Exhibit 10.3



================================================================================

                         TAX-EXEMPT BOND LINE OF CREDIT
                             AND SECURITY AGREEMENT

                           Dated as of March 26, 2003

                                      Among

                        CHARTER MAC EQUITY ISSUER TRUST,

                              FLEET NATIONAL BANK,
                    as Administrative Agent and as a Lender,

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                      as Syndication Agent and as a Lender,

                              FLEET SECURITIES INC.
                                       and
                           WACHOVIA SECURITIES, INC.,
                                       as
                               Co-Lead Arrangers,

                                       and

                            THE LENDERS PARTY HERETO

================================================================================


<PAGE>


<TABLE>
<CAPTION>


                                TABLE OF CONTENTS
                                -----------------

<S>                                                 <C>                     <C>      <C>
SECTION 1..........................................................DEFINITIONS       1

      1.1   Defined Terms....................................................1
            -------------

      1.2   Terms Generally..................................................1
            ---------------

      1.3   Accounting Principles; GAAP......................................2
            ---------------------------


SECTION 2...........................................................BACKGROUND       2

      2.1   Investments in Project Bonds.....................................2
            ----------------------------

      2.2   Establishment of Loan............................................2
            ---------------------


SECTION 3...........................................AMOUNT AND TERMS OF CREDIT       2

      3.1   Commitment of the Lenders........................................2

      3.2   Limitations on Advances; Loan Availability.......................3

            (a)   Loan Availability..........................................3
                  -----------------

            (b)   Minimum Required Eligible Project Bonds....................3
                  ---------------------------------------

            (c)   Valuation of Borrowing Base Eligible Project Bonds.........4
                  --------------------------------------------------

      3.3   Increase in Total Commitment.....................................4

      3.4   Term of Loan; Extension Right....................................6
            -----------------------------

      3.5   Interest Rate and Payment Terms..................................6

            (a)   Notes; Payment Terms, etc..................................6
                  --------------------------

            (b)   Interest Rate..............................................6
                  -------------

            (c)   Selection To Be Made.......................................6
                  --------------------

            (d)   Notice.....................................................6
                  ------

            (e)   If No Notice or LIBOR Advance Not Available................7
                  -------------------------------------------

            (f)   Telephonic Notice..........................................7
                  -----------------

            (g)   Limits On Options..........................................7
                  -----------------

            (h)   Payment and Calculation of Interest........................7
                  -----------------------------------

            (i)   Mandatory Principal Payments; Preapproved Bonds; Cash
                  Collateral.................................................8
                  ----------
</TABLE>


                                      -ii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                   <C>   <C>      <C>
            (j)   Prepayment................................................11
                  ----------

            (k)   Maturity..................................................11
                  --------

            (l)   Method of Payment; Date of Credit.........................11
                  ---------------------------------

            (m)   Billings..................................................11
                  --------

            (n)   Default Rate; Termination of Pricing Options..............12
                  --------------------------------------------

            (o)   Late Charges..............................................12
                  ------------

            (p)   Prepayment; Make-Whole; Yield Maintenance.................12
                  -----------------------------------------

      3.6   Loan Fees.......................................................13

            (a)   Commitment Fees...........................................13
                  ---------------

            (b)   Agent's Fees..............................................13
                  ------------

            (c)   Unused Fee................................................13
                  ----------

            (d)   Extension Fee.............................................13
                  -------------

      3.7   Loan Extension..................................................14

            (a)   Initial Maturity Date.....................................14
                  ---------------------

                  (i)   No Default..........................................14
                        ----------

                  (ii)  Notice From Borrower................................14
                        --------------------

                  (iii) Conditions Satisfied................................14
                        --------------------

                  (iv)  Extension Fee.......................................14
                        -------------

                  (v)   Additional Documents................................14
                        --------------------

                  (vi)  Before End of Term..................................14
                        ------------------

      3.8   Additional Provisions Related to Interest Rate Selection........15

            (a)   Increased Costs...........................................15
                  ---------------

            (b)   Illegality................................................15
                  ----------

            (c)   Additional LIBOR Conditions...............................15
                  ---------------------------

                  (i)   Availability........................................15
                        ------------

                  (ii)  Payments Net of Taxes...............................16
                        ---------------------

            (d)   Variable Rate Advances....................................16
                  ----------------------

            (e)   Conversion of Other Advances..............................16
                  ----------------------------


SECTION 4.............................................................ADVANCES       16
</TABLE>


                                     -iii-
<PAGE>


<TABLE>
<CAPTION>


<S>                         <C>                                             <C>      <C>
      4.1   Procedures......................................................16
            ----------

            (a)   Advance Requests; Certifications..........................16
                  --------------------------------

            (b)   Approval or Denial by the Agent and Lenders...............19
                  -------------------------------------------

            (c)   Funding by Agent and Lenders..............................19
                  ----------------------------

                  (i)   Existing Collateral Advances........................19
                        ----------------------------

                  (ii)  Borrowing Base Acquisition Advances; Increased
                        Collateral Value Advances...........................19
                        -------------------------

      4.2   Wet Funding Advances............................................22
            --------------------

      4.3   Other Conditions................................................23
            ----------------


SECTION 5.........................................SECURITY FOR THE OBLIGATIONS       23

      5.1   Grant of Security Interest......................................23
            --------------------------

      5.2   Authenticated Record............................................25
            --------------------

      5.3   Collection and Servicing Rights.................................25

      5.4   Return of Collateral upon Termination of Commitment.............26
            ---------------------------------------------------

      5.5   Removal of Eligible Project Bond as a Borrowing Base Eligible
            Project Bond by Borrower........................................26

      5.6   Release of Ineligible Project Bonds.............................28
            -----------------------------------

      5.7   Additional Borrowing Base Eligible Project Bonds................28
            ------------------------------------------------

      5.8   Cash Collateral Account.........................................30

            (a)   Maintenance of Account....................................30
                  ----------------------

            (b)   Control; Investment of Funds..............................30
                  ----------------------------

            (c)   Distributions; Application to Obligations.................30
                  -----------------------------------------


SECTION 6...................CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES       30
                            --------------------------------------------------


SECTION 7.................................................CONDITIONS PRECEDENT       30

      7.1   Closing Loan....................................................31
            ------------

            (a)   Satisfactory Loan Documents...............................31
                  ---------------------------

            (b)   Borrowing Base Eligible Project Bonds.....................31
                  -------------------------------------

            (c)   Delivery of Borrowing Base Eligible Project Bonds.........31
                  -------------------------------------------------
</TABLE>


                                      -iv-
<PAGE>


<TABLE>
<CAPTION>


<S>                                             <C>                         <C>      <C>
            (d)   Funding Certification.....................................31
                  ---------------------

            (e)   No Bond Document Default..................................31
                  ------------------------

            (f)   No Material Change........................................31
                  ------------------

            (g)   Warranties and Representations Accurate...................31
                  ---------------------------------------

            (h)   Officer's Certificate.....................................32
                  ---------------------

            (i)   Constituent Documents.....................................32
                  ---------------------

            (j)   Votes, Consents and Authorizations........................32
                  ----------------------------------

            (k)   Incumbency Certificate; Authorized Signers................32
                  ------------------------------------------

            (l)   Corporate Structure.......................................32
                  -------------------

            (m)   Litigation................................................32
                  ----------

            (n)   Financial Statements......................................33
               -----------------------

            (o)   Examination of Books and Assets...........................33
                  -------------------------------

            (p)   Compliance with Law.......................................33
                  -------------------

            (q)   Legal and other Opinions..................................33
                  ------------------------

            (r)   Payment of Fees...........................................33
                  ---------------

            (s)   No Default or  Event of Default...........................33
                  -------------------------------

            (t)   Additional Documents......................................34
                  --------------------

            (u)   Further Assurances........................................34
                  ------------------

            (v)   Advance Request...........................................34
                  ---------------

      7.2   Advances........................................................34
            --------

            (a)   Representations True; No Default or Event of Default......34
                  ----------------------------------------------------

            (b)   Certifications............................................34
                  --------------

            (c)   Borrowing Base Acquisition Advance........................34
                  ----------------------------------

            (d)   Notice of Approval........................................35
                  ------------------

            (e)   No Legal Impediment.......................................35
                  -------------------

            (f)   Governmental Regulation...................................35
                  -----------------------

            (g)   Proceedings and Documents.................................35
                  -------------------------

            (h)   No Adverse Changes........................................35
                  ------------------


SECTION 8.......................................WARRANTIES AND REPRESENTATIONS       35
                                                ------------------------------
</TABLE>


                                      -v-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                         <C>      <C>
      8.1   Financial Information...........................................35
            ---------------------

      8.2   Approved Project................................................36
            ----------------

      8.3   No Violations...................................................36
            -------------

      8.4   Litigation......................................................36
            ----------

      8.5   Borrowing Base Eligible Project Bonds...........................36
            -------------------------------------

      8.6   Project Letter of Credit........................................36
            ------------------------

      8.7   Good Title and No Liens.........................................37
            -----------------------

      8.8   Franchises, Patents, Copyrights, Etc............................37
            -------------------------------------

      8.9   Use of Proceeds.................................................37
            ---------------

      8.10  Entity Matters..................................................37

            (a)   Organization..............................................37
                  ------------

            (b)   Ownership, Subsidiaries and Taxpayer Identification
                  Numbers...................................................38
                  -------

            (c)   Authorization.............................................38
                  -------------

      8.11  Valid and Binding...............................................39
            -----------------

      8.12  Deferred Compensation and ERISA.................................39
            -------------------------------

      8.13  No Materially Adverse Contracts, Etc............................39
            -------------------------------------

      8.14  Compliance With Other Instruments, Laws, Etc....................39
            ---------------------------------------------

      8.15  Tax Status......................................................39
            ----------

      8.16  Holding Company and Investment Company Acts.....................40
            -------------------------------------------

      8.17  Certain Transactions............................................40
            --------------------

      8.18  Loan Documents..................................................40
            --------------

      8.19  Regulations U and X.............................................40
            -------------------

      8.20  Solvency........................................................40

      8.21  Conditions Satisfied............................................40
            --------------------

      8.22  No Material Change: No Default..................................41
            ------------------------------

      8.23  No Broker or Finder.............................................41
            -------------------

      8.24  Background Information and Certificates; Projects...............41
            -------------------------------------------------

      8.25  Background Information and Certificates.........................41
            ---------------------------------------

      8.26  Representations Regarding Eligible Project Bonds................41
            ------------------------------------------------
</TABLE>


                                      -vi-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                  <C>    <C>      <C>
      8.27  Reaffirmation...................................................42
            -------------


SECTION 9............................................................COVENANTS       43
                                                                     ---------

      9.1   Punctual Payment................................................43
            ----------------

      9.2   Maintenance of Office...........................................43
            ---------------------

      9.3   Organizational Number...........................................43
            ---------------------

      9.4   Records and Accounts............................................43
            --------------------

      9.5   Notices.........................................................43

            (b)   Notification of Claims against Borrowing Base Eligible
                  Project Bonds.............................................44
                  -------------

            (c)   Notice of Litigation and Judgments........................44
                  ----------------------------------

      9.6   Financial Statements and Reports................................45
            --------------------------------

            (a)   Monthly Statements........................................45
                  ------------------

            (b)   Quarterly and Annual Statements and Statement of Bond
                  Valuation.................................................45
                  ---------

            (c)   Data Requested............................................46
                  --------------

            (d)   Approved Project Financial Information....................46
                  --------------------------------------

      9.7   Existence; Conduct of Business..................................46
            ------------------------------

      9.8   Projects; Collateral Bonds......................................46

      9.9   Insurance.......................................................47
            ---------

      9.10  Taxes and Trade Debt............................................47
            --------------------

      9.11  Compliance with Laws, Contracts, Licenses, and Permits..........47

      9.12  Indemnification Against Payment of Brokers' Fees................48
            ------------------------------------------------

      9.13  Fiscal Year.....................................................48
            -----------

      9.14  Deposit of Proceeds; Disbursement of Loan Advances; Other Bank
            Accounts........................................................48

      9.15  Place for Records; Inspection...................................48
            -----------------------------

      9.16  Costs and Expenses..............................................49
            ------------------

      9.17  Indemnification.................................................50
            ---------------

      9.18  Replacement Documentation.......................................51
            -------------------------

      9.19  Revenue Bond Valuation Methodology..............................51
            ----------------------------------
</TABLE>


                                     -vii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                          <C>            <C>      <C>
      9.20  Further Assurances..............................................51
            ------------------

      9.21  Negative Covenants..............................................51
            ------------------

            (a)   Liens.....................................................51
                  -----

            (b)   Merger; Sale of Assets....................................51
                  ----------------------

            (c)   Loans and Advances........................................52
                  ------------------

            (d)   Limits on Changes to Approved Projects; Consents,
                  Ratifications, Waivers and Changes to Bond Documents,
                  Etc.......................................................52
                  ---

            (e)   Modifications of Servicing Agreement......................53
                  ------------------------------------

            (f)   Distributions.............................................54
                  -------------

            (g)   Affiliate Indebtedness....................................54
                  ----------------------

            (h)   Distribution of Project Owner Equity Funds................54
                  ------------------------------------------

      9.22  Borrower Financial Covenants....................................54

            (a)   Adjusted Tangible Net Worth...............................54
                  ---------------------------

            (b)   Fixed Charges.............................................54
                  -------------

            (c)   Facility Debt Service Coverage Ratio......................54
                  ------------------------------------


SECTION 10...................................................EVENTS OF DEFAULT       54
                                                             -----------------

      10.1  Events of Default...............................................54
            -----------------

            (a)   Failure to Pay............................................55
                  --------------

            (b)   Failure to Perform........................................55
                  ------------------

            (c)   Breach of Representation or Warranty......................55
                  ------------------------------------

            (d)   Failure to Pay other Indebtedness.........................55
                  ---------------------------------

            (e)   Insolvency................................................55
                  ----------

            (f)   Involuntary Proceedings...................................55
                  -----------------------

            (g)   Judgments.................................................56
                  ---------

            (h)   Cancellation of Loan Documents............................56
                  ------------------------------

            (i)   ERISA.....................................................56
                  -----

            (j)   Indictment................................................56
                  ----------

            (k)   Material Adverse Change...................................56
                  -----------------------

            (l)   Change in Control.........................................56
                  -----------------
</TABLE>


                                     -viii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                              <C>                        <C>      <C>
            (m)   Regarding Charter Mac and Holding Trust...................57
                  ---------------------------------------

            (n)   Charter Mac Covenants.....................................57
                  ---------------------

            (o)   Mortgage Warehousing Facility.............................57
                  -----------------------------

            (p)   Acquisition Line Facility.................................57
                  -------------------------

            (q)   Reimbursement Agreement...................................57
                  -----------------------

            (r)   Failure to Pay Dividends..................................57
                  ------------------------

      10.2  Written Waivers.................................................57
            ---------------

      10.3  Remedies........................................................57


SECTION 11.......................................SECURITY INTEREST AND SET-OFF       61

      11.1  Security Interest...............................................61
            -----------------

      11.2  Set-Off.........................................................61
            -------

      11.3  Additional Rights...............................................62
            -----------------


SECTION 12...........................................THE AGENT AND THE LENDERS       62

      12.1  Rights, Duties and Immunities of the Agent......................62

            (a)   Appointment of Agent......................................62
                  --------------------

            (b)   Syndication Agent and Co-Lead Arrangers...................63
                  ---------------------------------------

            (c)   Administration of Loan by Agent...........................63
                  -------------------------------

            (d)   Delegation of Duties......................................64
                  --------------------

            (e)   Exculpatory Provisions....................................64
                  ----------------------

            (f)   Reliance by Agent.........................................64
                  -----------------

            (g)   Notice of Default.........................................65
                  -----------------

            (h)   Lenders' Credit Decisions.................................65
                  -------------------------

            (i)   Agent's Reimbursement and Indemnification.................65
                  -----------------------------------------

            (j)   Agent in its Individual Capacity..........................66
                  --------------------------------

            (k)   Successor Agent...........................................66
                  ---------------

            (l)   Duties in the Case of Enforcement.........................67
                  ---------------------------------

      12.2  Respecting Loans and Payments...................................67

            (a)   Procedures for Advances...................................67
                  -----------------------
</TABLE>


                                      -ix-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                         <C>             <C>      <C>
            (b)   Nature of Obligations of Lenders..........................68
                  --------------------------------

            (c)   Payments to Agent.........................................68
                  -----------------

            (d)   Distribution of Liquidation Proceeds......................68
                  ------------------------------------

            (e)   Adjustments...............................................69
                  -----------

            (f)   Setoff....................................................69
                  ------

            (g)   Distribution by Agent.....................................70
                  ---------------------

            (h)   Delinquent Lenders........................................70
                  ------------------

            (i)   Holders...................................................71
                  -------

      12.3  Assignment......................................................71
            ----------

      12.4  Certain Representations and Warranties; Limitations; Covenants..72

      12.5  Register........................................................73
            --------

      12.6  New Notes.......................................................73
            ---------

      12.7  Participations..................................................73
            --------------

      12.8  Disclosure......................................................74
            ----------

      12.9  Miscellaneous Assignment Provisions.............................74
            -----------------------------------

      12.10 Assignment by Borrower..........................................74
            ----------------------

      12.11 Administrative Matters..........................................74

            (a)   Amendment, Waiver, Consent, Etc...........................74
                  --------------------------------

            (b)   Deemed Consent or Approval................................75
                  --------------------------


SECTION 13..................................................GENERAL PROVISIONS       76

      13.1  Notices.........................................................76
            -------

      13.2  Limitations on Assignment.......................................78
            -------------------------

      13.3  Further Assurances..............................................78
            ------------------

      13.4  Usury...........................................................78
            -----

      13.5  Payments to be Charged as an Advance............................79
            ------------------------------------

      13.6  Parties Bound; Integration......................................79

      13.7  Waivers, Extensions and Releases................................79
            --------------------------------

      13.8  Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury
            Trial...........................................................80
</TABLE>


                                      -x-
<PAGE>


            (a)   Substantial Relationship..................................80
                  ------------------------

            (b)   Place of Delivery.........................................80
                  -----------------

            (c)   Governing Law.............................................80
                  -------------

      13.9  Consent to Jurisdiction.........................................80
            -----------------------

      13.10 JURY TRIAL WAIVER...............................................80
            -----------------

      13.11 Survival........................................................81
            --------

      13.12 Cumulative Rights...............................................81
            -----------------

      13.13 Claims Against Agent or Lenders.................................81

            (a)   Borrower Must Notify......................................81
                  --------------------

            (b)   Remedies..................................................82
                  --------

            (c)   Limitations...............................................82
                  -----------

      13.14 Obligations Absolute............................................82
            --------------------

      13.15 Table of Contents, Title and Headings...........................82
            -------------------------------------

      13.16 Counterparts....................................................83
            ------------

      13.17 Time Of the Essence.............................................83
            -------------------

      13.18 No Oral Change..................................................83
            --------------

      13.19 Monthly Statements..............................................83
            ------------------

      13.20 Confidentiality.................................................83
            ---------------

      13.21 Acknowledgment of Joinder.......................................84
            -------------------------


                                      -xi-
<PAGE>


                                     -xii-
<PAGE>


                         TAX-EXEMPT BOND LINE OF CREDIT
                             AND SECURITY AGREEMENT
                             ----------------------

      THIS  TAX-EXEMPT  BOND LINE OF CREDIT AND  SECURITY  AGREEMENT  (the "Loan
Agreement" or this  "Agreement")  is made and entered into as of the 26th day of
March, 2003, by and among:

      CHARTER  MAC  EQUITY  ISSUER  TRUST,  a  Delaware   statutory  trust  (the
"Borrower");

      FLEET NATIONAL BANK, a national  banking  association,  as  Administrative
Agent (in such capacity, the "Agent") and as a Lender;

      WACHOVIA BANK, NATIONAL  ASSOCIATION,  a national banking association,  as
Syndication Agent and as a Lender;

      FLEET SECURITIES, INC. and WACHOVIA SECURITIES, INC., as Co-Lead Arrangers
(the "Arrangers"); and

      THE LENDERS party hereto from time to time.

      For good and valuable consideration,  the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

SECTION 1.  DEFINITIONS.

      1.1   Defined  Terms.  For all purposes of this Loan  Agreement, except as
otherwise  expressly  provided herein or unless the context otherwise  requires,
capitalized  terms not otherwise defined herein shall have the meanings given to
such terms in Exhibit A hereto,  which is incorporated  by reference  herein and
made a part of this Loan Agreement.

      1.2   Terms Generally.  Unless otherwise  specified in the Loan Documents:
(a) references in a Loan Document to "Sections,"  "Exhibits,"  and  "Schedules,"
are to  sections,  exhibits,  and  schedules in and to such Loan  Document,  (b)
references  in a Loan  Document to any  document,  instrument,  or agreement (i)
shall include all exhibits, schedules, and other attachments thereto, (ii) shall
include  all  documents,  instruments,  or  agreements  issued  or  executed  in
replacement  thereof, to the extent permitted hereby or thereby, and (iii) shall
mean such  document,  instrument,  or  agreement,  or  replacement  thereof,  as
amended, supplemented,  restated, or otherwise modified from time to time to the
extent permitted hereby or thereby and in effect at any given time, (c) wherever
from the context it appears appropriate, each term stated in either the singular
or plural  shall  include the singular  and plural,  and pronouns  stated in the
masculine, feminine, or neuter shall include the


<PAGE>


masculine,  the feminine, and the neuter, (d) unless explicitly set forth to the
contrary,  a reference to a "Subsidiary" means a Subsidiary of the Borrower or a
Subsidiary  of such  Subsidiary,  and a  reference  to an  "Affiliate"  means an
Affiliate  of the  Borrower,  (e) titles and  captions  of  Articles,  Sections,
subsections,  and clauses in any Loan  Document are for  convenience  only,  and
neither  limit nor  amplify the  provisions  of such Loan  Document,  (f) unless
otherwise  indicated,  all  references  to  "time"  are  references  to  Boston,
Massachusetts,  time, (g) all references to money (including the symbol "$") are
to lawful  currency of the United States,  (h)  references to  "including"  mean
including  without  limiting the  generality of any  description  preceding that
word, (i) the rule of construction  that references to general items that follow
references to specific  items are limited to the same type or character of those
specific  items is not applicable in the Loan  Documents,  (j) references to any
Person  include  that  Person's  heirs,  personal  representatives,  successors,
trustees,  receivers,  and permitted  assigns,  and (k)  references to any Legal
Requirement  include every  amendment or  supplement to it, rule and  regulation
adopted under it, and successor or replacement for it.

      1.3   Accounting  Principles;   GAAP.  Except  as  otherwise  specifically
provided for in this Loan Agreement,  all accounting and financial terms used in
the Loan Documents and the compliance with each financial covenant therein shall
be determined in accordance  with GAAP, and all accounting  principles  shall be
applied on a consistent  basis so that the  accounting  principles  in a current
period are  comparable  in all  material  respects to those  applied  during the
preceding comparable period.

SECTION 2.  BACKGROUND.

      2.1   Investments  in Project  Bonds.  The Borrower  currently  owns,  and
intends to purchase from time to time hereafter, Project Bonds.

      2.2   Establishment of Loan. The Borrower has requested that the Agent and
the  Lenders  establish  this  credit  facility  in favor of the  Borrower  (the
"Loan"), the proceeds of which shall be used by the Borrower to acquire and hold
Project Bonds. The Agent and the Lenders have agreed to establish the Loan, upon
and subject to the terms and conditions of this Loan Agreement.

SECTION 3.  AMOUNT AND TERMS OF CREDIT.

      3.1   Commitment of the Lenders.

            (a)  Subject  to and upon the  terms  and  conditions  of this  Loan
      Agreement,  each Lender,  severally and not jointly with any other Lender,
      agrees  to  establish  the  Loan and to make and  remake  Advances  to the
      Borrower  from the  Closing  Date until and  including  the  Business  Day
      immediately  preceding  the Maturity  Date in an  aggregate


                                      -2-
<PAGE>


      amount not to exceed at any time such  Lender's  Commitment,  during which
      period the  Borrower  may  borrow,  repay and  reborrow  such  Advances in
      accordance with the provisions of this Loan Agreement.

            (b) Each Advance shall be made by the Lenders pro rata in accordance
      with their respective Commitment Percentages. The failure of any Lender to
      make any Advance shall neither  relieve any other Lender of its obligation
      to fund its  Advance  in  accordance  with  the  provisions  of this  Loan
      Agreement, nor increase the obligation of any such other Lender.

            (c) While a Default  or Event of Default  exists,  the  Lenders  may
      refuse to make any Advances to the Borrower.  All Advances under this Loan
      Agreement constitute a single  indebtedness,  and all of the Collateral is
      security for the payment and the performance of all Obligations.

      3.2   Limitations on Advances; Loan Availability.

            (a)      Loan Availability.  The aggregate outstanding amount of all
Advances  under the Loan (after giving effect to all requested  Advances)  shall
not at any time exceed the lesser of (i) the Total  Commitment  at such time, or
(ii) an amount equal to the  Collateral  Value of the  Borrowing  Base  Eligible
Project Bonds at such time (the lesser of (i) or (ii), the "Loan Availability").

            (b)      Minimum  Required  Eligible  Project Bonds.  Subject to the
provisions of the next  sentence,  at all times there shall be at least four (4)
Borrowing Base Eligible Project Bonds.  Notwithstanding the foregoing provision,
in the event that a Borrowing  Base Eligible  Project Bond becomes an Ineligible
Project Bond, so long as (x) no Default or other Event of Default  otherwise has
occurred and is continuing, (y) there are at least three (3) remaining Borrowing
Base Eligible Project Bonds which continue to qualify as Borrowing Base Eligible
Project Bonds hereunder,  and (z) Section 3.5(i)(i) does not apply, the Borrower
shall either:

                     (i) deliver:  (1) to the Agent and the Lenders,  within one
            (1)  Business  Day of the  date  that  the  subject  Borrowing  Base
            Eligible Project Bond became an Ineligible Project Bond hereunder, a
            Preapproved   Bond   Eligibility   Certificate  with  respect  to  a
            Preapproved  Bond,  and (2) to the Custodian as  Collateral,  within
            three (3)  Business  Days after the date that the subject  Borrowing
            Base  Eligible  Project  Bond  became  an  Ineligible  Project  Bond
            hereunder,  the original  Preapproved Bond (either registered in the
            name of the Custodian,  or accompanied by all required  endorsements
            and other  documents  necessary  for the  Custodian  to effect  such
            registration)   which  is  the  subject  of  such  Preapproved  Bond
            Eligibility Certificate; or


                                      -3-
<PAGE>


                     (ii)  within  twenty-one  (21)  days from the date that the
            subject  Borrowing  Base Eligible  Project Bond became an Ineligible
            Project  Bond  hereunder,  provide the Agent and the Lenders with an
            additional  Eligible  Project  Bond  as  Collateral  hereunder,   in
            accordance with the provisions of Section 5.7 hereof.

            (c)      Valuation of Borrowing  Base Eligible  Project  Bonds.  The
Agent and the Lenders  shall,  on a quarterly  basis,  calculate the  Collateral
Value of the Borrowing Base Eligible Project Bonds, provided, however, the Agent
and the  Lenders  may  calculate  the  Collateral  Value of the  Borrowing  Base
Eligible  Project  Bonds at such  other  times as may be  necessary  in order to
enable the Agent or the Lenders to confirm the  Borrower's  compliance  with the
terms and conditions of this Agreement.  The Collateral  Value determined by the
Agent and the Lenders shall be conclusive, in the absence of manifest error. Any
Mandatory Principal Payment and/or granting of additional Collateral required to
be made after giving effect to such calculation shall be made by the Borrower as
provided for in Section 3.5(i).

      3.3   Increase in Total Commitment.

            (a)      So long as the Incremental Loan Commitment Requirements are
      satisfied  at the time of the  delivery of the request  referred to below,
      the  Borrower  shall have the right at any time and from time to time upon
      at least five (5) Business  Days' prior  written  notice to the Agent,  to
      increase  the amount of the Total  Commitment  to an amount in no event to
      exceed $100,000,000, either by new Lenders establishing Commitments, or by
      one or more of the then  existing  Lenders  increasing  their  Commitments
      (each such increase by either means,  a  "Commitment  Increase,"  and each
      such new  Lender or  Lender  increasing  its  Commitment,  an  "Additional
      Commitment  Lender"),  provided,  however,  that  (i) no  Lender  shall be
      obligated to provide a Commitment Increase as a result of any such request
      by the Borrower,  (ii) any new Lender must qualify as an Eligible Assignee
      and shall be subject to the approval of the Agent,  which  approval  shall
      not  unreasonably be withheld,  and (iii) without the consent of the Agent
      and all of the  Lenders,  at no time  shall  there be more  than  four (4)
      Lenders  hereunder.  No Commitment  Increase shall become effective unless
      and until the Borrower,  the Agent, and the Additional  Commitment  Lender
      shall have executed and delivered an agreement  substantially  in the form
      of Exhibit B hereto (a "Commitment Increase Supplement").  Each Commitment
      Increase shall be in a minimum  aggregate  amount of at least  $10,000,000
      and in integral multiples of $1,000,000 in excess thereof.

            (b)      In connection  with any Commitment  Increase to be provided
      hereunder,  the  Incremental  Loan Commitment  Requirements  and any other
      conditions  precedent  agreed to by the Borrower  that may be set forth in
      the applicable  Commitment  Increase  Supplement shall have been satisfied
      (including,  without  limitation,  the payment of any


                                       -4-
<PAGE>


      fees by the Borrower required in connection therewith,  including, without
      limitation,  any agreed  upon  up-front or  arrangement  fees owing to the
      Agent or the  Arrangers),  and the Borrower  shall deliver to the Agent an
      opinion or opinions, in form and substance reasonably  satisfactory to the
      Agent, from counsel to the Borrower  reasonably  satisfactory to the Agent
      (it being agreed that the counsel  that deliver the legal  opinions on the
      Closing  Date  shall be  satisfactory  to the  Agent) and dated such date,
      covering  such  of the  matters  set  forth  in the  opinions  of  counsel
      delivered to the Agent on the Closing Date  pursuant to Section 7.1 as may
      be reasonably  requested by the Agent, and such other matters as the Agent
      reasonably may request.  The Agent shall promptly notify each Lender as to
      the  effectiveness  of each  Commitment  Increase  (with each date of such
      effectiveness  being referred to herein as a "Commitment  Increase Date"),
      and at such time (i) the Total Commitment  under, and for all purposes of,
      the Loan  Agreement  shall be  increased by the  aggregate  amount of such
      Commitment Increases,  (ii) Schedule A shall be deemed modified to reflect
      the revised  Commitments of the affected Lenders,  and (iii) to the extent
      requested by any Additional Commitment Lender, Notes will be issued at the
      Borrower's  expense  to  such  Additional  Commitment  Lender,  to  be  in
      conformity   with   requirements   of   Section   3.5  (with   appropriate
      modification)  to the extent  necessary to reflect the new  Commitment  of
      such Additional Commitment Lender.

            (c)      In connection  with any  provision of Commitment  Increases
      hereunder,  the  Lenders  and the  Borrower  agree  that,  notwithstanding
      anything to the contrary in the Loan Agreement (i) the Borrower  shall, in
      coordination  with the Agent,  (x) repay  outstanding  Advances of certain
      Lenders,  and obtain  Advances from certain other Lenders  (including  the
      Additional  Commitment  Lenders),  or  (y)  take  such  other  actions  as
      reasonably  may be  required  by the Agent  (including  by  requiring  new
      Advances  to be  obtained  and added to then  outstanding  Advances,  even
      though,  as a result thereof,  such new Advances (to the extent maintained
      as LIBOR Advances) may have a shorter Interest Period than the outstanding
      Advances), in each case to the extent necessary so that all of the Lenders
      effectively  participate in each outstanding Advance pro rata on the basis
      of their  Commitment  Percentages  (determined  after giving effect to any
      increase in the Total  Commitment  pursuant to this Section 3.3), and (ii)
      the Borrower shall pay to the Lenders any costs of the type referred to in
      Section 3.5(p) in connection with any repayment  and/or Advances  required
      pursuant to preceding  clause (i). Without limiting the Obligations of the
      Borrower  provided for in this Section  3.3(c),  the Agent and the Lenders
      agree that they will use their best efforts to attempt to minimize (to the
      extent  possible  pursuant to  assignments  of the  Commitments  among the
      existing Lenders and the Additional  Commitment  Lenders,  or as otherwise
      may be feasible) the costs of the type referred to in Section 3.5(p) which
      the Borrower would otherwise  occur in connection with the  implementation
      of an increase in the Total Commitment.


                                      -5-
<PAGE>


      3.4   Term of Loan;  Extension  Right.  The Loan  shall be for a term (the
"Initial  Term")  commencing on the Agreement  Date and ending on March 25, 2005
(the "Initial Maturity Date"). At the election of the Borrower, the Initial Term
may  be  extended  to  March  25,  2006  (the  "Extended  Maturity  Date")  upon
satisfaction of the conditions set forth in Section 3.7.

      3.5   Interest Rate and Payment Terms.

            (a)      Notes; Payment Terms, etc. All Advances made under the Loan
shall be payable as to interest and principal in accordance  with the provisions
of this Loan  Agreement  and the Notes,  in the form of  Exhibit C hereto,  duly
executed  by the  Borrower in favor of each  Lender.  This Loan  Agreement  also
provides for interest at a Default Rate, Late Charges and prepayment  rights and
fees. Subject to Section 12.2(h),  all payments for the account of Lenders shall
be applied to the  respective  accounts of the Lenders in  accordance  with each
Lender's  Commitment  Percentage.  The Agent will  disburse such payments to the
Lenders on the date of receipt  thereof if received  on a Business  Day prior to
10:00  A.M.  on such  date  and,  if  received  later or on a day which is not a
Business Day, on the next Business Day. Any and all interest rate  selection and
conversion provisions in this Loan Agreement are to be administered by the Agent
and to be  allocated  on a pro rata basis to the Note held by each Lender  based
upon such Lender's Commitment Percentage.

            (b)      Interest Rate. Principal amounts outstanding under the Loan
shall bear interest at the following rates, at the Borrower's selection, subject
to the  conditions  and  limitations  provided for in this Loan  Agreement:  (i)
Variable  Rate,  or (ii) LIBOR  Rate.  Notwithstanding  the  foregoing,  all Wet
Funding Advances shall be Variable Rate Advances,  unless and until converted to
LIBOR Advances in accordance with the provisions of this Agreement.

            (c)      Selection  To Be  Made.  The  Borrower  shall  select,  and
thereafter may change the selection of, the applicable  interest rate,  from the
alternatives  provided for in this Loan Agreement,  by giving the Agent a Notice
of Rate  Selection  (defined  below):  (i) on (if not later than 10:00  A.M.) or
before the Drawdown  Date, for an Advance that is to be a Variable Rate Advance,
(ii) at least  three  (3)  Business  Days  prior to  first  day of the  proposed
Interest Period, for an Advance that is to be, or is to be converted to, a LIBOR
Advance,  or (iii) on (if not later than 10:00 A.M.) or before any  Business Day
on which the  Borrower  desires  to convert an  outstanding  LIBOR  Advance to a
Variable Rate Advance.

            (d)      Notice. In connection with a request for an Advance,  or in
order to convert the interest rate option  applicable to an outstanding  Advance
to another interest rate option hereunder,  the Borrower shall give to the Agent
a "Notice  of Rate  Selection"  which  shall be a written  notice in the form of
Exhibit D hereto, given by telecopier,  or by telephone if immediately confirmed
by such a written notice, from an Authorized Representative of the


                                      -6-
<PAGE>


Borrower which: (i) shall be irrevocable,  except for a Notice of Rate Selection
delivered in connection  with an Advance Request for a Wet Funding Advance which
is subject to the provisions of Section  4.1(a)(iii)  below; (ii) is received by
the Agent not later than 10:00 A.M.  on a Business  Day:  (x) if a LIBOR Rate is
selected,  which is at least three (3) Business  Days prior to the first day of,
and specifying, the Interest Period(s) applicable thereto, and (y) if a Variable
Rate is selected,  which is on or before the first day of the Interest Period to
which ________ it applies;  and (iii) as to each selected  interest rate option,
sets forth the aggregate _____  principal  amount(s) to which such interest rate
option(s) shall apply.

            (e)      If No  Notice  or  LIBOR  Advance  Not  Available.  If  the
Borrower  fails to  select  an  interest  rate  option  in  accordance  with the
foregoing prior to an Advance,  or at least three (3) Business Days prior to the
last day of the Interest Period applicable to an outstanding  LIBOR Advance,  or
if a LIBOR  Advance is not available (i) any new Advance made shall be deemed to
be a Variable Rate Advance,  and (ii) on the last day of the applicable Interest
Period all outstanding  principal  amounts of such LIBOR Advance shall be deemed
converted to a Variable Rate Advance.

            (f)      Telephonic   Notice.   Without  in  any  way  limiting  the
Borrower's obligation to confirm in writing any telephonic notice, the Agent may
act without  liability upon the basis of telephonic notice believed by the Agent
in good faith to be from the Borrower prior to receipt of written  confirmation.
In each case the Borrower  hereby waives the right to dispute the Agent's record
of the terms of such telephonic Notice of Rate Selection.

            (g)      Limits On Options. Each LIBOR Advance shall be in a minimum
amount of $500,000.  At no time shall there be  outstanding a total of more than
six (6) Interest Rate Periods in effect with respect to LIBOR Advances.

            (h)      Payment and Calculation of Interest.

                     (i) All accrued  interest  shall be: (x) payable in arrears
            on each Interest  Payment Date applicable  thereto,  on the Maturity
            Date,  and,  with respect to LIBOR  Advances,  upon any repayment or
            prepayment  thereof (on the amount  prepaid);  and (y) calculated on
            the basis of a 360 day year and the actual  number of days  elapsed.
            Each  change in the  Prime  Rate  shall  simultaneously  change  the
            Variable Rate payable under this Loan Agreement. Changes in the rate
            of interest  resulting from the changes in the Prime Rate shall take
            place  immediately  without  prior  notice  or  demand  of any kind.
            Interest at the LIBOR Rate shall be computed  from and including the
            first day of the applicable  Interest Period to, but excluding,  the
            last day thereof.


                                      -7-
<PAGE>


                     (ii) If, for any reason, (x) the Borrower repays an Advance
            on the same day that it was made by the Lenders, or (y) the Borrower
            instructs the Agent not to make a previously requested Advance after
            the Lenders have reserved funds or made other arrangements necessary
            to enable such Lenders to fund that Advance,  the Borrower agrees to
            pay,  in  addition  to those  amounts  required  pursuant to Section
            3.5(p), to each Lender an administrative fee equal to one (1) day of
            interest  on that  Advance  at the  then  effective  Variable  Rate.
            Administrative  fees  are due and  payable  in the  same  manner  as
            interest is due and payable under this Loan Agreement.
            (i)      Mandatory  Principal  Payments;   Preapproved  Bonds;  Cash
Collateral.  The  Borrower  shall repay the Loan in the amounts and at the times
provided for below (each a "Mandatory Principal Payment"):

                     (i)  Subject  to Section  5.3(b),  in the event that at any
            time the outstanding  principal balance of the Loan exceeds the Loan
            Availability   (including   because  what  theretofore  had  been  a
            Borrowing  Base Eligible  Project Bond became an Ineligible  Project
            Bond), the Borrower shall, within one (1) Business Day after demand,
            repay  such  excess  amount in  immediately  available  funds to the
            Agent,  for  the  ratable  benefit  of  the  Lenders,  so  that  the
            outstanding  principal balance of the Loan is in compliance with the
            terms and  provisions  of  Section  3.2(a).  If, at such time as the
            Borrower  shall be  required  to prepay  the Loan  pursuant  to this
            subsection  (i), no Default or Event of Default has  occurred and is
            continuing  (other  than the  Event of  Default  resulting  from the
            Borrower's  failure to have made the  payment  required by the first
            sentence  of this  subsection  (i)),  the  Borrower  may, in lieu of
            prepaying the Loan, either:

                             (1)      deliver (x) to the Agent and the  Lenders,
                     within the one (1) Business Day period referred to above, a
                     Preapproved Bond Eligibility  Certificate with respect to a
                     Preapproved Bond having a Collateral Value such that, after
                     giving effect to such Collateral  Value, the Borrower would
                     be in compliance with the provisions of Section 3.2(a), and
                     (y)  to the  Custodian  as  Collateral,  within  three  (3)
                     Business Days after the Agent's  demand  referred to above,
                     the original  Preapproved Bond which is the subject of such
                     Preapproved Bond Eligibility Certificate (either registered
                     in  the  name  of  the  Custodian,  or  accompanied  by all
                     required endorsements and other documents necessary for the
                     Custodian to effect such  registration) with a copy thereof
                     simultaneously to the Agent; or

                             (2)      deposit,  within the one (1)  Business Day
                     period  referred  to above,  cash into the Cash  Collateral
                     Account in the amount required by 3.5(i)(i).


                                      -8-
<PAGE>


                     (ii)    In the event that,  at any  time,  the  outstanding
            principal  balance of the Loan  exceeds  the Total  Commitment,  the
            Borrower  shall,  within one (1) Business Day of demand,  repay such
            excess amount in immediately  available funds to the Agent,  for the
            ratable benefit of the Lenders,  so that the  outstanding  principal
            balance of the Loan is in compliance  with the terms and  provisions
            hereof.

