CHARTER MUNICIPAL MORTGAGE ACCEPTANCE CO
EX. 10.4
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>cmmac-764507.txt
<DESCRIPTION>EX. 10.4
<TEXT>
                                                                    Exhibit 10.4



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

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


                  AMENDED AND RESTATED REIMBURSEMENT AGREEMENT


                           Dated as of March 31, 2003

                                      Among


                        CHARTER MAC EQUITY ISSUER TRUST,
                                  Account Party

                                       and

                              FLEET NATIONAL BANK,
                                      Agent

                              FLEET NATIONAL BANK,
                                  Issuing Bank

                                       and

                 THE PARTICIPANTS NAMED HEREIN FROM TIME TO TIME
                                  Participants


                 Letter of Credit Facility up to $35,000,000.00


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

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


<PAGE>


<TABLE>
<CAPTION>


                                Table of Contents
                                -----------------

<S>                                                                      <C>                  <C>        <C>
ARTICLE 1. DEFINITIONS AND GENERAL MATTERS...................................................1
           -------------------------------

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

        SECTION 1.2....................................................................General           1
                                                                                       -------

        SECTION 1.3......................................................Accounting Principles           2
                                                                         ---------------------


ARTICLE 2.   AGREEMENT TO ISSUE LETTER OF CREDIT; LETTER OF
             CREDIT AND L/C SCHEDULES.........................................................2
             ----------------------------------------------

             SECTION 1.4....Commitment to Issue Letter of Credit and L/C Schedules; Procedures           2

               (a)    Establishment of Letter of Credit Facility.............................2
                      ------------------------------------------

               (b)    Procedures for Issuance of Letter of Credit and L/C
                      Schedules..............................................................4
                      ----------------------------------------------------

               (c)    Drawings under the Letter of Credit....................................4
                      -----------------------------------

               (d)    Limitations............................................................5
                      -----------

               (e)    Allocable Share of  the Maximum Credit Amount; Addition
                      of Eligible Lease-Up Bonds to Letter of Credit Facility;
                      Deletion of Eligible Lease-Up Bonds from Letter of Credit
                      Facility................................................................5
                      ---------------------------------------------------------

                             (a)    with respect to Covered Eligible Bonds
                                    which were included in the most recent
                                    Applicable L/C Schedule and which are to
                                    remain Covered Eligible Bonds under the
                                    Applicable L/C Schedule, the Account Party
                                    shall provide the calculation of the
                                    Allocable Share of the Maximum Credit
                                    Amount for each such Covered Eligible Bond
                                    based upon the applicable Bond and
                                    Property information included in the most
                                    recent Servicer's Report furnished to the
                                    Agent pursuant to Section 10.1(g)(i)
                                    hereof, with such calculations to be set
                                    forth in an Allocable Share Calculation
                                    Certificate in the form of Exhibit I.....................5

                             (b)    the Account Party shall specifically
                                    identify in a Bond Withdrawal Notice any
                                    Covered Eligible Bonds which were included
                                    in the most recent Applicable L/C Schedule
                                    which
</TABLE>


                                      -ii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                                           <C>        <C>
                                    the Account Party has elected to withdraw
                                    from the Letter of Credit Facility (and
                                    which are, therefore, not included in the
                                    pro forma Applicable L/C Schedule).......................5

                             (c)    with respect to  additional Bonds which
                                    the Account Party is requesting to be
                                    included as Covered Eligible Bonds (with
                                    no such request being permitted during any
                                    Extension Period), the Account Party shall
                                    furnish the Agent with a Bond Eligibility
                                    Determination Request in the form of
                                    Exhibit J, pursuant to which:............................6

                                    (i)     the Account Party shall certify
                                            that each such Bond is an Eligible
                                            Lease-Up Bond as of the date of the
                                            request for inclusion as a Covered
                                            Eligible Bond and that it
                                            reasonably expects such Bond to be
                                            an Eligible Lease-Up Bond as of the
                                            subject Quarterly L/C Re-Schedule
                                            Date;............................................6

                                    (ii)    the Account Party shall provide the
                                            Agent with  the Eligible Lease-Up
                                            Bond Supporting Documentation
                                            relating to such Eligible Lease-Up
                                            Bond, including, without
                                            limitation, the Projected
                                            Stabilization Date of such Eligible
                                            Lease-Up Bond;...................................6

                                    (iii)   the Account Party shall certify
                                            that no Event of Default has
                                            occurred and is continuing at the
                                            time of such request;............................6

                                    (iv)    the Account Party shall certify
                                            that, after giving effect to the
                                            Allocable Share of the Maximum
                                            Credit Amount which would be
                                            attributed to such Bond, the sum of
                                            (x) the aggregate amount of the
                                            Allocable Share of the Maximum
                                            Credit Amount for all Covered
                                            Eligible Bonds to be covered by the
                                            subject L/C Schedule, plus (y) the
                                            amount of any then Unpaid Drawings,
                                            would
</TABLE>


                                     -iii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                               <C>                         <C>        <C>
                                            not exceed the Maximum Credit
                                            Amount; and......................................6

                                    (v)     the Account Party shall certify
                                            that there has not occurred any
                                            Material Change to the Transaction
                                            Documents........................................6

                             (d)    with respect to Covered Eligible Bonds
                                    that are secured by Properties which have
                                    become Stabilized Properties (and which
                                    are therefore not to be included on the
                                    Applicable L/C Schedule), the Account
                                    Party shall provide the Agent with the
                                    applicable Stabilization Confirmation (if
                                    not previously provided to the Agent)....................6

                             (e)    the Account Party shall provide the Agent
                                    with written confirmation from each of the
                                    Beneficiaries of their respective approval
                                    of the pro forma L/C Schedule............................7

               (f)    Ineligible Project Bonds...............................................7
                      ------------------------

               (g)    Voluntary Withdrawal of Covered Eligible Bonds.........................8
                      ----------------------------------------------

               (h)    Termination of Allocable Share of Maximum Credit Amount................8
                      -------------------------------------------------------

               (i)    Amendment of Applicable L/C Schedule...................................8
                  ----------------------------------------

        SECTION 1.5...............................................Extension of Expiration Date           9


               (a)    Procedures and Conditions for Extension................................9
                      ---------------------------------------

               (b)    No Obligation to Extend...............................................10
                      -----------------------

               (c)    Extension Period......................................................10
                      ----------------

               (d)    Termination of Letter of Credit Facility..............................10
                      ----------------------------------------


ARTICLE 3.   REIMBURSEMENT AND OTHER PAYMENTS...............................................10
           ----------------------------------

        SECTION 1.6..................................Repayment of Draws under Letter of Credit           10
                                                     -----------------------------------------

        SECTION 1.7...............................................................Default Rate           11
                                                                                  ------------

        SECTION 1.8...............................................................Late Charges           11
                                                                                  ------------

        SECTION 1.9...................................................Payment of other Amounts           11
                                                                      ------------------------

        SECTION 1.10...........................................................Lawful Currency           11
                                                                               ---------------
</TABLE>


                                      -iv-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                       <C>                                 <C>        <C>
        SECTION 1.11......................................Payments without Setoff or Deduction           12
                                                          ------------------------------------

        SECTION 1.12.................................................Future Legal Requirements           12
                                                                     -------------------------

        SECTION 1.13...............................................Future Capital Requirements           13
                                                                   ---------------------------

        SECTION 1.14...............................................................Certificate           13
                                                                                   -----------

        SECTION 1.15.........................................Computations of Interest and Fees           14
                                                             ---------------------------------


ARTICLE 4.   LETTER OF CREDIT FACILITY FEES.................................................14
           --------------------------------

        SECTION 1.16......................................................Letter of Credit Fee           14
                                                                          --------------------

        SECTION 1.17.......................................................Unused Facility Fee           14
                                                                           -------------------

        SECTION 1.18....................................................Issuing Bank's Charges           14
                                                                        ----------------------

        SECTION 1.19................................................................Other Fees           15
                                                                                    ----------

        SECTION 1.20.............................................................Fees; General           15
                                                                                 -------------


ARTICLE 5.   CONCERNING LETTER OF CREDIT....................................................15
           -----------------------------

        SECTION 1.21............................................................Responsibility           15
                                                                                --------------

        SECTION 1.22..............................................Honoring of Letter of Credit           15
                                                                  ----------------------------

        SECTION 1.23.....................................................Risk of Account Party           15
                                                                         ---------------------

        SECTION 1.24...............................................Concerning Specified Rights           16
                                                                   ---------------------------

        SECTION 1.25......................................Practices Governing Letter of Credit           16

        SECTION 1.26...................................................Relationship of Parties           16
                                                                       -----------------------

        SECTION 1.27.........................................Transfers of the Letter of Credit           17
                                                             ---------------------------------


ARTICLE 6.   CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT....................17
           -------------------------------------------------------------

        SECTION 1.28................................................Restatement Effective Date           17
                                                                    --------------------------

               (a)    Satisfactory Credit Documents.........................................17
                      -----------------------------

               (b)    L/C Schedule No. 3....................................................17
                      ------------------

               (c)    No Default under Transaction Documents................................17
                      --------------------------------------

               (d)    No Material Change....................................................17
                      ------------------

               (e)    Warranties and Representations Accurate...............................17
                      ---------------------------------------

               (f)    Officer's Certificates................................................18
                      ----------------------
</TABLE>


                                   -v-
<PAGE>


<TABLE>
<CAPTION>


<S>                           <C>                                                             <C>        <C>
               (g)    Preferred Shares Covenants............................................18
                      --------------------------

               (h)    Constituent Documents and Entity Agreements...........................18
                      -------------------------------------------

               (i)    Votes, Consents and Authorizations....................................18
                      ----------------------------------

               (j)    Incumbency Certificate; Authorized Signers............................18
                      ------------------------------------------

               (k)    Corporate Structure...................................................19
                      -------------------

               (l)    Litigation............................................................19
                      ----------

               (m)    Financial Statements..................................................19
                  ------------------------

