Exhibit 10.1
                                                                    ------------

                                                                  EXECUTION COPY






                       LIMITED LIABILITY COMPANY AGREEMENT


                                       OF


                            CENTERBROOK HOLDINGS LLC






<PAGE>



SCHEDULES

Schedule A    -    Addresses for Notices

Schedule B    -    Allocations

EXHIBITS

Exhibit A     -    Members and Membership Interests


<PAGE>



                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                            CENTERBROOK HOLDINGS LLC

     THIS LIMITED  LIABILITY  COMPANY  AGREEMENT OF CENTERBROOK  HOLDINGS LLC, a
Delaware limited liability  company (the "COMPANY"),  dated as of June 28, 2006,
is entered into by and among Charter Mac  Corporation,  a Delaware  corporation,
and IXIS Financial Products Inc., a Delaware corporation, as the members.

     WHEREAS,  the  Company  was formed  under the  Delaware  Limited  Liability
Company Act (6 Del. C. ss.  18-101,  et seq.) (as amended from time to time, the
"COMPANY  ACT"), by the filing of a Certificate of Formation of the Company with
the  Delaware  Secretary  of State on December 20, 2005 (as amended from time to
time, the "CERTIFICATE");

     NOW THEREFORE,  in consideration of the mutual covenants herein  contained,
and other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree as follows:

                                    ARTICLE 1
                                  DEFINED TERMS

     The  following  definitions  shall be for all  purposes,  unless  otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.

     "ADDITIONAL CAPITAL" has the meaning set forth in 4.2(a).

     "ADMINISTRATOR"  means  Charter  Capital  LLC, as  Administrator  under the
Administrative Services Agreement, or any successor pursuant to the terms of the
Administrative Services Agreement.

     "ADMINISTRATIVE  SERVICES  AGREEMENT"  means  the  Administrative  Services
Agreement  dated as of June 28, 2006 between the Company and the  Administrator,
or any successor agreement with a successor Administrator,  as amended from time
to time.

     "AFFILIATE" means, with respect to any Entity,  any Person which,  directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under  common  control  with,  any such  Entity  and,  if such  Person  is an
individual,  any member of the immediate family  (including  without  limitation
parents,  spouse,  children and siblings) of such individual and any trust whose
principal  beneficiary  is  such  individual  or one or  more  members  of  such
immediate  family and any Person who is  controlled by any such member or trust.
The term "control"  means the  possession,  direct or indirect,  of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities,  by contract or otherwise,  PROVIDED
that,  in any event,  any Person  that owns  directly or  indirectly  securities
having 5% or more of the voting  power for the  election of  directors  or other
governing  body  of a  corporation  or 5% or more of the  partnership  or  other
ownership interests of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.

     "AGREEMENT" means this Limited Liability Company  Agreement,  as originally
executed and as amended,  modified,  supplemented or restated from time to time,
as the context requires.

     "AVAILABLE CASH" means, with respect to the applicable  period, the excess,
if any, of

          (a) the gross cash  receipts of the Company and its  Subsidiaries  for
     such period from all sources  whatsoever,  including  cash  released by the
     Board of Managers from previously established reserves, plus any previously
     undistributed Available Cash from any prior period, over

          (b) the total cash paid by the  Company  and its  Subsidiaries  during
     such period for all purposes of the Company whatsoever.

Notwithstanding  the  foregoing,  Available  Cash  shall  not  include  any cash
received  by the  Company,  but set  aside  at the  discretion  of the  Board of
Managers, as reserves.

     "BOARD OF MANAGERS"  means,  the five  members  comprising  the  management
committee of the Company,  four of which are appointed  from time to time by the
Charter  Member,  and one of which is appointed from time to time by the Special
Member.


<PAGE>



     "CAPITAL  CONTRIBUTION"  means, with respect to any Member,  any cash which
such Member  contributes  or is deemed to contribute to the Company  pursuant to
Section 4.1 or 4.2.

     "CAPITAL  MODEL" has the  meaning  set forth in the  Centerbrook  Operating
Agreement.

     "CENTERBROOK" means Centerbrook Financial LLC, a Delaware limited liability
company.

     "CENTERBROOK  OPERATING  AGREEMENT"  means the  Limited  Liability  Company
Agreement  of  Centerbrook,  dated  as of June  28,  2006,  entered  into by the
Company, as amended from time to time.

     "CERTIFICATE" has the meaning set forth in the preamble.

     "CHARTERMAC" means CharterMac, a Delaware statutory trust.

     "CHARTERMAC  EVENT" means any of the following:  (a) any  representation or
warranty made by CharterMac in the CharterMac Guarantee shall prove to have been
incorrect  when made or deemed  made;  (b)  CharterMac  shall fail to observe or
perform any covenant  contained in Section 4.01 of the CharterMac  Guarantee and
such failure shall continue  unremedied for a period of 5 or more Business Days;
and (c)  CharterMac  shall fail to observe or perform any covenant  contained in
Section 4.02 of the CharterMac Guarantee.

     "CHARTERMAC GUARANTEE" means the Guarantee Agreement,  dated as of June 28,
2006, between IXIS Financial Products Inc. and CharterMac,  as amended from time
to time.

     "CHARTER MEMBER" means Charter Mac Corporation, a Delaware corporation,  in
such  Person's  capacity as a member of the  Company,  including  its  permitted
successors and assigns.

     "CHARTER  MEMBER  INTEREST"  means the  Membership  Interest of the Charter
Member in the Company.

     "CODE"  means the Internal  Revenue Code of 1986,  as amended and in effect
from time to time, as interpreted by the applicable regulations thereunder.  Any
reference  herein to a specific  section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.

     "COMMITMENT PERIOD" has the meaning set forth in Section 4.1(a).

     "COMMITMENTS" means the Original Commitments and the Special Commitments.

     "COMPANY" has the meaning set forth in the preamble.

     "COMPANY ACT" has the meaning set forth in the preamble.

     "COMPANY AUDITOR" means Deloitte & Touche LLP.

     "COMPANY  YEAR" means each fiscal year of the  Company,  which shall be the
calendar year beginning on January 1 and ending on December 31.

     "CREDIT ENHANCEMENT BUSINESS" means any of the following:

          (a) Credit enhancement of tax exempt or taxable  multi-family  revenue
     bonds or other debt  obligations  relating  to  multi-family  real  estate,
     including  multi-family  real  estate  that is newly  constructed  or under
     construction or rehabilitation or relating to existing properties.

          (b) Credit  enhancement  of TOB  Tax-Exempt  Certificates  relating to
     individual or pooled multi-family  housing revenue bonds held by a trust or
     other investment vehicle.

          (c)  Credit  enhancement  of Tax  Credit  Investments,  including  the
     returns and tax  benefits  realized by Pass Through  Entities  which invest
     directly  or through  Pass  Through  Entities  in  multi-family  properties
     anticipated to be entitled to Tax Credits, including Local Partnerships.


                                       2
<PAGE>



          (d) Issuance of  recapture  bonds to be provided to the IRS to avoid a
     recapture  of Tax  Credits  in  accordance  with  Section  42 of  the  Code
     following a change of ownership of multi-family real estate or the entities
     owning such multi-family real estate.

     "ENTITY" means any general partnership,  limited partnership,  corporation,
joint venture,  trust,  business trust,  statutory trust, real estate investment
trust, limited liability company,  limited liability  partnership,  cooperative,
association or other legal entity.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time.

     "FORCED SALE" means the sale of all or substantially  all of the assets and
properties of the Company in a bona fide arm's length  transaction  to or with a
Person not  otherwise an Affiliate of the Company or  CharterMac or a Subsidiary
thereof or any of the Company's Members.

     "GAAP" means United States generally accepted accounting principles,  as in
effect from time to time.

     "INDEMNITEE" means

          (a) any  Person  that is made a party to,  or is a  witness  in, or is
     threatened to be made a party to or a witness in, or is otherwise  involved
     in, any  threatened,  pending or completed  action or  proceeding,  whether
     civil,  criminal,  administrative  or  investigative,  by  reason  of  such
     Person's status as

               (i) a Member or an Affiliate of a Member,

               (ii) an officer or director of the Company,

               (iii) a  director  or officer  of a Member or an  Affiliate  of a
          Member,

               (iv) a director, trustee, member, or officer of any other Entity,
          if such  Person is  serving  in such  capacity  at the  request of the
          Company or the Board of Managers,

               (v) a member of the Board of Managers, or

               (vi)  the  Administrator,  or  an  officer  or  director  of  the
          Administrator; and

          (b) such  other  Persons  (including  Affiliates  of a  Member  or the
     Company) as the Board of Managers may designate  from time to time (whether
     before or after the event giving rise to potential liability),  in its sole
     and absolute discretion.

     "INTEREST  RATE"  means the prime rate of interest  published  from time to
time by  Bank of  America,  N.A.,  or its  successor,  or,  if such  rate is not
published, as determined by the Board of Managers by any other reasonable means.

     "IRS" means the Internal Revenue Service of the United States.

     "IXIS BOARD MEMBER" means the member of the Board of Managers  appointed by
the Special Member, if the Special Member is IXIS Financial Products Inc. or any
Affiliate thereof.

     "LIEN" means any lien, security interest,  mortgage, deed of trust, charge,
claim,  encumbrance,  pledge,  option, right of first offer or first refusal and
any  other  right or  interest  of  others  of any  kind or  nature,  actual  or
contingent, or other similar encumbrance of any nature whatsoever.

     "LIQUIDATING EVENT" has the meaning set forth in Section 13.1 hereof.

     "LIQUIDATOR" has the meaning set forth in Section 13.2 hereof.

     "LOCAL  PARTNERSHIPS"  has the meaning set forth in the  definition of "Tax
Credit Investments".

     "MEMBER"  means the Charter  Member,  Special Member or any other holder of
Membership  Interests in the Company other than an Other Equity holder  admitted
as a member of the Company,  and "MEMBERS" means the Charter Member, the Special


                                       3
<PAGE>



Member and each other  holder,  if any, of  Membership  Interests in the Company
other  than  an  Other  Equity  holder  admitted  as a  member  of  the  Company
collectively.

     "MEMBERSHIP  INTEREST"  means an  ownership  interest  in the  Company of a
Member representing a Capital Contribution by such Member and includes a limited
liability  company interest and any and all benefits to which the holder of such
Membership  Interest  may be entitled as  provided in this  Agreement  or in the
Company Act,  together  with all  obligations  of such Person to comply with the
terms and provisions of this Agreement. A Membership Interest shall be expressed
as a number of Units.

     "ORIGINAL COMMITMENT" has the meaning set forth in Section 4.1(a).

     "ORIGINAL  COMMITMENT  PERMITTED  PURPOSES"  has the  meaning  set forth in
Section 4.1(a).

     "ORIGINAL MEMBERS" means the Charter Member and the Special Member.

     "OTHER EQUITY" has the meaning set forth in Section 4.3(a).

     "PASS THROUGH  ENTITY" means any entity which is a pass through  entity for
federal income tax purposes.

     "PERCENTAGE  INTEREST"  means, at any time,  with respect to a Member,  the
ratio that (i) the number of such Member's  Units at such time bears to (ii) the
total number of Units of all Members of the Company at such time, expressed as a
percentage.  The initial  Percentage  Interest for each Member as of the date of
this Agreement shall be set forth in Exhibit A attached hereto.

     "PERSON" means an individual or Entity.

     "PUT DEFAULT" means the failure of Charter Mac  Corporation to purchase any
or all of the Units and warrants as required and in accordance with Section 4 of
the Warrant Agreement.

     "QUARTER"  means each of the three month  periods  ending on March 31, June
30, September 30 and December 31.

     "RATING  AGENCY"  has the meaning  set forth in the  Centerbrook  Operating
Agreement.

     "REGULATIONS" means the final, temporary or proposed Income Tax Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).

     "SPECIAL COMMITMENT" has the meaning set forth in Section 4.1(b).

     "SPECIAL  COMMITMENT  PERMITTED  PURPOSES"  has the  meaning  set  forth in
Section 4.1(b).

     "SPECIAL   MEMBER"  means  IXIS   Financial   Products   Inc.,  a  Delaware
corporation, in such Person's capacity as a member of the Company, including its
permitted successors and assigns.

     "SUBSIDIARY"  means,  with  respect  to any  Person,  any Entity of which a
majority of

          (a) the voting power of the voting equity securities or

          (b) the outstanding equity interests,

is owned, directly or indirectly, by such Person.

     "SUBSTITUTED  MEMBER"  means any  Person to whom Units are  Transferred  in
accordance with Article 11 hereof and who is admitted to the Company as a member
of the Company in connection therewith.

     "TAX CREDITS" means new market tax credits, low-income housing tax credits,
state low-income housing tax credits, historic rehabilitation tax credits, state
historic rehabilitation tax credits, home ownership tax credits (if such credits
are enacted as part of the Code) and similar  tax credits  established  by state
programs,  as well as depreciation and losses derived from the single-family and
multi-family  affordable  housing  transactions  owned by any Local Partnerships
that are allocated to the limited partner or member of such Local Partnership in
accordance with Section 42 of the Code and any applicable state legislation.


                                       4
<PAGE>



     "TAX CREDIT INVESTMENTS" means ownership interests in limited  partnerships
or limited  liability  companies (the "LOCAL  PARTNERSHIPS") in respect of which
certain Tax Credits are allocated to such Local Partnerships.

     "TERMINATING  CAPITAL  TRANSACTION"  means any sale or other disposition of
all or  substantially  all of the assets of the  Company or a related  series of
transactions  that, taken together,  result in the sale or other  disposition of
all or substantially all of the assets of the Company.

     "TOB TAX-EXEMPT  CERTIFICATES" has the meaning set forth in the Centerbrook
Operating Agreement.

     "TRANSFER"  as a noun,  means any  sale,  assignment,  conveyance,  pledge,
hypothecation,  gift,  encumbrance or other  transfer,  and as a verb,  means to
sell, assign, convey, pledge, hypothecate, give, encumber or otherwise transfer.

     "WARRANT AGREEMENT" means the Unitholder and Warrant Agreement, dated as of
June 28, 2006, among the Company,  IXIS Financial  Products Inc. and Charter Mac
Corporation, as amended from time to time.

