SHORTFALL, FEE AND COLLATERAL AGREEMENT

This SHORTFALL, FEE AND COLLATERAL AGREEMENT , dated as of June 26, 2008 (this “ Agreement ”), is among BANK OF AMERICA, N.A. (the “ Bank ”), as Bridge Loan Lender, LOC Provider (in such capacity, the “ LOC Provider ”) and as TOB Liquidity Provider (in such capacity, the “ TOB Liquidity Provider ”), BANC OF AMERICA SECURITIES LLC, as TOB Placement and Remarketing Agent (the “ TOB Placement and Remarketing Agent ”), AMERICA FIRST TAX-EXEMPT INVESTORS, L.P., a Delaware limited partnership (the “ Obligor ”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (the “ Collateral Agent ”).

WHEREAS , the Obligor has arranged for the delivery into custody of certain tax-exempt bonds owned by the Obligor (or with respect to certain bonds, participation interests therein) and the issuance of Unenhanced Custody Receipts (hereinafter defined) evidencing portions of interests in such bonds or participation interests;

WHEREAS , the Obligor has requested the LOC Provider to deliver letters of credit to secure the repayment of such of the Unenhanced Custody Receipts that are intended to be deposited into Tender Option Bond Trusts (hereinafter defined);

WHEREAS , such Unenhanced Custody Receipts designated for Tender Option Bond Trust deposit and related letters of credit will be deposited into custody with an Enhancement Custodian (hereinafter defined) under an Enhancement Custodial Agreement (hereinafter defined) pursuant to which the Enhancement Custodian will issue Enhanced Custody Receipts (hereinafter defined), each evidencing an interest in such designated Unenhanced Custody Receipt and its related letter of credit;

WHEREAS , the Enhanced Custody Receipts will be deposited into certain Tender Option Bond Trusts and each Tender Option Bond Trust will issue floating rate receipts to unrelated investors and residual receipts to the Obligor;

WHEREAS , the Obligor has requested the TOB Liquidity Provider to provide a liquidity facility for the floating rate receipts issued by each Tender Option Bond Trust;

WHEREAS , the Obligor has requested the TOB Placement and Remarketing Agent to act as remarketing agent for the floating rate receipts issued by each Tender Option Bond Trust;

WHEREAS , the Obligor has requested the Bank to provide bridge financing to enable the Obligor to purchase the bonds prior to the issuance of any Unenhanced Custody Receipts,  Enhanced Custody Receipts or receipts to be issued by the proposed Tender Option Bond Trust, if ratings on the Enhanced Custody Receipts and receipts to be issued by the proposed Tender Option Bond Trust cannot be obtained in time to provide funds for such bond purchases by the applicable deadlines for purchase;

WHEREAS , to induce the LOC Provider and the TOB Liquidity Provider to execute and deliver such letters of credit and liquidity facilities, respectively, to induce the TOB Placement and Remarketing Agent to provide remarketing services, and to induce the Bank to provide bridge financing, if necessary, the Obligor, among other things, has agreed to reimburse the LOC Provider for all drawings under each letter of credit and the TOB Liquidity Provider for all drawings under each liquidity facility not otherwise immediately reimbursed, to pay to the LOC Provider, the TOB Liquidity Provider and the TOB Placement and Remarketing Agent certain fees, to repay any bridge financing that is provided, and to provide security for such reimbursement and other payment obligations;

WHEREAS, the LOC Provider and the TOB Liquidity Provider have agreed to issue such letters of credit and liquidity facilities in accordance with, and subject to the terms and provisions of, this Agreement, the TOB Placement and Remarketing Agent has agreed to provide its remarketing services in accordance with, and subject to the terms and provisions of, each TOB Placement and Remarketing Agreement, and the Bank has agreed to provide bridge financing if needed; and

WHEREAS , the Bank has requested the Collateral Agent to act as collateral agent with respect to all items of Collateral posted by the Obligor hereunder.

NOW , THEREFORE , as consideration for the mutual promises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

SECTION 1.01.   Definitions .  The following terms, as used herein, shall have the following meanings:

“ AAA ” means the American Arbitration Association.

“ Act of Bankruptcy ” means (a) the filing of a petition in bankruptcy or other initiation of a bankruptcy proceeding by or against a debtor under the federal Bankruptcy Code or under any applicable state insolvency code, as now or hereafter in effect; (b) the entry against a debtor of a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding, or for the winding up or liquidation of its affairs; (c) the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of the debtor or of a substantial part of its property for purposes of distributing the debtor’s assets or winding up a debtor’s affairs; or (d) any of the following actions by a debtor: (i) any formal action which results in a publicly available written statement of action duly approved by an authorized committee or governing body of the debtor, as appropriate, that admits without condition the debtor’s inability to make payments on its debts as they become due, (ii) any failure to generally pay principal of or interest on its material obligations as they become due (except as a result of a dispute regarding such obligations), (iii) a general assignment for the benefit of creditors, or (iv) the adoption of a resolution or other approval by its board of directors, executive committee or other governing body for the filing of an action by the debtor under bankruptcy laws or the appointment of a receiver, custodian, trustee or liquidator of the debtor for purposes of distributing the debtor’s assets or the winding up of the debtor’s affairs.

