EXHIBIT 10.4

                                                                  EXECUTION COPY






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                              SENIOR LOAN AGREEMENT


                                   dated as of


                                  June 28, 2006


                                      among


                            CENTERBROOK FINANCIAL LLC


                            The Lenders Party Hereto


                                       and


                                 CITIBANK, N.A.,
                                 as Senior Agent

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


                          IXIS FINANCIAL PRODUCTS INC.,
                              as Sole Lead Arranger

                                 CITIBANK, N.A.,
                               as Sole Bookrunner





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<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               PAGE
                                                                                                               ----

<S>      <C>                  <C>                                                                               <C>
ARTICLE I DEFINITIONS............................................................................................1

         SECTION 1.01.        DEFINED TERMS......................................................................1
         SECTION 1.02.        CLASSIFICATION OF LOANS AND BORROWINGS.............................................8
         SECTION 1.03.        TERMS GENERALLY....................................................................8
         SECTION 1.04.        ACCOUNTING TERMS; GAAP.............................................................8

ARTICLE II THE CREDITS...........................................................................................8

         SECTION 2.01.        COMMITMENTS........................................................................8
         SECTION 2.02.        LOANS AND BORROWINGS...............................................................8
         SECTION 2.03.        REQUESTS FOR BORROWINGS............................................................9
         SECTION 2.04.        FUNDING OF BORROWINGS..............................................................9
         SECTION 2.05.        INTEREST RATE ELECTIONS............................................................9
         SECTION 2.06.        TERMINATION AND REDUCTION OF COMMITMENTS..........................................10
         SECTION 2.07.        REPAYMENT OF LOANS; EVIDENCE OF DEBT..............................................11
         SECTION 2.08.        PREPAYMENT OF LOANS...............................................................11
         SECTION 2.09.        FEES..............................................................................11
         SECTION 2.10.        INTEREST..........................................................................12
         SECTION 2.11.        ALTERNATE RATE OF INTEREST........................................................12
         SECTION 2.12.        INCREASED COSTS...................................................................12
         SECTION 2.13.        BREAK FUNDING PAYMENTS............................................................13
         SECTION 2.14.        TAXES.............................................................................13
         SECTION 2.15.        PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.......................14
         SECTION 2.16.        MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS....................................15
         SECTION 2.17.        LENDER RATING CRITERIA............................................................15

ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................16

         SECTION 3.01.        ORGANIZATION; POWERS..............................................................16
         SECTION 3.02.        AUTHORIZATION; ENFORCEABILITY.....................................................16
         SECTION 3.03.        GOVERNMENTAL APPROVALS; NO CONFLICTS..............................................16
         SECTION 3.04.        PROPERTIES........................................................................17
         SECTION 3.05.        LITIGATION........................................................................17
         SECTION 3.06.        COMPLIANCE WITH LAWS AND AGREEMENTS...............................................17
         SECTION 3.07.        INVESTMENT COMPANY STATUS.........................................................17
         SECTION 3.08.        TAXES.............................................................................17
         SECTION 3.09.        ERISA.............................................................................17
         SECTION 3.10.        DISCLOSURE........................................................................17
         SECTION 3.11.        SOLVENCY..........................................................................17
         SECTION 3.12.        SECURITY DOCUMENTS................................................................17
         SECTION 3.13.        CAPITALIZATION....................................................................17

ARTICLE IV CONDITIONS...........................................................................................18

         SECTION 4.01.        EFFECTIVE DATE....................................................................18
         SECTION 4.02.        EACH CREDIT EVENT.................................................................19

ARTICLE V AFFIRMATIVE COVENANTS.................................................................................19

         SECTION 5.01.        FINANCIAL STATEMENTS; RATINGS CHANGE AND OTHER INFORMATION........................19
         SECTION 5.02.        NOTICES OF MATERIAL EVENTS........................................................20
         SECTION 5.03.        EXISTENCE; CONDUCT OF BUSINESS....................................................20
         SECTION 5.04.        PAYMENT OF OBLIGATIONS............................................................21
         SECTION 5.05.        MAINTENANCE OF PROPERTIES; INSURANCE..............................................21
         SECTION 5.06.        BOOKS AND RECORDS; INSPECTION RIGHTS..............................................21
         SECTION 5.07.        COMPLIANCE WITH LAWS; CONTRACTUAL OBLIGATIONS.....................................21
         SECTION 5.08.        CERTAIN ADDITIONAL ACTIVITIES.....................................................21
         SECTION 5.09.        FURTHER ASSURANCES................................................................21
         SECTION 5.10.        USE OF PROCEEDS...................................................................21

</TABLE>


                                       (i)
<PAGE>



<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>      <C>                  <C>                                                                               <C>
ARTICLE VI NEGATIVE COVENANTS...................................................................................22

         SECTION 6.01.        INDEBTEDNESS......................................................................22
         SECTION 6.02.        LIENS.............................................................................22
         SECTION 6.03.        FUNDAMENTAL CHANGES...............................................................22
         SECTION 6.04.        INVESTMENTS.......................................................................23
         SECTION 6.05.        CAPITAL EXPENDITURE...............................................................23
         SECTION 6.06.        RESTRICTED PAYMENTS...............................................................23
         SECTION 6.07.        TRANSACTIONS WITH AFFILIATES......................................................23
         SECTION 6.08.        CERTAIN INDEBTEDNESS..............................................................23
         SECTION 6.09.        CAPITAL MODEL.....................................................................23
         SECTION 6.10.        FORMS.............................................................................23
         SECTION 6.11.        BUSINESS ACTIVITIES...............................................................23
         SECTION 6.12.        BANKRUPTCY........................................................................23

ARTICLE VII EVENTS OF DEFAULT...................................................................................23


ARTICLE VIII THE SENIOR AGENT...................................................................................25


ARTICLE IX MISCELLANEOUS........................................................................................27

         SECTION 9.01.        NOTICES...........................................................................27
         SECTION 9.02.        WAIVERS; AMENDMENTS...............................................................27
         SECTION 9.03.        EXPENSES; INDEMNITY; DAMAGE WAIVER................................................28
         SECTION 9.04.        SUCCESSORS AND ASSIGNS............................................................28
         SECTION 9.05.        SURVIVAL..........................................................................30
         SECTION 9.06.        COUNTERPARTS; INTEGRATION; EFFECTIVENESS..........................................30
         SECTION 9.07.        SEVERABILITY......................................................................30
         SECTION 9.08.        GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS........................31
         SECTION 9.09.        WAIVER OF JURY TRIAL..............................................................31
         SECTION 9.10.        HEADINGS..........................................................................31
         SECTION 9.11.        CONFIDENTIALITY...................................................................31
         SECTION 9.12.        USA PATRIOT ACT...................................................................31
         SECTION 9.13.        NO PETITION; LIMITED RECOURSE.....................................................32


SCHEDULES
---------

Schedule 2.01   --   Commitments

EXHIBITS:
--------

Exhibit A   --   Form of Assignment and Assumption
Exhibit B   --   Form of Opinion of Borrower's Counsel
Exhibit C   --   Form of CDS Security Agreement

</TABLE>


                                      (ii)
<PAGE>



          SENIOR  LOAN  AGREEMENT  dated as of June 28,  2006 among  Centerbrook
Financial LLC, the LENDERS party hereto, and Citibank, N.A., as Senior Agent.

          The parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

          SECTION 1.01. DEFINED TERMS. As used in this Agreement,  the following
terms have the meanings specified below:

          "ABR",  when used in  reference  to any Loan or  Borrowing,  refers to
whether such Loan, or the Loans comprising such Borrowing,  are bearing interest
at a rate determined by reference to the Base Rate.

          "ADMINISTRATIVE  QUESTIONNAIRE" means an Administrative  Questionnaire
in a form supplied by the Senior Agent.

          "AFFILIATE" means, with respect to a specified Person,  another Person
that directly, or indirectly through one or more intermediaries,  Controls or is
Controlled by or is under common Control with the Person  specified and, if such
other Person is an  individual,  any member of the immediate  family  (including
parents,  spouse,  children and siblings) of such individual and any trust whose
principal  beneficiary  is  such  individual  or one or  more  members  of  such
immediate  family and any Person who is  controlled by any such member or trust,
PROVIDED  that,  in any  event,  any Person  that owns  directly  or  indirectly
securities  having 5% or more of the voting  power for the election of directors
or other  governing  body of a corporation  or 5% or more of the  partnership or
other  ownership  interests of any other Person (other than as a limited partner
of such other  Person) will be deemed to  "Control"  such  corporation  or other
Person for purposes of this definition.

          "APPLICABLE  PERCENTAGE"  means,  with  respect  to  any  Lender,  the
percentage of the total Commitments represented by such Lender's Commitment.  If
the Commitments have terminated or expired, the Applicable  Percentages shall be
determined based upon the Commitments most recently in effect,  giving effect to
any assignments.

          "APPROVED FUND" means any Person (other than a natural person) that is
engaged in making,  purchasing,  holding or  investing in bank loans and similar
extensions  of  credit  in the  ordinary  course  of its  business  and  that is
administered or managed by (a) a Lender,  (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

          "ASSIGNMENT AND ASSUMPTION" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section  9.04),  and  accepted by the Senior  Agent,  in the form of
Exhibit A or any other form approved by the Senior Agent.

          "AVAILABILITY   PERIOD"  means  the  period  from  and  including  the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.

          "AVAILABLE MEZZANINE LOAN AMOUNTS" has the meaning ascribed thereto in
the Mezzanine Facility.

          "BANKRUPTCY  EVENT"  has the  meaning  assigned  to  such  term in the
Operating Agreement.

          "BASE RATE"  means,  for any day, a rate per annum equal to the higher
of (a) the Prime Rate in effect on such day and (b) the Federal Funds  Effective
Rate in effect on such day PLUS 1/2 of 1%.  Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds  Effective Rate shall be effective
from and including  the  effective  date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.

          "BOARD" means the Board of Governors of the Federal  Reserve System of
the United States of America.

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

          "BORROWING" means Loans of the same Type, made, converted or continued
on the same  date and,  in the case of  Eurodollar  Loans,  as to which a single
Interest Period is in effect.

          "BORROWING REQUEST" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.


<PAGE>



          "BUSINESS  DAY" means any day that is not a Saturday,  Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term  "BUSINESS  DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

          "CAPITAL  LEASE  OBLIGATIONS"  of any Person means the  obligations of
such  Person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

          "CAPITAL MODEL" has the meaning assigned to such term in the Operating
Agreement.

          "CDS"  has  the  meaning  assigned  to  such  term  in  the  Operating
Agreement.

          "CDS  HOLDERS"  has  the  meaning  assigned  to such  term in  Section
6.02(c).

          "CDS SECURITY  AGREEMENT" means the Security Agreement dated as of the
date hereof between the Borrower and the  collateral  agent party thereto and in
substantially the form of Exhibit C.

          "CHANGE IN CONTROL"  means at any time (i) Holdings  does not directly
own 100% of the Voting Interests of the Borrower, (ii) prior to a Qualified IPO,
CharterMac and its Controlled  affiliates do not collectively  own,  directly or
indirectly, at least 51% of each class of Voting Interests of Holdings, or (iii)
after a  Qualified  IPO,  CharterMac  and its  Controlled  affiliates  does  not
collectively own,  directly or indirectly,  at least 25% of each class of Voting
Interests of Holdings.

          "CHANGE IN LAW" means (a) the adoption of any law,  rule or regulation
after the date of this Agreement,  (b) any change in any law, rule or regulation
or in the  interpretation or application  thereof by any Governmental  Authority
after the date of this  Agreement  or (c)  compliance  by any  Lender  (or,  for
purposes of Section  2.12(b),  by any  lending  office of such Lender or by such
Lender's  holding  company,  if any) with any  request,  guideline  or directive
(whether or not having the force of law) of any  Governmental  Authority made or
issued after the date of this Agreement.

          "CHARTERMAC" means CharterMac, a Delaware statutory trust.

          "CODE" means the Internal Revenue Code of 1986.

          "COLLATERAL"   has  the   meaning   assigned   to  such  term  in  the
Subordination and Security Agreement.

          "COLLATERAL  AGENT" means Deutsche Bank Trust Company  Americas or any
successor or substitute  Collateral Agent appointed pursuant to the terms of the
Subordination and Security Agreement.

          "COLLATERAL SUPPORT SWAP" has the meaning assigned to such term in the
Operating Agreement.

          "COLLECTION  PERIOD"  has the  meaning  assigned  to such  term in the
Operating Agreement.

          "COMMITMENT"  means,  with respect to each Lender,  the  commitment of
such Lender to make Loans hereunder,  as such commitment may be (a) reduced from
time to time  pursuant to Section  2.06,  (b) reduced or increased  from time to
time pursuant to  assignments  by or to such Lender  pursuant to Section 9.04 or
(c)  reduced  pursuant  to Article  VII.  The  initial  amount of each  Lender's
Commitment is set forth on Schedule  2.01 or in the  Assignment  and  Assumption
pursuant to which such Lender shall have assumed its Commitment,  as applicable.
The initial aggregate amount of the Lenders' Commitments is $30,000,000.

          "CONTROL" means the possession,  directly or indirectly,  of the power
to direct or cause the  direction  of the  management  or  policies of a Person,
whether  through the ownership of voting  securities,  by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.

          "CREDIT  DOCUMENTS"  means,  collectively,   this  Agreement  and  the
Security Documents.

          "CUSTODY  AGREEMENT"  has the  meaning  assigned  to such  term in the
Operating Agreement.

          "DEFAULT" means any event or condition  which  constitutes an Event of
Default or which  upon  notice,  lapse of time or both  would,  unless  cured or
waived, become an Event of Default.

          "DISTRIBUTION  SCHEDULE" has the meaning  assigned to such term in the
Operating Agreement.

          "DOLLARS"  or "$"  refers  to  lawful  money of the  United  States of
America.


                                       2
<PAGE>



          "DOWNGRADED  BANK  ACCOUNT"  has the  meaning  set  forth  in  Section
2.17(a).

          "DOWNGRADED  BANK ACCOUNT  RELEASE  DATE" has the meaning set forth in
Section 2.17(c).

          "EFFECTIVE  DATE" means the date on which the conditions  specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

          "ENVIRONMENTAL  LAWS"  means  all  laws,  rules,  regulations,  codes,
ordinances,  orders,  decrees,  judgments,   injunctions,   notices  or  binding
agreements  issued,  promulgated or entered into by any Governmental  Authority,
relating in any way to the  environment,  preservation or reclamation of natural
resources,  the  management,  release or  threatened  release  of any  Hazardous
Material or to health and safety matters.

          "ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower directly or indirectly resulting from
or based upon (a) violation of any Environmental  Law, (b) the generation,  use,
handling,  transportation,  storage,  treatment  or  disposal  of any  Hazardous
Materials,  (c)  exposure  to  any  Hazardous  Materials,  (d)  the  release  or
threatened  release of any Hazardous  Materials into the  environment or (e) any
contract,  agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

          "EQUITY   INTERESTS"  means  shares  of  capital  stock,   partnership
interests,  membership  interests  in a limited  liability  company,  beneficial
interests in a trust or other equity  ownership  interests in a Person,  and any
warrants,  options or other rights  entitling the holder  thereof to purchase or
acquire any such equity interest.

          "ERISA" means the Employee Retirement Income Security Act of 1974.

          "ERISA  AFFILIATE"  means  any  trade  or  business  (whether  or  not
incorporated) that, together with the Borrower,  is treated as a single employer
under  Section  414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

          "ERISA EVENT" means (a) any "reportable  event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice  period is waived);  (b) the existence
with respect to any Plan of an "accumulated  funding  deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing  pursuant to Section  412(d) of the Code or Section 303(d) of ERISA of an
application  for a waiver of the minimum  funding  standard  with respect to any
Plan; (d) the  incurrence by the Borrower or any of its ERISA  Affiliates of any
liability  under Title IV of ERISA with respect to the  termination of any Plan;
(e) the receipt by the Borrower or any ERISA  Affiliate  from the PBGC or a plan
administrator  of any notice  relating to an intention to terminate  any Plan or
Plans or to appoint a trustee to administer  any Plan; (f) the incurrence by the
Borrower or any of its ERISA  Affiliates  of any  liability  with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice,  or the receipt by
any  Multiemployer  Plan from the Borrower or any ERISA Affiliate of any notice,
concerning  the  imposition of Withdrawal  Liability or a  determination  that a
Multiemployer  Plan is, or is expected to be,  insolvent  or in  reorganization,
within the meaning of Title IV of ERISA.

          "EURODOLLAR",  when used in reference to any Loan or Borrowing, refers
to whether  such Loan,  or the Loans  comprising  such  Borrowing,  are  bearing
interest at a rate determined by reference to the LIBO Rate.

          "EVENT OF DEFAULT"  has the  meaning  assigned to such term in Article
VII.

          "EXCLUDED  TAXES" means,  with respect to the Senior Agent, any Lender
or any  other  recipient  of any  payment  to be  made by or on  account  of any
obligation of the Borrower  hereunder,  (a) income or franchise taxes imposed on
(or  measured  by) its net income by the  United  States of  America,  or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal  office  is  located  or,  in the case of any  Lender,  in  which  its
applicable  lending  office is located,  (b) any branch profits taxes imposed by
the  United  States  of  America  or  any  similar  tax  imposed  by  any  other
jurisdiction  in which the  Borrower is located and (c) in the case of a Foreign
Lender  (other than an  assignee  pursuant  to a request by the  Borrower  under
Section 2.16(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section  2.14(e),  except to the extent that such Foreign
Lender (or its assignor,  if any) was entitled,  at the time of designation of a
new lending  office (or  assignment),  to receive  additional  amounts  from the
Borrower with respect to such withholding tax pursuant to Section 2.14(a).

          "FEDERAL  FUNDS  EFFECTIVE  RATE"  means,  for any day,  the  weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds  transactions with members of the Federal Reserve System
arranged by Federal funds brokers,  as published on the next succeeding 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 (rounded  upwards,  if
necessary,  to the  next  1/100 of 1%) of the  quotations  for such day for such


                                       3
<PAGE>



transactions  received by the Senior Agent from three  Federal  funds brokers of
recognized standing selected by it.

          "FINANCIAL  OFFICER"  means the  chief  financial  officer,  principal
accounting officer, treasurer or controller of the Borrower.

          "FOREIGN  LENDER" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this  definition,  the United  States of  America,  each State  thereof  and the
District of Columbia shall be deemed to constitute a single jurisdiction.

          "GAAP" means generally  accepted  accounting  principles in the United
States of America.

          "GOVERNMENTAL  AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local,  and any agency,  authority,  instrumentality,  regulatory  body,  court,
central  bank or  other  entity  exercising  executive,  legislative,  judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government.