     "WIND-DOWN  EVENT" has the meaning set forth in the  Centerbrook  Operating
Agreement.

     "UNIT" means a fractional,  undivided share of the Membership  Interests of
all  Members  issued  pursuant  to  Sections  4.1 and 4.2.  The  number of Units
outstanding  in the Company  are set forth in Exhibit A, as such  Exhibit may be
amended from time to time in accordance with Section 14.1.

     Certain  additional  terms and phrases  have the  meanings set forth in the
preamble and text of this Agreement.

                                    ARTICLE 2
                             ORGANIZATIONAL MATTERS

     2.1  Continuation
          ------------

          The Members hereby agree to continue the Company under and pursuant to
the Company Act. Except as expressly provided herein to the contrary, the rights
and  obligations of the Members and the  administration  and  termination of the
Company  shall be governed by the Company Act. The  Membership  Interest of each
Member shall be personal property for all purposes.

     2.2  Name
          ----

          The name of the Company shall continue to be Centerbrook Holdings LLC.
The  Company's  business may be  conducted  under any other name or names deemed
advisable by the Board of Managers.

     2.3  Registered Office and Agent; Principal Office
          ---------------------------------------------

          The  address of the  registered  office of the Company in the State of
Delaware and the name and address of the registered agent for service of process
on the Company in the State of Delaware is  Corporation  Service  Company,  2711
Centerville Road, Suite 400, Wilmington, Delaware 19808. The principal office of
the Company shall be 625 Madison Avenue, New York, NY 10022, or such other place
as the  Board of  Managers  may from  time to time  designate  by  notice to the
Members.  The Company may maintain  offices at such other place or places within
or outside the State of Delaware as the Board of Managers deems advisable.

     2.4  Term
          ----

          The  term  of the  Company  commenced  on the  date of  filing  of the
Certificate  and shall continue  until the Company is dissolved  pursuant to the
provisions of Article 13 or as otherwise provided by law.

     2.5  Authorized Person
          -----------------

          The Charter Member is hereby designated as the "authorized  person" of
the Company  within the meaning of the Company Act, and shall  execute,  deliver
and file or authorize persons to execute,  deliver or file any amendments and/or
restatements of the Certificate and any other certificates (and any corrections,
amendments and/or restatements thereof) required or permitted by the Company Act
to be filed with the Secretary of State of the State of Delaware.


                                       5
<PAGE>



                                    ARTICLE 3
                                     PURPOSE

     3.1  Purpose and Business
          --------------------

          The purpose and nature of the  business to be conducted by the Company
is to directly and through  Centerbrook  and other directly or indirectly  owned
Subsidiaries engage in the Credit Enhancement Business.

     3.2  Powers
          ------

          In  connection  with  carrying  out the  purpose  and  business of the
Company set forth in Section  3.1,  and subject to the terms and  conditions  of
this  Agreement,  the Company shall have full power and authority to enter into,
perform,  and carry out  contracts  of any  kind,  to borrow  money and to issue
evidences  of  indebtedness,  whether or not  secured by  mortgage,  trust deed,
pledge or other Lien,  and,  directly or indirectly,  to do any and all acts and
things necessary,  appropriate,  proper, advisable,  incidental to or convenient
for the furtherance and  accomplishment  of the purposes and business  described
herein and for the protection and benefit of the Company.

                                    ARTICLE 4
                              CAPITAL CONTRIBUTIONS

     4.1  Capital Contributions of the Members
          ------------------------------------

          (a) ORIGINAL  COMMITMENTS.  On the terms and  conditions  set forth in
     this Section 4.1 and for any Original Commitment Permitted Purpose, (i) the
     Charter Member hereby unconditionally commits to make capital contributions
     to the  Company  in cash up to an  aggregate  amount of $270  million  as a
     capital contribution at any time and from time to time during the period of
     five (5) years commencing on the date hereof (the "COMMITMENT  PERIOD") and
     (ii) the Special  Member  hereby  unconditionally  commits to make  capital
     contributions  to the  Company  in cash up to an  aggregate  amount  of $30
     million as a capital  contribution at any time and from time to time during
     the Commitment Period (each such commitment, a "ORIGINAL Commitment").  The
     Board of Managers, in its sole discretion,  shall have the right (but shall
     not be  obligated  notwithstanding  any  fiduciary  duty it may have to the
     Company,  the  Members or the  creditors  of the  Company) to call upon the
     Original  Members to make  contributions  at any time and from time to time
     during the  Commitment  Period up to, and  ratably  in  proportion  to, the
     aggregate amount of their respective Original Commitments for the following
     purposes (collectively,  the "ORIGINAL COMMITMENT PERMITTED PURPOSES"): (1)
     in order to pay operating expenses of the Company and (2) to make a capital
     contribution  to Centerbrook for use by Centerbrook (v) to incur new credit
     enhancement  obligations in the Credit  Enhancement  Business,  (w) to meet
     then-existing  credit  enhancement  obligations  in the Credit  Enhancement
     Business or to comply with  requirements  set forth by the Rating  Agencies
     applicable to Centerbrook, (x) to pay "Administrative Expenses" (as defined
     in the Centerbrook  Operating  Agreement) and other  operating  expenses of
     Centerbrook,  (y) to provide  funds  necessary  to comply  with the Capital
     Model, and (z) to make "Project Investments" (as defined in the Centerbrook
     Operating   Agreement).   The  Original  Members   acknowledge  that  their
     obligation to make said capital contributions is absolute and unconditional
     and the rights of the Company shall not be subject to any defense, set-off,
     counterclaim or recoupments which the Original Members may have against the
     Company or by reason of any  indebtedness or liability at any time owing by
     the  Company to the  Original  Members or by the  Original  Members to each
     other.  Any request by the Board of Managers under this clause (a) shall be
     given by notice to the Original  Members in writing of (i) the total amount
     of the Original Commitment being called and each Original Member's pro rata
     share thereof,  (ii) the related Original Commitment Permitted Purpose, and
     (iii) the date each  Original  Member's  capital is due and payable,  which
     date shall be not less than 10  business  days  after such  notice has been
     given.

          (b) SPECIAL COMMITMENTS. On the terms and conditions set forth in this
     Section  4.1 and for any Special  Commitment  Permitted  Purpose,  from and
     after the date on which the Original  Commitments  have been fully  called,
     (i) the  Charter  Member  hereby  unconditionally  commits to make  capital
     contributions  to the  Company  in cash up to an  aggregate  amount  of $54
     million as a capital  contribution at any time and from time to time during
     the Commitment  Period and (ii) the Special  Member hereby  unconditionally
     commits  to make  capital  contributions  to the  Company  in cash up to an
     aggregate  amount of $6 million as a capital  contribution  at any time and
     from time to time during the  Commitment  Period (each such  commitment,  a
     "SPECIAL COMMITMENT"). The Board of Managers, in its sole discretion, shall
     have the right (but shall not be obligated  notwithstanding  any  fiduciary
     duty it may  have to the  Company,  the  Members  or the  creditors  of the
     Company) to call upon the  Original  Members to make  contributions  at any
     time and from time to time during the Commitment  Period up to, and ratably
     in  proportion  to,  the  aggregate  amount  of  their  respective  Special
     Commitments  for  the  following  purposes   (collectively,   the  "SPECIAL
     COMMITMENT  PERMITTED  PURPOSES"):   to  make  a  capital  contribution  to
     Centerbrook  for  use  by  Centerbrook  (x)  to  cure  any  "Capital  Model


                                       6
<PAGE>



     Deficiency  Amount" as determined  by the Capital Model in connection  with
     the then-existing credit enhancement  obligations of Centerbrook and (y) as
     shall be  required  in order  for  Centerbrook  to  maintain  its "AAA" (or
     equivalent) counterparty rating with the Rating Agencies (if applicable) or
     to otherwise  prevent an event of the type described in Section  12.1(f) of
     the Centerbrook  Operating  Agreement from occurring.  The Original Members
     acknowledge  that their  obligation to make said capital  contributions  is
     absolute  and  unconditional  and the  rights of the  Company  shall not be
     subject to any defense,  set-off,  counterclaim  or  recoupments  which the
     Original  Members  may  have  against  the  Company  or by  reason  of  any
     indebtedness  or liability at any time owing by the Company to the Original
     Members or by the Original  Members to each other. Any request by the Board
     of Managers  under this clause (a) shall be given by notice to the Original
     Members in writing of (i) the total amount of the Special  Commitment being
     called and each Original Member's pro rata share thereof,  (ii) the related
     Special  Commitment  Permitted  Purpose,  and (iii) the date each  Original
     Member's  capital is due and payable,  which date shall be not less than 10
     business days after such notice has been given.

          (c)  FAILED  CONTRIBUTIONS.  If a Member  fails  to make  any  Capital
     Contribution  requested  under  clause (a) or clause (b) above prior to the
     expiration of the applicable due date (any such  non-contributing  party is
     referred to in this clause (c) as the "DEFAULTING  MEMBER"; and each Member
     that  actually  funded  its  pro  rata  share  of  the  requested   Capital
     Contribution is referred to in this clause (c) as a "CONTRIBUTING MEMBER"),
     the Board of  Managers  shall give  prompt  notice of such  failure and the
     amount of the  requested  Capital  Contribution  not funded to the  Company
     (such amount is hereinafter  referred to as the "FAILED  CONTRIBUTION") and
     within 30  business  days  after the date of such  notice,  a  Contributing
     Member may elect to fund the  Failed  Contribution.  The Board of  Managers
     shall continue to have the option to call for the  Defaulting  Member's pro
     rata  share of the  capital  called  pursuant  to clause  (a) or clause (b)
     above, but, with respect to capital calls under clause (b) above, the Board
     of Managers may, in its sole discretion,  call for additional capital under
     said  clause (b) from the other  Members  without  calling  for  additional
     capital from the Defaulting Member.

          (d) UNITS.  Each  Member  shall be issued one Unit in the  Company for
     each $100,000 (or fraction  thereof) of its Capital  Contribution  and each
     Capital Contribution shall be made by the applicable Member in cash. Except
     as provided in this Section 4.1 and in Section 4.2, no other Units shall be
     issued  by the  Company.  EXHIBIT  A shall be  amended  upon  each  Capital
     Contribution to reflect the additional capital  contributed by the relevant
     Member and any resulting adjustment to a Member's Percentage Interest.

     4.2  Additional Capital Contributions
          --------------------------------

          (a) If the Board of Managers determines,  in its sole discretion,  (i)
     at any time that the Members' Commitments have not been fully utilized, for
     any  purpose  related  to the  Credit  Enhancement  Business  other than an
     Original  Commitment  Permitted Purpose or a Special  Commitment  Permitted
     Purpose and (ii) from and after the date on which the Members'  Commitments
     have been fully utilized, for any purpose related to the Credit Enhancement
     Business (PROVIDED that any capital contributions to be made by the Company
     to any Subsidiary of the Company shall be permitted only if such Subsidiary
     is a  Subsidiary  of the Company in which no  interest  therein is owned by
     CharterMac or its  Affiliates  (other than the  Company))  that the Company
     requires additional capital contributions (the "ADDITIONAL CAPITAL"),  then
     the Board of Managers or its  designee  shall have the right (but shall not
     be obligated notwithstanding any fiduciary duty it may have to the Company,
     the Members or the  creditors of the Company) to give notice to the Members
     in  writing  (the  "CALL  NOTICE")  of (i) the total  amount of  Additional
     Capital required and each Member's pro rata share thereof,  (ii) the reason
     the Additional Capital is requested, and (iii) the date each Member's share
     of the Additional Capital is due and payable,  which date shall be not less
     than 45 business days after the notice has been given.

          (b) Each Member  shall have the right to fund its pro rata  portion of
     the amount of each request for Additional  Capital,  but no Member shall be
     obligated to fund any such request. If a Member elects, at its sole option,
     to not  contribute  the  Additional  Capital  requested in clause (a) above
     prior to the  expiration  of the  applicable  due date  (each  Member  that
     actually funded its pro rata share of the requested Capital Contribution is
     referred to in this clause (b) as a  "CONTRIBUTING  MEMBER"),  the Board of
     Managers  shall give prompt  notice of such  election and the amount of the
     capital  contribution not funded to the Company (such amount is hereinafter
     referred to as the  "Declined  Contribution")  and within 30 business  days
     after the date of such notice,  any  Contributing  Member may elect to fund
     the Declined Contribution.

          (c) If, at any time, the Special Member's  Percentage Interest is less
     than 5% (which Percentage Interest shall be determined for purposes of this
     clause (c) excluding  from the  denominator  thereof Units owned by Persons
     other than the  Special  Member,  the Charter  Member and their  respective
     Affiliates) and the aggregate amount of the Capital  Contributions  made by
     the Special  Member is less than  $50,000,000,  the Special Member shall no
     longer have the right to appoint a member of the Board of Managers.  If the
     Special  Member  loses  its  right  to  appoint  a member  to the  Board of


                                       7
<PAGE>



     Managers,  but,  thereafter,  its Percentage  Interest or aggregate capital
     contribution  exceeds either of such levels,  its right to appoint a member
     of the Board of Managers shall be reinstated, for so long as either of such
     levels are met. If the Special  Member does not have the right to appoint a
     member of the Board of Managers  pursuant to this Section 4.2(c),  then the
     Company  shall  permit  a   representative   of  the  Special  Member  (the
     "OBSERVER")  to attend each  meeting of the Board of Managers (in person or
     via  telephone),  in a non-voting  capacity.  The Company shall send to the
     Observer  the notice of the time and place of each such meeting in the same
     manner and at the same time as it shall send such  notice to the members of
     the Board of Managers.  The Company  shall also  provide the Observer  with
     copies of all reports,  minutes, consents and other information at the same
     time and in the same manner as such  information is provided to the members
     of the Board of Managers.