                     (iii)In  connection  with  (and  as  a  condition  to)  the
            release  of the Lien in favor of the Agent on behalf of the  Lenders
            on any  Borrowing  Base  Eligible  Project Bond in  accordance  with
            Section 5.5, the Borrower  shall repay the Loan to the extent and in
            the  amount  such  payment  would be  required  pursuant  to Section
            3.5(i)(i) prior to the release of such Lien. If, at such time as the
            Borrower  shall be  required  to prepay  the Loan  pursuant  to this
            subsection,  no  Default  or Event of Default  has  occurred  and is
            continuing  (other  than the  Event of  Default  resulting  from the
            Borrower's  failure to have made the  payment  required by the first
            sentence  of this  subsection(iii)),  the  Borrower  may, in lieu of
            prepaying the Loan, either

                             (1)      deliver  (x) at such time to the Agent and
                     the Lenders a Preapproved Bond Eligibility Certificate with
                     respect to a Preapproved Bond with a sufficient  Collateral
                     Value such that,  after  giving  effect to such  Collateral
                     Value,  the  Borrower  would  be  in  compliance  with  the
                     provisions  of Section  3.2(a),  and (y)  within  three (3)
                     Business   Days  after  the   delivery  of  the   foregoing
                     Preapproved Bond Eligibility Certificate, to the Custodian,
                     as Collateral,  the original  Preapproved Bond which is the
                     subject of such Preapproved  Bond  Eligibility  Certificate
                     (either  registered  in  the  name  of  the  Custodian,  or
                     accompanied   by  all  required   endorsements   and  other
                     documents  necessary  for  the  Custodian  to  effect  such
                     registration)  with a copy  thereof  simultaneously  to the
                     Agent; or

                             (2)      deposit  cash  into  the  Cash  Collateral
                     Account in the amount that would be required by 3.5(i)(i).

                     (iv)In the event that either (x) the Borrower has failed to
            deliver  to the  Agent  and the  Custodian,  as  applicable  (A) the
            documents, instruments and agreements referred to in clauses (b)(i),
            (b)(ii),  and  (b)(iii) of Section  4.1(c)(iii)(2)  (the  "Essential
            Required  Collateral  Documents")  with  respect to any Wet  Funding
            Advance  within  three  (3)  Business  Days  from the date  such Wet
            Funding  Advance  was  made,  and/or  (B)  the  remaining   Required
            Collateral  Documents with respect to any Wet Funding Advance within
            fourteen (14) days from the date such Wet Funding  Advance was made,
            or (y) all Required Collateral


                                      -9-
<PAGE>


            Documents  have been  delivered to the Agent and the  Custodian,  as
            applicable,  including, without limitation, all outstanding Pre-Bond
            Closing Due Diligence Materials,  and, upon examination by Agent and
            the  Lenders,  the Agent and the Lenders have  determined  that such
            Required Collateral Documents,  including,  without limitation,  all
            outstanding  Pre-Bond  Closing Due Diligence  Materials,  are not in
            compliance with the  requirements of this Agreement  and/or that the
            representations   and   warranties   set   forth   in  the   Funding
            Certification   are  not  true  and  correct  as  to  such  Required
            Collateral  Documents,  then, in either case,  the Wet Eligible Bond
            which was the subject of the Wet Funding  Advance shall  immediately
            become an Ineligible Project Bond, and the Borrower shall either:

                             (1)      repay  the  amount  of  such  Wet  Funding
                     Advance,  to the extent and in the  amount  such  repayment
                     would be required pursuant to Section 3.5(i)(i), within one
                     (1) Business Day following demand, or

                             (2)      if at such  time no  Default  or  Event of
                     Default  otherwise  has occurred and is  continuing  (other
                     than the Event of  Default  resulting  from the  Borrower's
                     failure to comply  with the  provisions  of  subclause  (1)
                     above), either:

                                      (a)  deliver  (x) to  the  Agent  and  the
                             Lenders  within  the one (1)  Business  Day  period
                             referred to above, a Preapproved  Bond  Eligibility
                             Certificate  with  respect  to a  Preapproved  Bond
                             having a Collateral  Value such that,  after giving
                             effect to such Collateral Value, the Borrower would
                             be in  compliance  with the  provisions of Sections
                             3.2(a),  and (y) to the  Custodian,  as Collateral,
                             within  three  (3)  Business  Days  of the  Agent's
                             demand  referred  to in clause  (x),  the  original
                             Preapproved  Bond  which  is the  subject  of  such
                             Preapproved  Bond Eligibility  Certificate  (either
                             registered  in  the  name  of  the  Custodian,   or
                             accompanied by all required  endorsements and other
                             documents  necessary  for the  Custodian  to effect
                             such    registration)    with   a   copy    thereof
                             simultaneously to the Agent; or

                                      (b)  deposit,  within the one (1) Business
                             Day period  referred  to above,  cash into the Cash
                             Collateral  Account  in the  amount  that  would be
                             required by 3.5(i)(i).

            Upon the  Agent's  written  confirmation  to the  Borrower  that the
            Borrower has satisfied the provisions of this  subsection  (iv), and
            provided no Event of Default has  occurred  and is  continuing,  the
            Agent's  security  interest in the Wet Eligible Bond shall be deemed
            released,  and if the Wet  Eligible  Bond has been  delivered


                                      -10-
<PAGE>


            to  the  Custodian,  the  Agent  shall  instruct  the  Custodian  to
            immediately  release  such  Wet  Eligible  Bond to the  Borrower  as
            provided for in Section 5.6

                     (v) As provided for in Section 3.5(k), below.

            (j)      Prepayment.  The Loan or any portion thereof may be prepaid
in full or in part at any time by 2:00 p.m.  on, with  respect to Variable  Rate
Advances,  the Business Day before,  and,  with respect to LIBOR  Advances,  the
third  Business  Day before,  the date of such  payment,  in either case without
premium or penalty,  subject to the make-whole and yield maintenance  provisions
set forth in  Section  3.5(p).  Any such  partial  prepayment  shall be  applied
against  outstanding  Advances as the Borrower  shall direct so long as there is
not then existing any Default or Event of Default,  and, during the existence of
any Default or Event of Default,  as the Requisite  Lenders  shall  determine in
their  unrestricted  discretion  (provided,  however,  the Lenders  agree not to
prepay a LIBOR Advance  prior to the end of an Interest  Period if there are any
outstanding Variable Rate Advances at such time).

            (k)      Maturity.  Upon acceleration of the Loan as provided for in
Section 10.3 below,  or at the Maturity Date,  all accrued and unpaid  interest,
principal  and other fees and charges due with  respect to the Loan shall be due
and payable in full, and the principal  balance and such other fees and charges,
but not unpaid  interest,  shall  continue to bear  interest at the Default Rate
until so paid.

            (l)      Method  of  Payment;   Date  of  Credit.  All  payments  of
interest,  principal and fees shall be made in lawful money of the United States
in immediately  available funds: (i) by direct charge to the Repayment  Account,
or (ii) by wire  transfer to Agent.  Payments  shall be credited on the Business
Day on which immediately available funds are received by no later than 1:00 P.M.
Eastern Time;  payments  received after 1:00 P.M. Eastern Time shall be credited
to the Loan on the next Business Day. All payments shall be applied first to the
payment of all fees,  expenses,  and other amounts due to the Lenders (excluding
principal and interest), then to accrued interest, and the balance on account of
outstanding principal,  provided,  however, that after the occurrence and during
the  continuation  of an Event  of  Default,  payments  will be  applied  to the
Obligations as the Agent determines,  subject to the provisions of Sections 12.2
(d) and 3.5 (j).

            (m)      Billings.   The  Agent  will  submit  billings   reflecting
payments due; however,  any changes in the interest rate which occur between the
date  of  billing  and  the due  date  may be  reflected  in the  billing  for a
subsequent  month.  Neither the failure of the Agent to submit a billing nor any
error in any such billing shall excuse the Borrower from the  obligation to make
full payment of all of the Borrower's payment obligations when due.


                                      -11-
<PAGE>


            (n)      Default Rate;  Termination  of Pricing  Options.  The Agent
shall have the option of imposing,  and will,  at the direction of the Requisite
Lenders,  impose, and the Borrower shall pay, upon billing therefor, an interest
rate which is four  percent  (4%) per annum above the  Variable  Rate  ("Default
Rate"):  (a)  following  any  Event of  Default,  unless  and until the Event of
Default is waived by the Agent (with any  required  Lenders'  approval) or cured
(if such cure is permitted hereunder),  and (b) after the Maturity Date. So long
as an Event of Default has occurred and is  continuing,  the Borrower shall have
no right to select LIBOR Advances.

            (o)      Late  Charges.   The  Borrower   shall  pay,  upon  billing
therefor,  a "Late  Charge"  equal to five  percent  (5%) of the  amount  of any
payment of principal,  other than principal due at the Maturity Date,  interest,
or both,  which is not paid within ten (10) days of the due date  thereof.  Late
Charges:  (a) are payable in addition to, and not in limitation  of, the Default
Rate,  (b) are  intended  to  compensate  the  Lenders  for  administrative  and
processing costs incident to late payments,  (c) are not interest, and (d) shall
not be subject to refund or rebate or credited against any other amount due.

            (p)      Prepayment; Make-Whole; Yield Maintenance. The Borrower may
prepay a LIBOR  Advance only upon at least three (3) Business days prior written
notice to the Agent (which notice shall be irrevocable).  The Borrower shall pay
to the Agent,  for the ratable  benefit of the  Lenders,  upon request of Agent,
such  amount or amounts as shall be  sufficient  (in the  reasonable  opinion of
Agent) to compensate  any Lender for any loss,  cost,  or expense  incurred as a
result of: (i) any payment or prepayment,  under any  circumstances  whatsoever,
whether  voluntary  or  involuntary,  of all or any  portion of a LIBOR  Advance
(including,  without  limitation,  any Mandatory  Principal  Payments) on a date
other than the last day of the Interest Period for such LIBOR Advance;  (ii) the
conversion,  for  any  reason  whatsoever,   whether  voluntary  or  involuntary
(including,  without  limitation,  as  a  result  of  the  acceleration  of  the
Obligations),  of any LIBOR Advance,  to a Variable Rate Advance on a date other
than the last day of the applicable  Interest  Period;  (iii) any failure by the
Borrower  to borrow a LIBOR  Advance  on the date  specified  by the  Borrower's
written  notice;  (iv) any failure by the Borrower to pay a LIBOR Advance on the
date for payment specified in the Borrower's written notice. Without duplication
of the foregoing,  the Borrower shall pay to the Agent,  for the ratable benefit
of the Lenders, a "Yield Maintenance Fee" in an amount computed as follows:  The
current rate for United States Treasury  securities (bills on a discounted basis
shall be converted  to a bond  equivalent)  with a maturity  date closest to the
term chosen pursuant to a applicable  Interest Period as to which the prepayment
is made,  shall be  subtracted  from the  LIBOR  Rate in  effect  at the time of
prepayment.  If the result is zero or a negative number, there shall be no yield
maintenance  fee.  If the  result  is a  positive  number,  then  the  resulting
percentage  shall be  multiplied  by the amount of the  principal  balance being
prepaid.  The  resulting  amount shall be divided by 360 and  multiplied  by the
number of days remaining in the term chosen  pursuant to the Interest  Period as
to which the  prepayment is made.  Said amount shall be reduced to Present Value
calculated by using the above-referenced  United States Treasury securities rate
and the


                                      -12-
<PAGE>


number of days remaining in the term chosen  pursuant to the Interest  Period as
to which  the  prepayment  is made.  The  resulting  amount  shall be the  yield
maintenance fee due to the Agent,  for the ratable benefit of the Lenders,  upon
prepayment of a LIBOR Advance.

      3.6   Loan Fees.

            (a)      Commitment Fees. The Borrower shall pay a commitment fee as
agreed to between the Borrower and the Agent, for the benefit of the Lenders, as
provided  for in a  certain  fee  letter  dated  as of  the  Closing  Date.  The
commitment fee shall be deemed to be fully earned as of the Agreement  Date, and
the  Borrower  shall not be entitled to any credit,  rebate or  repayment of the
commitment  fee  notwithstanding  any  termination  of this  Loan  Agreement  or
suspension or termination of any Lender's obligation to make Advances hereunder.

            (b)      Agent's Fees.  Borrower  shall pay to the Agent for its own
account an administrative fee as agreed to between the Borrower and the Agent as
provided  for in a certain fee letter by and between the  Borrower and the Agent
dated as of the Closing  Date and such other fees as may be agreed to in writing
by the Agent and the Borrower, as and when same become due.

            (c)      Unused Fee.  The  Borrower  shall pay a facility fee to the
Agent on behalf of the Lenders on the average  daily  unborrowed  portion of the
Loan from the Closing Date to the earlier to occur either of (x) the termination
of the Commitments  (whether pursuant to the request of the Borrower or pursuant
to the terms and  conditions of this  Agreement),  or (y) the Maturity Date (the
"Unused Fee"), calculated as set forth below. The Unused Fee shall be payable in
arrears on the first Business Day of each calendar  quarter for the  immediately
preceding  calendar  quarter or portion  thereof  and on the  Maturity  Date (or
earlier  acceleration  of the Loan),  and shall be calculated by multiplying the
average  daily  unborrowed  portion of the Loan for such  immediately  preceding
calendar  quarter or portion  thereof by 0.125%  percent per annum (based on 360
day years),  and multiplying that product by a fraction,  the numerator of which
is the number of days during such calendar  quarter or portion  thereof that the
Loan remained  outstanding,  and the  denominator of which is the number of days
during such  calendar  quarter or portion  thereof.  The  Borrower  shall not be
entitled to any credit,  rebate or repayment of any earned portion of the Unused
Fee  notwithstanding  any  termination  of this Loan  Agreement or suspension or
termination of any Lender's obligation to make Advances hereunder.

            (d)      Extension  Fee.  An  additional  fee of one  quarter of one
percent  (0.25%) of the then Total  Commitment  shall be payable to the Agent on
behalf  of the  Lenders  in  connection  with  the  Borrower's  exercise  of its
extension right, and as a condition  precedent to the effectiveness  thereof, as
provided in Section 3.7(a)(iv).


                                      -13-
<PAGE>


      3.7   Loan Extension.

            (a)      Initial  Maturity Date.  Upon  satisfaction  of each of the
following  conditions,  to the Agent's  satisfaction,  the Borrower may elect to
extend the Loan until the Extended Maturity Date:

                     (i) No Default.  No Default or Event of Default  shall then
exist;

                     (ii) Notice From  Borrower.  The Borrower  shall have given
the Agent and each of the Lenders  written notice of the  Borrower's  request to
exercise its extension  right at least sixty (60) days,  but no more than ninety
(90) days,  before the Initial Maturity Date (an "Extension  Request")  together
with the certificate required by subsection (iii) below;

                     (iii) Conditions Satisfied. All of the conditions set forth
in Sections 7.1(e),  7.1(m),  7.2(a),  7.2(e),  7.2(g),  and 7.2(h) of this Loan
Agreement,  to the extent  applicable,  shall continue to be satisfied,  and the
Agent  shall  have   received  an  updated   certificate   from  an   Authorized
Representative conforming to the requirements of Section 7.1(h);

                     (iv)  Extension  Fee.  The  extension  fee  referred  to in
Section  3.6(d) shall have been paid at least five (5) days prior to the Initial
Maturity Date;

                     (v) Additional Documents.  The Borrower shall have executed
and  delivered  to the Agent  such  agreements  and  documents  as the Agent may
reasonably require incident to the extension; and

                     (vi) Before End of Term.  Each of the foregoing  conditions
are satisfied not later than, and on, the Initial Maturity Date.

            (b)      Within fifteen (15) days following receipt by the Agent and
      each of the Lenders of the Borrower's Extension Request accompanied by the
      certificate  required by subsection (a)(iii) above, the Agent shall notify
      the  Borrower  in  writing  if  all  of the  conditions  precedent  to the
      extension,  other than payment of the extension fee, have been  satisfied,
      or if further  information  or  certificates  are  required.  If the Agent
      determines  that the  conditions to extension have been  satisfied,  other
      than payment of the extension  fee, the Agent shall so notify the Borrower
      and upon the Agent's  receipt of the extension fee not later than five (5)
      days prior to the Initial Maturity Date, so long as no Default then exists
      and is continuing,  the Maturity Date shall be extended until the Extended
      Maturity  Date. If the Agent does not notify the Borrower  within  fifteen
      (15) days  following  receipt by the Agent and each of the Lenders of such
      Extension  Request  that the  Agent  and the  Lenders  have  approved  the
      Extension  Request,  the  Extension  Request  shall be deemed to have been
      denied by the Agent and the Lenders.


                                      -14-
<PAGE>


      3.8   Additional Provisions Related to Interest Rate Selection.

            (a)      Increased  Costs.  If,  due to any one or more of:  (i) the
introduction  of any  applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements already referred
to in the definition of LIBOR Rate) in the  interpretation or application by any
authority charged with the  interpretation or application  thereof of any law or
regulation;  or (ii) the  compliance  with any  guideline  or  request  from any
governmental central bank or other governmental authority (whether or not having
the  force of law),  there  shall be an  increase  in the cost to any  Lender of
agreeing to make or making,  funding or maintaining  LIBOR Advances,  including,
without  limitation,  changes which affect or would affect the amount of capital
or reserves  required or expected to be maintained by any Lender with respect to
all or any portion of the Loan (other  than any change by way of  imposition  or
increase of reserve  requirements  already referenced in the definition of LIBOR
Rate),  or any  corporation  controlling any Lender,  on account  thereof,  then
Borrower  from time to time  shall,  upon  written  demand  by  Agent,  pay such
additional  amounts  as are  sufficient  to  indemnify  any Lender  against  the
increased  cost. A certificate  as to the amount of the  increased  cost and the
reason  therefor  submitted  to  Borrower  by Agent,  in the absence of manifest
error, shall be conclusive and binding for all purposes.  Any Lender entitled to
payment pursuant to this clause (a) shall use reasonable  efforts to designate a
different  lending  office,  to the  extent  such  designation  could  reduce or
eliminate such payment with no additional cost or expense to such Lender.

            (b)      Illegality.  Notwithstanding  any other  provision  of this
Agreement,  if the introduction of or change in or in the  interpretation of any
law,  treaty,  statute,  regulation  or  interpretation  thereof  shall  make it
unlawful, or any central bank or government authority shall assert by directive,
guideline or otherwise,  that it is unlawful, for any Lender to make or maintain
LIBOR  Advances  or to  continue to fund or maintain  LIBOR  Advances  then,  on
written  notice  thereof and demand by Agent to Borrower,  (i) the obligation of
Agent to make LIBOR  Advances  and to convert or  continue  any Advance as LIBOR
Advances  shall  terminate,  and  (ii)  all  principal  outstanding  under  this
Agreement automatically shall be converted into Variable Rate Advances.

            (c)      Additional LIBOR Conditions. The maintenance of any Advance
at the effective LIBOR Rate shall be subject to the following  additional  terms
and conditions:

                     (i) Availability. If, before or after Borrower has selected
to take or maintain a LIBOR Advance, Agent notifies Borrower that

                             (1)      dollar  deposits in the amount and for the
                     maturity  requested  are not available to any Lender in the
                     London interbank market at the rate


                                      -15-
<PAGE>


                     specified  in the definition of LIBOR Rate set forth above,
                     or

                             (2)      reasonable  means  do not  exist  for  any
                     Lender to  determine  the LIBOR  Rate for the  amounts  and
                     maturity requested,

            then the principal  which would have been a LIBOR Advance shall be a
            Variable Rate Advance.

                     (ii) Payments Net of Taxes. All payments and prepayments of
principal and interest under this  Agreement  shall be made net of any taxes and
costs resulting from having principal outstanding at, or computed with reference
to, a LIBOR Rate.  Without limiting the generality of the preceding  obligation,
illustrations  of such taxes and costs are taxes,  or the withholding of amounts
for  taxes,  of  any  nature  whatsoever  including  income,  excise,   interest
equalization  taxes (other than taxes to the extent based on net income) as well
as all levies, imposts, duties or fees whether now in existence or as the result
of  a  change  in  or  promulgation  of  any  treaty,  statute,  regulation,  or
interpretation  thereof or any  directive,  guideline  or otherwise by a central
bank or fiscal authority (whether or not having the force of law) or a change in
the basis of, or the time of payment of, such taxes and other amounts  resulting
therefrom. If any Lender receives a refund in respect of any amounts paid by the
Borrower  pursuant to this Section  3.8(c)(ii),  which refund, in the good faith
judgment of such Lender, is allocable to such payment,  it shall promptly notify
the Borrower of such refund and shall promptly pay such refund to the Borrower.

            (d)      Variable  Rate  Advances.  Each Variable Rate Advance shall
continue as a Variable  Rate Advance  until the  Maturity  Date,  unless  sooner
converted,  in whole or in part, to a LIBOR Advance,  subject to the limitations
and conditions set forth in this Loan Agreement.

            (e)      Conversion of Other Advances. At the end of each applicable
Interest  Period,  the applicable LIBOR Advance shall be converted to a Variable
Rate Advance  unless  Borrower  selects  another  option in accordance  with the
provisions of this Loan Agreement.

SECTION 4.  ADVANCES.

      4.1   Procedures.  Subject  to the  Borrower's  compliance  with all other
terms  and  conditions  of this Loan  Agreement  and the  following  provisions,
Lenders agree to make Advances to Borrower as follows:

            (a)      Advance Requests; Certifications.

                     (i) (x) At least ten (10) Business Days before any Drawdown
            Date for an Advance which either (A) is a Borrowing Base Acquisition
            Advance, or (B) is an


                                      -16-
<PAGE>


            Increased  Collateral Value Advance,  or (y) at the time a Notice of
            Rate  Selection  is  delivered  to the Agent in  connection  with an
            Advance which is an Existing Collateral Advance,  the Borrower shall
            submit to the Agent its  request for an Advance to acquire a Project
            Bond,  which request shall be in the form attached hereto as Exhibit
            E (an "Advance  Request").  Each such Advance Request shall specify:
            (A) the amount of the Advance requested,  (B) whether the Advance is
            (or is a combination of) (w) an Existing Collateral  Advance,  (x) a
            Borrowing Base Acquisition  Advance,  (y) a Wet Funding Advance,  or
            (z) an Increased Collateral Value Advance; (C) the proposed Drawdown
            Date and the proposed Bond Purchase Closing Date, if such Advance is
            a  Borrowing  Base  Acquisition   Advance,  and  (D)  the  aggregate
            outstanding  principal balance of the Loan prior to giving effect to
            such  Advance,   and  shall  be  accompanied  by  a  Borrowing  Base
            Certificate  in the form attached  hereto as Exhibit F (a "Borrowing
            Base Certificate") which shall set forth the calculations evidencing
            the Loan Availability as of the requested  Drawdown Date,  provided,
            however, (x) if such Advance is an Existing Collateral Advance, such
            calculation  shall not reflect the  inclusion of the Project Bond to
            be  acquired  in the  calculation  of the  Collateral  Value  of the
            Borrowing Base Eligible  Project Bonds, and (y) if such Advance is a
            Borrowing Base  Acquisition  Advance or Increased  Collateral  Value
            Advance,  such  calculation of the Collateral Value of the Borrowing
            Base Eligible Project Bonds shall give effect to either and/or both,
            as applicable,  (i) the inclusion of such Eligible Project Bond as a
            Borrowing  Base  Eligible  Project  Bond,  and/or (ii) the increased
            Collateral  Value  sought  to  be  attributed  to a  Borrowing  Base
            Eligible  Project  Bond on  account  of the same  having  become  an
            Eligible Unenhanced Lease-Up Bond or an Eligible Seasoned Bond.

                     (ii) Each Advance Request shall also contain the Borrower's
            certification  to  the  Agent  and  the  Lenders  (the  "Preliminary
            Certification")  pursuant  to  which  the  Borrower  shall  certify,
            warrant and represent to the Agent and the Lenders as follows:

                             (1)      If  the   requested   Advance   is  for  a
                     Borrowing Base Acquisition Advance:

                                      (a)   That    accompanying   the   Advance
                             Request is a true and accurate  copy of the package
                             prepared  by the  Borrower  for  submission  to its
                             investment  committee  or similar  body  having the
                             authority to approve the Borrower's purchase of the
                             subject Project Bond;

                                      (b)   That   accompanying    the   Advance
                             Request are the


                                      -17-
<PAGE>


                             Due Diligence Materials or the Pre-Bond Closing Due
                             Diligence Materials (specifically identifying those
                             Pre-Bond Closing Due Diligence  Materials which are
                             not yet available), as applicable;

                                      (c)   That the Project  complies  (or will
                             comply upon  completion)  with the Minimum  Project
                             Parameters (which  certification,  if not supported
                             by the  Due  Diligence  Materials  or the  Pre-Bond
                             Closing Due Diligence Materials provided,  shall be
                             supported  by  such   documentation   as  shall  be
                             reasonably  necessary to evidence such compliance);
                             and

                             (2)      If  the   requested   Advance  is  for  an
                     Increased  Collateral  Value  Advance,   that  the  subject
                     Borrowing  Base  Eligible  Project  Bond became an Eligible
                     Seasoned  Bond  or an  Eligible  Unenhanced  Lease-Up  Bond
                     (which   certification   shall   be   supported   by   such
                     documentation  as shall be reasonably  necessary to confirm
                     the same).

                             (3)      For all Advances:

                                      (a)   That the  Borrower is in  compliance
                             with, and is not currently in breach of any of, its
                             covenants  contained  in this Loan  Agreement,  and
                             that the conditions for the making of the requested
                             Advance set forth in Section 7.2 have been or will,
                             prior to the Drawdown Date, be satisfied; and

                                      (b)   That   each    representation    and
                             warranty which is made herein or in any of the Loan
                             Documents is then true and complete as of and as if
                             made on the date of such Advance Request (except to
                             the   extent   (x)  of   changes   resulting   from
                             transactions  contemplated  and  permitted  by this
                             Loan  Agreement  and the other Loan  Documents  and
                             changes   occurring  in  the  ordinary   course  of
                             business  that singly or in the  aggregate  are not
                             materially    adverse,    or    (y)    that    such
                             representations  and warranties relate expressly to
                             an earlier date, and except for representations and
                             warranties  which the Agent was  notified  were not
                             true and correct  prior to a request for an Advance
                             which was nonetheless  made), both with and without
                             giving effect to the Advance and the Borrower's use
                             of the proceeds thereof.

                     (iii)  Each  request  for an  Advance  hereunder  shall  be
            irrevocable  and  binding on the  Borrower  and shall  obligate  the
            Borrower to accept the Advance


                                      -18-
<PAGE>


            requested  on  the  proposed  Drawdown  Date.   Notwithstanding  the
            foregoing,  with respect to Wet Funding  Advances only, the Borrower
            shall  have no  obligation  to accept a Wet  Funding  Advance on the
            proposed  Drawdown  Date so long as the Borrower has first  notified
            the Agent in  writing  within  two (2)  Business  Days  prior to the
            proposed Drawdown Date, that either (x) the Borrower has elected not
            to  purchase  the  Project  Bond  which was the  subject of such Wet
            Funding Advance thereby  revoking such Advance  Request,  or (y) the
            Borrower has elected to extend the proposed Drawdown Date of the Wet
            Funding  Advance to a later date  specified  in such  notice,  which
            shall become the Drawdown Date for such Advance, provided,  however,
            and  without  limiting  the  provisions  of Section  9.16,  upon the
            occurrence of either of the events described in clauses (x) and (y),
            the Borrower shall promptly  reimburse the Agent and the Lenders for
            all reasonable costs and expenses (including  reasonable  attorneys'
            fees and  expenses)  incurred  in  connection  with the  Agent's and
            Lenders' review of the Pre-Bond Closing Due Diligence  Materials for
            such Project Bond.

            (b)      Approval or Denial by the Agent and Lenders.  In connection
with any Advance  Request that is for a Borrowing  Base  Acquisition  Advance or
Collateral Value Increase  Advance,  by 5:00 PM on the tenth (10th) Business Day
following  receipt  by the  Agent  and each of the  Lenders  of the  Preliminary
Certification, the Agent shall provide the Borrower with an Approval Notice or a
Denial Notice.

            (c)      Funding by Agent and Lenders.

                     (i)     Existing  Collateral  Advances. Promptly  following
receipt of the Advance Request and Preliminary  Certification with respect to an
Advance  which is an Existing  Collateral  Advance (if received by 12:00 Noon on
the requested  Drawdown Date, and if received  later, on the next Business Day),
the Agent shall  disburse the  proceeds of the Advance (to the extent  funded by
the Lenders as  provided in this Loan  Agreement)  on the  Borrower's  behalf in
accordance with the Borrower's written instructions;

                     (ii)    Borrowing  Base   Acquisition   Advances; Increased
Collateral  Value  Advances.  Notwithstanding  that the Agent may have issued an
Approval Notice,  the Agent and the Lenders shall have no obligation to fund any
Borrowing Base Acquisition  Advance, or any Increased  Collateral Value Advance,
unless and until the  Borrower  shall have  provided  the Agent with a date down
certification,  dated as of the applicable  Drawdown Date, in favor of the Agent
and the Lenders as to the following matters (which certification shall be in the
form attached hereto as Exhibit G, the "Funding Certification"):

                             (1)      If  the   requested   Advance   is  for  a
                     Borrowing Base Acquisition  Advance:


                                      -19-
<PAGE>


                                      (a)   there has been no material change to
                             the Due Diligence Materials or the Pre-Bond Closing
                             Due Diligence Materials, as applicable, provided to
                             the Agent and the Lenders; and

                                      (b)   the  Borrower  shall  have  attached
                             copies of the minutes of the Borrower's  investment
                             committee or similar  body having the  authority to
                             approve  the  Borrower's  purchase  of the  subject
                             Project  Bond   evidencing   the  approval  of  the
                             purchase of the subject Project Bond; and

                                      (c)   the  Borrower  shall have  confirmed
                             that  the   Borrower   shall  cause  the   Required
                             Collateral  Documents  to be delivered to the Agent
                             and the  Custodian,  as  applicable,  in accordance
                             with the provisions of Section 4.1(c)(iii)(2),  and
                             that  the  delay  in  delivering   the   applicable
                             Required Collateral  Documents to the Agent and the
                             Custodian  immediately  is  solely to  provide  the
                             Borrower and  Borrower's  counsel  with  sufficient
                             time to assemble in an orderly fashion for delivery
                             to the  Agent  and  the  Custodian  the  applicable
                             Required Collateral Documents; and

                                      (d)   the Borrower  shall have  attached a
                             fully  completed  Escrow  Letter  executed  by  the
                             Escrow Agent with respect to such Project Bond; and

                                      (e)   if required  under clause  (i)(v) of
                             the definition of "Minimum Project Parameters," the
                             Borrower shall have attached a fully  completed and
                             duly executed Bond Transfer Agreement.

                             (2)      For  both   Borrowing   Base   Acquisition
                     Advances and Increased Collateral Value Advances:

                                      (a)   All of the  representations  made by
                             the  Borrower  in  the  Preliminary   Certification
                             remain true and accurate; and

                                      (b)   The  preconditions  to such  Advance
                             set  forth  in  Section   7.2   hereof   have  been
                             satisfied.


                                      -20-
<PAGE>


                     (iii)   Promptly   following   receipt   of   the   Funding
            Certification  (if received by 12:00 Noon on the requested  Drawdown
            Date, and if received later, on the next Business Day):

                             (1)      if the Advance is an Increased  Collateral
                     Value Advance, the Agent shall disburse the proceeds of the
                     Advance (to the extent funded by the Lenders as provided in
                     this Loan Agreement) on the Borrower's behalf in accordance
                     with the Borrower's written instructions; and

                             (2)      if  the  Advance  is  a   Borrowing   Base
                     Acquisition  Advance,  the Agent shall fund the Advance (to
                     the extent  funded by the  Lenders as provided in this Loan
                     Agreement)  into the Bond  Purchase  Account,  pending  the
                     Agent's  written  confirmation  that the  Purchase  Funding
                     Conditions  have  been  satisfied.   As  used  herein,  the
                     "Purchase  Funding  Conditions"  shall  mean  that  (x) the
                     Borrower shall have deposited to the Bond Purchase Account,
                     in  immediately   available   funds,  an  amount  at  least
                     sufficient,  together with the proceeds of the Advance made
                     by the Lenders  hereunder,  to cover the purchase price and
                     all related  costs and  expenses,  for the  purchase of the
                     subject Eligible Project Bond at the Bond Purchase Closing,
                     and (y) the Agent shall have received a fully executed copy
                     of the Escrow  Agent's  Trust Receipt  confirming  that the
                     following   documents,   certificates  and  agreements  are
                     available for delivery to the Agent (or have been delivered
                     to the Agent) or the Custodian, as applicable,  and are not
                     subject to any  conditions  for the release  thereof to the
                     Agent  or the  Custodian,  as  applicable,  other  than the
                     payment of the purchase price for the  applicable  Eligible
                     Project Bond (the "Required Collateral Documents"):

                                      (a)   Any   documents,    agreements   and
                             materials as the Agent may have reasonably required
                             to resolve issues or clarify  concerns arising from
                             the  Agent's  or any  Lender's  review  of the  Due
                             Diligence   Materials   or  Pre-Bond   Closing  Due
                             Diligence Materials, as the case may be, shall have
                             been delivered to the Agent and the Lenders;

                                      (b)   That the Escrow  Agent will  deliver
                             within  three (3)  Business  Days of the  requested
                             Drawdown Date of the following:

                                      (i)   to  the   Custodian,   the  original
                                      subject Eligible Project Bond,  registered
                                      in   the   name   of  the   Custodian   or
                                      accompanied  by all required  endorsements
                                      and  other


                                      -21-
<PAGE>


                                      documents  necessary  for the Custodian to
                                      effect  such  registration,  with  a  copy
                                      thereof to the Agent;

                                      (ii)  to the  Agent,  for  all  applicable
                                      Projects,  a copy of the Project Letter of
                                      Credit with the beneficiary  thereof being
                                      the  Trustee   under  the   subject   Bond
                                      Documents or the Custodian; and

                                      (iii) to  the   Agent,  a  fully  executed
                                      Servicer's Notification, to be in the form
                                      of Exhibit H annexed hereto.

                                      (c)   That the Escrow  Agent will  deliver
                             to the  Agent  within  fourteen  (14)  days  of the
                             requested Drawdown Date of the following:

                                      (i)   true  and  accurate  copies  of  the
                                      executed  Bond  Documents  for the subject
                                      Project     set    forth    in    Schedule
                                      4.1(c)(iii)(2)(c); and

                                      (ii) copies of any Due Diligence Materials
                                      or   Pre-Bond    Closing   Due   Diligence
                                      Materials,  as the case  may be,  to which
                                      there  have  been  material  changes,   as
                                      certified  by the  Borrower in the Funding
                                      Certification  and  approved  by the Agent
                                      and the Lenders.

                     (iv) If the  Borrower  fails to deliver  (x) the  Essential
            Required  Collateral  Documents  to  the  Agent  or  Custodian,   as
            applicable,  within  three (3)  Business  Days after the date of the
            requested Drawdown Date, and (y) the remaining  Required  Collateral
            Documents  to the Agent within  fourteen  (14) days from the date of
            such  requested  Drawdown  Date,  the Borrower shall comply with the
            provisions of Section 3.5(i)(iv).

      4.2   Wet Funding  Advances. Notwithstanding the  Borrower's  inability to
deliver all of the Pre-Bond Closing Due Diligence Materials set forth on Exhibit
V when required  pursuant to Section  4.1(a)(ii) and 4.1(c)(iii),  the Agent and
the Lenders  agree to disburse the proceeds of any  Borrowing  Base  Acquisition
Advance (a "Wet  Funding  Advance") in order to enable the Borrower to acquire a
Wet Eligible Bond, subject to the following terms and conditions:

            (a)      The  Borrower  shall have  provided  the Agent with written
      disbursement instructions for such Wet Funding Advance;


                                      -22-
<PAGE>


            (b)      The aggregate  Collateral Value attributable at any time to
      Wet Eligible  Bonds shall not exceed the limit set forth in the applicable
      proviso in the definition of "Collateral Value;" and

            (c)      In  addition  to the Funding  Certification,  the  Borrower
      shall have provided the Agent with a certification  in the form of Exhibit
      I, annexed hereto (a "Wet Funding Certification"), certifying:

                     (i)     that  the   Borrower   has   obtained  all  of  the
            outstanding  Pre-Bond  Closing Due Diligence  Materials set forth on
            Schedule 1 to the Wet Funding  Certification and such matters are in
            form and substance  satisfactory to the Borrower and comply with the
            requirements of this Agreement;

                     (ii)    except for the matters  set forth on such  Schedule
            1, the  Borrower  has  delivered  to the Agent  all  other  Pre-Bond
            Closing Due Diligence Materials;

                     (iii)   that  the   delay  in   delivering   the   Required
            Collateral  Documents  to the  Agent  and the  Lenders  is solely to
            provide the Borrower and Borrower's  counsel with sufficient time to
            assemble  in an orderly  fashion  for  delivery to the Agent and the
            Lenders, the Required Collateral Documents;

                     (iv)    that,   (x)  the  Essential   Required   Collateral
            Documents  shall  be  delivered  to  the  Agent  or  Custodian,   as
            applicable, within three (3) Business Days from the date of such Wet
            Funding Advance, and (y) the remaining Required Collateral Documents
            (including, without limitation, the outstanding Pre-Bond Closing Due
            Diligence  Materials  identified  on  Schedule 1 to the Wet  Funding
            Certification)  shall be delivered to the Agent within fourteen (14)
            days  from  the date of such  Wet  Funding  Advance,  and  that,  if
            applicable, the Borrower shall comply with the provisions of Section
            3.5(i)(iv).

      4.3   Other  Conditions.  All  conditions  to closing  and  funding of the
Advance as set forth in Section 7 hereof, must be satisfied as a precondition to
the obligation of Lenders to make any particular Advance.

SECTION 5.  SECURITY FOR THE OBLIGATIONS.

      5.1   Grant  of  Security  Interest.  To  secure  the  Borrower's  prompt,
punctual,   and  faithful   performance  of  all  and  each  of  the  Borrower's
Obligations,  the Borrower  hereby  grants to the Agent,  for the benefit of the
Lenders,  a continuing  first priority lien on and security  interest in and to,
and pledges,  assigns,  transfers, and delivers to the Agent, for the benefit of
the Lenders,  all right,  title, and interest of the Borrower in, to, and under,
the following,  and each


                                      -23-
<PAGE>


item  thereof,  whether  now owned or now due, or in which the  Borrower  has an
interest,  or hereafter,  at any time in the future,  acquired,  arising,  or to
become due, or in which the  Borrower  obtains an  interest,  and all  products,
proceeds,  substitutions,  and accessions of or to any of, the following (all of
which,  together  with any other  property  in which the Agent,  for the ratable
benefit  of the  Lenders,  may in the  future  be  granted a  security  interest
pursuant hereto, is referred to hereinafter as the "Collateral"):

            (a)      All  Eligible  Project  Bonds  which  from time to time are
      pledged or delivered by the Borrower to the Agent or to the Custodian, for
      the  benefit of Agent for the benefit of the  Lenders  ("Pledged  Bonds"),
      including  all principal  and interest  collections  thereon and all other
      payments or distributions in respect thereof and all related Bond Assets;

            (b)      With respect to any Pledged  Bond,  any bond which is owned
      by the Borrower and which is secured by a  subordinate  or pari passu Lien
      on the associated Approved Project;

            (c)      The Bond Purchase Account,  the Repayment Account, the Cash
      Collateral Account,  all accounts maintained by the Custodian for payments
      in respect of  Pledged  Bonds,  and all Cash  Collateral,  monies,  funds,
      investment property and other property from time to time deposited therein
      or credited thereto;

            (d)      All  escrow  accounts,   documents,   instruments,   files,
      surveys,  certificates,  correspondence,  appraisals,  computer  programs,
      tapes,  discs,  cards,  accounting  records  (including  all  information,
      records,  tapes, data,  programs,  discs and cards necessary or helpful in
      the  administration  or servicing of the Collateral) and other information
      and data of the Borrower relating to the Collateral;

            (e)      All  Hedging  Agreements,  including  all rights to payment
      arising under such Hedging Agreements;

            (f)      All cash and non-cash proceeds of the Collateral, including
      all  dividends,  rents,  profits,  distributions,  proceeds  of  insurance
      policies,    surety   bonds,    letters   of   credit    (including    all
      letter-of-credit-rights),  guaranties, indemnities,  warranties, and other
      rights in connection  with,  and all additions  to,  modifications  of and
      replacements for, the Collateral; and

            (g)      Any and all products and Proceeds of any of the  foregoing,
      together with  whatever is  receivable or received when the  Collateral or
      Proceeds  of  Collateral  are  sold,  collected,  exchanged  or  otherwise
      disposed of, whether such disposition is voluntary or


                                      -24-
<PAGE>


      involuntary,  including all rights to payment with respect to any cause of
      action affecting or relating to the Collateral or proceeds of Collateral.

      5.2   Authenticated Record.  This Agreement  constitutes an  authenticated
record,  which  authorizes  the Agent to file such  financing  statements as the
Agent  determines as  appropriate  to perfect or protect the security  interests
created by this Loan Agreement and the other Loan Documents.

      5.3   Collection and Servicing Rights.

            (a)      Although this Loan Agreement constitutes a present, current
      and absolute security  interest in all of the Borrower's right,  title and
      interest  in and to the  Collateral,  so long as no Event of Default  then
      exists, the Borrower, or the Servicer on Borrower's behalf, shall have the
      right under a limited license  granted hereby,  and Agent hereby grants to
      Borrower  or the  Servicer  on  Borrower's  behalf,  a limited  license to
      service,  the Pledged Bonds. All payments and proceeds on or in respect of
      Pledged Bonds shall be paid directly by the  applicable  Trustees or other
      Person making such payment to the Custodian,  for distribution as provided
      in the Custodial Agreement and as provided herein. Upon the occurrence and
      during the  continuation  of any Event of Default,  the foregoing  license
      shall  immediately  be of no further force or effect,  and until such time
      that such  Event of Default  is cured or waived  upon  which such  license
      shall be  reinstated,  the Agent may direct the  servicing  of the Pledged
      Bonds,  any and all sums  payable to the  registered  owner of the Pledged
      Bonds shall be held in trust for the benefit of the Agent, for the ratable
      benefit of the Lenders, by the Custodian and applied to the Obligations as
      directed by the Agent in accordance with the applicable provisions of this
      Agreement.  Nothing in this  Section  5.3(a) is intended to or shall limit
      the rights and  remedies of the Agent and the Lenders  upon and during the
      continuation  of an  Event  of  Default  as  provided  elsewhere  in  this
      Agreement or under applicable law.