          "GUARANTEE"  of  or  by  any  Person  (the   "GUARANTOR")   means  any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of  guaranteeing  any  Indebtedness  or other  obligation of any
other  Person  (the  "PRIMARY  OBLIGOR")  in any  manner,  whether  directly  or
indirectly,  and including any obligation of the guarantor,  direct or indirect,
(a) to purchase or pay (or advance or supply  funds for the  purchase or payment
of) such  Indebtedness  or other  obligation  or to  purchase  (or to advance or
supply funds for the purchase of) any security for the payment  thereof,  (b) to
purchase or lease  property,  securities or services for the purpose of assuring
the owner of such  Indebtedness or other obligation of the payment thereof,  (c)
to maintain  working  capital,  equity capital or any other financial  statement
condition  or  liquidity  of the  primary  obligor so as to enable  the  primary
obligor to pay such  Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty  issued to support such
Indebtedness  or obligation;  PROVIDED that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.

          "HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes  and all  hazardous  or toxic  substances,  wastes  or other  pollutants,
including  petroleum or petroleum  distillates,  asbestos or asbestos containing
materials,  polychlorinated  biphenyls,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

          "HEDGING  AGREEMENT"  means any interest  rate  protection  agreement,
foreign currency  exchange  agreement,  commodity price protection  agreement or
other interest or currency exchange rate or commodity price hedging arrangement.

          "HOLDINGS" means Centerbrook Holdings LLC.

          "INDEBTEDNESS"  of any  Person  means,  without  duplication,  (a) all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind,  (b) all  obligations  of such Person  evidenced by bonds,
debentures,  notes or similar  instruments,  (c) all  obligations of such Person
upon which interest  charges are  customarily  paid, (d) all obligations of such
Person under  conditional sale or other title retention  agreements  relating to
property acquired by such Person,  (e) all obligations of such Person in respect
of the  deferred  purchase  price of  property or  services  (excluding  current
accounts  payable  incurred  in  the  ordinary  course  of  business),  (f)  all
Indebtedness of others secured by (or for which the holder of such  Indebtedness
has an existing  right,  contingent or otherwise,  to be secured by) any Lien on
property  owned or  acquired  by such  Person,  whether or not the  Indebtedness
secured  thereby  has  been  assumed,  (g)  all  Guarantees  by such  Person  of
Indebtedness of others,  (h) all Capital Lease  Obligations of such Person,  (i)
all obligations,  contingent or otherwise, of such Person as an account party in
respect of letters of credit and  letters of guaranty  and (j) all  obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances.  The
Indebtedness  of any Person shall include the  Indebtedness  of any other entity
(including  any  partnership  in which such Person is a general  partner) to the
extent such Person is liable  therefor  as a result of such  Person's  ownership
interest in or other  relationship  with such  entity,  except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

          "INDEPENDENT  MANAGER"  has the  meaning  assigned to such term in the
Operating Agreement.

          "INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.

          "INFORMATION MEMORANDUM" means the Confidential Information Memorandum
distributed on behalf of the Borrower in January,  2006 relating to the Borrower
and the Transactions.

          "INITIAL CAPITAL  CONTRIBUTION"  has the meaning assigned to such term
in the Operating Agreement.

          "INTEREST ELECTION REQUEST" means a request by the Borrower to convert
a Borrowing in accordance with Section 2.05.


                                       4
<PAGE>



          "INTEREST PERIOD" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the next Quarterly
Payment  Date  and  thereafter,  the  period  commencing  on the last day of the
preceding  Interest  Period and ending on the next  Quarterly  Payment Date. For
purposes  hereof,  the date of a Borrowing  initially shall be the date on which
such  Borrowing is made and  thereafter  shall be the effective date of the most
recent conversion or continuation of such Borrowing.

          "INVESTMENT"  means,  for any Person (a) the acquisition  (whether for
cash,  property,  services or securities or otherwise) of capital stock,  bonds,
notes, debentures,  partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any  securities at a time when such  securities  are
not owned by the Person entering into such sale),  (b) the making of any deposit
with,  or  advance,  loan or other  extension  of credit  to,  any other  Person
(including   the  purchase  of  property  from  another  Person  subject  to  an
understanding or agreement,  contingent or otherwise, to resell such property to
such Person),  (c) the entering  into of any  Guarantee of, or other  contingent
obligation with respect to,  Indebtedness or other liability of any other Person
and (without duplication) any amount committed to be advanced,  lent or extended
to such Person, or (d) the entering into of any Hedging Agreement.

          "LENDER RATING  CRITERIA"  means  criteria  satisfied on any date with
respect  to any  Lender  if (a)  either  (i)  the  unsecured,  unguaranteed  and
otherwise  unsupported  short-term debt  obligations of such Lender are rated at
least "A-1+" by S&P or (ii) if there is no such S&P short-term debt  obligations
rating, the unsecured,  unguaranteed and otherwise  unsupported long-term senior
debt  obligations of such Lender are rated at least "AA-" by S&P, and (b) either
(i)(x) the unsecured,  unguaranteed  and otherwise  unsupported  short-term debt
obligations  of such Lender are rated "P-1" by Moody's and such rating is not on
watch for possible downgrade by Moody's and (y) the unsecured,  unguaranteed and
otherwise unsupported long-term senior debt obligations of such Lender are rated
higher  than "A1" by Moody's or are rated "A1" by Moody's and such rating is not
on watch for  possible  downgrade by Moody's or (ii) if there is no such Moody's
short-term debt obligations  rating,  the unsecured,  unguaranteed and otherwise
unsupported  long-term  senior debt  obligations of such Lender are rated higher
than "Aa3" by Moody's or are rated  "Aa3" by Moody's  and such  rating is not on
watch for possible downgrade by Moody's.

          "LENDERS"  means the  Persons  listed on  Schedule  2.01 and any other
Person  that shall have become a party  hereto  pursuant  to an  Assignment  and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.

          "LIBO RATE" means,  with respect to any  Eurodollar  Borrowing for any
Interest Period,  the rate appearing on Page 3750 of the Telerate Service (or on
any  successor  or  substitute  page of such  Service,  or any  successor  to or
substitute  for such  Service,  providing  rate  quotations  comparable to those
currently  provided on such page of such  Service,  as  determined by the Senior
Agent from time to time for purposes of providing  quotations of interest  rates
applicable to dollar deposits in the London  interbank  market) at approximately
11:00 a.m.,  London time,  two Business Days prior to the  commencement  of such
Interest Period,  as the rate for dollar deposits with a maturity  comparable to
such Interest Period.  In the event that such rate is not available at such time
for any reason,  then the "LIBO RATE" with respect to such Eurodollar  Borrowing
for  such  Interest  Period  shall  be the  rate at  which  dollar  deposits  of
$5,000,000 and for a maturity  comparable to such Interest Period are offered by
the principal  London office of the Senior Agent in immediately  available funds
in the London  interbank market at  approximately  11:00 a.m.,  London time, two
Business Days prior to the commencement of such Interest Period.

          "LIEN"  has  the  meaning  assigned  to  such  term  in the  Operating
Agreement.

          "LOANS" means the loans made, continued or converted by the Lenders to
the Borrower pursuant to this Agreement.

          "MANAGING  MEMBER"  has  the  meaning  assigned  to  such  term in the
Operating Agreement.

          "MATERIAL  ADVERSE EFFECT" means a material  adverse effect on (a) the
business, operations,  property, condition (financial or otherwise) or prospects
of the  Borrower or the  Managing  Member,  (b) the  ability of the  Borrower to
perform its obligations under this Agreement or any other Program Document,  (c)
the validity or enforceability of any of the Program Documents or (d) the rights
or remedies of the Senior Agent or the Lenders under this Agreement or any other
Program Document.

          "MATERIAL  INDEBTEDNESS"  means Indebtedness (other than the Loans and
in respect of CDS) of the Borrower in an aggregate  principal  amount  exceeding
$1,000,000.

          "MATURITY  DATE"  means  June  28,  2036,  unless  such  date is not a
Business  Day,  in  which  case the  "Maturity  Date"  shall be the  immediately
preceding Business Day.

          "MEZZANINE  FACILITY"  has the  meaning  assigned  to such term in the
Operating Agreement.

          "MINIMUM CAPITAL REQUIREMENT" has the meaning assigned to such term in
the Operating Agreement.


                                       5
<PAGE>



          "MOODY'S" means Moody's Investors Service, Inc.

          "MULTIEMPLOYER  PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

          "MULTIFAMILY  REVENUE BONDS" has the meaning  assigned to such term in
the Operating Agreement.

          "OFF-SETTING  SWAP"  has the  meaning  assigned  to  such  term in the
Operating Agreement.

          "OPERATING AGREEMENT" means the Limited Liability Company Agreement of
the Borrower dated as of June 28, 2006.

          "OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property  taxes,  charges or similar levies arising
from any payment made hereunder or from the  execution,  delivery or enforcement
of, or otherwise with respect to, this Agreement.

          "PARTICIPANT" has the meaning set forth in Section 9.04.

          "PBGC" means the Pension Benefit Guaranty  Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

          "PERMITTED  INVESTMENTS"  has the meaning assigned to such term in the
Operating Agreement.

          "PERMITTED  LIENS"  has  the  meaning  assigned  to  such  term in the
Operating Agreement.

          "PERSON"  means any natural  person,  corporation,  limited  liability
company, trust, joint venture, association,  company, partnership,  Governmental
Authority or other entity.

          "PLAN"  means  any  employee   pension  benefit  plan  (other  than  a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA  Affiliate is (or, if such plan were  terminated,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA.

          "PRIME RATE" means the rate of interest per annum  publicly  announced
from time to time by  Citibank,  N.A.  as its prime rate  (which need not be its
best rate) in effect at its  principal  office in New York City;  each change in
the Prime Rate shall be  effective  from and  including  the date such change is
publicly announced as being effective.

          "PROGRAM  DOCUMENT"  has the  meaning  assigned  to  such  term in the
Operating Agreement.

          "PROJECT  INVESTMENTS"  has the  meaning  assigned to such term in the
Operating Agreement.

          "QUALIFIED IPO" means a bona fide  underwritten  sale to the public of
common stock of Holdings  pursuant to a  registration  statement  (other than on
Form S-8 or any other form  relating to  securities  issuable  under any benefit
plan  of  Holdings)  that  is  declared  effective  by the  Securities  Exchange
Commission and which results in minimum  aggregate gross cash proceeds in excess
of $500,000,000.

          "QUARTERLY  PAYMENT DATE" has the meaning assigned to such term in the
Operating Agreement.

          "RATING AGENCIES" means, collectively, Moody's and S&P.

          "RATING  CONDITION"  means, with respect to each Rating Agency and any
action taken or to be taken under this Agreement,  a condition that is satisfied
when each  Rating  Agency  has  confirmed  to the  Company  in  writing  that no
withdrawal,  reduction,  suspension or other adverse  action with respect to any
then current rating by such Rating Agency (including any private or confidential
rating) with respect to this Agreement will occur as a result of such action.

          "REGISTER" has the meaning set forth in Section 9.04.

          "RELATED PARTIES" means,  with respect to any specified  Person,  such
Person's Affiliates and the respective directors,  officers,  employees,  agents
and advisors of such Person and such Person's Affiliates.

          "REQUIRED LENDERS" means, at any time, Lenders having more than 50% of
the sum of (a) the aggregate  outstanding  principal amount of the Loans at such
time PLUS (b) the aggregate unused amount of the Commitments at such time.


                                       6
<PAGE>



          "RESERVE  ACCOUNT"  has  the  meaning  assigned  to  such  term in the
Operating Agreement.

          "RESTRICTED PAYMENT" means any dividend or other distribution (whether
in cash,  securities or other property) with respect to any Equity  Interests in
the Borrower,  or any payment  (whether in cash,  securities or other property),
including  any  sinking  fund or similar  deposit,  on account of the  purchase,
redemption,  retirement,  acquisition,  cancellation  or termination of any such
Equity  Interests  in the  Borrower  or any  option,  warrant or other  right to
acquire any such Equity Interests in the Borrower.

          "RIGHT OF FIRST REFUSAL LETTER" has the meaning  assigned to such term
in the Operating Agreement.

          "S&P"  means  Standard & Poor's  Ratings  Services,  a division of The
McGraw-Hill Companies Inc.

          "SECURITY  DOCUMENTS"  means,  collectively,   the  Subordination  and
Security Agreement, all Uniform Commercial Code financing statements required by
the  Subordination  and  Security  Agreement  to be filed  with  respect  to the
security  interests in personal  property and fixtures  created  pursuant to the
Subordination  and Security  Agreement,  any "control"  agreements in connection
therewith  and any  mortgage,  deed of trust or deed to secure debt entered into
pursuant to Section 5.09(b).

          "SENIOR AGENT" means Citibank, N.A., in its capacity as administrative
agent for the Lenders hereunder.

          "SENIOR  STEP  UP  DATE"  means  the  date   occurring  on  the  sixth
anniversary of the date of this Agreement.

          "SENIOR STEP UP RATE" means,  for purposes of  determining  commitment
fees pursuant to Section  2.09(a) and interest  pursuant to Section  2.10(a) and
Section 2.10(b) from and after the Senior Step Up Date, 0.25%.

          "SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the  property of such Person is greater  than
the total  amount of  liabilities,  including  contingent  liabilities,  of such
Person,  (b) the present fair salable  value of the assets 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 does
not intend to, and does not believe  that it will,  incur  debts or  liabilities
beyond such Person's  ability to pay such debts and  liabilities  as they mature
and (d) 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  an  unreasonably  small  capital.  The  amount of  contingent
liabilities  at any time shall be computed as the amount  that,  in the light of
all the facts and  circumstances  existing at such time,  represents  the amount
that can reasonably be expected to become an actual or matured liability.

          "SUBORDINATED  DEBT FACILITY" has the meaning assigned to such term in
the Operating Agreement.

          "SUBORDINATION  AND SECURITY  AGREEMENT" means the  Subordination  and
Security Agreement dated as of June 28, 2006 among the Borrower,  the Collateral
Agent,  the  Senior  Agent and the and  "Mezzanine  Agent"  under the  Mezzanine
Facility.

          "SUBSIDIARY"  means,  with respect to any Person (the "PARENT") at any
date, any corporation,  limited liability company,  partnership,  association or
other  entity the  accounts  of which  would be  consolidated  with those of the
parent in the  parent's  consolidated  financial  statements  if such  financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership,  association or other
entity (a) of which securities or other ownership  interests  representing  more
than 50% of the equity or more than 50% of the ordinary  voting power or, in the
case of a partnership,  more than 50% of the general partnership  interests are,
as of such date,  owned,  controlled  or held,  or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

          "TAXES"  means any and all present or future taxes,  levies,  imposts,
duties,  deductions,   charges  or  withholdings  imposed  by  any  Governmental
Authority.

          "TRANSACTIONS" means,  collectively,  the transactions contemplated by
this  Agreement  (including  the  execution,  delivery  and  performance  by the
Borrower of this Agreement,  the borrowing of Loans, and the use of the proceeds
thereof) and the other Program Documents.

          "TYPE",  when used in  reference to any Loan or  Borrowing,  refers to
whether  the rate of  interest  on such Loan,  or on the Loans  comprising  such
Borrowing, is determined by reference to the LIBO Rate or the Base Rate.

          "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.


                                       7
<PAGE>



          "VOTING  INTERESTS"  of any  Person at any time  shall mean the Equity
Interests of such Person that are at such time  entitled to vote in the election
of the Board of Managers or Managing Member of such Person.

          "WIND-DOWN  EVENT"  has  the  meaning  assigned  to  such  term in the
Operating Agreement.

          "WITHDRAWAL  LIABILITY"  means liability to a Multiemployer  Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

          SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS.  For purposes of
this  Agreement,  Loans may be  classified  and  referred  to by Type  (e.g.,  a
"Eurodollar  Loan").  Borrowings  also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").

          SECTION 1.03. TERMS  GENERALLY.  The definitions of terms herein shall
apply  equally to the singular and plural forms of the terms  defined.  Whenever
the context may require, any pronoun shall include the corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed  by the phrase  "without  limitation".  The word "will"
shall be  construed  to have the same  meaning  and effect as the word  "shall".
Unless the context requires  otherwise (a) any definition of or reference to any
agreement,  instrument or other document  herein shall be construed as referring
to such  agreement,  instrument or other  document as from time to time amended,
supplemented  or  otherwise  modified  (subject  to  any  restrictions  on  such
amendments,  supplements or modifications  set forth herein),  (b) any reference
herein to any Person shall be construed to include such Person's  successors and
assigns, (c) the words "herein", "hereof" and "hereunder",  and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any  particular  provision  hereof,  (d)  all  references  herein  to  Articles,
Sections,  Exhibits  and  Schedules  shall be construed to refer to Articles and
Sections  of, and  Exhibits  and  Schedules  to, this  Agreement,  (e) the words
"asset" and  "property"  shall be  construed to have the same meaning and effect
and to refer to any and all  tangible  and  intangible  assets  and  properties,
including cash,  securities,  accounts and contract rights and (f) references to
any law, constitution, statute, treaty, regulation, rule or ordinance, including
any section or other part thereof  (each,  for purposes of this Section  1.03, a
"law"),  shall refer to that law as amended,  supplemented or otherwise modified
from time to time and shall include any successor law.

          SECTION 1.04.  ACCOUNTING TERMS;  GAAP. Except as otherwise  expressly
provided  herein,  all  terms of an  accounting  or  financial  nature  shall be
construed  in  accordance  with GAAP,  as in effect from time to time;  PROVIDED
that,  if the Borrower  notifies the Senior Agent that the Borrower  requests an
amendment  to any  provision  hereof  to  eliminate  the  effect  of any  change
occurring  after the date  hereof in GAAP or in the  application  thereof on the
operation of such  provision (or if the Senior Agent  notifies the Borrower that
the  Required  Lenders  request an amendment  to any  provision  hereof for such
purpose),  regardless  of whether any such notice is given  before or after such
change  in GAAP or in the  application  thereof,  then such  provision  shall be
interpreted  on the basis of GAAP as in effect and  applied  immediately  before
such  change  shall have  become  effective  until such  notice  shall have been
withdrawn or such provision amended in accordance herewith.

                                   ARTICLE II
                                   THE CREDITS

          SECTION 2.01.  COMMITMENTS.  Subject to the terms and  conditions  set
forth herein, each Lender agrees to make Loans to the Borrower from time to time
during the  Availability  Period in an aggregate  principal amount that will not
result in the outstanding principal amount of such Lender's Loans exceeding such
Lender's  Commitment.  Within the foregoing  limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.
Each of the Lenders agrees that the CDS Holders (and any collateral agent acting
on their behalf) shall be express third party  beneficiaries of the Commitments,
as  provided  in the CDS  Security  Agreement,  and that such  rights of the CDS
Holders (and any such  collateral  agent) shall  survive the  occurrence  of any
Bankruptcy Event with respect to the Borrower, PROVIDED that notwithstanding the
foregoing the parties hereto shall be permitted to terminate,  amend, supplement
or  otherwise  modify this  Agreement  without the consent of any CDS Holder (or
such  collateral  agent),  except  as  otherwise  provided  in the CDS  Security
Agreement.