     4.3  Issuance of Additional Membership  Interests;  Admission of Additional
          ----------------------------------------------------------------------
          Members
          -------

          (a) The Board of  Managers is  authorized,  without the consent of any
     Member  (except as  provided in Section  7.2),  to cause the Company or its
     Subsidiaries to issue additional  classes of equity (the "OTHER EQUITY") in
     one or more series or  classes,  or in one or more series of any such class
     which may be senior  to the  Units,  which  may  include  preferred  equity
     entitling the investor to receive statutory credits or other recognition in
     consideration of its ratings under the Community  Reinvestment Act or other
     similar federal or state legislation,  on such terms and conditions, as the
     Board of Managers  shall  establish in each case,  subject to Delaware law,
     including,  without  limitation,  (i) the  allocations  of items of Company
     income,  gain, loss, deduction and credit with respect to the holder of the
     Other Equity, (ii) the rights of the holder of the Other Equity to share in
     Company  distributions,  and  (iii) the  rights of the  holder of the Other
     Equity upon  dissolution and winding up of the Company.  The Special Member
     shall have the right to acquire, on the same terms and conditions,  its pro
     rata share,  based on its Percentage  Interest,  of the Other Equity issued
     pursuant to this clause (a). The Company shall  provide the Special  Member
     not less than 30 days notice describing the Other Equity to be offered, the
     proposed  offering  price of the  Other  Equity,  and the  other  terms and
     conditions  on which it intends to offer the Other  Equity.  If the Special
     Member  elects to  participate  in such  offering and purchase its pro rata
     share of the Other Equity,  it shall do so by providing the Company written
     notice thereof by the end of such 30 day period.

          (b)  Without the  consent of any other  Person  (except as provided in
     Section 7.2),  the Board of Managers shall have the authority to amend this
     Agreement  to the extent  necessary to reflect the rights of the holders of
     the Other Equity or additional  Membership  Interests  issued in accordance
     with Section 4.3(a).

          (c) The Board of Managers is authorized to issue warrants on the terms
     set forth in the Warrant  Agreement and to issue Units on exercise  thereof
     on the terms set forth in the Warrant Agreement.

     4.4  No Third Party Beneficiary
          --------------------------

          To the maximum  extent  permitted  by law and except for the rights of
Indemnitees  under Section 7.5, no creditor or other third party having dealings
with the Company  shall have the right to enforce the rights or  obligations  of
any Member to make Capital  Contributions  or loans or to pursue any other right
or remedy hereunder or at law or in equity,  it being understood and agreed that
the provisions of this Agreement  shall be solely for the benefit of, and may be
enforced  solely by, the  parties  hereto and their  respective  successors  and
assigns.  In extending credit to the Company, to the maximum extent permitted by
law,  no  creditor  can  rely  on  any  Member's   obligation  to  make  Capital
Contributions or loans to the Company.

                                    ARTICLE 5
                                  DISTRIBUTIONS

     5.1  Regular Distributions
          ---------------------

          Except for  distributions  pursuant to Section 13.2 in connection with
the dissolution and winding up of the Company,  and subject to the provisions of
Sections 5.3, 5.4 and 10.5, Available Cash shall be distributed at such times as
shall be  determined  by the Board of  Managers,  to each Member,  pro rata,  in
accordance with such Member's respective Percentage Interest.

     5.2  Distributions Upon Liquidation
          ------------------------------

          Proceeds from a  Terminating  Capital  Transaction  and any other cash
received or  reductions in reserves  made after the  dissolution  and during the
period of winding  up of the  Company  shall be  distributed  to the  Members in
accordance with Section 13.2.


                                       8
<PAGE>



     5.3  Limitations on Distributions
          ----------------------------

          Notwithstanding any other provision  contained in this Agreement,  the
Company,  and the  Board of  Managers  on behalf  of the  Company,  shall not be
required to make any  distribution to a Member in respect of its interest in the
Company if such  distribution  would violate the Company Act or other applicable
law.

                                    ARTICLE 6
                                   ALLOCATIONS

     6.1  Allocations
          -----------

          Items of income,  deduction,  gain and loss,  if any, in each  taxable
     year of the Company shall be allocated to the Members,  in accordance  with
     Schedule B.

                                    ARTICLE 7
                      MANAGEMENT AND OPERATIONS OF BUSINESS

     7.1  Management
          ----------

          (a) Subject to this Section 7.1 and Section 7.2(f) and Section 7.2(g),
     full, complete and exclusive  discretion to manage and control the business
     and affairs of the Company is and shall be vested in the Board of Managers,
     and no Member  shall have any  authority  to act for or bind the Company or
     any right to  participate in or exercise  control or management  power over
     the business  and affairs of the Company.  In addition to the powers now or
     hereafter  granted a managing member of a limited  liability  company under
     applicable  law or which are  granted  to the Board of  Managers  under any
     other  provision of this  Agreement,  the Board of Managers shall have full
     power and authority to do all things deemed necessary or desirable by it to
     conduct the  business of the  Company,  to exercise all powers set forth in
     Section 3.2 hereof and to effectuate  the purposes set forth in Section 3.1
     hereof.

          (b) The Board of Managers  may from time to time  delegate  all or any
     portion of its authority to others,  including without  limitation  agents,
     officers  and other  employees  of itself  or the  Company  which it or the
     Company may appoint,  hire or contract with at the Company's expense.  Such
     persons  may  include  persons  employed  by the  Charter  Member  and  its
     Affiliates,   including   persons   providing   services  pursuant  to  the
     Administrative Services Agreement.

          (c) (i) Each of the Members agrees that,  subject to Section 7.2, each
     member of the Board of  Managers  or a designee  thereof is  authorized  to
     execute,  deliver and perform all agreements and  transactions on behalf of
     the Company without any further act, approval or vote of the Members to the
     fullest extent  permitted  under the Company Act or other  applicable  law,
     rule or regulation.

               (ii) To the  fullest  extent  permitted  by law,  the  execution,
          delivery  or  performance  by a member  of the  Board of  Managers,  a
          designee  thereof  or the  Company  of  any  agreement  authorized  or
          permitted  under this  Agreement  shall not constitute a breach by the
          Board of Managers  of any duty that the Board of Managers  may owe the
          Company or the Members or any other Persons under this Agreement or of
          any duty stated or implied by law or equity.

     7.2  Board of Managers
          -----------------

          (a) The Board of Managers  shall consist of five (5) members and shall
     have such  powers as set forth in this  Agreement.  Four (4) of the members
     shall be appointed by the Charter Member (the "CHARTER BOARD  MEMBERS") and
     one (1) of the members  shall be  appointed by the Special  Member,  if the
     Special  Member  is  IXIS   Financial   Products  Inc.  or  its  Affiliate.
     Notwithstanding  anything  in this  Agreement  to the  contrary or any duty
     (fiduciary or  otherwise)  that might  otherwise  have existed at law or in
     equity, and to the fullest extent permitted by applicable law, (i) the IXIS
     Board  Member  shall  not be deemed  to owe any duty  (including  fiduciary
     duties) to any Member or any other Person (other than the Special  Member),
     including  without  limitation in  connection  with (x) the business of the
     Company  and its  Subsidiaries,  (y) any  action by any  Manager  or Member
     pursuant to this  Agreement or (z) any approval or  withholding  of consent
     contemplated  by this  Agreement,  (ii) whenever in this Agreement the IXIS
     Board  Member is  permitted  or  required  to make a decision or to give or
     withhold  approval or consent,  the IXIS Board  Member shall be entitled to
     act in its sole  discretion  and in the  interests  of the Special  Member,
     (iii) the IXIS Board  Member  shall not have any  obligation  to  otherwise
     consider the interests of any of the other Members in exercising any rights
     pursuant  to this  Agreement  and (iv) each of the IXIS Board  Member,  its


                                       9
<PAGE>



     officers and employees,  and their respective agents and/or representatives
     shall not be liable to any  Member  or any  other  Person  (other  than the
     Special  Member)  for any  action  or  inaction  in  connection  with  this
     Agreement.

          (b) The  Charter  Member or  Special  Member,  as the case may be, may
     appoint any  alternate  for each member  appointed to the Board of Managers
     who shall have the powers of the Board of Managers member in his absence or
     inability to serve.  The Charter Member or Special Member,  as the case may
     be, shall have the sole power to remove any member or  alternate  member of
     the Board of Managers appointed by it, by delivery of written notice to the
     other Member of such removal.  Vacancies on the Board of Managers  shall be
     filled  by  the  Member  which  appointed  the  Board  of  Managers  member
     previously holding the position which is then vacant.

          (c)  The  Board  of  Managers,  shall  (but  shall  not  be  obligated
     notwithstanding any fiduciary duty it may have to the Company,  the Members
     or the creditors of the Company),  in its sole  discretion,  be entitled to
     call upon the  Members to make loans to the  Company on a pro rata basis in
     accordance  with their  Percentage  Interests and on such terms as shall be
     determined  by the Board of  Managers,  in lieu of calling  for  Additional
     Capital pursuant to Section 4.2. Notwithstanding the authority of the Board
     of Managers to call upon the Members to make loans pursuant to this Section
     7.2(c), no Member shall be obligated to make such loans to the Company.

          (d)  Subject  to  Section  7.2(f)  and  Section  7.2(g)  each Board of
     Managers  member  shall be  entitled  to cast one vote with  respect to any
     decision  made by the Board of Managers,  PROVIDED that the members who are
     actually present at a meeting of the Board of Managers shall be entitled to
     cast the vote of a member not  present at such  meeting,  with the  written
     consent of such non-attending member on whose behalf a vote is being cast.

          (e) The Board of Managers shall meet at least once each quarter at the
     offices of the Company  (unless such meeting shall be waived by all members
     thereof) or on the call of either the Charter  Member or Special  Member or
     three  members of the Board of Managers upon 10 days' notice to the Members
     and all  members of the Board of Managers by  telephone,  electronic  mail,
     telecopy  (with receipt  confirmed by sender's fax machine).  An agenda for
     each  meeting  shall be prepared in advance by the Member or the members of
     the Board of Managers who called the meeting. Three members of the Board of
     Managers shall  constitute a quorum,  except in such cases as stipulated in
     Section  7.2(f) or Section 7.2(g) when the consent of the IXIS Board Member
     or the Special  Member,  as the case may be, is required  for the  proposed
     action  to be  taken,  in which  case a quorum  shall  only be deemed to be
     present if the IXIS Board Member or the Special Member, as the case may be,
     is also present.  Subject to Section 7.2(f) and Section 7.2(g), the vote of
     a majority of the members of the Board of  Managers  shall be required  for
     all actions of the Board of Managers and for all matters on which the Board
     of Managers  can act under this  Agreement.  The Board of Managers  may act
     without a meeting if the action  taken is approved in advance in writing by
     a majority of the Members  including  the IXIS Board  Member or the Special
     Member,  as the case may be,  where the consent of the IXIS Board Member or
     the Special  Member,  as the case may be, is  required  pursuant to Section
     7.2(f) or Section 7.2(g).

          (f)  Notwithstanding  anything  to the  contrary  set  forth  in  this
     Agreement, the Board of Managers shall not, without the consent of the IXIS
     Board Member  (unless and to the extent that the Special  Member's right to
     select a member  of the  Board of  Managers  has been  terminated  (and not
     reinstated)  under  Section  4.2(c)),  which may be granted in its sole and
     absolute discretion, cause the Company to:

               (i)  amend,  waive  or  otherwise  modify,  or  terminate,   this
          Agreement or the Administrative Services Agreement,  PROVIDED that the
          Board of Managers  may amend this  Agreement  to reflect the rights of
          Additional  Units or Other  Equity  permitted  to be issued under this
          Agreement,  subject only to the consent of the IXIS Board Member as to
          the  form of  such  amendment  and,  notwithstanding  anything  to the
          contrary  contained  herein,  the Special  Member may not withhold its
          consent based on the substance of such amendment;

               (ii)  approve  the  budget  under  the  Administrative   Services
          Agreement for any calendar year if the aggregate amount in such budget
          exceeds 110% of the aggregate amount in the budget for the immediately
          preceding calendar year,  PROVIDED that if such immediately  preceding
          calendar year is less than a full calendar year, the calculation shall
          be based on the  annualized  amount  set forth in the  budget for such
          immediately preceding calendar year; or approve any expenditures under
          the  budget  as then  in  effect  for  any  calendar  year  under  the
          Administrative  Services Agreement if the aggregate expenditures under
          such budget would exceed 110% of the aggregate  amount  originally set
          forth in such budget.

               (iii)  change the lines of  business of the Company or any of its
          Subsidiaries  to any lines of  business  other than a line of business
          specified in Section 3.1 of this Agreement;


                                       10
<PAGE>



               (iv) sell, assign or transfer assets of the Company or any of its
          Subsidiaries  (including  equity interests in Centerbrook or any other
          Subsidiary  of the Company)  outside the ordinary  course of business,
          except to the  extent  permitted  under the  Warrant  Agreement  or in
          connection with a Forced Sale permitted under clause (xiv) below;

               (v) merge or consolidate with, or convert into, another Entity or
          acquire the assets of another  Entity  other than the  acquisition  of
          investments   made  by   Centerbrook  or  other   Subsidiaries   which
          investments are related to the Credit Enhancement Business;

               (vi) issue to the  Charter  Member or its  Affiliates  additional
          Units or Other  Equity  which are  senior in any  respect to the Units
          owned by the Special Member;

               (vii)  permit any  transactions  between (x) the  Company  and/or
          Centerbrook or any other Subsidiary of the Company on the one hand and
          (y) the  Charter  Member  or any of its  Affiliates  (other  than  the
          Company and its  wholly-owned  Subsidiaries)  or any  non-wholly-owned
          Subsidiary of the Company on the other hand,  unless such  transaction
          is on arm's  length terms no less  favorable  than that which could be
          obtained   from  an   independent   third   party,   other   than  the
          Administrative  Services  Agreement  and the  issuance of Units to the
          Charter Member in accordance with the terms hereof;

               (viii)  issuance  of any equity  interest in  Centerbrook  or any
          other  Subsidiary  of the Company to the Charter  Member or any of its
          Affiliates (other than the Company or any of its Subsidiaries);

               (ix) file a petition in bankruptcy or consent to the  institution
          of a bankruptcy  proceeding  with respect to, or otherwise  permit the
          liquidation, dissolution or winding up of, the Company, Centerbrook or
          any of its  Subsidiaries,  except  in  connection  with a Forced  Sale
          permitted under clause (xiv) below;

               (x) appoint any successor  Administrator under the Administrative
          Services  Agreement  (or  appoint  any  Person to  fulfill  any of the
          obligations  or  duties  contained  in  the  Administrative   Services
          Agreement) or consent to the  assignment by the  Administrator  of its
          rights and obligations under the Administrative Services Agreement;

               (xi)  transfer or assign its  obligations  under the  Centerbrook
          Operating Agreement;

               (xii)  permit any changes to the Capital  Model that could permit
          at any time the ratio of (x) the  aggregate  amount of equity  capital
          contributed  to  Centerbrook  up to  such  time  DIVIDED  BY  (y)  the
          aggregate  notional  amount of all CDS (as defined in the  Centerbrook
          Operating Agreement) in the CDS Program (as defined in the Centerbrook
          Operating Agreement) at such time to be lower than 0.05;

               (xiii) form or acquire, or permit any of its Subsidiaries to form
          or acquire, any  non-wholly-owned  Subsidiaries to the extent that any
          ownership  interest  therein  is  held  by  CharterMac  or  any of its
          Affiliates  (other  than  the  Company  or  any  of  its  wholly-owned
          Subsidiaries);

               (xiv) sell all or substantially  all of the assets and properties
          of the Company,  PROVIDED  that,  subject to the rights of the Special
          Member under  Section  4.01(c) of the Warrant  Agreement,  the Company
          shall be permitted to enter into a Forced Sale without such consent at
          any time after the fifth anniversary of the date hereof so long as the
          Company shall have provided  written  notice  thereof to the "Holders"
          (as defined in the Warrant  Agreement),  which  notice shall set forth
          the consideration  (including amount and type) and the other terms and
          conditions  thereof,  at  least  20  days  prior  to the  consummation
          thereof; and

               (xv) at any time that the Board of Managers  consists of three or
          more  members  that are also  employees  of  Holdings,  enter into any
          employment  agreement,  profits  interests  agreement,  incentive plan
          agreement or any other employment  related agreement with any employee
          or prospective employee of the Company.