               (n)    Examination of Books and Assets.......................................19
                      -------------------------------

               (o)    Compliance with Law...................................................19
                      -------------------

               (p)    Legal and other Opinions..............................................19
                      ------------------------

               (q)    Payment of Fees.......................................................20
                      ---------------

               (r)    No Event of Default...................................................20
                      -------------------

               (s)    Additional Documents..................................................20
                      --------------------

               (t)    Further Assurances....................................................20
                      ------------------

        SECTION 1.29..........Addition of Eligible Lease-Up Bonds to Letter of Credit Facility           20

               (a)    Representations True; No Event of Default.............................20
                      -----------------------------------------

               (b)    No Legal Impediment...................................................20
                      -------------------

               (c)    Governmental Regulation...............................................20
                      -----------------------

               (d)    Proceedings and Documents.............................................21
                      -------------------------

               (e)    No Adverse Changes....................................................21
                      ------------------

               (f)    Other Certificates....................................................21
                      ------------------


ARTICLE 7.   AUTHORIZED REPRESENTATIVES.....................................................21
           ----------------------------

        SECTION 1.30........................Continuing Authority of Authorized Representatives           21
                                            --------------------------------------------------


ARTICLE 8.   OBLIGATIONS ABSOLUTE...........................................................21
           ----------------------

        SECTION 1.31......................................................Obligations Absolute           22
                                                                          --------------------

        SECTION 1.32.......No Liability on Account of Issuance or Transfer of Letter of Credit           22

        SECTION 1.33..................................................Other Persons Not Liable           23
                                                                      ------------------------


ARTICLE 9.   WARRANTIES AND REPRESENTATIONS.................................................23
           --------------------------------
</TABLE>


                                      -vi-
<PAGE>


<TABLE>
<CAPTION>


<S>                                              <C>                                          <C>        <C>
        SECTION 1.34.....................................................Transaction Documents           23
                                                                         ---------------------

        SECTION 1.35.......................................................No Event of Default           23
                    --------------------------------------------------------------------------

        SECTION 1.36.....................................................Financial Information           23
                                                                         ---------------------

        SECTION 1.37.............................................................No Violations           24
                                                                                 -------------

        SECTION 1.38.............................................................No Litigation           24

               (a)    Account Party and Charter Mac.........................................24
                      -----------------------------

               (b)    Other Charter Entities................................................24
                      ----------------------

        SECTION 1.39.....................................Franchises, Patents, Copyrights, Etc.           24
                                                         -------------------------------------

        SECTION 1.40...................................................Good Title and No Liens           24
                                                                       -----------------------

        SECTION 1.41............................................................Entity Matters           24

               (a)    Organization..........................................................25
                      ------------

               (b)    Ownership, Subsidiaries and Taxpayer Identification
                      Numbers...............................................................25
                      -------

               (c)    Authorization.........................................................25
                      -------------

        SECTION 1.42.........................................................Valid and Binding           26
                                                                             -----------------

        SECTION 1.43...........................................Deferred Compensation and ERISA           26
                                                               -------------------------------

        SECTION 1.44.....................................No Materially Adverse Contracts, Etc.           26
                                                         -------------------------------------

        SECTION 1.45.............................Compliance With Other Instruments, Laws, Etc.           26
                                                 ---------------------------------------------

        SECTION 1.46................................................................Tax Status           26
                                                                                    ----------

        SECTION 1.47...............................Holding Company and Investment Company Acts           27
                                                   -------------------------------------------

        SECTION 1.48......................................................Certain Transactions           27
                                                                          --------------------

        SECTION 1.49..........................................................Credit Documents           27
                                                                              ----------------

        SECTION 1.50........................................................No Material Change           27
                                                                            ------------------

        SECTION 1.51.......................................................No Broker or Finder           27
                                                                           -------------------

        SECTION 1.52...................................Background Information and Certificates           27
                                                       ---------------------------------------

        SECTION 1.53.............................................................Reaffirmation           27
                                                                                 -------------

        SECTION 1.54..........................................Existing Reimbursement Agreement           28
                                                              --------------------------------


ARTICLE 10.   COVENANTS.....................................................................28
            -----------

        SECTION 1.55.....................................................Affirmative Covenants           28
                                                                         ---------------------

               (a)    Punctual Payment......................................................28
                      ----------------
</TABLE>


                                     -vii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                                         <C>          <C>
               (b)    Maintenance of Office.................................................28
                      ---------------------

               (c)    Records and Accounts..................................................28
                      --------------------

               (d)    Compliance with Transaction Documents.................................28
                      -------------------------------------

               (e)    Bond Documents........................................................29
                      --------------

               (f)    Notices...............................................................29
                      -------

                      (i)    Ineligible Bond Status.........................................29
                             ----------------------

                      (ii)   Defaults.......................................................29
                             --------

                             (a)    The Account Party will promptly notify the
                                    Agent in writing of the occurrence of any
                                    Event of Default known to the Account
                                    Party...................................................29

                             (b)    If any Person shall give any notice to the
                                    Account Party (or to any Subsidiary of the
                                    Account Party, if the Account Party has,
                                    or, if in the exercise of appropriate
                                    diligence as the parent of such
                                    Subsidiary, reasonably should have had,
                                    actual knowledge thereof) or take any
                                    other action involving the Account Party
                                    (or involving any Subsidiary of the
                                    Account Party, if the Account Party has,
                                    or, if, in the exercise of appropriate
                                    diligence as the parent of such
                                    Subsidiary,  reasonably should have had,
                                    actual knowledge thereof) in respect of a
                                    claimed default (whether or not
                                    constituting an event of default) under
                                    any note, evidence of indebtedness,
                                    indenture or other obligation, including,
                                    without limitation, the Insurance
                                    Agreement, the Liquidity Facility or any
                                    other Transaction Document, to which or
                                    with respect to which the Account Party or
                                    any of its Subsidiaries is a party or
                                    obligor, whether as principal or surety,
                                    and such default would permit the holder
                                    of such note or obligation or other
                                    evidence of indebtedness to accelerate the
                                    maturity thereof, which acceleration would
                                    have a material adverse effect on the
                                    Account Party, the Account Party shall
                                    forthwith give written notice thereof to
                                    the Agent
</TABLE>


                                     -viii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                                         <C>          <C>
                                    describing the notice or action and the
                                    nature of the claimed default...........................29

                             (c)    The Account Party will provide the Agent
                                    with copies of any notices required to be
                                    provided by any Charter Entity to MBIA
                                    pursuant to Section 3.4(d) of the
                                    Insurance Agreement.....................................29

                             (d)    The Account Party will promptly notify the
                                    Agent in writing of the occurrence of any
                                    event of default under any of the Bond
                                    Documents relating to a Covered Eligible
                                    Bond....................................................30

                      (iii)  Notification of Claims against Covered Eligible
                             Bonds..........................................................30
                             -----

                      (iv)   Notice of Litigation and Judgments.............................30
                             ----------------------------------

               (g)    Financial Statements and Reports......................................30
                      --------------------------------

                      (i)    Monthly Statements.............................................30
                             ------------------

                      (ii)   Quarterly Statements...........................................30
                             --------------------

                      (iii)  Compliance Certificate.........................................30
                             ----------------------

                      (iv)   Additional Financial Information...............................31
                             --------------------------------

               (h)    Existence; Conduct of Business........................................31
                      ------------------------------

               (i)    Insurance.............................................................31
                      ---------

               (j)    Taxes and Trade Debt..................................................31
                      --------------------

               (k)    Compliance with Laws, Contracts, Licenses, and Permits................31
                      ------------------------------------------------------

               (l)    Indemnification Against Payment of Brokers' Fees......................32
                      ------------------------------------------------

               (m)    Fiscal Year...........................................................32
                      -----------

               (n)    Place for Records; Inspection.........................................32
                      -----------------------------

               (o)    Costs and Expenses....................................................33
                      ------------------

               (p)    Indemnification.......................................................33
                      ---------------

               (q)    Amendments to Credit Documents........................................34
                      ------------------------------

               (r)    Account Party Financial Covenants.....................................34
                      ---------------------------------

                      (i)    Adjusted Tangible Net Worth....................................34
                             ---------------------------

                      (ii)   Fixed Charges..................................................35
                             -------------

                      (iii)  Leverage.......................................................35
                             --------
</TABLE>


                                      -ix-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                         <C>             <C>          <C>
               (s)    Further Assurances....................................................35
                      ------------------

               (t)    Revenue Bond Valuation................................................35
                      ----------------------

        SECTION 1.56........................................................Negative Covenants           35
                                                                            ------------------

               (a)    Liens.................................................................35
                      -----

               (b)    Merger; Sale of Assets................................................35
                      ----------------------

               (c)    Loans and Advances....................................................36
                      ------------------

               (d)    No Material Modifications.............................................36
                      -------------------------

               (f)    Effect of Amendment...................................................36
                      -------------------


ARTICLE 11.   EVENTS OF DEFAULT.............................................................36
            -------------------

        SECTION 1.57.........................................................Events of Default           36
                                                                             -----------------

               (a)    Failure to Pay........................................................36
                      --------------

               (b)    Failure to Perform....................................................36
                      ------------------

               (c)    Breach of Representation or Warranty..................................37
                      ------------------------------------

               (d)    Failure to Pay other Indebtedness.....................................37
                      ---------------------------------

               (e)    Insolvency............................................................37
                      ----------

               (f)    Involuntary Proceedings...............................................37
                      -----------------------

               (g)    Judgments.............................................................37
                      ---------

               (h)    Cancellation of Credit Documents......................................37
                      --------------------------------

               (i)    ERISA.................................................................38
                      -----

               (j)    Indictment............................................................38
                      ----------

               (k)    Material Adverse Change...............................................38
                      -----------------------

               (l)    Change in Control.....................................................38
                      -----------------

               (m)    Regarding Charter Mac.................................................38
                      ---------------------

               (n)    Mortgage Warehousing Facility.........................................38
                      -----------------------------

               (o)    Acquisition Line Facility.............................................38
                      -------------------------