          SECTION 2.02. LOANS AND BORROWINGS.

          (a)  OBLIGATIONS  OF  LENDERS.  Each Loan shall be made by the Lenders
ratably in  accordance  with their  respective  Commitments.  The failure of any
Lender to make any Loan  required  to be made by it shall not  relieve any other
Lender  of its  obligations  hereunder;  PROVIDED  that the  Commitments  of the
Lenders are several and no Lender shall be  responsible  for any other  Lender's
failure to make Loans as required.

          (b) TYPES OF LOANS.  Subject to Section 2.11,  each Borrowing shall be
comprised  entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance  herewith.  Each Lender at its option may make any Eurodollar Loan
by causing any  domestic or foreign  branch or  Affiliate of such Lender to make
such  Loan;  PROVIDED  that any  exercise  of such  option  shall not affect the
obligation  of the Borrower to repay such Loan in  accordance  with the terms of
this Agreement.


                                       8
<PAGE>



          (c)  MINIMUM  AMOUNTS;  LIMITATION  ON  NUMBER OF  BORROWINGS.  At the
commencement  of  each  Interest  Period  for  any  Eurodollar  Borrowing,  such
Borrowing  shall be in an  aggregate  amount  that is an  integral  multiple  of
$10,000 and not less than  $1,000,000.  At the time that each ABR  Borrowing  is
made,  such  Borrowing  shall  be in an  aggregate  amount  that is an  integral
multiple of $10,000 and not less than $1,000,000; PROVIDED that an ABR Borrowing
may be in an aggregate  amount that is equal to the entire unused balance of the
total  Commitments.  Borrowings of more than one Type may be  outstanding at the
same time;  PROVIDED  that  there  shall not at any time be more than a total of
five Eurodollar Borrowings outstanding.

          (d)  LIMITATION  ON  INTEREST  PERIODS.   Notwithstanding   any  other
provision of this Agreement,  the Borrower shall not be entitled to request,  or
to elect to convert, any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.

          SECTION 2.03.  REQUESTS FOR  BORROWINGS.  To request a Borrowing,  the
Borrower  shall  notify the Senior  Agent of such  request  (a) in the case of a
Eurodollar  Borrowing,  not later than  11:00  a.m.,  New York City time,  three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of the
proposed  Borrowing.  Each such Borrowing Request shall be irrevocable and shall
be in a form approved by the Senior Agent and signed by the  Borrower,  PROVIDED
that,  without  prejudice to Section  2.13,  the Borrower  shall be permitted to
revoke any  Borrowing  Request  related  to a  Eurodollar  Borrowing.  Each such
Borrowing  Request shall specify the following  information  in compliance  with
Section 2.02:

          (i) the aggregate amount of the requested Borrowing;

          (ii) the date of such Borrowing, which shall be a Business Day;

          (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
     Borrowing;

          (iv) in the  case of a  Eurodollar  Borrowing,  the  initial  Interest
     Period to be applicable  thereto,  which shall conform to the definition of
     the term "Interest Period"; and

          (v) the location and number of the  Borrower's  account to which funds
     are to be disbursed,  which shall comply with the  requirements  of Section
     2.04.

If no election as to the Type of  Borrowing  is  specified,  then the  requested
Borrowing shall be an ABR Borrowing.  Promptly  following receipt of a Borrowing
Request in  accordance  with this  Section,  the Senior  Agent shall advise each
Lender of the details thereof and of the amount of such Lender's Loan to be made
as part of the requested Borrowing.

          SECTION 2.04. FUNDING OF BORROWINGS.

          (a) FUNDING BY LENDERS. Each Lender shall make each Loan to be made by
it  hereunder  on the  proposed  date  thereof by wire  transfer of  immediately
available  funds by 12:00 noon, New York City time, to the account of the Senior
Agent most recently  designated by it for such purpose by notice to the Lenders.
The Senior  Agent will make such Loans  available  to the  Borrower  by promptly
crediting the amounts so received,  in like funds, to an account of the Borrower
maintained with the Senior Agent in New York City and designated by the Borrower
in the applicable Borrowing Request.

          (b)  PRESUMPTION  BY SENIOR AGENT.  Unless the Senior Agent shall have
received  notice from a Lender prior to the proposed date of any Borrowing  that
such Lender will not make  available to the Senior Agent such Lender's  share of
such Borrowing, the Senior Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section and may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount.  In such  event,  if a  Lender  has not in fact  made  its  share of the
applicable  Borrowing  available to the Senior Agent, then the applicable Lender
and the Borrower  severally agree to pay to the Senior Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Senior Agent,  at (i) in the case of such Lender,  the greater
of the Federal Funds Effective Rate and a rate determined by the Senior Agent in
accordance with banking industry rules on interbank  compensation or (ii) in the
case of the Borrower,  the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Senior  Agent,  then such amount shall  constitute  such
Lender's Loan included in such Borrowing.

          SECTION 2.05. INTEREST RATE ELECTIONS.

          (a) ELECTIONS BY BORROWER FOR  BORROWINGS.  Each  Borrowing  initially
shall be of the Type specified in the applicable  Borrowing  Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period conforming
to the definition of the term "Interest  Period".  Thereafter,  the Borrower may
elect to convert such Borrowing to a different Type as provided in this Section.


                                       9
<PAGE>



The Borrower may elect different  options with respect to different  portions of
the  affected  Borrowing,  in which case each such  portion  shall be  allocated
ratably among the Lenders holding the Loans  comprising such Borrowing,  and the
Loans comprising each such portion shall be considered a separate Borrowing.

          (b) NOTICE OF ELECTIONS. To make an election pursuant to this Section,
the Borrower  shall notify the Senior Agent of such  election by the time that a
Borrowing  Request  would be required  under  Section 2.03 if the Borrower  were
requesting a Borrowing of the Type  resulting  from such  election to be made on
the effective date of such election.  Each such Interest  Election Request shall
be irrevocable and shall be in a form approved by the Senior Agent and signed by
the Borrower.

          (c) CONTENT OF INTEREST  ELECTION  REQUESTS.  Each  Interest  Election
Request shall specify the following information in compliance with Section 2.02:

          (i) the Borrowing to which such Interest Election Request applies and,
     if different  options are being elected with respect to different  portions
     thereof,  the portions thereof to be allocated to each resulting  Borrowing
     (in which case the  information  to be specified  pursuant to clauses (iii)
     and (iv) below shall be specified for each resulting Borrowing);

          (ii) the effective date of the election made pursuant to such Interest
     Election Request, which shall be a Business Day;

          (iii) whether the  resulting  Borrowing is to be an ABR Borrowing or a
     Eurodollar Borrowing; and

          (iv)  if  the  resulting  Borrowing  is a  Eurodollar  Borrowing,  the
     Interest  Period  to be  applicable  thereto  after  giving  effect to such
     election,  which  shall  conform to the  definition  of the term  "Interest
     Period".

          (d) NOTICE OF INTEREST ELECTION REQUEST. Promptly following receipt of
an Interest Election  Request,  the Senior Agent shall advise each Lender of the
details thereof and of such Lender's portion of each resulting Borrowing.

          (e)  AUTOMATIC  CONTINUATION  AND  CONVERSION.   Unless  a  Eurodollar
Borrowing  is repaid  as  provided  herein,  at the end of the  Interest  Period
applicable  thereto  such  Borrowing  shall  be  automatically  continued  as  a
Eurodollar Borrowing,  unless any of the circumstances described in Section 2.11
exist,  in which case such  Eurodollar  Borrowing  shall be  converted to an ABR
Borrowing  at the end of such  Interest  Period.  Notwithstanding  any  contrary
provision  hereof, if an Event of Default has occurred and is continuing and the
Senior Agent, at the request of the Required Lenders,  so notifies the Borrower,
then, so long as an Event of Default is continuing (i) no outstanding  Borrowing
may be  converted to or  continued  as a  Eurodollar  Borrowing  and (ii) unless
repaid, each Eurodollar  Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.

          SECTION 2.06. TERMINATION AND REDUCTION OF COMMITMENTS.

          (a)  SCHEDULED   TERMINATION.   Unless  previously   terminated,   the
Commitments shall terminate on the Maturity Date.

          (b) VOLUNTARY  TERMINATION OR REDUCTION.  The Borrower may at any time
terminate, or from time to time reduce, the Commitments;  PROVIDED that (i) each
reduction of the Commitments  shall be in an amount that is an integral multiple
of $10,000 and not less than  $1,000,000,  (ii) the Borrower shall not terminate
or reduce the Commitments  if, after giving effect to any concurrent  prepayment
of the Loans in accordance with Section 2.08, the aggregate  principal amount of
outstanding  Loans would  exceed the total  Commitments  and (iii) the  Borrower
shall not reduce or terminate the Commitments if the Minimum Capital Requirement
is not  satisfied  after  giving  effect to such  reduction  or  termination  as
determined by the Capital Model.

          (c) NOTICE OF VOLUNTARY  TERMINATION OR REDUCTION.  The Borrower shall
notify the Senior Agent of any  election to terminate or reduce the  Commitments
under  paragraph  (b) of this Section at least three  Business Days prior to the
effective date of such  termination or reduction,  specifying  such election and
the effective date thereof. Promptly following receipt of any notice, the Senior
Agent shall advise the Lenders of the contents thereof. Each notice delivered by
the Borrower  pursuant to this Section  shall be  irrevocable;  PROVIDED  that a
notice of  termination  of the  Commitments  delivered by the Borrower may state
that  such  notice  is  conditioned  upon  the  effectiveness  of  other  credit
facilities,  in which case such notice may be revoked by the Borrower (by notice
to the  Senior  Agent  on or  prior  to the  specified  effective  date) if such
condition is not  satisfied.  Any  termination  or reduction of the  Commitments
shall be  permanent.  Each  reduction of the  Commitments  shall be made ratably
among the Lenders in accordance with their respective Commitments.


                                       10
<PAGE>



          SECTION 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT.

          (a) REPAYMENT.  The Borrower hereby unconditionally promises to pay to
the Senior Agent for the account of each Lender the then unpaid principal amount
of each Loan on the Maturity Date.

          (b)  MAINTENANCE OF RECORDS BY LENDERS.  Each Lender shall maintain in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness  of the  Borrower to such Lender  resulting  from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.

          (c)  MAINTENANCE  OF RECORDS BY SENIOR  AGENT.  The Senior Agent shall
maintain  accounts  in which it shall  record  (i) the  amount of each Loan made
hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the  Borrower  to each  Lender  hereunder  and (iii) the  amount of any sum
received by the Senior Agent  hereunder  for the account of the Lenders and each
Lender's share thereof.

          (d) EFFECT OF ENTRIES.  The entries  made in the  accounts  maintained
pursuant to paragraph (b) or (c) of this Section  shall be PRIMA FACIE  evidence
of the existence and amounts of the obligations recorded therein;  PROVIDED that
the failure of any Lender or the Senior Agent to maintain  such  accounts or any
error therein  shall not in any manner affect the  obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.

          (e) PROMISSORY  NOTES. Any Lender may request that Loans made by it be
evidenced by a promissory  note.  In such event,  the  Borrower  shall  prepare,
execute  and deliver to such Lender a  promissory  note  payable to the order of
such Lender (or, if requested by such Lender,  to such Lender and its registered
assigns)  and in a form  approved  by the Senior  Agent.  Thereafter,  the Loans
evidenced  by such  promissory  note and  interest  thereon  shall at all  times
(including after  assignment  pursuant to Section 9.04) be represented by one or
more  promissory  notes in such form  payable  to the  order of the payee  named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

          SECTION 2.08. PREPAYMENT OF LOANS.

          (a)  OPTIONAL  PREPAYMENTS.  Subject to the  priority of payments  set
forth in Section 13.3 of the Operating  Agreement,  the Borrower  shall have the
right at any time and from time to time to prepay any  Borrowing  in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section.

          (b) NOTICES,  ETC.  The Borrower  shall notify the Senior Agent of any
prepayment  hereunder (i) in the case of  prepayment of a Eurodollar  Borrowing,
not later than 11:00 a.m.,  New York City time,  three  Business Days before the
date of prepayment or (ii) in the case of  prepayment of an ABR  Borrowing,  not
later than 10:00 a.m., New York City time, on the date of prepayment.  Each such
notice  shall be  irrevocable  and shall  specify  the  prepayment  date and the
principal  amount of each Borrowing or portion  thereof to be prepaid;  PROVIDED
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the  Commitments as  contemplated  by Section 2.06,  then such
notice of prepayment  may be revoked if such notice of termination is revoked in
accordance  with Section  2.06.  Promptly  following  receipt of any such notice
relating  to a  Borrowing,  the Senior  Agent  shall  advise the  Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be  permitted  in the case of an advance of a  Borrowing  of the same
Type as provided  in Section  2.02.  Each  prepayment  of a  Borrowing  shall be
applied  ratably to the Loans  included  in the prepaid  Borrowing.  Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.10.

          SECTION 2.09. FEES.

          (a) COMMITMENT FEE. The Borrower agrees to pay to the Senior Agent for
the account of each Lender a  commitment  fee,  which shall accrue at a rate per
annum equal to 0.40% PLUS the Senior Step Up Rate (if  applicable)  on the daily
amount of the unused  portion of the Commitment of such Lender during the period
from and including  the  Effective  Date to but excluding the date on which such
Commitment  terminates.  Accrued  commitment fees shall be payable in arrears on
each Quarterly Payment Date and on the date on which the Commitments  terminate,
commencing on the first such date to occur after the date hereof. All commitment
fees shall be  computed  on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

          (b) SENIOR  AGENT'S  FEES.  The  Borrower  agrees to pay to the Senior
Agent,  for its own  account,  fees  payable  in the  amounts  and at the  times
separately agreed upon between the Borrower and the Senior Agent.

          (c) PAYMENT OF FEES. All fees payable  hereunder  shall be paid on the
dates due, in immediately available funds, to the Senior Agent for distribution,
in the case of commitment fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.


                                       11
<PAGE>



          SECTION 2.10. INTEREST.

          (a) ABR LOANS.  The Loans  comprising  each ABR  Borrowing  shall bear
interest  at the  Base  Rate  PLUS  1.40%  PLUS  the  Senior  Step Up  Rate  (if
applicable).

          (b) EURODOLLAR  LOANS. The Loans comprising each Eurodollar  Borrowing
shall bear interest at the LIBO Rate for the Interest  Period in effect for such
Borrowing PLUS 0.40% PLUS the Senior Step Up Rate (if applicable).

          (c) DEFAULT INTEREST.  Notwithstanding the foregoing, if any principal
of or interest on any Loan or any fee or other  amount  payable by the  Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise,  such  overdue  amount shall bear  interest,  after as well as before
judgment,  at a rate per annum equal to (i) in the case of overdue  principal of
any Loan, 2% PLUS the rate otherwise  applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
PLUS the rate  applicable  to ABR Loans as  provided  in  paragraph  (a) of this
Section,  PROVIDED  that, as provided in Section  2.15(g),  solely to the extent
that the Borrower has  insufficient  funds to pay amounts  hereunder (other than
with respect to the principal of and interest and commitment  fees on the Loans)
in accordance with Sections  13.1(a) and 13.3 of the Operating  Agreement,  such
unpaid amounts shall not accrue interest.

          (d)  PAYMENT  OF  INTEREST.  Accrued  interest  on each Loan  shall be
payable in arrears on each  Quarterly  Payment Date and upon  termination of the
Commitments;  PROVIDED  that (i) interest  accrued  pursuant to paragraph (c) of
this Section  shall be payable on demand and (ii) in the event of any  repayment
or prepayment of any Loan,  accrued  interest on the principal  amount repaid or
prepaid shall be payable on the date of such repayment or prepayment.

          (e) COMPUTATION. All interest hereunder shall be computed on the basis
of a year of 360 days,  except that  interest  computed by reference to the Base
Rate at times when the Base Rate is based on the Prime Rate shall be computed on
the basis of a year of 365 days (or 366 days in a leap  year),  and in each case
shall be payable for the actual number of days elapsed  (including the first day
but  excluding  the last day).  The  applicable  Base Rate or LIBO Rate shall be
determined  by the Senior  Agent,  and such  determination  shall be  conclusive
absent manifest error.

          SECTION 2.11. ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:

          (a)  the  Senior  Agent  determines  (which   determination  shall  be
     conclusive absent manifest error) that adequate and reasonable means do not
     exist for ascertaining the LIBO Rate for such Interest Period; or

          (b) the Senior Agent is advised by the Required  Lenders that the LIBO
     Rate for such Interest  Period will not  adequately  and fairly reflect the
     cost to such Lenders (or Lender) of making or  maintaining  their Loans (or
     its Loan) included in such Borrowing for such Interest Period;

then the Senior Agent shall give notice  thereof to the Borrower and the Lenders
as promptly as practicable  thereafter  and, until the Senior Agent notifies the
Borrower  and the Lenders that the  circumstances  giving rise to such notice no
longer exist, (i) any Interest  Election Request that requests the conversion of
any Borrowing to a Eurodollar  Borrowing  shall be  ineffective  and (ii) if any
Borrowing Request requests a Eurodollar Borrowing,  such Borrowing shall be made
as an ABR Borrowing.

          SECTION 2.12. INCREASED COSTS.

          (a) INCREASED COSTS GENERALLY. If any Change in Law shall:

          (i) impose, modify or deem applicable any reserve,  special deposit or
     similar requirement against assets of, deposits with or for the account of,
     or credit extended by, any Lender; or

          (ii)  impose on any  Lender or the London  interbank  market any other
     condition  affecting this Agreement or Eurodollar Loans made by such Lender
     or participation therein;

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or  maintaining  any  Eurodollar  Loan (or of  maintaining  its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable  by  such  Lender  hereunder  (whether  of  principal,   interest  or
otherwise),  then the Borrower will pay to such Lender, as the case may be, such
additional amount or amounts as will compensate such Lender, as the case may be,
for such additional costs incurred or reduction suffered.

          (b) CAPITAL REQUIREMENTS.  If any Lender determines that any Change in
Law regarding capital  requirements has or would have the effect of reducing the
rate of return on such  Lender's  capital  or on the  capital  of such  Lender's
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender,  to a level below that which such Lender or such  Lender's  holding
company   could  have   achieved  but  for  such  Change  in  Law  (taking  into


                                       12
<PAGE>



consideration  such Lender's  policies and the policies of such Lender's holding
company with respect to capital  adequacy),  then from time to time the Borrower
will pay to such Lender,  as the case may be, such additional  amount or amounts
as will  compensate  such Lender or such Lender's  holding  company for any such
reduction suffered.