          (g)  Notwithstanding  anything  to the  contrary  set  forth  in  this
Agreement, at any time that the Special Member's right to select a member of the
Board of Managers has been terminated (and not reinstated) under Section 4.2(c),
the Board of Managers  shall not,  without  the  consent of the Special  Member,
which may be granted in its sole and absolute discretion, cause the Company to:


                                       11
<PAGE>



               (i)  amend,  waive or  otherwise  modify  this  Agreement  or the
          Administrative Services Agreement, PROVIDED that the Board of Managers
          may amend this Agreement to reflect the rights of Additional  Units or
          Other Equity permitted to be issued under this Agreement, subject only
          to the consent of the Special  Member as to the form of such amendment
          and,  notwithstanding  anything to the contrary  contained herein, the
          Special  Member may not withhold its consent based on the substance of
          such amendment;

               (ii)  change the lines of  business  of the Company or any of its
          Subsidiaries  to any lines of  business  other than a line of business
          specified in Section 3.1 of this Agreement;

               (iii) sell,  assign or  transfer  assets of the Company or any of
          its  Subsidiaries  (including  equity  interests in Centerbrook or any
          other  Subsidiary  of  the  Company)  to  CharterMac  or  any  of  its
          Affiliates;

               (iv) issue to the  Charter  Member or its  Affiliates  additional
          Units or Other  Equity  which are  senior in any  respect to the Units
          owned by the Special Member;

               (v)  permit  any  transactions  between  (x) the  Company  and/or
          Centerbrook or any other Subsidiary of the Company on the one hand and
          (y) the  Charter  Member  or any of its  Affiliates  (other  than  the
          Company and its  wholly-owned  Subsidiaries)  or any  non-wholly-owned
          Subsidiary of the Company on the other hand,  unless such  transaction
          is on arm's  length terms no less  favorable  than that which could be
          obtained   from  an   independent   third   party,   other   than  the
          Administrative  Services  Agreement  and the  issuance of Units to the
          Charter Member in accordance with the terms hereof;

               (vi) issuance of any equity  interest in Centerbrook or any other
          Subsidiary  of  the  Company  to  the  Charter  Member  or  any of its
          Affiliates (other than the Company or any of its Subsidiaries);

               (vii) form or acquire,  or permit any of its Subsidiaries to form
          or acquire, any  non-wholly-owned  Subsidiaries to the extent that any
          ownership  interest  therein  is  held  by  CharterMac  or  any of its
          Affiliates  (other  than  the  Company  or  any  of  its  wholly-owned
          Subsidiaries);

               (viii) sell all or substantially all of the assets and properties
          of the Company,  PROVIDED  that,  subject to the rights of the Special
          Member under  Section  4.01(c) of the Warrant  Agreement,  the Company
          shall be permitted to enter into a Forced Sale without such consent at
          any time after the fifth anniversary of the date hereof so long as the
          Company shall have provided  written  notice  thereof to the "Holders"
          (as defined in the Warrant  Agreement),  which  notice shall set forth
          the consideration  (including amount and type) and the other terms and
          conditions  thereof,  at  least  20  days  prior  to the  consummation
          thereof; and

               (ix) at any time that the Board of Managers  consists of three or
          more  members  that are also  employees  of  Holdings,  enter into any
          employment  agreement,  profits  interests  agreement,  incentive plan
          agreement or any other employment  related agreement with any employee
          or prospective employee of the Company.

     7.3  Reimbursement of the Board of Managers
          --------------------------------------

          (a) The Board of Managers  shall be reimbursed  for all  out-of-pocket
     expenses that it incurs on behalf of the Company.

          (b)  Such   reimbursement   shall  be  in  addition  to  (but  without
     duplication  of) any  reimbursement  made as a  result  of  indemnification
     pursuant to Section 7.5 hereof.

     7.4  Transactions with Affiliates
          ----------------------------

          (a) (i) The Company may lend or  contribute  funds or other  assets to
     Subsidiaries and such  Subsidiaries  may borrow funds from the Company,  on
     terms and conditions established in the sole and absolute discretion of the
     Board of Managers.

               (ii) The  foregoing  authority  shall  not  create  any  right or
          benefit in favor of any Affiliate or any other Person.


                                       12
<PAGE>



          (b) The Company may in the ordinary course of business Transfer assets
     to Subsidiaries  and entities which thereby become  Subsidiaries  upon such
     terms and subject to such  conditions  consistent  with this  Agreement and
     applicable  law  as  the  Board  of  Managers,  in its  sole  and  absolute
     discretion, may determine.

          (c) The Company may enter into an Administrative  Services  Agreement,
     in respect of services to be  performed,  directly or  indirectly,  for the
     benefit of the Company, the Members, any Subsidiaries of the Company or any
     Affiliate of any of them, on terms to be approved by the Members.

          (d) One of the principal  purposes for the formation of the Company is
     to engage in the Credit  Enhancement  Business  with  respect to tax exempt
     bonds owned by CharterMac  and its  Affiliates  and returns to investors in
     investment programs sponsored by CharterMac or its Affiliates. Accordingly,
     the Board of Managers,  without the consent of the Members,  shall have the
     authority to enter into agreements  directly or through Centerbrook and its
     directly  or  indirectly  owned   Subsidiaries  to  engage  in  the  Credit
     Enhancement  Business with  CharterMac  and its Affiliates and it shall not
     constitute a breach of duty,  including any  fiduciary  duty, to enter into
     such  transactions,   PROVIDED  that  the  Board  of  Managers   reasonably
     determines in each case that the credit  enhancement  transaction meets the
     requirements set forth in this Agreement and the operating agreement of the
     applicable  Subsidiary  and is on arm's length terms no less favorable than
     that which could be obtained from an independent third party.

          (e) Nothing in this Section 7.4 shall limit Section  7.2(f) or Section
     7.2(g).

     7.5  Indemnification
          ---------------

          (a) (i) To the fullest  extent  permitted by Delaware law, the Company
     shall  indemnify  each  Indemnitee  from and  against  any and all  losses,
     claims,  damages,  liabilities,  joint  or  several,  expenses  (including,
     without  limitation,  reasonable  attorneys'  fees and other legal fees and
     expenses),  judgments,  fines, settlements,  and other amounts arising from
     any  and  all  claims,  demands,  actions,  suits  or  proceedings,  civil,
     criminal,  administrative  or investigative,  that such Indemnitee  becomes
     subject to or liable for by reason of the formation, operation, dissolution
     or  termination  of the  Company  or the  actions  of  such  Indemnitee  in
     connection  with the conduct of the affairs of the  Company,  except to the
     extent it is finally determined by a court of competent jurisdiction,  from
     which no  further  appeal  may be  taken,  that  such  Indemnitee's  action
     constituted  intentional acts or omissions  constituting willful misconduct
     or gross negligence.

               (ii) Any  indemnification  pursuant to this  Section 7.5 shall be
          made only out of the assets of the  Company,  and  neither the Charter
          Member nor Special  Member shall have any  obligation to contribute to
          the capital of the Company,  or otherwise provide funds, to enable the
          Company to fund its obligations under this Section 7.5.

          (b) Reasonable  expenses incurred by an Indemnitee who is a party to a
     proceeding  shall be paid or  reimbursed  by the  Company in advance of the
     final  disposition of the proceeding so long as such Indemnitee or a Person
     on such Indemnitee's  behalf shall have provided the Company with a written
     undertaking  to  reimburse  the Company  for all amounts  advanced if it is
     ultimately   determined   that  such   Indemnitee   is  not   entitled   to
     indemnification hereunder.

          (c) The  indemnification  provided  by this  Section  7.5  shall be in
     addition to any other rights to which an Indemnitee or any other Person may
     be  entitled  under any  agreement,  pursuant to any vote or consent of the
     Members,  as a matter  of law or  otherwise,  and shall  continue  as to an
     Indemnitee  who has  ceased  to serve  in such  capacity  unless  otherwise
     provided  in a written  agreement  pursuant  to which  such  Indemnitee  is
     indemnified.

          (d)  Notwithstanding  any duty otherwise existing at law or in equity,
     and to the fullest  extent  permitted  by law,  the members of the Board of
     Managers  shall not be subject to a  fiduciary  duty to the  Company or the
     Members and each member of the Board of Managers  shall be entitled to vote
     or consent based on the interests of, and in accordance with the directions
     of, the Member appointing him or her.

          (e) The Company  may,  but shall not be  obligated  to,  purchase  and
     maintain insurance,  on behalf of the Indemnitees and such other Persons as
     the Board of Managers  shall  determine,  against any liability that may be
     asserted  against  or  expenses  that may be  incurred  by such  Person  in
     connection with the Company's activities, regardless of whether the Company
     would have the power to indemnify such Person against such liability  under
     the provisions of this Agreement.


                                       13
<PAGE>



          (f) An Indemnitee shall not be denied  indemnification  in whole or in
     part under this Section 7.5 because the  Indemnitee  had an interest in the
     transaction  with  respect  to which  the  indemnification  applies  if the
     transaction was otherwise permitted by the terms of this Agreement.

          (g) (i) The  provisions of this Section 7.5 are for the benefit of the
     Indemnitees,  their heirs, successors, assigns and administrators and shall
     not be deemed to create any rights for the benefit of any other Persons.

               (ii) Any amendment, modification or repeal of this Section 7.5 or
          any provision  hereof shall be  prospective  only and shall not in any
          way  affect  the  Company's  liability  to any  Indemnitee  under this
          Section  7.5,  as in  effect  immediately  prior  to  such  amendment,
          modification,  or  repeal  with  respect  to  claims  arising  from or
          relating  to  matters  occurring,  in whole or in part,  prior to such
          amendment,  modification or repeal, regardless of when such claims may
          arise or be asserted.

     7.6  Liability of the Members of the Board of Managers and the Members
          -----------------------------------------------------------------

          (a)  Notwithstanding  anything  to the  contrary  set  forth  in  this
     Agreement,  the Members and the members of the Board of Managers  shall not
     be liable for  monetary  damages to the  Company or any  Members for losses
     sustained  or  liabilities  incurred  as a result of errors in  judgment or
     mistakes of fact or law or of any act or omission unless such member of the
     Board of Managers' or the Member's actions  constitute  intentional acts or
     omissions constituting willful misconduct or gross negligence.

          (b) The members of the Board of Managers and the Members  shall not be
     responsible  for any  misconduct  or  negligence  on the part of any  agent
     appointed by the Board of Managers in good faith.

          (c)  Notwithstanding  any duty that might otherwise have existed under
     law or equity,  whenever this Agreement or any other agreement contemplated
     hereby provides any Indemnitee or their respective  Affiliates is permitted
     or required to make a decision (i) in its  "discretion" or under a grant of
     similar  authority or latitude,  the Indemnitee or such Affiliate shall, to
     the fullest extent permitted by law, be entitled to consider such interests
     and factors as it desires and shall have no duty or  obligation to give any
     consideration  to any interest of or factors  affecting  the Company or any
     Member, or (ii) in its "good faith" or under another express standard,  any
     Indemnitee or Affiliate  thereof shall act under such express  standard and
     shall not be subject to any other or different  standards,  imposed by this
     Agreement,  any other  agreement  contemplated  hereby or applicable law or
     equitable principles, unless otherwise required by a mandatory provision of
     applicable law.

          (d) The provisions of this  Agreement,  to the extent they restrict or
     eliminate the duties and liabilities of any Indemnitee or Affiliate thereof
     otherwise  existing  at law or in  equity,  are  agreed by the  Members  to
     completely  replace such other duties and  liabilities of the Indemnitee or
     their Affiliates.

     7.7  Other Matters Concerning the Board of Managers
          ----------------------------------------------

          (a) The  members  of the  Board of  Managers  may  rely  and  shall be
     protected  in acting,  or  refraining  from  acting,  upon any  resolution,
     certificate,  statement,  instrument,  opinion,  report,  notice,  request,
     consent,  order, bond, debenture, or other paper or document believed by it
     in good faith to be genuine  and to have been  signed or  presented  by the
     proper party or parties.

          (b) The  members  of the Board of  Managers  may  consult  with  legal
     counsel,  accountants,   appraisers,  management  consultants,   investment
     bankers,  architects,   engineers,   environmental  consultants  and  other
     consultants and advisers selected by it, and any act taken or omitted to be
     taken in reliance  upon the opinion of such Persons as to matters which the
     members  of the Board of  Managers  reasonably  believe  to be within  such
     Person's  professional or expert competence shall be conclusively  presumed
     to have been done or omitted in good faith if taken in accordance with such
     opinion.