            (b)      So  long  as no  Event  of  Default  then  exists,  (i) all
      regularly scheduled installments of principal and interest received by the
      Custodian in respect of any Pledged  Bonds shall be paid by the  Custodian
      directly  to the  Borrower,  and (ii) all other  payments  received by the
      Custodian in respect of any Pledged  Bonds shall be paid by the  Custodian
      to the  Repayment  Account.  By 3:00 p.m. on any Business Day on which the
      Agent  receives  immediately  available  funds from the  Custodian  in the
      Reimbursement Account (if so disbursed by 12:00 noon on such Business Day,
      and  otherwise  by 12:00 noon on the next  Business  Day),  the Agent will
      notify the  Borrower  and the other  Lenders of such receipt and as to the
      Agent's  calculation  of the then  Collateral  Value of the Borrowing Base
      Eligible  Project  Bonds (after  giving  effect to such payment and to any
      release  of  Pledged  Bonds  required  as a result  thereof).  If the Loan
      Availability is then exceeded,  then,  notwithstanding  Section 3.5(i)(i),
      the Agent shall (x) apply amounts in the


                                      -25-
<PAGE>


      Repayment  Account to the outstanding  principal balance of the Loan in an
      amount  equal to such  excess,  and (y)  transfer  any amounts  thereafter
      remaining in the Repayment Account to the Operating  Account.  If the Loan
      Availability  is not then  exceeded,  the Agent shall transfer the amounts
      received in the Repayment Account to the Operating Agreement.

            (c)      Without   limiting  the  provisions  of  the  second  (2nd)
      sentence  of clause (a) above,  or any other  rights and  remedies  of the
      Agent  and the  Lenders  hereunder  and  under  applicable  law,  upon the
      occurrence  and during the  continuation  of an Event of  Default,  at and
      subject to the direction of the Agent  (following any necessary  approvals
      of or directions from the Required  Lenders or all of the Lenders,  as may
      be  applicable)  the  Custodian,  as agent for the Agent and the  Lenders,
      shall be entitled to collect all sums  payable to the  Borrower in respect
      of the Pledged Bonds (including,  without limitation, the Bond Assets) and
      exercise  all of the  rights of the  Borrower  under all  applicable  Bond
      Documents and all of the Agent's rights and remedies as a secured creditor
      under the Collateral, and in such case (1) the Agent may cause the Pledged
      Bonds to be registered in its own name or in the name of its designee, and
      may, or its designee in its  discretion  may, in its own name, in the name
      of the  Borrower or  otherwise,  demand,  sue for,  collect or receive any
      money or property at any time  payable or  receivable  on account of or in
      exchange for any of the Collateral,  but Agent has no obligation to do so,
      (2) all amounts received by or for the benefit or account of the Borrower,
      shall be  deemed  received  in trust  for the  Lenders,  and upon  receipt
      promptly  shall  be  turned  over to the  Agent  (for the  benefit  of the
      Lenders) with any necessary endorsements,  and (3) all amounts so received
      and  collected  by Agent will be held by it as part of the  Collateral  or
      applied to the Obligations.

      5.4   Return of Collateral  upon  Termination  of  Commitment.  If (a) the
Total Commitment has expired or been terminated,  and (b) no Advances,  interest
or other Obligations are outstanding and unpaid, Agent will promptly release its
security interest pursuant to an instrument or instruments reasonably acceptable
to the Borrower,  and will deliver all Collateral in its  possession,  or in the
possession  of the  Custodian,  to Borrower at  Borrower's  expense.  Borrower's
acknowledgment  or receipt for any Collateral  released or delivered to Borrower
under any  provision of this Loan  Agreement is a complete and full  acquittance
for the  Collateral so returned,  and Agent is discharged  from any liability or
responsibility for that Collateral.

      5.5   Removal  of  Eligible  Project  Bond as a  Borrowing  Base  Eligible
Project  Bond by  Borrower.  From  time to time  during  the  term of this  Loan
Agreement  following  (i)  Borrower's  written  request   ("Collateral   Release
Request") that a Borrowing Base Eligible  Project Bond be released from the Lien
held by the Agent (which Collateral  Release Request shall,  among other things,
specify  the  manner  in which the  Borrower  intends  to  satisfy  the  Release
Condition set forth in clause (a), below, if applicable),  and (ii) satisfaction
of the Release Conditions (defined


                                      -26-
<PAGE>


below),  the Agent shall release such Borrowing Base Eligible  Project Bond from
the Lien held by the Agent. The "Release Conditions" are the following:

            (a)      The  Borrower  shall  either (x) to the extent a  Mandatory
      Principal  Payment  would  be  required  by  Section  3.5(i)(iii),  make a
      Mandatory Principal Payment or provide a replacement  Preapproved Bond, as
      provided for therein, and/or (y) simultaneously substitute for the subject
      Borrowing Base Eligible Project Bond a replacement Borrowing Base Eligible
      Project  Bond in  accordance  with the  provisions  of Section 5.7 hereof,
      provided, however, after giving effect to such Mandatory Principal Payment
      and/or the inclusion of such  replacement  Borrowing Base Eligible Project
      Bond for purposes of calculation of the Collateral  Value of the Borrowing
      Base Eligible  Project  Bonds,  the  provisions of Section  3.2(a) and (b)
      shall not be violated.

            (b)      No Event of Default  shall exist under this Loan  Agreement
      (including,  without limitation,  the provisions of Section 3.2(b)) or the
      other Loan Documents at the time of the Collateral  Release  Request or at
      the time of (and after giving effect to) any such  release,  except for an
      Event  of  Default  which  would be cured  by the  giving  effect  to such
      release.

            (c)      All representations  and warranties  contained herein or in
      the other Loan  Documents  shall be true and correct as of the time of any
      such  release  (except  to  the  extent  (x)  of  changes  resulting  from
      transactions  contemplated  and  permitted by this Loan  Agreement and the
      other Loan  Documents  and changes  occurring  in the  ordinary  course of
      business that singly or in the aggregate are not  materially  adverse,  or
      (y) that  such  representations  and  warranties  relate  expressly  to an
      earlier date,  and except for  representations  and  warranties  which the
      Agent was  notified  were not true and  correct  prior to a request for an
      Advance which was nonetheless made, or (z)  representations  or warranties
      relating  to the  Borrowing  Base  Eligible  Project  Bond  proposed to be
      released).

            (d)      The  Borrower  shall  pay or  reimburse  the  Agent for all
      reasonable legal fees and expenses and other reasonable costs and expenses
      incurred by Agent in connection with the release.

      The Agent shall  notify the Borrower  within three (3) Business  Days from
the date of the Collateral  Release  Request if the Collateral  Release  Request
meets all of the Release  Conditions  (subject  to the  payment or  substitution
required  pursuant to clause (a), above, as specified in the Collateral  Release
Request).  If all of the Release  Conditions  have not been met, the Agent shall
include a description of which Release  Conditions have not been  satisfied.  If
the Agent notifies the Borrower that Release Conditions have not been satisfied,
such  Borrowing  Base Eligible  Project Bond shall (to the extent the applicable
conditions for eligibility as an Eligible Project


                                      -27-
<PAGE>


Bond continue to be met) remain a Borrowing Base Eligible Project Bond hereunder
and shall be included within the Collateral.

      5.6   Release of Ineligible  Project Bonds. At the request of the Borrower
from time to time while no Event of Default has occurred and is continuing,  the
Agent shall direct the Custodian,  at the Borrower's  sole cost and expense,  to
return to the Borrower any Ineligible Project Bond then being held as Collateral
hereunder, and the Agent otherwise shall take steps, at the Borrower's sole cost
and expense,  to release the Lien therein and in all related  Collateral granted
by the Borrower to the Agent hereunder.

      5.7   Additional  Borrowing Base Eligible Project Bonds. From time to time
during the term of this Loan  Agreement  following  Borrower's  written  request
("Additional  Collateral  Request"),  compliance  with  the  provisions  of this
Section 5.7 and compliance with the requirements set forth in Section 4.1(a) and
4.1(b),  the Lenders  shall  authorize  the Agent to accept one or more Eligible
Project  Bonds as Borrowing  Base Eligible  Project Bonds (as  identified by the
Borrower in its written  request)  to be held by the Agent as  Collateral  or to
increase the Collateral Value attributed to one or more existing  Borrowing Base
Eligible  Project Bonds because such  Borrowing  Base Eligible  Project  Bond(s)
became Eligible Seasoned Bond(s) or Eligible  Unenhanced  Lease-Up Bond(s).  The
Lenders  shall  agree  to the  acceptance  of an  Eligible  Project  Bond  as an
additional  Borrowing  Base Eligible  Project Bond or to increase the Collateral
Value  attributed to one or more existing  Borrowing Base Eligible Project Bonds
because such Borrowing Base Eligible  Project Bond(s) became  Eligible  Seasoned
Bond(s) or Eligible  Unenhanced  Lease-Up  Bond(s) only upon the satisfaction of
the following conditions, in a manner reasonably acceptable to the Agent and the
Lenders:

            (a)      No Default by Borrower  shall exist under this Agreement or
      the other Loan Documents at the time of (x) any such Eligible Project Bond
      becoming a Borrowing Base Eligible Project Bond or (y) the increase in the
      Collateral  Value  attributed  to any  existing  Borrowing  Base  Eligible
      Project Bond because such Borrowing  Base Eligible  Project Bond became an
      Eligible Seasoned Bond or an Eligible Unenhanced Lease-Up Bond, except for
      any  Default  which is cured or  remedied by such  Eligible  Project  Bond
      becoming a Borrowing  Base  Eligible  Project  Bond or by  increasing  the
      Collateral  Value  attributed  to such  existing  Borrowing  Base Eligible
      Project Bond.

            (b)      No Event of Default shall exist under this Agreement or the
      other Loan Documents at the time of (x) the Additional Collateral Request,
      (y) any such  Eligible  Project Bond  becoming a Borrowing  Base  Eligible
      Project Bond, or (z) the increase in the  Collateral  Value  attributed to
      any existing  Borrowing Base Eligible  Project Bond because such Borrowing
      Base Eligible Project Bond became an Eligible Seasoned Bond or an Eligible
      Unenhanced  Lease-Up Bond,  except for any Event of Default which is cured
      or  remedied by such  Borrowing  Base  Eligible  Project  Bond  becoming a
      Borrowing


                                      -28-
<PAGE>


      Base  Eligible   Project  Bond  or  by  increasing  the  Collateral  Value
      attributed to such existing Borrowing Base Eligible Project Bond.

            (c)      All representations  and warranties  contained herein or in
      the other Loan  Documents  shall be true and correct as of the time of any
      such Eligible Project Bond becoming a Borrowing Base Eligible Project Bond
      (except  to  the  extent  (x)  of  changes   resulting  from  transactions
      contemplated  and  permitted  by this Loan  Agreement  and the other  Loan
      Documents  and changes  occurring in the ordinary  course of business that
      singly or in the aggregate are not  materially  adverse,  or (y) that such
      representations  and warranties  relate  expressly to an earlier date, and
      except for  representations  and  warranties  which the Agent was notified
      were not true and  correct  prior to a request  for an  Advance  which was
      nonetheless made).

            (d)      The  original   Eligible   Project  Bond  shall  have  been
      delivered to the Custodian either registered in the name of the Custodian,
      or accompanied by all required  endorsements and other documents necessary
      for the  Custodian to effect such  registration,  with a copy thereof sent
      simultaneously to the Agent.

            (e)      The  Borrower  shall  pay or  reimburse  the  Agent and the
      Lenders for all  reasonable  legal fees and  expenses  and other costs and
      expenses  incurred  by  Agent  and the  Lenders  in  connection  with  the
      Additional Collateral Request.

            (f)      Prior to the approval of the Additional Collateral Request,
      the Borrower and the subject  Borrowing  Base Eligible  Project Bond shall
      have satisfied all applicable  conditions  precedent set forth in Sections
      7.1(e),  7.1(m),  7.2(a),  7.2(e), 7.2(g), and 7.2(h) and, with respect to
      the request for an increase in the  Collateral  Value to be  attributed to
      any existing Borrowing Base Eligible Project Bond, the Borrower shall have
      provided the Agent and the Lenders with such documents,  instruments,  and
      agreements as the Agent and the Lenders shall reasonably  require in order
      to confirm that such  Borrowing  Base Eligible  Project Bond has become an
      Eligible Seasoned Bond or an Eligible Unenhanced Lease-Up Bond.

      The Agent shall notify the Borrower within ten (10) Business Days from the
date of the Additional  Collateral  Request if either (x) such proposed Eligible
Project  Bond  satisfies  the  conditions  of this  Loan  Agreement  and will be
accepted  as a  Borrowing  Base  Eligible  Project  Bond,  or (y)  any  existing
Borrowing Base Eligible  Project Bond has been confirmed to have become,  and is
accepted as, an Eligible Seasoned Bond or an Eligible  Unenhanced Lease-Up Bond.
No Eligible  Project Bond shall be included in determining the Collateral  Value
of the  Borrowing  Base Eligible  Project Bonds Base for any purpose  unless and
until it is accepted by Agent and the Lenders,  all of the foregoing  conditions
are satisfied or waived by the Agent and


                                      -29-
<PAGE>


the Lenders, and the Agent has received a Funding Certification and all Required
Collateral Documents related to such Eligible Project Bond.

      5.8   Cash Collateral Account.

            (a)      Maintenance of Account.  The Cash Collateral  Account shall
be maintained in accordance with this Agreement until the Obligations  have been
indefeasibly  paid  in  full  and  the  Commitments  all  have  expired  or been
terminated.

            (b)      Control;  Investment  of  Funds.  At all  times,  the  Cash
Collateral  Account and all Cash  Collateral  shall be subject to the  exclusive
dominion and control of the Agent (for the benefit of the Lenders),  which shall
hold and administer the Cash  Collateral  subject to the terms and conditions of
this  Agreement.  Provided no Event of Default then exists,  the Agent shall use
its best efforts to invest and reinvest funds in the Cash Collateral  Account in
daily redeemable tax-exempt money market mutual funds.

            (c)      Distributions;  Application to  Obligations.  So long as no
Default or Event of Default  exists and is continuing or would,  on an actual or
pro forma basis occur as a result  thereof  (after giving effect to the addition
at such time of any Borrowing Base Eligible Project Bond as Collateral  pursuant
to Sections  3.5(i)(i) or 5.7),  the Borrower may from time to time request that
the  Agent  either  apply  all  or a  portion  of  the  Cash  Collateral  to the
Obligations,  or  transfer  all or a  portion  of  the  Cash  Collateral  to the
Operating  Account.  If an Event of Default shall occur and be  continuing,  the
Agent may apply any Cash Collateral to the payment of the  Obligations,  whether
or not then due, in such order as the Agent may  determine  in  accordance  with
applicable provisions of this Agreement.

SECTION 6. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES. Agent and each of
the Lenders are authorized to rely upon the continuing authority of the persons,
officers,    signatories   or   agents   hereafter    designated    ("Authorized
Representatives") to bind Borrower with respect to all matters pertaining to the
Loan and the Loan  Documents  including,  but not limited to, the  selection  of
interest  rates,  and the  submission of requests for Advances and  certificates
with regard thereto.  Such authorization may be changed only upon written notice
to Agent  accompanied  by evidence,  reasonably  satisfactory  to Agent,  of the
authority  of the person  giving such notice and such notice  shall be effective
not sooner than five (5) Business Days following  receipt thereof by Agent.  The
present  Authorized  Representatives  of the  Borrower are listed on Schedule 6.
Agent  shall  have a right  of  approval,  not to be  unreasonably  withheld  or
delayed,  over the identity of the  Authorized  Representatives  so as to assure
Agent  and  each  of  the  Lenders  that  each  Authorized  Representative  is a
responsible and senior official of Borrower.

SECTION 7.  CONDITIONS PRECEDENT.


                                      -30-
<PAGE>


      7.1   Closing  Loan. It shall be a  condition  precedent  of  Agent's  and
Lenders' obligation to establish the Loan that each of the following  conditions
precedent be satisfied  in full (as  determined  by the Agent and the Lenders in
their  discretion  which  discretion  shall be exercised in good faith),  unless
specifically  waived in  writing  by the Agent  and the  Lenders  at or prior to
closing:

            (a)      Satisfactory  Loan  Documents.  Each of the Loan  Documents
shall be satisfactory  in form,  content and manner of execution and delivery to
Agent and its counsel,  and shall have been duly  executed and  delivered by all
parties  thereto.  All UCC Financing  Statements  with respect to the Collateral
shall have been duly filed,  and the Agent and the Lenders  shall  otherwise  be
satisfied  with  the  perfection  of  the  Agent's  security   interest  in  the
Collateral.

            (b)      Borrowing Base Eligible Project Bonds. Without limiting the
generality  of the  provisions  of  subclause  (a) above,  with  respect to each
Borrowing  Base Eligible  Project Bond,  the Agent shall have issued an Approval
Notice for each such Project Bond.

            (c)      Delivery of Borrowing  Base  Eligible  Project  Bonds.  The
Borrower shall have delivered the initial  Borrowing Base Eligible Project Bonds
included  in the  calculation  of the  Collateral  Value of the  Borrowing  Base
Eligible  Project Bonds as of the Closing Date to the  Custodian,  registered in
the name of the Custodian, or accompanied by all required endorsements and other
documents  necessary for the Custodian to effect such registration,  with a copy
thereof to the Agent.

            (d)      Funding  Certification.  If an Advance is  requested  to be
made on the Closing Date,  the Agent and the Lenders shall have received a fully
executed Funding  Certification,  together with the Borrower's initial Borrowing
Base Certificate.

            (e)      No Bond Document Default. There shall not have occurred and
be continuing any Bond Document Default.

            (f)      No Material  Change.  No material adverse change shall have
occurred in the financial condition, business, affairs, operations or control of
Borrower since the date of its financial  statements most recently  delivered to
the Lenders (September 30, 2002).

            (g)      Warranties and Representations Accurate. All warranties and
representations  made by or on behalf of Borrower to Agent or any of the Lenders
shall be true, accurate and complete in all material respects and shall not omit
any material fact necessary to make the same not misleading.


                                      -31-
<PAGE>


            (h)      Officer's  Certificate.  The Agent  shall  have  received a
certificate executed by an Authorized Representative of the Borrower in the form
of Exhibit J annexed hereto.

            (i)      Constituent  Documents.  The Agent shall have received from
the Borrower a copy, certified as of a recent date by the appropriate officer of
the State in which the Borrower is organized,  to be true and  complete,  of the
Constituent   Documents   of  the   Borrower  as  in  effect  on  such  date  of
certification.  The Borrower shall furnish  evidence  satisfactory  to the Agent
that the Borrower is duly qualified and in good standing in each jurisdiction in
which  it owns or  leases  property  or in which  the  conduct  of its  business
requires it to so qualify, except where the failure to so qualify could not have
a materially adverse effect on the business,  assets, or financial  condition of
the Borrower.

            (j)      Votes, Consents and Authorizations. All actions on the part
of the Borrower and Charter Mac necessary for the valid execution,  delivery and
performance  by (x) the Borrower of this  Agreement and the other Loan Documents
to which it is or is to become a party, and (y) Charter Mac and Holding Trust of
the Joinder to this Agreement,  shall have been duly and effectively  taken, and
evidence thereof  reasonably  satisfactory to the Agent shall have been provided
to the Agent. The Agent shall have received from the Borrower true copies of the
Borrower's resolutions adopted by the Borrower's Board of Trustees or directors,
as the  case  may  be,  authorizing  the  transactions  described  herein,  each
certified  by the  Borrower's  Secretary  as of a  recent  date to be  true  and
complete.

            (k)      Incumbency Certificate; Authorized Signers. The Agent shall
have  received  from each of the  Borrower,  Charter Mac and Holding  Trust,  an
incumbency  certificate,  dated  as  of  the  Closing  Date,  signed  by a  duly
authorized  officer of such  Person  and giving the name and  bearing a specimen
signature of each individual, and as to the Borrower, who shall be an Authorized
Representative:  (i) as to the Borrower, Charter Mac and Holding Trust, to sign,
in the name and on behalf of such  Person,  each of the Loan  Documents to which
such Person is or is to become a party; (ii) as to the Borrower, to make Advance
Requests and Additional  Collateral Requests;  and (iii) as to the Borrower,  to
give notices,  provide certifications,  make representations,  and to take other
action on behalf of the Borrower under the Loan Documents.

            (l)      Corporate  Structure.  The Agent and the  Lenders  shall be
satisfied in all respects  with the legal  structure and  capitalization  of the
Borrower and all documentation relating thereto.

            (m)      Litigation.   There  shall  be  no  pending  or  threatened
litigation  involving the Borrower,  Charter Mac, or Holding Trust which, in the
reasonable judgment of the Agent and the Lenders,  could have a material adverse
effect on such Person or the ability of the Borrower to perform its  obligations
under the Loan  Documents,  or the  ability of Charter  Mac or Holding  Trust to
perform their respective obligations under the Joinder to this Agreement, and no


                                      -32-
<PAGE>


judgment,  order,  injunction  or other  similar  injunction  or  other  similar
restraint prohibiting any of the transactions contemplated hereby shall exist.

            (n)      Financial Statements.  The Agent and the Lenders shall have
received such financial  statements and other information and projections as the
Agent and/or the Lenders shall have  reasonably  requested,  and the information
shall be reasonably satisfactory to the Agent and the Lenders.

            (o)      Examination of Books and Assets.  The Agent and the Lenders
shall have been afforded the  opportunity  prior to closing to review the books,
records,  leases,  contracts,  pension plans,  workers' compensation and retiree
health plans, ERISA matters,  insurance coverage and properties of the Borrower,
Charter Mac and Holding Trust and to perform such other due diligence  regarding
the  Borrower,  Charter  Mac and Holding  Trust as the Agent  and/or the Lenders
shall have  reasonably  required,  the results of which review and due diligence
shall have been reasonably satisfactory to the Agent and the Lenders.

            (p)      Compliance   with  Law.  The  Agent  shall  be   reasonably
satisfied  that (i) the Borrower  has  obtained  all  material  and  appropriate
authorizations and approvals of all Governmental  Authorities or any other third
parties which are required for the due  execution,  delivery and  performance by
the  Borrower of each of the Loan  Documents  and for the  perfection  of or the
exercise by the Agent and the Lenders of their  respective  rights and  remedies
under the Loan  Documents,  and (ii) the Loan as well as all other  transactions
contemplated  hereby,  shall be in material  compliance  with,  and the Borrower
shall have obtained,  all material and appropriate  approvals pertaining to, any
applicable laws, rules, regulations and orders,  including,  without limitation,
all  governmental,   environmental,  ERISA  retiree  health  benefits,  workers'
compensation  and  other  requirements,  regulations  and  laws  and  shall  not
contravene  any  Constituent   Document,   debt  instrument  or  other  material
Contractual  Obligation of the Borrower and its Subsidiaries,  or of Charter Mac
or Holding Trust or any of their respective Subsidiaries.

            (q)      Legal and other  Opinions.  The Lenders and the Agent shall
have received an opinion  addressed to the Lenders and the Agent and dated as of
the Closing Date, in form and substance reasonably satisfactory to the Agent and
the Lenders, from the Borrower's counsel, Paul, Hastings, Janofsky & Walker LLP,
Richards, Layton & Finger, P.A., and Greenberg Traurig, LLP.

            (r)      Payment of Fees.  The Borrower shall have paid to the Agent
all fees and expenses  required to be paid upon or prior to the Closing Date, as
applicable, pursuant to this Agreement and the other Loan Documents.

            (s)      No  Default  or Event of  Default.  There  shall not be any
Default or any Event of Default under any of the Loan Documents.


                                      -33-
<PAGE>


            (t)      Additional Documents. The Borrower shall have provided such
additional  instruments  and  documents  to the Agent  and/or the Lenders as the
Agent, the Lenders or their counsel may have reasonably  requested to effectuate
this Agreement or to perfect the security interests granted hereunder.

            (u)      Further  Assurances.  In  addition  to  the  execution  and
delivery of this  Agreement  and the other Loan  Documents,  the Borrower  shall
execute  such other  documentation  as may be  reasonably  required by the Agent
and/or the Lenders to effectuate  this  Agreement,  accomplish  the purposes and
intentions  of the parties,  or to perfect the security  interests  and/or other
rights granted by the Borrower to the Agent and the Lenders hereunder.

            (v)      Advance  Request.  If the Borrower is seeking an Advance on
the Closing Date, the Borrower shall have submitted an Advance Request.

      7.2   Advances. Each Advance  shall be subject to the condition  precedent
that all  conditions  to closing of the Loan continue to be satisfied and to the
further  satisfaction  of each of the  following  conditions  precedent,  unless
specifically waived in writing by Agent (with the approval of the Lenders) at or
prior to the time of each such Advance:

            (a)      Representations  True; No Default or Event of Default. Each
of the representations and warranties and covenants of the Borrower contained in
this Loan Agreement or the other Loan Documents  shall be true as of the date as
of which it was made and shall  also be true at and as of the time of the making
of such Advance,  with the same effect as if made at and as of that time (except
to the extent of changes resulting from transactions  contemplated and permitted
by this Loan Agreement and the other Loan Documents and changes occurring in the
ordinary  course of business that singly or in the aggregate are not  materially
adverse, or except to the extent that such representations and warranties relate
expressly  to an earlier  date) and no  Default  or Event of Default  shall have
occurred and be  continuing.  Each of the Lenders shall have received an Advance
Request and  Preliminary  Certification  of the Borrower signed by an Authorized
Representative.

            (b)      Certifications.  Each of the  Agent and the  Lenders  shall
have  received  an  Advance  Request,  Preliminary  Certification  and a Funding
Certification  of the Borrower signed by an Authorized  Representative,  and, if
the  Advance  shall  constitute  a Wet  Funding  Advance,  the Agent  shall have
received a Wet Funding Certification.

            (c)      Borrowing Base Acquisition Advance. If a proposed Borrowing
Base  Acquisition  Advance is not a Wet  Funding  Advance,  the Agent shall have
determined that the Purchase Funding Conditions have been satisfied.


                                      -34-
<PAGE>


            (d)      Notice of  Approval.  If such  Advance is a Borrowing  Base
Acquisition Advance, the Agent shall have issued an Approval Notice.

            (e)      No Legal  Impediment.  No change shall have occurred in any
law or regulations thereunder or interpretations  thereof that in the reasonable
opinion  of any  Lender  would  make it  illegal  for such  Lender  to make such
Advance.

            (f)      Governmental  Regulation.  Each Lender shall have  received
such statements in substance and form reasonably  satisfactory to such Lender as
such Lender  shall  require for the purpose of  compliance  with any  applicable
regulations of the  Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.

            (g)      Proceedings  and Documents.  All  proceedings in connection
with the  transactions  contemplated  by this Loan  Agreement,  the  other  Loan
Documents  and  all  other  documents   incident  thereto  shall  be  reasonably
satisfactory  in  substance  and in form to the  Agent,  the  Lenders  and their
respective  counsel,  and,  with respect to any Project  securing a Project Bond
which  the  Borrower  has  requested  be  included  in  the  calculation  of the
Collateral  Value of the Borrowing Base Eligible  Project Bonds,  the Agent, the
Lenders,  and such counsel shall have been satisfied,  in their sole discretion,
with all Due Diligence Materials or Pre-Bond Closing Due Diligence Materials, as
the  case  may  be,  and the  form  and  substance  of all  Required  Collateral
Documents.

            (h)      No Adverse Changes.  There shall not have been any material
adverse change in the financial condition,  business, or affairs of the Borrower
since the date of this Loan  Agreement  which in Agent's good faith judgment may
jeopardize  in a material  manner the ability of  Borrower to perform  fully its
obligations under each Loan Document.


SECTION 8. WARRANTIES AND  REPRESENTATIONS.  Borrower warrants and represents to
Agent and each of the Lenders for the express  purpose of inducing the Agent and
the  Lenders to enter into this Loan  Agreement,  to make each  Advance,  and to
otherwise  complete all of the transactions  contemplated  hereby that as of the
date of this Loan  Agreement  and upon the date of each  Advance  (except to the
extent made as a specific date), as follows:

      8.1   Financial  Information.   True,   accurate  and  complete  financial
statements of Borrower and Charter Mac have been  delivered to Agent and each of
the Lenders and the same fairly present the financial  condition of such Persons
as of the date thereof and no material  and adverse  change has occurred in such
financial  condition  of such  Persons  since the date  thereof.  All  financial
statements  of Borrower and Charter Mac  hereafter  furnished to Agent or any of
the Lenders  shall be true,  accurate and complete and shall fairly  present the
financial condition of Borrower and Charter Mac as of the date thereof.


                                      -35-
<PAGE>


      8.2   Approved   Project.   Each  Approved   Project  is  a   multi-family
development  for rental in whole, or in part, to low and moderate income tenants
and qualifies  for federal low income  housing tax credits.  True,  accurate and
complete  information  has  been  delivered  to Agent  and  each of the  Lenders
concerning  each Approved  Project and the same fairly present the status of the
subject  Approved  Project and the  subject  Project  Owner and no material  and
adverse  change has occurred with respect  thereto  since the date thereof.  All
information and statements relative to any Approved Projects hereafter furnished
to Agent or any of the Lenders (x) if prepared by Borrower or an Affiliate shall
be true,  accurate  and  complete  and shall  fairly  present  the status of the
subject  Approved  Project and the subject Project Owner as of the date thereof,
and (y) if prepared by any Person other than the Borrower or any  Affiliates  of
the  Borrower,  to the best of  Borrower's  knowledge,  after the  Borrower  has
conducted reasonable  investigation with due diligence,  shall be true, accurate
and complete and shall fairly present the status of the subject Approved Project
and the subject Project Owner as of the date thereof.

      8.3   No  Violations.  The  consummation  of the Loan  and the  subsequent
payment and  performance  of the  Obligations  evidenced and secured by the Loan
Documents  shall not  constitute  a violation  of, or conflict  with,  any Legal
Requirement, Contractual Obligation, Constituent Document, or Bond Documents, to
which  Borrower,  Charter Mac or Holding  Trust is a party or by which it or its
property is or may be bound.

      8.4   Litigation.   There   are  no   actions,   suits,   proceedings   or
investigations  of any  kind  pending  or,  to the  knowledge  of the  Borrower,
threatened,  against the Borrower and/or Charter Mac and/or Holding Trust before
any  court,  tribunal  or  administrative  agency or board  that,  if  adversely
determined,  would  reasonably  be  expected  to,  either  in any case or in the
aggregate,   materially  adversely  affect  the  properties,  assets,  financial
condition  or  business of such  Person or  materially  impair the right of such
Person  or,  as  to  the  Borrower,  its  Subsidiaries,  to  carry  on  business
substantially as now conducted by it, or result in any substantial liability not
adequately  covered  by  insurance,  or for  which  adequate  reserves  are  not
maintained  on the  balance  sheet  of such  Person,  or,  with  respect  to the
Borrower, which question the validity of this Loan Agreement or any of the other
Loan Documents, or any action taken or to be taken pursuant hereto or thereto.

      8.5   Borrowing Base Eligible Project  Bonds.  Each of the Borrowing  Base
Eligible Project Bonds is owned by the Borrower and may be pledged to the Agent,
on  behalf of the  Lenders,  as  provided  herein.  The  Borrower  has  received
customary  opinions from qualified  Persons stating that interest on each of the
Eligible Project Bonds acquired with the proceeds of the Loan is excludable from
gross income for federal income tax purposes.

      8.6   Project Letter of Credit.  Any Project Letter of Credit  reflects as
the beneficiary thereof the Trustee under the Bond Documents.


                                      -36-
<PAGE>


      8.7   Good Title and No Liens.  Borrower,  Charter Mac and Holding  Trust,
respectively,  are the lawful owner of their respective  assets and are and will
be the lawful owner of such assets, free and clear of all liens and encumbrances
of any nature  whatsoever other than those matters permitted in conjunction with
this Loan Agreement,  the Liquidity Agreement,  the Insurance  Agreement,  other
securitization  vehicles,  or other Indebtedness incurred in connection with the
conduct of  business  by the  Borrower,  Charter  Mac and  Holding  Trust in the
ordinary course of their respective businesses.

      8.8   Franchises,  Patents, Copyrights, Etc. The Borrower, Charter Mac and
Holding  Trust each possess all  franchises,  patents,  copyrights,  trademarks,
trade  names,  licenses  and  permits,  and rights in respect of the  foregoing,
adequate for the conduct of its business substantially as now conducted, without
known  conflict  with any rights of others,  except to the extent the failure to
own or  have  the  same  would  not be  reasonably  expected  to (x)  materially
adversely  effect the ability of the Borrower to perform its  Obligations  under
any Loan Document,  or (y) have a material  adverse effect upon the  operations,
business,  properties  or financial  condition of the  Borrower,  Charter Mac or
Holding Trust.

      8.9   Use of Proceeds.  The proceeds  of the Loan shall be used solely and
exclusively for the purchase of the Project Bonds.

      8.10  Entity Matters.

            (a)      Organization.

                     (i)  The  Borrower  is a duly  organized  validly  existing
            statutory  trust in good  standing  under  the laws of the  State of
            Delaware and is duly qualified in the jurisdiction  where the nature
            of its  business  is such that  qualification  is  required or where
            failure to be so qualified would not materially adversely affect its
            business or assets,  and has all  requisite  power and  authority to
            conduct its business and to own its  property,  as now  conducted or
            owned, and as contemplated by this Agreement.

                     (ii) Holding  Trust is a duly  organized  validly  existing
            statutory  trust in good  standing  under  the laws of the  State of
            Delaware and is duly qualified in the jurisdiction  where the nature
            of its  business  is such that  qualification  is  required or where
            failure to be so qualified would not materially adversely affect its
            business or assets,  and has all  requisite  power and  authority to
            conduct its business and to own its  property,  as now  conducted or
            owned.


                                      -37-
<PAGE>


                     (iii)Charter  Mac  is a  duly  organized  validly  existing
            statutory  trust in good  standing  under  the laws of the  State of
            Delaware and is duly qualified in the jurisdiction  where the nature
            of its  business  is such that  qualification  is  required or where
            failure to be so qualified would not materially adversely affect its
            business or assets,  and has all  requisite  power and  authority to
            conduct its business and to own its  property,  as now  conducted or
            owned.

            (b)      Ownership,   Subsidiaries   and   Taxpayer   Identification
Numbers.

                     (i) The Borrower,  indirectly, is a wholly-owned Subsidiary
            of Charter Mac, and, other than  outstanding  Preferred  Shares,  no
            additional ownership interests, or rights or instruments convertible
            into such ownership  interests,  exist.  True and complete copies of
            each of the  agreements  listed  on  Schedule  8.10(b)(i)  have been
            furnished to the Agent by the Borrower.

                     (ii)  The   taxpayer   identification   numbers  and  state
            organizational   numbers  (if   applicable)   of  the  Borrower  are
            accurately stated in Schedule 8.10(b)(ii).

                     (iii) The Borrower,  Charter Mac and Holding Trust are each
            the  owner,  free and clear of all liens  and  encumbrances,  of the
            Equity  Interests  which  they  purport  to own  of  each  of  their
            respective  Subsidiaries.  All shares of such Equity  Interests have
            been  validly  issued and are fully paid and  nonassessable,  and no
            rights to subscribe to any additional shares have been granted,  and
            no options,  warrants,  or similar rights are outstanding  except as
            set forth in Schedule 8.10(b)(iii).

            (c)      Authorization.  The  execution  and  delivery  of this Loan
Agreement  (and of the Joinder  hereto by each of Charter Mac and Holding Trust)
and the other Loan  Documents to which the Borrower is to become a party and the
performance by the Borrower of the transactions  contemplated hereby and thereby
(i) are within the authority of the Borrower, Charter Mac, and Holding Trust, as
applicable,  (ii) have been duly authorized by all necessary trust  proceedings,
(iii) do not conflict with or result in any breach or contravention of any Legal
Requirement  to  which  the  Borrower,   Charter  Mac,  and  Holding  Trust,  as
applicable,  is subject or any judgment,  order,  writ,  injunction,  license or
permit  applicable  to  the  Borrower,   Charter  Mac,  and  Holding  Trust,  as
applicable,  and (iv) do not  conflict  with any  provision  of the  Borrower's,
Charter Mac's, and Holding Trust's, as applicable,  Constituent Documents or any
Contractual  Obligation  of the  Borrower,  Charter Mac, and Holding  Trust,  as
applicable,  except  where such  conflict  would not have a  materially  adverse
effect on the business,  assets or financial condition of the Borrower,  Charter
Mac, and Holding Trust, as applicable.


                                      -38-
<PAGE>


      8.11  Valid and  Binding.  Each of the Loan  Documents  constitute  legal,
valid and binding  obligations  of Borrower,  in accordance  with the respective
terms  thereof,  subject to  bankruptcy,  insolvency and similar laws of general
application  affecting the rights and remedies of creditors and, with respect to
the  availability  of the  remedies  of  specific  enforcement,  subject  to the
discretion of the court before which any proceeding therefor may be brought.

      8.12  Deferred Compensation and ERISA. Borrower does not have any pension,
profit  sharing,  stock  option,  insurance  or  other  arrangement  or plan for
employees covered by Title IV of the Employment Retirement Security Act of 1974,
as now or hereafter  amended  ("ERISA")  except as may be designated to Agent in
writing by Borrower from time to time ("ERISA Plan") and no  "Reportable  Event"
as defined in ERISA has occurred and is now continuing  with respect to any such
ERISA  Plan.  The  granting  of the Loan,  the  performance  by  Borrower of its
obligations under the Loan Documents and Borrower's conducting of its operations
do not and will not violate any provisions of ERISA.

      8.13  No Materially Adverse Contracts, Etc. None of the Borrower,  Charter
Mac, or Holding Trust, or any of their respective Subsidiaries is subject to any
charter,  corporate or other legal restriction,  or any judgment, decree, order,
rule or  regulation  that has or is expected in the future to have a  materially
adverse effect on the business,  assets or financial  condition of the Borrower,
Charter Mac, or Holding  Trust.  None of the  Borrower,  Charter Mac, or Holding
Trust,  or any of their  respective  Subsidiaries  is a party to any contract or
agreement that has or is expected,  in the judgment of the  Borrower's,  Charter
Mac's, or Holding Trust's officers, respectively, to have any materially adverse
effect on the business,  assets, or financial condition of the Borrower, Charter
Mac, or Holding Trust.

      8.14  Compliance With Other Instruments,  Laws, Etc. None of the Borrower,
Charter  Mac or Holding  Trust nor any of their  respective  Subsidiaries  is in
violation of any  provision of its  Constituent  Documents,  or any  Contractual
Obligations or any Legal Requirements, in any of the foregoing cases in a manner
that could result in the imposition of  substantial  penalties or materially and
adversely affect the financial condition,  properties or business of such Person
or such Person's Subsidiaries.

      8.15  Tax Status.  The  Borrower,  Charter  Mac,  Holding  Trust and their
respective  Subsidiaries (a) have made or filed all federal and state income and
all other tax returns,  reports and declarations required by any jurisdiction to
which  such  Person is  subject,  (b) has paid all taxes and other  governmental
assessments  and charges shown or determined to be due on such returns,  reports
and declarations,  except those being contested in good faith and by appropriate
proceedings and (c) has set aside on its books  provisions  reasonably  adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns,  reports or  declarations  apply.  Except for taxes being  contested as
provided in clause (b), above,  there are no unpaid


                                      -39-
<PAGE>


taxes in any material  amount  claimed to be due by the taxing  authority of any
jurisdiction, and the officers of the foregoing Persons know of no basis for any
such claim.

      8.16  Holding  Company and Investment  Company Acts.  Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined  in  the  Public  Utility  Holding  Company  Act of  1935;  nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.

      8.17  Certain  Transactions.  Except as set forth in Schedule 8.17 hereof,
as of  the  date  of  this  Loan  Agreement,  none  of the  officers,  trustees,
directors,  or employees of the Borrower or any of its Subsidiaries is presently
a party to any transaction with the Borrower or any of its  Subsidiaries  (other
than for services as employees, officers and directors), including any contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer, trustee, director or such employee or
any  corporation,  partnership,  trust or other  entity  in which  any  officer,
trustee,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

      8.18  Loan  Documents.  All of the  representations  and warranties of the
Borrower  made in the  Loan  Documents  are  true and  correct  in all  material
respects.

      8.19  Regulations U and X. No portion of any Advance is to be used for the
purpose of  purchasing  or carrying any "margin  security" or "margin  stock" as
such  terms are used in  Regulations  U and X of the Board of  Governors  of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.

      8.20  Solvency.

            (a)      The  Borrower,  individually,  is, and the Borrower and its
      Subsidiaries, on a consolidated basis, are, Solvent.

            (b)      Each of Charter Mac and Holding  Trust,  individually,  is,
      and on a consolidated basis, are, Solvent.

      8.21  Conditions  Satisfied.  Assuming that the Agent and the Lenders have
approved all matters requiring their approval,  all of the conditions  precedent
set forth in Section 7.1 have been satisfied.


                                      -40-
<PAGE>


      8.22  No  Material  Change:  No  Default.  There has been no (i)  material
adverse change in the financial condition,  business, or assets of the Borrower,
and/or  Charter  Mac  and/or  Holding  Trust,  or (ii)  Change in Control of the
Borrower  and/or Charter Mac and/or  Holding  Trust,  since the date of its last
financial statement most recently delivered to the Agent.

      8.23  No Broker or  Finder.  Neither  the  Borrower,  nor anyone on behalf
thereof has dealt with any broker, finder or other person or entity who or which
may be entitled to a broker's or finder's fee, or other compensation, payable by
the Agent or any of the Lenders in connection with this Loan.

      8.24  Background  Information  and  Certificates;  Projects.  All  of  the
factual information contained or referred to in Section 2 of this Loan Agreement
and  in  the  Exhibits  and  Schedules  to  this  Loan  Agreement,  and  in  the
certificates and opinions  furnished to the Agent or any of the Lenders by or on
behalf of Borrower in connection  with any Project,  (x) if prepared by Borrower
or an Affiliate  of the Borrower is true,  accurate and complete in all material
respects,  and omits no material fact necessary to make the same not misleading,
and (y) if prepared by any Person other than the Borrower or an Affiliate of the
Borrower, to the best of Borrower's knowledge,  after the Borrower has conducted
reasonable  investigation with due diligence,  is true, accurate and complete in
all material respects, and omits no material fact necessary to make the same not
misleading.