          (c) CERTIFICATES FROM LENDERS. A certificate of a Lender setting forth
the  amount or  amounts  necessary  to  compensate  such  Lender or its  holding
company,  as the case  may be,  as  specified  in  paragraph  (a) or (b) of this
Section  shall be  delivered  to the  Borrower  and shall be  conclusive  absent
manifest  error.  The Borrower  shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

          (d) DELAY IN  REQUESTS.  Failure or delay on the part of any Lender to
demand  compensation  pursuant to this Section shall not  constitute a waiver of
such Lender's right to demand such compensation;  PROVIDED that (i) the Borrower
shall not be required to  compensate  a Lender  pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that
such  Lender  notifies  the  Borrower  of the Change in Law giving  rise to such
increased  costs  or  reductions  and  of  such  Lender's   intention  to  claim
compensation  therefor  and  (ii)  if the  Change  in Law  giving  rise  to such
increased costs or reductions is  retroactive,  then the 180-day period referred
to in the  foregoing  clause  (ii) shall be  extended  to include  the period of
retroactive effect thereof.

          SECTION 2.13. BREAK FUNDING PAYMENTS.  In the event of (a) the payment
of any  principal  of any  Eurodollar  Loan  other  than on the  last day of the
Interest  Period  applicable  thereto  (including  as a  result  of an  Event of
Default),  (b) the conversion of any Eurodollar  Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert or
prepay  any  Eurodollar  Loan on the  date  specified  in any  notice  delivered
pursuant hereto (regardless of whether such notice may be revoked under Sections
2.03 or 2.08(b) and is revoked in accordance  therewith),  or (d) the assignment
of any  Eurodollar  Loan  other  than on the  last  day of the  Interest  Period
applicable  thereto as a result of a request by the Borrower pursuant to Section
2.16, then, in any such event, the Borrower shall compensate each Lender for the
loss,  cost and expense  attributable to such event. In the case of a Eurodollar
Loan,  such loss,  cost or  expense to any Lender  shall be deemed to include an
amount  determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal  amount of such Loan had such
event not  occurred,  at the LIBO Rate that would have been  applicable  to such
Loan,  for the  period  from the date of such  event to the last day of the then
current  Interest  Period  therefor  (or,  in the case of a failure to borrow or
convert, for the period that would have been the Interest Period for such Loan),
over (ii) the amount of interest which would accrue on such principal amount for
such period at the interest  rate which such Lender would bid were it to bid, at
the commencement of such period,  for dollar deposits of a comparable amount and
period from other banks in the  eurodollar  market.  A certificate of any Lender
setting  forth any amount or amounts  that such  Lender is  entitled  to receive
pursuant  to this  Section  shall be  delivered  to the  Borrower  and  shall be
conclusive  absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

          SECTION 2.14. TAXES.

          (a) PAYMENTS  FREE OF TAXES.  Any and all payments by or on account of
any  obligation  of the Borrower  hereunder  shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the
Borrower shall be required to deduct any  Indemnified  Taxes or Other Taxes from
such payments,  then (i) the sum payable shall be increased as necessary so that
after  making  all  required  deductions  (including  deductions  applicable  to
additional  sums payable  under this Section) the Senior Agent or Lender (as the
case may be) receives an amount  equal to the sum it would have  received had no
such  deductions  been made,  (ii) the Borrower  shall make such  deductions and
(iii)  the  Borrower  shall  pay  the  full  amount  deducted  to  the  relevant
Governmental Authority in accordance with applicable law.

          (b) PAYMENT OF OTHER TAXES BY  BORROWER.  In  addition,  the  Borrower
shall pay any Other Taxes to the relevant  Governmental  Authority in accordance
with applicable law.

          (c)  INDEMNIFICATION  BY BORROWER.  The Borrower  shall  indemnify the
Senior Agent and each Lender, within 10 days after written demand therefor,  for
the full amount of any Indemnified Taxes or Other Taxes paid by the Senior Agent
or such  Lender,  as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including Indemnified Taxes
or Other Taxes imposed or asserted on or  attributable  to amounts payable under
this  Section) and any  penalties,  interest  and  reasonable  expenses  arising
therefrom  or with respect  thereto,  whether or not such  Indemnified  Taxes or
Other  Taxes were  correctly  or legally  imposed or  asserted  by the  relevant
Governmental  Authority.  A  certificate  as to the  amount of such  payment  or
liability  delivered to the Borrower by a Lender,  or by the Senior Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

          (d) EVIDENCE OF PAYMENTS.  As soon as practicable after any payment of
Indemnified  Taxes or Other Taxes by the Borrower to a  Governmental  Authority,
the Borrower  shall deliver to the Senior Agent the original or a certified copy
of a receipt issued by such Governmental  Authority  evidencing such payment,  a
copy of the return  reporting  such  payment or other  evidence of such  payment
reasonably satisfactory to the Senior Agent.

          (e)  FOREIGN  LENDERS.  Any  Foreign  Lender  that is  entitled  to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located,  or any treaty to which such jurisdiction is a


                                       13
<PAGE>



party,  with  respect to  payments  under this  Agreement  shall  deliver to the
Borrower (with a copy to the Senior Agent),  at the time or times  prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable  law or  reasonably  requested  by the  Borrower  as will permit such
payments to be made without withholding or at a reduced rate.

          (f) REFUNDS.  If the Senior Agent or a Lender determines,  in its sole
discretion,  that it has  received  a refund of any  Taxes or Other  Taxes as to
which it has been  indemnified  by the  Borrower  or with  respect  to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay over
such refund to the Borrower (but only to the extent of indemnity  payments made,
or additional  amounts paid, by the Borrower  under this Section with respect to
the Taxes or Other Taxes giving rise to such refund),  net of all  out-of-pocket
expenses of the Senior Agent or such Lender and without interest (other than any
interest  paid by the  relevant  Governmental  Authority  with  respect  to such
refund);  PROVIDED  that the  Borrower,  upon the request of the Senior Agent or
such  Lender,  agrees to repay the amount  paid over to the  Borrower  (plus any
penalties,  interest  or other  charges  imposed  by the  relevant  Governmental
Authority)  to the Senior  Agent or such Lender in the event the Senior Agent or
such Lender is required  to repay such  refund to such  Governmental  Authority.
This Section shall not be construed to require the Senior Agent or any Lender to
make available its tax returns (or any other  information  relating to its taxes
which it deems confidential) to the Borrower or any other Person.

          SECTION  2.15.  PAYMENTS  GENERALLY;  PRO RATA  TREATMENT;  SHARING OF
SET-OFFS.

          (a)  PAYMENTS  BY  BORROWER.  The  Borrower  shall  make each  payment
required to be made by it hereunder (whether of principal,  interest or fees, or
of amounts payable under Section 2.12, 2.13 or 2.14, or otherwise) prior to 2:00
p.m., New York City time, on the date when due, in immediately  available funds,
without  set-off or  counterclaim.  Any amounts  received after such time on any
date may, in the discretion of the Senior Agent, be deemed to have been received
on the  next  succeeding  Business  Day for  purposes  of  calculating  interest
thereon.  All such  payments  shall be made to the Senior Agent in the manner as
shall have been notified by the Senior Agent to the other parties hereto, except
that  payments  pursuant to  Sections  2.12,  2.13,  2.14 and 9.03 shall be made
directly to the Persons entitled thereto.  The Senior Agent shall distribute any
such  payments  received  by it for  the  account  of any  other  Person  to the
appropriate  recipient  promptly  following  receipt  thereof.  If  any  payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next  succeeding  Business Day, and, in the case of any
payment accruing  interest,  interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.

          (b) APPLICATION OF INSUFFICIENT  PAYMENTS. If at any time insufficient
funds are received by and available to the Senior Agent to pay fully all amounts
of principal,  interest and fees then due hereunder, such funds shall be applied
towards  payment of  interest  and fees then due  hereunder,  ratably  among the
parties  entitled  thereto in  accordance  with the amounts of interest and fees
then due to such parties.

          (c) PRO  RATA  TREATMENT.  Except  to the  extent  otherwise  provided
herein: (i) each Borrowing shall be made from the Lenders,  each payment of fees
for account of the Lenders  under  Section 2.09 shall be made for account of the
Lenders,  and each  termination  or reduction  of the amount of the  Commitments
under  Section  2.06  shall be  applied  to the  respective  Commitments  of the
Lenders, pro rata according to the amounts of their respective Commitments; (ii)
each  Borrowing  shall be allocated pro rata among the Lenders  according to the
amounts of their respective  Commitments (in the case of the making of Loans) or
their respective Loans that are to be included in such Borrowing (in the case of
conversions  and  continuations  of Loans);  (iii) each payment or prepayment of
principal of Loans by the Borrower  shall be made for account of the Lenders pro
rata in accordance  with the respective  unpaid  principal  amounts of the Loans
held by them;  and (iv) each payment of interest on Loans by the Borrower  shall
be made for account of the Lenders  pro rata in  accordance  with the amounts of
interest on such Loans then due and payable to the respective Lenders.

          (d) SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by exercising
any right of set-off or counterclaim or otherwise,  obtain payment in respect of
any  principal  of or  interest  on any of its Loans  resulting  in such  Lender
receiving  payment of a greater  proportion of the aggregate amount of its Loans
and accrued interest  thereon than the proportion  received by any other Lender,
then the Lender  receiving such greater  proportion  shall purchase (for cash at
face value) participations in the Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders  ratably
in accordance with the aggregate  amount of principal of and accrued interest on
their  respective  Loans;  PROVIDED  that  (i) if any  such  participations  are
purchased  and  all or any  portion  of  the  payment  giving  rise  thereto  is
recovered,  such  participations  shall  be  rescinded  and the  purchase  price
restored  to the  extent  of such  recovery,  without  interest,  and  (ii)  the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower  pursuant to and in  accordance  with the express  terms of this
Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment of or sale of a participation  in any of its Loans to any assignee or
participant,  other than to the Borrower or  Affiliate  thereof (as to which the
provisions  of  this  paragraph  shall  apply).  The  Borrower  consents  to the
foregoing and agrees,  to the extent it may  effectively do so under  applicable
law,  that any  Lender  acquiring  a  participation  pursuant  to the  foregoing
arrangements   may  exercise   against  the  Borrower   rights  of  set-off  and
counterclaim with respect to such  participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation,  PROVIDED
that any amounts  collected by such Lender  pursuant to this  sentence  shall be
subject to and paid in  accordance  with Sections 13.1 and 13.3 of the Operating
Agreement.


                                       14
<PAGE>



          (e)  PRESUMPTIONS  OF  PAYMENT.  Unless  the Senior  Agent  shall have
received  notice from the Borrower prior to the date on which any payment is due
to the Senior Agent for the account of the Lenders  hereunder  that the Borrower
will not make such  payment,  the Senior  Agent may assume that the Borrower has
made such payment on such date in accordance  herewith and may, in reliance upon
such assumption,  distribute to the Lenders, as the case may be, the amount due.
In such event,  if the Borrower has not in fact made such payment,  then each of
the Lenders,  as the case may be,  severally agrees to repay to the Senior Agent
forthwith  on demand the amount so  distributed  to such  Lender  with  interest
thereon,  for each day from and including the date such amount is distributed to
it to but excluding  the date of payment to the Senior Agent,  at the greater of
the Federal Funds  Effective  Rate and a rate  determined by the Senior Agent in
accordance with banking industry rules on interbank compensation.

          (f) CERTAIN  DEDUCTIONS BY SENIOR  AGENT.  If any Lender shall fail to
make any  payment  required  to be made by it  pursuant  to  Section  2.04(b) or
2.15(d),  then the Senior  Agent may,  in its  discretion  (notwithstanding  any
contrary provision hereof),  apply any amounts thereafter received by the Senior
Agent for the account of such Lender to satisfy such Lender's  obligations under
such Sections until all such unsatisfied obligations are fully paid.

          (g) PAYMENTS SUBJECT TO OPERATING AGREEMENT.  Notwithstanding anything
herein to the contrary,  (i) all payments by the Borrower  under this  Agreement
shall be subject to and paid in  accordance  with  Sections 13.1 and 13.3 of the
Operating  Agreement  and (ii) to the extent that the Borrower has  insufficient
funds to pay amounts  hereunder  (other than the  principal  of and interest and
commitment  fees on the  Loans,  which  shall  be and  remain  due  and  payable
hereunder,  with interest thereon, until paid in accordance with this Agreement)
in accordance  with Sections  13.1(a) and 13.3 of the Operating  Agreement,  the
amounts for which funds are so available shall be due and payable  hereunder and
the  amounts  for which funds are not so  available  shall be deferred  (without
accrued  interest  thereon) and shall not be due and payable  hereunder (and the
failure  to pay such  deferred  amounts  shall not  constitute  a  Default  or a
Wind-Down  Event under (and as defined in) the  Operating  Agreement)  until the
next Quarterly  Payment Date on which the Borrower has  sufficient  funds to pay
such  deferred  amounts  in  accordance  with  Section  13.3  of  the  Operating
Agreement.

          SECTION 2.16. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

          (a) DESIGNATION OF DIFFERENT  LENDING  OFFICE.  If any Lender requests
compensation  under  Section  2.12,  or if the  Borrower  is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender  pursuant  to Section  2.14,  then such Lender  shall use  reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder  or to assign its rights and  obligations  hereunder to another of its
offices,  branches  or  affiliates,  if, in the  judgment of such  Lender,  such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to  Section  2.12 or 2.14,  as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed  cost or expense and would not otherwise
be  disadvantageous  to such  Lender.  The  Borrower  hereby  agrees  to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

          (b) REPLACEMENT OF LENDERS. If any Lender requests  compensation under
Section 2.12, or if the Borrower is required to pay any additional amount to any
Lender or any  Governmental  Authority for the account of any Lender pursuant to
Section  2.14,  or if any  Lender  defaults  in its  obligation  to  fund  Loans
hereunder,  or if in  connection  with  any  proposed  amendment,  modification,
supplement  or waiver with  respect to any  provision  of this  Agreement or any
other Credit  Document as  contemplated  by Section  9.02(b) any Lender fails to
consent to any such  proposed  action within 10 days that such Lender shall have
been notified of such proposed  amendment,  modification,  supplement or waiver,
then the  Borrower  may, at its sole  expense  and  effort,  upon notice to such
Lender and the Senior Agent, require such Lender to assign and delegate, without
recourse  (in  accordance  with and  subject to the  restrictions  contained  in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such  obligations  (which  assignee may be another
Lender,  if such other Lender  accepts such  assignment);  PROVIDED that (i) the
Borrower  shall have  received the prior  written  consent of the Senior  Agent,
which consent shall not  unreasonably  be withheld,  (ii) such Lender shall have
received  payment of an amount equal to the outstanding  principal of its Loans,
accrued  interest  thereon,  accrued  fees and all other  amounts  payable to it
hereunder,  from the assignee (to the extent of such  outstanding  principal and
accrued  interest and fees) or the  Borrower (in the case of all other  amounts)
and  (iii)  in the  case of any  such  assignment  resulting  from a  claim  for
compensation  under  Section  2.12 or payments  required to be made  pursuant to
Section 2.14, such assignment will result in a reduction in such compensation or
payments.  A Lender  shall  not be  required  to make any  such  assignment  and
delegation  if,  prior  thereto,  as a result  of a  waiver  by such  Lender  or
otherwise,  the circumstances  entitling the Borrower to require such assignment
and delegation cease to apply.

          SECTION 2.17. LENDER RATING CRITERIA.

          (a) If any Lender fails to satisfy the Lender  Rating  Criteria at any
time during the Availability  Period,  such Lender shall promptly give notice to
the Borrower,  the Senior Agent and the Rating  Agencies of such failure and, if
such Lender does not within 10 calendar  days of such  failure (i) provide  cash
collateral  to a segregated  deposit  account (the  "DOWNGRADED  BANK  Account")
designated  by the  Borrower  to secure  such  Lender's  obligation  to fund its
Commitment  hereunder  in an  amount  equal to the then  undrawn  amount of such
Lender's unused Commitment or (ii) cause a guaranty to be executed and delivered
in favor of the Senior Agent by an Affiliate of such Lender that  satisfies  the
Lender Rating  Criteria,  in form and substance  reasonably  satisfactory to the


                                       15
<PAGE>



Senior  Agent,  guaranteeing  the  obligation  of such  Lender in respect of the
Commitment of such Lender,  the Borrower shall be required to use its reasonable
efforts to replace such  Lender,  with the prior  written  consent of the Senior
Agent (which consent shall not unreasonably be withheld),  with an assignee that
satisfies such Lender Rating Criteria.  In the event of any such requirement for
the Borrower to replace a Lender, such Lender shall (i) assign all of its rights
and obligations  hereunder to an assignee  selected by the Borrower upon payment
to such Lender of an amount equal to the outstanding principal of its Loans (or,
if such Loans are trading below par, at the then-market price therefor), accrued
interest thereon, accrued fees and all other amounts payable to it hereunder and
(ii) execute and deliver an Assignment and  Assumption and such other  documents
evidencing such assignment as shall be necessary or reasonably  requested by the
Borrower or the Senior Agent,  PROVIDED that no such assignment  shall be to the
Borrower or any of its Affiliates without the prior consent of each Lender.

          (b) The Senior  Agent shall have full power and  authority to withdraw
funds  from each  applicable  Downgraded  Bank  Account  at the time of,  and in
connection  with, the conversion of a funds  contained  therein to a Loan and to
deposit funds to each Downgraded Bank Account,  all in accordance with the terms
of and for the purposes set forth in this Agreement.

          (c) From and after the establishment of a Downgraded Bank Account with
respect to any Lender,  and until the date (the "DOWNGRADED BANK ACCOUNT RELEASE
DATE" for such Lender) that is the earliest of:

          (i) the  assignment  by such  Lender of all of its rights  pursuant to
Section 9.04,

          (ii) such Lender satisfying the Lender Rating Criteria, and

          (iii) the Maturity Date,

all  Loans  to be  made by  such  Lender  shall  be  made  by the  Senior  Agent
withdrawing  funds  from such  Downgraded  Bank  Account,  and all  payments  of
principal  with respect to Loans made by such Lender  (whether or not originally
funded  from such  Downgraded  Bank  Account)  shall be made by  depositing  the
related  funds into such  Downgraded  Bank  Account.  Upon the  Downgraded  Bank
Account  Release Date for a Lender,  all funds then held in such Downgraded Bank
Account  (after  giving  effect to any Loans to be made on such  date)  shall be
remitted by the Senior  Agent to such  Lender,  and  thereafter  all payments of
principal  with respect to Loans made by such Lender  shall be paid  directly to
such Lender in accordance with the terms of this Agreement.

