfield

Golden State Finance Authority

Multifamily Housing Revenue Bonds

(Harmony Court Bakersfield Apartments Project) 2016 Series E-1

 

3.Harmony Terrace Apartments

Golden State Finance Authority

Senior Housing Revenue Bonds

(Harmony Terrace Apartments Project) 2016 Series I-1

 

4.Las Palmas II Apartments

Golden State Finance Authority

Multifamily Housing Revenue Bonds

(Las Palmas II Apartments Project) 2016 Series A-1

 

5.San Vicente Townhomes

Golden State Finance Authority

Multifamily Housing Revenue Bonds

(San Vicente Townhomes Project) 2016 Series C-1

 

6.Seasons Lakewood Apartments

Golden State Finance Authority

Senior Housing Revenue Bonds

(Seasons Lakewood Apartments Project) 2016 Series H-1

 

7.Seasons San Juan Capistrano Apartments

Golden State Finance Authority

Senior Housing Revenue Bonds

(Seasons San Juan Capistrano Apartments Project) 2016 Series F-1

 

8.Simi Valley Apartments

Golden State Finance Authority

Senior Housing Revenue Bonds

(Seasons at Simi Valley Apartments Project) 2015 Series A-1

 

 

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

 

9.Summerhill Family Apartments

Golden State Finance Authority

Multifamily Housing Revenue Bonds

(Summerhill Family Apartments Project) 2016 Series D-1

 

10.Sycamore Walk

Golden State Finance Authority

Multifamily Housing Revenue Bonds (Sycamore Walk Project)

2015 Series B-1

 

11.Village at Madera Apartments

Golden State Finance Authority

Multifamily Housing Revenue Bonds (Village at Madera Apartments Project)

2016 Series B-1

 

 

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

 

EXHIBIT II

MORTGAGED PROPERTIES AND FIRST OPTIONAL REDEMPTION DATES

Bond Issue and Series

 

First Optional Redemption Date at Par

Washington State Housing Finance Commission
Multifamily Housing Revenue Bonds
(15 West Apartments Project), Series 2014A

01/01/2032

Public Finance Authority
Multifamily Housing Revenue Bonds
(Berrendo Square Apartments Project) Series 2015A

11/01/2029

City of Dallas Housing Finance Corporation, Multifamily Housing Revenue Bonds
(Bruton Apartments) Series 2014

02/01/2032

South Carolina State Housing Finance and Development Authority
Multifamily Housing Revenue Bonds
(Columbia Gardens) Series 2015

12/01/2027

Public Finance Authority
Multifamily Housing Revenue Bonds
(Companion at Thornhill Apartments Project) Series 2016

02/01/2027

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Gulfgate Apartments Project) Series 2015A

06/01/2030

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Little York Apartments Project) Series 2015A

06/01/2030

Public Finance Authority
Multifamily Housing Revenue Bonds
(Concord at Williamcrest Apartments Project) Series 2015A

06/01/2030

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Courtyard Apartments Project) 2016 Series G-1

12/01/2030

Texas Department of Housing and Community Affairs
Multifamily Housing Revenue Bonds
(Decatur-Angle Apartments) Series 2014

02/01/2031

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Harmony Court Bakersfield Apartments Project) 2016 Series E-1

12/01/2030

 

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

 

Bond Issue and Series

 

First Optional Redemption Date at Par

Golden State Finance Authority
Senior Housing Revenue Bonds
(Harmony Terrace Apartments Project) 2016 Series I-1

01/01/2031

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Las Palmas II Apartments Project) 2016 Series A-1

11/01/2030

Public Finance Authority
Multifamily Housing Revenue Bonds
(Laurel Crossings Apartments Project) Series 2015A

11/01/2029

Capital Area Housing Finance Corporation
Multifamily Housing Revenue Bonds
(Oaks at Georgetown Apartments Project),
2016 Series A-1

12/01/2030

San Antonio Housing Trust Finance Corporation
Multifamily Housing Revenue Bonds
(Palo Alto Apartments) Series 2015

07/01/2033

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(San Vicente Townhomes Project) 2016 Series C-1

11/01/2030

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons Lakewood Apartments Project) 2016 Series H-1

01/01/2031

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons San Juan Capistrano Apartments Project) 2016 Series F-1

01/01/2031

Golden State Finance Authority
Senior Housing Revenue Bonds
(Seasons at Simi Valley Apartments Project) 2015 Series A-1

07/01/2029

Golden State Finance Authority
Multifamily Housing Revenue Bonds

(Summerhill Family Apartments Project) 2016 Series D-1

12/01/2030

Golden State Finance Authority
Multifamily Housing Revenue Bonds (Sycamore Walk Project) 2015 Series B-1

01/01/2030

Golden State Finance Authority
Multifamily Housing Revenue Bonds
(Village at Madera Apartments Project) 2016 Series B-1

12/01/2030

 

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

 

Bond Issue and Series

 

First Optional Redemption Date at Par

South Carolina State Housing Finance and Development Authority
Multifamily Rental Housing Revenue Bonds
(Village at River’s Edge) Series 2015

06/01/2032

South Carolina State Housing Finance and Development Authority

Multifamily Housing Revenue Bonds
(Willow Run Apartments)

Series 2015

12/01/2027