“ Additional Eligible Collateral ” means cash and securities described and valued as provided in Schedule VI attached hereto.

“ Additional Second Lien Mortgage ” means an unrecorded second lien mortgage granted by the Property Owner of each Additional Second Lien Property in favor of the Obligor to secure repayment of the Pledged Note executed and delivered by such owner in favor of the Obligor and assigned by the Obligor to the Collateral Agent to secure the Obligations.

“ Additional Second Lien Property ” means each of the three Properties for which an unrecorded second lien will be delivered on the date of this Agreement, as indicated in Schedule IX attached hereto.

“ Additional Termination Event ” has the meaning set forth in Section 9.02 hereof.

“ Affiliate ” means any Person directly or indirectly controlling, controlled by or under common control with the Obligor.  For purposes of this definition, the term “control” shall mean the direct or indirect ability to determine the direction of management and policies through ownership, contract or otherwise.

“ Applicable Law ” means all applicable provisions of all constitutions, statutes, rules, regulations and orders of all governmental bodies, all Governmental Approvals and all orders, judgments and decrees of all courts and arbitrators.

“ Applicable Rate ” means the Reimbursement Rate until such time as an Event of Default or Additional Termination Event has occurred hereunder, after which interest shall accrue on all Obligations outstanding hereunder at the Default Rate.

“ Bankruptcy Code ” means the Bankruptcy Reform Act of 1978, as amended from time to time, and any Federal law with respect to bankruptcy, insolvency, reorganization, liquidation, moratorium or similar laws affecting creditors’ rights generally.

“ BBA LIBOR ” means the British Bankers Association LIBOR Rate.

“ Bond Documents ” means, with respect to any Bond, the Bond Indenture and any other related documents.

“ Bond Indenture ” means, with respect to any Bond, the indenture, trust agreement or other primary issuance document pursuant to which such Bond was issued.

“ Bond Payment Drawing ” means a drawing on a Letter of Credit to pay any principal or redemption price of and/or interest on the related Unenhanced Custody Receipt.

“ Bonds ” means, collectively, (a) the Eligible Bonds and (b) the Collateral Bonds.

“ Bond Trustee ” means, with respect to each Bond, the trustee under the Bond Indenture pursuant to which such Bond was issued, or if there is a participation interest in any underlying bond, the custodian under the applicable custody arrangement creating the participation, as the context may require .

“ Bridge Loan ” means a loan in the amount of $65,091,371.66 from the Bank to the Obligor pursuant to the provisions of this Agreement.

               “ Bridge Loan Commitment Fee ” means a commitment fee in the amount of $65,091.37 (10 basis points (0.10%) multiplied by the principal amount of the Bridge Loan).

“ Bridge Loan Maturity Date ” means September 26, 2008.

“ Bridge Loan Note” means the promissory note of even date herewith executed and delivered by the Obligor to the Bank to evidence the Bridge Loan.

“ Bridge Loan Rate ” means LIBOR plus 2.25% per annum.

“ Business Day ” means any day on which banks or trust companies located in New York, New York are not required or authorized by law to remain closed or on which the New York Stock Exchange is not closed.

“ Collateral ” means (a) for such period of time as the Bridge Loan is outstanding, all Eligible Bonds and any related “securities entitlements” (as such term is defined in the UCC) therein, (b) all Collateral Unenhanced Custody Receipts, (c) all TOB Residuals, (d) all Collateral Bonds, (e) all Pledged Notes, (e) all Additional Eligible Collateral delivered by the Obligor pursuant to Section 4.02(b) hereof, (f) the Recorded Second Lien Mortgages, and (g) the Additional Second Lien Mortgages.

“ Collateral Bond ” means a tax-exempt bond identified in Schedule II attached hereto.

“ Collateral Unenhanced Custody Receipts ” means each Unenhanced Custody Receipt identified in Schedule III attached hereto as a “Collateral Unenhanced Custody Receipt”,  which will not be deposited into custody with the Enhancement Custodian under the Enhancement Custodial Agreement but will be Collateral delivered to the Collateral Agent.

“ Commitment Fee ” means the commitment fee payable by the Obligor to the Bank pursuant to the Commitment Letter.

“ Commitment Letter ” means the commitment letter from the Bank to the Obligor dated June 3, 2008 and accepted by the Obligor.

“ Collateral Agent Fee ” shall mean a fee equal to $1,000 per annum per Eligible Bond, Collateral Bond, Collateral Unenhanced Custody Receipt, Pledged Note and TOB Residual held by the Collateral Agent hereunder.