          (d) The Senior  Agent shall from time to time invest and  reinvest the
funds on deposit in such  Downgraded Bank Account from time to time in Permitted
Investments  having  a  maturity  of not  more  than  one day  from  the date of
acquisition.  On each  Quarterly  Payment Date,  the Senior Agent shall remit or
cause to be remitted to the relevant  Lender all earnings  received with respect
to the relevant  Downgraded Bank Account during the related  Collection  Period.
Notwithstanding  anything  herein to the contrary,  neither the Senior Agent nor
the Borrower  shall have any liability for any loss arising from any  investment
or reinvestment  made by it in accordance  with, and pursuant to, the provisions
hereof.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Lenders that:

          SECTION 3.01.  ORGANIZATION;  POWERS.  The Borrower is duly organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  has all requisite power and authority to carry on its business as
now conducted  and,  except where the failure to do so,  individually  or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect,  is  qualified  to do business  in, and is in good  standing  in,  every
jurisdiction where such qualification is required.

          SECTION 3.02.  AUTHORIZATION;  ENFORCEABILITY.  The  Transactions  are
within  the  Borrower's  limited  liability  company  powers  and have been duly
authorized by all necessary limited  liability company and, if required,  member
action.  Each of the Program Documents to which the Borrower is a party has been
duly executed and delivered by the Borrower and  constitutes a legal,  valid and
binding  obligation of the Borrower,  enforceable in accordance  with its terms,
subject to  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
other  laws  affecting  creditors'  rights  generally  and  subject  to  general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

          SECTION 3.03. GOVERNMENTAL  APPROVALS; NO CONFLICTS.  The Transactions
(a) do not require any consent or approval of,  registration  or filing with, or
any other  action  by,  any  Governmental  Authority,  except  such as have been
obtained  or made and are in full force and  effect,  (b) will not  violate  any
applicable law or regulation or the Operating Agreement or other  organizational
documents of the Borrower or any order of any Governmental  Authority,  (c) will
not  violate  or result in a default  under any  indenture,  agreement  or other
instrument  binding  upon the  Borrower or its  assets,  or give rise to a right


                                       16
<PAGE>



thereunder to require any payment to be made by the Borrower, and (d) other than
the  Liens  permitted  by  Section  6.02,  will not  result in the  creation  or
imposition of any Lien on any asset of the Borrower.

          SECTION 3.04. PROPERTIES.

          (a)  PROPERTY  GENERALLY.  The  Borrower  has good  title to, or valid
leasehold  interests  in, all its real and  personal  property  material  to its
business,  except  for minor  defects in title  that do not  interfere  with its
ability to conduct  its  business  as  currently  conducted  or to utilize  such
properties for their intended purposes.

          (b) INTELLECTUAL  PROPERTY.  The Borrower owns, or is licensed to use,
all trademarks,  tradenames, copyrights, patents and other intellectual property
material to its business,  and the use thereof by the Borrower does not infringe
upon the rights of any other  Person,  except for any such  infringements  that,
individually or in the aggregate,  could not reasonably be expected to result in
a Material Adverse Effect.

          SECTION 3.05.  LITIGATION.  There are no actions, suits or proceedings
by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower,  threatened  against or affecting the Borrower (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely  determined,  could reasonably be expected,  individually or in the
aggregate,  to result in a  Material  Adverse  Effect or (ii) that  involve  any
Program Document or the  Transactions.  Except with respect to any matters that,
individually or in the aggregate,  could not reasonably be expected to result in
a Material  Adverse  Effect,  the Borrower (i) has not failed to comply with any
Environmental Law or to obtain,  maintain or comply with any permit,  license or
other approval required under any Environmental Law, (ii) has not become subject
to any Environmental Liability,  (iii) has not received notice of any claim with
respect to any  Environmental  Liability  or (iv) does not know of any basis for
any Environmental Liability.

          SECTION 3.06. COMPLIANCE WITH LAWS AND AGREEMENTS.  The Borrower is in
compliance with all laws,  regulations and orders of any Governmental  Authority
applicable  to it or its  property  and all  indentures,  agreements  and  other
instruments binding upon it or its property,  except where the failure to do so,
individually or in the aggregate,  could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing.

          SECTION  3.07.  INVESTMENT  COMPANY  STATUS.  The  Borrower  is not an
"investment  company"  as  defined  in, or  subject  to  regulation  under,  the
Investment Company Act of 1940.

          SECTION  3.08.  TAXES.  The  Borrower has timely filed or caused to be
filed all Tax returns  and  reports  required to have been filed and has paid or
caused to be paid all Taxes  required to have been paid by it,  except (a) Taxes
that are being contested in good faith by appropriate  proceedings and for which
the Borrower has set aside on its books  adequate  reserves or (b) to the extent
that the  failure  to do so could  not  reasonably  be  expected  to result in a
Material Adverse Effect.

          SECTION  3.09.  ERISA.  No ERISA Event has  occurred or is  reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

          SECTION 3.10.  DISCLOSURE.  Neither the Information Memorandum nor any
of the other reports,  financial  statements,  certificates or other information
furnished  by or on behalf of the  Borrower to the Senior Agent or any Lender in
connection  with the  negotiation of this  Agreement or delivered  hereunder (as
modified  or   supplemented  by  other   information  so  furnished   (including
modifications to the Operating Agreement)) contains any material misstatement of
fact or  omits to state  any  material  fact  necessary  to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading;  PROVIDED that, with respect to projected financial information, the
Borrower  represents only that such information was prepared in good faith based
upon  assumptions  believed  to be  reasonable  at the  time.  Since the date of
formation  of the  Borrower,  there has been no material  adverse  change in the
business, operations,  property, condition (financial or otherwise) or prospects
of the Borrower.

          SECTION 3.11. SOLVENCY. The Borrower is Solvent.

          SECTION 3.12. SECURITY DOCUMENTS.  The Security Documents to which the
Borrower is a party create valid and perfected first priority security interests
in the Collateral  securing the payment of the  obligations  owing to the Senior
Agent and the  Lenders  under this  Agreement  and the other  Credit  Documents,
subject to no equal or prior Lien,  except as expressly  permitted under Section
6.02.

          SECTION 3.13. CAPITALIZATION. The Borrower has heretofore delivered to
the Lenders true and complete copies of the Operating Agreement. The only member
of the Borrower on the date hereof is Holdings. As of the date hereof, (x) there
are no outstanding  Equity Interests with respect to the Borrower other than the
Equity Interests of Holdings and (y) there are no outstanding obligations of the
Borrower to repurchase, redeem, or otherwise acquire any membership interests of


                                       17
<PAGE>



the Borrower nor are there any  outstanding  obligations of the Borrower to make
payments to any  Person,  such as "phantom  equity"  payments,  where the amount
thereof is calculated with reference to the fair market value or equity value of
the Borrower.

          SECTION 3.14. SUBSIDIARIES.  The Borrower has no Subsidiaries,  except
for Subsidiaries permitted by Section 6.03(e).

                                   ARTICLE IV
                                   CONDITIONS

          SECTION 4.01.  EFFECTIVE  DATE. The obligations of the Lenders to make
Loans hereunder  shall not become  effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):

          (a) EXECUTED  COUNTERPARTS.  The Senior Agent shall have received from
     each party hereto  either (i) a  counterpart  of this  Agreement  signed on
     behalf of such party or (ii) written  evidence  satisfactory  to the Senior
     Agent (which may include  telecopy  transmission of a signed signature page
     of this  Agreement)  that  such  party  has  signed a  counterpart  of this
     Agreement.

          (b) OPINIONS OF BORROWER COUNSEL. The Senior Agent shall have received
     (i) a favorable  written  opinion  (addressed  to the Senior  Agent and the
     Lenders  and  dated  the  Effective  Date)  of  counsel  for the  Borrower,
     substantially  in the  form of  Exhibit  B, and  (ii) a  favorable  written
     opinion  (addressed  to the  Senior  Agent  and the  Lenders  and dated the
     Effective  Date) of Proskauer Rose LLP,  counsel for the Borrower,  stating
     that, subject to customary  assumptions,  the Borrower and its assets would
     not be substantively consolidated with the assets of Holdings or CharterMac
     in a bankruptcy of Holdings or CharterMac (and the Borrower hereby requests
     such counsel to deliver each such opinion).

          (c) LIMITED LIABILITY COMPANY  DOCUMENTS.  The Senior Agent shall have
     received such documents and certificates as the Senior Agent or its counsel
     may reasonably  request  relating to the  organization,  existence and good
     standing of the Borrower,  the  authorization  of the  Transactions and any
     other  legal  matters  relating  to the  Borrower,  this  Agreement  or the
     Transactions,  all in form and substance  satisfactory  to the Senior Agent
     and its counsel.

          (d)  OFFICER'S  CERTIFICATE.  The Senior  Agent shall have  received a
     certificate,  dated the Effective Date and signed by the President,  a Vice
     President or a Financial  Officer of the  Borrower,  confirming  compliance
     with the conditions set forth in paragraphs (f) and (g) of this Section.

          (e) PAYMENT OF FEES,  ETC.  The Senior  Agent shall have  received all
     fees and other amounts due and payable on or prior to the  Effective  Date,
     including,  to  the  extent  invoiced,  reimbursement  or  payment  of  all
     out-of-pocket  expenses  required to be  reimbursed or paid by the Borrower
     hereunder,  and including all fees set forth in the fee letter to which the
     Senior Agent and the Borrower  are parties.  In addition,  the Senior Agent
     shall have  received  upfront  fees for the  account  of each  Lender in an
     amount for each Lender equal to 0.0035  MULTIPLIED BY the aggregate  amount
     of the Commitment of such Lender on the Effective Date.

          (f) REPRESENTATIONS AND WARRANTIES. The representations and warranties
     of the Borrower set forth in this Agreement and the other Program Documents
     shall be true and correct on and as of the Effective Date.

          (g) NO  DEFAULT,  ETC.  No  Default  or Event of  Default  shall  have
     occurred and be continuing as of the Effective Date.

          (h)  INSURANCE.  The Senior  Agent  shall have  received  satisfactory
     evidence  that the  Borrower  has  obtained,  from  financially  sound  and
     reputable insurance  companies,  insurance in such amounts and against such
     risks as are  customarily  maintained  by companies  engaged in the same or
     similar businesses operating in the same or similar locations.

          (i) SUBORDINATION AND SECURITY AGREEMENT.  The Senior Agent shall have
     received  the  Subordination  and  Security  Agreement,  duly  executed and
     delivered  by the parties  thereto.  In addition,  the Borrower  shall have
     taken such other actions as the  Collateral  Agent shall have  requested in
     order to  perfect a first  priority  security  interest  in the  Collateral
     created pursuant to the  Subordination  and Security  Agreement in favor of
     the Collateral Agent (including  actions necessary for the Collateral Agent
     to have control (within the meaning of Section 9-104 of the UCC) of each of
     the deposit accounts owned by the Borrower).

          (j) OTHER DOCUMENTS.  The Senior Agent shall have received each of the
     following  documents,  each of which shall be executed and delivered by the
     parties  thereof and shall be on terms and conditions  satisfactory  to the


                                       18
<PAGE>



     Senior Agent:  (i) the Operating  Agreement,  (ii) the Mezzanine  Facility,
     (iii) the Custody Agreement,  (iv) the Collateral Support Swap and (v) such
     other documents as the Senior Agent or any Lender may reasonably request.

          (k) EQUITY  CONTRIBUTIONS;  CAPITAL STRUCTURE.  The Senior Agent shall
     have  received  satisfactory  evidence  that  Holdings has made the Initial
     Capital  Contribution  on terms and conditions  satisfactory  to the Senior
     Agent.  The capital  structure of the  Borrower  (including  the  Mezzanine
     Facility) shall be reasonably satisfactory to the Senior Agent.

          (l) GOVERNMENTAL  APPROVALS;  THIRD PARTY APPROVALS.  The Borrower has
     demonstrated  to the  satisfaction  of the Senior Agent that all  necessary
     consent or approval of,  registration  or filing with,  or any other action
     by, any Governmental Authority and all necessary consent of approval of any
     material  third party have been  obtained or made and are in full forth and
     effect in connection with the Transactions.

          (m)  LITIGATION  OR  ADMINISTRATIVE   PROCEEDINGS.   There  exists  no
     litigation  or  administrative  proceedings  or other  legal or  regulatory
     developments  that  could be  reasonably  likely to  prohibit  or to impose
     burdensome  conditions on the consummation of the Transactions or to result
     in a Material Adverse Effect.

          (n)  MEZZANINE  FACILITY.  The  Borrower  shall have  delivered to the
     Senior Agent a certificate  setting  forth the  "Available  Mezzanine  Loan
     Amount" under the Mezzanine Facility, as determined by the Capital Model.

          (o) RATINGS.  The  obligations  of the Borrower  under this  Agreement
     shall be rated "Aaa" by Moody's and "AAA" by S&P,  and the  obligations  of
     the Borrower in respect of the Mezzanine  Facility  shall be rated at least
     "A1" by Moody's and at least "A+" by S&P.

          (p) LIEN  SEARCHES.  The Borrower  shall have  delivered to the Senior
     Agent certified copies of UCC search reports,  dated a date reasonably near
     to the Effective Date, listing all effective  financing  statements,  which
     name the  Borrower  as  debtor,  together  with  copies  of such  financing
     statements (none of which shall cover any Collateral).

          (q) CDS SECURITY  AGREEMENT.  The Senior Agent shall have received the
     CDS Security Agreement, duly executed and delivered by the parties thereto.

The Senior  Agent shall  notify the  Borrower  and the Lenders of the  Effective
Date,  and such notice  shall be  conclusive  and binding.  Notwithstanding  the
foregoing,  the  obligations  of the Lenders to make Loans  hereunder  shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m.,  New York City time, on June
30, 2006 (and, in the event such conditions are not so satisfied or waived,  the
Commitments shall terminate at such time).

          SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to make
a Loan on the occasion of any Borrowing shall not be subject to any condition or
event  whatsoever  (including  whether  a Default  shall  have  occurred  and be
continuing or whether the Loans shall have been accelerated  pursuant to Article
VII),  except for the requirement that (i) the Borrower shall have complied with
Sections 2.03, (ii) after giving effect to such Loan, the aggregate  outstanding
principal  amount of the Loans of such Lender do not exceed the aggregate amount
of the Commitments of such Lender and (iii) the Available Mezzanine Loan Amount"
under the Mezzanine  Facility shall have been fully utilized by the Borrower (it
being  understood  that  Available  Mezzanine Loan Amounts shall be deemed to be
utilized if a Lender has been  requested to make an advance  under the Mezzanine
Facility and irrespective of whether a Lender under the Mezzanine Facility shall
have complied with its obligation thereunder to fund its loan).

                                    ARTICLE V
                              AFFIRMATIVE COVENANTS

          Until  the  Commitments  have  expired  or  been  terminated  and  the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lenders that:

          SECTION  5.01.   FINANCIAL   STATEMENTS;   RATINGS  CHANGE  AND  OTHER
INFORMATION. The Borrower will furnish to the Senior Agent and each Lender:

          (a) within 90 days after the end of each fiscal year of the  Borrower,
     its audited  balance sheet and related  statements of operations,  members'
     equity and cash flows as of the end of and for such year,  setting forth in
     each case (other than in the case of  financial  statements  for the fiscal
     year ending  December  31,  2006) in  comparative  form the figures for the
     previous  fiscal  year,  all  reported on by Deloitte & Touche LLP or other
     independent public  accountants of recognized  national standing (without a
     "going  concern"  or  like  qualification  or  exception  and  without  any
     qualification  or  exception  as to the scope of such  audit) to the effect
     that such financial  statements present fairly in all material respects the


                                       19
<PAGE>



     financial condition and results of operations of the Borrower in accordance
     with GAAP consistently applied;

          (b)  within 45 days  after the end of each of the first  three  fiscal
     quarters of each fiscal year of the Borrower, its balance sheet and related
     statements of operations,  members'  equity and cash flows as of the end of
     and for such  fiscal  quarter  and the then  elapsed  portion of the fiscal
     year,  setting forth in each case in  comparative  form the figures for the
     corresponding  period or periods of (or, in the case of the balance  sheet,
     as of the end of) the  previous  fiscal year,  all  certified by one of its
     Financial  Officers  as  presenting  fairly in all  material  respects  the
     financial condition and results of operations of the Borrower in accordance
     with  GAAP   consistently   applied,   subject  to  normal  year-end  audit
     adjustments and the absence of footnotes;

          (c)  concurrently  with any  delivery of  financial  statements  under
     clause  (a) or (b)  above,  a  certificate  of a  Financial  Officer of the
     Borrower  (i)  certifying  as to whether a Default has  occurred  and, if a
     Default has occurred,  specifying the details  thereof and any action taken
     or proposed to be taken with respect  thereto and (ii) stating  whether any
     change in GAAP or in the application thereof has occurred since the date of
     the audited financial  statements  previously  delivered under this Section
     and, if any such change has occurred,  specifying the effect of such change
     on the financial statements accompanying such certificate;

          (d) promptly  after  receipt of any notice or  communication  from any
     Rating  Agency with respect to a change in the rating  established  for the
     Loans or any other  matter with respect to this  Agreement,  a copy of each
     such notice or communication;

          (e) not later than 11:00 a.m. (New York City time) the fifth  Business
     Day  immediately  preceding  each  Quarterly  Payment  Date,  a copy of the
     Distribution Schedule with respect to such Quarterly Payment Date;

          (f)  concurrently  with any  delivery  of any  other  notice or report
     pursuant to any Program Document, a copy of each such notice or report; and

          (g) promptly  following any request  therefor,  such other information
     regarding the operations,  business affairs and financial  condition of the
     Borrower,  or compliance  with the terms of this  Agreement,  as the Senior
     Agent or any Lender may reasonably request.

          SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Borrower will furnish to
the Senior Agent and each Lender prompt written notice of the following:

          (a) the occurrence of any Default or any development  that results in,
     or could reasonably be expected to result in, a Material Adverse Effect;

          (b) the filing or commencement of any action, suit or proceeding by or
     before any arbitrator or  Governmental  Authority  against or affecting the
     Borrower or any  Affiliate  thereof that,  if adversely  determined,  could
     reasonably be expected to result in a Material Adverse Effect;

          (c) the occurrence of any ERISA Event that, alone or together with any
     other ERISA  Events that have  occurred,  could  reasonably  be expected to
     result in a Material Adverse Effect;

          (d) the  occurrence  of either (i) a downgrade by either Rating Agency
     of its rating of the Borrower's obligations under the Mezzanine Facility or
     (ii) a withdrawal by either Rating Agency of such rating;

          (e) the occurrence of any Capital Model Deficiency  Amount (as defined
     in the Operating  Agreement)  after running the Capital Model as prescribed
     by the Operating Agreement;

          (f) the occurrence of an adjustment in the  "Available  Mezzanine Loan
     Amount" under the Mezzanine  Facility,  as determined by the Capital Model;
     and

          (g)  the  occurrence  of any  Program  Violation  (as  defined  in the
     Operating Agreement).