      8.25  Background   Information  and  Certificates.   All  of  the  factual
information  contained or referred to in Section 2 of this Loan Agreement and in
the  Exhibits  and  Schedules to this Loan  Agreement,  and in the  certificates
furnished  to the Agent or any of the  Lenders  by or on behalf of  Borrower  in
connection  with this Loan  Agreement  or any other Loan  Document,  is true and
complete in all material respects,  and omits no material fact necessary to make
the same not misleading.

      8.26  Representations  Regarding  Eligible  Project  Bonds.  The  Borrower
hereby  represents,  warrants  and  covenants to the Agent and the Lenders as to
each Eligible Project Bond as follows:

            (a)      The Borrower is the sole legal and beneficial owner of each
      Eligible Project Bond and has good and marketable title thereto,  free and
      clear of any Lien or participation  or ownership  interest in favor of any
      other  Person,  except as permitted by the Agent (with the approval of the
      Lenders) in writing;

            (b)      Borrower  has not taken (or  omitted  to take),  and has no
      notice that the related Bond Issuer  and/or any Bond Obligor has taken (or
      omitted to take),  any action that would impair or invalidate the coverage
      provided by any existing insurance policy relating to any Approved Project
      or prevent the Borrower or any assignee or secured


                                      -41-
<PAGE>


      party from enforcing the  provisions of any such Eligible  Project Bond or
      related Bond Documents.

            (c)      To Borrower's  knowledge,  no Bond Document Default exists,
      except as  disclosed  in writing to the Agent,  and the  Borrower  has not
      waived any material default,  breach,  violation or event of acceleration,
      and to  Borrower's  knowledge,  no Bond Issuer  and/or any Bond Obligor is
      currently in default in complying with the terms of its Bond Documents.

            (d)      To Borrower's knowledge,  after having conducted reasonable
      investigation  with due  diligence,  as of the closing date relating to an
      Eligible  Project Bond, (i) there exists no reason why such interest would
      not be  excludable  from gross  income  for  purposes  of  federal  income
      taxation,  and (ii) it is  reasonably  expected that the Bond Obligor will
      pay debt service on the Eligible Project Bonds.

            (e)      To the Borrower's  knowledge,  no Eligible  Project Bond is
      subject to a bankruptcy plan.

            (f)      The  Borrower has caused all of its records to be marked to
      indicate  that the Pledged Bonds have been assigned by the Borrower to the
      Agent for the ratable benefit of the Lenders.

            (g)      To the Borrower's  knowledge,  there exists no violation of
      any Environmental Laws with respect to any Approved Project.

            (h)      To the Borrower's knowledge, all environmental remediations
      recommended in a report of an  environmental  engineer with respect to any
      Approved  Project will be made, or were made,  within eighteen (18) months
      of the closing date relating to an Eligible Project Bond.

For  purposes  of the  representations  made  herein,  the  phrase  "to the best
knowledge of the Borrower" or "to the Borrower's  knowledge" means to the actual
knowledge of an  Authorized  Representative  or other  executive  officer of the
Borrower after reasonable inquiry.

      8.27  Reaffirmation.  Each request by the  Borrower for an Advance,  or to
add an Eligible  Project Bond as Borrowing Base Eligible Project Bond: (i) shall
constitute an  affirmation  by Borrower that the foregoing  representations  and
warranties  are true and  correct as of the date of such  request  (except as to
matters specifically  disclosed in writing to the Agent and the Lenders prior to
or simultaneously with such written request, and except to the extent of changes
resulting from  transactions  contemplated  and permitted by this Loan Agreement
and the other Loan  Documents  and changes  occurring in the ordinary  course of
business that singly or in


                                      -42-
<PAGE>


the aggregate  are not  materially  adverse,  and except to the extent that such
representations  and warranties relate expressly to an earlier date) and, unless
Agent and the Lenders  are  notified  to the  contrary  prior to the date of the
addition of such Eligible  Project Bond as Borrowing Base Eligible Project Bond,
will  be so on the  date  of  such  addition,  and  (ii)  shall  constitute  the
representation  and warranty of Borrower that the  information set forth in each
such  request  is true and  complete  in all  material  respects,  and  omits no
material fact necessary to make the same not misleading.

SECTION 9.  COVENANTS.  Borrower  covenants and agrees that from the date hereof
and so long as Lenders have any obligation to make the Loan or fund any Advances
hereunder,  or any indebtedness is outstanding hereunder,  or any of the Loan or
other Obligations remains outstanding, as follows:

      9.1   Punctual Payment.  Borrower will duly and punctually pay or cause to
be paid the principal and interest on the Loan and all interest,  fees and other
Obligations  provided for in this Loan  Agreement,  all in  accordance  with the
terms of this Loan  Agreement  and the Note,  as well as all  other  sums  owing
pursuant to the Loan Documents.

      9.2   Maintenance  of Office.  Borrower will maintain its chief  executive
office in New York,  New York,  or at such other  place in the United  States of
America as the Borrower shall  designate upon not less than forty-five (45) days
prior written notice to the Agent.

      9.3   Organizational   Number.   The   Borrower   will  not   change   its
organizational number or taxpayer  identification number, except upon forty-five
(45) days prior written notice to the Agent.

      9.4   Records and Accounts.  The Borrower will keep, and cause each of its
Subsidiaries  to keep,  true and accurate  records and books of account in which
full, true and correct entries will be made in accordance with GAAP.

      9.5   Notices.

            (a)      Borrower  shall,  with  reasonable  promptness,  but in all
      events  within  five  (5)  Business  Days  after it has  actual  knowledge
      thereof,  notify  Agent  in  writing  of any of the  following  (each,  an
      "Impairment Event"):

                     (i)     the occurrence of any act, event or condition which
            constitutes  a Default or an Event of Default  under any of the Loan
            Documents,  to  include  a  written  statement  of any  remedial  or
            curative  actions  which  Borrower  proposes to undertake to cure or
            remedy any such Default before it becomes an Event of Default;


                                      -43-
<PAGE>


                     (ii)    the occurrence of any act, event or condition which
            constitutes  a  Bond  Document  Default  under  any  Borrowing  Base
            Eligible Project Bond;

                     (iii)   the  occurrence  of any event  which would give the
            registered owner of a Borrowing Base Eligible Project Bond the right
            to direct the Trustee under any Bond  Documents  for such  Borrowing
            Base  Eligible  Project  Bond to exercise  any rights  upon  default
            thereunder;

                     (iv)    the  occurrence  of any event  which would give the
            registered owner of a Borrowing Base Eligible Project Bond the right
            to submit a draw, or to direct the Trustee under the Bond  Documents
            for any Borrowing Base Eligible Project Bond to submit a draw, under
            a  Project  Letter of  Credit,  or to cause  the  redemption  of any
            Borrowing Base Eligible Project Bond; or

                     (v)     the occurrence of any event which has, or will have
            with the passage of time, a materially adverse effect on any Project
            Owner or any Approved  Project  securing a Borrowing  Base  Eligible
            Project Bond, or any Collateral,  including, without limitation, (x)
            any  materially  adverse  change in the  financial  condition of any
            Project  Owner or any  guarantor of the  obligations  of the Project
            Owner,  under  the  Bond  Documents  relating  to a  Borrowing  Base
            Eligible  Project  Bond,  (y)  any  change  to an  Approved  Project
            securing a Borrowing  Base Eligible  Project Bond which would result
            in a Major Bond Action having  occurred,  or (z) any event which may
            cause the interest on any Borrowing Base Eligible Project Bond to be
            includable in gross income for federal income tax purposes.

            (b)      Notification  of Claims  against  Borrowing  Base  Eligible
Project Bonds. The Borrower will, promptly upon (but in any event not later than
ten (10) days after) becoming aware thereof,  notify the Agent in writing of any
events  relating  to  any  Borrowing  Base  Eligible  Project  Bond  that  would
reasonably be expected to materially adversely affect the rights of the Agent or
the Lenders with respect thereto.

            (c)      Notice of Litigation and Judgments.  The Borrower will, and
will cause each of its  Subsidiaries,  Charter  Mac and Holding  Trust,  and any
Subsidiaries  of Charter Mac and Holding  Trust to, give notice to the Agent and
the  Lenders  in  writing  (within  ten (10)  days of the date on which any such
Person shall become aware thereof) of any  litigation or proceedings  threatened
or any pending  litigation  and  proceedings  affecting  (x) the Borrower or any
Subsidiaries  of the Borrower or to which such Person is or is to become a party
involving an amount in controversy  exceeding  $500,000.00,  and (y) Charter Mac
and Holding  Trust or any  Subsidiaries  of Charter Mac and Holding Trust (other
than the  Borrower  and its  Subsidiaries)  or to which such  Person is or is to
become a party involving an amount in controversy exceeding


                                      -44-
<PAGE>


$5,000,000.00,  or with  respect  to any of the  foregoing  Persons,  that could
reasonably  be expected to have a materially  adverse  effect on such Person and
stating the nature and status of such  litigation or  proceedings.  The Borrower
will, and will cause each of its  Subsidiaries,  Charter Mac,  Holding Trust and
any  Subsidiaries  of Charter Mac and Holding Trust to, give notice to the Agent
and the  Lenders in writing in form and detail  reasonably  satisfactory  to the
Agent and the Lenders (within ten (10) days of the date on which any such Person
shall  become  aware  thereof),  with  respect  to  (x)  the  Borrower  and  any
Subsidiaries  of the  Borrower,  of any  judgment in excess of  $500,000.00  not
covered by insurance, final or otherwise,  against such Persons, and (y) Charter
Mac,  Holding Trust and any Subsidiaries of Charter Mac and Holding Trust (other
than  the  Borrower  and  its  Subsidiaries),  of  any  judgment  in  excess  of
$5,000,000.00  not  covered  by  insurance,  final or  otherwise,  against  such
Persons.

      9.6   Financial Statements and Reports. Borrower shall furnish or cause to
be  furnished  to the  Agent  and each of the  Lenders  from  time to time,  the
following financial  statements and reports and other information,  all in form,
manner of presentation and substance acceptable to Agent:

            (a)      Monthly  Statements.  As  soon as  practicable,  but in any
event not later than forty-five days (45) days after the end of each month,  the
Servicer's  Report in the form of Exhibit K attached hereto,  for each Borrowing
Base  Eligible  Project  Bond.  The Agent and the  Lenders  shall be entitled to
conclusively  rely on each  Servicer's  Report as being  accurate and  complete,
absent manifest error;

            (b)      Quarterly  and  Annual  Statements  and  Statement  of Bond
Valuation.

                     (i)     No later than 55 days after the end of each  fiscal
            quarter of the  Borrower,  the  following,  internally  prepared  by
            Borrower  and  certified  by  Borrower  to  be  true,  accurate  and
            complete:   (i)  an  operating  statement  showing  the  results  of
            operation  for the prior  quarter and a  year-to-date  basis for the
            period just ended, (ii) financial statements of Borrower prepared in
            accordance  with  GAAP,  or other  recognized  method of  accounting
            acceptable to Agent,  consistently applied, (iii) a statement of the
            Market Value of the Borrowing Base Eligible  Project Bonds as of the
            end of such fiscal quarter,  each in form and manner of presentation
            acceptable  to  Agent,   to  be  supplemented  by  such  detail  and
            supporting  data  and  schedules  as  Agent  may  from  time to time
            reasonably   determine,    and   (iv)   a   compliance   certificate
            substantially  in the form of  Exhibit  L  attached  hereto  with an
            attached  schedule  of  calculations  demonstrating  compliance,  or
            non-compliance, as the case may be, with the financial covenants set
            forth in Section 9.21, the Preferred Shares Covenants, and including
            worksheets  showing the  calculation  of the estimated fair value of
            its  investments in revenue bonds,  using the Revenue Bond Valuation
            Methodology;


                                      -45-
<PAGE>


                     (ii)    As soon as practicable,  but in any event not later
            than one hundred twenty (120) days after the end of each fiscal year
            of the  Borrower,  the  audited  consolidated  balance  sheet of the
            Borrower and the Borrower's  Subsidiaries (on a consolidated basis),
            and the related  audited  statements  of earnings and cash flows for
            such year,  each setting forth in  comparative  form the figures for
            the previous fiscal year and all such statements to be in reasonable
            detail,  prepared in accordance  with GAAP,  and  accompanied  by an
            auditor's  report prepared  without  qualification by an independent
            certified public accountant reasonably acceptable to the Agent.

            (c)   Data  Requested.  Within a reasonable  period of time and from
time to time,  such other  financial  data or information as Agent or any Lender
may reasonably request with respect to the Collateral, any Approved Project, any
Project Owner (provided, however, as to any Project Owner, the obligation of the
Borrower to provide such financial  data or information  shall be limited to the
extent the  Borrower  is  entitled to request (or to cause a Trustee to request)
such  financial  data or  information  from any  Project  Owner  pursuant to the
applicable  Bond  Documents),  or the Borrower,  including,  without  limitation
operating  statements,  occupancy reports, and Construction Reports with respect
to Approved Projects which secure Borrowing Base Eligible Project Bonds; and

            (d)   Approved Project  Financial  Information.  Within a reasonable
period of time after the receipt thereof,  copies of all insurance  certificates
with respect to each Approved Project,  any periodic  financial reports received
from a  Project  Owner  with  respect  to an  Approved  Project  as to which the
Eligible Project Bond is a Borrowing Base Eligible Project Bond.

      9.7   Existence; Conduct of Business. (a) The Borrower will do or cause to
be done all things  necessary  to preserve and keep in full force and effect its
existence as a Delaware statutory trust, (b) the Borrower will do or cause to be
done all things  necessary  to preserve and keep in full force all of its rights
and  franchises,  except  where such failure  would not have a material  adverse
effect on the business,  assets or financial condition of the Borrower,  and (c)
the  Borrower  will  only  engage  in  businesses  now  engaged  in  by  it  and
contemplated by its Constituent Documents.

      9.8   Projects; Collateral Bonds.

            (a)      So long as the  Borrower is the  Bondholder  Representative
      under the Custody  Agreement  (as  determined  in  accordance  pursuant to
      Section  10.3  hereof),  the  Borrower  shall  take all  reasonable  steps
      necessary  to  maintain,  preserve  and enforce the rights and  privileges
      available  to the  registered  owner of the Bond  Documents  relating to


                                      -46-
<PAGE>


      a Borrowing  Base  Eligible  Project Bond. To the extent that any proceeds
      thereof  are not  payable  directly  to the  Agent or the  Custodian,  the
      Borrower shall  promptly  deposit such proceeds  (other than,  provided no
      Default  or Event of  Default  then  exists,  to the  extent  constituting
      interest in respect of the subject  Borrowing Base Eligible  Project Bond)
      into the Cash  Collateral  Account,  to be held and  disbursed as provided
      herein.  Any such  proceeds as shall have been  received by the  Custodian
      shall be  distributed  as  provided  in the  Custodial  Agreement  and the
      applicable provisions of this Agreement.

            (b)      The  Borrower  shall  cause  the  Person  charged  with the
      responsibility  of preparing  closing  binders  containing  the documents,
      instruments  and agreements  executed and delivered in connection with the
      issuance of any Borrowing Base Eligible Project Bond  (including,  without
      limitation,  executed copies of the Bond Documents) to diligently  prepare
      such closing  binders and to deliver to the Agent and the Lenders,  as and
      when distributed to the Borrower, a complete set of such closing binders.

      9.9   Insurance.  Schedule 9.9 sets forth all presently existing insurance
maintained by the Borrower. The Borrower will maintain insurance with respect to
its business  operations,  and will cause each of its  Subsidiaries  to maintain
with financially  sound and reputable  insurers,  insurance with respect to such
properties and its business  against such casualties and  contingencies as shall
be in accordance  with the general  practices of  businesses  engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent.

      9.10  Taxes and Trade Debt.  The Borrower will, and will cause each of its
Subsidiaries  to, duly pay and  discharge,  or cause to be paid and  discharged,
before  the  same  shall  become  overdue,  all  taxes,  assessments  and  other
governmental  charges  imposed  upon  it and  its  real  properties,  sales  and
activities, or any part thereof, or upon the income or profits therefrom, except
for those taxes,  assessments  or charges which any such Person is contesting in
good faith by  appropriate  proceedings  and with  respect to which  appropriate
reserves have been established and are being maintained in accordance with GAAP.

      9.11  Compliance with Laws, Contracts, Licenses, and Permits.

            (a)      The  Borrower  will  comply with (x) all  applicable  Legal
      Requirements   now  or  hereafter  in  effect  wherever  its  business  is
      conducted, (y) the provisions of its Constituent Documents, and (z) all of
      its  Contractual   Obligations   (except  during  any  period  where  such
      compliance is not permitted by the terms of this Agreement), except to the
      extent  the  failure  to  comply  with any of the  foregoing  would not be
      reasonably expected to (x) materially  adversely effect the ability of the
      Borrower to perform its Obligations under any Loan Document, or (y) have a
      material  adverse  effect upon the  operations,  business,  properties  or
      financial  condition of the Borrower.  If at any time


                                      -47-
<PAGE>


      while any Obligation is outstanding,  any  Governmental  Authorization  or
      other third party  consents,  approvals,  or  notifications  shall  become
      necessary  or required in order that the  Borrower  may fulfill any of its
      obligations  hereunder,  the Borrower  will  promptly  take or cause to be
      taken all reasonable steps within the power of the Borrower to obtain such
      Governmental  Authorization  or other third party  consents and to provide
      such notifications, and furnish the Agent with evidence thereof.

            (b)      Without limiting the generality of subclause (a) above, and
      unless otherwise prohibited pursuant to the provisions of Section 9.21(f),
      the Borrower shall at all times comply with the Preferred Shares Covenants
      in effect as of the date  hereof and set forth on Exhibit M hereto,  which
      is  incorporated  by  reference  herein  and  made a  part  of  this  Loan
      Agreement.

      9.12  Indemnification  Against  Payment of  Brokers'  Fees.  The  Borrower
agrees to defend, indemnify and hold harmless the Agent and the Lenders from and
against  any and all  liabilities,  damages,  penalties,  costs,  and  expenses,
relating in any manner to any  brokerage or finder's fees in respect of the Loan
(except as resulting from any arrangements or agreements made with any broker or
finder by the Agent, the Lenders, or any Participant).

      9.13  Fiscal  Year.  The fiscal  year of the  Borrower  presently  ends on
December 31 of each year. If the Borrower or its Subsidiaries shall change their
fiscal  year end,  such Person  shall  promptly  furnish the Agent with  written
notice thereof.

      9.14  Deposit  of  Proceeds;  Disbursement  of Loan  Advances;  Other Bank
Accounts.  Borrower  shall  establish the Bond Purchase  Account,  the Repayment
Account,  the Operating  Account,  and the Cash  Collateral  Account with Agent.
Agent is hereby  authorized,  on or after the due date,  to charge the Repayment
Account with the amount of all payments due under this Loan Agreement,  the Note
or the other Loan  Documents.  The failure of Agent to so charge such  Repayment
Account  shall not affect or limit  Borrower's  obligation  to make any required
payment.  In addition,  at all times, each Lender may at its option from time to
time disburse an Advance to make payments (not sooner than the due date thereof)
of interest  or other  amounts  which are  payable to any of the Agent,  Agent's
counsel,  Lenders,  Lenders'  counsel,  or other  representatives  of any of the
Lenders, or to pay costs and expenses incurred by Agent or any of the Lenders in
the exercise of its rights and remedies following an Event of Default.

      9.15  Place for Records; Inspection. The Borrower, Charter Mac and Holding
Trust shall maintain all of their business  records at the address  specified in
Section  13.1  of  this  Loan  Agreement  with  respect  to the  Borrower.  Upon
reasonable  notice and at reasonable  times during normal  business  hours,  the
Agent and each Lender shall have the right  (through such agents or  consultants
as the Agent or any Lender may  designate) to examine the Borrower's and Charter
Mac's  property and make copies of and abstracts  from the  Borrower's,  Charter
Mac's and


                                      -48-
<PAGE>


Holding  Trust's  books of  account,  correspondence  and other  records  and to
discuss  their  respective  financial  and  other  affairs  with  any  of  their
respective senior officers and any accountants  hired by the Borrower,  it being
agreed that the Agent and each Lender shall hold such  information in confidence
in accordance with the provisions of Section 13.20 hereof. Any transferee of the
Loan or any holder of a  participation  interest in the Loan, or any participant
in or assignee of any Lender's  Commitment,  shall be entitled to deal with such
information in the same manner and in connection with any subsequent transfer of
its interest in the Loan or of further participation  interests therein, or by a
Lender of its interest in or a  participation  in its interest in such  Lender's
Commitment;   provided,   however,  any  such  Lender,  transferee,   holder  or
participant shall be bound by the confidentiality provisions of Section 13.20.

      9.16  Costs and  Expenses.  Whether or not the  transactions  contemplated
hereby shall be consummated,  the Borrower agrees to pay promptly,  but no later
than ten (10) days of the  Agent's  demand:  (i) all the actual  and  reasonable
out-of-pocket  costs and expenses of  preparation  of the Loan Documents and any
consents,  amendments,  waivers, or other modifications  thereto incurred by the
Agent and the Arrangers;  (ii) the reasonable fees, expenses,  and disbursements
of counsel to the Agent and the  Arrangers in connection  with the  negotiation,
preparation,  execution,  and  administration  of the  Loan  Documents  and  any
consents,  amendments,  waivers,  or other  modifications  thereto and any other
documents  or matters  requested  by the  Borrower;  (iii) all other  actual and
reasonable  out-of-pocket  costs  and  expenses  incurred  by the  Agent and the
Arrangers in connection with the  establishment  of the Loan, the syndication of
the  Commitments  and the  negotiation,  preparation,  and execution of the Loan
Documents and any consents, amendments,  waivers, or other modifications thereto
and the transactions contemplated thereby; and (iv) all reasonable out-of-pocket
expenses (including reasonable attorneys' fees and costs, which attorneys may be
employees  of the  Agent or any  Lender  and the fees and  costs of  appraisers,
brokers,  investment  bankers  or other  experts  retained  by the  Agent or any
Lender)  incurred  by the  Agent  or any  Lender  in  connection  with  (i)  the
enforcement of or preservation of rights under any of the Loan Documents against
the  Borrower  or any other  Person,  or the  administration  thereof,  (ii) any
refinancing or restructuring of the credit arrangements provided under this Loan
Agreement  in the  nature of a  "work-out"  or  pursuant  to any  insolvency  or
bankruptcy proceedings, and (iii) any litigation,  proceeding or dispute whether
arising  hereunder  or  otherwise,  in any way  related  to the  Agent's  or any
Lender's relationship with the Borrower, except to the extent arising out of the
Agent's or any Lender's  bad faith,  gross  negligence,  willful  misconduct  or
material  breach of this Loan Agreement or any other Loan  Document,  as finally
determined by a court of competent  jurisdiction.  The covenants of this Section
shall survive  payment or  satisfaction of payment of amounts owing with respect
to the  Obligations.  The amount of all such expenses  shall,  until paid,  bear
interest at the rate  applicable to principal  hereunder  (including the Default
Rate) and be an Obligation secured by any Collateral.


                                      -49-
<PAGE>


      9.17  Indemnification.  Borrower  shall  indemnify  and hold  harmless the
Agent  and  the  Lenders,  their  affiliates  and  their  respective  directors,
officers, agents, employees,  successors and assigns, and all those claiming by,
through or under the Agent and each of the Lenders  ("Indemnified  Party")  from
and  against  any and all  claims,  actions  and  suits  whether  groundless  or
otherwise,  and from and against any and all  liabilities,  losses,  damages and
expenses of every nature and character arising out of this Loan Agreement or any
of the other Loan Documents or the transactions  contemplated hereby ("Damages")
including,  without limitation (a) any actual or proposed use by the Borrower or
any of  their  Subsidiaries  of the  proceeds  of any of the  Advances,  (b) the
Borrower  or any of its  Subsidiaries  entering  into or  performing  this  Loan
Agreement  or any of the other Loan  Documents,  and/or (c) with  respect to the
Borrower and its Subsidiaries and their  respective  properties and assets,  the
violation of any Legal Requirement, in each case including,  without limitation,
the reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation,  litigation or other
proceeding;  provided,  however,  that no Indemnified Party shall be entitled to
indemnification  if a court of competent  jurisdiction  finally  determines (all
appeals  having been exhausted or waived) that such  Indemnified  Party acted in
bad faith, with willful misconduct, gross negligence, or material breach of this
Loan  Agreement  or any other  Loan  Document.  No  Indemnified  Party  shall be
entitled to settle or enter into any accommodation in respect of any such claim,
action or suit without the prior  written  consent of the Borrower (and that any
Indemnified Party so settling or accommodating  without such Borrower's  consent
shall not be entitled to indemnification  therefor),  and provided,  however, if
the  Borrower  shall  refuse to  provide  its  written  consent  to a  requested
settlement,  the Borrower shall, as collateral for potential payment of the full
amount of the claimed Damages, provide either a letter of credit in favor of the
Indemnified  Party,  on terms and conditions  satisfactory  to the Agent, in its
sole discretion, or, as cash collateral, cash or cash equivalents,  any of which
shall  be in  the  full  amount  of  the  claimed  Damages,  together  with  all
anticipated  costs  and  expenses  (including  reasonable  attorneys'  fees  and
expenses)  anticipated  by the  Agent,  in its sole  discretion,  to  accrue  in
connection with the defense and possible payment of the claimed Damages.  If the
Borrower  fails to provide such  required  collateral,  or fails to respond to a
request for a consent to a  settlement,  within five (5)  Business  Days of when
first requested by the Agent, the Indemnified  Party shall be entitled to settle
the claim as it proposed,  and the Borrower  shall be liable for the full amount
thereof  together with all related  Damages.  In litigation,  or the preparation
therefor,  the  Lenders  and the Agent  shall be  entitled  to select  their own
counsel and, in addition to the foregoing indemnity,  the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the extent
that the  Obligations of the Borrower under this Section 9.17 are  unenforceable
for any reason,  the Borrower hereby agrees to make the maximum  contribution to
the payment in  satisfaction  of such  Obligations  which is  permissible  under
applicable  law. The provisions of this Section 9.17 shall survive the repayment
of the Loan and the  termination of the obligations of the Lenders and the Agent
hereunder.


                                      -50-
<PAGE>


      9.18  Replacement  Documentation.  Upon  receipt  of  an  affidavit  of an
officer of (x) a Lender as to the loss, theft, destruction or mutilation of such
Lender's  Note, or (y) the Agent as to any other Loan  Document  which is not of
public  record,  and,  in the  case of any  such  loss,  theft,  destruction  or
mutilation, upon surrender and cancellation of such Note or other Loan Document,
Borrower will promptly issue, in lieu thereof,  a replacement Note or other Loan
Document which shall be, as applicable, in the same principal amount thereof and
otherwise of like tenor.

      9.19  Revenue  Bond  Valuation  Methodology.  For the purpose of financial
statement  presentation,  the  Borrower  will  estimate  the  fair  value of its
investments in revenue bonds using the Revenue Bond Valuation  Methodology or as
may be  required  to be  modified  by changes in GAAP,  and will not  materially
deviate  from such  methodology.  The  Borrower  shall  notify  the Agent of any
changes in GAAP  which  would  require a change in the  Revenue  Bond  Valuation
Methodology.

      9.20  Further Assurances. The Borrower will cooperate with, and will cause
each of its  Subsidiaries  to  cooperate  with,  the Agent and the  Lenders  and
execute such further instruments and documents as the Lenders or the Agent shall
reasonably   request  to  carry  out  to  their  satisfaction  the  transactions
contemplated by this Loan Agreement and the other Loan Documents.

      9.21  Negative Covenants. The Borrower covenants and agrees, from the date
hereof  and so long as the  Loan or other  Obligations  remain  outstanding,  as
follows:

            (a)      Liens.  The  Borrower  will not, and will not permit any of
      its Subsidiaries to, create, incur or assume any Lien upon or with respect
      to any  Collateral,  except  for any  subordinate  Lien to which the Agent
      (with the approval of the Lenders) has consented in writing.

            (b)      Merger;  Sale of Assets. The Borrower will not be, and will
      not permit Charter Mac to be, a party to any merger or  consolidation,  or
      purchase or otherwise  acquire all or  substantially  all of the assets or
      any  stock of any class of, or any  partnership,  joint  venture  or other
      equity interest in, any other Person, or sell, transfer,  convey, or lease
      (in one transaction or a series of transactions)  all or substantially all
      of its assets (x) if, after giving effect to the  occurrence of any of one
      (1) of the foregoing  events, a Change of Control with respect to Borrower
      or Charter  Mac, as the case may be,  shall  occur,  (y) if the  aggregate
      value of the assets of Borrower or Charter  Mac, as the case may be, which
      are to be sold,  transferred,  conveyed or leased  (after giving effect to
      the value of any  assets  which were the  subject  of any sale,  transfer,
      conveyance or lease which may have  previously  permitted  pursuant to the
      terms and conditions of this Loan Agreement) exceeds  twenty-five  percent
      (25%) of total  value of all the assets  (calculated  in  accordance  with
      GAAP) of such  Person  prior to  giving  effect  to such  sale,  transfer,
      conveyance  or  lease  transaction,  and  (z)  if,  in  the  case  of  any
      acquisition of the assets or any


                                      -51-
<PAGE>


stock of any  class  of,  or any  partnership,  joint  venture  or other  equity
interest in, any other Person which is engaged in (x) a business  which is not a
business  in which  Borrower or Charter  Mac,  as the case may be, is  currently
engaged  or  (y)  a  business  which  is  not a  business  contemplated  by  the
Constituent  Documents  of  Borrower  or  Charter  Mac,  as the case may be (the
"Acquired Assets"), the aggregate value of such Acquired Assets shall not exceed
five percent (5%) of value of the total assets  (calculated  in accordance  with
GAAP) of such Person prior to giving effect to the  acquisition  of the Acquired
Assets.

            (c)      Loans  and  Advances.  The  Borrower  will not and will not
      permit  any of its  Subsidiaries  to,  make any loans or  advances  to any
      Person other than in connection  with the funding of bonds in the ordinary
      course and advances to the  Borrower's or its  Subsidiaries'  employees in
      the ordinary course of business for reasonable  expenses to be incurred by
      such employees for the benefit of the Borrower or such Subsidiaries.

            (d)      Limits  on  Changes   to   Approved   Projects;   Consents,
      Ratifications,  Waivers and Changes to Bond Documents,  Etc. The Borrower,
      as Bondholder Representative,  will not, and will not direct or permit the
      Custodian  to,  permit,  cause or  consent  to,  any  change to be made or
      suffered  to  any  Approved  Project,   grant  or  withhold  any  consent,
      ratification  or waiver or otherwise  take,  fail to take, or refrain from
      taking,  any action  permitted  by, or exercise  any right or remedy under
      (other than the collection of payments  thereunder in accordance  with the
      terms thereof),  the provisions of any Bond Documents relating to any such
      Borrowing Base Eligible  Project Bonds, or permit any change to be made to
      any Bond Documents  relating to any Borrowing  Base Eligible  Project Bond
      (individually and collectively, a "Bond Action"), unless:

                     (i)     if   such   Bond   Action,   in  the   good   faith
            determination  of the  Borrower,  is not a Major  Bond  Action,  the
            Borrower  shall  have  provided  the  Agent  and  the  Lenders  with
            reasonably contemporaneous notice of such Bond Action, together with
            an explanation therefor and copies of any documents, instruments, or
            agreements relating to such Bond Action; and

                     (ii)    if such Bond Action is a Major Bond Action (unless,
            in the good faith  reasonable  judgement of the Borrower  such Major
            Bond  Action  is  being  taken to avoid  an  immediate  threat  of a
            material loss in the value of the affected  Borrowing  Base Eligible
            Project Bond or the related  Approved  Project,  in which event such
            action  shall be treated as a Bond Action  which is not a Major Bond
            Action) such action is being taken by the  Borrower,  the  following
            have occurred:

                             (1)      the Borrower shall have first provided the
                     Agent and the Lenders with  written  notice of its intended
                     Major  Bond  Action  together  with  information  which the
                     Borrower  believes,  in good faith, is sufficient to enable
                     the Agent  and the  Lenders  to  reasonably  determine  the
                     impact of


                                      -52-
<PAGE>


                     such proposed  Major Bond Action on the affected  Borrowing
                     Base  Eligible  Project Bond and to determine its pro forma
                     Post-Bond  Action   Collateral  Value  and  copies  of  all
                     proposed documentation to implement the intended Major Bond
                     Action;

                             (2)      within  ten  (10)   Business   Days  after
                     receipt of such notice, information and documentation,  the
                     Agent shall have either (x) notified the Borrower  that the
                     Agent and the Lenders have  determined  that the  Post-Bond
                     Action  Collateral  Value of the  affected  Borrowing  Base
                     Eligible Project Bond immediately after the  implementation
                     of the  intended  Major Bond Action will be the same as its
                     Collateral Value immediately  before the  implementation of
                     the  intended   Major  Bond  Action   (provided  that  such
                     implementation  is completed  within  forty-five  (45) days
                     after the notice to the Agent and the  Lenders,  or, if not
                     completed,  is being diligently  pursued),  or (y) notified
                     the Borrower of the Post-Bond Action Collateral Value which
                     the Lenders  intend to  attribute  to such  Borrowing  Base
                     Eligible   Project   Bond  after   giving   effect  to  the
                     implementation  of  the  proposed  Major  Bond  Action.  If
                     Section 3.5(i)(i) would apply on a pro forma basis based on
                     the  Post-Bond  Action  Collateral  Value  of the  affected
                     Borrowing Base Eligible Project Bond, prior to implementing
                     the Major Bond Action the  Borrower  shall comply with such
                     Section, and, upon the completion of the Major Bond Action,
                     the  Borrower  shall  provide  the Agent  and the  Lenders,
                     reasonably  contemporaneously when executed, with copies of
                     any and all documents,  instruments and agreements executed
                     and delivered by any Persons in connection  with such Major
                     Bond Action.  If the Agent does not respond to the Borrower
                     within the ten (10)  Business  Day period  provided  above,
                     then,  until notice is otherwise  given by the Agent (which
                     notice must be given within thirty (30) days of the Agent's
                     receipt of the notice  relating to such proposed Major Bond
                     Action),  the  Post-Bond  Action  Collateral  Value  of the
                     affected  Borrowing Base Eligible  Project Bond immediately
                     after the  implementation of the intended Major Bond Action
                     will be the same as its Collateral Value immediately before
                     the  implementation  of the  intended  Major  Bond  Action.
                     Nothing  contained  herein  shall be deemed to derogate the
                     Agent's and the Lender's rights to calculate the Collateral
                     Value of the  Borrowing  Base  Eligible  Project Bonds from
                     time to time as provided for in Section 3.2(c) hereof.

            (e)      Modifications of Servicing Agreement. The Borrower will not
permit any material  change to be made to the  Servicing  Agreement  without the
prior written consent of the Agent (with the approval of the Lenders).


                                      -53-
<PAGE>


            (f)      Distributions.  So long as a Default or an Event of Default
has  occurred  and is  continuing,  the  Borrower  will not make any payments or
distributions to any Person on account of the Borrower's Equity Interests.

            (g)      Affiliate Indebtedness. So long as a Default or an Event of
Default has occurred and is continuing,  the Borrower will not make any payments
to any  Affiliate  on account of any  Indebtedness  owed by the  Borrower to any
Affiliate.

            (h)      Distribution  of Project Owner Equity  Funds.  The Borrower
shall not direct or permit any Trustee to  disburse  any  Project  Owner  Equity
Funds to the Project Owner  without the prior  written  consent of the Agent and
the Lenders, except to the extent such disbursement is required to be made under
the applicable Bond Documents.

      9.22  Borrower Financial Covenants.

            (a)      Adjusted  Tangible Net Worth. For so long as any Obligation
or any portion thereof remains unpaid,  the Borrower shall at all times maintain
(to be tested as of the last day of each  fiscal  quarter,  commencing  with the
Borrower's fiscal quarter ending March 31, 2003) a minimum Adjusted Tangible Net
Worth  of not less  than the sum of (i)  $375,000,000,  plus  (ii)  seventy-five
percent  (75%) of the offering  proceeds of any  issuances  of Equity  Interests
after  January  1,  2003 (net of the costs and  expenses  actually  incurred  by
Borrower in connection with such equity issuances).

            (b)      Fixed Charges. For so long as any Obligation or any portion
thereof  remains  unpaid,  the  Borrower  shall  not  permit  the  ratio  of its
consolidated (i) Adjusted EBITDA, divided by (ii) Fixed Charges, to be less than
2.5 to 1.0,  for any  fiscal  quarter  (to be  tested as of the last day of each
fiscal quarter,  commencing with the Borrower's  fiscal quarter ending March 31,
2003).

            (c)      Facility Debt Service  Coverage  Ratio.  The Borrower shall
not permit the Facility Debt Service  Coverage Ratio at any time to be less than
1.75 : 1.0. The foregoing  covenant shall be tested  quarterly,  commencing with
the Borrower's fiscal quarter ending March 31, 2003.

SECTION 10. EVENTS OF DEFAULT.   The  following  provisions  deal with Events of
Default  and  certain  rights of Agent  and the  Lenders  following  an Event of
Default.

      10.1  Events of Default. Each of the following events, unless cured within
any applicable grace period set forth or referred to below in this Section 10.1,
shall constitute an "Event of Default."


                                      -54-
<PAGE>



      (a)   Failure to Pay.

            (i)      The Borrower  shall fail to pay any  principal or any other
      Obligation  (except for  interest  as provided  for below) as and when the
      same shall become due and payable; or

            (ii)     The Borrower  shall fail to pay any interest under the Loan
      within three (3) days of when the same is due and payable.

      (b)   Failure to Perform.  The  Borrower  shall fail to comply with any of
its other agreements and covenants contained herein or any of the agreements and
covenants  contained in any other Loan  Documents  and which are not  referenced
herein;

      (c)   Breach of Representation or Warranty. Any representation or warranty
of the Borrower in this Loan Agreement or any of the other Loan Documents  shall
have been  false in any  material  respect  upon the date when made or deemed to
have been made or repeated;

      (d)   Failure  to  Pay  other  Indebtedness.  The  Borrower  or any of its
Subsidiaries  shall fail to pay at maturity,  or within any applicable period of
grace, or otherwise  default under,  any obligation for borrowed money or credit
received  in excess of  $5,000,000.00,  as a result of which the  holder of such
Indebtedness  could  accelerate  the  time  for  payment  of such  Indebtedness,
notwithstanding  that such  acceleration has not occurred (unless such Person is
contesting the existence of any such alleged default and has fully reserved,  in
cash or cash equivalents, the full amount of the subject Indebtedness);

      (e)   Insolvency.  The Borrower or any of its  Subsidiaries  shall make an
assignment  for the benefit of  creditors,  or admit in writing its inability to
pay or  generally  fail to pay its debts as they  mature or become due, or shall
petition  or  apply  for  the  appointment  of a  trustee  or  other  custodian,
liquidator  or receiver of the  Borrower  or any of its  Subsidiaries  or of any
substantial  part of the assets of the  Borrower or any of its  Subsidiaries  or
shall commence any case or other  proceeding  relating to the Borrower or any of
its Subsidiaries under any bankruptcy, reorganization,  arrangement, insolvency,
readjustment  of  debt,  dissolution  or  liquidation  or  similar  law  of  any
jurisdiction,  now or hereafter in effect, or shall take any action to authorize
or in  furtherance  of  any  of  the  foregoing,  or if  any  such  petition  or
application  shall  be  filed or any  such  case or  other  proceeding  shall be
commenced  against the Borrower or any of its  Subsidiaries  and the Borrower or
any of its Subsidiaries shall indicate its approval thereof,  consent thereto or
acquiescence therein;

      (f)   Involuntary Proceedings.  The filing of any case or other proceeding
against  the  Borrower  or  any  of  its  Subsidiaries   under  any  bankruptcy,
reorganization,


                                      -55-
<PAGE>


arrangement,  insolvency,  readjustment  of debt,  dissolution or liquidation or
similar law of any  jurisdiction,  now or  hereafter  in effect and such case or
proceeding is not  controverted  within ten (10) days or dismissed  within sixty
(60) days of its commencement;  a decree or order is entered appointing any such
trustee, custodian,  liquidator or receiver, or adjudicating the Borrower or any
of its Subsidiaries  bankrupt or insolvent,  or approving a petition in any such
case or other proceeding;  or a decree or order for relief is entered in respect
of the Borrower or any Subsidiary of the Borrower,  in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;

      (g)   Judgments.  There shall remain in force,  undischarged,  unsatisfied
and unstayed,  for more than forty-five (45) days,  whether or not  consecutive,
any uninsured  final  judgment  against the Borrower or any of its  Subsidiaries
that, with other outstanding  uninsured final judgments,  undischarged,  against
the Borrower or any of its Subsidiaries exceeds in the aggregate $5,000,000;

      (h)   Cancellation of Loan  Documents.  If any of the Loan Documents shall
be canceled,  terminated,  revoked or rescinded or any action at law, suit or in
equity or other legal  proceeding  to cancel,  revoke or rescind any of the Loan
Documents  shall be  commenced  by or on  behalf of the  Borrower  or any of its
Subsidiaries,  or any court or any other governmental or regulatory authority or
agency of competent  jurisdiction  shall make a  determination  that, or issue a
judgment,  order,  decree or ruling to the effect  that,  any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;

      (i)   ERISA.  With respect to any ERISA Plan,  an ERISA  Reportable  Event
shall have  occurred and (i) a trustee  shall have been  appointed by the United
States  District  Court to  administer  such  Plan;  or (ii) the PBGC shall have
instituted   proceedings  to  terminate  such  Guaranteed  Pension  Plan  (which
termination  proceedings could result in liability of the Borrower or any of its
Subsidiaries to the PBGC in excess of $250,000;

      (j)   Indictment. The Borrower, Charter Mac, Holding Trust or any of their
respective  Subsidiaries shall be indicted for a federal crime, a punishment for
which  could  include  the  forfeiture  of any  assets of the  Borrower  or such
Subsidiaries;

      (k)   Material Adverse Change.  There shall have occurred any change in or
to  the  assets,  liabilities,  financial  condition,  business  operations,  or
prospects of the Borrower and its Subsidiaries,  taken as a whole,  which change
materially  adversely affects the Borrower's  ability to perform its obligations
under this Loan Agreement or the other Loan Documents;

      (l)   Change in Control.  The  occurrence of a Change in Control of either
the Borrower or Charter Mac or Holding Trust;


                                      -56-
<PAGE>


      (m)   Regarding  Charter Mac and Holding  Trust.  The occurrence of any of
the foregoing  Events of Default  described in  subsections  (c), (d), (e), (f),
(g), (i), (j) or (k) above,  with respect to Charter Mac or Holding Trust, as if
either of such Persons were the "Borrower" described therein;

      (n)   Charter Mac Covenants.  Charter Mac shall fail to comply with any of
the Charter Mac Covenants;

      (o)   Mortgage Warehousing Facility. The occurrence of an event of default
(however defined or described) under the Mortgage Warehousing Facility;

      (p)   Acquisition  Line  Facility.  The  occurrence of an event of default
(however defined or described) under the Acquisition Line Facility;

      (q)   Reimbursement  Agreement.  The  occurrence  of an event  of  default
(however defined or described) under the Reimbursement Agreement; or

      (r)   Failure  to Pay  Dividends.  Subject  to the  provisions  of Section
9.21(f) above,  the Borrower shall fail to pay, as and when the same become due,
any  dividends  required  to be paid to the holders of the  Preferred  Shares in
accordance  with  the  terms  and  conditions  of  the  Borrower's   Constituent
Documents.