“ Debt Service Coverage Ratio ” means, with respect to each Property, the net operating income of such Property divided by the total annual debt service payable in respect of all senior debt outstanding in respect of such Property, whether or not such debt is secured by a lien on such Property.

“ Default ” means an event which, with notice or lapse of time or both, would constitute an Event of Default.

“ Default Rate ” means the Reimbursement Rate plus 2.00% per annum.

“ Designated Deposit Unenhanced Custody Receipt ” means an Unenhanced Custody Receipt designated for deposit into the Enhancement Custodial Agreement with a related Letter of Credit, as set forth on Schedules I and IV attached hereto.

“ Dispute ” means any controversy, claim or dispute between Bank of America and the Obligor, including any such controversy, claim or dispute arising out of or relating to (a) this Agreement or (b) the transactions contemplated herein (including any claim based on or arising from an alleged personal injury or business tort).

“ Eligible Bond ” means a tax-exempt bond or participation interest in a tax-exempt bond, as applicable, identified in Schedule I attached to this Agreement.

“ Eligible Bond Payment Date ” means the date on which principal, redemption price or interest is payable on an Eligible Bond in accordance with its terms.

“ Enhanced Custody Receipt ” means an Enhanced Custody Receipt issued by the Enhancement Custodian on the Letter of Credit Issuance Date to represent an interest in an Unenhanced Custody Receipt and its related Letter of Credit, as identified on Schedules I and IV attached hereto.

“ Enhanced Custody Receipt Mandatory Tender Date ” means the date on which any Enhanced Custody Receipts are subject to mandatory tender pursuant to the provisions of the Enhancement Custodial Agreement after the occurrence of an Enhanced Custody Receipt Mandatory Tender Event.

“ Enhanced Custody Receipt Mandatory Tender Drawing ” means a drawing on a Letter of Credit to pay the purchase price of the related Enhanced Custody Receipts upon the occurrence of an Enhanced  Custody Receipt Mandatory Tender Event.

“ Enhanced Custody Receipt Mandatory Tender Event ” shall have the meaning given to term “Mandatory Tender Date” in the Enhancement Custodial Agreement.

“ Enhanced Custody Receipt Mandatory Tender Price” shall have the meaning given the term “Mandatory Tender Price” in the Enhancement Custodial Agreement.

“ Enhancement Custodial Agreement ” means the Enhancement Custodial Agreement to be dated the Letter of Credit Issuance Date between the Bank, as Administrator, and the Enhancement Custodian.

“ Environmental Claim ” means any complaint, action, notice, order, claim, investigation, judicial or administrative proceeding or action, or similar claims or communications from any Person involving or alleging any non-compliance with any Environmental Requirement or the existence of any unsafe or hazardous condition resulting from or related to the Release of any Hazardous Material.

“ Environmental Law ” means any and all applicable federal, state or local laws, statutes, ordinances, rules, regulations, orders, principals of common law, judgments, permits, licenses or other determinations of any judicial or regulatory authority, now or hereafter in effect, imposing liability, establishing standards of conduct or otherwise relating to protection of the environment (including natural resources, surface water, groundwater, soils and indoor and ambient air), health and safety, land use matters or the presence, generation, treatment, storage, disposal, Release or threatened Release, transport or handling of any Hazardous Material.

“ Environmental Requirement ” means any Environmental Law, or any other applicable agreement or restriction (including any condition or requirement imposed by any third party or insurance or surety company), now or hereafter in effect, which relates to any matters addressed by any Environmental Law, Hazardous Material or the prevention of any unsafe or hazardous condition resulting from or related to the Release of any Hazardous Material.

“ Event of Default ” has the meaning set forth in Section 9.01 hereof.

“ Fee Payment Date ” means each Letter of Credit Fee Payment Date and each Remarketing and Liquidity Charge Payment Date.

“ Governmental Approval ” means an authorization, permit, consent, approval, license or exemption from, registration or filing with, or report to, any Governmental or regulatory unit.

“ Hazardous Material ” means any substance, material, element, compound, waste or chemical, whether solid, liquid or gaseous, which is defined, listed, classified or otherwise regulated in any way under any Environmental Laws, or any other such substances or conditions (including mold and other mycotoxins or fungi) which may create any unsafe or hazardous condition or pose any threat to health and safety.

“ Letter of Credit ” means each letter of credit identified on Schedule I attached hereto issued by the LOC Provider to the Enhancement Custodian as beneficiary in the form attached to the Enhancement Custodial Agreement.

“ Letter of Credit Drawing ” means a Bond Payment Drawing or Enhanced Custody Receipt Mandatory Tender Drawing.

“ Letter of Credit Expiration Date ” means initially the date that is 364 days after the Letter of Credit Issuance Date, as such date may be extended for any particular Letter of Credit pursuant to Section 2.01(b) hereof.