               (p)    Bond Warehousing Facility.............................................38
                      -------------------------

               (q)    Transaction Documents.................................................38
                      ---------------------

               (r)    Failure to Pay Dividends..............................................39
                      ------------------------

        SECTION 1.58..........................................................Certain Remedies           39
                                                                              ----------------

               (a)    Establishment of Funded Reserve.......................................39
                      -------------------------------
</TABLE>


                                      -x-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                          <C>             <C>          <C>
               (b)    Accelerate Debt.......................................................39
                      ---------------

               (c)    Pursue Remedies.......................................................39
                      ---------------

               (d)    Power of Attorney.....................................................39
                      -----------------

        SECTION 1.59...........................................................Written Waivers           39
                                                                               ---------------


ARTICLE 12.   SET-OFF.......................................................................40
            ---------

        SECTION 1.60...................................................................Set-Off           40
                                                                                       -------

        SECTION 1.61...........................................................Right to Freeze           40
                                                                               ---------------

        SECTION 1.62.........................................................Additional Rights           41
                                                                             -----------------


ARTICLE 13.   THE AGENT AND THE PARTICIPANTS................................................41
            --------------------------------

        SECTION 1.63................................Rights, Duties and Immunities of the Agent           41

               (a)    Appointment of Agent..................................................41
                      --------------------

               (b)    Administration of Letter of Credit Facility by Agent..................41
                      ----------------------------------------------------

               (c)    Delegation of Duties..................................................42
                      --------------------

               (d)    Exculpatory Provisions................................................42
                      ----------------------

               (e)    Reliance by Agent.....................................................42
                      -----------------

               (f)    Notice of Event of Default............................................43
                      --------------------------

               (g)    Participants' Credit Decisions........................................43
                      ------------------------------

               (h)    Agent's Reimbursement and Indemnification.............................43
                      -----------------------------------------

               (i)    Agent in its Individual Capacity......................................44
                      --------------------------------

               (j)    Successor Agent.......................................................44
                      ---------------

               (k)    Duties in the Case of Enforcement.....................................44
                      ---------------------------------

        SECTION 1.64......................Respecting Issuance of Letter of Credit and Payments           45

               (a)    Participations in Letter of Credit....................................45
                      ----------------------------------

               (b)    Nature of Obligations of Participants.................................46
                      -------------------------------------

               (c)    Payments to Agent.....................................................47
                      -----------------

               (d)    Distribution of Liquidation Proceeds..................................47
                      ------------------------------------

               (e)    Adjustments...........................................................48
                      -----------

               (f)    Setoff................................................................48
                      ------

               (g)    Distribution by Agent.................................................48
                      ---------------------
</TABLE>


                                      -xi-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                           <C>                           <C>          <C>
               (h)    Delinquent Participant................................................49
                      ----------------------

        SECTION 1.65..............................................Assignment and Participation           50

               (a)    Conditions to Assignment by Participants and Issuing Bank.............50
                      ---------------------------------------------------------

               (b)    Certain Representations and Warranties; Limitations;
                      Covenants.............................................................50
                      ---------

               (c)    Register..............................................................51
                      --------

               (d)    Participations........................................................52
                      --------------

               (e)    Disclosure............................................................52
                      ----------

               (f)    Miscellaneous Assignment Provisions...................................52
                      -----------------------------------

               (g)    No Assignment by Account Party........................................53
                      ------------------------------

        SECTION 1.66....................................................Administrative Matters           53

               (a)    Amendment, Waiver, Consent, Etc.......................................53
                      --------------------------------

               (b)    Deemed Consent or Approval............................................54
                      --------------------------


ARTICLE 14.   GENERAL PROVISIONS............................................................54
            --------------------

        SECTION 1.67...................................................................Notices           54
                                                                                       -------

        SECTION 1.68................................................Parties Bound; Integration           56
                                                                    --------------------------

        SECTION 1.69..........................................Waivers, Extensions and Releases           56
                                                              --------------------------------

        SECTION 1.70...............................................Governing Law; Severability           57

               (a)    Substantial Relationship..............................................57
                      ------------------------

               (b)    Place of Delivery.....................................................57
                      -----------------

               (c)    Governing Law; Sealed Instruments.....................................57
                      ---------------------------------

               (d)    Severability..........................................................57
                      ------------

        SECTION 1.71...................................................Consent to Jurisdiction           57
                                                                       -----------------------

        SECTION 1.72.........................................................JURY TRIAL WAIVER           57
                                                                             -----------------

        SECTION 1.73..................................................................Survival           58
                                                                                      --------

        SECTION 1.74.........................................................Cumulative Rights           58
                                                                             -----------------

        SECTION 1.75.......................Claims Against Agent, Issuing Bank, or Participants           58

               (a)    Account Party Must Notify.............................................58
                      -------------------------

               (b)    Remedies..............................................................59
                      --------

               (c)    Limitations...........................................................59
                      -----------
</TABLE>


                                     -xii-
<PAGE>


<TABLE>
<CAPTION>


<S>                                                                  <C>                                 <C>
        SECTION 1.76..............................................................Counterparts           59
                                                                                  ------------

        SECTION 1.77.......................................................Time Of the Essence           59
                                                                           -------------------

        SECTION 1.78............................................................No Oral Change           59
                                                                                --------------

        SECTION 1.79........................................................Monthly Statements           60
                                                                            ------------------

        SECTION 1.80.................................................Acknowledgment of Joinder           60
                                                                     -------------------------
</TABLE>


                                     -xiii-
<PAGE>


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

Exhibit A      -      Definitions
Exhibit B      -      Form of Covered Eligible Bond Report
Exhibit C      -      Form of L/C Schedule No. 3
Exhibit D      -      Form of L/C Schedule
Exhibit E      -      Letter of Credit (with L/C Schedule No. 2)
Exhibit F      -      Preferred Shares Covenants
Exhibit G      -      Form of Assignment and Acceptance
Exhibit H      -      Form of L/C Schedule Request Certificate
Exhibit I      -      Form of Allocable Share Calculation Certificate
Exhibit J      -      Form of Bond Eligibility Determination Request
Exhibit K      -      Form of Bond Withdrawal Notice
Exhibit L      -      Form of Stabilization Confirmation
Exhibit M      -      Charter Mac Covenants
        Annex M - 1   Existing Permitted Indebtedness
        Annex M - 2   Revenue Bond Valuation Methodology
Schedule 7            - Authorized Representatives
Schedule 9.8(b)(i)    - Account Party Organizational Documents
Schedule 9.8(b)(ii)   - Taxpayer Identification and State Organizational Numbers
Schedule 9.8(b)(iii)  - Outstanding Options, Etc.
Schedule 9.15         - Certain Transactions
Schedule 10.1(i)      - Insurance
Schedule A            - Participants, Commitments, and Commitment Percentages


                                     -xiv-
<PAGE>


                  AMENDED AND RESTATED REIMBURSEMENT AGREEMENT
                  --------------------------------------------


        THIS AMENDED AND RESTATED REIMBURSEMENT  AGREEMENT (this "Agreement") is
made as of March 31,  2003,  by and among  CHARTER MAC EQUITY  ISSUER TRUST (the
"Account Party"), a Delaware statutory trust, FLEET NATIONAL BANK ("Fleet"),  as
Agent (in such  capacity,  the "Agent") for itself,  the Issuing  Bank,  and the
Participants,  and as the Issuing Bank (in such capacity,  the "Issuing  Bank"),
and the Participants.

                                    RECITALS
                                    --------

        The Account Party,  the Agent,  the Issuing Bank, and Fleet, as the sole
Participant  thereunder,  are parties to a certain Reimbursement Agreement dated
as of December 10, 2002 (the "Existing  Reimbursement  Agreement"),  pursuant to
which Fleet, as the Issuing Bank, issued the Letter of Credit and has issued L/C
Schedule No. 2 (superseding  the Initial L/C Schedule).  The Permitted  Transfer
has occurred,  and the beneficiary  under the Letter of Credit  currently is the
Administrative Agent.

        On and subject to the terms and conditions  set forth herein,  Fleet (in
its capacity as Agent, Issuing Bank, and sole Participant) and the Account Party
desire to amend the Existing Reimbursement Agreement to, among other things, add
Citicorp USA, Inc., as a Participant,  and to restate certain  provisions of the
Existing Reimbursement Agreement.

        This  Agreement  is not intended by the parties to  constitute  either a
novation or a discharge or  satisfaction  of the  indebtedness  and  obligations
under the Existing  Reimbursement  Agreement (which indebtedness and obligations
shall  remain  outstanding  hereunder  on the terms and  conditions  hereinafter
provided).


        FOR GOOD AND  VALUABLE  CONSIDERATION,  the receipt and  sufficiency  of
which are hereby acknowledged, the parties agree as follows:

                                   ARTICLE 1.

                        DEFINITIONS AND GENERAL MATTERS.
                        --------------------------------

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

        SECTION 1.2      General.  Unless  otherwise  specified  in  the  Credit
Documents:  (a) references in a Credit  Document to "Sections,"  "Exhibits," and
"Schedules"  are to  sections,  exhibits,  and  schedules  in and to such Credit
Document,  (b) references in a Credit Document to


<PAGE>


any  document,   instrument,  or  agreement  (i)  shall  include  all  exhibits,
schedules,  and other  attachments  thereto,  (ii) shall include all  documents,
instruments,  or agreements  issued or executed in replacement  thereof,  to the
extent  permitted  hereby,  and (iii) shall mean such document,  instrument,  or
agreement,  or  replacement or predecessor  thereto,  as amended,  supplemented,
restated, or otherwise modified from time to time to the extent permitted hereby
and in effect at any given  time,  (c)  wherever  from the  context  it  appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine,  feminine,  or neuter
gender shall include the  masculine,  the feminine,  and the neuter,  (d) unless
explicitly  set forth to the  contrary,  a reference to a  "Subsidiary"  means a
Subsidiary  of the  Account  Party or a  Subsidiary  of such  Subsidiary,  and a
reference  to an  "Affiliate"  means a reference  to an Affiliate of the Account
Party, (e) titles and captions of Articles,  Sections,  subsections, and clauses
in any Credit Document are for  convenience  only, and neither limit nor amplify
the provisions of this Agreement, (f) unless otherwise indicated, all references
to time are  references to Boston,  Massachusetts,  time,  (g) all references to
money  (including  the symbol "$") are to lawful  currency of the United States,
(h) references to "including" mean including  without limiting the generality of
any  description  preceding  that  word,  (i)  the  rule  of  construction  that
references to general items that follow references to specific items are limited
to the same type or character of those  specific  items is not applicable in the
Credit  Documents,  (j)  references to any Person  include that Person's  heirs,
personal  representatives,   successors,   trustees,  receivers,  and  permitted
assigns,  and (k) references to any Legal Requirement include every amendment or
supplement  to it,  rule and  regulation  adopted  under it,  and  successor  or
replacement for it.