      10.2  Written  Waivers.  If a Default  or an Event of Default is waived by
the  Lenders,  in  accordance  with  the  applicable  provisions  of  this  Loan
Agreement,  their sole  discretion,  pursuant to a specific  written  instrument
executed by an authorized  officer of Agent,  the Default or Event of Default so
waived shall be deemed to have never occurred.

      10.3  Remedies.

            (a)      If an Event of  Default  described  in  Section  10.1(e) or
      10.1(f)  occurs  with  respect  to  the  Borrower,   the  Commitment  will
      automatically  terminate  and the unpaid  principal  amount of and accrued
      interest  on the  Loan  and  all  other  Obligations  (including,  without
      limitation,   those   amounts   contemplated   by  Section   3.5(p))  will
      automatically become due and payable, without presentment, demand or other
      requirements of any kind, all of which each Borrower expressly waives.

            (b)      If any other  Event of Default  occurs  and is  continuing,
      Agent may,  and, at the  direction of the  Requisite  Lenders,  shall,  by
      notice to Borrower,  terminate the Commitments and declare the Obligations
      to be immediately due and payable.


                                      -57-
<PAGE>


            (c)      If an Event of Default occurs and is continuing,  the Agent
      may, and, at the direction of the Requisite  Lenders,  shall,  also at any
      time and from time to time,  take any,  all,  or any  combination,  of the
      following actions:

                     (i)     Foreclose  upon or  otherwise  enforce its security
            interest in and the Lien on the  Collateral  to secure all  payments
            and performance of the Obligations in any manner permitted by law or
            provided for in the Loan Documents.

                     (ii)    Exercise    all    rights    as   the    Bondholder
            Representative  under  the  Custodial  Agreement,   including,   for
            purposes  of  illustration  only  and  not in any way  limiting  the
            Agent's rights, taking the following actions:

                             (1)      notifying the Custodian that the Agent has
                     become the Bondholder  Representative,  to the exclusion of
                     the Borrower;

                             (2)      upon  the   occurrence   and   during  the
                     continuation  of a Bond  Document  Default  such  that  the
                     Custodian,  acting  on  the  direction  of  the  Bondholder
                     Representative,  could (but for any  provision of this Loan
                     Agreement)  cause a  Project  Letter of Credit to be drawn,
                     and  subject  to  the   provisions  of  the  relevant  Bond
                     Documents,  the Agent shall have the  authority to instruct
                     Custodian  to direct  the Bond  Trustee  to draw  under any
                     Project  Letter of Credit  relating to the subject  Pledged
                     Bond,  the maximum  amount  permitted  thereby,  unless all
                     Lenders instruct the Agent to the contrary. The proceeds of
                     such  drawing  shall  be  applied  to  the  Obligations  as
                     provided in Section12.2(d); or

                             (3)      causing any Pledged Bond to be  registered
                     in  the  name  of the  Agent  (in  its  capacity  as  Agent
                     hereunder)  and  exercising  any  and  all  rights  of  the
                     registered  owner with respect thereto and all related Bond
                     Documents.

                     (iii)   Notify  all  obligors  under any of the  Collateral
            that the Collateral has been assigned to Agent (or to another Person
            designated by Agent) and that all payments on that Collateral are to
            be made directly to Agent (or such other Person);  collect,  settle,
            compromise, adjust, or release, in whole or in part, any amounts any
            Person  owes on or in  respect  of any of the  Collateral  on  terms
            acceptable  to Agent  and the  Requisite  Lenders;  take any and all
            steps in the name of the Borrower to enforce  payment and  prosecute
            and/or  defend  any  action  or  proceeding  involving  any  of  the
            Collateral;  and where any Collateral is in default, foreclose on or
            repossess, and/or otherwise enforce any Liens securing, that


                                      -58-
<PAGE>


            Collateral  in any  manner  permitted  by law and sell any  property
            acquired as a result of those enforcement actions.

                     (iv)    To receive,  take, endorse,  assign and deliver all
            checks,   notes,   drafts,   acceptances,   documents,   and   other
            instruments,  documents  and chattel paper in respect of any Pledged
            Bonds and other Collateral.

                     (v)     Require  Borrower to assemble and make available to
            Agent the  Collateral  and all related  books and records at a place
            designated by Agent.

                     (vi)    Enter onto property where any Collateral or related
            books and records are  located  and take  possession  of those items
            with or without  judicial  process;  and obtain access to Borrower's
            data processing  equipment,  computer hardware and software relating
            to the Collateral  and use all of the foregoing and the  information
            contained  in the  foregoing in any manner Agent or the Lenders deem
            necessary  for the purpose of  effectuating  their rights under this
            Agreement and any other Loan Document.

                     (vii)   Before the disposition of the  Collateral,  prepare
            it for  disposition  in any manner and to the extent the Agent deems
            appropriate.

                     (viii)  Exercise  all  rights  and  remedies  of a  secured
            creditor under the UCC or other applicable law,  including,  without
            limitation,  selling or otherwise disposing of all or any portion of
            the  Collateral at one or more public or private  sales,  whether or
            not the  Collateral  is  present  at the place of sale,  for cash or
            credit or  future  delivery,  on the terms and in the  manner as the
            Agent may determine.  The Borrower waives any right the Borrower may
            have  to  prior  notice  of the  sale of all or any  portion  of the
            Collateral  to the extent  allowed by  applicable  law. If notice is
            required under  applicable law, the Agent will give the Borrower not
            less than 10 days'  notice of any  public  sale or of the date after
            which any  private  sale may be held.  The  Borrower  agrees that 10
            days' notice is reasonable  notice. The Agent may, without notice or
            publication, adjourn any public or private sale one or more times by
            announcement  at the time and place fixed for the sale, and the sale
            may be held at any time or place  announced at the  adjournment.  In
            the case of a sale of all or any portion of the Collateral on credit
            or for future  delivery,  the Collateral  sold on those terms may be
            may be retained by the Agent  until the  purchaser  pays the selling
            price or takes possession of the Collateral. The Agent shall have no
            liability  to the  Borrower if a purchaser  fails to pay for or take
            possession of the Collateral  sold on those terms,  and, in the case
            of any such failure,  the Agent may sell the  Collateral  again upon
            notice (if and to the extent  required by applicable  law) complying
            with this Section.


                                      -59-
<PAGE>


                     (ix)    Instead of or in  conjunction  with  exercising the
            power of sale authorized by Section  10.3(c) (viii),  the Agent may,
            and, at the direction of the Requisite  Lenders,  shall,  proceed by
            suit at law or in  equity  to  collect  all  amounts  due  upon  the
            Collateral,  or to foreclose the Agent's Lien on, all or any portion
            of the Collateral.

                     (x)     Proceed against the Borrower on the Notes.

                     (xi)    Retain all excess  proceeds  from the sale or other
            disposition of the Collateral,  and apply them to the payment of the
            Obligations under Section 12.2(d).

            (d)      The Agent and the  Lenders  will  incur no  liability  as a
      result of the commercially  reasonable sale or other disposition of all or
      any  portion of the  Collateral  at any  public or  private  sale or other
      disposition.  The  Borrower  waives (to the extent  permitted  by law) any
      claims it may have  against the Agent or the Lenders  arising by reason of
      the fact that the price at which  the  Collateral  may have been sold at a
      private  sale was less than the price that Agent might have  obtained at a
      public  sale,  or was less than the  aggregate  amount of the  outstanding
      Advances,  plus accrued and unpaid  interest on the  Advances,  and unpaid
      fees,  even if the Agent  accepts  the first offer  received  and does not
      offer the  Collateral to more than one offeree.  The Borrower  agrees that
      any  disposition of Collateral  arranged by the Borrower (and consented to
      by the  Agent  and the  Requisite  Lenders),  whether  before or after the
      occurrence  of an Event of Default,  will be deemed to have been made in a
      commercially reasonable manner.

            (e)      The  Borrower  specifically  waives  and  releases  (to the
      extent  permitted  by law) any  equity  or right  of  redemption,  stay or
      appraisal  that  the  Borrower  has or may have  under  any rule of law or
      statute now existing or adopted after the date of this Loan Agreement, and
      any right to require the Agent or the  Lenders to (1) proceed  against any
      Person, (2) proceed against or exhaust any of the Collateral or pursue its
      rights and remedies against the Collateral in any particular order, or (3)
      pursue any other right or remedy within its or the Lenders' power.

            (f)      Lenders may, but are not obligated to,  advance any sums or
      do any act or thing  necessary  to uphold or enforce the Lien and priority
      of, or the security  intended to be afforded by the Collateral,  including
      payment of delinquent  taxes or assessments  and insurance  premiums.  All
      advances,  charges,  costs and expenses,  including reasonable  attorneys'
      fees and disbursements, incurred or paid by Agent or Lenders in exercising
      any  right,  power  or  remedy  conferred  by  this  Agreement,  or in the
      enforcement of this Agreement,  together with interest on those amounts at
      the Default Rate, from the time


                                      -60-
<PAGE>


      paid by Agent or  Lenders  until  repaid  by  Borrower,  are  deemed to be
      principal outstanding under this Agreement and the Notes.

            (g)      No  failure or delay on the part of Agent to  exercise  any
      right,  power or remedy provided in this Agreement or under any other Loan
      Document,  at law or in equity,  will  operate as a waiver of that  right,
      power or  remedy.  No single or  partial  exercise  by Agent of any right,
      power or remedy  provided under this Agreement or any other Loan Document,
      at law or in  equity,  precludes  any other or  further  exercise  of that
      right,  power, or remedy by Agent, or Agent's exercise of any other right,
      power or remedy. Without limiting the foregoing,  each Borrower waives all
      defenses based on the statute of  limitations  to the extent  permitted by
      law. The remedies  provided in this Agreement and the other Loan Documents
      are cumulative and are not exclusive of any remedies provided at law or in
      equity.

            (h)      For the purpose of  exercising  the rights  granted by this
      Section 10, as well as any and all other  rights and remedies of the Agent
      or the Lenders,  the Borrower hereby irrevocably  constitutes and appoints
      the  Agent  (or  any  agent  or  officer  thereof),  with  full  power  of
      substitution,  its true and lawful attorney-in-fact,  exercisable upon and
      during  the  continuation  of any Event of  Default,  with full  power and
      authority  of the  Borrower,  to  execute,  acknowledge  and  deliver  any
      documents,  instruments,   agreements,  notices,  instructions,  or  other
      papers,  and to do and  perform  any  acts in the name  and on  behalf  of
      Borrower  which may be necessary or desirable (as determined by the Agent,
      which  determination shall be conclusive as to the Borrower) to accomplish
      the purposes of this Agreement,  including, without limitation, to realize
      on, and to stand in the place of the  Borrower  under and with respect to,
      any and all Collateral granted hereunder.

SECTION 11. SECURITY INTEREST AND SET-OFF.

      11.1  Security Interest.  Borrower  hereby grants to Agent and each of the
Lenders,  a lien,  security  interest  and right of setoff as  security  for all
Obligations to Agent and each of the Lenders,  whether now existing or hereafter
arising,  upon and against the Repayment Account, the Bond Purchase Account, and
the Cash Collateral  Account and all proceeds thereof and sums and property from
time to time deposited therein or credited thereto.

      11.2  Set-Off.  If any  payment is not made when due under any of the Loan
Documents,  after giving regard to applicable  grace periods,  if any, or if any
Event of Default or other event which would  entitle Agent or any of the Lenders
to  accelerate  the Loan  occurs,  any such  deposits,  balances  or other  sums
credited by or due from Agent or any of the  Lenders,  or from any  affiliate of
Agent  or any of the  Lenders,  to  Borrower  may  to  the  fullest  extent  not
prohibited by applicable law at any time or from time to time, without regard to
the  existence,  sufficiency  or adequacy of any other  collateral,  and without
notice or compliance with any other condition


                                      -61-
<PAGE>


precedent now or hereafter imposed by statute, rule of law or otherwise,  all of
which are hereby waived,  be set off,  appropriated and applied by Agent or such
Lender  or  affiliate  thereof  against  any or all  of  Borrower's  Obligations
irrespective   of  whether  demand  shall  have  been  made  and  although  such
obligations  may be  unmatured,  in such  manner  as  Agent  or such  Lender  or
affiliate  thereof in such Person's sole and absolute  discretion may determine.
Within  five (5)  Business  Days of making  any such set off,  appropriation  or
application,  Agent or the applicable  Lender agrees to notify Borrower thereof,
provided  the failure to give such notice  shall not affect the validity of such
set off or appropriation or application.  ANY AND ALL RIGHTS TO REQUIRE AGENT OR
ANY  LENDER  TO  EXERCISE  ITS  RIGHTS OR  REMEDIES  WITH  RESPECT  TO ANY OTHER
COLLATERAL  WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS,  CREDITS OR OTHER PROPERTY OF THE BORROWER, ARE HEREBY
KNOWINGLY,  VOLUNTARILY AND IRREVOCABLY  WAIVED. Each of the Lenders agrees with
each  other  Lender  that (a) if an  amount  to be set off is to be  applied  to
indebtedness  of the  Borrower  to  such  Lender,  other  than  the  Obligations
evidenced by the Note held by such Lender,  such amount shall be applied ratably
to such other indebtedness and to the Obligations  evidenced by the Note held by
such Lender, and (b) if such Lender shall receive from the Borrower,  whether by
voluntary payment, exercise of the right of setoff, counterclaim,  cross action,
enforcement  of  the  claim  evidenced  by the  Note  held  by  such  Lender  by
proceedings  against  the  Borrower  at law or in equity or by proof  thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise,  and shall  retain and apply to the  payment of the Note held by such
Lender any amount in excess of its ratable  portion of the payments  received by
all of the Lenders with  respect to the Notes held by all of the  Lenders,  such
Lender will make such disposition and  arrangements  with the other Lenders with
respect to such excess,  either by way of distribution,  pro tanto assignment of
claims,  subrogation  or otherwise  as shall result in each Lender  receiving in
respect of the Note held by it its proportionate payment as contemplated by this
Loan  Agreement;  provided  that if all or any part of such  excess  payment  is
thereafter  recovered from such Lender,  such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but without
interest.

      11.3  Additional Rights.  The rights of the Agent,  the Lenders,  and each
affiliate of the Agent and the Lenders under this Section 11 are in addition to,
and not in limitation of, other rights and remedies,  including  other rights of
set off, which the Agent or any of the Lenders may have.

SECTION 12. THE AGENT AND THE LENDERS.

      12.1  Rights, Duties and Immunities of the Agent.

            (a)      Appointment  of  Agent.  Each  Lender  hereby   irrevocably
designates  and appoints  Fleet  National Bank as Agent of such Lender to act as
specified  herein and in the other


                                      -62-
<PAGE>


Loan Documents,  and each such Lender hereby irrevocably authorizes the Agent to
take such actions, exercise such powers and perform such duties as are expressly
delegated to or conferred upon the Agent by the terms of this Loan Agreement and
the other Loan  Documents,  together  with such other  powers as are  reasonably
incidental thereto.  The Agent agrees to act as such upon the express conditions
contained  in  this  Section  12.  The  Agent  shall  not  have  any  duties  or
responsibilities  except those  expressly  set forth herein or in the other Loan
Documents,  nor shall it have any fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this  Loan  Agreement  or  otherwise  exist  against  the  Agent.  The
provisions  of this Section 12.1 are solely for the benefit of the Agent and the
Lenders, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions  hereof. The Agent shall at all times be a Lender which
holds a Commitment of at least $20,000,000.00.

            (b)      Syndication  Agent  and  Co-Lead  Arrangers.  Each  of  the
Syndication  Agent and Arrangers  (collectively,  the " Titled  Agents") in each
such respective  capacity,  assumes no responsibility  or obligation  hereunder,
including,  without limitation, for servicing,  enforcement or collection of any
of the Loans,  nor any duties as an agent hereunder for the Lenders.  The titles
of "Co-Lead Arranger" and "Syndication  Agent" are solely honorific and imply no
fiduciary  responsibility  on the part of the Titled  Agents to the  Agent,  the
Borrower  or any Lender and the use of such titles does not impose on the Titled
Agents  any duties or  obligations  greater  than  those of any other  Lender or
entitle  the  Titled  Agents to any  rights  other than those to which any other
Lender is entitled.

            (c)      Administration  of  Loan  by  Agent.  The  Agent  shall  be
responsible for administering the Loan on a day-to-day basis. In the exercise of
such administrative  duties, the Agent shall use the same diligence and standard
of care that is customarily used by the Agent with respect to similar loans held
by the Agent solely for its own account.  Each Lender delegates to the Agent the
full right and authority on its behalf to take the following specific actions in
connection with its administration of the Loan:

                     (i) to fund the Loan in accordance  with the  provisions of
            the Loan Documents,  but only to the extent of immediately available
            funds  provided  to the  Agent by the  respective  Lenders  for such
            purpose;

                     (ii) to receive all payments of principal,  interest,  fees
            and other charges paid by, or on behalf of, the Borrower and, except
            for  fees to  which  the  Agent  is  entitled  pursuant  to the Loan
            Documents  or  otherwise,  to  distribute  all  such  funds  to  the
            respective Lenders as provided for hereunder;

                     (iii) to keep and maintain  complete and accurate files and
            records of all material  matters  pertaining  to the Loan,  and make
            such files and records  available


                                      -63-
<PAGE>


            for  inspection  and  copying  by each  Lender  and  its  respective
            employees and agents during normal  business  hours upon  reasonable
            prior notice to the Agent; and

                     (iv) to do or omit doing all such  other  actions as may be
            reasonably    necessary   or   incident   to   the   implementation,
            administration  and  servicing of the Loan and the rights and duties
            delegated hereinabove described.

            (d)      Delegation  of  Duties.  The Agent may  execute  any of its
duties under this Loan  Agreement  or any other Loan  Document by or through its
agents or  attorneys-in-  fact,  and shall be  entitled to the advice of counsel
concerning  all matters  pertaining to its rights and duties  hereunder or under
the Loan  Documents.  The Agent shall not be  responsible  for the negligence or
misconduct  of any agents or  attorneys-in-fact  selected by it with  reasonable
care.

            (e)      Exculpatory  Provisions.  Neither  the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
liable for any action  lawfully taken or omitted to be taken by it or them under
or in connection  with this Loan Agreement or the other Loan  Documents,  except
for its or their gross negligence or willful  misconduct.  Neither the Agent nor
any  of  its  officers,  directors,  employees,  agents,   attorneys-in-fact  or
affiliates shall be responsible for or have any duty to ascertain, inquire into,
or verify (i) any recital,  statement,  representation  or warranty  made by the
Borrower,  Charter Mac or Holding Trust or any of their  respective  officers or
agents  contained in this Loan  Agreement or the other Loan  Documents or in any
certificate  or other  document  delivered  in  connection  therewith;  (ii) the
performance or observance of any of the covenants or agreements contained in, or
the conditions of, this Loan  Agreement or the other Loan  Documents;  (iii) the
state or  condition  of any  properties  of the  Borrower  or any other  obligor
hereunder constituting Collateral for the Obligations of the Borrower hereunder,
or any information  contained in the books or records of the Borrower;  (iv) the
validity, enforceability,  collectibility,  effectiveness or genuineness of this
Loan Agreement or any other Loan Document or any other certificate,  document or
instrument furnished in connection therewith;  or (v) the validity,  priority or
perfection of any lien securing or purporting to secure the  Obligations  or the
value or sufficiency of any of the Collateral.

            (f)      Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully  protected  in relying,  upon any notice,  consent,  certificate,
affidavit, or other document or writing believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons,  and upon
the advice and  statements of legal  counsel  (including,  without,  limitation,
counsel to the Borrower),  independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action  under this Loan  Agreement  or any other Loan  Document  unless it shall
first receive such advice or  concurrence  of the Requisite  Lenders as it deems
appropriate or it shall first be indemnified to its  satisfaction by the Lenders
against any and all  liability and expense which may be incurred by it by reason
of


                                      -64-
<PAGE>


the taking or failing to take any such  action.  The Agent shall in all cases be
fully  protected  in  acting,  or in  refraining  from  acting,  under this Loan
Agreement and the other Loan Documents in accordance with any written request of
the  Requisite  Lenders  or the  Lenders,  as may be  applicable,  and each such
request of the Requisite Lenders or the Lenders,  as may be applicable,  and any
action taken or failure to act by the Agent pursuant  thereto,  shall be binding
upon all of the Lenders; provided, however, that the Agent shall not be required
in any event to act,  or to refrain  from  acting,  in any  manner  which in its
judgment is contrary to the Loan Documents or to applicable law.

            (g)      Notice of  Default.  The Agent  shall not be deemed to have
knowledge or notice of the  occurrence of any Default or Event of Default unless
the Agent has actual  knowledge of the same or has received notice from a Lender
or the Borrower  referring to this Loan  Agreement,  describing  such Default or
Event of Default and stating that such notice is a "notice of  default".  In the
event that the Agent  obtains such actual  knowledge or receives  such a notice,
the Agent shall give prompt  notice  thereof to each of the  Lenders.  The Agent
shall take such action with respect to such Default or Event of Default as shall
be  reasonably  directed by the  Requisite  Lenders.  Unless and until the Agent
shall have  received such  direction,  the Agent may (but shall not be obligated
to) take such action,  or refrain  from taking such action,  with respect to any
such Default or Event of Default as it shall deem advisable in the best interest
of the  Lenders,  provided,  however,  that the Agent shall not  accelerate  the
indebtedness  under this Loan Agreement without the prior written consent of the
Requisite Lenders.

            (h)      Lenders' Credit Decisions. Each Lender acknowledges that it
has,  independently  and without reliance upon the Agent, the Arrangers,  or any
other Lender, and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate,  made its own
credit  analysis  and  investigation  into  the  business,  assets,  operations,
property, and financial and other condition of the Borrower and has made its own
decision to enter into this Loan  Agreement and the other Loan  Documents.  Each
Lender also acknowledges  that it will,  independently and without reliance upon
the Agent,  the Arrangers or any other Lender,  and based on such  documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit decisions in determining  whether or not conditions  precedent to closing
the Loan  hereunder  have been  satisfied and in taking or not taking any action
under this Loan Agreement and the other Loan Documents.

            (i)      Agent's  Reimbursement  and  Indemnification.  The  Lenders
agree to  reimburse  and  indemnify  the  Agent  and its  affiliates  and  their
respective directors,  officers,  agents,  employees,  successors,  and assigns,
ratably in proportion to their respective  Commitments,  for (i) any amounts not
reimbursed by the Borrower for which the Agent is entitled to  reimbursement  by
the Borrower  under this Loan  Agreement or the other Loan  Documents,  (ii) any
other expenses incurred by the Agent on behalf of the Lenders in connection with
the preparation,  execution, delivery, administration,  amendment, waiver and/or
enforcement


                                      -65-
<PAGE>


of this  Loan  Agreement  and  the  other  Loan  Documents  (including,  without
limitation,  reasonable  attorneys'  fees and expenses and  disbursements),  and
(iii)  any  liabilities,   obligations,  losses,  damages,  penalties,  actions,
judgments,  suits,  costs,  expenses  or  disbursements  of any kind and  nature
whatsoever  (including,  without  limitation,  reasonable  attorneys'  fees  and
expenses  and  disbursements)  which may be imposed on,  incurred by or asserted
against the Agent in any way  relating to or arising out of this Loan  Agreement
or the other  Loan  Documents  or any other  document  delivered  in  connection
therewith or any transaction  contemplated thereby, or the enforcement of any of
the terms hereof or thereof,  provided that no Lender shall be liable for any of
the foregoing to the extent that they arise from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any purpose
shall,  in the opinion of the Agent, be  insufficient  or become  impaired,  the
Agent may call for additional  indemnity and cease,  or not commence,  to do the
action indemnified against until such additional indemnity is furnished.

            (j)      Agent  in its  Individual  Capacity.  With  respect  to its
Commitment  as a Lender,  and the Advances made by it and the Note issued to it,
the Agent  shall have the same rights and powers  hereunder  and under any other
Loan  Document as any Lender and may exercise the same as though it were not the
Agent,  and the term "Lender" or "Lenders" shall,  unless the context  otherwise
indicates,  include  the  Agent in its  individual  capacity.  The Agent and its
Subsidiaries  and  Affiliates  may  accept  deposits  from,  lend  money to, and
generally  engage  in any  kind of  commercial  or  investment  banking,  trust,
advisory or other business with Charter Mac, Holding Trust, the Borrower, or any
Subsidiary  or  Affiliate  of any of such  Persons  as if it were not the  Agent
hereunder.

            (k)      Successor Agent. The Agent may resign at any time by giving
thirty  (30)  days'  prior  written  notice to the  Lenders  and  Borrower.  The
Requisite Lenders, for good cause, may remove Agent at any time by giving thirty
(30)  days'  prior  written  notice to the  Agent,  the  Borrower  and the other
Lenders.  Upon any such resignation or removal, the Requisite Lenders shall have
the right to appoint a successor Agent (with the consent of the Borrower,  which
consent will not be unreasonably withheld and shall not be required if a Default
or Event of Default  shall have  occurred  and be  continuing).  If no successor
Agent shall have been so appointed by the  Requisite  Lenders and accepted  such
appointment  within thirty (30) days after the retiring Agent's giving notice of
resignation or the Requisite Lenders' giving notice of removal,  as the case may
be, then the  retiring  Agent may  appoint,  on behalf of the  Borrower  and the
Lenders,  a  successor  Agent.  Each such  successor  Agent shall be a financial
institution  which  meets the  requirements  of an Eligible  Assignee.  Upon the
acceptance of any  appointment  as Agent  hereunder by a successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights,  powers,  privileges and duties of the retiring Agent,  and the retiring
Agent shall be discharged  from its duties and  obligations  hereunder and under
the other Loan Documents.  After any retiring Agent's resignation hereunder, the
provisions of this Section


                                      -66-
<PAGE>


12 shall  continue in effect for its benefit in respect of any actions  taken or
omitted to be taken by it while it was acting as the Agent hereunder.

            (l)      Duties  in the  Case of  Enforcement.  In case  one or more
Events of Default  have  occurred  and shall be  continuing,  and whether or not
acceleration  of the  Obligations  shall have occurred,  the Agent shall, at the
request, or may, upon the consent,  of the Requisite Lenders,  and provided that
the Lenders have given to the Agent such  additional  indemnities and assurances
against expenses and liabilities as the Agent may reasonably request, proceed to
enforce  the  provisions  of this Loan  Agreement  and the other Loan  Documents
respecting the foreclosure of mortgages, the sale or other disposition of all or
any part of the  Collateral  and the  exercise of any other  legal or  equitable
rights or remedies as it may have  hereunder or under any other Loan Document or
otherwise by virtue of applicable law, or to refrain from so acting if similarly
requested by the  Requisite  Lenders.  The Agent shall be fully  protected in so
acting or refraining from acting upon the instruction of the Requisite  Lenders,
and such  instruction  shall be  binding  upon all the  Lenders.  The  Requisite
Lenders  may  direct the Agent in writing as to the method and the extent of any
such  foreclosure,  sale or other disposition or the exercise of any other right
or remedy,  the Lenders hereby agreeing to indemnify and hold the Agent harmless
from all costs and  liabilities  incurred  in  respect of all  actions  taken or
omitted in  accordance  with such  direction,  provided  that the Agent need not
comply with any such direction to the extent that the Agent reasonably  believes
the Agent's  compliance  with such  direction  to be  unlawful  or  commercially
unreasonable  in any applicable  jurisdiction.  The Agent may, in its discretion
but without obligation,  in the absence of direction from the Requisite Lenders,
take such interim actions as it believes necessary to preserve the rights of the
Lenders  hereunder  and  in  and to any  Collateral  securing  the  Obligations,
including  but not  limited  to  petitioning  a  court  for  injunctive  relief,
appointment  of a receiver or  preservation  of the proceeds of any  Collateral.
Each of the  Lenders  acknowledges  and  agrees  that no  individual  Lender may
separately  enforce  or  exercise  any of  the  provisions  of  any of the  Loan
Documents, including without limitation the Notes, other than through the Agent.

      12.2  Respecting Loans and Payments.

            (a)      Procedures for Advances. Agent shall give written notice to
each Lender of each request for an Advance, or conversion of an existing Advance
from a Variable Rate Advance to a LIBOR Advance, by facsimile transmission, hand
delivery or overnight courier, not later than 11:00 a.m. (Boston time) (i) three
(3) Business Days prior to any LIBOR  Advance or conversion to a LIBOR  Advance,
or (ii) prior to 10:00 a.m.  (Boston  time) on any  Business Day of any Variable
Rate Advance.  Each such notice shall be accompanied by a written summary of the
request for an Advance and shall specify (a) the date of the requested  Advance,
(b) the aggregate  amount of the requested  Advance,  (c) each Lender's pro rata
share of the requested Advance, and (d) the applicable interest rate selected by
Borrower with respect to such Advance, or any portion thereof, together with the
applicable Interest Period, if any, selected,  or


                                      -67-
<PAGE>


deemed selected, by Borrower. Each Lender shall, before 11:00 a.m. (Boston time)
on the date set forth in any such  request for an  Advance,  make  available  to
Agent, at an account to be designated by Agent at Fleet National Bank in Boston,
Massachusetts, in same day funds, each Lender's ratable portion of the requested
Advance. After Agent's receipt of such funds and upon Agent's determination that
the applicable  conditions to making the requested  Advance have been fulfilled,
Agent  shall make such funds  available  to  Borrower  as  provided  for in this
Agreement.  Promptly after receipt by Agent of written  request from any Lender,
Agent shall deliver to the requesting Lender the accompanying certifications and
such other instruments,  documents, certifications and approvals delivered by or
on behalf of Borrower to Agent in support of the requested Advance.

            (b)      Nature of  Obligations of Lenders.  The  obligations of the
Lenders  hereunder  are several and not joint.  Failure of any Lender to fulfill
its  obligations  hereunder  shall  not  result  in any  other  Lender  becoming
obligated to advance more than its Commitment  Percentage of the Loan, nor shall
such failure release or diminish the obligations of any other Lender to fund its
Commitment Percentage provided herein.

            (c)      Payments  to  Agent.  All  payments  of  principal  of  and
interest on the Loans or the Notes shall be made to the Agent by the Borrower or
any other  obligor or  guarantor  for the account of the Lenders in  immediately
available  funds as  provided  in the Notes and this Loan  Agreement.  Except as
otherwise  expressly provided herein, the Agent agrees promptly to distribute to
each  Lender,  such  Lender's  proportionate  share  of  each  such  payment  in
immediately  available  funds,  excluding  Liquidation  Proceeds  which shall be
distributed in accordance with Section 12.2(d), below. The Agent shall upon each
distribution  promptly  notify  each  Lender of the  amounts  distributed  to it
applicable to principal of, and interest on, the proportionate share held by the
applicable  Lender.  Each payment received by the Agent under the first sentence
of this Section shall constitute a payment by the Borrower to each Lender in the
amount  of such  Lender's  proportionate  share  of such  payment,  and any such
payment to the Agent shall not be considered  outstanding  for any purpose after
the date of such payment by the Borrower to the Agent without  regard to whether
or when the Agent makes  distribution  thereof as provided above. If any payment
received by the Agent from the Borrower is  insufficient to pay both all accrued
interest and all principal then due and owing,  the Agent shall first apply such
payment to all outstanding  interest until paid in full and shall then apply the
remainder  of such  payment  to all  principal  then due and  owing,  and  shall
distribute the payment to each Lender accordingly.

            (d)      Distribution of Liquidation Proceeds.  Subject to the terms
and conditions  hereof,  the Agent shall distribute all Liquidation  Proceeds in
the order and manner set forth below:


                                      -68-
<PAGE>


      First:         To the Agent, towards any fees and any expenses for which
                     the Agent is entitled to reimbursement under this Loan
                     Agreement or the other Loan Documents not theretofore paid
                     to the Agent.

      Second:        To all applicable Lenders in accordance with their
                     respective Commitment Percentages until all Lenders have
                     been reimbursed for all expenses which such Lenders have
                     previously paid to the Agent and not theretofore paid to
                     such Lenders.

      Third:         To all Lenders in accordance with their respective
                     Commitment Percentages until all Lenders have been paid in
                     full all principal and interest due to such Lenders under
                     the Loan, with each Lender applying such proceeds for
                     purposes of this Loan Agreement first against the
                     outstanding principal balance due to such Lender under the
                     Loan and then to accrued and unpaid interest due under the
                     Loan.

      Fourth:To  all applicable Lenders in accordance with their respective
                     Commitment Percentages until all Lenders have been paid in
                     full all other amounts due to such Lenders under the Loan
                     including, without limitation, any costs and expenses
                     incurred directly by such Lenders to the extent such costs
                     and expenses are reimbursable to such Lenders by the
                     Borrower under the Loan Documents.

      Fifth:         To the Borrower or such third parties as may be entitled to
                     claim Liquidation Proceeds.

            (e)      Adjustments.   If,  after  Agent  has  paid  each  Lender's
proportionate  share of any  payment  received or applied by Agent in respect of
the Loan,  that payment is rescinded or must  otherwise be returned or paid over
by Agent,  whether  pursuant to any  bankruptcy  or insolvency  law,  sharing of
payments  clause of any  agreement or otherwise,  such Lender shall,  at Agent's
request,  promptly return its proportionate share of such payment or application
to Agent,  together  with the  Lender's  proportionate  share of any interest or
other  amount  required  to be paid by Agent  with  respect  to such  payment or
application.

            (f)      Setoff. If any Lender (including the Agent),  acting in its
individual  capacity,  shall  exercise  any  right of  setoff  against a deposit
balance or other  account of the Borrower  held by such Lender on account of the
obligations of the Borrower under this Loan  Agreement,  such Lender shall remit
to the Agent all such sums  received  pursuant to the  exercise of such right of
setoff,  and the Agent  shall  apply all such sums for the benefit of all of the
Lenders hereunder in accordance with the terms of this Loan Agreement.


                                      -69-
<PAGE>


            (g)      Distribution  by  Agent.  If in the  opinion  of the  Agent
distribution  of any amount  received by it in such capacity  hereunder or under
the Notes or under any of the other Loan Documents  might involve any liability,
it may refrain  from making  distribution  until its right to make  distribution
shall have been  adjudicated  by a court of competent  jurisdiction  or has been
resolved  by the  mutual  consent of all  Lenders.  In  addition,  the Agent may
request full and complete indemnity,  in form and substance  satisfactory to it,
prior to making  any such  distribution.  If a court of  competent  jurisdiction
shall  adjudge that any amount  received and  distributed  by the Agent is to be
repaid,  each  Lender to whom any such  distribution  shall have been made shall
either repay to the Agent its  proportionate  share of the amount so adjudged to
be repaid or shall pay over to the same in such  manner  and to such  persons as
shall be determined by such court.

            (h)      Delinquent Lenders.

                     (i) If for any reason  any  Lender  shall fail or refuse to
            abide  by its  obligations  under  this  Loan  Agreement,  including
            without limitation its obligation to make available to Agent its pro
            rata share of any Loans,  expenses or setoff (a "Delinquent Lender")
            and such  failure is not cured  within ten (10) days of receipt from
            the Agent of written notice thereof, then, in addition to the rights
            and remedies that may be available to Agent,  and the other Lenders,
            the  Borrower  or any other  party at law or in  equity,  and not at
            limitation   thereof,   (i)  such   Delinquent   Lender's  right  to
            participate  in the  administration  of, or  decision-making  rights
            related  to,  the  Loans,  this Loan  Agreement  or the  other  Loan
            Documents shall be suspended  during the pendency of such failure or
            refusal,  and  (ii) a  Delinquent  Lender  shall be  deemed  to have
            assigned any and all payments due to it from the  Borrower,  whether
            on account of outstanding Advances,  interest, fees or otherwise, to
            the  remaining   non-delinquent  Lenders  for  application  to,  and
            reduction of, their proportionate shares of all outstanding Advances
            until,  as a result of  application  of such  assigned  payments the
            Lenders'  respective  pro rata  shares of all  outstanding  Advances
            shall have  returned  to those in effect  immediately  prior to such
            delinquency and without giving effect to the nonpayment causing such
            delinquency.    The   Delinquent   Lender's    decision-making   and
            participation  rights and rights to payments as set forth in clauses
            (i) and (ii) hereinabove  shall be restored only upon the payment by
            the Delinquent Lender of its pro rata share of any Loans or expenses
            as to which it is delinquent,  together with interest thereon at the
            Default Rate from the date when  originally  due until the date upon
            which any such amounts are actually paid.

                     (ii) The non-delinquent  Lenders shall also have the right,
            but not the  obligation,  in their  respective,  sole  and  absolute
            discretion,  to acquire for no cash consideration,  (pro rata, based
            on the respective  Commitments of those Lenders


                                      -70-
<PAGE>


            electing to exercise such right) the Delinquent  Lender's Commitment
            to fund  future  Loans  (the  "Future  Commitment").  Upon  any such
            purchase  of the pro rata share of any  Delinquent  Lender's  Future
            Commitment,  the  Delinquent  Lender's share in future Loans and its
            rights under the Loan Documents with respect thereto shall terminate
            on the date of purchase,  and the  Delinquent  Lender shall promptly
            execute all documents reasonably requested to surrender and transfer
            such  interest,  including,  if  so  requested,  an  Assignment  and
            Acceptance.  Each  Delinquent  Lender shall indemnify Agent and each
            non-delinquent  Lender from and against any and all loss,  damage or
            expenses,  including but not limited to reasonable  attorneys'  fees
            and funds  advanced  by Agent or by any  non-delinquent  Lender,  on
            account of a Delinquent Lender's failure to timely fund its pro rata
            share of a Loan or to otherwise  perform its  obligations  under the
            Loan Documents.

      (i)   Holders. The  Agent  may deem and treat the payee of any Note as the
owner thereof for all purposes  hereof unless and until a written  notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Agent. Any request,  authority or consent of any person or entity
who, at the time of making such request or giving such authority or consent,  is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or endorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.

      12.3  Assignment. Except as provided herein, each Lender may assign to one
or more  Eligible  Assignees  all or a  portion  of its  interests,  rights  and
obligations  under  this  Loan  Agreement  (including  all or a  portion  of its
Commitment  Percentage  and  Commitment and the same portion of the Loans at the
time owing to it and the Notes held by it), upon  satisfaction  of the following
conditions:  (a) each of the Agent and the  Borrower  shall have given its prior
written consent to such assignment  (provided that, in the case of the Borrower,
such  consent will not be  unreasonably  withheld and shall not be required if a
Default or Event of Default  shall have  occurred and be  continuing),  (b) each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning  Lender's rights and obligations  under this Loan Agreement,  (c) each
assignment  shall be in an amount  that is at least  $10,000,000  and is a whole
multiple of $500,000;  provided however, or if the assigning Lender is assigning
all of such Lender's  rights and  obligations  under this Loan  Agreement,  such
assignment  shall  be in  the  amount  of  such  assigning  Lender's  Commitment
Percentage and Commitment,  and (d) the parties to such assignment shall execute
and  deliver  to the  Agent,  for  recording  in the  Register  (as  hereinafter
defined),  an Assignment and Acceptance,  substantially in the form of Exhibit N
hereto (an "Assignment and Acceptance"), together with any Notes subject to such
assignment.  Upon such execution,  delivery,  acceptance and recording, from and
after the effective date  specified in each  Assignment  and  Acceptance,  which
effective  date shall be at least  five (5)  Business  Days after the  execution
thereof,  (x) the assignee thereunder shall be a party hereto and,


                                      -71-
<PAGE>


to the extent provided in such  Assignment and  Acceptance,  have the rights and
obligations of a Lender  hereunder,  and (y) the assigning  Lender shall, to the
extent  provided  in such  assignment  and  upon  payment  to the  Agent  of the
registration  fee referred to in Section 12.5, be released from its  obligations
under this Loan Agreement.