          (c) In the  event an  attorney  in fact is  acting  on  behalf  of the
     members of the Board of  Managers,  such  attorney  in fact  shall,  to the
     extent  provided  by the members of the Board of Managers in their power of
     attorney,  have full power and  authority  to do and perform each and every
     act and duty which is  permitted  or  required to be done by the members of
     the Board of Managers hereunder.


                                       14
<PAGE>



     7.8  Reliance by Third Parties
          -------------------------

          (a)  Notwithstanding  anything to the contrary in this Agreement,  any
     Person  dealing with the Company shall be entitled to assume that the Board
     of Managers has full power and  authority,  without  consent or approval of
     any Member or any other Person,  to encumber,  sell or otherwise use in any
     manner any and all assets of the Company and to enter into any contracts on
     behalf  of the  Company,  and take any and all  actions  on  behalf  of the
     Company,  and such  Person  shall be  entitled  to deal  with the  Board of
     Managers  as if the Board of  Managers  were the  Company's  sole  party in
     interest, both legally and beneficially.

          (b) To the fullest extent  permitted by law, each Member hereby waives
     any and all defenses or other remedies which may be available  against such
     Person to contest,  negate or disaffirm any action of the Board of Managers
     in connection with any such dealing,  other than in connection with actions
     requiring consent pursuant to Section 7.2(f) and Section 7.2(g).

          (c) In no event shall any Person dealing with the Board of Managers or
     its  representatives  be  obligated  to  ascertain  that the  terms of this
     Agreement  have been  complied  with or to inquire  into the  necessity  or
     expediency  of any  act or  action  of  the  Board  of  Managers  or  their
     representatives.

          (d) Each and every certificate,  document or other instrument executed
     on behalf of the Company by the Board of Managers or its representatives at
     the  direction  of the Board of Managers  shall be  conclusive  evidence in
     favor of any and every Person relying thereon or claiming thereunder that

               (i)  at  the  time  of  the   execution   and  delivery  of  such
          certificate,  document or instrument, this Agreement was in full force
          and effect;

               (ii)  the  Person  executing  and  delivering  such  certificate,
          document or instrument was duly  authorized and empowered to do so for
          and on behalf of the Company; and

               (iii) such certificate,  document or instrument was duly executed
          and  delivered in  accordance  with the terms and  provisions  of this
          Agreement and is binding upon the Company.

                                    ARTICLE 8
                      RIGHTS AND OBLIGATIONS OF THE MEMBERS

     8.1  Limitation of Liability
          -----------------------

          The Members shall have no liability  under this  Agreement  except for
intentional  acts  or  omissions   constituting   willful  misconduct  or  gross
negligence.

     8.2  Management of Business
          ----------------------

          The  Members  shall  not take  part in the  day-to-day  operations  or
management of the Company,  transact any business in the Company's  name or have
the power to sign  documents for or otherwise  bind the Company,  except through
the Board of Managers.

     8.3  Outside Activities of the Members
          ---------------------------------

          (a)  Notwithstanding  any duty otherwise existing at law or in equity,
     any Member or member of the Board of Managers  and any  officer,  director,
     employee,  agent, trustee,  Affiliate or shareholder of any Member shall be
     entitled to and may engage in or possess an interest in any other  business
     venture,  of every nature and  description,  independently  or with others,
     whether or not  competitive  with the  business of the  Company,  except as
     separately  agreed in writing  between the  Special  Member and the Charter
     Member.

          (b)  Notwithstanding  any duty otherwise existing at law or in equity,
     neither the Company nor any Member  shall have any rights by virtue of this
     Agreement in any business ventures, or the income derived therefrom, of any
     Member outside of the business  contemplated  by this Agreement  and/or any
     exhibits hereto.


                                       15
<PAGE>



     8.4  Rights of Members Relating to the Company
          -----------------------------------------

          (a) In addition to the other rights  provided by this  Agreement or by
     the Company Act, and except as limited by Section 8.4(d), the Company shall
     promptly provide to the Members all information reasonably requested by any
     or all of them in connection with any filing requirements  (whether related
     to tax or otherwise) applicable to any Member.

          (b) In addition to the other rights  provided by this  Agreement or by
     the Company Act, and except as limited by Section 8.4(d), each Member shall
     have the right,  PROVIDED  that such  request  is for a purpose  reasonably
     related to such Member's interest as a Member in the Company,  upon written
     demand with a statement of the purpose of such demand and at such  Member's
     own expense:

               (i) to obtain a copy of the  Company's  federal,  state and local
          income tax returns for each Company Year;

               (ii)  to  obtain  a  current  list of the  name  and  last  known
          business, residence or mailing address of any Member;

               (iii) to obtain a copy of this Agreement and the  Certificate and
          all amendments or restatements thereto,  together with executed copies
          of all  powers of  attorney  pursuant  to which  this  Agreement,  the
          Certificate and all amendments and/or  restatements  thereto have been
          executed.

          (c) In addition to the other rights  provided by this  Agreement or by
     the Company Act and except as limited by Section 8.4(d)  hereof,  the Board
     of Managers shall send to each Member at the Company's expense,  within the
     time periods set forth below:

               (i) as soon as  available  and in any event within 120 days after
          the close of each Company  Year,  (a) the  statements of income of the
          Company  for  such  Company  Year,  (b)  the  related  balance  sheets
          (including  any related notes thereto) of the Company as at the end of
          such Company Year, (c) the related statements of equity and cash flows
          for the Fiscal Year, (d) the related notes to the financial statements
          and (d) an opinion of the Company  Auditor,  which opinion shall state
          that the final statements of income,  retained earnings and cash flows
          and balance  sheet  (including  the related notes  thereto)  delivered
          under this clause fairly  present the financial  condition and results
          of  operations  of the Company as at the end of, and for, such Company
          Year in accordance with GAAP;

               (ii) as soon as  available  and in any event within 60 days after
          the end of each of the first three  quarters of each  Company  Year of
          the Company, (a) the statements of income of the Company for each such
          quarter  and (b) the related  balance  sheets  (including  any related
          notes  thereto) of the  Company as at the end of such  quarter and the
          related  statements of cash flows for the period from the beginning of
          such Company Year to the end of such quarter;

               (iii) as soon as available  with  respect to each  Company  Year,
          annual  budgets  of  the  Company,   Centerbrook  and  each  of  their
          Subsidiaries;

               (iv) as soon as available,  copies of (a) any  auditors'  reviews
          pursuant to Section  2.11(g) of the Centerbrook  Operating  Agreement,
          (b) all reports and notices pursuant to Section 9.2 of the Centerbrook
          Operating Agreement,  (c) each "Distribution  Schedule" (as defined in
          the Centerbrook  Operating  Agreement)  delivered  pursuant to Section
          13.2 of the Centerbrook  Operating Agreement and (d) all other notices
          and reports  delivered under or pursuant to the Centerbrook  Operating
          Agreement; and

               (v) upon the occurrence thereof, notice of any event described in
          Section 12.1(i) of the Centerbrook Operating Agreement.

          (d)  Notwithstanding  any other  provision  of this  Section  8.4, the
     Company may keep confidential from each Member,  for such period of time as
     the Board of Managers  reasonably  believes is necessary,  any  information
     that

               (i) the Company is required by law to keep confidential; or


                                       16
<PAGE>



               (ii) the Company is required by agreements  with an  unaffiliated
          third party to keep confidential, to the extent that such Member shall
          not  have  agreed  to  keep  any  such  information   confidential  on
          substantially  similar terms and  conditions as shall have been agreed
          by the Company in such agreement;

          PROVIDED that,  notwithstanding the provisions of this Section 8.4(d),
the Members shall in any event be entitled to obtain copies of the Company's tax
returns  and  information  reasonably  needed by either  Member to  prepare  tax
returns as provided in Section 8.4(b)(i).

                                    ARTICLE 9
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

     9.1  Records and Accounting
          ----------------------

          (a) The  Board  of  Managers  shall  keep or  cause  to be kept at the
     principal office of the Company those records and documents  required to be
     maintained  by the Company  Act and other  books and records  deemed by the
     Board of Managers to be appropriate with respect to the Company's business,
     and to  provide  to the  Members  any  information,  lists  and  copies  of
     documents  required  to be  provided  pursuant  to Section  8.4(a)  hereof.
     Subject  to   Section   8.4(d),   any   Member  (or  its  duly   authorized
     representative), at the expense of such Member, shall have the right at any
     time to inspect and copy from such  books,  records  and  documents  during
     normal business hours upon reasonable notice, PROVIDED that such inspection
     and copying do not  interfere  with the normal  business  operations of the
     Company;  and  PROVIDED,  FURTHER,  that such  inspection  is for a purpose
     reasonably related to such Member's interest as a Member of the Company.

          (b) Any  records  maintained  by or on  behalf of the  Company  in the
     regular  course of its business may be kept on, or be in the form of, punch
     cards, magnetic tape,  photographs,  micrographics or any other information
     storage  device,  PROVIDED that the records so maintained  are  convertible
     into clearly legible written form within a reasonable period of time.

                                   ARTICLE 10
                                   TAX MATTERS

     10.1 Preparation of Tax Returns
          --------------------------

          (a) The Board of Mangers shall arrange for the  preparation and timely
     filing of all  returns of Company  income,  gains,  deductions,  losses and
     other items  required  of the  Company  for  federal  and state  income tax
     purposes and shall use commercially  reasonable efforts to furnish,  within
     one hundred  eighty (180) days of the close of each taxable  year,  the tax
     information reasonably required by the Members for federal and state income
     tax reporting  purposes.  In addition,  the Board of Managers shall, within
     seventy-five  (75) days after the close of each taxable  year,  furnish the
     Members with a list of states where Company  income is reportable  for such
     taxable year,  together  with an estimate of such income  allocable to each
     such state.

     10.2 Tax Elections
          -------------

          (a) The Board of Managers shall, in its sole and absolute  discretion,
     determine  whether to make any  available  election  pursuant  to the Code;
     PROVIDED, HOWEVER, that, to the extent any such election affects the amount
     or timing of  recognition of gain or taxable income or loss by the Members,
     such  election  shall only be made with the consent of the  Members,  which
     shall not be unreasonably withheld.

          (b) The Board of  Managers  shall have the right to seek to revoke any
     tax  election it makes,  PROVIDED,  HOWEVER,  that,  to the extent any such
     revocation of election  affects the amount or timing of recognition of gain
     or taxable income or loss by the Members, such revocation of election shall
     only  be  made  with  the  consent  of  the  Members,  which  shall  not be
     unreasonably withheld.

     10.3 Tax Matters Member
          ------------------

          (a) The Charter Member shall serve as the "tax matters partner" of the
     Company for federal income tax purposes.


                                       17
<PAGE>



          (b)  Upon  receipt  of  notice  from  the IRS of the  beginning  of an
     administrative  proceeding  with  respect to the  Company,  the tax matters
     partner   shall   furnish  the  IRS  with  the  name,   address,   taxpayer
     identification number, and profit interest of each of the Members; PROVIDED
     that such  information  is  provided  to the  Company by the  Members.  The
     Members shall have the right at their expense to participate in any audits.

          (c) Except as otherwise  provided in this  Agreement,  the tax matters
     partner is authorized, but not required:

               (i) to enter into any settlement with the IRS with respect to any
          administrative  or judicial  proceedings for the adjustment of Company
          items  required  to be taken  into  account by a Member for income tax
          purposes (such administrative  proceedings being referred to as a "tax
          audit" and such judicial  proceedings  being  referred to as "judicial
          review"),  and in the settlement agreement the tax matters partner may
          expressly state that such agreement  shall bind all Members,  PROVIDED
          that no action  shall be taken  without  the  consent  of the Board of
          Managers and such settlement agreement shall not bind any Member:

                    (A) who (within the time prescribed pursuant to the Code and
               Regulations)  files a statement  with the IRS providing  that the
               tax matters  partner shall not have the authority to enter into a
               settlement agreement on behalf of such Member; or

                    (B)  who  is a  "NOTICE  PARTNER"  (as  defined  in  Section
               6231(a)(8)  of the  Code) or a member  of a  "NOTICE  GROUP"  (as
               defined in Section 6223(b)(2) of the Code);

               (ii)  in  the  event  that a  notice  of a  final  administrative
          adjustment  at the Company level of any item required to be taken into
          account by a Member for tax purposes (a "final  adjustment") is mailed
          to the tax  matters  partner,  to seek  judicial  review of such final
          adjustment,  including the filing of a petition for readjustment  with
          the Tax Court or the filing of a complaint  for refund with the United
          States Claims Court or the District Court of the United States for the
          district  in  which  the  Company's  principal  place of  business  is
          located;

               (iii) to intervene in any action  brought by any other Member for
          judicial review of a final adjustment;

               (iv) to file a request for an administrative  adjustment with the
          IRS and,  if any part of such  request is not  allowed by the IRS,  to
          file an  appropriate  pleading  (petition or  complaint)  for judicial
          review with respect to such request;

               (v) to enter into an agreement  with the IRS to extend the period
          for assessing any tax which is attributable to any item required to be
          taken account of by a Member for tax purposes,  or an item affected by
          such item; and

               (vi) to take any other  action on  behalf of the  Members  or the
          Company in connection with any tax audit or judicial review proceeding
          to the extent permitted by applicable law or regulations.

          The taking of any action and the  incurring  of any expense by the tax
matters  partner in connection  with any such  proceeding,  except to the extent
required  by law,  is a matter in the sole and  absolute  discretion  of the tax
matters partner and the provisions  relating to  indemnification of the Board of
Managers set forth in Section 7.6 of this Agreement shall be fully applicable to
the tax matters partner in its capacity as such.

          (d)  (i) The tax matters partner shall receive no compensation for its
     services as such.

               (ii) All third  party  costs  and  expenses  incurred  by the tax
          matters partner in performing its duties as such (including  legal and
          accounting fees and expenses) shall be borne by the Company.

               (iii)  Nothing  herein shall be construed to restrict the Company
          from engaging an accounting  firm to assist the tax matters partner in
          discharging its duties hereunder,  so long as the compensation paid by
          the Company for such services is reasonable.