“ Letter of Credit Fee ” means on each applicable Letter of Credit Fee Payment Date with respect to each Letter of Credit, a fee in an amount equal to 1.35% per annum multiplied by the sum of the amount available to be drawn under such Letter of Credit on such Letter of Credit Fee Payment Date plus any amount then subject to reinstatement in accordance with the provisions of the Letter of Credit.

“ Letter of Credit Fee Payment Date ” means, with respect to each Letter of Credit, the  Letter of Credit Issuance Date and quarterly thereafter beginning on the first day of the third calendar month following the Letter of Credit Issuance Date and on the first day of each third calendar month thereafter (the exact dates to be included in the Enhancement Custodial Agreement on the Letter of Credit Issuance Date).

“ Letter of Credit Issuance Date ” means the date on which the Letters of Credit are issued pursuant to this Agreement.

“ Letter of Credit Shortfall Amount ” means the amount of a Letter of Credit Drawing honored by the LOC Provider that is not immediately reimbursed to the LOC Provider by the Enhancement Custodian.

“ LIBOR ” means for any day, a fluctuating rate of interest per annum equal to BBA LIBOR, as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) as determined for each Business Day at approximately 11:00 a.m. London time two (2) London Banking Days prior to such day, for U.S. Dollar deposits (for delivery on such day) with a one month term, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs.  If such rate is not available at such time for any reason, then the rate will be determined by such alternate method as reasonably selected by the Bank.

If the Bank determines that no adequate basis exists for determining BBA LIBOR or that BBA LIBOR will not adequately and fairly reflect the cost to the Bank of funding Letter of Credit Drawings or TOB Liquidity Drawings, or that any Applicable Law or regulation or compliance therewith by the Bank prohibits or restricts or makes impossible the charging of interest based on BBA LIBOR and the Bank so notifies the Obligor, then until the Bank notifies the Obligor that the circumstances giving rise to such suspension no longer exist, interest shall accrue and be payable on unreimbursed Obligations from the date the Bank so notifies the Obligor until all such Obligations have been reimbursed in full (whether by acceleration, declaration, extension or otherwise) at a fluctuating rate of interest equal to the Prime Rate plus the basis points that otherwise would have been added to the LIBOR rate.

“ London Banking Day ” means a day on which banks in London are open for business and dealing in offshore dollars.

“ Material Adverse Effect ” means, (a)(i) with respect to any Person, a material adverse effect upon such Person’s business, assets, liabilities, financial condition or results of operations, and (ii) with respect to a group of Persons as a whole, a material adverse effect upon such Persons’ businesses, assets, liabilities, financial conditions or results of operations, taken as a whole, and (b) with respect to any agreement or obligation, a material adverse effect upon the binding nature, validity or enforceability of such agreement or obligation.

“ Obligations ” means amounts due and owing by the Obligor to the Bank, the LOC Provider, the TOB Liquidity Provider and/or the TOB Placement and Remarketing Agent in respect of the Bridge Loan, Letter of Credit Shortfall Amounts, TOB Liquidity Shortfall Amounts, accrued and unpaid interest on such amounts, unpaid Letter of Credit Fees, unpaid Bridge Loan Fee, unpaid Remarketing and Liquidity Charges and any and all other obligations and liabilities of the Obligor hereunder.

“ Person ” includes an individual, association, unincorporated organization, corporation, partnership, limited partnership, limited liability company, joint venture, business trust or a government or an agency or political subdivision thereof, or any other entity.

“ Pledged Notes ” means the amended and restated operating loan notes executed and delivered by the five Property Owners identified on Schedule IX attached hereto, copies of which notes are attached as Exhibit A hereto.

“ Prime Rate ” means, on any day, the rate of interest per annum then most recently established by the Bank as its “prime rate.”  Any such rate is a general reference rate of interest, may not be related to any other rate, and may not be the lowest or best rate actually charged by the Bank to any customer or a favored rate and may not correspond with future increases or decreases in interest rates charged by other lenders or market rates in general, and that the Bank may make various business or other loans at rates of interest having no relationship to such rate.  Each time the Prime Rate changes, the per annum rate of interest on outstanding Obligations shall change immediately and contemporaneously with such change in the Prime Rate.  If the Bank ceases to exist or to establish or publish a prime rate from which the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is determined thereafter shall be instead the prime rate reported in The Wall Street Journal (or the average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall change without notice with each change in such prime rate as of the date such change is reported.

“ Property ” means each real property identified on Schedule VIII attached hereto.

“ Property Owner ” means the owner of the fee simple interest in each Property, as set forth on Schedule VIII attached hereto.

“ Recorded Second Lien Mortgage ” means a recorded second lien mortgage granted by the Property Owner of each Recorded Second Lien Property in favor of the Obligor to secure repayment of the Pledged Note executed and delivered by such owner in favor of the Obligor and assigned by the Obligor to the Collateral Agent to secure the Obligations.

“ Recorded Second Lien Properties ” means each of the two Properties for which a recorded second lien is indicated in Schedule IX attached hereto.