      12.4  Certain Representations and Warranties;  Limitations;  Covenants. By
executing  and  delivering  an  Assignment  and  Acceptance,  the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

            (a)      other than the representation and warranty that it is the
      legal and beneficial owner of the interest being assigned thereby free and
      clear of any adverse claim, the assigning Lender makes no representation
      or warranty, express or implied, and assumes no responsibility with
      respect to any statements, warranties or representations made in or in
      connection with this Loan Agreement or the execution, legality, validity,
      enforceability, genuineness, sufficiency or value of this Loan Agreement,
      the other Loan Documents or any other instrument or document furnished
      pursuant hereto or the attachment, perfection or priority of any security
      interest or mortgage;

            (b)      the assigning Lender makes no representation or warranty
      and assumes no responsibility with respect to the financial condition of
      the Borrower and its affiliates, related entities or subsidiaries or any
      other person primarily or secondarily liable in respect of any of the
      Obligations, or the performance or observance by the Borrower or any other
      person primarily or secondarily liable in respect of any of the
      Obligations of any of their obligations under this Loan Agreement or any
      of the other Loan Documents or any other instrument or document furnished
      pursuant hereto or thereto;

            (c)      such assignee confirms that it has received a copy of this
      Loan Agreement, together with copies of the most recent financial
      statements provided by the Borrower as required by the terms of this Loan
      Agreement, together with such other documents and information as it has
      deemed appropriate to make its own credit analysis and decision to enter
      into such Assignment and Acceptance;

            (d)      such assignee will, independently and without reliance upon
      the assigning Lender, the Agent or any other Lender and based on such
      documents and information as it shall deem appropriate at the time,
      continue to make its own credit decisions in taking or not taking action
      under this Loan Agreement and the other Loan Documents;

            (e)      such assignee represents and warrants that it is an
      Eligible Assignee;

            (f)      such assignee appoints and authorizes the Agent to take
      such action as agent on its behalf and to exercise such powers under this
      Loan Agreement and the other


                                      -72-
<PAGE>


      Loan Documents as are delegated to the Agent by the terms hereof or
      thereof, together with such powers as are reasonably incidental thereto;

            (g)      such assignee agrees that it will perform in accordance
      with their terms all of the obligations that by the terms of this Loan
      Agreement are required to be performed by it as a Lender; and

            (h)      such assignee represents and warrants that it is legally
      authorized to enter into such Assignment and Acceptance.

      12.5  Register.  The Agent shall  maintain a copy of each  Assignment  and
Acceptance  delivered to it and a register or similar list (the  "Register") for
the  recordation  of the names and  addresses of the Lenders and the  Commitment
Percentage of, and principal  amount of the Loans owing to the Lenders from time
to time.  The entries in the  Register  shall be  conclusive,  in the absence of
manifest  error,  and the  Borrower,  the Agent and the  Lenders  may treat each
person  whose name is recorded in the  Register  as a Lender  hereunder  for all
purposes of this Loan Agreement.  The Register shall be available for inspection
by the  Borrower  and the Lenders at any  reasonable  time and from time to time
upon reasonable prior notice.  Upon each such recordation,  the assigning Lender
agrees to pay to the Agent a registration  fee in the sum of Three Thousand Five
Hundred Dollars ($3,500.00).

      12.6  New Notes. Upon its receipt of an Assignment and Acceptance executed
by the  parties  to such  assignment,  together  with each Note  subject to such
assignment,  the Agent shall (a) record the information contained therein in the
Register,  and (b) give prompt  notice  thereof to the  Borrower and the Lenders
(other than the assigning  Lender).  Within five (5) Business Days after receipt
of such notice, the Borrower,  at its own expense,  shall execute and deliver to
the Agent,  in exchange  for each  surrendered  Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained some portion of its obligations  hereunder, a new Note to the order
of the  assigning  Lender  in an  amount  equal  to the  amount  retained  by it
hereunder.  Such new Notes  shall  provide  that they are  replacements  for the
surrendered  Notes,  shall  be in an  aggregate  principal  amount  equal to the
aggregate  principal  amount  of the  surrendered  Notes,  shall  be  dated  the
effective  date of  such  Assignment  and  Acceptance  and  shall  otherwise  be
substantially in the form of the assigned Notes. The surrendered  Notes shall be
cancelled and returned to the Borrower.

      12.7  Participations.  Each Lender may sell  participations to one or more
banks or other financial  institutions (a  "Participant") in all or a portion of
such Lender's  rights and  obligations  under this Loan  Agreement and the other
Loan Documents;  provided that (a) each such participation shall be in a minimum
amount of $10,000,000.00, (b) each participant shall meet the requirements of an
Eligible  Assignee,  (c) any such sale or  participation  shall not  affect  the


                                      -73-
<PAGE>


rights and duties of the selling Lender  hereunder to the Borrower,  and (d) the
only  rights  granted  to  the  participant   pursuant  to  such   participation
arrangements  with respect to waivers,  amendments or  modifications of the Loan
Documents shall be the rights to approve  waivers,  amendments or  modifications
that would reduce the principal of or the interest rate on any Loans, extend the
term or increase  the amount of the  Commitment  of such Lender as it relates to
such  participant,  reduce  the  amount  of any  commitment  fees to which  such
participant  is  entitled or extend any  regularly  scheduled  payment  date for
principal or interest.

      12.8  Disclosure. The Borrower agrees that in addition to disclosures made
in accordance with standard and customary banking  practices,  the Agent and any
Lender may disclose information obtained by the Agent or such Lender pursuant to
this Loan  Agreement to assignees or  participants  and  potential  assignees or
participants hereunder, subject to the provisions of Section 13.20.

      12.9  Miscellaneous  Assignment  Provisions.  Any  assigning  Lender shall
retain its rights to be indemnified pursuant to Section 9.17 with respect to any
claims or actions arising prior to the date of such assignment.  If any assignee
Lender is not incorporated under the laws of the United States of America or any
state  thereof,  it shall,  prior to the date on which any  interest or fees are
payable  hereunder  or under any of the other Loan  Documents  for its  account,
deliver to the Borrower and the Agent  certification  as to its  exemption  from
deduction or withholding  of any United States  federal  income taxes.  Anything
contained in this Section 12.9 to the contrary  notwithstanding,  any Lender may
at any time pledge all or any portion of its interest and rights under this Loan
Agreement  (including  all or any  portion  of its  Notes) to any of the  twelve
Federal  Reserve Banks  organized under Section 4 of the Federal Reserve Act, 12
U.S.C.  Section 341. No such pledge or the enforcement thereof shall release the
pledgor  Lender from its  obligations  hereunder  or under any of the other Loan
Documents.

      12.10 Assignment by Borrower.   The Borrower  shall not assign or transfer
any of its rights or  obligations  under any of the Loan  Documents  without the
prior written consent of each of the Lenders.

      12.11 Administrative Matters.

            (a)      Amendment,   Waiver,  Consent,  Etc.  Except  as  otherwise
provided  herein or as to any term or provision  hereof  which  provides for the
consent or approval of the Agent, no term or provision of this Loan Agreement or
any other Loan Document may be changed,  waived,  discharged or terminated,  nor
may any consent  required or permitted by this Loan  Agreement or any other Loan
Document be given, unless such change, waiver, discharge, termination or consent
receives the written approval of the Requisite Lenders.


                                      -74-
<PAGE>


      Notwithstanding the foregoing, the unanimous written approval of all the
Lenders (other than a Defaulting Lender) shall be required with respect to any
proposed amendment, waiver, discharge, termination, or consent which:

            (i)      has the effect of (a) extending the final scheduled
      maturity (other than as provided for in Section 3.4) or the date of any
      amortization payment of any Loan or Note, (b) reducing the rate or
      extending the time of payment of interest or fees thereon, (c) increasing
      or reducing the principal amount thereof, or (d) otherwise postponing or
      forgiving any indebtedness thereunder,

            (ii)     releases or discharges any material portion of the
      Collateral other than in accordance with the express provisions of the
      Loan Documents,

            (iii)    amends, modifies or waives any provisions of this Section
      12.11,

            (iv)     amends or modifies the definition of "Approved Project",
      "Collateral Value," "Eligible Project Bond", "Wet Funding Advance", or
      "Major Bond Action".

            (iv)     amends any of the financial covenants or provisions set
      forth in Sections 3.2, 3.4, 3.5, 3.6, 3.7, 4 and 9 of this Loan Agreement,

            (v)      reduces the percentage specified in the definition of
      Requisite Lenders,

            (vi)     except as otherwise provided in the Agreement, changes the
      amount of any Lender's Commitment or Commitment Percentage, or

            (vii)    releases or waives any indemnifications provided in the
      Loan Documents

and  provided,  further,  that without the consent of the Agent,  no such action
shall  amend,  modify or waive any  provision  of this  Section  12 or any other
provision of any Loan Document which relates to the rights or obligations of the
Agent.

      (b)   Deemed Consent or Approval. With respect to any requested amendment,
waiver,  consent or other  action which  requires the approval of the  Requisite
Lenders or all of the Lenders,  as the case may be, in accordance with the terms
of this  Loan  Agreement,  or if the Agent is  required  hereunder  to seek,  or
desires to seek, the approval of the Requisite Lenders or all of the Lenders, as
the case may be, prior to undertaking a particular  action or course of conduct,
the Agent in each such case shall provide each Lender with written notice of any
such request for amendment, waiver or consent or any other requested or proposed
action or course of conduct, accompanied by such detailed background information
and explanations as may be reasonably  necessary to determine whether to approve
or disapprove such amendment, waiver,


                                      -75-
<PAGE>


consent or other  action or course of  conduct.  The Agent may (but shall not be
required to) include in any such notice,  printed in capital letters or boldface
type, a legend substantially to the following effect:

      "THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND WITHIN
      TEN (10) CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL
      CONSTITUTE A DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION REQUESTED BY
      THE BORROWER OR THE COURSE OF CONDUCT PROPOSED BY THE AGENT AND RECITED
      ABOVE,"

and if the foregoing legend is included by the Agent in its communication, a
Lender shall be deemed to have approved or consented to such action or course of
conduct for all purposes hereunder if such Lender fails to object to such action
or course of conduct by written notice to the Agent within ten (10) calendar
days of such Lender's receipt of such notice.

SECTION 13. GENERAL PROVISIONS.

      13.1  Notices. Any notice or other  communication  in connection with this
Loan  Agreement,  the  Notes,  or any of the other Loan  Documents,  shall be in
writing,  and (i)  deposited in the United  States  Mail,  postage  prepaid,  by
registered  or  certified  mail,  or (ii)  hand  delivered  by any  commercially
recognized  courier  service  or  overnight  delivery  service  such as  Federal
Express,  or (iii) sent by facsimile  transmission if a fax number is designated
below, addressed:

            If to Borrower:

                    Charter MAC Equity Issuer Trust
                    c/o Charter Mac Corporation
                    625 Madison Avenue
                    New York, New York 10022
                    Attention: Chief Financial Officer and
                               Vice President- Capital Markets
                    Fax No.: (212) 751-3350

            If to Charter Mac:

                    Charter Municipal Mortgage Acceptance Company
                    c/o Charter Mac Corporation
                    625 Madison Avenue
                    New York, New York 10022
                    Attention: Chief Financial Officer and
                               Vice President- Capital Markets


                                      -76-
<PAGE>


                    Fax No.: (212) 751-3350

            If to Holding Trust:

                    CM Holding Trust
                    c/o Charter Mac Corporation
                    625 Madison Avenue
                    New York, New York 10022
                    Attention: Chief Financial Officer and
                               Vice President- Capital Markets
                    Fax No.: (212) 751-3350




            in each case, with copies by regular mail or such hand delivery or
            facsimile transmission to (which shall not constitute notice):

                    Paul, Hastings, Janofsky & Walker LLP
                    75 East 55th Street
                    New York, New York 10022-4697
                    Fax No.: (212) 319-4090
                    Attention: Michael K. Chernick, Esquire

            If to Agent:

                    Fleet National Bank
                    One Federal Street
                    Boston, Massachusetts 02110
                    Fax No.:  (617) 346-4670
                    Attention: Mr. John F. Simon
                               Mail Stop: MA DE 10304X

            with copies by regular mail or such hand delivery or facsimile
            transmission to (which shall not constitute notice):

                    Riemer & Braunstein LLP
                    Three Center Plaza
                    Boston, Massachusetts 02108
                    Fax No.: (617) 880-3456
                    Attention: Ronald N. Braunstein, Esquire


                                      -77-
<PAGE>


            If to Syndication Agent:

                    Wachovia Bank, National Association
                    301 South College St., NC0172
                    Charlotte, North Carolina 28288
                    Fax No.:(704) 383-6205
                    Attention: Mr. David Hoagland

            If to a Lender: To such address for such Lender as appears on
            Schedule A.

Any such addressee may change its address for such notices to such other address
in the United States as such addressee shall have specified by written notice
given as set forth above. All periods of notice shall be measured from the
deemed date of delivery.

      A notice shall be deemed to have been given, delivered and received for
the purposes of all Loan Documents upon the earliest of: (i) if sent by such
certified or registered mail, on the third Business Day following the date of
postmark, or (ii) if hand delivered at the specified address by such courier or
overnight delivery service, when so delivered or tendered for delivery during
customary business hours on a Business Day, or (iii) if so mailed, on the date
of actual receipt as evidenced by the return receipt, or (iv) if so delivered,
upon actual receipt, or (v) if facsimile transmission is a permitted means of
giving notice, upon receipt as evidenced by confirmation.

      13.2  Limitations on Assignment. Borrower may not assign this Loan
Agreement or any interest therein without the prior written consent of the
Lenders in each instance.

      13.3  Further  Assurances.  Borrower  shall upon request from Agent or any
Lender from time to time  execute,  seal,  acknowledge  and deliver such further
instruments  or documents  which Agent or any Lender may  reasonably  require to
better perfect and confirm their respective rights and remedies hereunder, under
the Notes, and under each of the other Loan Documents.

      13.4  Usury.  If at any  time,  the rate of  interest,  together  with all
amounts which  constitute  interest and which are reserved,  charged or taken by
the  Agent  or any  Lender  as  compensation  for  fees,  services  or  expenses
incidental  to the  making,  negotiating  or  collection  of the Loan  evidenced
hereby,  shall be deemed by any competent court of law,  governmental  agency or
tribunal to exceed the maximum  rate of interest  permitted to be charged by the
Agent or any Lender to Borrower under applicable law, then,  during such time as
such rate of interest would be deemed  excessive,  that portion of each sum paid
attributable to that portion of such interest rate that exceeds the maximum rate
of interest so permitted shall be deemed a voluntary prepayment of principal. As
used herein, the term "applicable law" shall mean the law in effect


                                      -78-
<PAGE>


as of the date hereof; provided, however, that in the event there is a change in
the law which results in a higher  permissible rate of interest,  then this Loan
Agreement shall be governed by such new law as of its effective date.

      13.5  Payments to be Charged as an Advance.  Any payments required by this
Loan  Agreement,  the Note or any of the  other  Loan  Documents,  or any  other
instruments or agreements executed in connection herewith or therewith, may (but
not before the due date thereof) be deducted by Lender from the amount,  if any,
not already advanced,  and the same shall be deemed to be an Advance,  or may be
deducted from any Advance due hereunder. Any attorneys' fees, inspection fee, or
any other  expense  payable by Borrower as herein  provided  for, or incurred in
connection  with the  examination  of title to the  Collateral for the Loan, the
drafting of the Loan Documents and other instruments  evidencing or securing the
Obligations  and all other Loan  Documents  may be  likewise  deducted  from the
amounts,  if any, not already  advanced or from any Advance  payable to Borrower
and, in any event, charged as an Advance hereunder.

      13.6  Parties Bound; Integration.

            (a)      The  provisions  of this Loan  Agreement and of each of the
      other Loan  Documents  shall be binding  upon and inure to the  benefit of
      Borrower  and the  Agent  and each of the  Lenders  and  their  respective
      successors  and  assigns,  except  as  otherwise  prohibited  by this Loan
      Agreement or any of the other Loan Documents.

            (b)      This Loan  Agreement is a contract by,  between,  and among
      Borrower,  Agent and each of the Lenders for their mutual benefit,  and no
      third person shall have any right, claim or interest against either Agent,
      any of the Lenders, or Borrower by virtue of any provision hereof.

            (c)      This Loan  Agreement  is intended by the parties  hereto as
      the final, complete and exclusive statement of the transactions  evidenced
      by this Loan Agreement. All prior or contemporaneous promises,  agreements
      and understandings,  whether oral or written,  are deemed to be superceded
      by this Loan Agreement, and no party is relying on any promise,  agreement
      or understanding  not set forth in this Loan Agreement or in an applicable
      Loan Document.

      13.7  Waivers,  Extensions  and  Releases.  Except as  otherwise  provided
herein,  Agent may, unless otherwise directed by the Requisite Lenders or all of
the Lenders, as the case may be, at any time and from time to time waive any one
or  more  of the  conditions  contained  herein  or in any  of  the  other  Loan
Documents, or extend the time of payment of the Loan, or release portions of the
Collateral  from the  provisions  of this Loan  Agreement  and from the Security
Document,  but any such waiver,  extension or release shall be deemed to be made
in  pursuance  and not in  modification  hereof,  and  any  such  waiver  in any
instance, or under any particular


                                      -79-
<PAGE>


circumstance  shall not be  considered  a waiver of such  condition in any other
instance or any other circumstance.

      13.8  Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial.

            (a)      Substantial Relationship.  It is understood and agreed that
all of the  Loan  Documents  were  negotiated,  executed  and  delivered  in the
Commonwealth  of  Massachusetts,  which  Commonwealth  the  parties  agree has a
substantial  relationship  to the  parties  and to the  underlying  transactions
embodied by the Loan Documents.

            (b)      Place of Delivery.  Borrower agrees to furnish to the Agent
at  the  Agent's  office  in  Boston,  Massachusetts  all  further  instruments,
certifications and documents to be furnished hereunder.

            (c)      Governing  Law.  This Loan  Agreement and each of the other
Loan  Documents  shall in all  respects  be  governed,  construed,  applied  and
enforced  in  accordance   with  the  internal  laws  of  the   Commonwealth  of
Massachusetts without regard to principles of conflicts of law.

      13.9  Consent  to  Jurisdiction.  BORROWER  AGREES  THAT  ANY SUIT FOR THE
ENFORCEMENT  OF THIS LOAN  AGREEMENT OR ANY OF THE OTHER LOAN  DOCUMENTS  MAY BE
BROUGHT IN THE COURTS OF THE  COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE  JURISDICTION OF SUCH COURT AND
SERVICE OF PROCESS  IN ANY SUCH SUIT  BEING  MADE UPON  BORROWER  BY MAIL AT THE
ADDRESS SET FORTH IN SECTION 13.1 HEREOF.  BORROWER  HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR  HEREAFTER  HAVE TO THE  VENUE OF ANY  SUCH  SUIT OR ANY SUCH
COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT FORUM.

      13.10 JURY  TRIAL  WAIVER.  BORROWER,  AGENT AND EACH OF THE  LENDERS  (BY
EXECUTION OF THIS LOAN AGREEMENT OR ANY OTHER ASSIGNMENT AND ACCEPTANCE)  HEREBY
KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY  WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON,  ARISING OUT OF, UNDER OR IN CONNECTION  WITH
THIS LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENTS  CONTEMPLATED  TO BE EXECUTED IN
CONNECTION  HEREWITH OR ANY COURSE OF CONDUCT,  COURSE OF  DEALINGS,  STATEMENTS
(WHETHER  VERBAL  OR  WRITTEN)  OR  ACTIONS  OF ANY  PARTY,  INCLUDING,  WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,  STATEMENTS OR ACTIONS OF
AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF
THE


                                      -80-
<PAGE>


LOAN  DOCUMENTS,  AND AGREE THAT NONE OF THE BORROWER,  AGENT OR ANY LENDER WILL
SEEK TO CONSOLIDATE  ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT AS PROHIBITED BY LAW,  BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY  LITIGATION ANY SPECIAL,
EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL  DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF AGENT OR ANY LENDER HAS  REPRESENTED,  EXPRESSLY OR OTHERWISE,  THAT
AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF  LITIGATION,  SEEK TO ENFORCE THE
FOREGOING WAIVER.  THIS WAIVER  CONSTITUTES A MATERIAL  INDUCEMENT FOR AGENT AND
THE LENDERS TO EXECUTE THIS LOAN AGREEMENT AND MAKE THE LOAN.

      13.11 Survival. All representations,  warranties, covenants and agreements
of Borrower herein or in any other Loan Document, or in any notice, certificate,
or other  paper  delivered  by or on  behalf of  Borrower  pursuant  hereto  are
significant  and shall be deemed to have been  relied  upon by Agent and each of
the  Lenders  notwithstanding  any  investigation  made by  Agent or each of the
Lenders or on its behalf and shall  survive the  delivery of the Loan  Documents
and the  making  of the Loan and each  advance  pursuant  thereto.  No review or
approval  by  Agent  or  the  Lenders,   or  by  any  of  their  consultants  or
representatives,  of any opinion letters, certificates by professionals or other
item  of  any  nature  shall  relieve  Borrower  or  anyone  else  of any of the
obligations,  warranties  or  representations  made by or on behalf of  Borrower
under any one or more of the Loan Documents.

      13.12 Cumulative Rights.    All of the rights of the Agent and the Lenders
hereunder and under each of the other Loan Documents and any other agreement now
or hereafter executed in connection  herewith or therewith,  shall be cumulative
and may be exercised singly,  together, or in such combination as the Agent, the
Lenders, or the Requisite Lenders, as may be applicable,  may determine in their
respective sole good faith judgment.

      13.13 Claims Against Agent or Lenders.

            (a)      Borrower  Must  Notify.  The Agent and each of the  Lenders
shall not be in  default  under  this Loan  Agreement,  or under any other  Loan
Document,  unless a  written  notice  specifically  setting  forth  the claim of
Borrower  shall have been given to Agent and each of the Lenders  within  thirty
(30) days after  Borrower  first had actual  knowledge  or actual  notice of the
occurrence  of the event  which  Borrower  alleges  gave rise to such  claim and
Lender does not remedy or cure the  default,  if any there be,  with  reasonable
promptness  thereafter.  Such actual  knowledge or actual  notice shall refer to
what was actually known by, or expressed in a written notification furnished to,
any  of the  persons  or  officials  referred  to in  Schedule  6 as  Authorized
Representatives.


                                      -81-
<PAGE>


            (b)      Remedies. If it is determined by the final order of a court
of competent jurisdiction, which is not subject to further appeal, that Agent or
any of the Lenders has breached any of its obligations  under the Loan Documents
and has not  remedied  or cured the same with  reasonable  promptness  following
notice  thereof,  Agent's  and each of the  Lender's  responsibilities  shall be
limited to: (i) where the breach  consists  of the  failure to grant  consent or
give approval in violation of the terms and requirements of a Loan Document, the
obligation  to grant such consent or give such  approval  and to pay  Borrower's
reasonable  costs  and  expenses  including,   without  limitation,   reasonable
attorneys' fees and disbursements in connection with such court proceedings; and
(ii) the case of any such failure to grant such  consent or give such  approval,
or in the case of any other such default by Agent or any of the  Lenders,  where
it is also so  determined  that Agent or any of the Lenders  acted in bad faith,
the payment of any actual, direct, compensatory damages sustained by Borrower as
a result  thereof plus  Borrower's  reasonable  costs and  expenses,  including,
without limitation,  reasonable  attorneys' fees and disbursements in connection
with such court proceedings.

            (c)      Limitations.  In no event, however, shall Agent and each of
the Lenders be liable to Borrower or anyone else for other  damages such as, but
not limited to, indirect, speculative or punitive damages whatever the nature of
the  breach by Agent or any of the  Lenders of its  obligations  under this Loan
Agreement or under any of the other Loan  Documents.  In no event shall Agent or
any of the Lenders be liable to Borrower or anyone else unless a written  notice
specifically  setting forth the claim of Borrower shall have been given to Agent
and each of the Lenders within the time period specified above.

      13.14 Obligations Absolute.  Except to the extent prohibited by applicable
law which cannot be waived, the Obligations of Borrower under the Loan Documents
shall be absolute,  unconditional  and irrevocable and shall be paid strictly in
accordance  with  the  terms  of the  Loan  Documents  under  all  circumstances
whatsoever,  including, without limitation, the existence of any claim, set off,
defense or other right which  Borrower may have at any time against Agent or any
of the Lenders whether in connection with the Loan or any unrelated transaction.

      All parties to the Loan  Agreement are looking  solely to the Borrower and
its assets for the satisfaction of the Obligations.  The Board of Trustees,  the
Manager  and the  Shareholder  of the  Borrower  (each as  defined in the Equity
Issuer Trust Agreement) dated June 29, 2000, as amended from time to time, shall
not have any personal liability under this Loan Agreement.

      13.15 Table of Contents,  Title and Headings.  Any Table of Contents,  the
titles and the headings of sections are not parts of this Loan  Agreement or any
other  Loan  Document  and  shall  not  be  deemed  to  affect  the  meaning  or
construction of any of its or their provisions.


                                      -82-
<PAGE>


      13.16 Counterparts.   This Loan Agreement and each other Loan Document may
be executed in several  counterparts,  each of which when executed and delivered
is an original,  but all of which together shall  constitute one instrument.  In
making  proof of this Loan  Agreement,  it shall not be  necessary to produce or
account for more than one such  counterpart  executed by the party  against whom
enforcement of such Agreement is sought.

      13.17 Time Of the  Essence.  Time is of the essence of each  provision  of
this Loan Agreement and each other Loan Document.

      13.18 No Oral  Change.  This Loan  Agreement  and each of the  other  Loan
Documents may only be amended,  terminated,  extended or otherwise modified by a
writing signed by the party against which  enforcement is sought (except no such
writing shall be required for any party which,  pursuant to a specific provision
of any Loan  Document,  is required to be bound by changes  without such party's
assent). In no event shall any oral agreements,  promises,  actions,  inactions,
knowledge,  course of conduct,  course of dealings or the like be  effective  to
amend,  terminate,  extend or otherwise modify this Loan Agreement or any of the
other Loan Documents.

      13.19 Monthly  Statements.   While  Agent  may  issue  invoices  or  other
statements  on a monthly or  periodic  basis (a  "Statement"),  it is  expressly
acknowledged and agreed that: (i) the failure of Agent to issue any Statement on
one or more occasions shall not affect  Borrower's  obligations to make payments
under the Loan  Documents as and when due; (ii) the  inaccuracy of any Statement
shall not be binding upon Lenders and so Borrower shall always remain  obligated
to pay the full  amount(s)  required  under the Loan  Documents  as and when due
notwithstanding any provision to the contrary contained in any Statement;  (iii)
all  Statements  are  issued  for  information  purposes  only and  shall  never
constitute any type of offer,  acceptance,  modification,  or waiver of the Loan
Documents or any of Lenders' rights or remedies thereunder; and (iv) in no event
shall any  Statement  serve as the basis for, or a  component  of, any course of
dealing,  course of conduct,  or trade  practice which would modify,  alter,  or
otherwise affect the express written terms of the Loan Documents.

      13.20 Confidentiality. Each of the Agent and the Lenders shall maintain in
confidence in accordance with its customary procedures for handling confidential
information, all written information that the Borrower or any of its Affiliates,
or any of their Authorized Representatives, furnishes to the Agent or any Lender
("Confidential Information"),  other than any such Confidential Information that
becomes generally  available to the public other than as a result of a breach by
the  Agent or any  Lender of its  obligations  hereunder  or that is or  becomes
available to the Agent or such Lender from a source  other than  Borrower or any
of its  Subsidiaries,  or any of their Authorized  Representatives,  and that is
not, to the  knowledge  of the  recipient  thereof,  subject to  obligations  of
confidentiality with respect thereto; provided, however, that the Agent and each
Lender  shall  in any  event  have  the  right  to  deliver  copies  of any such
Confidential Information, and to disclose any such Confidential Information, to:


                                      -83-
<PAGE>


            (a)      its directors,  officers,  trustees,  partners,  employees,
      agents, attorneys, professional consultants, portfolio management services
      and rating agencies;

            (b)      any other Lender and any successor Agent;

            (c)      any Person to which such Lender  offers to sell any Loan or
      any part  thereof or  interest or  participation  therein  (provided  such
      Person agrees to keep such  information  confidential  on terms similar to
      those set forth in this Section 13.20);

            (d)      any federal or state regulatory  authority or examiner,  or
      any insurance industry association, regulating or having jurisdiction over
      the Agent or such Lender; and

            (e)      any other Person to which such delivery or  disclosure  may
      be necessary or appropriate  (i) in compliance  with any  applicable  law,
      rule, regulation or order, (ii) in response to any subpoena or other legal
      process or informal  investigative  demand,  (iii) in connection  with any
      litigation  to which  the  Agent  or such  Lender  is a party,  or (iv) in
      connection with the enforcement of the rights and remedies of the Agent or
      the Lenders under this  Agreement and the other Loan Documents at any time
      when an Event of Default shall have occurred and be continuing.

      13.21 Acknowledgment of Joinder. The Borrower acknowledges and consents to
the terms and  conditions of the Joinder to this Loan  Agreement  which has been
executed by each of Charter Mac and Holding Trust and further  acknowledges  and
agrees that the terms and  conditions  of the  Joinder  are hereby  incorporated
herein by reference.


                  [Remainder of page intentionally left blank]


                                      -84-
<PAGE>


      IN  WITNESS  WHEREOF  this  Loan  Agreement  has been  duly  executed  and
delivered  as a sealed  instrument  at Boston,  Massachusetts,  this 26th day of
March, 2003.


                                          CHARTER MAC EQUITY ISSUER
                                          TRUST, a Delaware statutory trust
                                          (Borrower)

                                          By: Charter Mac Corporation,
                                                Its Manager

                                                By_____________________________
                                                Name:__________________________
                                                Title:_________________________


                                          FLEET NATIONAL BANK
                                          (As Administrative Agent and a Lender)

                                          By___________________________________
                                          Name:________________________________
                                          Title:_______________________________

                                          WACHOVIA BANK, NATIONAL
                                          ASSOCIATION
                                          (As Syndication Agent and a Lender)

                                          By___________________________________
                                          Name:________________________________
                                          Title:_______________________________


                                       S-1
<PAGE>


                                   Joinder of
                  Charter Municipal Mortgage Acceptance Company
                                       and
                                CM Holding Trust

      Reference is made to that certain Tax-Exempt Bond Line of Credit and
Security Agreement dated as of March 26, 2003 (the"Loan Agreement") by and among
Charter Mac Equity Issuer Trust as Borrower, Fleet National Bank as
Administrative Agent for a syndicate of Lenders, Wachovia Bank, National
Association as Syndication Agent, Fleet Securities Inc. and Wachovia Securities,
Inc., as Co-Lead Arrangers, and such Lenders. Unless otherwise defined herein,
all capitalized terms used herein shall have the meaning set forth in the Loan
Agreement.

      Charter Mac and Holding Trust each acknowledge that Holding Trust is a
direct wholly owned Subsidiary of Charter Mac, and that the Borrower is a direct
wholly owned Subsidiary of Holding Trust, and that although, pursuant to the
provisions of the Borrower's Constituent Documents, Charter Mac and Holding
Trust are each prohibited from becoming obligated for the debts of the Borrower
or holding out its credit as being available to satisfy the obligations of the
Borrower to any Person, the Agent and the Lenders are relying on certain
representations, warranties and covenants of Charter Mac and Holding Trust, but
not the credit of Charter Mac or Holding Trust, as an inducement for the Agent
and the Lenders to enter into the Loan Agreement and to make Advances to the
Borrower in accordance with the terms and conditions thereof. Accordingly, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Charter Mac and Holding Trust each hereby joins in the Loan
Agreement for the following purposes (the "Joinder"):

      1.    Charter Mac agrees to comply with the Charter Mac Covenants set
forth on Exhibit O to the Loan Agreement. Charter Mac shall provide the Agent
with a quarterly compliance certificate in form satisfactory to the Agent
demonstrating compliance, or non-compliance, as the case may be, with the
Charter Mac Covenants.

      2.    Charter Mac and Holding Trust each acknowledges and confirms the
warranties and representations made specifically on their behalf by the Borrower
pursuant to the Loan Agreement.

      3.    Charter Mac and Holding Trust each agrees to comply with the
affirmative and negative covenants set forth in Section 9 of the Loan Agreement
which specifically make reference to an obligation of Charter Mac and/or Holding
Trust, respectively.

      4.    Charter Mac and Holding Trust each acknowledges and agrees that an
Event of Default shall occur if (x) Charter Mac fails to comply with the Charter
Mac Covenants, (y) either of Charter Mac or Holding Trust fails to comply with
the affirmative and negative covenants set


                                      J/S-2
<PAGE>


forth in Section 9 of the Loan Agreement which specifically make reference to an
obligation of Charter Mac and/or Holding Trust, respectively, or (y) any of the
events described in Section 10.1 of the Loan Agreement which make specific
reference to Charter Mac and/or Holding Trust shall have occurred.

      5.    Charter Mac and Holding Trust each further covenant and agree from
the date hereof and so long as the Loan or other Obligations remain outstanding,
that neither Charter Mac nor Holding Trust shall, so long as a Default or an
Event of Default has occurred and is continuing, permit the Borrower to make any
payments or distributions to any Person on account of the Borrower's Equity
Interests nor shall either of Charter Mac or Holding Trust accept any payments
or distributions on account of the Borrower's Equity Interests.

      6.    By accepting this Loan Agreement and this Joinder, the Agent and the
Lenders acknowledge and agree that neither Charter Mac nor Holding Trust has
any, and that neither Charter Mac nor Holding Trust shall ever have any,
personal liability to the Agent or any Lender on account of any Default or Event
of Default under the Loan Agreement or any breach by Charter Mac of any of the
Charter Mac Covenants, or a breach by either Charter Mac or Holding Trust of any
of the provisions of the Loan Agreement which are incorporated into this Joinder
by reference, and that the Agent's and Lenders' sole recourse on account of the
occurrence of any of the foregoing events shall be to exercise their rights and
remedies against the Borrower and the Collateral as provided for in the Loan
Agreement.

      Executed as a sealed instrument as of March 26, 2003

                                          CHARTER MUNICIPAL MORTGAGE
                                          ACCEPTANCE COMPANY, a Delaware
                                          statutory trust
                                          By: Charter Mac Corporation,
                                                 Its Manager

                                                By_____________________________
                                                Name:__________________________
                                                Title:_________________________


                                      J/S-3
<PAGE>


                                          CM HOLDING TRUST, a Delaware
                                          statutory trust

                                                By: Charter Mac Corporation,
                                                Its Manager

                                                By_____________________________
                                                Name:__________________________
                                                Title:_________________________


                                      J/S-4
<PAGE>


                            EXHIBITS AND SCHEDULES:
                            -----------------------


<TABLE>
<CAPTION>

                                                                                          Section
                                                                                        Reference
                                                                                           Number
<S>                   <C>     <C>                                               <C>

Exhibit A             -       Definitions                                                     1.1
Exhibit B             -       Commitment Increase Supplement                               3.3(a)
Exhibit C             -       Note                                                         3.5(a)
Exhibit D             -       Notice of Rate Selection                                     3.5(d)
Exhibit E             -       Advance Request                                           4.1(a)(i)
Exhibit F             -       Borrowing Base Certificate                                4.1(a)(i)
Exhibit G             -       Funding Certification                                    4.1(c)(ii)
Exhibit H             -       Servicer's Notification                           4.1(c)(iii)(2)(b)
Exhibit I             -       Wet Funding Certification                                    4.2(a)
Exhibit J             -       Officer's Certificate                                        7.1(h)
Exhibit K             -       Servicer's Report                                            9.6(a)
Exhibit L             -       Compliance Certificate                                    9.6(b)(i)
Exhibit M             -       Preferred Shares Covenants                                  9.11(b)
Exhibit N             -       Assignment and Acceptance                                      12.3
Exhibit O             -       Charter Mac Covenants                                     Exhibit A
Exhibit O-1           -       Indebtedness Schedule for Charter Mac                     Exhibit A
Exhibit P             -       Custodial Agreement                                       Exhibit A
Exhibit Q             -       Due Diligence Materials                                   Exhibit A
Exhibit R             -       Escrow Letter                                             Exhibit A
Exhibit S             -       Major Bond Actions                                        Exhibit A
Exhibit T             -       Form of Project Letter of Credit                          Exhibit A
Exhibit U             -       Preapproved Bond Eligibility Certificate                  Exhibit A
Exhibit V             -       Pre-Bond Closing Due Diligence Materials                  Exhibit A
Exhibit W             -       Revenue Bond Valuation Methodology                        Exhibit A
Exhibit X             -       Bond Transfer Agreement                                   Exhibit A
Schedule A            -       Lenders' Commitments                                      Exhibit A
Schedule B            -       Initial Borrowing Base Eligible Project Bonds             Exhibit A
Schedule 4.1(c)(ii)(2)(b)     Bond Documents                                     4.1(c)(ii)(2)(b)
Schedule 6            -       Authorized Representatives                                        6
Schedule 8.10(b)(i)   -       Borrower Constituent Documents                           8.10(b)(i)
Schedule 8.10(b)(ii)  -       Taxpayer Identification and State
                              Organizational Numbers                                  8.10(b)(ii)
Schedule 8.10(b)(iii) -       Outstanding Options, Etc.                              8.10(b)(iii)
</TABLE>


<PAGE>


<TABLE>
<CAPTION>


<S>                   <C>     <C>                                                            <C>

Schedule 8.17         -       Certain Transactions                                           8.17
Schedule 9.9          -       Insurance                                                       9.9
</TABLE>


<PAGE>


                             EXHIBIT A TO AGREEMENT
                             ----------------------

                                  DEFINITIONS
                                  -----------

      Acquired Assets as defined in Section 9.21(b).

      Acquisition Line Facility means that certain Acquisition Loan Agreement
dated as of December 24, 2001 by and among Fleet National Bank, as Agent for a
syndicate of Lenders, such Lenders, and Charter Mac Corporation, as amended and
in effect.

      Additional Collateral Request as defined in Section 5.7.

      Additional Commitment Lender as defined in Section 3.3(a).

      Adjusted EBITDA means, measured as of the last day of each calendar
quarter, without duplication, and in accordance with GAAP, the amount derived
from (A) for such quarter then ended, the Borrower's consolidated net income
(before deduction of Preferred Dividend payments and minority interest in income
of Subsidiaries (as so characterized on the Borrower's income statement from
time to time)), plus (B) Interest Expense (including under the Loan) for such
period, (C) plus the amount of income tax expense deducted in calculating net
income for that period, minus (D) the amount of income taxes actually paid
during that period, plus (E) depreciation, amortization and other non-cash items
deducted in calculating net income for that period, minus (F) non-cash revenue
included in calculating net income for that period, minus (G) to the extent
included in determining net income, any unrealized gain or loss in respect of
revenue bonds or hedging transactions, all of the foregoing as determined in
accordance with GAAP for such period, plus (H) all program fees associated with
the TOPS Program in respect of such period, minus (I) any and all special
distributions to its Affiliate management company in respect of such period,
plus (J) extraordinary losses for such period as determined in accordance with
GAAP, minus (K) extraordinary gains for such period as determined in accordance
with GAAP, plus (L) non-recurring litigation expenses and expenses related to
transactions outside of the Borrower's normal business activities which were
terminated prior to consummation, minus (M) non-recurring income or loss.

      Adjusted LIBOR Rate means for each Interest Period the rate per annum
obtained by dividing (i) LIBOR for such Interest Period, by (ii) an amount equal
to the number one minus the maximum reserve percentage (expressed as a decimal)
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System for determining the
maximum reserve requirements (including, without limitation, any basic,
supplemental, marginal and emergency reserve requirements) for Agent (or of any
subsequent holder of a Note hereunder which is subject to such reserve
requirements) in respect of liabilities or assets consisting of or including
Eurocurrency liabilities (as such term is defined


                                      A-3
<PAGE>


in Regulation D of the Board of Governors of the Federal Reserve System) having
a term equal to the Interest Period.

      Adjusted Tangible Net Worth means, at the time of determination, Total
Assets, minus (a) Intangible Assets, minus (b) Total Liabilities, minus (c) net
interest receivables in respect of defaulted bonds or other impaired assets,
minus (d) to the extent not included in "Total Liabilities," minority interests
in Subsidiaries subject to mandatory redemption, plus (e) to the extent included
in "Total Liabilities," dividends payable on Subsidiaries' preferred shares.

      Advance means a disbursement of the proceeds of the Loan made or to be
made by the Lenders pursuant to the terms of this Loan Agreement.

      Advance Rate means the applicable percentage to be applied to a particular
type of Collateral in order to determine its Collateral Value, as specified in
the applicable provisions of the definition of "Collateral Value."

      Advance Request as defined in Section 4.1(a)(i).

      Affiliate means, as to any Person, any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with,
such Person, and shall include (a) any beneficial holder of 10% or more of any
class of the then outstanding capital stock (or other shares of beneficial
interest or voting securities) of the specified Person, and (b) any Person
directly or indirectly possessing the power to direct or cause the direction of
the management or policies of the specified Person, whether through the
ownership of voting securities, by agreement, or otherwise.

      Agent means Fleet National Bank, acting as agent for the Lenders.

      Agreement as defined in the Preamble.

      Agreement Date means the date as of which this Loan Agreement is executed
as set forth in the Preamble hereto.

      Appraised Value means with respect to a Property, the value of such
Property as set forth in the most recent appraisal of the Property (and
inclusion of the investment value of federal low-income housing tax credits)
approved by the Agent and the Requisite Lenders using an appraisal methodology
reasonably acceptable to the Agent and the Requisite Lenders.

Approval Notice means, as to any Advance Request, written notification
from the Agent to the Borrower to the effect the Agent and the Lenders have (x)
determined that (i) the subject Project is an Approved Project, or (ii) an
Eligible Project Bond already included as Borrowing


                                      A-4
<PAGE>


Base Eligible Project Bond has become an Eligible Seasoned Bond or an Eligible
Unenhanced Lease-Up Bond, and (y) approved the Advance Request subject to the
Borrower's satisfaction of the applicable provisions of Section 4.1.

      Approved Project means any Project as to which the Agent and the Lenders
(a) have determined in their sole discretion that the Due Diligence Materials or
the Pre-Bond Closing Due Diligence Materials, as the case may be, are
satisfactory in form and substance, (b) have determined that the applicable
Project satisfies (or will, upon completion of the construction of such Project,
satisfy) the Minimum Project Parameters, and (c) have determined that the
Project Bond secured by the Project qualifies (or will, upon issuance in
accordance with the Due Diligence Materials, qualify) as an Eligible Project
Bond hereunder.