Each notice  delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or  development  requiring such notice and any action taken
or proposed to be taken with respect thereto.

          SECTION 5.03. EXISTENCE;  CONDUCT OF BUSINESS. The Borrower will do or
cause to be done all things necessary to preserve,  renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business.


                                       20
<PAGE>



          SECTION  5.04.  PAYMENT  OF  OBLIGATIONS.  The  Borrower  will pay its
obligations,  including Tax  liabilities,  that, if not paid,  could result in a
Material  Adverse Effect before the same shall become  delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower has set aside on its books adequate
reserves  with respect  thereto in  accordance  with GAAP and (c) the failure to
make payment  pending such contest could not reasonably be expected to result in
a Material Adverse Effect.

          SECTION 5.05. MAINTENANCE OF PROPERTIES;  INSURANCE. The Borrower will
(a) keep and maintain all property owned by the Borrower material to the conduct
of its  business in good working  order and  condition,  ordinary  wear and tear
excepted,  and (b) maintain,  with  financially  sound and  reputable  insurance
companies,  insurance in such amounts and against such risks as are  customarily
maintained by companies engaged in the same or similar  businesses  operating in
the same or similar locations.

          SECTION 5.06. BOOKS AND RECORDS;  INSPECTION RIGHTS. The Borrower will
keep proper books of record and account in which full,  true and correct entries
are made of all  dealings  and  transactions  in  relation to its  business  and
activities.  The  Borrower  will permit any  representatives  designated  by the
Senior Agent or any Lender,  upon reasonable prior notice,  to visit and inspect
its properties,  to examine and make extracts from its books and records, and to
discuss its affairs,  finances and condition  with its officers and  independent
accountants,  all at such reasonable times and as often as reasonably requested,
PROVIDED  that,  unless a Default  shall have  occurred and be  continuing,  the
Senior  Agent  and each  Lender  shall be  permitted  to visit and  inspect  the
properties,  and to examine and make extracts from the books and records, of the
Borrower on not more than one occasion during any calendar year.

          SECTION  5.07.  COMPLIANCE  WITH LAWS;  CONTRACTUAL  OBLIGATIONS.  The
Borrower  will  comply  with all  laws,  rules,  regulations  and  orders of any
Governmental  Authority  applicable to it or its  property,  and with all of its
contractual  obligations  (including in respect of CDS), hereunder or otherwise,
except  in  each  case  where  the  failure  to do  so,  individually  or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect.

          SECTION 5.08. CERTAIN ADDITIONAL ACTIVITIES.(a) The Borrower will take
     all steps required by the Operating Agreement, this Agreement and the other
     Program  Documents or  reasonably  required by the Senior Agent to continue
     the Borrower's  identity as a separate legal entity and to make it apparent
     to other Persons that the Borrower is an entity with assets and liabilities
     distinct from those of any other Person.

          (b)  The  Borrower  will  (i)  be  a  limited  purpose  company  whose
     activities are restricted to those activities permitted by Section 6.11 and
     (ii)  comply  with the terms  and  conditions  set  forth in the  Operating
     Agreement  (including (a) complying with the special-purpose  covenants set
     forth in Section 2.10 of the Operating Agreement, (b) operating the Capital
     Model at the times required therein,  (c) entering into CDS and Off-Setting
     Swaps, and making  Investments  contemplated by Section  6.04(vi),  only if
     permitted by the Capital Model, (d) entering into CDS and Off-Setting Swaps
     only if the eligibility  criteria relating thereto are satisfied and (e) if
     a Wind-Down  Event shall have occurred and be continuing,  (x) not entering
     into any new CDS or Off-Setting Swaps and not making any Project Investment
     contemplated  by clause (iii) of the definition  thereof and (y) making new
     Project  Investments  (other than any Project  Investment  contemplated  by
     clause (iii) of the definition thereof) only to limit its risk exposure).

          SECTION  5.09.  FURTHER  ASSURANCES.(a)  The  Borrower  will take such
     action from time to time (including filing  appropriate  Uniform Commercial
     Code financing  statements and executing and delivering  such  assignments,
     security  agreements  and  other  instruments)  as  shall be  necessary  or
     reasonably  requested  by the  Senior  Agent  to  create,  in  favor of the
     Collateral  Agent  for  the  benefit  of the  Lenders,  perfected  security
     interests and Liens in the Collateral to secure its obligations  hereunder;
     PROVIDED  that any such  security  interest or Lien shall be subject to the
     relevant requirements of the Security Documents.

          (b) If the Borrower or any of its Subsidiaries  shall acquire any real
     property  interest  after the date  hereof  having a fair  market  value of
     $250,000  or  more,  then  it will  (or,  as  applicable,  will  cause  the
     respective  Subsidiary  holding such real  property  interest to) within 60
     days of such  acquisition  execute and  deliver in favor of the  Collateral
     Agent a mortgage,  deed of trust or deed to secure debt (as appropriate for
     the  jurisdiction  in which such  respective  real property is situated) in
     form and substance reasonably satisfactory to the Senior Agent and pursuant
     to which the  Borrower  (or such  Subsidiary)  will create a Lien upon such
     real property  interest in favor of the Collateral Agent for the benefit of
     the Lenders as  collateral  security  for the  obligations  of the Borrower
     hereunder, and the Borrower will deliver such opinions of counsel and title
     insurance  policies  as  the  Senior  Agent  shall  reasonably  request  in
     connection therewith in form and substance  reasonably  satisfactory to the
     Senior Agent.

          SECTION 5.10.  USE OF PROCEEDS.  The proceeds of any Loan will be used
only for (a) making  settlement  and  periodic  payments in respect of CDS,  (b)
making Project Investments,  (c) payment of Administrative  Expenses (as defined
in the Operating Agreement), (d) payment of amounts owing under Off-Setting Swap
contracts  and (e)  payments  in respect of  interest  and fees owing under this
Agreement. No part of the proceeds of any Loan will be used, whether directly or
indirectly,  for any purpose that entails a violation of any of the  regulations
of the Board, including Regulations T, U and X.


                                       21
<PAGE>



                                   ARTICLE VI
                               NEGATIVE COVENANTS

          Until the Commitments  have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Borrower covenants and agrees with the Lenders that:

          SECTION  6.01.  INDEBTEDNESS.  The  Borrower  will not create,  incur,
assume or permit to exist any Indebtedness, except:

               (a)  Indebtedness  created  hereunder and under the other Program
     Documents;

               (b) Indebtedness created under the Mezzanine Facility;

               (c)  Indebtedness  in respect of CDS,  Off-Setting  Swaps and the
     Collateral Support Swap; and

               (d) Indebtedness up to an aggregate  outstanding principal amount
     of $200,000,000 created under the Subordinated Debt Facility in the form of
     Exhibit  E to the  Operating  Agreement  with  such  changes  as  shall  be
     permitted by the Required Lenders.

          SECTION 6.02.  LIENS. The Borrower will not create,  incur,  assume or
permit  to  exist  any Lien on any  property  or asset  now  owned or  hereafter
acquired  by it, or assign or sell any income or  revenues  (including  accounts
receivable) or rights in respect of any thereof, except:

               (a) Liens created pursuant to the Security Documents;

               (b) Permitted Liens; and

               (c) Liens created pursuant to the CDS Security  Agreement for the
     benefit of the holders from time to time of the obligations of the Borrower
     in  respect  of CDS (the "CDS  HOLDERS")  in the right of the  Borrower  to
     require the Lenders to  unconditionally  make Loans to the  Borrower  under
     this  Agreement as provided  herein,  as such agreement may be from time to
     time  amended,  supplemented  or otherwise  modified to the extent that the
     Rating  Condition shall have been satisfied after giving effect to any such
     amendment, supplement or other modification.

          SECTION 6.03. FUNDAMENTAL CHANGES.

               (a) The Borrower will not enter into any transaction of merger or
     consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
     suffer any liquidation or dissolution).

               (b) The Borrower will not acquire any business or property  from,
     or capital stock of, or be a party to any acquisition of, any Person except
     (i) for purchases of property  necessary to or consistent  with the conduct
     of the activities  permitted by Section 6.11,  (ii) as permitted by Section
     6.04 and (iii) for acquisitions of any underlying  properties in connection
     with  the  exercise  of  remedies  by  the  Borrower  with  respect  to any
     Multifamily  Revenue Bonds so long as (x) any such  underlying  property is
     owned by the  Borrower  through a special  purpose  corporation  or limited
     liability  company  established  by the  Borrower  for the sole  purpose of
     owning any such underlying  property and (y) the Borrower complies with the
     applicable provisions of Section 5.09.

               (c) Except as expressly  permitted in Sections  6.04 and 6.06 and
     the  payments  contemplated  by  Sections  13.1 and  13.3 of the  Operating
     Agreement,  the  Borrower  will not  convey,  sell,  lease,  dispose  of or
     otherwise  transfer,  in one transaction or a series of  transactions,  any
     part of its business or property,  whether now owned or hereafter acquired,
     other than (i) Permitted Investments and (ii) real property and partnership
     and limited liability company ownership  interests acquired by the Borrower
     in respect  of Project  Investments  or CDS,  in each case for fair  market
     value and on an arm's length basis.

               (d) The  Borrower  will not cause or consent to any  amendment or
     modification of or waiver under, or permit any amendment or modification of
     or waiver under, the Operating Agreement,  any Credit Document, the Custody
     Agreement,  the  Collateral  Support  Swap,  the  Mezzanine  Facility,  the
     Subordinated  Debt Facility or any other Program  Document or engage in any
     business other than a business expressly permitted by Section 6.11.

               (e) The Borrower will not create,  acquire or otherwise permit to
     exist any Subsidiary,  except for (i)  Subsidiaries  created or acquired in
     connection with the making of any Project  Investment and (ii) Subsidiaries
     created pursuant to Section 6.03(b)(iii).


                                       22
<PAGE>



               (f) The  Borrower  will not  reduce  the  commitments  under  the
     Mezzanine Facility below the "Available  Mezzanine Loan Amount" (as defined
     in the Mezzanine Facility).

          SECTION 6.04.  INVESTMENTS.  The Borrower will not make any Investment
other than (i) Project Investments, (ii) Permitted Investments,  (iii) CDS, (iv)
Off-Setting  Swaps so long as the Rating  Condition  shall  have been  satisfied
after giving  effect to such  Off-Setting  Swap,  (v) Hedging  Agreements in the
ordinary  course of  business  and not for  speculative  purposes so long as the
Rating  Condition  shall have been satisfied after giving effect to such Hedging
Agreement and the Members shall have been notified thereof and (vi) acquisitions
of  Multifamily  Revenue  Bonds (and/or any custodial  receipts  evidencing  any
Multifamily  Revenue  Bonds)  pursuant  to the terms of any CDS and the  Custody
Agreement.  The  Borrower  will not  enter  into any  arrangement,  directly  or
indirectly, with any Person whereby it shall sell or transfer any property, real
or  personal,  used or useful in its  business,  whether now owned or  hereafter
acquired,  and thereafter rent or lease such property or other property which it
intends to use for  substantially  the same  purpose or purposes as the property
being sold or transferred.

          SECTION  6.05.  CAPITAL  EXPENDITURE.  The Borrower  will not make any
capital expenditure other than Project Investments.

          SECTION 6.06.  RESTRICTED  PAYMENTS.  The Borrower will not declare or
make, or agree to pay or make,  directly or indirectly,  any Restricted  Payment
except as permitted by the priority of payments set forth in Section 13.3 of the
Operating Agreement.

          SECTION  6.07.  TRANSACTIONS  WITH  AFFILIATES.  The Borrower will not
sell, lease or otherwise transfer any property or assets to, or purchase,  lease
or otherwise  acquire any property or assets  from,  or otherwise  engage in any
other  transactions  with,  any of its  Affiliates,  except (a) in the  ordinary
course of business at prices and on terms and  conditions  not less favorable to
the  Borrower  than could be obtained on an  arm's-length  basis from  unrelated
third parties and (b) any Restricted Payment permitted by Section 6.06.

          SECTION  6.08.  CERTAIN  INDEBTEDNESS.  The Borrower  will not prepay,
redeem or repurchase any portion of any  Indebtedness in respect of, or make any
other payments under, the Mezzanine  Facility or the Subordinated Debt Facility,
except  in each case as  permitted  by the  priority  of  payments  set forth in
Section 13.3 of the Operating Agreement.

          SECTION 6.09.  CAPITAL MODEL. The Borrower will not materially  amend,
modify, waive or otherwise make any material change to the Capital Model without
first satisfying the Rating Condition.

          SECTION 6.10. FORMS. The Borrower will not amend,  modify or otherwise
make any  material  change to any of the forms  relating  to CDS or  Off-Setting
Swaps, in each case as set forth in the exhibits to the Operating Agreement,  or
make  any  material  amendment,  modification,  waiver  or other  change  to the
definitive  agreements  of any CDS or  Off-Setting  Swaps,  without in each case
first satisfying the Rating Condition.

          SECTION 6.11. BUSINESS ACTIVITIES. The Borrower will not engage in any
business  activities  other than those set forth and permitted under Section 2.4
of the Operating Agreement.

          SECTION 6.12. BANKRUPTCY.  The Borrower will not, without the approval
of the Independent  Manager, (i) voluntarily commence any proceeding or file any
petition seeking  liquidation,  reorganization or other similar relief under any
Federal,  state or foreign bankruptcy,  insolvency,  receivership or similar law
now or  hereafter  in effect;  (ii)  consent to the  institution  of, or fail to
contest in a timely and appropriate  manner,  any proceeding or petition seeking
(a)  liquidation,  reorganization  or other  similar  relief in  respect  of the
Borrower  or its  debts,  or of a  substantial  part of its  assets,  under  any
Federal,  state or foreign bankruptcy,  insolvency,  receivership or similar law
now or  hereafter  in  effect or (b) the  appointment  of a  receiver,  trustee,
custodian, sequestrator, conservator or similar official for the Borrower or for
a substantial part of its assets;  (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or for a  substantial  part of its assets;  (iv) file an answer
admitting the material  allegations  of a petition  filed against it in any such
proceeding;  (v) make a general assignment for the benefit of creditors; or (vi)
take any action for the purpose of effecting any of the foregoing.


                                   ARTICLE VII
                                EVENTS OF DEFAULT

               If any of the following events ("EVENTS OF DEFAULT") shall occur:

               (a) the Borrower shall fail to pay any principal of any Loan when
     and as the same  shall  become  due and  payable,  whether  at the due date
     thereof or at a date fixed for prepayment thereof or otherwise;


                                       23
<PAGE>



               (b) the  Borrower  shall fail to pay any  interest on any Loan or
     any fee or any other amount (other than an amount referred to in clause (a)
     of this Article)  payable under this Agreement,  when and as the same shall
     become due and payable,  and such failure shall  continue  unremedied for a
     period of three Business Days;

               (c) any  representation  or warranty made or deemed made by or on
     behalf of the  Borrower  in or in  connection  with this  Agreement  or any
     amendment or  modification  hereof or waiver  hereunder,  or in any report,
     certificate, financial statement or other document furnished pursuant to or
     in connection with this Agreement or any amendment or  modification  hereof
     or waiver hereunder, shall prove to have been incorrect when made or deemed
     made in any material  respect and such breach shall not have been remedied,
     cured,  reversed or waived  within 30 days after receipt by the Borrower of
     written notice from the Senior Agent or any Lender of the foregoing;

               (d) the Borrower  shall fail to observe or perform any  covenant,
     condition or agreement  contained  in Sections  5.08,  5.09(b) and 5.10 and
     Article VI;

               (e) the Borrower  shall fail to observe or perform any  covenant,
     condition  or  agreement  contained  in this  Agreement  (other  than those
     specified  in clause (a),  (b) or (d) of this  Article),  and such  failure
     shall continue unremedied for a period of 30 days after notice thereof from
     the Senior Agent to the Borrower (which notice will be given at the request
     of any Lender);

               (f) the  Borrower  shall  fail to make any  payment  (whether  of
     principal or interest and  regardless of amount) in respect of any Material
     Indebtedness, when and as the same shall become due and payable;

               (g) any event or  condition  occurs that  results in any Material
     Indebtedness  becoming due prior to its scheduled  maturity or that enables
     or permits (after the expiration of any applicable cure periods) the holder
     or holders of any Material  Indebtedness  or any trustee or agent on its or
     their  behalf to cause any  Material  Indebtedness  to  become  due,  or to
     require the prepayment, repurchase, redemption or defeasance thereof, prior
     to its scheduled maturity; PROVIDED that this clause (g) shall not apply to
     secured  Indebtedness that becomes due as a result of the voluntary sale or
     transfer of the property or assets securing such Indebtedness;

               (h)  an   involuntary   proceeding   shall  be  commenced  or  an
     involuntary  petition shall be filed seeking (i) liquidation,  dissolution,
     reorganization  or  other  relief  in  respect  of any of the  Borrower  or
     Holdings or its debts,  or of a substantial  part of its assets,  under any
     Federal, state or foreign bankruptcy,  insolvency,  receivership or similar
     law now or  hereafter  in effect  or (ii) the  appointment  of a  receiver,
     trustee, custodian,  sequestrator,  conservator or similar official for any
     of the Borrower or Holdings or for a substantial  part of its assets,  and,
     in any such case,  such  proceeding or petition shall continue  undismissed
     for 60  days  or an  order  or  decree  approving  or  ordering  any of the
     foregoing shall be entered;

               (i)  any  of the  Borrower  or  Holdings  shall  (i)  voluntarily
     commence  any  proceeding  or  file  any  petition   seeking   liquidation,
     dissolution,  reorganization  or other relief  under any Federal,  state or
     foreign  bankruptcy,  insolvency,   receivership  or  similar  law  now  or
     hereafter in effect, (ii) consent to the institution of, or fail to contest
     in a timely and appropriate manner, any proceeding or petition described in
     clause (h) of this Article,  (iii) apply for or consent to the  appointment
     of a receiver,  trustee,  custodian,  sequestrator,  conservator or similar
     official  for the  Borrower  or  Holdings,  as the  case  may be,  or for a
     substantial part of its assets,  (iv) file an answer admitting the material
     allegations of a petition filed against it in any such proceeding, (v) make
     a general  assignment  for the benefit of creditors or (vi) take any action
     for the purpose of effecting any of the foregoing;