                                       18
<PAGE>



     10.4 Organizational Expenses
          -----------------------

          The Company shall elect to deduct expenses,  if any, incurred by it in
organizing the Company as provided in Section 709 of the Code.

     10.5 Withholding
          -----------

          (a) The Members hereby  authorize the Company to withhold from, or pay
     on behalf of or with respect to, such Member any amount of federal,  state,
     local,  or foreign  taxes that the Board of  Managers  determines  that the
     Company is required  by law to  withhold or pay with  respect to any amount
     distributable  or  allocable  to such Member  pursuant  to this  Agreement,
     including, without limitation, any taxes required to be withheld or paid by
     the Company  pursuant to Sections  1441,  1442,  1445, or 1446 of the Code.
     Prior to  withholding,  the Board of Managers shall endeavor to (i) provide
     reasonable advance notice to the Members, which shall provide the basis for
     withholding  and (ii) if  requested,  discuss the need to withhold with the
     Members.  The Board of  Managers  shall  permit a Member  who is subject to
     withholding to contest the obligation to withhold at its own expense.

          (b) (i) Any amount paid on behalf of or with respect to a Member shall
     constitute a loan by the Company to such Member, which loan shall be repaid
     by such  Member  within  fifteen  (15) days after  notice from the Board of
     Managers that such payment must be made unless

                    (A)  first,  the  Company  withholds  such  payment  from  a
               distribution which would otherwise be made to the Member; or

                    (B) second,  the Board of Managers  determines,  in its sole
               and absolute  discretion,  that such payment may be satisfied out
               of the available  funds of the Company which would,  but for such
               payment, be distributed to the respective Member.

               (ii) Any amounts withheld  pursuant to the foregoing  clauses (A)
          or (B) shall be treated as having been distributed to such Member.

          (c) (i) Each Member hereby  unconditionally  and irrevocably grants to
     the Company a security  interest in such  Member's  Membership  Interest to
     secure such Member's  obligation to pay to the Company any amounts required
     to be paid pursuant to this Section 10.5.

               (ii) (A) In the  event  that a  Member  fails to pay when due any
          amounts  owed to the  Company  pursuant  to  this  Section  10.5,  the
          non-defaulting Member may, in its sole and absolute discretion,  elect
          to make the  payment  to the  Company  on  behalf  of such  defaulting
          Member,  and in such event  shall be deemed to have loaned such amount
          to such defaulting Member and shall succeed to all rights and remedies
          of the Company as against such defaulting Member.

                    (B) Without  limitation,  in such event, the  non-defaulting
               Member shall have the right to receive  distributions  that would
               otherwise be distributable  to such defaulting  Member until such
               time as such loan,  together with all interest thereon,  has been
               paid in  full,  and any such  distributions  so  received  by the
               non-defaulting Member shall be treated as having been distributed
               to the defaulting  Member and immediately  paid by the defaulting
               Member to the non-defaulting Member in repayment of such loan.

               (iii)  Any  amount  payable  by a  Member  hereunder  shall  bear
          interest at the Interest Rate plus four (4) percentage  points, but in
          no event  higher  than the  maximum  lawful  rate of  interest on such
          obligation,  such  interest to accrue from the date such amount is due
          (i.e.,  fifteen (15) days after  demand)  until such amount is paid in
          full.

               (iv) Each  Member  shall take such  actions as the Company or the
          Board of  Managers  shall  request in order to perfect or enforce  the
          security interest created hereunder.


                                       19
<PAGE>



                                   ARTICLE 11
                           TRANSFERS AND RESIGNATIONS

     11.1 Transfer
          --------

          (a) No Membership  Interest shall be Transferred,  in whole or in part
     except in  accordance  with this  Article 11, and any Transfer or purported
     Transfer of a Membership  Interest not made in accordance with this Article
     11 shall, to the fullest extent permitted by law, be null and void.

          (b) The bankruptcy (as defined in the Company Act) of a Member, in and
     of  itself,  shall  not  cause  such  Member  to cease to be a Member or to
     dissolve or terminate the Company.

     11.2 Transfer of Membership Interests
          --------------------------------

          (a) A  Member  may  Transfer,  in whole  or in  part,  its  Membership
     Interest to any Person and such Person  shall be admitted to the Company as
     a Substitute  Member,  PROVIDED  that (i) subject to clause (b) below,  the
     affirmative  consent of the Charter Member shall have been obtained for any
     such Transfer, (ii) subject to clause (b) below, the affirmative consent of
     the Special  Member shall have been  obtained for any such  Transfer by the
     Charter Member or any of its  Affiliates,  (iii) such Transfer shall not be
     permitted  (A) if it  results  in (x) the  Company  being  classified  as a
     publicly traded partnership for purposes of Section 7704 of the Code, (y) a
     violation of the federal securities laws or in the Company being treated as
     an investment company under the Investment Company Act of 1940, as amended,
     or (z) a violation of, or make the Company  subject to the  requirements of
     ERISA or result in the assets of the Company being treated as "plan assets"
     under ERISA,  or (B) if the  transferee  is not treated as a United  States
     person  within the  meaning of section  7701(a)(30)  of the Code,  (iv) the
     applicable Substituted Member shall have delivered to the Board of Managers
     evidence of acceptance in a form  reasonably  satisfactory  to the Board of
     Managers of all of the terms and  conditions of this  Agreement and (v) any
     Transfer by a Member that is a "Holder" under the Warrant shall comply with
     Section 3 of the Warrant Agreement.

          (b) Notwithstanding clause (a)(i) above, the following Transfers shall
     not require the consent of either the Charter Member or the Special Member:

               (i) any  Transfer  of Units  contemplated  by or  pursuant to the
          Warrant Agreement;

               (ii) any  Transfer  of a  Membership  Interest by a Member to any
          Affiliate of such Member or any member, manager or partner thereof;

               (iii)  any  Transfer  by the  Charter  Member  of its  Membership
          Interest  (x) so long as a "Change  of  Control"  (as  defined  in the
          Warrant Agreement) has not occurred and would not occur as a result of
          such  Transfer or (y) at any time that the Special  Member's  right to
          select a member of the Board of Managers has been has been  terminated
          (and not reinstated) under Section 4.2(d) hereof;

               (iv) any Transfer of a Membership  Interest by the Special Member
          after  the  occurrence  and  during  the  continuance  of (x) an event
          described in clauses (b) through (e) of the  definition of "Triggering
          Event" in the Warrant Agreement, (y) a Put Default or (z) a CharterMac
          Event; and

               (v) any bona fide pledge or assignment of a security  interest to
          a financial institution by the Charter Member or the Special Member in
          all or  any  portion  of a its  Membership  Interest  to  secure  full
          recourse  obligations  of such Member and,  following a default,  such
          financial  institution (or its transferee or nominee) may exercise its
          default  remedies  and may acquire the Member  Interest of such Member
          and become a Member;

          (c) A  Substituted  Member  who  has  been  admitted  as a  Member  in
     accordance with this Article 11 shall have all the rights and powers and be
     subject to all the  restrictions  and  liabilities  of a Member  under this
     Agreement. Upon the admission of a Substituted Member, without the need for
     any  additional  act or consent of any Person,  the Board of Managers shall
     amend  Exhibit A to  reflect  the name,  address,  number of Units,  and to
     eliminate or adjust,  if necessary,  the name,  address and interest of the
     predecessor of such Substituted Member.


                                       20
<PAGE>



     11.3 General Provisions
          ------------------

          (a) No Member may resign from the Company  other than as a result of a
     permitted  Transfer of all of such Member's  Units in accordance  with this
     Article 11.

          (b) Any Member  which  shall  Transfer  all of its Units in a Transfer
     permitted  pursuant to this  Article 11 shall cease to be a Member upon the
     effective date of the Transfer.

          (c) (i) Solely for purposes of making such  allocations,  each of such
     items for the  calendar  month in which the Transfer or  assignment  occurs
     shall be allocated to the transferee Member, and none of such items for the
     calendar month in which an exchange, transfer or assignment occurs shall be
     allocated to the transferor Member,  PROVIDED,  HOWEVER,  that the Board of
     Managers  may adopt such  other  conventions  relating  to  allocations  in
     connection with transfers,  assignments,  or exchanges as it determines are
     necessary or appropriate.

               (ii) All  distributions of Available Cash  attributable to Units,
          with  respect to which the  Company  Record Date is before the date of
          such transfer, assignment, or exchange of such Units, shall be made to
          the  transferor  Member,  and in the case of a transfer or  assignment
          other than an exchange, all distributions of Available Cash thereafter
          attributable to such Units shall be made to the transferee Member.

                                   ARTICLE 12
                              ADMISSION OF MEMBERS

     12.1 Amendment of Agreement and Certificate
          --------------------------------------

          For the admission to the Company of any Member in accordance  with the
provisions of this Agreement, without the need for any additional act or consent
of any Person  (except for any consent  required under any other section of this
Agreement), the Board of Managers shall take all steps necessary and appropriate
under the Company Act to amend the records of the Company and, if necessary,  to
prepare as soon as  practical  an  amendment  of this  Agreement  (including  an
amendment  of Exhibit A) and,  if  required  by law,  shall  prepare and file an
amendment  to the  Certificate  and may for this  purpose  exercise the power of
attorney granted pursuant to Section 2.4 hereof.

                                   ARTICLE 13
                    DISSOLUTION, LIQUIDATION AND TERMINATION

     13.1 Dissolution
          -----------

          (a) The Company shall not be dissolved by the admission of Substituted
     Members or by the  admission  of a successor  Charter  Board Member or IXIS
     Board Member or the admission of any other Person as a Member in accordance
     with the terms of this Agreement.

          (b) The Company  shall  dissolve,  and its affairs  shall be wound up,
     only  upon  the  first  to  occur  of any of  the  following  ("LIQUIDATING
     EVENTS"):

               (i) an  election to  dissolve  the  Company  made by the Board of
          Managers;

               (ii) entry of a decree of  judicial  dissolution  of the  Company
          pursuant to Section 18-802 of the Company Act;

               (iii)  the sale of all or  substantially  all of the  assets  and
          properties of the Company; and

               (iv) any time  there are no members  of the  Company,  unless the
          Company  is  continued  without  dissolution  in  accordance  with the
          Company Act.

     13.2 Winding Up
          ----------

          (a) (i) Upon the occurrence of a Liquidating  Event, the Company shall
     continue  solely for the  purposes  of winding up its affairs in an orderly
     manner,  liquidating its assets, and satisfying the claims of its creditors
     and Members.


                                       21
<PAGE>



               (ii) No Member shall take any action that is  inconsistent  with,
          or  not  necessary  to or  appropriate  for,  the  winding  up of  the
          Company's business and affairs.

               (iii)  The  Board  of  Managers,  or,  in the  event  there is no
          remaining  member of the Board of Managers,  any other Person  elected
          with the consent of the  Members to act as  liquidating  trustee  (the
          Board of Managers or such other Person being referred to herein as the
          "LIQUIDATOR"),  shall be responsible for overseeing the winding up and
          dissolution  of  the  Company  and  shall  take  full  account  of the
          Company's  liabilities and property and the Company  property shall be
          liquidated as promptly as is consistent  with obtaining the fair value
          thereof,  and the proceeds  therefrom shall be applied and distributed
          in  the  following  order,  unless  otherwise  required  by  mandatory
          provisions of applicable law:

                    (A) First, to the satisfaction of all of the Company's debts
               and liabilities to creditors  other than the Members  (whether by
               payment or reasonable provision for payment thereof);

                    (B)  Second,  to the  satisfaction  of all of the  Company's
               debts and  liabilities  to the  Members  (whether  by  payment or
               reasonable  provision for payment thereof) in proportion to their
               outstanding principal balances thereof;

                    (C) The balance, if any, to the Members to the extent of and
               in accordance with the Percentage Interests,  after giving effect
               to all  contributions,  distributions,  and  allocations  for all
               periods.

               (iv) The Board of Managers or its designee  shall not receive any
          additional  compensation for any services  performed  pursuant to this
          Article 13.

               (v) Any  distributions  pursuant to this Section 13.2(a) shall be
          made by the end of the Company's taxable year in which the dissolution
          occurs  (or,  if  later,   within  90  days  after  the  date  of  the
          dissolution).

          (b) (i) Notwithstanding the provisions of Section 13.2(a) hereof which
     require liquidation of the assets of the Company,  but subject to the order
     of priorities  set forth  therein,  if the  Liquidator  determines  that an
     immediate sale of part or all of the Company's  assets would be impractical
     or would cause undue loss to the Members,  the Liquidator  may, in its sole
     and absolute discretion, defer for a reasonable time the liquidation of any
     asset except those  necessary  or advisable to satisfy  liabilities  of the
     Company  (including  those to Members as  creditors)  or  distribute to the
     Members,  in lieu of cash, as tenants in common and in accordance  with the
     provisions of Section 13.2(a) hereof,  undivided  interests in such Company
     assets as the Liquidator deems not suitable for liquidation.

               (ii) Any such distributions in kind shall be made only if, in the
          good faith judgment of the Liquidator,  such distributions in kind are
          in the best  interests  of the  Members,  and shall be subject to such
          conditions   relating  to  the  disposition  and  management  of  such
          properties as the Liquidator deems reasonable and equitable and to any
          agreements governing the operation of such properties at such time.

               (iii) The Liquidator shall determine the fair market value of any
          property distributed in kind using such reasonable method of valuation
          as it may adopt.

          (c) In the reasonable discretion of the Liquidator, a pro rata portion
     of the  distributions  that would otherwise be made to the Members pursuant
     to this Article 13 may be:

               (i)  distributed  to a trust  established  for the benefit of the
          Members for the purposes of  liquidating  Company  assets,  collecting
          amounts owed to the Company, and paying any contingent, conditional or
          unmatured  liabilities  or  obligations of the Company or the Board of
          Managers arising out of or in connection with the Company;  the assets
          of any such trust shall be  distributed  to the  Members  from time to
          time,  in the  reasonable  discretion of the  Liquidator,  in the same
          proportions  as the amount  distributed  to such trust by the  Company
          would otherwise have been  distributed to the Members pursuant to this
          Agreement; or

               (ii)  withheld or escrowed  to provide a  reasonable  reserve for
          Company liabilities (contingent,  conditional, unmatured or otherwise)
          and to reflect the unrealized  portion of any installment  obligations


                                       22
<PAGE>



          owed to the Company,  PROVIDED that such withheld or escrowed  amounts
          shall  be  distributed  to the  Members  in the  manner  and  order of
          priority set forth in Section 13.2(a) hereof as soon as practicable.