“ Reimbursement Rate ” means LIBOR plus 2.50% per annum.

“ Related Documents ” means the Bridge Loan Note, the Unenhanced Custodial Agreement, the Enhancement Custodial Agreement, the Letters of Credit, the TOB Liquidity Facilities, the TOB Placement and Remarketing Agreements, the Eligible Bonds, the Collateral Bonds, the Collateral Unenhanced Custody Receipts, the Designated Deposit Unenhanced Custody Receipts, the Pledged Notes, the Recorded Second Lien Mortgages, the Additional Second Lien Mortgages and all assignments of any of the foregoing documents to secure the Obligations.

“ Release ” means the presence of or any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, drums, tanks and other similar containers, including any Hazardous Material) into the indoor or outdoor environment.

“ Remarketing and Liquidity Charges ” means all fees payable for each TOB Liquidity Facility and remarketing services provided by the TOB Placement and Remarketing Agent in connection with each TOB Trust, calculated at the combined rate of 0.30% per annum (0.20% for the provision of liquidity and 0.10% for the provision of remarketing services) and payable in arrears on each Remarketing and Liquidity Charge Payment Date.

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“Remarketing and Liquidity Charge Payment Date ” means the dates on which the Remarketing and Liquidity Charges are payable by the Obligor, as set forth on Schedule V attached hereto.

 “ Shortfall Amounts ” means Letter of Credit Shortfall Amounts and TOB Liquidity Shortfall Amounts.

“ Tender Option Bond Trust ” or “ TOB Trust ” means each of the single bond trusts and pooled trusts identified on Schedule I attached.

“ TOB Floater Purchase Price ” means the “Purchase Price” payable to the holders of TOB Floaters upon any optional or mandatory tender of such TOB Floaters, as defined in the applicable TOB Trust Agreement.

“ TOB Floaters ” means the floating rate receipts issued by each TOB Trust.

“ TOB Liquidity Drawing” means a drawing under a TOB Liquidity Facility to pay the TOB Floater Purchase Price.

“ TOB Liquidity Facility ” means each of the liquidity facilities provided by the TOB Liquidity Provider to a TOB Trust, as identified on Schedule I attached hereto.

“ TOB Liquidity Shortfall Amount ” means the amount of a TOB Liquidity Drawing honored by the TOB Liquidity Provider that is not immediately reimbursed to the TOB Liquidity Provider by the applicable TOB Trustee.

“ TOB Placement and Remarketing Agent ” means Banc of America Securities LLC.

“ TOB Placement and Remarketing Agreement ” means each Remarketing Agreement to be dated the Letter of Credit Issuance Date among the TOB Trustee, Bank of America, as trustor, and the TOB Placement and Remarketing Agent, pursuant to which the TOB Placement and Remarketing Agent will remarket TOB Floaters tendered for purchase that are subject to remarketing.

“ TOB Residuals ” means the residual receipts issued by each TOB Trust.

“ TOB Trust ” means a trust created by a TOB Trust Agreement on the Letter of Credit Issuance Date.

“ TOB Trust Documents ” means the TOB Trust Agreement, TOB Liquidity Facility and TOB Placement and Remarketing Agreement executed and delivered in connection with each TOB Trust.

“ TOB Trust Agreement ” means each Trust Agreement to be dated the Letter of Credit Issuance Date between the Bank, as trustor, and the TOB Trustee, executed and delivered to create the TOB Trusts identified on Schedule I attached.

“ TOB Trustee ” mean, with respect to any TOB Receipts, Deutsche Bank Trust Company Americas, as trustee under the related TOB Trust Agreement.

“ Trigger Price ” means, with respect to each Eligible Bond, the applicable value listed under the column marked “Trigger Price” on Schedule I attached hereto.

“ UCC ” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided , however , in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection of priority and for purposes of definitions related to such provisions.

“ Underlying Custodian ” means Deutsche Bank Trust Company Americas and any substitute or successor custodian under the Unenhanced Custodial Agreement.

“ Unenhanced Custodial Agreement ” means the Unenhanced Custodial Agreement to be dated the Letter of Credit Issuance Date among the Bank, as Administrator, and the Underlying Custodian.

“ Unenhanced Custody Receipt ” means an Unenhanced  Custody Receipt issued by the Underlying Custodian to represent an interest in an Eligible Bond.

 “ Unrestricted Liquid Assets ” means unrestricted liquid assets (consisting of unrestricted, unencumbered cash or marketable securities that are not counted toward any minimum liquidity requirement of any other creditor).

SECTION 1.02.   Accounting Matters .  Unless otherwise defined herein, all accounting terms used herein are used with the meanings ascribed to such terms in accordance with generally accepted accounting principles.  All computations utilized by the Bank or by the Obligor in complying with any covenant contained herein shall, unless there is an express direction to the contrary, be computed on a basis consistent with generally accepted accounting principles and any applicable regulations as from time to time in effect.