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

                                   ARTICLE 2.

          AGREEMENT TO ISSUE LETTER OF CREDIT; LETTER OF CREDIT AND L/C
                                   SCHEDULES.
          -------------------------------------------------------------


        SECTION  1.4     Commitment to Issue Letter of Credit and L/C Schedules;
Procedures.

               (a)  Establishment of Letter of Credit Facility.  Pursuant to the
Existing  Reimbursement  Agreement,  at the  request of the Account  Party,  the
Issuing Bank  established  this letter of credit  facility,  to be continued and
maintained as provided in this  Agreement  (the "Letter of Credit  Facility") in
order to  provide  credit  support  from  time to time in  respect  of  Eligible
Lease-Up Bonds, so that such Eligible Lease-Up Bonds,  which otherwise would not
qualify as  Seasoned  Bonds  under the  Insurance  Agreement,  shall  constitute
Seasoned Bonds


                                      -2-
<PAGE>


thereunder  (after giving effect to the credit support provided to such Eligible
Lease-Up  Bond by the  Letter  of  Credit  Facility).  Subject  to the terms and
conditions of this Agreement and, as applicable, the Letter of Credit:

                    (i) (x) on the Initial  Issuance  Date (A) the Issuing  Bank
        issued the Letter of Credit and the Initial L/C Schedule in favor of the
        Owner  Trust and the  Origination  Trust  (each,  a  "Beneficiary,"  and
        collectively,  the  "Beneficiaries"),  as their  interests then appeared
        with respect to each then Covered  Eligible  Bond, and (B) the Permitted
        L/C Transfer was consummated,  and (y) on each Quarterly L/C Re-Schedule
        Date,  the Issuing Bank shall issue a replacement  L/C Schedule in favor
        of the Beneficiaries, as their interests may appear with respect to each
        Covered Eligible Bond (L/C Schedule No. 2 having been issued on December
        31, 2002, and L/C Schedule No. 3 to be issued on the Agreement Date).

                    (ii)  (x)  prior  to  the  Permitted   L/C  Transfer,   each
        Beneficiary  was  entitled  to  draw  under  the  Letter  of  Credit  in
        accordance with the terms thereof upon, from and after the occurrence of
        a Drawing Event occurring on or prior to the Expiration Date relating to
        such  Beneficiary's  Covered  Eligible Bonds, and (y) from and after the
        Permitted L/C Transfer, only the Administrative Agent may draw under the
        Letter of Credit in accordance  with the terms  thereof  upon,  from and
        after the  occurrence  of a Drawing  Event  occurring on or prior to the
        Expiration  Date,  or on a date that is no more  than five (5)  Business
        Days before the Expiration  Date,  with respect to any Covered  Eligible
        Bonds.

                    (iii) the Issuing  Bank agrees to pay from its own funds the
        amount of any conforming  Drawing made in accordance  with the terms and
        conditions  of the  Letter of Credit,  and  regardless  of  whether  any
        Participant  fails to reimburse the Issuing Bank for such  Participant's
        pro rata share  thereof,  or the Agent has been  granted any  Collateral
        therefor,

                    (iv) the Account  Party agrees to reimburse the Issuing Bank
        for the amount of any  Drawings  made  under the Letter of Credit,  with
        interest thereon as provided for herein, and to pay the Issuing Bank and
        the Agent the fees provided for herein,

                    (v) the  Participants  agree  to pay to the  Agent,  for the
        benefit of the Issuing Bank, their respective Commitment  Percentages of
        all Unpaid Drawings, and

                    (vi) the proceeds of all Drawings  shall be paid directly by
        the Issuing  Bank to the  Administrative  Agent in  accordance  with the
        Funding Instructions,  to be held and administered by the Administrative
        Agent in accordance with the terms and conditions of the  Administration
        and Custody Agreement.


                                      -3-
<PAGE>


               (b)   Procedures  for  Issuance  of  Letter  of  Credit  and  L/C
Schedules.  On the Agreement Date and each subsequent  Quarterly L/C Re-Schedule
Date,  the Issuing  Bank shall (i) issue to the  Administrative  Agent,  for the
account of the Account Party, a replacement L/C Schedule,  which shall thereupon
become the Applicable L/C Schedule,  and (ii) provide the  Beneficiaries  with a
copy of the  replacement  L/C Schedule.  The Letter of Credit shall be deemed to
have  been  automatically  amended  upon the  issuance  of each  Applicable  L/C
Schedule and on any date that an Applicable  L/C Schedule is deemed to have been
amended as provided for in this  Agreement.  Each  Applicable L/C Schedule shall
reflect (i) the  recalculation  of the  Allocable  Share of the  Maximum  Credit
Amount of each Covered Eligible Bond under the immediately  preceding Applicable
L/C Schedule which remains a Covered Eligible Bond, (ii) the elimination of each
Covered Eligible Bond which became a Stabilized  Property or in respect of which
a Stabilization Failure Drawing was made during the period between Quarterly L/C
Re-Schedule  Dates (or between the Initial Issuance Date and the first Quarterly
L/C Re-Schedule Date, as the case may be), and (iii) the addition (which may not
occur  during any  Extension  Period),  withdrawal,  or  deletion of any Covered
Eligible Bonds pursuant to Sections 2.1(e), 2.1(f) and 2.1(g) hereof.

               (c) Drawings under the Letter of Credit.  Provided that a Drawing
Event has occurred and is continuing, Drawings under the Letter of Credit may be
made following  presentation to the Issuing Bank, at the Drawing  Office,  which
presentation may be made by facsimile transmission, in accordance with the terms
and  conditions  of the  Letter of  Credit:  (x) from time to time  prior to the
Expiration  Date, of a Stabilization  Failure Draw Notice,  or (y) on a Business
Day which is not more than five (5) Business Days prior to the Expiration  Date,
of an  Expiry  Draw  Notice,  and (z) in the case of all  Drawings,  such  other
documents as may be required to be presented pursuant to the terms of the Letter
of Credit.  Drawings shall be disbursed by the Issuing Bank (solely from its own
funds) in  accordance  with the Funding  Instructions,  or  dishonored  (if such
Drawing does not conform with the  requirements of the Letter of Credit) by 4:00
P.M.  (Boston  time) on the  third  (3rd)  Business  Day after  presentation  of
purportedly  conforming  documents.  For the purposes of the preceding  sentence
(and not for the purpose of determining whether a Drawing was timely presented),
presentation  of a Drawing  Notice  made after 12:00 Noon  (Boston  time) on any
Business  Day shall be deemed made on the next  Business  Day. The amount of any
Drawing under the Letter of Credit shall be equal to, in the case of:

                    (i) A Stabilization  Failure Drawing, an amount equal to the
        Allocable  Share of the Maximum  Credit Amount for the Covered  Eligible
        Bond  as  to  which  the  subject  Stabilization  Failure  occurred  and
        respecting  which  the  Issuing  Bank has  received  such  Stabilization
        Failure Draw Notice.

                    (ii) An Expiry  Drawing,  an amount  equal to the  aggregate
        Allocable  Share of the Maximum  Credit Amount of each Covered  Eligible
        Bond that is secured by a Property which is not a Stabilized Property as
        of such time.


                                      -4-
<PAGE>


               (d) Limitations. Notwithstanding any provision of this Agreement,
the sum of (i) the aggregate amount of the Allocable Share of the Maximum Credit
Amount of each Covered  Eligible Bond under the  Applicable  L/C Schedule,  plus
(ii) the  amount of any Unpaid  Drawings,  shall at no time  exceed the  Maximum
Credit Amount.

               (e) Allocable  Share of the Maximum  Credit  Amount;  Addition of
Eligible  Lease-Up  Bonds to Letter of Credit  Facility;  Deletion  of  Eligible
Lease-Up Bonds from Letter of Credit Facility.

                    (i) Subject to the terms and conditions  hereof,  commencing
        with the Agreement  Date,  and on each  Quarterly L/C  Re-Schedule  Date
        occurring  thereafter prior to the Expiration Date, the Agent will issue
        a replacement L/C Schedule (which,  upon such issuance,  will become the
        Applicable L/C Schedule) in favor of the Administrative Agent, a copy of
        which shall be furnished to the Account Party and the Beneficiaries,  to
        reflect  (x) the  recalculation  of the  Allocable  Share of the Maximum
        Credit Amount of each Covered Eligible Bond which is to remain a Covered
        Eligible Bond under the Applicable L/C Schedule, and (y) the addition of
        Covered  Eligible  Bonds  (which  shall  not  be  permitted  during  any
        Extension  Period),  and (z)  the  deletion  or  withdrawal  of  Covered
        Eligible Bonds.