      Arrangers as defined in the Preamble hereto.

      Assignment and Acceptance as defined in Section 12.3.

      Authorized Representatives as defined in Section 6 and listed on Schedule
6.

      Bankruptcy Law means any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution, or liquidation or
similar law, whether now or hereafter in effect.

      Bond Assets means all of the Borrower's right, title and interest in, to
and under (i) the Project Bonds; (ii) all Bond Collateral and Bond Documents
relating to the Project Bonds; (iii) all monies and other property of any kind
that relate to any of the Project Bonds and that are at any time or times in the
possession or under the control of Borrower, the Servicer or any bailee of the
Servicer; (iv) all monies, including monies not yet received, that represent
payments of principal and interest on the Project Bonds; (v) all books and
records of Borrower to the extent pertaining to any of (i) through (iv) above,
including all computer programs, disks, tapes and related electronic data
processing media, credit files, account cards, payment records, correspondence
and ledgers in which any of the foregoing are reflected or maintained; (vi) the
present and continuing exclusive right, power and authority, subject to the
provisions of the Servicing Agreement, to give and receive notices and other
communications, to make waivers or other agreements, to make claims for and
demand performance on, under or pursuant to any of the Project Bonds, the Bond
Documents, or the Bond Collateral, including, without limitation, to cause the
Trustee to draw under any Project Letter of Credit as and when permitted under
the Bond Documents, to bring actions and proceedings thereunder or for the
enforcement of the Project Bonds, the Bond Documents, or the Bond Collateral,
and to exercise all remedies, powers, privileges and options and to take any and
all actions which Borrower is or may become entitled to take under the Project
Bonds, the Bond Documents, or the Bond Collateral; (vii) any and all property of
every name and nature, now or hereafter transferred, mortgaged, pledged or
assigned as security or additional security for payment or performance of any
obligation of the Bond Issuers and/or Bond Obligors to Borrower under the
Project Bonds or any of the Bond


                                      A-5
<PAGE>


Collateral, and the liabilities, obligations and indebtedness evidenced thereby
or reflected therein; and (viii) all income, revenues, issues, products,
revisions, substitutions, replacements, profits and proceeds of and from all of
the foregoing.

      Bond Collateral means with respect to each Project Bond, all of the
property and interests in property now or hereafter securing such Project Bond,
and the obligations of the Bond Issuer and/or any Bond Obligor in respect of
such Bond, including, without limitation, all contract rights, accounts
receivable, accounts, documents, instruments, general intangibles, escrows and
Bond Documents.

      Bond Debt Service means, for any Project Bond, for any fiscal period, the
total debt service required to be paid in accordance with the terms thereof.

      Bond Debt Service Coverage Ratio means, as to any Project Bond for any
period, the ratio of Net Operating Income to Bond Debt Service for the Project
securing such Project Bond for such period.

      Bond Documents means with respect to each Project Bond, any and all
instruments, loan agreements, construction facility agreements, mortgages,
indentures, agreements, guaranties, certificates, title insurance policies, UCC
financing statements, or other writings (including, without limitation, Project
Letters of Credit) now or hereafter evidencing or securing the obligations of
the Bond Issuer and/or any Bond Obligor in respect of such Project Bond, and all
related rights.

      Bond Document Default means the occurrence of an event of default (after
any applicable grace or cure periods) under any Bond Document.

      Bond Issuer means, with respect to a Project Bond, the state or local
government unit, authority or instrumentality that issued such Project Bond.

      Bond Action as defined in Section 9.20(d).

      Bond Obligor means with respect to each Project Bond, each Person directly
(including the Project Owner) or indirectly obligated to repay the indebtedness
evidenced by such Project Bond (including any guarantor of any such Person).

      Bond Purchase Account means account number 9421136513 maintained by the
Borrower at Fleet National Bank into which the Agent shall deposit the proceeds
of all Borrowing Base Acquisition Advances and the Borrower shall deposit all
additional funds necessary to be paid in connection with, and at the time of,
the Bond Purchase Closing for the purchase of the subject Eligible Project Bond.


                                      A-6
<PAGE>


      Bond Purchase Closing means the closing on the purchase of a Project Bond
by the Borrower.

      Bond Purchase Closing Date means the date on which a Bond Closing is
consummated.

      Bond Transfer Agreement as defined in "Minimum Project Parameters".

      Bondholder Representative as defined in the Custody Agreement.

      Borrower as defined in the Preamble.

      Borrowing Base Acquisition Advance means an Advance, the proceeds of which
are to be used by the Borrower to acquire an Eligible Project Bond for inclusion
for purposes of calculation of the Collateral Value of the Borrowing Base
Eligible Project Bonds as a Borrowing Base Eligible Project Bond.

      Borrowing Base Certificate as defined in Section 4.1(a) and in the form of
Exhibit F hereto, concerning the Borrowing Base Eligible Project Bonds as of the
date specified therein.

      Borrowing Base Eligible Project Bonds means, at any time, all Eligible
Project Bonds, initially to comprise the Eligible Project Bonds identified on
Schedule B hereto, (a) which the Requisite Lenders have accepted as "Borrowing
Base Eligible Project Bonds" in accordance with the terms and conditions of this
Agreement, (b) in which the Agent, for the benefit of the Lenders, has been
granted a security interest hereunder to secure the Obligations, and (c) which
have Collateral Value attributed to them for the purposes of determining Loan
Availability.

      Business Day means any day of the year, other than a Saturday or Sunday,
on which offices of Fleet National Bank are not required or authorized by law to
be closed for business in Boston, Massachusetts. If any day on which a payment
is due is not a Business Day, then the payment shall be due on the next day
following which is a Business Day. Further, if there is no corresponding day for
a payment in the given calendar month (i.e., there is no "February 30th"), the
payment shall be due on the last Business Day of the calendar month.

      Cash Collateral means all cash, instruments, securities and funds
deposited or credited from time to time in the Cash Collateral Account, all
investments of funds from the Cash Collateral Account and all instruments and
securities evidencing such investments (and any related accounts or subaccounts
to which such investments are credited or held), and all proceeds thereof.

      Cash Collateral Account means that certain demand deposit account number
942136468 with the Agent entitled " Charter MAC Equity Issuer Trust Restricted
Account/Fleet National Bank, Agent," which shall be under the sole dominion and
control of the Agent, for the benefit of


                                      A-7
<PAGE>


the Lenders, and disbursements from which shall be made to the Borrower (by
transfer to the Operating Account) only subject to the terms and conditions of
this Agreement.

      Change in Control means the occurrence of any of the following with
respect to the Borrower and Charter Mac and Holding Trust, as applicable:

      (A)   as to the Borrower:

            (b) any Person or group of Persons (within the meaning of Section 13
or 14 of the Securities Exchange Act) is or becomes the beneficial owner (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act) of the common shares (and not the Preferred
Shares) representing a majority of total voting power of the aggregate
outstanding common shares of the Borrower normally entitled to vote in the
election of directors of the Borrower, or

            (c) during any period of twelve (12) consecutive calendar months,
individuals who were directors or trustees of the Borrower on the first day of
such period (together with any new directors or trustees whose election by the
board of directors or board of trustees (or the like) of the Borrower or whose
nomination for election by the shareholders of the Borrower was approved by a
vote of a majority of the directors or trustees then still in office who were
either directors or trustees (or the like) at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the board of directors or board of
trustees (or the like) of the Borrower.

      (b)   as to Charter Mac or Holding Trust: (i) any merger or consolidation
of Charter Mac or Holding Trust with or into any Person or any sale, transfer or
other conveyance, whether direct or indirect, of all or substantially all of the
assets of Charter Mac or Holding Trust, on a consolidated basis, in one
transaction or a series of related transactions, if, immediately after giving
effect to such transaction, any Person or group of Persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act) is or becomes the beneficial
owner (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act) of the common shares
representing a majority of the total voting power of the aggregate outstanding
securities of the transferee or surviving entity normally entitled to vote in
the election of directors, managers, or trustees, as applicable, of the
transferee or surviving entity, (ii) any Person or group of Persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act) is or becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act) of the common shares
representing a majority of total voting power of the aggregate outstanding
common shares of Charter Mac or Holding Trust normally entitled to vote in the
election of directors of Charter Mac or Holding Trust, (iii) during any period
of 12 consecutive calendar months, individuals who were directors or trustees of
Charter Mac or Holding Trust on the first day of such period (together with any
new directors or trustees whose election by the board of directors or board of
trustees of Charter Mac or Holding Trust or whose nomination for election by the
stockholders of Charter Mac or Holding Trust was approved by a vote of a
majority of the


                                      A-8
<PAGE>


directors or trustees then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
board of directors of Charter Mac or Holding Trust, or (iv) the sale or
disposition, whether directly or indirectly, by Charter Mac or Holding Trust
and/or their respective Subsidiaries (whether pursuant to a single transaction
or series of related transaction) of tangible assets representing more than 25%
of Charter Mac's Tangible Assets (as defined in the Charter Mac Covenants) or
Holding Trust's Tangible Assets (as defined in the Charter Mac Covenants), as of
the date of such sale or disposition.

      Charter Mac means Charter Municipal Mortgage Acceptance Company, a
Delaware statutory trust.

      Charter Mac Covenants are set forth on Exhibit O attached hereto.

      Closing Date means the date as of which all conditions specified in
Section 7.1 have been satisfied or waived in accordance with the terms thereof.

      Code means the Internal Revenue Code of 1986, as amended from time to
time, and all Treasury Regulations thereunder, as amended from time to time.

      Collateral as defined in Section 5.1.

      Collateral Release Request as defined in Section 5.5.

      Collateral Value means, at any time of calculation, a dollar amount equal
to the aggregate of:

      (A)   With respect to each Eligible Enhanced Non-Seasoned Bond, an amount
equal to sixty percent (60%) of the Market Value of such Eligible Enhanced
Non-Seasoned Bond; plus

      (B)   With respect to each Eligible Unenhanced Non-Seasoned Bond, an
amount equal to fifty percent (50%) of the Market Value of such Eligible
Unenhanced Non-Seasoned Bond; plus

      (C)   With respect to each Eligible Seasoned Bond, an amount equal to
seventy percent (70%) of the Market Value of such Eligible Seasoned Bond; plus

      (D)   With respect to each Eligible Unenhanced Lease-Up Bond, an amount
equal to sixty percent (60%) of the Market Value of such Eligible Unenhanced
Lease-Up Bond; plus

      (E)   With respect to each Wet Eligible Bond, the Collateral Value which
would have been attributable thereto had all Purchase Funding Conditions been
met; plus


                                      A-9
<PAGE>


      (F)   With respect to Cash Collateral, an amount equal to one hundred
percent (100%) thereof,

provided, however:

            (I)      In no event shall Collateral Value be attributed at any
      time to (i) Wet Eligible Bonds in excess of an aggregate of $15,000,000;
      (ii) any one Eligible Project Bond in an amount in excess of the lesser of
      (x) $20,000,000, or (y) an amount which exceeds 40% of the Collateral
      Value (including such Eligible Project Bond) of all Borrowing Base
      Eligible Project Bonds; (iii) Eligible Unenhanced Non-Seasoned Bonds,
      Eligible Unenhanced Lease-Up Bonds, and Eligible Seasoned Bonds, in the
      aggregate, in an amount in excess of the lesser of (x) 30% of the Total
      Commitment at such time, or (y) 50% of the outstanding principal balance
      of the Loan at such time, (iv) Eligible Partially Seasoned Bonds to the
      extent exceeding 25% of the Collateral Value attributable to all Eligible
      Seasoned Bonds, or (v) an Eligible Project Bond which had been a Borrowing
      Base Eligible Project Bond and became an Ineligible Project Bond; and

            (II)     The Collateral Value of any Borrowing Base Eligible Project
      Bond as to which there shall have occurred (x) a Bond Action (whether or
      not constituting a Major Bond Action), or (y) an Impairment Event, shall
      be such dollar amount as the Agent and the Lenders acting in their
      reasonable discretion shall from time to time determine and advise the
      Borrower.

      Commitment means, with respect to each Lender at any time, the amount set
forth on Schedule A hereto as the amount of such Lender's commitment to make
Advances to the Borrower, as may be (a) adjusted from time to time as a result
of assignments to or from such Lender pursuant to Sections 12.2(h) or 12.3, or
(b) increased from time to time pursuant to Section 3.3.

      Commitment Increase as defined in Section 3.3(a).

      Commitment Increase Date as defined in Section 3.3(b).

      Commitment Increase Supplement as defined in Section 3.3(a).

      Commitment Percentage means, with respect to each Lender, the percentage
set forth on Schedule A hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders, as may be amended from time to time by the
Agent as provided in Section 12.

      Confidential Information as defined in Section 13.20.

      Constituent Documents means, with respect to any Person, its articles or
certificate of incorporation, governing instrument, trust agreement, charter,
resolutions, constitution, by-laws,


                                      A-10
<PAGE>


partnership agreements, organizational documents, limited liability company
agreements, or such other document as may govern such entity's formation or
organization.

      Construction Reports means any report prepared by Person, including,
without limitation, any architect, contractor, or engineer in connection with
the construction or substantial rehabilitation of any Project.

      Contractual Obligation means, for any Person, any provision of any
security issued by that Person or of any material indenture, mortgage, deed of
trust, contract, undertaking, agreement, or other instrument to which such
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.

      Credit Rating means the rating assigned by S&P to the Project Letter of
Credit Issuer's long-term obligations (bank deposits, bank notes, letters of
credit, etc.).

      Custodial Agreement means that certain Custodial Agreement by and among
the Agent, the Borrower, and the Custodian in the form of Exhibit P hereto.

      Custodian means Deutsche Bank National Trust Company, a national banking
association, having an address at 6810 Crumpler Blvd., Olive Branch, Mississippi
38654 .

      Damages as defined in Section 9.17.

      Debt Service means, for any period, determined on a consolidated basis (A)
the Borrower's Interest Expense for such period, plus (B) the aggregate amount
of regularly scheduled or mandatory principal payments of Indebtedness
(excluding optional prepayments and balloon principal payments due on maturity
in respect of any Indebtedness) required to be made during such period by the
Borrower or any of its Subsidiaries (and, if such period is less than a full
twelve month period, annualized by taking the sum of all of the payments
required to be made during such period and during any immediately subsequent
periods required to create a full twelve month test period).

      Default means a condition or event which would, with the giving of notice
or lapse of time or both, constitute an Event of Default.

      Default Rate as defined in Section 3.5(n).

      Delinquent Lender as defined in Section 12.2(h).

      Denial Notice means as to any Advance Request, the written notification by
the Agent to the Borrower that the Agent and the Lenders have determined not to
make the requested Advance.


                                      A-11
<PAGE>


      Dollar(s) means lawful money of the United States.

      Drawdown Date means the Business Day on which any Advance is funded.

      Due Diligence Materials are set forth on Exhibit Q attached hereto.

      Eligible Assignee means, any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; and (d) the central bank of any
country which is a member of the OECD.

      Eligible Enhanced Non-Seasoned Bond means a Pledged Bond which is a
Non-Seasoned Project Bond, secured by a Lien on an Approved Project as to which
a Project Letter of Credit is outstanding.

      Eligible Fully Seasoned Bond means a Pledged Bond which is secured by a
Lien on an Approved Project which is a Seasoned Project.

      Eligible Partially Seasoned Bond means a Pledged Bond which, immediately
prior to the time of reference, was an Eligible Fully Seasoned Bond, and is
secured by a Lien on an Approved Project that is not a Seasoned Project, solely
because the Bond Debt Service Coverage Ratio produced by such Project for each
of the immediately preceding three (3) calendar months was less than 1.10:1, but
was at least 1.0:1.

      Eligible Project Bond means any Project Bond (a) which, at the time of
reference, is an Eligible Enhanced Non-Seasoned Bond, an Eligible Seasoned Bond,
an Eligible Unenhanced Non-Seasoned Bond, or an Eligible Unenhanced Lease-Up
Bond, (b) as to which the Agent has received all Required Collateral Documents
(subject to the provisions of Section 4.2), (c) as to which the Borrower owns at
least the percentage of the total outstanding amount of all series of bonds
issued in connection therewith as is necessary to control (by directing the
Trustee or otherwise) all matters requiring or permitting the direction, consent
or approval (whether by vote or otherwise) of bondholders other than Permitted
Consent Exceptions, (d) as to which the Project Bond represents one hundred
percent (100%) of all series of bonds issued in connection therewith for which
interest payable thereon is excludable from gross income for purposes of federal
income taxation, and (e) which was not subject to a Bond Document Default when
first


                                      A-12
<PAGE>


included as a Borrowing Base Eligible Project Bond hereunder and as to which no
Bond Document Default has occurred and is continuing for a period of greater
than ninety (90) days.

      Eligible Seasoned Bond means a Pledged Bond which is an Eligible Fully
Seasoned Bond or an Eligible Partially Seasoned Bond.

      Eligible Unenhanced Lease-Up Bond means, a Pledged Bond (a) which,
immediately prior to the time of reference, was either (i) an Eligible Enhanced
Non-Seasoned Bond or (ii) an Eligible Unenhanced Non-Seasoned Bond, in either
case as to which Collateral Value had been attributed for the purposes of
determining Loan Availability, (b) which has become a Lease-Up Bond, and (c)
which otherwise meets all of the criteria of a Non-Seasoned Project Bond.
Notwithstanding the foregoing, a Pledged Bond which otherwise meets the
foregoing criteria shall automatically cease to qualify as an Eligible Project
Bond, without prior notice to the Borrower, if any of the following events shall
occur: (x) such Pledged Bond fails to become an Eligible Fully Seasoned Bond
within twelve (12) months from the date such Project Bond became an Eligible
Unenhanced Lease-Up Bond hereunder, or (y) as of the last day of each calendar
quarter, the average Bond Debt Service Coverage Ratio (exclusive of amounts
funded from operating reserves for the purposes of the calculation thereof)
produced by the subject Project for such calendar quarter has failed to exceed
the average Bond Debt Service Coverage Ratio (exclusive of amounts funded from
operating reserves for the purposes of the calculation thereof) produced by the
subject Project for the immediately preceding calendar quarter.

      Eligible Unenhanced Non-Seasoned Bonds means a Pledged Bond which is a
Non-Seasoned Project Bond, secured by a Lien on an Approved Project as to which
no Project Letter of Credit is outstanding.

      Equity Interests means, as to any Person, any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interest in (however designated) equity of such Person, including, without
limitation, any preferred interests, any limited or general partnership
interest, and any limited liability company membership interests, but excluding
investment interests issued by special purpose trusts as part of a
securitization of Project Bonds.

      Equity Issuer Trust Agreement means the Amended and Restated Trust
Agreement dated as of June 29, 2000, by and among the Managing Trustees, Charter
Municipal Mortgage Acceptance Company, Wilmington Trust Company, as Registered
Trustee, and Related Charter, L.P., as Manager relating to the Borrower.

      ERISA and ERISA Plan each as defined in Section 8.12.

      Escrow Agent means a Person approved by the Agent, in such Person's
capacity as escrow agent for the Agent (on behalf of the Lenders) pursuant to
the Escrow Agreement.


                                      A-13
<PAGE>


      Escrow Agent's Trust Receipt means a certificate of the Escrow Agent in
the form of Exhibit A to the Escrow Letter.

      Escrow Letter means that certain Escrow Letter by and among the Agent and
the Escrow Agent in the form of Exhibit R hereto.

      Essential Required Collateral Documents as defined in Section 3.5(i)(iv).

      Event of Default as defined in Section 10.1.

      Existing Collateral Advance means an Advance to be supported solely by the
then Borrowing Base Eligible Project Bonds, where the Loan Availability is to be
calculated without utilizing any increase in the Advance Rate applicable to any
such Borrowing Base Eligible Project Bond from that utilized when the Collateral
Value thereof was last determined by the Agent and the Lenders.

      Extended Maturity Date as defined in Sections 3.4.


      Extension Request as defined in Section 3.7(a)(ii).

      Facility Debt Service Coverage Ratio means, the ratio of Interest Income
to Loan Debt Service.

      Federal Funds Rate means: For any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York, or
if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such transactions received by the Agent from
three federal funds brokers of recognized standing selected by the Agent.

      Fixed Charges means, measured as of the last day of each calendar quarter,
without duplication, an amount for the then ending quarter equal to the sum for
such period of the Borrower's consolidated (A) Debt Service, plus (B) Preferred
Dividends, plus (C) program fees associated with the TOPS Program, Merrill Lynch
P-Floats, and other similar securitization programs.

      Funding Certification as defined in Section 4.1(c)(ii).

      Future Commitments as defined in Section 12.2(h)(ii).


                                      A-14
<PAGE>


      Generally Accepted Accounting Principles or GAAP means generally accepted
accounting principles as in effect from time to time set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the audited
financial statements of the Borrower for the fiscal year ended December 31,
2001, provided to the Agent and the Lenders.

      Governmental Authority means any nation or government, any federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, regulatory
or administrative functions.

      Governmental Authorization means any permit, license, authorization, plan,
directive, consent order, or consent decree of or from any Governmental
Authority.

      Hedging Agreements means any agreement between the Borrower and the Agent
or any Lender (or any Affiliate of any such Person) which protects the Borrower
from fluctuations in interest rates or asset values in connection with the Loan.

      Holding Trust means CM Holding Trust, a Delaware statutory trust.

      Impairment Event as defined in Section 9.5(a).

      Increased Collateral Value Advance means an Advance to be supported solely
by the then Borrowing Base Eligible Project Bonds, where the Loan Availability
is to be calculated utilizing an increase in the Advance Rate applicable to any
one or more of such Borrowing Base Eligible Project Bonds from that utilized
when the Collateral Value thereof was last determined by the Agent (because such
Eligible Project Bond or Eligible Project Bonds were Non-Seasoned Project Bonds
which became Eligible Seasoned Bonds or Eligible Unenhanced Non-Seasoned Bond
since its or their Collateral Value was last determined by the Agent and the
Lenders).

      Incremental Loan Commitment Requirements means, with respect to any
request for a Commitment Increase made pursuant to Section 3.3, or any provision
of a Commitment Increase on a given Commitment Increase Date, the satisfaction
of each of the following conditions: (i) no Default or Event of Default then
exists or would result therefrom (including on a pro forma basis relative to
financial covenant compliance), (ii) the Borrower shall have certified to the
Agent that the incurrence of Indebtedness in an aggregate principal amount equal
to the full amount of the Commitment Increase then requested or provided would
not cause a breach of, or a default under, any agreement to which the Borrower
is a party, (iii) all representations and warranties and covenants of the
Borrower contained in this Loan Agreement or the other Loan Documents shall be
true as of the date as of which it was made and shall also be true at and as of


                                      A-15
<PAGE>


the such date of request or Commitment Increase Date, as the case may be (after
giving effect to the incurrence of any Advances at such time), except to the
extent of changes resulting from transactions contemplated and permitted by this
Loan Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, or except to the extent that such representations and warranties relate
expressly to an earlier date, and (iv) the delivery by the Borrower of an
officer's certificate to the Agent certifying as to compliance with the
preceding clauses (i), (ii), and (iii).

      Indebtedness means all obligations, contingent and otherwise, that in
accordance with Generally Accepted Accounting Principles should be classified
upon the consolidated balance sheet of a Borrower and the Borrower's
Subsidiaries as liabilities, or to which reference should be made by footnotes
thereto, including in any event and whether or not so classified: (a) all
obligations for borrowed money or other extensions of credit whether or not
secured or unsecured, absolute or contingent, including, without limitation,
unmatured reimbursement obligations with respect to letters of credit or
guarantees issued for the account of or on behalf of the Borrower and its
Subsidiaries and all obligations representing the deferred purchase price of
property; (b) all obligations evidenced by bonds, notes, debentures or other
similar instruments; (c) all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property owned
or acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (d) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others or
otherwise, including any obligations with respect to puts, swaps, and other
similar undertakings, any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase indebtedness, or to
assure the owner of indebtedness against loss, through an agreement to purchase
goods, supplies, or services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise, and the obligations
to reimburse the issuer in respect of any letters of credit; and (e) that
portion of all obligations arising under capital leases that is required to be
capitalized on the consolidated balance sheet of the Borrower and its
Subsidiaries; but excluding, in all events obligations arising under operating
leases and accounts payable arising in the ordinary course of business.

      Indemnified Party as defined in Section 9.17.

      Ineligible Project Bond means a Project Bond which had been an Eligible
Project Bond, but which ceased to possess one or more of the characteristics for
eligibility as such.

      Initial Term as defined in Section 3.4.

      Initial Maturity Date as defined in Section 3.4.

      Insurance Agreement means the amended and restated insurance agreement,
dated as of December 1, 2000, by and among Charter Mac, the Borrower, Deutsche
Bank, as Administrative


                                      A-16
<PAGE>


Agent, and others, as such agreement may be amended, restated, modified or
supplemented from time to time.

      Intangible Assets means, at the time of determination, those assets of the
Borrower and its Subsidiaries on a consolidated basis that, in accordance with
GAAP, are properly classifiable as intangible assets, including, but not limited
to, goodwill, franchises, licenses, patents, trademarks, trade names and
copyrights.

      Interest Expense means, for any period, the sum (calculated on an
annualized basis), on a consolidated basis of (A) all consolidated interest
expense of the Borrower determined in accordance with GAAP, plus (B) capitalized
interest not covered by an interest reserve from a loan facility, plus (C) the
allocable portion (based on liability) of any accrued or paid interest incurred
on any obligation for which any entity in the Borrower's consolidated group is
wholly or partially liable under repayment, interest carry, or performance
guarantees, or other relevant liabilities (including, without limitation,
accrued or paid interest characterized on the Borrower's balance sheet from time
to time as "minority interest in income of subsidiary"), provided that no
expense shall be included more than once in such calculation even if it falls
within more than one of the foregoing categories.

      Interest Income means, for any period, the interest payments made by all
Bond Obligors on account of all Borrowing Base Eligible Project Bonds.

      Interest Payment Date means (a) the last day of each calendar month, and
(b) the Maturity Date.

      Interest Period.

      (A)   The term "Interest Period" means with respect to each LIBOR Advance:
a period of one (1), two (2), three (3), or six (6) consecutive months, subject
to availability, as selected, or deemed selected, by Borrower in accordance with
the provisions of this Loan Agreement. Each such Interest Period shall commence
on the Business Day so selected, or deemed selected, by Borrower and shall end
on the numerically corresponding day in the first, second, third or sixth month
thereafter, as applicable. Provided, however: (i) if there is no such
numerically corresponding day, such Interest Period shall end on the last
Business Day of the applicable month, (ii) if the last day of such an Interest
Period would otherwise occur on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day; but (iii) if such
extension would otherwise cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding Business Day.

      (B)   The term "Interest Period" means with respect to each Variable Rate
Advance consecutive periods of one (1) day each.


                                      A-17
<PAGE>


      (C)   No Interest Period may be selected which would end beyond the then
Maturity Date of the Loan (as actually extended) . If the last day of an
Interest Period would otherwise occur on a day which is not a Business Day, such
last day shall be extended to the next succeeding Business Day, except as
provided above in clause (A) relative to a LIBOR Advance.

      Investment means the acquisition of any real or tangible personal property
or of any stock or other security, any loan, advance, bank deposit, money market
fund, contribution to capital, extension of credit (except for accounts
receivable arising in the ordinary course of business and payable in accordance
with customary terms), or purchase or commitment or option to purchase or
otherwise acquire real estate or tangible personal property or stock or other
securities of any party or any part of the business or assets comprising such
business, or any part thereof.

      Joinder  means the  joinder  to this Loan  Agreement  executed  by each of
Charter Mac and Holding Trust.

      Late Charge as defined in Section 3.5(o).

      Lease-Up Bond means a Pledged Bond that is secured by an Approved  Project
as to which (a) the construction of such Approved Project has been substantially
completed (including all phases of such Approved Project), except solely for the
completion of minor "punch list" items,  such that all residential units thereof
are  habitable  and  rentable,  and  permanent  certificates  of  occupancy  (or
temporary  certificates  of occupancy  if approved by the Agent,  in the Agent's
sole and absolute  discretion) for such Approved  Projects (for all phases) have
been issued by the appropriate  Governmental  Authority  having  jurisdiction to
issue such  certificates,  (b) any letter of credit  supporting the construction
financing for the Approved Project has terminated,  and (c) the Approved Project
is in the lease-up phase.

      Legal Requirements means, all applicable federal,  state, county and local
laws, by-laws, rules, regulations, codes and ordinances, and the requirements of
any  governmental  agency or  authority  having or  claiming  jurisdiction  with
respect  thereto,  including,  but not limited to, those  applicable  to zoning,
subdivision,  building,  health, fire, safety, sanitation, the protection of the
handicapped,  and  environmental  matters and shall also  include all orders and
directives  of any court,  governmental  agency or authority  having or claiming
jurisdiction with respect thereto.

      Lenders means, collectively, the financial institutions listed on Schedule
A, as well as any Person which becomes a "Lender"  hereunder pursuant to Section
3.3 or 12.3.

      LIBOR  means,  as  applicable  to any LIBOR  Advance  for the  purposes of
determining  the applicable  LIBOR Rate, the rate per annum as determined on the
basis of the offered  rates for deposits in U.S.  dollars,  for a period of time
comparable to the Interest Period applicable to such LIBOR Advance which appears
on the  Telerate  page 3750 as of 11:00 a.m.  London time on the day that is two
London  Banking Days  preceding the first day of such LIBOR  Advance;  provided,
however,  if the rate described  above does not appear on the Telerate System on
any applicable


                                      A-18
<PAGE>


interest  determination  date,  LIBOR  shall be the rate  (rounded  upwards,  if
necessary,  to  the  nearest  one  hundred-thousandth  of a  percentage  point),
determined  on the basis of the  offered  rates for  deposits  in Dollars  for a
period of time  comparable  to the  Interest  Period  applicable  to such  LIBOR
Advance which are offered by four major banks in the London  interbank market at
approximately  11:00 a.m. London time, on the day that is two (2) London Banking
Days preceding the first day of such LIBOR Advance as selected by the Agent. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its Dollar  deposit  offered rate. If at least two (2)
such quotations are provided, the rate for that date will be the arithmetic mean
of the  quotations.  If fewer than two (2) quotations are provided as requested,
the rate for that date will be  determined  on the basis of the rates quoted for
loans in Dollars to leading  European  banks for a period of time  comparable to
the Interest  Period  applicable to such LIBOR Advance offered by major banks in
New York City at approximately 11:00 a.m. New York City time, on the day that is
two (2) London Banking Days preceding the first day of such LIBOR Advance.

      LIBOR  Advance  means any Advance  outstanding  under this Loan  Agreement
which pursuant to this Loan Agreement bears interest at the LIBOR Rate.

      LIBOR Rate means the per annum rate equal to the Adjusted  LIBOR Rate plus
150 basis points.

      Licenses and Permits  means,  all licenses,  permits,  authorizations  and
agreements issued by or agreed to by any Governmental Authority, or by a private
party pursuant to a Permitted Title  Exception,  and including,  but not limited
to, building permits,  occupancy permits and such special permits, variances and
other  relief as may be  required  pursuant to Legal  Requirements  which may be
applicable to the Property or the Project.

      Lien means,  any mortgage,  deed of trust,  lien,  pledge,  hypothecation,
assignment,  security interest,  or any other  encumbrance,  charge or transfer,
including,  without  limitation,  any conditional  sale or other title retention
agreement,  any financing lease having substantially the same economic effect as
any of the foregoing, and mechanic's,  materialmen's and other similar liens and
encumbrances.

      Liquidation  Proceeds  means,  amounts  received  by the Agent  and/or the
Lenders in the  exercise  of the rights and  remedies  under the Loan  Documents
(including,  but not limited to, all rents,  profits and other proceeds received
by the Agent  and/or  the  Lenders  from the  operation  of the  Project  or the
liquidation of any Collateral, but not including any amount bid at a foreclosure
sale or on behalf of the Agent or  otherwise  credited to the  Borrower  in, any
deed-in-lieu of foreclosure or similar transaction).

      Liquidity  Agreement means the amended and restated  liquidity  agreement,
dated as of December 1, 2000, by and among others,  the Owner Trust,  acting for
itself and by, for and on behalf of each Owner Trust  Series,  the Tender Agent,
the Certificate Trust Agent,  the  Liquidity


                                      A-19
<PAGE>


Agent,  the  Liquidity  Banks named  therein  (each of the  foregoing as defined
therein), as such agreement may be amended,  restated,  modified or supplemented
from time to time

      Loan as defined in Section 2.2.

      Loan Agreement as defined in the Preamble.

      Loan Availability as defined in Section 3.2(a).

      Loan Debt Service means,  for any period,  the  Borrower's  total interest
expense on account of the Loan.

      Loan Documents  means singly and  collectively,  the Loan  Agreement,  the
Notes,  the  Custodial  Agreement,  any Bond  Transfer  Agreement,  any  Hedging
Agreements,  and such other and further instruments,  documents, and agreements,
whether now existing or hereafter arising,  by, between, and among the Borrower,
the Agent,  and the  Lenders in any way  relating to the  foregoing,  all as may
hereafter  be  amended,  modified,  extended,  severed,  assigned,  substituted,
renewed or restated from time to time.

      London Banking Day means, any day on which dealings in deposits in Dollars
are transacted in the London interbank market.

      Major Bond Actions are set forth on Exhibit S attached hereto.

      Mandatory Principal Payment as defined in Section 3.5(i).

      Market Value means,  as to any Eligible  Project  Bond,  as of any date of
determination,  the least of (a) the value of such  Project Bond  determined  in
accordance with the Borrower's  Revenue Bond Valuation  Methodology and accepted
by the Borrower's independent auditors, (b) the aggregate Appraised Value of all
Properties securing such Project Bond, (c) the then outstanding principal amount
of such Project Bond,  (d) the purchase price paid or to be paid by the Borrower
for such  Project  Bond,  or (e) if such  Eligible  Project  Bond is an Eligible
Enhanced Seasoned Bond, the undrawn amount of the Project Letter of Credit.

      Maturity  Date  means,  the  Initial  Maturity  Date,  or, if the  Initial
Maturity  Date  has  been  extended  pursuant  to the  provisions  of this  Loan
Agreement, the Extended Maturity Date.

      Minimum  Project  Parameters  means,  with  respect to each  Project,  the
following parameters for such Project:

      (a)   The Property  benefits from equity raised through the syndication of
federal  low-income  housing tax credits,  and 100% of the residential units are
set aside to be rented to qualifying low income tenants;


                                      A-20
<PAGE>


      (b)   The Project Owner has  contributed  federal  low-income  housing tax
credit equity to the Project in an amount not less than twenty  percent (20%) of
the total committed amount of such equity to such Project;

      (c)   The  projected  Bond Debt  Service  Coverage  Ratio for the Project,
assuming the  completion  and  occupancy of the Project,  shall not be less than
1.10 to 1.00 (1.0 to 1.0 for a Project securing an Eligible  Partially  Seasoned
Bond,  subject to the  limitations  set forth in the  applicable  proviso in the
definition of "Collateral Value");

      (d)   The Project  Loan to Value  Ratio  shall not be greater  than .85 to
1.0;

      (e)   The Project  Bond shall be secured by the  following  (each of which
security or mortgage  interests  shall be in favor of the Trustee of the Project
Bond):  (i) a first  mortgage  in and to the  Project,  (ii) a first  pledge and
security  interest  in and  to  all  leases,  licenses,  contracts,  agreements,
furniture,    fixtures,    building   supplies,   personal   property,   capital
contributions,  and all other assets of the Project  Owner  relating to the use,
operation,  ownership and development of the Project,  and (iii)  completion and
suretyship guarantees;

      (f)   The Project Bond has been duly  authorized and validly issued by the
related  Bond  Issuer  and was,  at the time of  issuance,  a valid and  binding
obligation of such Bond Issuer,  and an  unqualified  opinion of bond counsel to
such effect was  rendered at the time each such  Project  Bond was issued.  Each
Project  Bond and  related  Bond  Document is  genuine,  has not been  impaired,
altered  or  modified  in any  respect  and  is the  legal,  valid  and  binding
obligation  of the  maker  thereof,  enforceable  in  accordance  with its terms
(except as such  enforceability  may be limited by Bankruptcy Law and by general
principles  of  equity,  regardless  of  whether  such  enforceability  shall be
considered  in a  proceeding  in equity or at law),  and is not  subject  to any
dispute, right of setoff, counterclaim or defense of any kind;

      (g)   The Project Bond and related Bond  Document  contains  customary and
enforceable  provisions  so as to render the rights and  remedies  of the holder
thereof  adequate  for  the  practical  realization  against  the  related  Bond
Collateral  of the  benefits of the security  interests  intended to be provided
thereby, including by judicial foreclosure. There is no exemption under existing
law  available  to the related Bond Issuer  and/or any Bond Obligor  which would
interfere  with the right of Borrower or any  assignee to  foreclose  or realize
upon such  Project  Bond and  related  Bond  Documents,  other than which may be
available under applicable Bankruptcy Law, debt relief or homestead statutes;

      (h)   The Project  Bond shall  provide for a market  fixed rate (and not a
variable rate) of interest  (other than a one-time  contractual  adjustment from
one fixed rate of  interest  to another  pre-set  fixed  rate of  interest  upon
completion of construction of the subject Project);


                                      A-21
<PAGE>


      (i)   If the interest  payable on any revenue bond issued by a Bond Issuer
in conjunction  with a Project Bond with respect to a particular  Project is not
excludable  from gross income for purposes of federal income  taxation  (each, a
"Related Taxable Bond"), then

            (i)   the  Project  Bond and  Related  Taxable  Bonds are all issued
                  pursuant to, and governed by, a single Trust Indenture;

            (ii)  the  aggregate  face amount of the Related  Taxable Bonds does
                  not  exceed  20% of the  aggregate  face  amount of the entire
                  issue of Project Bonds and Related Taxable Bonds;

            (iii) the Lien  securing  such  Related  Taxable  Bond shall be on a
                  parity with or  subordinate  to the Lien  securing the related
                  Project Bond;

            (iv)  the  owner  of all  such  Related  Taxable  Bonds  shall be an
                  Affiliate of the Borrower; and

            (v)   the owner of the Related  Taxable  Bond,  the Borrower and the
                  Servicer  thereof  shall  have  entered  into a Bond  Transfer
                  Agreement with the Agent in the form of Exhibit X hereto.

      (j)   For all Projects, to the extent applicable,

            (i) if the  repayment  of the  Project  Bond  shall be  secured by a
            Project  Letter of Credit,  such  Project  Letter of Credit shall be
            substantially  in the form annexed  hereto as Exhibit T, issued by a
            Project  Letter  of  Credit  Issuer  reasonably  acceptable  to  the
            Lenders, and the Project Letter of Credit Issuer shall have received
            and  approved,  at a  minimum,  a Project  Budget,  final  plans and
            specifications, and the construction contract for such Project, and;

            (ii)  if the  Project  is not  completed  (as  defined  in the  Bond
            Documents  for such  Project  Bond) the  Project  Owner  shall  have
            entered into a guaranteed  maximum price or fixed price contract for
            the construction of the Project; and

            (iii) the  Project  Owner has funded a reserve  account in an amount
            sufficient to fund 100% of the interest payments required to be made
            on account of the subject  Project Bond through the completion  date
            (as defined in the Bond  Documents  for such Project Bond) which has
            been  pledged  to the  Trustee  of such  Project  Bond on terms  and
            conditions satisfactory to the Agent.

      (k)   The Project  shall be subject to no other  Lien,  except for (i) the
Lien referred to in clause (e) above, (ii) a Lien in favor of the Trustee of the
Project Bond and the Project Letter of Credit Issuer, (iii) a Lien to secure any
other bond which is owned by the Borrower,  provided


                                      A-22
<PAGE>


that the Borrower pledges such bond to the Agent, for the ratable benefit of the
Lenders, as additional Collateral for the Obligations,  (iv) the Lien securing a
Related  Taxable  Bond,  if approved by the Agent and the  Lenders,  and (v) any
other  Lien  approved  by  the  Lenders,  in  the  Lenders'  sole  and  absolute
discretion.

      (l)   The Agent,  for the  ratable  benefit of the  Lenders,  shall have a
first priority  perfected  security  interest in the Borrower's  interest in the
Bond Assets.

      (m)   The Project is not subject to a bankruptcy plan.

      (n)   Except as contemplated to be remediated by an approved environmental
remediation  plan,  there  exists no violation  of any  Environmental  Laws with
respect to the Project.

      (o)   All environmental   remediations  recommended  in  a  report  of  an
environmental  engineer  with respect to the Project will be made, or were made,
within eighteen (18) months of the closing date relating to such Project Bond.

      (p)   The Project satisfies the Minimum Real Estate Parameters.

      Minimum Real Estate Parameters means,

      (a)   with respect to each Seasoned Project,  the following parameters for
            such Project:

            (i)   All Licenses and Permits and private approvals of every nature
                  whatsoever, if any, which are reasonably necessary in order to
                  allow the  construction,  leasing,  operation and occupancy of
                  the Project have been issued or obtained;

            (ii)  The  Trustee  of  the  Project  Bond  shall  have  received  a
                  mortgagee's   title  insurance  policy   reflecting  that  the
                  obligations  with  respect to the Project Bond is secured by a
                  first  mortgage  in and to the  Project,  subject  to only (i)
                  non-material  covenants,  easements or  restrictions of record
                  and (ii)  Liens  permitted  under the  definition  of  Minimum
                  Project Parameters;

            (iii) There shall have been no  material  unrepaired  or  unrestored
                  damage or  destruction by fire or otherwise to any of the real
                  or  tangible  personal  property  comprising  or  intended  to
                  comprise the Project;

            (iv)  Sanitary  drinking  water,  sanitary sewer  disposal  systems,
                  utility and power  connections and storm drainage adequate for
                  the Project are available as a matter of right; and


                                      A-23
<PAGE>


            (v)   The  Project  Owner  shall have  delivered  to the  Borrower a
                  report  acceptable to the Borrower as to the  acceptability of
                  any  environmental  risk  associated  with  the  Project,  and
                  addressing  the  existence of any  hazardous  materials at, or
                  which may affect, the Project.