SECTION 1.03.   Use of Phrases .  The words “herein,” “hereby,” “hereunder,” “hereof,” “hereinbefore,” “hereinafter” and other equivalent words refer to this Agreement as an entirety and not solely to the particular portion thereof in which any such word is used.  The definitions set forth in Section 1.01 hereof include both singular and plural.  Whenever used herein, any pronoun shall be deemed to include both singular and plural and to cover all genders.

SECTION 1.04.   Computation of Time Periods .  In this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and each of the words “to” and “until” means “to but excluding.”

SECTION 1.05.   Statutory References .  References in this Agreement to any section of the Uniform Commercial Code or the UCC shall mean, on or after the effective date of adoption of any revision to the Uniform Commercial Code or the UCC in the applicable jurisdiction, such revised or successor section thereto.

SECTION 2.01.   Issuance of Letters of Credit .  The LOC Provider agrees to issue the Letters of Credit on any Business Day on or after the date hereof that all conditions precedent set forth in Sections 5.02, 5.03 and 5.05 hereof have been satisfied and the Placement and Remarketing Agent is able to sell the TOB Floaters, upon the terms and subject to the conditions of this Agreement, and relying upon the representations and warranties of the Obligor contained herein .  Each Letter of Credit will be issued in the initial stated amount indicated on Schedule I attached hereto.

SECTION 2.02.   Term of Letters of Credit .  Each Letter of Credit shall expire on the applicable Letter of Credit Expiration Date, unless earlier terminated pursuant to the terms of this Agreement.  Each original Letter of Credit Expiration Date may be extended one time for a period of up to 12 months; provided , that (a) no later than sixty (60) days prior to the initial Letter of Credit Expiration Date the Obligor has requested the LOC Provider, in writing, to so extend; (b) no Default or Event of Default or Additional Termination Date has occurred and is continuing at the time of such request or at the time of the original Letter of Credit Expiration Date; and (c) such request is accompanied by a firm written commitment from a third party credit enhancer to provide substitute credit enhancement that will replace the applicable Letter of Credit within such extension period.  Any such extension must be documented in writing in accordance with the provisions of the Letter of Credit.  After any such substitution, neither the related Enhanced Custody Receipts, nor the Designated Deposit Unenhanced Custody Receipts nor Eligible Bonds will be included in the Bank’s Tender Option Bond program, unless the TOB Placement and Remarketing Agent and the TOB Liquidity Provider for the related TOB Floaters have given their prior written consent (which consents may be conditioned on fee adjustments) and any additional requirements for such substitution are met, including without limitation, consent of the holders of the related TOB Floaters, mandatory tender of the related TOB Floaters, and/or updated disclosure with respect to such Enhanced Custody Receipts, Designated Deposit Unenhanced Custody Receipts and/or Eligible Bonds.

SECTION 2.03.   Bridge Loan .  (a)  In the event that the necessary ratings on the Enhanced Custody Receipts and TOB Floaters have not been obtained prior to the date of this Agreement in sufficient time to close the TOB Trusts on the date of this Agreement, the Bank agrees to make the Bridge Loan to the Obligor, and the Obligor agrees to borrow the Bridge Loan from the Bank, in a single advance on the date of this Agreement, subject to the terms and conditions set forth in this Agreement.  In consideration for the Bank’s approval of the Bridge Loan, if the Obligor borrows the Bridge Loan the Obligor hereby agrees to pay to the Bank the Bridge Loan Commitment Fee without notice or demand, in immediately available funds in advance on the date hereof.

(b)   The Obligor will use the proceeds of the Bridge Loan solely for the purpose of paying the purchase price of the Eligible Bonds.  The Bank will advance Bridge Loan proceeds to be applied to such purposes in accordance with written instructions from the Obligor.  The Obligor will be responsible for payment on the date of this Agreement, of the Bridge Loan Fee and all closing costs associated with the Bridge Loan closing (e.g., title company charges).

(c)   Interest on the outstanding principal balance of the Bridge Loan shall accrue at the Bridge Loan Rate and shall be payable in arrears on the first day of each month, beginning August 1, 2008, and on the date the Bridge Loan is repaid in full.  The entire principal balance of the Bridge Loan then unpaid, together with all accrued interest thereon, shall be due and payable in full on the earlier to occur of (i) the Bridge Loan Maturity Date or (ii) the Letter of Credit Issuance Date.  The Bridge Loan may be prepaid in whole or in part at any time without penalty, provided that all conditions for prepayment set forth in the Bridge Loan Note have been satisfied.  The Bridge Loan is not a revolving loan; amounts repaid may not be reborrowed.