                    (ii) No more than thirty (30) days, and no less than fifteen
        (15) days,  prior to each  Quarterly L/C  Re-Schedule  Date, the Account
        Party  shall  submit to the Agent,  for its review and  approval,  a pro
        forma  Applicable  L/C Schedule to be issued on the next  Quarterly  L/C
        Re-Schedule  Date,  together  with  a  certification  by  an  Authorized
        Representative  of the Account Party in the form of Exhibit H hereto (an
        "L/C Schedule Request  Certificate") as to the following matters and any
        supporting documentation referred to below:

                               (a) with respect to Covered  Eligible Bonds which
                         were  included  in  the  most  recent   Applicable  L/C
                         Schedule and which are to remain Covered Eligible Bonds
                         under the  Applicable  L/C Schedule,  the Account Party
                         shall provide the calculation of the Allocable Share of
                         the  Maximum   Credit  Amount  for  each  such  Covered
                         Eligible  Bond  based  upon  the  applicable  Bond  and
                         Property   information  included  in  the  most  recent
                         Servicer's  Report  furnished to the Agent  pursuant to
                         Section 10.1(g)(i) hereof, with such calculations to be
                         set forth in an Allocable Share Calculation Certificate
                         in the form of Exhibit I.

                               (b) the Account Party shall specifically identify
                         in a Bond Withdrawal  Notice any Covered Eligible Bonds
                         which were included in the most recent  Applicable  L/C
                         Schedule   which  the  Account  Party  has  elected  to
                         withdraw from the Letter of Credit


                                      -5-
<PAGE>


                         Facility (and which are, therefore, not included in the
                         pro forma Applicable L/C Schedule).

                               (c) with  respect to  additional  Bonds which the
                         Account  Party is  requesting to be included as Covered
                         Eligible  Bonds (with no such request  being  permitted
                         during any Extension  Period),  the Account Party shall
                         furnish the Agent with a Bond Eligibility Determination
                         Request in the form of Exhibit J, pursuant to which:

                                     (i) the Account  Party shall  certify  that
                               each such Bond is an Eligible Lease-Up Bond as of
                               the  date  of  the  request  for  inclusion  as a
                               Covered  Eligible  Bond  and  that it  reasonably
                               expects such Bond to be an Eligible Lease-Up Bond
                               as of the subject Quarterly L/C Re-Schedule Date;

                                     (ii) the Account  Party  shall  provide the
                               Agent with the Eligible  Lease-Up Bond Supporting
                               Documentation  relating to such Eligible Lease-Up
                               Bond,   including,    without   limitation,   the
                               Projected  Stabilization  Date of  such  Eligible
                               Lease-Up Bond;

                                     (iii) the Account  Party shall certify that
                               no  Event  of  Default   has   occurred   and  is
                               continuing at the time of such request;

                                     (iv) the Account  Party shall certify that,
                               after giving effect to the Allocable Share of the
                               Maximum  Credit  Amount which would be attributed
                               to such Bond, the sum of (x) the aggregate amount
                               of the  Allocable  Share  of the  Maximum  Credit
                               Amount  for  all  Covered  Eligible  Bonds  to be
                               covered by the subject L/C Schedule, plus (y) the
                               amount  of any then  Unpaid  Drawings,  would not
                               exceed the Maximum Credit Amount; and

                                     (v) the Account  Party shall  certify  that
                               there has not occurred any Material Change to the
                               Transaction Documents.

                               (d) with respect to Covered  Eligible  Bonds that
                         are secured by Properties which have become  Stabilized
                         Properties  (and which are therefore not to be included
                         on the  Applicable  L/C  Schedule),  the Account  Party
                         shall   provide   the   Agent   with   the   applicable
                         Stabilization  Confirmation (if not previously provided
                         to the Agent).


                                      -6-
<PAGE>


                               (e) the  Account  Party  shall  provide the Agent
                         with   written    confirmation   from   each   of   the
                         Beneficiaries of their  respective  approval of the pro
                         forma L/C Schedule.

                    (iii)  No less  than  two (2)  Business  Days  prior  to the
Quarterly L/C  Re-Schedule  Date, the Agent shall notify the Account Party,  the
Administrative  Agent, and the  Beneficiaries  that either (x) the Agent and the
Issuing  Bank  have  approved  the pro forma L/C  Schedule  (including,  without
limitation, the addition of any requested new Eligible Lease-Up Bonds as Covered
Eligible Bonds), in which event the Issuing Bank shall issue the L/C Schedule on
the subject  Quarterly  L/C  Re-Schedule  Date in the form of such pro forma L/C
Schedule,  or (y) that the Agent and the Issuing  Bank have not  approved all or
any portion of the pro forma L/C Schedule, in which event the Issuing Bank shall
issue  an L/C  Schedule  (to be the  Applicable  L/C  Schedule)  on the  subject
Quarterly L/C Re-Schedule Date covering only such Covered  Eligible Bonds,  with
such Allocable Shares of the Maximum Credit Amount, as the Agent and the Issuing
Bank shall have determined not to be objectionable. Each Applicable L/C Schedule
shall upon  issuance be sent by  telecopier  to the  Beneficiaries,  the Account
Party,  and  the  Administrative  Agent  with  the  original  to be  sent to the
Administrative Agent by one of the other methods of giving notices under Section
14.1.

               (f)  Ineligible  Project  Bonds.   In the event that any  Covered
Eligible  Bond becomes an  Ineligible  Project  Bond,  the Account Party and the
applicable Owner  Beneficiary shall cause any one (1) of the following events to
occur  within  seven (7)  Business  Days after such Bond  becomes an  Ineligible
Project Bond:

                    (i)  Eliminate  such   Ineligible   Project  Bond  from  the
        Applicable L/C Schedule,  by giving the Agent a Bond  Withdrawal  Notice
        covering  such  Ineligible  Project  Bond.  Upon the  delivery of a Bond
        Withdrawal  Notice,  the Applicable L/C Schedule shall  automatically be
        deemed amended to eliminate the Bonds identified therein for withdrawal;
        or

                    (ii) Unless  such event has  occurred  during any  Extension
        Period, in which case the option set forth in this clause (ii) shall not
        be  available,  substitute  on the  Applicable  L/C Schedule an Eligible
        Lease-Up Bond for the  Ineligible  Project Bond;  provided,  however (x)
        after giving effect to the removal of the  Ineligible  Project Bond from
        the Letter of Credit Facility and the  substitution of another  Eligible
        Lease-Up Bond therefor, the sum of the aggregate amount of the Allocable
        Share of the Maximum  Credit Amount of all Covered  Eligible Bonds which
        are subject to the Letter of Credit  Facility,  plus any Unpaid Drawings
        shall not exceed the Maximum Credit Amount,  (y) the Account Party shall
        deliver a Bond Withdrawal  Notice  covering the Ineligible  Project Bond
        being  withdrawn  and a  Bond  Eligibility  Determination  Request  with
        respect to the Eligible  Lease-Up Bond  proposed for such  substitution,
        and (z) the Account Party and the  applicable  Owner  Beneficiary  shall
        execute and deliver to the Agent such documentation


                                      -7-
<PAGE>


        as the Agent shall  reasonably  require to reflect the withdrawal of the
        Ineligible  Project  Bond from the  Letter of  Credit  Facility  and the
        replacement  of  same  with a  substitute  Eligible  Lease-Up  Bond  and
        otherwise satisfy the applicable  requirements of Section  2.1(e)(ii)(c)
        with respect to such requested  substitute  Eligible Lease-Up Bond. Upon
        the  satisfaction  of  the  applicable   requirements  of  this  Section
        2.1(f)(ii) and Section 2.1(e)(ii)(c),  the Applicable L/C Schedule shall
        automatically  be deemed  amended to  eliminate  the subject  Ineligible
        Project  Bond  and to add the  substitute  Eligible  Lease-Up  Bond as a
        Covered Eligible Bond; or

                    (iii)  Deposit  into the Cash  Collateral  Account an amount
        equal to the Allocable Share of the Maximum Credit Amount of the subject
        Ineligible  Project Bond, with such funds at all times constituting cash
        Collateral to the Agent and the Issuing Bank to secure all  Obligations,
        and the  Account  Party  shall  execute  and deliver to the Agent a Cash
        Collateral  Pledge  Agreement  and such other and  further  instruments,
        documents,  and  agreements  as the  Agent  may  reasonably  require  in
        connection therewith. Upon the completion of the foregoing, as confirmed
        by the Agent in writing,  such Ineligible Project Bond may continue as a
        Covered  Eligible Bond for up to an additional  one hundred eighty (180)
        days or until the Expiration Date, if earlier. The Agent shall return to
        the Account Party any Collateral  held by it hereunder in respect of any
        Bond in respect  of which no  Drawing  has been made and as to which (x)
        the Account  Party  elects to  exercise  either of the  options,  to the
        Agent's  satisfaction,  set forth in clauses  (i) and (ii)  (other  than
        during any Extension  Period),  above, or (y) the Property securing such
        Bond has become a Stabilized Property.

               (g) Voluntary  Withdrawal of Covered Eligible Bonds. From time to
time prior to the Expiration  Date, the Account Party may  voluntarily  withdraw
Covered  Eligible  Bonds from the  Applicable L/C Schedule by giving the Agent a
Bond Withdrawal Notice covering the Bonds to be so withdrawn.  Upon the delivery
of a Bond  Withdrawal  Notice,  the  withdrawn  Bonds shall no longer be Covered
Eligible Bonds,  and the Applicable L/C Schedule shall be  automatically  deemed
amended to eliminate such Bonds.

               (h) Termination of Allocable Share of Maximum Credit Amount. From
and after the date on which the Agent receives a  Stabilization  Confirmation as
to a Property which secures a Covered Eligible Bond, or a Bond Withdrawal Notice
with  respect  to a Covered  Eligible  Bond  (including  one which has become an
Ineligible  Project Bond),  and without further notice to the Account Party, the
Administrative  Agent, either Beneficiary,  or any other Person, no Person shall
have any right to request a Drawing in respect of such Bond, and such Bond shall
be deleted from the  Applicable  L/C  Schedule  and released  from the Letter of
Credit  Facility  without  further  action by the Agent,  the Issuing Bank,  the
Account  Party,  the  Administrative  Agent,  or  either  Beneficiary,  and  the
Applicable L/C Schedule shall be deemed automatically amended as of such date to
eliminate such Bond as a Covered Eligible Bond.