               (j) any of the  Borrower or  Holdings  shall admit in writing its
     inability or fail generally to pay its debts as they become due;

               (k)  one or  more  judgments  for  the  payment  of  money  in an
     aggregate  amount in excess of  $1,000,000  shall be  rendered  against the
     Borrower  and  the  same  shall  remain  undischarged  for a  period  of 30
     consecutive days during which execution shall not be effectively stayed, or
     any action shall be legally taken by a judgment  creditor to attach or levy
     upon any assets of the Borrower to enforce any such judgment;

               (l) an ERISA Event shall have  occurred  that,  in the opinion of
     the Required Lenders,  when taken together with all other ERISA Events that
     have occurred, could reasonably be expected to result in a Material Adverse
     Effect;

               (m) a Change in Control shall occur;

               (n) a Wind-Down  Event (other than (i) a Wind-Down Event referred
     to in clause (d) of Section 12.1 of the  Operating  Agreement to the extent
     such event relates to this Agreement and (ii) a Wind-Down Event referred to
     in clause (l) of Section 12.1 of the Operating Agreement) shall occur;


                                       24
<PAGE>



               (o) (i) any  provision  of the  Operating  Agreement,  any Credit
     Document or the Mezzanine Facility ceases for any reason to be legal, valid
     or binding on the  Borrower,  or the  Borrower  (or any of its  affiliates)
     shall in writing state that any provision of any such document should cease
     for any reason to be legal valid and binding on the  Borrower,  or (ii) any
     provision of the Right of First Refusal  Letter ceases for any reason to be
     legal,  valid  or  binding  on  CharterMac,  or  CharterMac  (or any of its
     affiliates)  shall in writing state that any provision of any such document
     should cease for any reason to be legal valid and binding on CharterMac;

               (p) the Collateral  Agent shall at any time fail to have a valid,
     perfected,  first priority security interest in any material portion of the
     Collateral; or

               (q) (i) the  Managing  Member  willfully  violates,  or takes any
     action  that it knows  breaches,  any  material  provision  of any  Program
     Document,  and any such violation or action could reasonably be expected to
     result in a Material  Adverse Effect,  (ii) the Managing Member  materially
     breaches any provision of any Program Document or any  representation  made
     by the Managing  Member shall prove to have been incorrect when made in any
     material respect,  and within 30 days of its becoming aware of such breach,
     or such incorrect  representation,  the Managing  Member fails to cure such
     breach or (iii) the Managing Member commits fraud or criminal activity,  or
     exercises gross  negligence  that has an adverse effect on the Lenders,  in
     the performance of its obligations or the Managing Member is indicted for a
     criminal offense related to its primary businesses;

then,  subject  in each case to  Section  2.15(g),  (1) and in every  such event
(other than an event described in clause (h) or (i) of this Article), and at any
time thereafter  during the continuance of such event, the Senior Agent may, and
at the request of the Required Lenders shall, by notice to the Borrower, declare
the Loans then  outstanding to be due and payable in whole (or in part, in which
case any  principal  not so declared to be due and  payable  may  thereafter  be
declared to be due and  payable),  and  thereupon  the principal of the Loans so
declared to be due and payable,  together with accrued  interest thereon and all
fees and other obligations of the Borrower accrued  hereunder,  shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind,  all of which are hereby  waived by the  Borrower;  (2) in case of any
event described in clause (h) or (i) of this Article, the principal of the Loans
then outstanding,  together with accrued interest thereon and all fees and other
obligations  accrued  hereunder,  shall  automatically  become due and  payable,
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby waived by the Borrower; and (3)

               (i) except as provided in clause (v) below, the Commitments shall
     not terminate  and the Lenders  shall remain  obligated to make Loans under
     Section 2.01,  including the  obligation to make Loans  thereunder  for the
     benefit of the CDS Holders,  as provided in the CDS Security  Agreement (it
     being  recognized  that  any such new  Loan  shall be due and  payable  if,
     pursuant to the  foregoing  clauses (1) or (2),  the other Loans shall have
     been declared due and payable), subject to the terms and conditions in this
     Agreement;

               (ii) the Borrower shall not be permitted to enter into new CDS or
     Off-Setting  Swaps or make any Project  Investment  contemplated  by clause
     (iii) of the definition thereof and the Borrower shall only be permitted to
     make  new  Project   Investments   (other   than  any  Project   Investment
     contemplated  by clause (iii) of the definition  thereof) to limit its risk
     exposure;

               (iii) the Required  Lenders shall have the option to instruct the
     Collateral  Agent to foreclose on the  Collateral and exercise the remedies
     available  under  the  Subordination   and  Security   Agreement  (and,  in
     connection  therewith,  instruct the Collateral  Agent to appoint a special
     manager to manage the Collateral (including Project Investments));

               (iv) the principal amount of the Loans shall be repaid from funds
     in the Reserve  Account in  accordance  with the  priority of payments  set
     forth in Section 13.3 of the Operating Agreement;

               (v) after the  outstanding  Loans shall have been repaid in full,
     the aggregate  amount  required to be held in the Reserve  Account shall be
     increased by an amount equal to the aggregate  Commitments  of all Lenders,
     and the Commitment for each Lender shall be permanently  reduced to zero on
     a  dollar-for-dollar  basis as such additional  amounts are retained in the
     Reserve Account,  as determined by the Capital Model and in accordance with
     the  priority  of  payments  set  forth in  Section  13.3 of the  Operating
     Agreement; and

               (vi) the Borrower  shall not make,  directly or  indirectly,  any
     Restricted  Payment to Holdings  until the Commitment for each Lender shall
     have been permanently reduced to zero.

                                  ARTICLE VIII
                                THE SENIOR AGENT

               Each of the Lenders  hereby  irrevocably  appoints and authorizes
the  Senior  Agent to act as its agent  hereunder  and  under  the other  Credit
Documents  with such powers as are delegated to the Senior Agent by the terms of
this  Agreement and the other Credit  Documents,  together with such actions and


                                       25
<PAGE>



powers as are reasonably incidental thereto.  Without limiting the generality of
the foregoing,  by its signature hereto each Lender  authorizes the Senior Agent
to execute,  deliver and perform the  Subordination  and Security  Agreement and
agrees to be bound by the terms and conditions  thereof as if such Lender were a
party thereto.  Subject to the provisions of this Article VIII, the Senior Agent
shall take such actions under the Subordination and Security  Agreement as shall
be directed by the Required Lenders.

               The bank  serving as the Senior  Agent  hereunder  shall have the
same rights and powers in its  capacity as a Lender as any other  Lender and may
exercise the same as though it were not the Senior Agent,  and such bank and its
Affiliates may accept deposits from,  lend money to and generally  engage in any
kind of business with the Borrower or other Affiliate  thereof as if it were not
the Senior Agent hereunder.

               The Senior Agent shall not have any duties or obligations  except
those  expressly  set forth  herein and in the other Credit  Documents.  Without
limiting  the  generality  of the  foregoing,  (a) the Senior Agent shall not be
subject  to any  fiduciary  or other  implied  duties,  regardless  of whether a
Default has occurred and is continuing,  (b) the Senior Agent shall not have any
duty to take any  discretionary  action or exercise  any  discretionary  powers,
except discretionary rights and powers expressly  contemplated hereby and by the
other Credit  Documents that the Senior Agent is required to exercise in writing
as directed by the Required  Lenders (or such other number or  percentage of the
Lenders as shall be  necessary  under the  circumstances  as provided in Section
9.02),  and (c) except as  expressly  set forth  herein and in the other  Credit
Documents,  the Senior Agent shall not have any duty to disclose,  and shall not
be liable for the failure to disclose,  any information relating to the Borrower
that is  communicated  to or obtained by the bank serving as Senior Agent or any
of its Affiliates in any capacity.  The Senior Agent shall not be liable for any
action  taken or not  taken  by it with the  consent  or at the  request  of the
Required  Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross  negligence  or wilful  misconduct.  The Senior  Agent shall be
deemed not to have  knowledge  of any Default  unless and until  written  notice
thereof is given to the Senior Agent by the Borrower or a Lender, and the Senior
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or the other Program Documents,  (ii) the contents of any certificate,
report  or other  document  delivered  hereunder  or  under  the  other  Program
Documents or in  connection  herewith or  therewith,  (iii) the  performance  or
observance of any of the covenants,  agreements or other terms or conditions set
forth  herein  or  in  the  other   Program   Documents,   (iv)  the   validity,
enforceability,  effectiveness  or  genuineness  of this  Agreement,  the  other
Program  Documents or any other  agreement,  instrument or document,  or (v) the
satisfaction of any condition set forth in Article IV or elsewhere  herein or in
the other Program  Documents,  other than to confirm  receipt of items expressly
required to be delivered to the Senior Agent.

               The Senior  Agent shall be  entitled to rely upon,  and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement,  instrument,  document or other writing  believed by it to be genuine
and to have been signed or sent by the proper Person.  The Senior Agent also may
rely upon any statement  made to it orally or by telephone and believed by it to
be made by the proper  Person,  and shall not incur any  liability  for  relying
thereon. The Senior Agent may consult with legal counsel (who may be counsel for
the Borrower),  independent  accountants  and other experts  selected by it, and
shall not be liable for any action taken or not taken by it in  accordance  with
the advice of any such counsel, accountants or experts.

               The Senior  Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents  appointed by the
Senior  Agent.  The Senior Agent and any such  sub-agent may perform any and all
its duties and exercise its rights and powers through their  respective  Related
Parties.  The exculpatory  provisions of the preceding paragraphs shall apply to
any such  sub-agent and to the Related  Parties of the Senior Agent and any such
sub-agent.

               Subject to the appointment  and acceptance of a successor  Senior
Agent as provided in this paragraph,  the Senior Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation,  the Required
Lenders shall have the right,  in consultation  with the Borrower,  to appoint a
successor.  If no successor shall have been so appointed by the Required Lenders
and shall have  accepted  such  appointment  within 30 days  after the  retiring
Senior Agent gives  notice of its  resignation,  then the retiring  Senior Agent
may, on behalf of the Lenders, appoint a successor Senior Agent which shall be a
bank with an office in New York,  New York,  or an  Affiliate  of any such bank.
Upon the acceptance of its appointment as Senior Agent hereunder by a successor,
such successor  shall succeed to and become vested with all the rights,  powers,
privileges and duties of the retiring Senior Agent hereunder and under the other
Credit  Documents,  and the retiring  Senior Agent shall be discharged  from its
duties and obligations hereunder and under the other Credit Documents.  The fees
payable by the  Borrower to a successor  Senior Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Senior Agent's  resignation  hereunder,  the provisions of
this Article and Section  9.03 shall  continue in effect for the benefit of such
retiring Senior Agent,  its sub-agents and their  respective  Related Parties in
respect of any actions  taken or omitted to be taken by any of them while it was
acting as Senior Agent.

               Each Lender  acknowledges that it has,  independently and without
reliance  upon the Senior Agent or any other Lender and based on such  documents
and information as it has deemed  appropriate,  made its own credit analysis and
decision to enter into this  Agreement.  Each Lender also  acknowledges  that it
will,  independently  and without  reliance  upon the Senior  Agent or any other
Lender and based on such documents and information as it shall from time to time


                                       26
<PAGE>



deem  appropriate,  continue to make its own  decisions  in taking or not taking
action under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.

               Notwithstanding   anything  herein  to  the  contrary,  the  Sole
Bookrunner  and Sole Lead  Arranger  named on the cover  page of this  Agreement
shall not have any duties or  liabilities  under this  Agreement,  except in its
capacity, if any, as a Lenders.

                                   ARTICLE IX
                                  MISCELLANEOUS

          SECTION 9.01. NOTICES.

               (a)  NOTICES  GENERALLY.  All  notices  and other  communications
provided  for  herein  shall be in  writing  and shall be  delivered  by hand or
overnight  courier  service,  mailed by certified or registered  mail or sent by
telecopy, as follows:

               (i) if to the Borrower,  to it at 625 Madison  Avenue,  New York,
          New York 10022, Attention of James Spound (Telecopy No. 212-317-5762);

               (ii) if to the  Senior  Agent,  to  Citibank,  N.A.  at One Court
          Square,  45th Floor Zone 11, Long Island City, NY 11120,  Attention of
          Maria  McKeon  (Telecopy  No.  718-248-4722),  with a copy to Rhona L.
          Landau,  Deputy General Counsel,  Citigroup Commercial Business Group,
          One Court Square, 14th Floor, Long Island City, NY 11120 (Telecopy No.
          718-248-6009); and

               (iii) if to any other  Lender,  to it at its address (or telecopy
          number) set forth in its Administrative Questionnaire.

               (b) ELECTRONIC  COMMUNICATIONS.  Notices and other communications
to  the  Lenders   hereunder   may  be  delivered  or  furnished  by  electronic
communications  pursuant to procedures  approved by the Senior  Agent;  PROVIDED
that the  foregoing  shall not apply to  notices  pursuant  to Article II unless
otherwise agreed by the Senior Agent and the applicable Lender. The Senior Agent
or the  Borrower  may,  in its  discretion,  agree to accept  notices  and other
communications  to  it  hereunder  by  electronic   communications  pursuant  to
procedures  approved by it;  PROVIDED  that approval of such  procedures  may be
limited to particular notices or communications.

               (c)  CHANGE OF  ADDRESS,  ETC.  Any party  hereto  may change its
address or telecopy  number for notices and other  communications  hereunder  by
notice to the other parties hereto. All notices and other  communications  given
to any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.

          SECTION 9.02. WAIVERS; AMENDMENTS.

               (a) NO DEEMED WAIVERS;  REMEDIES CUMULATIVE.  No failure or delay
by the Senior  Agent or any Lender in  exercising  any right or power  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right or  power,  or any  abandonment  or  discontinuance  of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power.  The rights and remedies of the Senior
Agent and the Lenders  hereunder  are  cumulative  and are not  exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this  Agreement or consent to any departure by the Borrower  therefrom  shall in
any event be effective  unless the same shall be  permitted by paragraph  (b) of
this  Section,  and then such waiver or consent  shall be effective  only in the
specific  instance  and for the purpose for which  given.  Without  limiting the
generality  of the  foregoing,  the making of a Loan shall not be construed as a
waiver of any Default,  regardless of whether the Senior Agent or any Lender may
have had notice or knowledge of such Default at the time.

               (b) AMENDMENTS. Neither this Agreement, any other Credit Document
nor any provision  hereof or thereof may be waived,  amended or modified  except
pursuant to an agreement or agreements  in writing  entered into by the Borrower
and the  Required  Lenders  or by the  Borrower  and the  Senior  Agent with the
consent of the Required Lenders; PROVIDED that no such agreement shall

               (i) increase  the  Commitment  of any Lender  without the written
          consent of such Lender,

               (ii) reduce the  principal  amount of any Loan or reduce the rate
          of interest thereon, or reduce any fees payable hereunder, without the
          written consent of each Lender adversely affected thereby,

               (iii)  postpone the  scheduled  date of payment of the  principal
          amount of any  Loan,  or any  interest  thereon,  or any fees  payable
          hereunder,  or reduce the amount of, waive or excuse any such payment,


                                       27
<PAGE>



          or  postpone  the  scheduled  date of  expiration  of any  Commitment,
          without the written consent of each Lender adversely affected thereby,

               (iv) change  Section  2.15(b) or (c) in a manner that would alter
          the pro rata sharing of payments required thereby, without the written
          consent of each Lender adversely affected thereby,

               (v)  change  any  of  the  provisions  of  this  Section  or  the
          definition  of  "Required  Lenders"  or  any  other  provision  hereof
          specifying  the number or  percentage  of Lenders  required  to waive,
          amend or modify  any rights  hereunder  or make any  determination  or
          grant any  consent  hereunder,  without  the  written  consent of each
          Lender,

               (vi) release any material  portion of the Collateral  without the
          written consent of each Lender, and

               (vii) amend,  modify or otherwise  affect the rights or duties of
          the Senior Agent  hereunder  without the prior written  consent of the
          Senior Agent.

          SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.

               (a) COSTS AND EXPENSES. The Borrower shall pay (i) all reasonable
out-of-pocket  expenses  incurred  by  the  Senior  Agent  and  its  Affiliates,
including the  reasonable  fees,  charges and  disbursements  of counsel for the
Senior Agent,  in connection  with the  preparation  and  administration  of the
Credit  Documents or any amendments,  modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated),  and (ii) all out-of-pocket  expenses incurred by the Senior Agent
or any Lender,  including the fees, charges and disbursements of any counsel for
the Senior Agent or any Lender, in connection with the enforcement or protection
of its rights in  connection  with the Credit  Documents,  including  its rights
under this Section,  or in connection with the Loans made  hereunder,  including
all such  out-of-pocket  expenses incurred during any workout,  restructuring or
negotiations in respect of such Loans.

               (b) INDEMNIFICATION BY BORROWER. The Borrower shall indemnify the
Senior Agent and each Lender,  and each  Related  Party of any of the  foregoing
Persons (each such Person being called an "INDEMNITEE")  against,  and hold each
Indemnitee harmless from, any and all losses, claims,  damages,  liabilities and
related expenses,  including the fees,  charges and disbursements of any counsel
for any Indemnitee,  incurred by or asserted against any Indemnitee  arising out
of, in connection  with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or the use of the proceeds  therefrom,  (iii) any actual or alleged  presence or
release of Hazardous  Materials on or from any property owned or operated by the
Borrower, or any Environmental  Liability related in any way to the Borrower, or
(iv) any actual or prospective  claim,  litigation,  investigation or proceeding
relating to any of the foregoing,  whether based on contract,  tort or any other
theory and  regardless of whether any  Indemnitee is a party  thereto;  PROVIDED
that such indemnity shall not, as to any Indemnitee,  be available to the extent
that  such  losses,  claims,  damages,   liabilities  or  related  expenses  are
determined  by a court of  competent  jurisdiction  by final  and  nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.

               (c)  INDEMNIFICATION BY LENDERS.  To the extent that the Borrower
fails to pay any  amount  required  to be paid by it to the Senior  Agent  under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Senior Agent such Lender's Applicable Percentage (determined as of the time that
the  applicable  unreimbursed  expense or  indemnity  payment is sought) of such
unpaid  amount;  PROVIDED that the  unreimbursed  expense or  indemnified  loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Senior Agent in its capacity as such.

               (d) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent permitted
by applicable law, the Borrower shall not assert,  and hereby waives,  any claim
against any  Indemnitee,  on any theory of  liability,  for  special,  indirect,
consequential  or  punitive  damages  (as  opposed to direct or actual  damages)
arising out of, in  connection  with,  or as a result of, this  Agreement or any
agreement or instrument contemplated hereby, the Transactions or any Loan or the
use of the proceeds thereof.