     13.3 No Obligation to Contribute Deficit
          -----------------------------------

          If any Member has a deficit balance in his Capital Account (as defined
in Schedule B) (after  giving  effect to all  contributions,  distributions  and
allocations  for all  taxable  years,  including  the  year  during  which  such
dissolution  occurs),   such  Member  shall  have  no  obligation  to  make  any
contribution  to the capital of the Company  with respect to such  deficit,  and
such deficit  shall not be considered a debt owed to the Company or to any other
Person for any purpose whatsoever.

     13.4 Rights of the Members
          ---------------------

          Except as otherwise provided in this Agreement, each Member shall look
solely to the assets of the Company for the return of its Capital  Contributions
and shall have no right or power to demand or receive  property  other than cash
from the Company.

     13.5 Notice of Dissolution
          ---------------------

          In the event a Liquidating Event occurs or an event occurs that would,
but for the provisions of an election by one or more Members pursuant to Section
13.1  hereof,  result in a  dissolution  of the  Company,  the Board of Managers
shall,  within thirty (30) days  thereafter,  provide  written notice thereof to
each of the Members.

     13.6 Termination of Company and Cancellation of Certificate
          ------------------------------------------------------

          Upon the  completion  of the winding up of the Company's  affairs,  as
provided in Section 13.2 hereof,  the Company  shall be terminated by the filing
of a  certificate  of  cancellation  with the Secretary of State of the State of
Delaware pursuant to the Company Act, and all qualifications of the Company as a
foreign  limited  liability  company  in  jurisdictions  other than the State of
Delaware  shall be  canceled  and such  other  actions  as may be  necessary  to
terminate the Company in jurisdictions other than Delaware shall be taken.

     13.7 Reasonable Time for Winding Up
          ------------------------------

          A reasonable  time shall be allowed for the orderly  winding up of the
business and affairs of the Company and the  liquidation of its assets  pursuant
to Section 13.2 hereof in order to minimize any losses otherwise  attendant upon
such winding up, and the  provisions  of this  Agreement  shall remain in effect
among the Members during the period of winding up.

     13.8 Waiver of Partition
          -------------------

          Each  Member  hereby  waives  any right to  partition  of the  Company
property.

                                   ARTICLE 14
                   AMENDMENT OF OPERATING AGREEMENT; MEETINGS

     14.1 Amendments
          ----------

          Subject to Sections  4.3(b),  7.2(f),  7.2(g) and 12.1, this Agreement
     may only be amended,  supplemented  or  otherwise  modified  with the prior
     written consent of the Charter Member.

     14.2 Meetings of the Members
          -----------------------

          (a) (i) Meetings of the Members may be called from time to time by the
     Board of Managers and shall be called upon the receipt by Board of Managers
     of a written request by either Member.

               (ii) Notice of any such meeting shall be given to all Members not
          less than seven (7) days nor more than  thirty  (30) days prior to the
          date of such meeting.

               (iii) The request  shall  state the nature of the  business to be
          transacted.

               (iv) Members may vote in person or by proxy at such meeting.


                                       23
<PAGE>



               (v)  Whenever  the vote or consent of the Members is permitted or
          required under this Agreement,  such vote or consent may be given at a
          meeting  of the  Members  or may  be  given  in  accordance  with  the
          procedure prescribed in Section 14.2(b) hereof.

          (b) (i) Any action  required or  permitted to be taken at a meeting of
     the Members may be taken  without a meeting and without  prior  notice if a
     written  consent setting forth the action so taken is signed by the Members
     required to consent to such action.

               (ii)  Such  consent  may  be in  one  instrument  or  in  several
          instruments,  and shall  have the same force and effect as a vote at a
          meeting.

               (iii) Such consent shall be filed with the Board of Managers.

               (iv) An action so taken  shall be deemed to have been  taken at a
          meeting held on the effective  date of the consent as certified by the
          Board of Managers.

          (c) (i) Each Member may authorize any Person or Persons to act for him
     by proxy on all  matters  in which a Member  is  entitled  to  participate,
     including  waiving notice of any meeting,  or voting or  participating at a
     meeting.

               (ii) Every proxy must be signed by the Member or his  attorney in
          fact and a copy thereof delivered to the Company.

               (iii) No proxy shall be valid after the expiration of eleven (11)
          months from the date thereof unless otherwise provided in the proxy.

               (iv) Every proxy shall be revocable at the pleasure of the Member
          executing  it,  such  revocation  to be  effective  upon the  Board of
          Managers' receipt of written notice of such revocation from the Member
          executing such proxy.

          (d) Each  meeting of the Members  shall be  conducted  by the Board of
     Managers or such other Person as the Board of Managers may appoint pursuant
     to such rules for the  conduct of the  meeting as the Board of  Managers or
     such other Person deems appropriate.

                                   ARTICLE 15
                               GENERAL PROVISIONS

     15.1 Addresses and Notice
          --------------------

          Any notice,  demand,  request or report  required or  permitted  to be
given or made to a Member under this Agreement  shall be in writing and shall be
deemed given or made when delivered in person or when sent by overnight delivery
or via  facsimile  to such Member at the address set forth in Schedule A or such
other  address of which  such  Member  shall  notify  the Board of  Managers  in
writing.

     15.2 Titles and Captions
          -------------------

          All article or section  titles or captions in this  Agreement  are for
convenience only, shall not be deemed part of this Agreement and shall in no way
define,  limit, extend or describe the scope or intent of any provisions hereof.
Except  as  specifically  provided  otherwise,   references  to  "ARTICLES"  and
"SECTIONS" are to Articles and Sections of this Agreement.

     15.3 Pronouns and Plurals
          --------------------

          Whenever the context may require,  any pronoun used in this  Agreement
shall include the  corresponding  masculine,  feminine or neuter forms,  and the
singular  form of nouns,  pronouns  and verbs shall  include the plural and vice
versa.

     15.4 Further Action
          --------------

          The parties  shall  execute and  deliver  all  documents,  provide all
information  and take or  refrain  from  taking  action as may be  necessary  or
appropriate to achieve the purposes of this Agreement.


                                       24
<PAGE>



     15.5 Binding Effect
          --------------

          This  Agreement  shall be binding upon and inure to the benefit of the
parties hereto and their heirs,  executors,  administrators,  successors,  legal
representatives and permitted assigns.

     15.6 Creditors
          ---------

          Other  than  as  expressly  set  forth  herein  with  respect  to  the
Indemnitees,  none of the provisions of this Agreement  shall be for the benefit
of, or shall be enforceable by, any creditor of the Company.

     15.7 Waiver
          ------

          No failure by any party to insist upon the strict  performance  of any
covenant,  duty,  agreement or  condition  of this  Agreement or to exercise any
right or remedy  consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

     15.8 Counterparts
          ------------

          This Agreement may be executed in counterparts,  all of which together
shall   constitute  one  agreement   binding  on  all  of  the  parties  hereto,
notwithstanding that all such parties are not signatories to the original or the
same  counterpart.  Each party shall become bound by this Agreement  immediately
upon affixing its signature hereto.

     15.9 Applicable Law
          --------------

          This Agreement  shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware,  without regard to the principles
of conflicts of laws thereof.

     15.10 Invalidity of Provisions
           ------------------------

          If any provision of this Agreement is or becomes  invalid,  illegal or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

     15.11 Entire Agreement
           ----------------

          This Agreement,  together with the Administrative  Services Agreement,
the Warrant Agreement and the Registration Rights Agreement dated as of the date
hereof between IXIS Financial Products Inc. and the Company, contains the entire
understanding and agreement among the Members with respect to the subject matter
hereof and thereof and supersedes any other prior written or oral understandings
or agreements among them with respect thereto.

     15.12 Merger
           ------

          Subject to Section 7.2(f) and Section 7.2(g),  solely upon the consent
of the Board of  Managers  and  without  the need for the  consent  of any other
Person,  including any Member,  the Company may merge with, or consolidate into,
or convert into, any Person or Entity in accordance with the Company Act and any
other applicable law.

     15.13 Acquisition of Debt
           -------------------

          The Charter  Member  shall not acquire any debt,  additional  Units or
Other Equity that have been issued by the Company or any of its  Subsidiaries to
third parties from such third parties without the consent of the Special Member.


                                       25
<PAGE>



          Signature Page to Limited  Liability  Company Agreement of Centerbrook
Holdings LLC by and among the undersigned and the other parties thereto.



                                                    CHARTER MEMBER:


                                                    CHARTER MAC CORPORATION


                                                   By: /s/ Marc D. Schnitzer
                                                       ---------------------
                                                 Name: Marc D. Schnitzer
                                                Title: Chief Executive Officer




                                                    SPECIAL MEMBER:


                                                    IXIS FINANCIAL PRODUCTS INC.


                                                   By: /s/ N. Mumford
                                                       --------------
                                                 Name: N. Mumford
                                                Title: Managing Director

                                                   By: /s/ Christopher Hayden
                                                       ----------------------
                                                 Name: Christopher Hayden
                                                Title: Managing Director


                                       26
<PAGE>



                                   SCHEDULE A
                                   ----------

                              ADDRESSES FOR NOTICES
                              ---------------------

If to the Charter Member, to:

         Charter Mac Corporation
         625 Madison Avenue
         New York, New York  10022
         Attention:  Marc Schnitzer

         with a copy to:

         Proskauer Rose LLP
         1585 Broadway
         New York, New York  10036-8299
         Attention:  Steven A. Fishman, Esq.

If to the Special Member, to:

         IXIS Financial Products Inc.
         9 West 57th Street
         New York, NY 10019
         Attention:  Nick Mumford


                                       A-1
<PAGE>



                                   SCHEDULE B
                                   ----------

                                   ALLOCATIONS
                                   -----------

1.   DEFINED TERMS
     -------------

          "ADJUSTED  CAPITAL  ACCOUNT"  means,  with respect to any Member,  its
Capital Account as of the end of the relevant year, as adjusted by (i) crediting
to such  Capital  Account any amount that such  Member is  obligated  to restore
pursuant to the provisions of Section 1.704-1(b)(2)(ii)(c) of the Regulations or
is deemed obligated to restore pursuant to Regulation Section  1.704-2(g)(1) and
1.704-2(i)(5);  and (ii) debiting from such Capital  Account items  described in
Regulation   Section   1.704-1(b)(2)(ii)(d)(4),    1.704-1(b)(2)(ii)(d)(5)   and
1.704-1(b)(2)(ii)(d)(6). This definition of Adjusted Capital Account is intended
to comply with the  provisions of Regulation  Section  1.704-1(b)(2)(ii)(d)  and
shall be interpreted consistently therewith.

          "CAPITAL  ACCOUNT"  means,  with  respect to any  Member,  the capital
account  maintained in accordance  with Sections  1.704-1(b)  and 1.704-2 of the
Regulations,  and shall be interpreted  and applied in a manner  consistent with
such Regulations.  In the event the Board of Managers shall reasonably determine
that it is prudent to modify the manner in which the  Capital  Accounts,  or any
debits or credits thereto are computed in order to comply with such Regulations,
the Board of Managers may make such modification; PROVIDED that it does not have
an adverse effect on the amounts distributable to any Member pursuant to Article
13 hereof upon the dissolution of the Company.

          "COMPANY  MINIMUM GAIN" means  "company  minimum gain" as that term is
defined in Regulations Section  1.704-2(d),  substituting the term "Company" for
the term "partnership" as the context requires.

          "DEPRECIATION" means, with respect to any asset of the Company for any
Company Year or other period, the depreciation, depletion, amortization or other
cost recovery  deduction,  as the case may be,  allowed or allowable for federal
income tax  purposes  in respect  of such asset for such  Company  Year or other
period; PROVIDED, HOWEVER, that if there is a difference between the Gross Asset
Value and the adjusted tax basis of such asset at the  beginning of such Company
Year or other period,  Depreciation for such asset shall be an amount that bears
the same ratio to the  beginning  Gross Asset Value of such asset as the federal
income  tax  depreciation,   depletion,  amortization  or  other  cost  recovery
deduction for such Company Year or other period bears to the beginning  adjusted
tax basis of such  asset;  PROVIDED,  FURTHER,  that if the  federal  income tax
depreciation,  depletion, amortization or other cost recovery deduction for such
asset for such Company Year or other period is zero,  Depreciation of such asset
shall be determined  with  reference to the beginning  Gross Asset Value of such
asset using any reasonable method selected by the Board of Managers.

          "EXERCISING  MEMBER" has the meaning set forth in Section 2.5(d)(i) of
this Schedule B.

          "GROSS ASSET VALUE"  means,  with respect to any asset of the Company,
such asset's adjusted basis for federal income tax purposes, except as follows:

          (a) if the Board of Managers reasonably  determines that an adjustment
     is necessary or appropriate to reflect the relative  economic  interests of
     the Members, the Gross Asset Values of all Company assets shall be adjusted
     in accordance with Sections 1.704-1(b)(2)(iv)(f) and (g) of the Regulations
     to equal their respective gross fair market values,  without  reduction for
     liabilities,  as reasonably  determined by the Board of Managers, as of the
     following times:

               (i) a  Capital  Contribution  (other  than a de  minimis  Capital
          Contribution)   to  the  Company  by  a  new  or  existing  Member  as
          consideration for a Membership Interest; or

               (ii) the  distribution  by the Company to a Member of more than a
          de  minimis  amount  of  Company  assets  as  consideration   for  the
          repurchase of a Membership Interest; or

               (iii) the  liquidation  of the  Company  within  the  meaning  of
          Section 1.704-1(b)(2)(ii)(g) of the Regulations;

          (b) the Gross Asset Values of Company assets distributed to any Member
     shall be the gross  fair  market  values  of such  assets  (taking  Section
     7701(g) of the Code into account)  without  reduction for  liabilities,  as
     reasonably  determined  by  the  Board  of  Managers  as  of  the  date  of
     distribution; and

          (c) the Gross Asset Values of Company  assets  shall be increased  (or
     decreased) to reflect any  adjustments to the adjusted basis of such assets
     pursuant to Sections  734(b) or 743(b) of the Code,  but only to the extent
     that such  adjustments  are  taken  into  account  in  determining  Capital
     Accounts  pursuant  to  Section  1.704-1(b)(2)(iv)(m)  of the  Regulations;



<PAGE>



     PROVIDED,  HOWEVER,  that Gross Asset Values shall not be adjusted pursuant
     to this subsection (c) to the extent that the Board of Managers  reasonably
     determines that an adjustment pursuant to subsection (a) above is necessary
     or appropriate in connection with a transaction that would otherwise result
     in an adjustment pursuant to this subsection (c).