               (i)  Amendment of Applicable  L/C  Schedule.  If and whenever any
Applicable  L/C  Schedule  is deemed to have been  amended  in  accordance  with
applicable


                                      -8-
<PAGE>


provisions of this  Agreement,  such  amendment to such  Applicable L/C Schedule
shall be  effective  immediately  and  automatically  in  accordance  with  such
applicable  provisions,  and the Issuing  Bank shall  promptly  (i) issue to the
Administrative  Agent,  for the  account of the  Account  Party,  an amended and
restated replacement Applicable L/C Schedule to reflect each such amendment, and
(ii)  provide  the  Beneficiaries  with  a  copy  of the  amended  and  restated
replacement Applicable L/C Schedule. Any delay or failure of the Issuing Bank to
issue such amended and restated  replacement  Applicable  L/C Schedule shall not
negate the effectiveness of the subject amendment.

        SECTION 1.5      Extension of Expiration Date.

               (a) Procedures  and  Conditions for Extension.  If on the initial
Expiration Date there are any Covered  Eligible Bonds then on the Applicable L/C
Schedule,  the Expiration Date may be extended to no later than December 9, 2004
(with the period from the initial  Expiration  Date to the  extended  Expiration
Date being referred to herein as, the "Extension  Period"):  either (x) upon the
written notification from the Agent to the Account Party, the Beneficiaries, and
the  Administrative  Agent not less than thirty (30)  Business Days prior to the
Expiration Date that the Issuing Bank has elected to extend the Expiration Date,
and stating the new Expiration  Date, or (y) upon receipt of the written request
of the Account Party given to the Agent not less than  forty-five (45) days, nor
more than one hundred twenty (120) days, prior to the Expiration Date, the Agent
and the Issuing Bank, in their sole and absolute discretion, may elect to extend
the Expiration Date (as relating to Covered Eligible Bonds on the Applicable L/C
Schedule as of the initial Expiration Date), and provide written notification to
the Account Party, the Beneficiaries,  and the Administrative  Agent stating the
new  Expiration  Date not more than thirty (30)  Business Days after the Agent's
receipt of the Account Party's extension request. With respect to each of clause
(x) and (y),  above,  the Account  Party hereby  covenants and agrees as follows
(other than to the extent  waived by the Issuing Bank,  in its  discretion,  and
whether or not such waiver has been  requested by the Account Party or any other
Person):

                    (i)  The  Account  Party  shall  pay to the  Agent,  for the
        account of the Issuing  Bank (for the benefit of the  Participants),  on
        the commencement date of the Extension Period, an extension fee equal to
        0.375% of the  Maximum  Credit  Amount (or any  portion  thereof)  to be
        extended, as determined solely by the Agent;

                    (ii) The  Account  Party  shall  execute  and  deliver  such
        documentation  as  the  Agent  may  reasonably   require  in  connection
        therewith, all of which shall be in form and substance acceptable to the
        Agent and the Issuing Bank; and

                    (iii) (x) At the time of any such written  extension request
        from the  Account  Party to the  Agent,  there  shall  exist no Event of
        Default hereunder or under any of the other Credit Documents, and (y) on
        the first day of the Extension Period there shall exist no uncured Event
        of Default.


                                      -9-
<PAGE>


               (b) No Obligation to Extend. The Account Party hereby agrees that
the Issuing Bank has no commitment or obligation to extend the  Expiration  Date
beyond December 9, 2003,  unless each of the conditions for the Extension Period
set forth in Section 2.2 above shall have been  satisfied or waived by the Agent
and the Issuing Bank with respect to such Extension  Period. No extension (other
than an extension at the Issuing Bank's election pursuant to Section  2.2(a)(x))
shall be effective  unless and until the Agent has  confirmed,  in writing,  the
Account  Party's  compliance  or waiver  with all  conditions  precedent  to the
extension of the Expiration Date.

               (c) Extension  Period.  During the Extension  Period,  if any, no
Bonds which were not Covered  Eligible Bonds on the initial  Expiration Date may
become  such,  including  in the event that a Covered  Eligible  Bond becomes an
Ineligible Project Bond.

               (d)  Termination  of Letter of Credit  Facility.  If the  Issuing
Bank's Credit  Rating shall drop to lower than A by S&P or A2 by Moody's,  then,
upon at least three (3)  Business  Days notice to the Agent and the Issuing Bank
(which notice the Agent shall  promptly  transmit to each of the  Participants),
with the written consent of the Beneficiaries and the Administrative  Agent, the
Account Party shall have the right to terminate  the Letter of Credit  Facility,
in its  entirety,  without  premium or  penalty,  in which event (i) such notice
shall  have the  effect  of a Bond  Withdrawal  Notice  as to all  then  Covered
Eligible Bonds,  (ii) the Account Party shall  immediately pay to the Agent, for
the  account  of the  Issuing  Bank  (for the  further  ratable  benefit  of the
Participants,  as the case may be),  all  outstanding  Unpaid  Drawings  and all
accrued  and  unpaid  interest  on all  Obligations,  and all other  outstanding
Obligations,  including  accrued fees up to such date  determined on a prorated,
per diem  basis,  (iii) the  Maximum  Credit  Amount and all  Commitments  shall
thereupon be reduced to zero, and the Letter of Credit Facility shall terminate,
and (iv) the Issuing Bank and the Account Party shall reconcile  (either in cash
from the Issuing Bank, or as a credit against  amounts due by the Account Party,
as the case may be) the Letter of Credit Fee over the period from the  beginning
of  the  quarter  in  which  such  termination  occurs  and  the  date  of  such
termination, determined on a per diem basis.

                                   ARTICLE 3.

                        REIMBURSEMENT AND OTHER PAYMENTS.
                        ---------------------------------

        SECTION 1.6      Repayment of Draws under Letter of Credit.  The Account
Party hereby agrees to pay to the Agent, for the account of the Issuing Bank, on
the date which is two (2) Business  Days after any  Drawing,  a sum equal to the
amount of such Unpaid Drawing,  together with interest on such sum from the time
paid by the  Issuing  Bank at a per annum rate equal to the Prime  Rate.  If the
amount of an Unpaid Drawing is not reimbursed by 12:00 noon (Boston time) on the
second Business Day following such Drawing, interest shall accrue on such amount
from such time until paid at the Default Rate.  The  obligations  of the Account
Party under this  Section 3.1 to  reimburse  the  Issuing  Bank with  respect to
Unpaid Drawings  (including,  in each case,  interest thereon) shall be absolute
and  unconditional  under  any and all  circumstances  and  irrespective  of any
setoff,  counterclaim  or defense to payment


                                      -10-
<PAGE>


which the  Account  Party may have or have had  against  the Agent,  the Issuing
Bank, or any Participant,  including, without limitation, any defense based upon
the failure of any Drawing under the Letter of Credit to conform to the terms of
the Letter of Credit or any nonapplication or misapplication by a Beneficiary of
the  proceeds  of  such  Drawing;  provided  that  the  Issuing  Bank  shall  be
responsible  (subject to the  limitations set forth elsewhere in this Agreement)
for its gross negligence or willful misconduct (as finally determined by a court
of competent  jurisdiction) in connection with Drawings made under the Letter of
Credit.

        SECTION 1.7      Default  Rate.  If the Account Party fails to make when
due any payment  required  hereunder or any Credit  Document,  the Account Party
shall pay interest on such amounts at a per annum rate equal to the Default Rate
until such amounts have been paid in full.

        SECTION 1.8      Late Charges. The Account Party shall pay, upon billing
therefor,  a "Late  Charge"  equal to five  percent  (5%) of the  amount  of any
Obligations  which are not paid  within  ten (10) days of the due date  thereof.
Late  Charges are:  (a) payable in addition  to, and not in  limitation  of, the
Default Rate, (b) intended to compensate Agent for administrative and processing
costs incident to late payments, (c) not interest, and (d) not subject to refund
or rebate or credit against any other amount due.

        SECTION 1.9      Payment of other  Amounts.  The Account  Party  further
agrees to pay the following:

               (a) On demand,  all  expenses of the  Issuing  Bank and the Agent
(including  reasonable  attorneys'  fees  and  expenses  and  disbursements)  in
connection with the negotiation,  preparation,  execution,  and delivery of this
Agreement, the Letter of Credit, and of any other document and agreement between
the Account Party and the Issuing Bank or the Account  Party,  the Agent and the
Participants; and

               (b)  Any  and  all  reasonable  attorneys'  fees,   out-of-pocket
expenses and other costs  hereafter  incurred by the Issuing Bank,  the Agent or
any  Participant,  which fees,  expenses  and costs are  directly or  indirectly
related to or in respect of the Issuing Bank's, the Agent's or the Participant's
efforts to  protect,  collect  and/or  enforce any of their  respective  rights,
remedies,  powers,  and privileges  against or with respect to the Account Party
(whether  or not suit is  instituted  against  the  Account  Party)  and/or with
respect  to any  security  held by any of them,  and/or in  connection  with any
liability  asserted,  claimed,  and/or threatened  against the Issuing Bank, the
Agent, or any Participant on account of or in respect of the Letter of Credit.

        SECTION 1.10     Lawful  Currency.  All payments by the Account Party to
the Issuing Bank or the Agent  hereunder shall be made in lawful currency of the
United States and in  immediately  available  funds at the Agent's office at 100
Federal Street, Boston, Massachusetts.  Whenever any payment hereunder is due on
a day other than a day on which the


                                      -11-
<PAGE>


Agent is open to the public to transact  banking business (other than a Saturday
or Sunday), such payment may be made on the next succeeding Business Day.