          SECTION 9.04. SUCCESSORS AND ASSIGNS.

               (a) ASSIGNMENTS GENERALLY. The provisions of this Agreement shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective successors and assigns permitted hereby, except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations  hereunder
(except as provided in the CDS  Security  Agreement)  without the prior  written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without  such  consent  shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this  Section.  Nothing  in this  Agreement,  expressed  or  implied,  shall  be
construed  to confer  upon any Person  (other  than the  parties  hereto,  their
respective successors and assigns permitted hereby,  Participants (to the extent
provided  in  paragraph  (c) of  this  Section)  and,  to the  extent  expressly
contemplated  hereby,  the Related  Parties of each of the Senior  Agent and the
Lenders)  any legal or  equitable  right,  remedy or claim under or by reason of
this Agreement.


                                       28
<PAGE>



               (b) ASSIGNMENTS BY LENDERS.

               (i) ASSIGNMENTS GENERALLY. Subject to the conditions set forth in
paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a
portion of its rights and obligations  under this Agreement  (including all or a
portion of its  Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

               (A) the Borrower,  PROVIDED that no consent of the Borrower shall
          be required for an assignment  to a Lender,  an Affiliate of a Lender,
          an  Approved  Fund or,  if an Event of  Default  has  occurred  and is
          continuing, any other assignee; and

               (B) the  Senior  Agent,  PROVIDED  that no  consent of the Senior
          Agent shall be required for an assignment of all or any portion of the
          Commitments or Loans to a Lender.

               (ii) CERTAIN  CONDITIONS  TO  ASSIGNMENTS.  Assignments  shall be
subject to the following additional conditions:

               (A)  except  in the  case  of an  assignment  to a  Lender  or an
          Affiliate of a Lender or an assignment of the entire  remaining amount
          of the  assigning  Lender's  Commitment  or Loans,  the  amount of the
          Commitment  or Loans of the  assigning  Lender  subject  to each  such
          assignment  (determined  as of the date the  Assignment and Assumption
          with respect to such  assignment  is  delivered  to the Senior  Agent)
          shall not be less than $5,000,000  unless each of the Borrower and the
          Senior Agent otherwise  consent,  PROVIDED that no such consent of the
          Borrower  shall be required if an Event of Default has occurred and is
          continuing;

               (B) each partial  assignment  shall be made as an assignment of a
          proportionate   part  of  all  the  assigning   Lender's   rights  and
          obligations under this Agreement;

               (C) the parties to each  assignment  shall execute and deliver to
          the  Senior  Agent  an  Assignment  and  Assumption,  together  with a
          processing and recordation fee of $3,500;

               (D) the assignee,  if it shall not be a Lender,  shall deliver to
          the Senior Agent an Administrative Questionnaire; and

               (E) the assignee shall satisfy the Lender Rating  Criteria or the
          alternative   requirements  of  Section  2.17  on  the  date  of  such
          assignment.

               (iii)  EFFECTIVENESS  OF  ASSIGNMENTS.  Subject to acceptance and
recording thereof pursuant to paragraph (b)(iv) of this Section,  from and after
the effective  date  specified in each  Assignment  and  Assumption the assignee
thereunder  shall be a party hereto and, to the extent of the interest  assigned
by such Assignment and  Assumption,  have the rights and obligations of a Lender
under this Agreement,  and the assigning Lender  thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Assumption  covering all of the assigning  Lender's rights and obligations under
this Agreement,  such Lender shall cease to be a party hereto but shall continue
to be entitled  to the  benefits of Sections  2.12,  2.13,  2.14 and 9.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this  Section  shall be treated  for  purposes of this
Agreement  as a sale by such  Lender  of a  participation  in  such  rights  and
obligations in accordance  with  paragraph (c) of this Section.  Notwithstanding
anything to the contrary  contained herein,  the Borrower shall not be obligated
to pay to any assignee of any Lender any amount under any of Sections 2.12, 2.13
or 2.14 greater than the amount the Borrower would have been obligated to pay to
such Lender if such Lender had not made any  assignment to such assignee of such
Lender's rights under this  Agreement,  unless such assignment is made at a time
when the circumstances giving rise to such greater payments did not exist.

               (iv) MAINTENANCE OF REGISTER.  The Senior Agent,  acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a copy
of  each  Assignment  and  Assumption  delivered  to it and a  register  for the
recordation  of the names and addresses of the Lenders,  and the  Commitment of,
and  principal  amount of the Loans owing to, each Lender  pursuant to the terms
hereof from time to time (the "REGISTER").  The entries in the Register shall be
conclusive,  and the  Borrower,  the Senior Agent and the Lenders may treat each
Person whose name is recorded in the Register  pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement,  notwithstanding  notice to
the contrary. The Register shall be available for inspection by the Borrower and
any Lender,  at any reasonable time and from time to time upon reasonable  prior
notice.

               (v) ACCEPTANCE OF  ASSIGNMENTS BY SENIOR AGENT.  Upon its receipt
of a duly completed  Assignment and Assumption  executed by an assigning  Lender
and an assignee, the assignee's completed  Administrative  Questionnaire (unless
the  assignee  shall  already  be  a  Lender  hereunder),   the  processing  and
recordation  fee  referred to in  paragraph  (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, the Senior
Agent shall accept such  Assignment and  Assumption  and record the  information


                                       29
<PAGE>



contained therein in the Register. No assignment shall be effective for purposes
of this  Agreement  unless it has been  recorded in the  Register as provided in
this paragraph.

               (c) PARTICIPATIONS.

               (i) PARTICIPATIONS GENERALLY. Any Lender may, without the consent
of the Borrower or the Senior Agent, sell participations to one or more banks or
other entities (a "PARTICIPANT") in all or a portion of such Lender's rights and
obligations  under this Agreement  (including all or a portion of its Commitment
and the Loans owing to it);  PROVIDED that (A) such Lender's  obligations  under
this  Agreement  shall remain  unchanged,  (B) such Lender  shall remain  solely
responsible to the other parties hereto for the performance of such  obligations
and (C) the Borrower,  the Senior Agent, and the other Lenders shall continue to
deal solely and  directly  with such  Lender in  connection  with such  Lender's
rights and  obligations  under  this  Agreement.  Any  agreement  or  instrument
pursuant to which a Lender sells such a  participation  shall  provide that such
Lender shall retain the sole right to enforce this  Agreement and to approve any
amendment,  modification or waiver of any provision of this Agreement;  PROVIDED
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant,  agree to any amendment,  modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph  (c)(ii) of this  Section,  the  Borrower  agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to
the  same  extent  as if it were a  Lender  and had  acquired  its  interest  by
assignment pursuant to paragraph (b) of this Section.

               (ii) LIMITATIONS ON RIGHTS OF PARTICIPANTS.  A Participant  shall
not be entitled to receive any greater  payment  under Section 2.12 or 2.14 than
the  applicable  Lender would have been  entitled to receive with respect to the
participation sold to such Participant,  unless the sale of the participation to
such  Participant  is  made  with  the  Borrower's  prior  written  consent.   A
Participant  that  would be a Foreign  Lender  if it were a Lender  shall not be
entitled to the  benefits of Section 2.14 unless the Borrower is notified of the
participation  sold to such  Participant and such  Participant  agrees,  for the
benefit of the  Borrower,  to comply  with  Section  2.14(e) as though it were a
Lender.

               (d) CERTAIN PLEDGES.  Any Lender may at any time pledge or assign
a security  interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender,  including any pledge or assignment to secure
obligations  to a Federal  Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security  interest;  PROVIDED that no such pledge
or  assignment  of a security  interest  shall  release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

               (e) NO TRANSFERS TO THE BORROWER OR AFFILIATES.  Anything in this
Section to the contrary notwithstanding, no Lender may sell, assign, participate
or in any way  transfer  any  interest in any Loan held by it to the Borrower or
any of its Affiliates without the prior consent of each Lender.

          SECTION 9.05. SURVIVAL. All covenants, agreements, representations and
warranties  made  by  the  Borrower  herein  and in the  certificates  or  other
instruments  delivered in connection with or pursuant to this Agreement shall be
considered  to have been  relied  upon by the  other  parties  hereto  and shall
survive  the  execution  and  delivery of this  Agreement  and the making of any
Loans,  regardless of any  investigation  made by any such other party or on its
behalf  and  notwithstanding  that the  Senior  Agent or any Lender may have had
notice or knowledge of any Default or  incorrect  representation  or warranty at
the time any credit is extended hereunder,  and shall continue in full force and
effect as long as the  principal  of or any accrued  interest on any Loan or any
fee or any other amount payable under this  Agreement is outstanding  and unpaid
and so long as the Commitments have not expired or terminated. The provisions of
Sections  2.12,  2.13,  2.14,  9.03 and 9.13 and Article VIII shall  survive and
remain  in  full  force  and  effect  regardless  of  the  consummation  of  the
transactions  contemplated hereby, the repayment of the Loans, the expiration or
termination  of the  Commitments  or the  termination  of this  Agreement or any
provision hereof.

          SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in  counterparts  (and by different  parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken  together  shall  constitute a single  contract.  This  Agreement  and any
separate  letter  agreements  with  respect to fees  payable to the Senior Agent
constitute the entire contract among the parties  relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written,  relating to the subject matter  hereof.  Except as provided in Section
4.01, this Agreement shall become  effective when it shall have been executed by
the Senior  Agent and when the Senior  Agent  shall have  received  counterparts
hereof  which,  when taken  together,  bear the  signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective  successors and assigns.  Delivery of an
executed  counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to be
invalid,  illegal  or  unenforceable  in  any  jurisdiction  shall,  as to  such
jurisdiction,  be  ineffective to the extent of such  invalidity,  illegality or
unenforceability without affecting the validity,  legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a  particular  jurisdiction  shall not  invalidate  such  provision in any other
jurisdiction.


                                       30
<PAGE>



          SECTION  9.08.  GOVERNING  LAW;  JURISDICTION;  CONSENT  TO SERVICE OF
PROCESS.

               (a)  GOVERNING  LAW.  This   Agreement   shall  be  construed  in
accordance with and governed by the law of the State of New York.

               (b) SUBMISSION TO JURISDICTION.  The Borrower hereby  irrevocably
and unconditionally  submits,  for itself and its property,  to the nonexclusive
jurisdiction  of the Supreme  Court of the State of New York sitting in New York
County and of the United States  District Court of the Southern  District of New
York,  and any  appellate  court from any thereof,  in any action or  proceeding
arising out of or relating to this Agreement,  or for recognition or enforcement
of any  judgment,  and  each  of  the  parties  hereto  hereby  irrevocably  and
unconditionally  agrees  that  all  claims  in  respect  of any such  action  or
proceeding  may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other  jurisdictions  by suit on the judgment or in any other manner
provided  by law.  Nothing  in this  Agreement  shall  affect any right that the
Senior Agent or any Lender may otherwise  have to bring any action or proceeding
relating to this Agreement  against the Borrower or its properties in the courts
of any jurisdiction.

               (c)  WAIVER  OF  VENUE.  The  Borrower  hereby   irrevocably  and
unconditionally  waives, to the fullest extent it may legally and effectively do
so, any objection  which it may now or hereafter  have to the laying of venue of
any suit,  action or proceeding  arising out of or relating to this Agreement in
any court  referred to in  paragraph  (b) of this  Section.  Each of the parties
hereto hereby  irrevocably  waives,  to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

               (d) SERVICE OF PROCESS.  Each party to this Agreement irrevocably
consents  to service of process in the manner  provided  for  notices in Section
9.01.  Nothing  in this  Agreement  will  affect  the right of any party to this
Agreement to serve process in any other manner permitted by law.

          SECTION 9.09.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST  EXTENT  PERMITTED BY APPLICABLE  LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY  ARISING OUT OF OR
RELATING TO THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY  (WHETHER
BASED ON CONTRACT,  TORT OR ANY OTHER  THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO  REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS  REPRESENTED,
EXPRESSLY  OR  OTHERWISE,  THAT SUCH  OTHER  PARTY  WOULD  NOT,  IN THE EVENT OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)  ACKNOWLEDGES  THAT IT
AND THE OTHER PARTIES  HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 9.10. HEADINGS.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement  and  shall  not  affect  the   construction  of,  or  be  taken  into
consideration in interpreting, this Agreement.

          SECTION  9.11.  CONFIDENTIALITY.  Each  of the  Senior  Agent  and the
Lenders agrees to maintain the  confidentiality  of the  Information (as defined
below),  except that Information may be disclosed (a) to its and its Affiliates'
directors,  officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be  informed of the  confidential  nature of such  Information  and
instructed to keep such Information  confidential),  (b) to the extent requested
by any regulatory  authority,  (c) to the extent  required by applicable laws or
regulations or by any subpoena or similar legal  process,  (d to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding  relating to this Agreement or the enforcement
of  rights  hereunder,   (f)  subject  to  an  agreement  containing  provisions
substantially  the same as  those of this  Section,  to (i) any  assignee  of or
Participant  in, or any  prospective  assignee of or Participant  in, any of its
rights or  obligations  under this  Agreement or (ii) any actual or  prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such  Information  (i)  becomes  publicly  available  other than as a
result of a breach of this Section or (ii) becomes available to the Senior Agent
or any Lender on a nonconfidential  basis from a source other than the Borrower.
For the purposes of this Section,  "INFORMATION" means all information  received
from the Borrower relating to the Borrower or its business,  other than any such
information  that  is  available  to  the  Senior  Agent  or  any  Lender  on  a
nonconfidential basis prior to disclosure by the Borrower; PROVIDED that, in the
case of  information  received  from the Borrower  after the date  hereof,  such
information is clearly  identified at the time of delivery as confidential.  Any
Person  required to maintain the  confidentiality  of Information as provided in
this Section shall be  considered to have complied with its  obligation to do so
if  such  Person  has  exercised  the  same  degree  of  care  to  maintain  the
confidentiality  of such  Information  as such  Person  would  accord to its own
confidential information.

          SECTION  9.12.  USA PATRIOT  ACT.  Each  Lender  hereby  notifies  the
Borrower that pursuant to the  requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)),  such Lender may be required
to obtain,  verify and record  information  that identifies the Borrower,  which
information  includes the name and address of the Borrower and other information
that will allow such Lender to identify  the  Borrower in  accordance  with said
Act.


                                       31
<PAGE>



          SECTION 9.13. NO PETITION;  LIMITED RECOURSE.  Each of the Lenders and
the Senior Agent (collectively,  the "CREDITORS") agrees (which agreement shall,
pursuant  to the  terms of this  Agreement,  be  binding  upon  its  successors,
assigns,  and  participants)  that it shall not institute  against,  or join any
other   Person  in   instituting   against,   the   Borrower   any   bankruptcy,
reorganization,  arrangement,  insolvency or  liquidation  proceeding,  or other
proceeding  under any federal or state  bankruptcy  or similar law, for one year
and a day (or,  if longer,  the then  applicable  preference  period)  after the
payment  in full of all  amounts  due  hereunder  and  the  Mezzanine  Facility.
Notwithstanding  anything herein or any other Program  Document to the contrary,
the  obligations of the Borrower owing to the Creditors  hereunder or thereunder
are limited  recourse  and are payable  only from the property and assets of the
Borrower, only to the extent funds are available for payment of such obligations
in  accordance  with  Sections  13.1 and  13.3 of the  Operating  Agreement.  No
recourse  shall be had and no claim shall be made,  whether by levy or execution
or otherwise, for the payment or satisfaction of any obligations of the Borrower
hereunder or under any other Program Document against any member of the Borrower
or any of its assets, other than the property and assets of the Borrower, and no
member  of the  Borrower  shall be  liable  for any  deficiency  judgment  based
thereon, it being expressly understood and agreed that the sole remedies of each
of the Creditors  with respect to such amounts shall be against the property and
assets of the Borrower in accordance  with this  Agreement and the other Program
Documents.

          SECTION  9.14.  RIGHT OF  SET-OFF.  If an Event of Default  shall have
occurred and be  continuing,  each Lender and each of its  Affiliates  is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all  deposits  (general  or  special,  time or
demand, provisional or final) at any time held and other obligations at any time
owing by such  Lender or  Affiliate  to or for the credit or the  account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement  held by such Lender,  irrespective  of whether or
not such Lender  shall have made any demand  under this  Agreement  and although
such  obligations may be unmatured,  PROVIDED that any amounts  collected by any
Lender or its  Affiliates  pursuant to this Section shall be subject to and paid
in accordance with Sections 13.1 and 13.3 of the Operating Agreement. The rights
of each Lender  under this  Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.


                                       32
<PAGE>



          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be duly executed by their respective  authorized officers as of the day and year
first above written.


                               CENTERBROOK FINANCIAL LLC
                               By: CENTERBROOK HOLDINGS LLC, its Managing Member


                               By: /S/ ROBERT MAUM
                                   ---------------
                             Name: Robert Maum
                            Title: Chief Executive Officer



                               CITIBANK, N.A.,
                               as Senior Agent


                               By: /S/ MARIA MCKEON
                                   ----------------
                             Name: Maria McKeon
                            Title: Vice President


                                       33
<PAGE>



                                                    LENDERS
                                                    -------

                                                    CITIBANK, N.A.


                                                    By: /S/ MARIA MCKEON
                                                        ----------------
                                                  Name: Maria McKeon
                                                 Title: Vice President


                                                    IXIS FINANCIAL PRODUCTS INC.


                                                    By: /S/ N. MUMFORD
                                                        --------------
                                                  Name: N. Mumford
                                                 Title: Managing Director

                                                    By: /S/ CHRISTOPHER HAYDEN
                                                        ----------------------
                                                  Name: Christopher Hayden
                                                 Title: Managing Director

                                                    CHARTERMAC


                                                    By: /S/ MARC D. SCHNITZER
                                                        ---------------------
                                                  Name: Marc D. Schnitzer
                                                 Title: Chief Executive Officer


                                       34
<PAGE>



                                                                   SCHEDULE 2.01

                                   COMMITMENTS
                                   -----------

        [See definitions of "Commitments" and "Lenders" in Section 1.01]


        NAME OF LENDER                                          COMMITMENT
        --------------                                         -----------
CharterMac                                                     $ 5,000,000
Citibank, N.A.                                                 $10,000,000
IXIS Financial Products Inc.                                   $15,000,000
--------------------------------------------------------------------------------
TOTAL                                                          $30,000,000


<PAGE>



                                                                       EXHIBIT A

                                [Exhibit Omitted]


<PAGE>



                                                                       EXHIBIT B


                                [Exhibit Omitted]


<PAGE>



                                                                       EXHIBIT C

                                [Exhibit Omitted]