(d)   As soon as practicable after the date of this Agreement that the necessary ratings have been obtained and the TOB Trusts can be closed, the Obligor hereby authorizes the LOC Provider, the TOB Liquidity Provider and the TOB Placement and Remarketing Agent, without any further action or execution or direction by the Obligor, (i) to finalize and execute all Related Documents not yet executed and delivered, in substantially the forms reviewed and approved by the Obligor as of the date of this Agreement, with any such changes as may be required by the rating agency, to finalize the Related Documents to conform to the provisions of this Agreement and to eliminate blanks and brackets, so long as copies of any revisions are provided to the Obligor, (ii) to issue the Letters of Credit and TOB Liquidity Facilities, (iii) to close all custodial and TOB transactions contemplated by the Related Documents, (iv) to deliver to the Bond Trustees for the Eligible Bonds all documentation executed by the Obligor that is necessary to cause the registered ownership of the Eligible Bonds to be transferred from the Obligor to the Underlying Custodian, and (v) to apply the proceeds from the sale of the TOB Floaters and TOB Residuals to repayment in full of the Bridge Loan and all accrued interest thereon and to payment of the Letter of Credit Fee payable on the Letter of Credit Issuance Date, to the balance of the Commitment Fee, and to any additional closing costs (such as rating agency fees) and to remit the remaining balance to the Obligor.  The Obligor will be responsible for delivering immediately available funds to the Placement and Remarketing Agent in payment for the TOB Residuals.

SECTION 3.01.   Letters of Credit; Letter of Credit Shortfall Obligations .  The LOC Provider agrees to issue the Letters of Credit at any time up to and including the Bridge Loan Maturity Date, provided that all conditions for such issuance set forth herein have been satisfied. The Obligor agrees to reimburse the LOC Provider in immediately available funds for the amount of each drawing honored by the LOC Provider under each Letter of Credit and not otherwise immediately reimbursed to the LOC Provider, together with interest pursuant to Section 3.04 hereof, as follows:

(a)   Pursuant to the Enhancement Custodial Agreement, the Enhancement Custodian (i) will draw on each Letter of Credit on each Eligible Bond Payment Date for the amount of principal, redemption price and/or interest payable in respect of the related Eligible Bond, (ii) will deliver to the LOC Provider all amounts received by the Enhancement Custodian in respect of payments on such Eligible Bond, to reimburse the LOC Provider for the amount of such Bond Payment Drawing, and (iii) will notify the LOC Provider and the Obligor of the amount of any shortfall in the event the Enhancement Custodian has not received sufficient funds to provide for reimbursement to the LOC Provider in full for such Bond Payment Drawing.  In the event that the LOC Provider is not reimbursed in full by the Enhancement Custodian for any such Bond Payment Drawing on the date of such drawing, the Obligor will reimburse the LOC Provider, without any requirement of notice or demand by the LOC Provider, for the Letter of Credit Shortfall Amount.

(b)   Pursuant to the Enhancement Custodial Agreement, on each Enhanced Custody Receipt Mandatory Tender Date the Enhancement Custodian (i) will draw on each related Letter of Credit for the amount of the Enhanced Custody Receipt Mandatory Tender Price payable in respect of the Enhanced Custody Receipts subject to mandatory tender, (ii) will deliver to the LOC Provider all amounts received by the Enhancement Custodian in respect of the liquidation or distribution of the related Eligible Bonds, to reimburse the LOC Provider for the amount of the Enhanced Custody Receipt Mandatory Tender Drawing, and (iii) will notify the LOC Provider and the Obligor of the amount of any shortfall in the event the Enhancement Custodian has not received sufficient funds to provide for reimbursement in full of such Enhanced Custody Receipt Mandatory Tender Drawing.  In the event that the LOC Provider is not reimbursed in full by the Enhancement Custodian for any such Enhanced Custody Receipt Mandatory Tender Drawing on the date of such drawing, the Obligor will reimburse the LOC Provider, without any requirement of notice or demand by the LOC Provider, for the Letter of Credit Shortfall Amount.

SECTION 3.02.   TOB Liquidity Shortfall Obligations . The TOB Liquidity Provider agrees to issue the TOB Liquidity Facilities at any time up to and including the Bridge Loan Maturity Date, provided that all conditions for such issuance set forth herein have been satisfied.  Under each TOB Trust Agreement, the TOB Floaters are subject to optional and mandatory tender under certain circumstances provided therein.  Each TOB Trust Agreement provides that the TOB Trustee (a) will draw on the applicable TOB Liquidity Facility for such TOB Trust to pay the TOB Floater Purchase Price payable to the tendering holders of TOB Floaters to the extent that remarketing proceeds are not available to pay such TOB Floater Purchase Price, (b) will deliver to the TOB Liquidity Provider all amounts received by the TOB Trustee in respect of proceeds from the liquidation or distribution of the Enhanced Custody Receipts upon any final tender of the TOB Floaters, and (c) will notify the TOB Liquidity Provider and the Obligor of the amount of any shortfall in the event the TOB Trustee has not received sufficient funds to provide for reimbursement in full of such TOB Liquidity Drawing on the date of such drawing.  In the event that the TOB Liquidity Provider is not reimbursed in full by the TOB Trustee for any such TOB Liquidity Drawing on the date of such drawing, the Obligor will reimburse the TOB Liquidity Provider, without any requirement of notice or demand by the TOB Liquidity Provider, for the TOB Liquidity Shortfall Amount.