        SECTION 1.11     Payments  without Setoff or Deduction.  All payments by
the Account Party hereunder and under any of the other Credit Documents shall be
made without setoff or counterclaim and free and clear of and without  deduction
for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory  loans,  restrictions  or  conditions  of any nature now or hereafter
imposed or levied by any  jurisdiction or any political  subdivision  thereof or
taxing or other  authority  therein unless the Account Party is compelled by law
to make such deduction or  withholding.  If any such  obligation is imposed upon
the Account  Party with  respect to any amount  payable by it hereunder or under
any of the other  Credit  Documents,  the Account  Party will pay to the Issuing
Bank or the Agent (as Agent for the account of the Participants) or (as the case
may be) the Agent for its own account, as applicable,  on the date on which such
amount is due and payable  hereunder or under such other Credit  Document,  such
additional  amount  as shall be  necessary  to  enable  the  Issuing  Bank,  the
Participants or the Agent to receive the same amount which the Issuing Bank, the
Participants  or the  Agent  would  have  received  on such due date had no such
obligation  been imposed upon the Account Party.  The Account Party will deliver
promptly  to the Agent  certificates  or other valid  vouchers  for all taxes or
other charges deducted from or paid with respect to payments made by the Account
Party hereunder or under such other Credit Document.

        SECTION  1.12    Future Legal Requirements.  If any  present  or  future
applicable Legal Requirement shall:

               (a) subject the Issuing Bank, any Participant or the Agent to any
tax, levy,  impost,  duty,  charge,  fee, deduction or withholding of any nature
with respect to this  Agreement  (other than taxes based upon or measured by the
income or profits of the Issuing Bank, such Participant or the Agent); or

               (b) materially  change the basis of taxation  (except for changes
in taxes on income or profits) of payments to the Issuing Bank, the Agent or any
Participant  of any amounts  payable to such person under this  Agreement or the
other Credit Documents; or

               (c) impose or  increase or render  applicable  (other than to the
extent  specifically  provided  for  elsewhere  in this  Agreement)  any special
deposit,  reserve,  assessment,  liquidity,  capital  adequacy or other  similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or  commitments  of an office of
the Issuing Bank or any Participant; or

               (d) impose on the Issuing Bank, any  Participant or the Agent any
other  conditions  or  requirements  with respect to this  Agreement,  the other
Credit Documents; or

               (e)  impose  on the  Issuing  Bank or any  Participant  any other
conditions or requirements relating to any Letter of Credit


                                      -12-
<PAGE>


        and the result of any of the foregoing is

                    (i)  to  increase  the  cost  to  the  Issuing  Bank  or any
        Participant  of  making,  funding,  issuing,   renewing,   extending  or
        maintaining or participating in the Letter of Credit, as applicable; or

                    (ii) to reduce the amounts payable to the Issuing Bank, such
        Participant,  or the Agent hereunder on account of the Letter of Credit;
        or

                    (iii) to require the Issuing Bank,  such  Participant or the
        Agent to make any payment or to forego any interest or other sum payable
        hereunder, the amount of which payment or foregone interest or other sum
        is calculated by reference to the gross amount of any sum  receivable or
        deemed received by the Issuing Bank, such  Participant or the Agent from
        the Account Party hereunder,

        then,  and in each such case,  the Account  Party will,  within ten (10)
        days of the written demand made by the Issuing Bank or the Agent setting
        forth  in  reasonable   detail  the  effect  of  the  applicable   Legal
        Requirement,  at any  time  and  from  time to time  and as often as the
        occasion  therefor may arise,  pay to the Issuing Bank or the Agent (for
        the benefit of the subject  Participant,  if applicable) such additional
        amounts as will be  sufficient  to  compensate  the Issuing  Bank,  such
        Participant or the Agent for such additional cost, reduction, payment or
        foregone interest or other sum.

        SECTION 1.13     Future Capital  Requirements.  If any present or future
applicable  Legal  Requirement  (whether  or not having the force of law) or the
interpretation  thereof by a court or  governmental  authority with  appropriate
jurisdiction affects the amount of capital required or expected to be maintained
by the Issuing Bank, any Participant or the Agent or any corporation controlling
the Issuing  Bank,  such  Participant  or the Agent and the Issuing  Bank,  such
Participant or the Agent  determines  that the amount of capital  required to be
maintained by it or such corporation is increased by or based upon the existence
of this Agreement and the other Credit  Documents,  then the Issuing Bank or the
Agent may notify the Account Party of such fact, and the Account Party shall pay
to the Issuing Bank or the Agent (for the benefit of the subject Participant, if
applicable) from time to time within ten (10) days of the written demand made by
the Issuing Bank or the Agent setting  forth in reasonable  detail the effect of
the applicable Legal Requirement,  as an additional fee payable hereunder,  such
amount as the Issuing Bank,  such  Participant  or the Agent shall  determine in
good faith and  certify in a notice to the  Account  Party to be an amount  that
will  adequately  compensate the Issuing Bank, such  Participant,  the Agent, or
such  corporation  in light of these  circumstances  for its increased  costs of
maintaining such capital.

        SECTION 1.14     Certificate. A certificate setting forth any additional
amounts payable  pursuant to Sections 3.7 or 3.8 hereof and a brief  explanation
of such amounts which


                                      -13-
<PAGE>


are due,  submitted by the Issuing  Bank,  any  Participant  or the Agent to the
Account  Party,  shall be prima  facie  evidence  that such  amounts are due and
owing.

        SECTION 1.15     Computations of Interest and Fees. All  computations of
interest  hereunder  (including  the Default Rate) and of the fees payable under
Sections  4.1, 4.2, and 4.3,  hereunder  shall be made on the basis of a year of
360 days for the actual  number of days  (including  the first day but excluding
the last day)  occurring  in the  period  for which  such  interest  or fees are
payable. All changes in the rate of interest resulting from changes in the Prime
Rate shall take place immediately without notice or demand of any kind.

                                   ARTICLE 4.

                         LETTER OF CREDIT FACILITY FEES.
                         -------------------------------

        SECTION 1.16     Letter of Credit Fee.  The Account  Party agrees to pay
the Agent, for the benefit of the Issuing Bank (which the Issuing Bank agrees to
pass-through to the  Participants  pro rata in accordance with their  Commitment
Percentages),  for the  period  from the  Agreement  Date to but  excluding  the
Expiration  Date  (as it may be  extended  pursuant  to  Section  2.2),  payable
quarterly in advance on the first day of January,  April,  July,  and October of
each year,  a Letter of Credit Fee (so referred to herein) in an amount equal to
1.50% per annum,  of the aggregate  amount of the Allocable Share of the Maximum
Credit  Amount of all Covered  Eligible  Bonds for the subject  quarter,  as set
forth on the  Applicable  L/C  Schedule  issued by the Issuing  Bank on the most
recent  Quarterly L/C Re-Schedule Date (and on the Issuance Date with respect to
the Initial L/C Schedule).  In the event that the average daily aggregate amount
of the Allocable  Share of the Maximum  Credit  Amount for all Covered  Eligible
Bonds during any quarter is less than or greater than the amount as of the first
day of such  quarter,  the Agent  and the  Account  Party  shall  reconcile  the
difference  by  appropriately  adjusting  the amount of the Letter of Credit Fee
otherwise  payable on the next  quarterly  payment date, or, with respect to the
period ending on the Expiration Date, by a cash payment due on such date.

        SECTION 1.17     Unused  Facility  Fee. The Account  Party agrees to pay
the Agent for the benefit of the Issuing  Bank (which the Issuing Bank agrees to
pass-through to the  Participants  pro rata in accordance with their  Commitment
Percentages),  for the  period  from the  Agreement  Date to but  excluding  the
Expiration  Date  (as  it  may be  extended  pursuant  to  Section  2.2)  or the
termination of the Letter of Credit Facility  pursuant to Section 2.2(d) hereof,
payable  quarterly  in  arrears  on the first day of  January,  April,  July and
October of each year,  on the  initial  Expiration  Date,  and, if the Letter of
Credit  Facility is  terminated  in  accordance  with the  provisions of Section
2.2(d)  hereof,  on the date of such  termination,  an Unused  Facility  Fee (so
referred to herein), computed at a rate per annum equal to the Applicable Unused
Facility  Fee  Percentage  on the average  daily Unused  Commitment  during such
quarter.  No Unused Facility Fee shall accrue or be payable during any Extension
Period.

        SECTION 1.18     Issuing Bank's Charges. The Account Party agrees to pay
the Issuing Bank's reasonable  customary fees,  service charges,  commissions or
other charges


                                      -14-
<PAGE>


imposed by the Issuing Bank with  respect to the issuance and any  modifications
of the  Letter  of Credit  and each L/C  Schedule,  which  shall be  payable  as
incurred,  including,  without limitation (a) payment of transfer charges of 1/4
of 1% of the Maximum  Commitment Amount for any transfer of the Letter of Credit
permitted  by the Issuing  Bank,  other than the  Permitted  L/C  Transfer if it
occurs within thirty (30) days after the Agreement Date, and (b) a fee of $75.00
for  discrepancy/re-examination  fee(s)  for  each set of  discrepant  documents
presented with any Drawing.

        SECTION 1.19     Other Fees.  The  Account  Party shall pay to the Agent
and/or the Issuing Bank,  for their own  accounts,  such other fees as have been
agreed to in writing by the Account Party.

        SECTION 1.20     Fees; General.  Except as specifically provided herein,
the Account  Party shall not be entitled to any rebate,  refund,  or relief with
respect to the Letter of Credit Fee, the Unused  Facility  Fee, or any other fee
or amount paid hereunder on account of the expiry of the Letter of Credit or the
reduction  to the Maximum  Credit  Amount,  and all of said fees shall be deemed
fully  earned on the date when due and shall not be refunded in whole or in part
to the Account Party in any event, including,  without limitation, the expiry or
surrender of, or any reduction in the amount of, the Letter of Credit.

                                   ARTICLE 5.

                           CONCERNING LETTER OF CREDIT
                           ---------------------------

        SECTION 1.21     Responsibility.  None of the Agent,  the  Participants,
the  Issuing  Bank,  the  Issuing  Bank's   correspondents,   or  any  advising,
negotiating,  or  paying  bank with  respect  to the  Letter of Credit  shall be
responsible in any way for:

               (a) The performance by either  Beneficiary of that  Beneficiary's
obligations, if any, to the Account Party;

               (b) The form, sufficiency, correctness, genuineness, authority of
any person signing;  falsification; or the legal effect of; any documents called
for under the Letter of Credit if (with respect to the foregoing) such documents
on their face appear to be in order.