     At all times,  Gross Asset  Values  shall be  adjusted by any  Depreciation
taken  into  account  with  respect to the  Company's  assets  for  purposes  of
computing Net Income and Net Loss.

     "MEMBER  NONRECOURSE  DEDUCTION" means "partner  nonrecourse  deduction" as
that term is defined in Regulations  Section  1.704-2(i),  substituting the term
"Member" for the term "partner" as the context requires.

     "MEMBER  NONRECOURSE LOAN" means a loan made to, or credit  arrangement for
the benefit  of, the Company by a Member or by a person  related to a Member (as
defined in Regulations  Section  1.752-4(b),  substituting the term "Member" for
the term "partner" as the context  requires)  which by its terms  exculpates the
Members  from  personal  liability  on the debt,  but under which such Member or
related  person bears the ultimate  economic  risk of loss within the meaning of
Regulations Section 1.752-2.

     "NET INCOME" or "NET LOSS" means, for each Company Year or other applicable
period, an amount equal to the Company's taxable income or loss for such year or
period as determined  for federal  income tax purposes by the Board of Managers,
determined in accordance with Section 703(a) of the Code (for this purpose,  all
items of  income,  gain,  loss or  deduction  required  to be stated  separately
pursuant to Section  703(a) of the Code shall be  included in taxable  income or
loss), adjusted as follows:

          (a) by  including  as an item of gross  income any tax  exempt  income
     received by the Company and not  otherwise  taken into account in computing
     Net Income or Net Loss;

          (b) by treating as a deductible expense any expenditure of the Company
     described  in  Section  705(a)(2)(B)  of the Code (or which is treated as a
     Section 705(a)(2)(B)  expenditure pursuant to Section  1.704-1(b)(2)(iv)(i)
     of the  Regulations)  and not otherwise taken into account in computing Net
     Income or Net Loss,  including  amounts  paid or incurred  to organize  the
     Company (unless an election is made pursuant to Section 709(b) of the Code)
     or to  promote  the  sale  of  interests  in the  Company  and by  treating
     deductions for any losses  incurred in connection with the sale or exchange
     of Company property  disallowed  pursuant to Section 267(a)(1) or 707(b) of
     the Code as expenditures described in Section 705(a)(2)(B) of the Code;

          (c) by  taking  into  account  Depreciation  in lieu of  depreciation,
     depletion,  amortization  and other  cost  recovery  deductions  taken into
     account in computing taxable income or loss;

          (d) by  computing  gain or loss  resulting  from  any  disposition  of
     Company  property  with  respect  to which gain or loss is  recognized  for
     federal  income tax  purposes by reference to the Gross Asset Value of such
     property rather than its adjusted tax basis;

          (e) in the  event of an  adjustment  of the Gross  Asset  Value of any
     Company asset which  requires  that the Capital  Accounts of the Company be
     adjusted  pursuant to  Sections  1.704  1(b)(2)(iv)(e),  (f) and (g) of the
     Regulations,  by taking into  account the amount of such  adjustment  as if
     such adjustment represented additional Net Income or Net Loss; and

          (f) by not taking  into  account in  computing  Net Income or Net Loss
     items separately allocated to the Members.

     "NONRECOURSE   DEDUCTIONS"   has  the   meaning   set  forth  in   Sections
1.704-2(b)(1) and 1.704-2(c) of the Regulations.

2.   ALLOCATIONS
     -----------

     2.1  Allocations of Net Income
          -------------------------

          Net Income of the Company for any Company  Year or other  period shall
     be allocated to the Members in  proportion to their  respective  Percentage
     Interest.


                                       C-3
<PAGE>

     2.2  Allocation of Net Losses
          ------------------------

          Net Losses for any Company  Year or other period shall be allocated to
     the  Members  in  proportion  to  their  respective   Percentage  Interest.
     Notwithstanding the foregoing, (i) to the extent that any allocation of Net
     Losses  pursuant  to this  Section  2.2 would  cause or  increase a deficit
     balance in a Member's  Adjusted Capital  Account,  such portion of such Net
     Losses  shall be  reallocated  among the  Members  with  positive  Adjusted
     Capital  Account  balances,  pro  rata in  accordance  with  such  positive
     balances,  until no Member has a positive  Adjusted Capital Account balance
     and (ii) to the extent that any  allocations  were made  pursuant to clause
     (i) above,  then Net Income  shall be  allocated  to the Members  until the
     aggregate amount of Net Income allocated under this clause (ii) is equal to
     the aggregate amount of Net Loss allocated pursuant to clause (i) above.

     2.3  Allocation Adjustment Upon Issuance of Member Interests
          -------------------------------------------------------

          The  Board  of  Managers  shall  have  the  authority  to  adjust  the
     allocations  of Net Income and Net Losses for the  issuance  of  Membership
     Interests  pursuant to this Schedule B and the issuance of other Membership
     Interests as  authorized  by the Board of Managers,  PROVIDED that any such
     adjustment  shall not  affect any Member  disproportionately  without  such
     Member's prior written consent and shall not disproportionately benefit the
     Charter Member.

     2.4  Certain Special Allocations
          ---------------------------

          Notwithstanding  any other provision of this Agreement,  the following
     allocations  shall  be made  prior  to any  other  allocations  under  this
     Agreement and in the following order of priority:

          (a) (i) If there is a net decrease in Company  Minimum Gain during any
          Company  Year  or  period  so  that  an   allocation  is  required  by
          Regulations  Section  1.704-2(f),  items of income  and gain  shall be
          allocated  to the Members in the manner and to the extent  required by
          such  Regulation.  This  provision  is intended  to be a minimum  gain
          chargeback within the meaning of Regulations Section 1.704-2(f)(1) and
          shall be interpreted and applied consistently therewith.

               (ii) If there is a net decrease in the minimum gain  attributable
          to a Member Nonrecourse Loan during any Company Year or period so that
          an  allocation  is  required  by  Regulations  Section   1.704-2(i)(4)
          (minimum gain chargeback  attributable to a member  nonrecourse debt),
          items of income and gain shall be  allocated  in the manner and to the
          extent required by such Regulation.

          (b) If, at the close of any Company Year, allocations of Net Income or
     Net Losses  pursuant to the other  provisions  of this Section 2, would not
     prevent  or would  cause any  Member to have a  negative  Adjusted  Capital
     Account  balance,  then gross  income of the Company for such year and each
     subsequent  year (if  necessary)  shall be  allocated to such Member to the
     extent  required  to  eliminate,  as quickly  as  possible,  such  negative
     Adjusted Capital Account balance. This Section 2.4(b) is intended to comply
     with  the  qualified  income  offset  requirement  of  Regulations  Section
     1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

          (c)  Nonrecourse  Deductions,  if any,  for any Company Year or period
     shall be  allocated  to the  Members  in  proportion  to  their  Percentage
     Interests.

          (d) Member  Nonrecourse  Deductions  shall be  allocated to the Member
     that bears the  economic  risk of loss with respect to the loan giving rise
     to such deduction within the meaning of Regulations Section 1.752-2.

     2.5  Allocation for Income Tax Purposes
          ----------------------------------

          (a) For  federal,  state and local income tax  purposes,  all items of
     taxable income,  gain,  loss, and deduction for each Company Year or period
     shall be allocated among the Members in accordance with the manner in which
     the corresponding items were allocated under Sections 2.1, 2.2, 2.3, 2.4(b)
     and 2.4(c) of this Schedule B.

          (b) If property is contributed to the Company by a Member and there is
     a difference  between the basis of such property to the Company for federal
     income  tax  purposes  and  the  fair  market  value  at  the  time  of its
     contribution,  then items of income,  gain, deduction and loss with respect
     to such property,  as computed for federal income tax purposes (but not for
     book purposes),  shall be allocated (in any permitted manner  determined by
     the Board of  Managers)  among the  Members  so as to take  account of such
     book/tax difference as required by Code Section 704(c).


                                       C-4
<PAGE>



          (c) If property  (other than property  described in Section 2.5(b)) of
     the Company is reflected in the  Adjusted  Capital  Accounts of the Members
     and on the books of the  Company  at a book  value  that  differs  from the
     adjusted  basis of such property for federal  income tax purposes by reason
     of a revaluation of such property,  then items of income,  gain,  deduction
     and loss with respect to such property,  as computed for federal income tax
     purposes (but not for book purposes),  shall be allocated (in any permitted
     manner determined by the Board of Managers), with the prior written consent
     of each affected Member (which consent shall not be unreasonably withheld),
     among the Members in a manner that takes account of the difference  between
     the adjusted basis of such property for federal income tax purposes and its
     book value in the same manner as  differences  between  adjusted  basis and
     fair market value are taken into account in determining the Members' shares
     of tax items under Code Section 704(c).

          (d) (i) In  connection  with the  exercise  of the  rights  under  the
          Warrant  Agreement,  allocations shall be made in respect of the Units
          issued upon such exercise in a manner  consistent with the allocations
          described in Proposed Treasury Regulation Section 1.704-1(b)(2)(iv)(s)
          or in accordance  with then applicable law, as determined by the Board
          of Managers in good faith after  consultation with the Company's legal
          and tax  advisors,  and with the value of the  Company,  to the extent
          relevant,  determined  with the prior  written  consent of the Special
          Member (which consent shall not be unreasonably withheld).  Solely for
          federal income tax purposes,  any unrealized  income,  gain,  loss, or
          deduction in assets of the Company (that has not been reflected in the
          Adjusted Capital Account  previously)  shall first be allocated to the
          Member  exercising  the  Warrant  ("Exercising  Member") to the extent
          necessary to reflect such Member's share in partnership  capital,  and
          second to the Members in accordance with Section 704(b) and (c) of the
          Code  and  the  Treasury  Regulations   promulgated  thereunder  using
          "traditional   method"  as  set  forth   under   Regulations   Section
          1.704-3(b),  in  any  permitted  manner  determined  by the  Board  of
          Managers.

               (ii) If,  after  making the  allocations  described in clause (i)
          above,  the  Exercising  Member's  Adjusted  Capital  Account does not
          reflect its right to share in the Company's capital,  then, solely for
          federal   income  tax  purposes,   the  Company's   capital  shall  be
          reallocated  (in any  permitted  manner  determined  by the  Board  of
          Managers)  between the Members and the  Exercising  Member so that the
          Exercising Member's Adjusted Capital Account does reflect its right to
          share in the  Company's  capital.  The Board of  Managers  shall  make
          corrective allocations beginning with the taxable year of the exercise
          of the rights  under the Warrant  Agreement  as  described in Proposed
          Treasury Regulation Section 1.704-1(b)(4)(x).

          (e) The  Members  are  aware of the  income  tax  consequences  of the
     allocations  made by this  Section 2, and  hereby  agree to be bound by the
     provisions  of this  Section 2 in reporting  their shares of income,  gain,
     loss and deduction for income tax purposes.

     2.6  Remedial Allocations
          --------------------

          The  foregoing  provisions  are  intended to comply  with  Regulations
     Section  1.704-1(b),  and shall be  interpreted  and applied as provided in
     such Regulations.  If the Board of Managers shall reasonably determine that
     the manner in which the Capital Accounts or Adjusted Capital  Accounts,  or
     any increases or decreases  thereto,  are computed,  or the manner in which
     any  allocations  are made  under  Article 13 of this  Agreement  should be
     adjusted in order to comply with Section  704(b) and Section  704(c) of the
     Code and  Regulations  thereunder,  the Board of  Managers  shall make such
     modifications;  PROVIDED  that the Board of  Managers  shall not modify the
     manner of making distributions pursuant to this Agreement. Without limiting
     the generality of the foregoing, the Board of Managers shall apply Sections
     2.1 and 2.2 of this  Schedule B, in  conjunction  with  Section 2.3 of this
     Schedule  B in a manner  that  does not  result in the  duplication  of the
     allocation  of items of income,  gain,  deduction or loss.  All  elections,
     decisions and other matters concerning the allocations  hereunder among the
     Members, and accounting procedures, not specifically and expressly provided
     for by the terms of this  Agreement,  including,  but not  limited  to, the
     election pursuant to Section 754 of the Code (or  corresponding  provisions
     of subsequent law) to adjust the basis of the Company's  assets as provided
     by Sections 734 and 743 of the Code, shall be reasonably  determined by the
     Board of Managers.

     2.7  Proration of Allocations
          ------------------------

          If there is a transfer of Units,  a daily net  allocation of the items
     or amounts of net taxable income or loss allocated pursuant to this Section
     2 shall be computed by dividing  the items or amounts for the period by the
     number of days in the period. The quotient obtained shall be applied to the
     former  Member and the present  Member in  proportion to the number of days
     each of them was a Member in the Company for such  Company  Year;  PROVIDED
     that (i) any item or amount arising from the  acquisition or disposition of
     Company  assets  outside of the ordinary  course of business shall be taken
     into account as of the date thereof and (ii) the Board of Managers  may, in
     its  discretion,  elect any other  reasonable  method  for  allocating  net
     taxable income or loss between the transferor and transferee


                                       C-5
<PAGE>



                                    EXHIBIT A
                                    ---------

                        MEMBERS AND MEMBERSHIP INTERESTS

<TABLE>
<CAPTION>

                                   Capital        Number of                        Percentage
Name                             Contribution       Units       Price Per Unit      Interest
----------------------------     ------------     ---------     --------------     ----------
<S>                              <C>                 <C>          <C>                 <C>
Charter Mac Corporation          $29,700,000         297          $100,000            90%

IXIS Financial Products Inc.     $ 3,300,000          33          $100,000            10%

</TABLE>