SECTION 3.03.   Letter of Credit Fee .  The Obligor hereby agrees to pay to the LOC Provider the Letter of Credit Fee payable with respect to each Letter of Credit, without notice or demand, in immediately available funds in advance on the Letter of Credit Issuance Date and quarterly thereafter on each applicable Letter of Credit Fee Payment Date.  The Letter of Credit Fee shall be fully earned when due and nonrefundable when paid, with respect to the commitment of the LOC Provider under each Letter of Credit.

SECTION 3.04.   Remarketing and Liquidity Charges .  The Obligor hereby agrees to pay to the TOB Placement and Remarketing Agent, without notice or demand, the portion of the Remarketing and Liquidity Charges relating to provision of remarketing services, and hereby agrees to pay to the TOB Liquidity Provider, without notice or demand, the portion of the Remarketing and Liquidity Charges relating to provision of the TOB Liquidity Facilities in each case in immediately available funds in arrears on each applicable Remarketing and Liquidity Charge Payment Date.  The Remarketing and Liquidity Charges shall be fully earned when due and nonrefundable when paid, with respect to the commitment of the TOB Liquidity Provider under each TOB Liquidity Facility and the services of the TOB Placement and Remarketing Agent under each TOB Placement and Remarketing Agreement.

SECTION 3.05.   Notice of Fee Amounts Payable .  The Bank will endeavor to provide written notice to the Obligor, at least fifteen (15) Business Days prior to each Fee Payment Date, of the amount of the Letter of Credit Fee and/or Remarketing and Liquidity Charges payable on such Fee Payment Date; provided , however , that the Letter of Credit Fee and the Remarketing and Liquidity Charges shall be due and payable on such Fee Payment Date, notwithstanding any delay or  failure by the Bank in providing such notice.

SECTION 3.06.   Letter of Credit Drawing Fee .  The Obligor agrees to pay to the LOC Provider a Letter of Credit drawing fee of $250, without notice or demand by the LOC Provider, on each day on which a Drawing is honored by the LOC Provider under each Letter of Credit.

SECTION 3.07.   Waiver and Amendment Fee; Courier Fee .  (a)  Upon each waiver and any amendment relating to the Bridge Loan, any Letter of Credit, any TOB Liquidity Facility or this Agreement, the Obligor agrees to pay to the Bank the sum of $250 plus the Bank’s reasonable costs and expenses (including legal fees) associated with such waiver or amendment (and interest on such costs and expenses from the date expended by the Bank to the date reimbursed at the Applicable Rate, payable on the date of such waiver or amendment.

(b)   In connection with any express mailing or similar express delivery required to be made by the Bank pursuant to this Agreement, the Obligor agrees to reimburse the Bank upon demand the sum of $45.

SECTION 3.08.   Interest on Obligations .  The Obligor shall pay interest to the Bank, the LOC Provider, the TOB Liquidity Provider, and the TOB Placement and Remarketing Agent, as applicable, at the Applicable Rate, compounded daily, on the amount of each Obligation or other amount due hereunder from the date such Obligation or other amount becomes owing to the date of reimbursement or payment in full to the Bank, the LOC Provider, TOB Liquidity Provider or TOB Placement and Remarketing Agent, as applicable.

SECTION 3.09.   Place, Time and Manner of Payment; Maximum Interest Rate .  All payments by the Obligor to the Bank, the LOC Provider, the TOB Liquidity Provider and the TOB Placement and Remarketing Agent under this Agreement shall be made in lawful currency of the United States and in immediately available funds by federal wire in accordance with the payment instructions set forth on Schedule VI attached hereto and shall be made without any set-off, counterclaim or deduction whatsoever.  The Obligor hereby agrees to pay to the Bank, the LOC Provider, the TOB Liquidity Provider and the TOB Placement and Remarketing Agent on demand interest at the Applicable Rate, compounded daily, on any and all amounts due and unpaid hereunder by the Obligor from the date such amounts become due until paid in full (after as well as before judgment).  Any payment received by the Bank, the LOC Provider, the TOB Liquidity Provider or the TOB Placement and Remarketing Agent after 2:00 p.m. on a Business Day shall be deemed to have been received by such party on the next succeeding Business Day for purposes of the immediately preceding sentence and all other calculations of interest and fees.  Except as otherwise provided herein, all computations of fees and interest shall be made by the Bank on the basis of a year of 360 days for the actual number of days elapsed (including the first day but excluding the last day).  Each determination by the Bank of an interest rate or of interest or fees payable hereunder shall be conclusive and binding for all purposes in the absence of manifest error.  In the event that the date specified for any payment hereunder is not a Business Day, such payment shall be made not la