      (b)   with respect to each  Project  which is not a Seasoned  Project, the
following parameters for such Project:

            (i)   All applicable  Licenses and Permits and private  approvals of
                  every  nature   whatsoever,   if  any,  which  are  reasonably
                  necessary  in  order  to  allow  the  construction,   leasing,
                  operation  and occupancy of the Project shall have been issued
                  or obtained;

            (ii)  The Trustee of the Project Bond shall have received a specimen
                  mortgagee's   title   insurance   policy  or  title  insurance
                  commitment reflecting that the obligations with respect to the
                  Project  Bond is  secured  by a first  mortgage  in and to the
                  Project, subject to only (i) non-material covenants, easements
                  or restrictions of record,  and (ii) Liens permitted under the
                  definition of Minimum Project Parameters;

            (iii) Upon completion of the  construction of the Project,  sanitary
                  drinking water,  sanitary sewer disposal systems,  utility and
                  power  connections and storm drainage adequate for the Project
                  are available as a matter of right; and

            (iv)  The  Project  Owner  shall have  delivered  to the  Borrower a
                  report  acceptable to the Borrower as to the  acceptability of
                  any  environmental  risk  associated  with  the  Project,  and
                  addressing  the  existence of any  hazardous  materials at, or
                  which may affect, the Project.

      Moody's means Moody's Investor Services, Inc.

      Mortgage means a mortgage, deed of trust, or similar Lien on a Project.

      Mortgage  Warehousing  Facility  means that certain  Mortgage  Warehousing
Credit and Security  Agreement  dated as of December 24, 2001 by and among Fleet
National Bank, as Agent for a syndicate of Lenders, such Lenders, and PW Funding
Inc., as amended and in effect.

      Net  Operating  Income  means,  for any period,  as to any Project (a) all
gross  revenues  received from the operation of such Project  during such period
(including,  without limitation,  payments received from insurance on account of
business or rental interruption and condemnation proceeds from any temporary use
or occupancy,  in each case to the extent  attributable  to the period for which
such Net Operating Income is being  determined,  but


                                      A-24
<PAGE>


excluding any proceeds from the sale or other  disposition of any part or all of
such Project;  or from any financing or refinancing of such Project; or from any
condemnation  of any part or all of such Project  (except for  temporary  use or
occupancy); or on account of a casualty to the Project (other than payments from
insurance  on account  of  business  or rental  interruption);  or any  security
deposits paid under leases of all or a part of such Project, unless forfeited by
tenants;  and similar items or transactions the proceeds of which under GAAP are
deemed attributable to capital), minus (b) all reasonable and customary property
operating,  maintenance  and repair  costs,  leasing and  administrative  costs,
management fees and,  without double  counting,  real estate taxes and insurance
premiums paid or accrued on account of such Property  (whether by direct payment
or  by  deposit  into  reserves  for  future  payment),   exclusive  of  capital
expenditures. When calculating Net Operating Income, there shall be no deduction
for any non cash items,  such as depreciation.  The calculation of Net Operating
Income shall be in accordance with accepted, customary industry practice.

      Non-Seasoned  Project  Bond  means a Project  Bond  secured by a Lien on a
Project which is not a Seasoned Project at the time of determination.

      Note  means,  Notes  payable to each of the Lenders in the amount of their
respective Commitments pursuant to Section 3.3, Section 3.5 and Section 12.6.

      Notice of Rate Selection as defined in Section 3.5(d).

      Obligations  means all  indebtedness,  obligations  and liabilities of the
Borrower to the Agent  and/or any Lender from time to time,  direct or indirect,
joint or several,  absolute or contingent,  matured or unmatured,  liquidated or
unliquidated,  secured or unsecured,  arising by contract,  operation of law, or
otherwise,  arising or incurred  under this Loan  Agreement  or any of the other
Loan Documents.

      OECD as defined in the definition of "Eligible Assignee."

      Operating Account means,  that certain demand deposit account  #9421136521
maintained at the Agent in Borrower's name which shall be under the sole control
of the Borrower.

      Owner Trust means Charter Mac Owner Trust I, a Delaware statutory trust.

      Participant as defined in Section 12.7.

      PBGC means the Pension Benefit Guaranty  Corporation  established pursuant
to Section 4002 of ERISA, or any successor thereto.

      Permitted  Consent  Exception means any  prohibition  contained in a Trust
Indenture  governing both Project Bonds and Related Taxable Bonds secured by the
same  Project,  against the taking of any of the following  actions  without the
consent of the registered  owners of all of


                                      A-25
<PAGE>


such bonds: (a) (i) an extension of the maturity date of the principal of or the
due date for any interest  owed on any bond,  (ii) a reduction in the  principal
amount  of any  bond or the  rate of  interest  thereon,  (iii) a  privilege  or
priority of any bond or bonds over any other bond or bonds,  (iv) a reduction in
the percentages of the owners of the  outstanding  bonds required for consent to
any of the  foregoing,  (v) the  creation of any lien other than a lien  ratably
securing all of the bonds at any time outstanding;  or (vi) any reduction of the
trusts, powers, rights, obligations, duties, remedies, immunities and privileges
of the  Trustee,  or (b) (i) an  extension  of the  time of the  payment  of any
amounts  payable under the related Bond  Documents  (loan  documents or facility
documents),  or (ii) a  reduction  in the amount of any  payment or in the total
amount  due under  the  related  Bond  Documents  (loan  documents  or  facility
documents).

      Person means any legal  person,  including  any  individual,  corporation,
limited  liability   company,   partnership,   business  trust,  joint  venture,
association,   joint  stock  company,  trust,   unincorporated  organization  or
government or any agency or political subdivision thereof

      Pledged Bonds as defined in Section 5.1(a).

      Post-Bond  Action  Collateral  Value means, at the time of reference,  the
Collateral  Value  attributed to a Borrowing Base Eligible Project Bond from and
after  the time  (and from time to time  thereafter)  that such  Borrowing  Base
Eligible Project Bond was affected by a Bond Action.

      Preapproved  Bond means, at any time, any Eligible  Project Bond which the
Borrower  has  submitted  to the Agent and the  Lenders in  accordance  with the
provisions  of Section 5.7 hereof,  and as to which the Agent has  provided  the
Borrower  with an Approval  Notice,  but which the  Borrower  has elected not to
pledge  to the  Agent as of such  time.  There  shall  not be more  than two (2)
Preapproved Bonds at any one time.

      Preapproved Bond Eligibility  Certificate means the Borrower's certificate
concerning a Preapproved Bond in the form of Exhibit U attached hereto, pursuant
to which  the  Borrower  certifies  to the Agent and the  Lenders,  among  other
things, the following:

      (a)   there has been no material change to the Due Diligence  Materials or
the Preapproved Bond since the date such Eligible Project Bond
became a Preapproved Bond;

      (b)   that the Borrower is in  compliance  with,  and is not  currently in
breach of any of, its covenants contained in this Loan Agreement;

      (c)   that such   Preapproved   Bond  shall,   as  of  the  date  of  such
certification,  constitute  a Pledged  Bond under the Loan  Agreement,  that the
Borrower has, pursuant to such certification, granted a security interest in and
to such  Preapproved  Bond, and all associated  Collateral in favor of the Agent
for the ratable benefit of the Lenders;


                                      A-26
<PAGE>


      (d) that the Borrower  will deliver the original  Preapproved  Bond to the
Custodian  within three (3) Business  Days from the date of such  certification,
registered  in the  name  of  the  Custodian  (or  accompanied  by all  required
endorsements  and other  documents  necessary  for the  Custodian to effect such
registration) with a copy thereof simultaneously to the Agent; and

      (e) that an Event of Default  shall occur if (x) the Agent and the Lenders
shall determine that any of the certifications set forth herein are not true and
correct,  and/or  (y) unless  prior to such time the Event of  Default  has been
cured or waived or no Mandatory Principal Payment is required to be made at such
time,  the  Borrower  fails to  deliver  the  original  Preapproved  Bond to the
Custodian  within  three (3) Business  Days from the date of such  certification
(either registered in the name of the Custodian,  or accompanied by all required
endorsements  and other  documents  necessary  for the  Custodian to effect such
registration) with a copy thereof simultaneously to the Agent.

      Pre-Bond  Closing  Due  Diligence  Materials  are set  forth on  Exhibit V
attached hereto.

      Preferred  Dividends  means, for any period,  without  duplication of such
amounts  as  constitute  intercompany  debts  or  distributions,  the sum of (A)
dividends or distributions  due and payable or accrued during such period on the
Preferred  Shares  issued  by  Borrower,  and (B)  distributions  which  are the
functional equivalent of preferred dividends (i.e., which the issuer is required
to make  prior to  distributions  on  another  class or other  classes of equity
interests)  and which are due and  payable  or  accrued  during  such  period on
preferred equity interests issued by Borrower or a Subsidiary.

      Preferred  Shares  means  Series A,  Series A-1,  Series A-2,  Series A-3,
Series B, Series B-1, and Series B-2  preferred  shares  issued by the Borrower,
and any other "preferred shares" issued by the Borrower after the date hereof in
accordance with, and as defined in, the Equity Issuer Trust Agreement.

      Preferred Shares Covenants are set forth on Exhibit M hereto.

      Preliminary Certification as defined in Section 4.1(a)(ii).

      Present Value means,  the value at the applicable  maturity  discounted to
the date of prepayment using the Treasury Rate.

      Prime Rate means the  variable  per annum rate of interest  so  designated
from time to time by Fleet  National Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily  represent the lowest or best rate being
charged to any customer.

      Proceeds has the meaning given that term in the UCC.


                                      A-27
<PAGE>


      Project means a multifamily  housing  property  constituting  a "qualified
residential  rental property" under Section 142(d) of the Code (or a predecessor
provision) which secures a Project Bond.

      Project Bond means a revenue  bond that is a  "qualified  bond" within the
meaning of Section 141(e) of the Code, the interest or  distributions in respect
of which are excluded  from gross income for federal  income tax  purposes,  and
which is secured by, among other collateral, a Mortgage on a Project.

      Project Budget means the project budget,  development budget or such other
budget prepared by the Project Owner and approved under the Bond Documents.

      Project Debt Service  Coverage  Ratio  means,  as to any Eligible  Project
Bond,  the ratio of Net  Operating  Income to Bond Debt Service for the Approved
Project securing such Eligible Project Bond.

      Project  Letter  of  Credit  means,  with  respect  to  any  Project,   an
irrevocable  letter of credit issued by the Project  Letter of Credit Issuer for
the  benefit  of a  Trustee  under a Project  Bond  pursuant  to a Project  Loan
Agreement together any substitutes therefor or replacements thereof, as the same
may be  amended,  modified  or  supplemented  from  time to  time to the  extent
permitted  hereby,  in a face  amount  which is equal to the face  amount of the
Project Bond (plus certain accrued interest thereon),  less the dollar amount of
any related Project Owner Equity Funds.

      Project  Letter of Credit Issuer means,  with respect to any Project,  the
financial  institution,  approved  by the Agent  and the  Requisite  Lenders  in
writing,  and at a minimum,  whose  Credit  Rating is not less than A, which has
issued a Project Letter of Credit in connection with such Project.

      Project Loan means,  with respect to any Project,  the loan to the Project
Owner  of the  proceeds  of a  Project  Bond  for use by the  Project  Owner  in
accordance with the Bond Documents.

      Project  Loan  Agreement  means,  with  respect  to  any  Project,  a loan
agreement by and among the Project Owner of such Project, the lender thereunder,
if any, the Servicer and the Trustee,  which sets forth the terms and conditions
of the Project Loan.

      Project  Loan to  Value  Ratio  means  the  ratio  of (a) the  outstanding
Indebtedness attributable to the Project Bond on account of any Eligible Project
Bond to (b) the Appraised Value.

      Project Owner means the Person which is the owner of a Project.


                                      A-28
<PAGE>


      Project  Owner Equity Funds means with respect to any Approved  Project as
to which the face amount of any  Project  Letter of Credit is less than the face
amount of the Project  Bond,  to the extent  applicable,  that Dollar  amount in
addition to the proceeds of a such Project Bond which (a) has been  delivered as
collateral to the Trustee by the Project Owner in accordance  with the terms and
conditions of the Bond Documents, (b) has been deposited by the Trustee into the
appropriate  construction  fund  subaccount in accordance with the provisions of
the Bond  Documents,  and (c) may be used solely either (x) to be distributed to
the  Project  Owner at a time after the  Approved  Project has become a Seasoned
Project  (provided that no Bond Document  Defaults then exist), or (y) to fund a
redemption  of the  subject  Project  Bonds  under the same  circumstances  as a
drawing could be made under the Project Letter of Credit supporting such Project
Bonds.

      Property  means with respect to each Project Bond, all real property which
is subject to any Lien  securing the  obligations  of the Bond Issuer and/or any
Bond Obligor in respect of such Project Bond.

      Purchase Funding Conditions as defined in Section 4.1(c)(iii)(2).

      Register as defined in Section 12.5.

      Reimbursement  Agreement means that certain Reimbursement  Agreement dated
as of  December  10,  2002 by and  among  Fleet  National  Bank,  as Agent for a
syndicate of Participants,  such Participants,  and the Borrower, as amended and
in effect.

      Related  Taxable  Bond as  defined  in  clause  (i) of the  definition  of
"Minimum Project Parameters."

      Release Conditions as defined in Section 5.5.

      Release Price means,  with respect to any Borrowing Base Eligible  Project
Bond,  the  amount,  if any,  necessary  to  reduce  the  aggregate  outstanding
principal amount of the Loan to the Loan  Availability  (computed without regard
to the Borrowing  Base  Eligible  Project Bond for which the Borrower is seeking
release).

      Repayment Account means that certain non-interest bearing,  demand deposit
account (Account No. 9421136441) in the name of the Borrower and maintained with
the Agent. Such account is Collateral hereunder, and is a "no-access" account as
which only the Agent shall have the right to withdraw funds.

      Reportable Event as defined in Section 8.12.
      Required Collateral Documents as defined in Section 4.1(c)(ii)(2).


                                      A-29
<PAGE>


      Requisite Lenders means, as of any date, (a) if there are two (2) or fewer
Lenders holding Commitments, Requite Lenders shall mean all such Lenders, except
a  Delinquent  Lender,  or (b) if there are three  (3) or more  Lenders  holding
Commitments,  Requisite  Lenders  shall  mean  the  Lenders,  exclusive  of  any
Delinquent Lenders, holding at least sixty-five percent (65%) of the outstanding
principal  amount  of the  Loans  on  such  date;  and if no such  principal  is
outstanding,  the  Lenders  whose  aggregate  Commitments  constitute  at  least
sixty-five percent (65%) of the Total Commitment.

      Revenue  Bond  Valuation  Methodology  is  described  on Exhibit W annexed
hereto.

      S&P means Standard & Poor's Ratings Services.

      Seasoned  Project means a Project  securing a Project Bond, which Project,
at the time of determination,  (a) maintains and has maintained  occupancy of no
less than 85% for each of the immediately  preceding three (3) calendar  months,
and (b) produces and has produced a Bond Debt Service Coverage Ratio of at least
1.10:1 for each of the immediately preceding three (3) calendar months.

      Servicer means the Person  (currently  Charter Mac Corporation)  acting as
"Servicer"  on behalf of the Trustee of a Project  Bond and any Related  Taxable
Bonds pursuant to a Servicing Agreement.

      Servicer's  Report  has the  meaning  given to such term in the  Servicing
Agreement.

      Servicing  Agreement means the servicing agreement relating to an Eligible
Project  Bond by and between the Trustee of such  Eligible  Project Bond and the
Servicer.

      Solvent  means,  as to any Person at any time,  that (a) the fair value of
the  property  of such  Person  is  greater  than the  amount  of such  Person's
liabilities  (including  disputed,  contingent and unliquidated  liabilities) as
such value is  established  and  liabilities  evaluated  for purposes of Section
101(31) of the  Bankruptcy  Code and, in the  alternative,  for  purposes of the
Uniform  Fraudulent  Transfer  Act; (b) the present fair  saleable  value of the
Property of such Person is not less than the amount that will be required to pay
the probable  liability of such Person on its debts as they become  absolute and
matured;  (c) such Person is able to realize upon its Property and pay its debts
and  other  liabilities   (including   disputed,   contingent  and  unliquidated
liabilities)  as they mature in the normal  course of business;  (d) such Person
does  not  intend  to,  and  does  not  believe  that it  will,  incur  debts or
liabilities  beyond such Person's  ability to pay as such debts and  liabilities
mature; and (e) such Person is not engaged in business or a transaction,  and is
not  about to engage in  business  or a  transaction,  for which  such  Person's
property would constitute unreasonably small capital.

      Statement as defined in Section 13.19.


                                      A-30
<PAGE>


      Subsidiary  means, as to any Person (a) any  corporation  more than 50% of
whose stock of any class or classes having by the terms thereof  ordinary voting
power to elect a majority of the directors of such corporation  (irrespective of
whether or not at the time  stock of any class or  classes  of such  corporation
shall  have or  might  have  voting  power by  reason  of the  happening  of any
contingency) is at the time owned by such Person and/or one or more Subsidiaries
of such Person, and (b) any partnership, limited liability company, association,
joint  venture,  or  other  entity  in  which  such  Person  and/or  one or more
Subsidiaries of such Person has more than a 50% Equity Interest at the time.

      TOPS  Program  means the  Borrower's  MBIA  Private  Label  Tender  Option
Program.

      Total  Assets  means,  at the  time of  determination  all  assets  of the
Borrower and its  Subsidiaries on a consolidated  basis determined in accordance
with GAAP.

      Total  Commitment  means the sum of the Commitments of the Lenders.  As of
the Agreement Date, the Total Commitment is $75,000,000.

      Total Liabilities means, at the time of determination,  all liabilities of
the  Borrower  and  its  Subsidiaries  on a  consolidated  basis  determined  in
accordance  with GAAP and all  indebtedness  and  contingent  obligations of the
Borrower  and  its  Subsidiaries  on a  consolidated  basis,  whether  or not so
classified,  including all redemption obligations, hedging and swap liabilities,
and off-balance  sheet  financial  transactions as to which there is recourse to
the  Borrower  or a  Subsidiary  provided,  however,  for  purposes  of  valuing
liabilities  incurred in the ordinary course of business pursuant to any Hedging
Agreement  and  not  for  speculation   which  are  included  under  GAAP,  such
liabilities  shall  be  valued  on  the  basis  of  the  net  hedging  liability
thereunder.

      Treasury Rate means, as of the date of any  calculation or  determination,
the latest  published  rate for United States  Treasury  Notes or Bills (but the
rate on  Bills  issued  on a  discounted  basis  shall  be  converted  to a bond
equivalent)  as  published  weekly in the Federal  Reserve  Statistical  Release
H.15(519)  of  Selected  Interest  Rates in an  amount  which  approximates  (as
determined by Agent) the amount (i)  approximately  comparable to the portion of
the Loan to which the Treasury Rate applies for the Interest Period,  or (ii) in
the case of a prepayment,  the amount prepaid and with a maturity closest to the
original maturity of the installment which is prepaid in whole or in part.

      Trustee  means,  with  respect to any Project  Bond,  the Person  named as
trustee under the Trust Indenture.

      Trust Indenture means the trust indenture agreement executed and delivered
in connection with the issuance of Project Bond.


                                      A-31
<PAGE>


      UCC means the Uniform  Commercial  Code in effect in the  Commonwealth  of
Massachusetts and the jurisdiction where the Property is situated.

      Unused Fee as defined in Section 3.6(c).
      Variable  Rate means a per annum rate equal at all times to the Prime Rate
plus 25 basis points.

      Variable Rate Advance means any principal  amount  outstanding  under this
Loan  Agreement  which  pursuant to this Loan  Agreement  bears  interest at the
Variable Rate.

      Wet Eligible  Bond means a Pledged Bond which would qualify as an Eligible
Project Bond except that the Agent has not  received  all  Pre-Bond  Closing Due
Diligence Materials in respect of such Pledged Bond; provided, however, that the
Agent shall have received a Wet Funding Certification as to such Pledged Bond.

      Wet Funding Advances as defined in Section 4.2.

      Wet Funding Certification as defined in Section 4.2.

      Yield Maintenance Fee as defined in Section 3.5(p).


                                      A-32
<PAGE>


                                    EXHIBIT O
                              CHARTER MAC COVENANTS
                              ---------------------

1.    Taxes  and  Trade  Debt.  Charter  Mac will,  and will  cause  each of its
Subsidiaries  to, duly pay and  discharge,  or cause to be paid and  discharged,
before  the  same  shall  become  overdue,  all  taxes,  assessments  and  other
governmental  charges  imposed  upon  it and  its  real  properties,  sales  and
activities, or any part thereof, or upon the income or profits therefrom, except
for those taxes,  assessments  or charges which any such Person is contesting in
good faith by  appropriate  proceedings  and with  respect to which  appropriate
reserves have been established and are being maintained in accordance with GAAP.

2.    Adjusted  Tangible Net Worth. For so long as any Obligation or any portion
thereof remains unpaid,  or other  obligations  under any of the Loan Documents,
Charter Mac shall at all times maintain (to be tested as of the last day of each
fiscal quarter) a minimum  Adjusted  Tangible Net Worth of not less than the sum
of  (i)$475,000,000.00,  plus (ii)  seventy-five  percent  (75%) of the offering
proceeds of any issuances of Equity  Interests after January 1, 2003 (net of the
costs and  expenses  actually  incurred by Charter Mac in  connection  with such
equity issuances). As used herein:

      a.    "Adjusted  Tangible Net Worth" means, at the time of  determination,
Total Assets,  minus (a) Intangible Assets,  minus (b) Total Liabilities,  minus
(c) net interest  receivables  in respect of defaulted  bonds or other  impaired
assets,  minus (d) to the extent not included in "Total  Liabilities,"  minority
interests  in  Subsidiaries  subject to  mandatory  redemption,  plus (e) to the
extent  included  in "Total  Liabilities,"  dividends  payable on  Subsidiaries'
preferred shares,  minus (f) the Taxable Tail Amount;  plus (g) the Taxable Tail
Adjustment Amount.

      b.    "Total Assets" means, at the time of determination (a) all assets of
Charter  Mac  and  its  Subsidiaries  on  a  consolidated  basis  determined  in
accordance  with  GAAP,  plus  (b) to  the  extent  not  otherwise  included  in
determining  "Total Assets," Charter Mac's  proportionate  share of the tangible
assets of its Minority Holdings determined in accordance with GAAP.

      c.    "Total  Liabilities"  means,  at the time of  determination  (a) all
liabilities  of  Charter  Mac  and  its  Subsidiaries  on a  consolidated  basis
determined  in  accordance  with  GAAP  and  all   indebtedness  and  contingent
obligations of Charter Mac and its Subsidiaries on a consolidated basis, whether
or not so  classified,  including all redemption  obligations,  hedging and swap
liabilities,  and off-balance sheet financial  transactions as to which there is
recourse to Charter Mac or a  Subsidiary,  plus (b) to the extent not  otherwise
included in "Total Liabilities,"  Charter Mac's proportionate share of the total
liabilities  of its Minority  Holdings as determined  in  accordance  with GAAP;
provided, however, for purposes of valuing the following liabilities referred to
in this subsection  (iii) which are not included under GAAP, the following shall
apply:


                                      O-33
<PAGE>


            (i)   No amount shall be included  for  exposure  derived from PWF's
contingent  loss  sharing  liability  to Fannie Mae under the DUS  Product  Line
(until the loss has occurred and has been  recognized  on Charter Mac's books in
accordance with GAAP).

            (ii)  With respect to any tax credit  investment  fund  sponsored by
Charter Mac or an Affiliate  of Charter Mac, as to which  Charter Mac provides a
specified  yield  guaranty to the  investors in such fund ("Yield  Guarantees"),
"Total  Liabilities"  shall include an amount equal to (A) 10% of the total fund
size (based on total  investment  commitments)  until such time as each property
within  the  fund has  received  its IRS Form  8609  (or  applicable  comparable
replacement form) and has commenced  delivering tax credits to the fund, and (B)
5% of the total fund size  thereafter.  If any asset  within a fund pool becomes
impaired  during the period while the Yield Guaranty  applicable to such fund is
outstanding,  then, in addition to the  foregoing,  100% of the present value of
the liability  attributable to such  impairment  amount shall be included within
"Total Liabilities" (without duplication of any amount otherwise attributable to
such impairment in determining "Total Liabilities")).

            (iii) With  respect to  letter of credit  reimbursement  commitments
issued by ventures in which  Charter Mac or an Affiliate of Charter Mac holds an
interest,  supporting  letters of credit  enhancing  tax exempt bonds  financing
multi-family  housing projects  ("Enhancement  Programs"),  "Total  Liabilities"
shall  include an amount  equal to (x) with  respect to programs  other than the
Credit Re Mortgage Capital, L.L.C. Credit Enhancement Program Agreement dated as
of January 27, 1998 (the  "Credit Re  Program"),  15% of Charter  Mac's  maximum
contractual  indemnification  obligation  to the  venture  (100%  of any  actual
indemnification obligation arising upon the occurrence of a loss event), and (y)
with  respect to the Credit Re  Program,  5% with  respect to any  portfolio  of
properties in respect of which such  commitments have been issued as of December
24, 2002, and 15% with respect to any other properties, of Charter Mac's maximum
contractual  indemnification  obligation  to the  venture  (100%  of any  actual
indemnification obligation arising upon the occurrence of a loss event).

            (iv)  Liabilities  incurred  in  the  ordinary  course  of  business
pursuant to any Interest  Rate  Protection  Agreement  and not for  speculation,
shall be valued on the basis of the net hedging liability thereunder.

      d.    "Intangible  Assets"  means,  at the  time of  determination,  those
assets of Charter Mac and its  Subsidiaries  on a  consolidated  basis that,  in
accordance with GAAP, are properly classifiable as intangible assets, including,
but not limited to, goodwill,  franchises,  licenses, patents, trademarks, trade
names and copyrights.

      e.    "Minority  Holdings" means any Person in which Charter Mac or any of
its Subsidiaries,  directly or indirectly,  has an ownership interest, but which
is not required  under GAAP to be  consolidated  with Charter Mac for  financial
reporting purposes.

      f.    "Taxable  Tail  Amount"  means,  at the time of  determination,  the
amount of so-called "taxable tails" then included in "Total Assets."


                                      O-34
<PAGE>


      g.    "Taxable   Tail   Adjustment   Amount"   means,   at  the   time  of
determination, an amount equal to 80% of the then Taxable Tail Amount, but in no
event to exceed four percent (4%) of the amount of Total Assets at such time.


      h.    "PWF" means PWF Funding Inc., a Delaware corporation.

      i.    "PWF  Subsidiaries"  means  any  Subsidiaries   created  by  PWF  in
accordance with the provisions of Section 7.17 of the loan agreement  evidencing
the Mortgage Warehousing Facility.

3.    Liquidity.  Charter Mac shall at all times maintain  unrestricted cash and
      Cash Equivalents of not less than $5,000,000.00.

      As used herein and, as the case may be,  elsewhere in this  Guaranty,  the
term "Cash  Equivalents"  shall mean (i) securities issued or directly and fully
guaranteed  or  insured  by the  United  States  of  America  or any  agency  or
instrumentality  thereof  (provided that the full faith and credit of the United
States of America is pledged in support  thereof) having  maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S.  dollar  denominated  (or foreign  currency  fully  hedged) time  deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit  of (y) any  domestic  commercial  bank of  recognized  standing  having
capital and surplus in excess of $250,000,000  or (z) any bank whose  short-term
commercial  paper rating from S&P is at least A-1 or the  equivalent  thereof or
from Moody's is at least P-1 or the  equivalent  thereof (any such bank being an
"Approved  Bank"),  in each case with  maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing  within  twelve months of the date of
acquisition,  (iv) repurchase agreements with a bank or trust company (including
a Lender) or a recognized securities dealer having capital and surplus in excess
of  $500,000,000  for direct  obligations  issued by or fully  guaranteed by the
United States of America,  (v)  obligations of any state of the United States or
any  political  subdivision  thereof  for  the  payment  of  the  principal  and
redemption  price of and  interest on which  there  shall have been  irrevocably
deposited Government  Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment,  (vi) auction preferred stock
rated in the highest  short-term  credit  rating  category by S&P or Moody's and
(vii) U.S. dollar  denominated  time and demand deposit accounts or money market
accounts with those domestic banks meeting the  requirements  of item (y) or (z)
of clause (ii) above and any other domestic commercial banks insured by the FDIC
with an aggregate balance not to exceed $100,000 in the aggregate at any time at
any such bank.


                                      O-35
<PAGE>


4.    Fixed Charges.  Charter Mac shall not permit the ratio of its consolidated
(i) Adjusted EBITDA, divided by (ii) Fixed Charges, to be less than 1.75 to 1.0,
for any fiscal  quarter,  commencing  with Charter Mac's fiscal  quarter  ending
March 31, 2003. As used herein

      a.    "Adjusted  EBITDA"  means,  measured  as of the  last  day  of  each
calendar quarter,  without duplication,  and in accordance with GAAP, the amount
derived from (A) for such quarter then ended,  Charter  Mac's  consolidated  net
income  (before  deduction of  preferred  stock  dividend  payments and minority
interest in income of subsidiaries (as so characterized on Charter Mac's balance
sheet from time to time)),  plus (B) Interest Expense (including under the Loan)
for such  period,  (C)  plus the  amount  of  income  tax  expense  deducted  in
calculating  net income for that  period,  minus (D) the amount of income  taxes
actually paid during that period, plus (E) depreciation,  amortization and other
non-cash  items deducted in  calculating  net income for that period,  minus (F)
non-cash revenue  included in calculating net income for that period,  minus (G)
to the extent included in determining net income, any unrealized gain in respect
of revenue bonds or hedging transactions,  all of the foregoing as determined in
accordance with GAAP for such period,  plus (H) all program fees associated with
the TOPS  Program  in  respect  of such  period,  minus (I) any and all  special
distributions  to its  Affiliate  management  company in respect of such period,
plus (J)  extraordinary  losses for such period as determined in accordance with
GAAP, minus (K) extraordinary  gains for such period as determined in accordance
with GAAP, plus (L) to the extent not otherwise  included in "Adjusted  EBITDA,"
Charter Mac's  proportionate  share of Adjusted EBITDA of its Minority  Holdings
for such period  (determined  in a manner  consistent  with this  definition  of
"Adjusted  EBITDA,"  but  without  regard to item (L)),  plus (M)  non-recurring
litigation  expenses and  expenses  related to  transactions  outside of Charter
Mac's normal business  activities  which were terminated  prior to consummation,
minus (N) non-recurring income.

      b.    "Fixed Charges" means,  measured as of the last day of each calendar
quarter, without duplication, an amount for the then ending quarter equal to the
sum for such period of Charter Mac's  consolidated  (A) Debt  Service,  plus (B)
Preferred Dividends, plus (C) program fees associated with the TOPS Program.

      c.    "Debt Service" means,  for any period,  determined on a consolidated
basis (A) Charter Mac's Interest Expense for such period, plus (B) the aggregate
amount of regularly  scheduled or mandatory  principal  payments of Indebtedness
(excluding  optional  prepayments and balloon principal payments due on maturity
in  respect of any  Indebtedness)  required  to be made  during  such  period by
Charter Mac or any Person in Charter  Mac's  consolidated  group  (and,  if such
period is less than a full twelve month period,  annualized by taking the sum of
all of the  payments  required  to be made  during  such  period  and during any
immediately  subsequent  periods  required  to create a full  twelve  month test
period).

      d.    "Interest  Expense" means, for any period, the sum (calculated on an
annualized  basis),  on a consolidated  basis of (A) all  consolidated  interest
expense of Charter Mac determined in accordance  with GAAP, plus (B) capitalized
interest not covered by an interest


                                      O-36
<PAGE>


reserve  from  a loan  facility,  plus  (C)  the  allocable  portion  (based  on
liability) of any accrued or paid interest  incurred on any obligation for which
any entity in Charter  Mac's  consolidated  group is wholly or partially  liable
under repayment,  interest carry, or performance  guarantees,  or other relevant
liabilities   (including,   without   limitation,   accrued  or  paid   interest
characterized  on Charter  Mac's  balance  sheet from time to time as  "minority
interest in income of  subsidiary"),  provided that no expense shall be included
more than once in such  calculation even if it falls within more than one of the
foregoing categories.

      e.    "Preferred Dividends" means, for any period,  without duplication of
such amounts as constitute  intercompany debts or distributions,  the sum of (A)
dividends  or  distributions  due and  payable or accrued  during such period on
preferred  stock issued by a  Subsidiary,  and (B)  distributions  which are the
functional equivalent of preferred dividends (i.e., which the issuer is required
to make  prior to  distributions  on  another  class or other  classes of equity
interests)  and which are due and  payable  or  accrued  during  such  period on
preferred equity interests issued by a Subsidiary.

      f.    "TOPS  Program"  means  Charter  Mac's  Private  Label Tender Option
Program.

5.    Total  Liabilities.   Charter  Mac  shall  not  permit  at  any  time  its
consolidated  Total Liabilities to exceed sixty percent (60%) of the fair market
value of its  consolidated  Total Assets as reflected on Charter  Mac's  balance
sheet from time to time.

6.    Indebtedness. Charter Mac itself will not create, incur, assume, guarantee
or be  or  remain  liable,  contingently  or  otherwise,  with  respect  to  any
Indebtedness other than any of the following:

      a.    Under its  guaranty  of  obligations  of its  Subsidiaries  to Fleet
National Bank, as Agent and the lenders under each of (x) the  Acquisition  Line
Facility and (y) the Mortgage  Warehousing  Facility,  or a replacement mortgage
warehousing facility in favor of PWF and the PWF Subsidiaries, to the extent the
establishment  of  such  replacement  facility  would  not  (A)  result  in  the
acceleration of the loans under the Acquisition Line Facility, or (B) constitute
an Event of Default under the Mortgage Warehousing Facility;

      b.    Under its guaranty of obligations of Charter Mac  Corporation  under
that certain Stock Purchase  Agreement dated as of October 24, 2001, as amended,
by and among the Charter Mac Corporation and the former stockholders of PWF;

      c.    Current  liabilities of Charter Mac incurred in the ordinary  course
of business  (including all liabilities under the TOPS Program and Charter Mac's
P-FLOATS/RITES  Program or similar secured  financing  program) but not incurred
through (A) the  borrowing of money,  or (B) the  obtaining of credit except for
credit on an open account  basis  customarily  extended and in fact  extended in
connection with normal purchases of goods and services;


                                      O-37
<PAGE>


      d.    Indebtedness  existing on the date of this Loan Agreement and listed
and described on Schedule O-1 hereto;

      e.    Secured purchase money debt or capitalized lease obligations;

      f.    Indebtedness to Fannie Mae,  Freddie Mac, GNMA, FHA or other parties
with whom Charter Mac or its Subsidiaries originate, sell, repurchase or service
Mortgage  Loans,  to the extent  directly  relating  to or  arising  out of such
origination, sale, repurchase, or servicing in the ordinary course of business;

      g.    Indebtedness  secured by real property  acquired upon foreclosure of
mortgages,  to the extent directly related to such real property,  not in excess
of the fair market value thereof,  and reasonably  expected by Charter Mac to be
recovered from the sale or the disposition of the subject real property;

      h.    Indebtedness  incurred in the ordinary course of business secured by
one or more specific  assets,  in each  instance the  principal  amount of which
shall not exceed the GAAP book value of the subject asset(s);

      i.  Liabilities in the ordinary course of business under Charter Mac's (A)
credit enhancement  products  supporting  multi-family  housing project bonds or
other financing of multi-family housing projects, and (B) Yield Guarantees;

      j.    Guaranties  provided for the benefit of Subsidiaries in the ordinary
course of business;

      k.    Liabilities  incurred pursuant to Hedging Agreements in the ordinary
course of business and not for speculation; and

      l.    As to PWF and the PWF Subsidiaries, indebtedness permitted according
to the  terms  of the  PWF  Covenants  (but  without  duplication  of any of the
applicable foregoing exceptions in clause (a) through (l)).

7.    Financial Information.  Charter Mac shall deliver or cause to be delivered
to Agent and to each  Lender  quarterly  and  annual  financial  statements  for
Charter Mac in form and substance  reasonably  satisfactory to the Agent and the
Requisite  Lenders as soon as  available  and in all events no later than ninety
(90)  days  after  the  close of each  fiscal  year for  annual  statements  and
forty-five  (45) days after the close of each quarter for  quarterly  statements
(including for the fourth fiscal quarter,  which shall be subject to normal year
end audit  adjustments).  The  quarterly  financial  statements  shall include a
consolidated and  consolidating  (as relating to Charter Mac Corporation and PWF
(and the PWF  Subsidiaries))  balance  sheet and the  related  consolidated  and
consolidating  (as  relating  to Charter  Mac  Corporation  and PWF (and the PWF
Subsidiaries))  statements of income and retained earnings and of cash flows for
such period and


                                      O-38
<PAGE>


the portion of the  applicable  fiscal year through the end of such period.  The
annual statements shall include a consolidated and consolidating (as relating to
Charter Mac Corporation and PWF (and the PWF  Subsidiaries))  balance sheets and
the  related   consolidated  and  consolidating  (as  relating  to  Charter  Mac
Corporation  and PWF  (and  the PWF  Subsidiaries))  statements  of  income  and
retained  earnings and of cash flows,  setting forth in each case in comparative
form the  figures  for the  previous  year,  without a "going  concern"  or like
qualification  or exception,  or  qualification  arising out of the scope of the
audit,  and shall be audited by  independent  certified  public  accountants  of
nationally  recognized  standing  reasonably  acceptable to the Agent.  Both the
annual and  quarterly  statements  shall be  certified as true and correct by an
authorized financial officer of Charter Mac. Additionally, Charter Mac will:

      a.    promptly  supply  the Agent and the  Lenders  with such  information
concerning  its  affairs and  property as the Agent or any Lender may  hereafter
reasonably request from time to time.

      b.    promptly  notify the Agent of any condition or event of which it has
knowledge which constitutes (or which upon the giving of notice or lapse of time
or both  would  constitute)  (A) an Event of Default  under the Loan  Agreement,
including any event or circumstance  which results in the information  which has
been  provided by it to Agent or the Lenders  including  an untrue  statement of
material  fact or omitting to state any material  fact or any fact  necessary to
make the statements  therein, in the light of the circumstances under which they
were  made,  not  materially  misleading  and in such  event  Charter  Mac shall
promptly furnish to the Agent updated or revised  information which will correct
such untrue  statement or include such omitted  fact; or (B) an event of default
by Charter Mac or any Subsidiary  under any  indebtedness  or other  Contractual
Obligation  of such  Person,  where such event of default  would  reasonably  be
expected  to have a  material  adverse  effect on the  business,  operation,  or
properties  of such Person,  or as to the  Borrower,  its ability to perform its
obligations to the Agent or the Lenders under any Loan Document.

      c.    deliver  to the  Agent,  together  with  the  quarterly  and  annual
financial statements,  a Compliance  Certificate signed by its treasurer,  chief
financial  officer or chief  accounting  officer  showing the  calculations  and
computations necessary to determine compliance by Charter Mac with its covenants
hereunder and stating that, to such officer's knowledge,  no Default or Event of
Default exists  hereunder or under the Loan Documents,  or if, to such officer's
knowledge,  any such Default or Event of Default exists,  stating the nature and
status  thereof.  With each such quarterly  Compliance  Certificate  Charter Mac
shall  include  (A)  summary  information,  calculations,   information,  and  a
description of occurrences relevant to the applicable financial covenants herein
concerning the applicable Taxable Tail Amount, Yield Guarantees, and Enhancement
Programs, and (B) worksheets showing the calculation of the estimated fair value
of its investments in revenue bonds, using the methodology  described in Exhibit
W to the Loan Agreement.


                                      O-39
<PAGE>


      d.    at any time during regular business hours after reasonable notice to
Charter Mac permit the Agent,  any Lender,  or any of their  representatives  to
have access to and examine all of its books and records.

      e.    permit the Agent, any Lender, or their respective representatives to
copy, at Charter Mac's sole cost, and to make abstracts from any and all of such
books and records.

      f.    promptly  furnish to the Agent  copies (with  sufficient  copies for
each  Lender)  of all  (A)  filings  by it  with  the  Securities  and  Exchange
Commission or any national securities  exchange,  including reports on forms 10K
and 10Q, (B) financial statements,  reports and proxy statements furnished by it
to its  shareholders,  and (C) other  information  concerning  Charter Mac as is
reasonably  requested  from  time to  time by  either  the  Agent  or any of the
Lenders.

      g.    within  sixty (60) days prior to each fiscal  year end,  provide the
Agent with detailed operating  projections for Charter Mac and its Subsidiaries,
in form reasonably satisfactory to the Agent.

      h.    promptly (and in any event within ten (10) Business Days) notify the
Agent of all new Yield  Guarantees  and  Enhancement  Programs,  and provide the
Agent with copies of all relevant documents related thereto.

8.    Material Adverse Change. There shall not occur any material adverse change
in the financial condition of Charter Mac.

9.    Liens. Other than in favor of the Fleet National Bank, as Agent (on behalf
of the Lenders)  pursuant to the  Acquisition  Line  Facility,  in no event will
Charter  Mac pledge or grant a security  interest in any of its shares from time
to time of Charter Mac  Corporation in favor of any Person,  or grant a negative
pledge therein in favor of any Person.

10.   Revenue  Bond   Valuation.   For  the  purpose  of   financial   statement
presentation,  Charter Mac will  estimate the fair value of its  investments  in
revenue bonds using the methodology described in Exhibit W to the Loan Agreement
or as may be required to be modified by changes in GAAP, and will not materially
deviate from such methodology. Charter Mac shall notify the Agent of any changes
in GAAP which would require a change in the  methodology  described in Exhibit W
to the Loan Agreement.

11.   Distributions.  So long a Default or an Event of Default has  occurred and
is continuing,  Charter Mac will not make any payments or  distributions  to any
Person on account of Charter Mac's Equity Interests.


                                      O-40