        SECTION 1.22     Honoring  of Letter of  Credit.  The  Issuing  Bank may
honor,  as  complying  with the terms of the Letter of Credit and of any Drawing
thereunder,  any drafts or other  documents  otherwise  in order,  but signed or
issued  by an  administrator,  conservator,  trustee  in  bankruptcy,  debtor in
possession,  assignee for the benefit of  creditors,  liquidator,  receiver,  or
other legal  representative  of the party authorized under such Letter of Credit
to draw or issue such drafts or other documents.

        SECTION 1.23     Risk of Account Party. All directions,  correspondence,
and funds  transfers  relating  to the  Letter of Credit  are at the risk of the
Account Party. The Issuing Bank


                                      -15-
<PAGE>


shall have discharged its  obligations  under the Letter of Credit which, or the
Drawing under which,  includes  payment  instructions,  by the initiation of the
method of payment called for in, and in accordance  with, such  instructions (or
by any other commercially  reasonable and comparable  method).  The Issuing Bank
shall not have any  responsibility for any inaccuracy,  interruption,  error, or
delay in  transmission  or  delivery  by post,  telegraph  or cable,  or for any
inaccuracy of  translation,  unless any of the foregoing  shall be caused by the
gross  negligence or willful  misconduct of the Issuing Bank, as determined by a
final order of a court of competent  jurisdiction  in a proceeding  to which the
Issuing Bank is a party, which is not subject to further appeal.

        SECTION 1.24     Concerning   Specified  Rights.  The  rights,   powers,
privileges and immunities of the Agent, the  Participants,  and the Issuing Bank
specified in or arising under this  Agreement are in addition to any  heretofore
or at any time  hereafter  otherwise  created or arising,  whether by statute or
rule of law or contract.

        SECTION 1.25     Practices Governing Letter of Credit.

               (a) The Letter of Credit  shall be  subject to the  International
Standby Practices 1998 (issued as International  Chamber of Commerce Publication
No. 590), in effect,  or the most recent revision or success thereto which shall
be in effect  from time to time  ("ISP98"),  the terms of which are known to the
Account Party and which are incorporated by reference  herein. In the event of a
conflict  between this Agreement and ISP98,  the terms of this  Agreement  shall
control.

               (b) The Issuing Bank is  authorized  to  interpret  the Letter of
Credit in  accordance  with rules,  regulations,  and customs  prevailing at the
place and time during  which the Letter of Credit is  available  or Drawings are
made or negotiated.

        SECTION 1.26     Relationship of Parties.  The Account  Party recognizes
that:

               (a) The  Issuing  Bank has issued  the Letter of Credit  (and has
issued and will issue L/C Schedules) as a financial accommodation to the Account
Party, without regard to the terms, conditions, or circumstances which relate to
the underlying transactions which the Letter of Credit supports.

               (b) The Agent,  the  Participants (as of the Agreement Date), and
the Issuing Bank (other than as a Liquidity  Bank) have not  participated in the
establishment,  negotiation,  or  documentation  of the underlying  transactions
which the Letter of Credit support.

               (c) Except for Fleet's participation as a Liquidity Bank and as a
lender  and an agent  under  the  Bond  Warehousing  Facility,  the  Agent,  the
Participants  (as of the Agreement Date), and the Issuing Bank have no financial
or other interests in either Beneficiary.

               (d) The Issuing Bank is  irrevocably  obligated to honor a proper
Drawing  under the Letter of Credit,  regardless of whether or not a Participant
reimburses the Issuing Bank for an Unpaid Drawing.


                                      -16-
<PAGE>


        SECTION 1.27     Transfers  of the  Letter of  Credit.  The  rights  and
interests of the  Beneficiaries  in the Letter of Credit may be transferred only
in accordance with the terms thereof to the Administrative Agent, which transfer
was  consummated on the Initial  Issuance Date (the  "Permitted L/C  Transfer").
Except as the Agent and the Issuing Bank  reasonably  may  determine the context
otherwise  requires in any one or more particular  instances or as to any one or
more  provisions  of this  Agreement,  references to the  "Beneficiaries"  and a
"Beneficiary" in this Agreement shall continue to be to the Beneficiaries.

                                   ARTICLE 6.

          CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
          ------------------------------------------------------------

        SECTION 1.28     Restatement  Effective  Date.  It shall be a  condition
precedent  of the  effectiveness  of  this  Agreement  and the  issuance  of L/C
Schedule No. 3 pursuant to this Agreement, that each of the following conditions
precedent be satisfied in full (as  determined by the Agent and the Issuing Bank
in their discretion,  which discretion shall be exercised in good faith), unless
specifically  waived in writing by the Agent and the Issuing Bank at or prior to
issuance of L/C Schedule No. 3:

               (a) Satisfactory Credit Documents. Each of Credit Documents shall
have been duly executed and delivered by the  respective  parties  thereto,  and
shall be in full force and effect and shall be in form and substance  reasonably
satisfactory to the Agent and the Issuing Bank.

               (b) L/C  Schedule  No.  3. All  applicable  conditions  under the
Existing  Reimbursement  Agreement  for the issuance of L/C Schedule No. 3 shall
have been satisfied in accordance with the terms thereof.

               (c) No Default under Transaction Documents.  There shall not have
occurred  and be  continuing  any  default or event of default  under any of the
Transaction Documents.

               (d) No Material  Change.  No material  adverse  change shall have
occurred in the  financial  condition,  business,  affairs or  operations of the
Account Party since the date of its financial statements most recently delivered
to the Agent as of September 30, 2002.

               (e) Warranties and Representations Accurate.

                   (i) All warranties and  representations  made by or on behalf
        of the Account Party to Agent or the Issuing Bank pursuant to the Credit
        Documents shall be true and accurate in all material  respects and shall
        not omit any material fact necessary to make the same not misleading.


                                      -17-
<PAGE>


                   (ii) To the extent that any  warranties  and  representations
        made  by or on  behalf  of  the  Account  Party  under  the  Transaction
        Documents  relate to the Covered  Eligible  Bonds and the ability of the
        Account  Party to perform its  obligations  and  liabilities  under this
        Agreement and under the other Credit Documents,  all such warranties and
        representations  made by or on behalf of the Account  Party  pursuant to
        the  Transaction  Documents  shall be true and  accurate in all material
        respects and shall not omit any material fact necessary to make the same
        not misleading.

               (f)  Officer's  Certificates.  The Agent  shall  have  received a
Certificate executed by an Authorized  Representative  stating that, among other
things,  the  representations  and  warranties  made by the Account Party to the
Agent and the Issuing  Bank in the Credit  Documents  to which it is a party are
true  and  complete  as of the  date of such  Certificate,  and that no Event of
Default has occurred.

               (g) Preferred Shares Covenants. The Account Party shall not be in
default of any Preferred Shares Covenant.

               (h) Constituent Documents and Entity Agreements.  The Agent shall
have received  from each of the Account Party and Charter Mac a copy,  certified
as of a recent date by the appropriate officer of the State in which such Person
is organized  and/or by an  authorized  certifying  officer of such  Person,  as
applicable,  to be true and  complete,  of any  amendments  or  additions to the
Constituent Documents and any other organizational documents of such Person from
those furnished to the Agent and the Issuing Bank in connection with the Initial
Issuance Date.

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

               (j) Incumbency  Certificate;  Authorized Signers. The Agent shall
have received from the Account Party and Charter Mac an incumbency  certificate,
dated as of the Closing Date, signed by a duly authorized officer of such Person
and giving the name and  bearing a specimen  signature  of each  individual  who
shall be an Authorized  Representative:  (i) as to the Account Party and Charter
Mac,  to sign,  in the name and on behalf  of such  Person,  each of the  Credit
Documents to which such Person is or is to become a party;  (ii) with respect to
the Account Party, to make requests to add Eligible Lease-Up Bonds to the Letter
of Credit Facility; and (iii) to give notices,  provide  certifications,  and to
take other action on behalf of the Account Party under the Credit  Documents and
on behalf of Charter Mac with respect to the Joinder.


                                      -18-
<PAGE>


               (k)  Corporate  Structure.  The Agent shall be  satisfied  in all
respects with the legal  structure and  capitalization  of the Account Party and
all documentation relating thereto.

               (l)   Litigation.   There  shall  be  no  pending  or  threatened
litigation  involving the Account Party and/or  Charter Mac or any other Charter
Entity which, in the judgment of the Agent, could have a material adverse effect
on such Person or the ability of the  Account  Party to perform its  obligations
under the  Credit  Documents  or the  ability  of  Charter  Mac to  perform  its
obligations  under  the  Joinder  to this  Agreement,  and no  judgment,  order,
injunction or other similar  injunction or other similar  restraint  prohibiting
any of the transactions contemplated hereby shall exist.

               (m)  Financial  Statements.  The Agent and the Issuing Bank shall
have received such financial statements and other information and projections as
the  Agent  shall  have  reasonably  requested,  and the  information  shall  be
satisfactory to the Agent and the Issuing Bank.

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

               (o) Compliance with Law. The Agent shall be reasonably  satisfied
that  (i)  the  Account   Party  has  obtained  all  material  and   appropriate
authorizations and approvals of all governmental  authorities or any other third
parties  (including,   without   limitation,   any  approvals  required  by  the
Beneficiary  and/or  any of the other  parties  to the  Transaction  Documents),
required for the due execution, delivery and performance by the Account Party of
each of the  Credit  Documents  to  which  it is or will be a party  and for the
perfection  of or the  exercise  by the  Agent  and the  Issuing  Bank of  their
respective rights and remedies under the Credit  Documents,  and (ii) the Letter
of Credit Facility as well as all other transactions  contemplated hereby, shall
be in material  compliance with, and the Account Party shall have obtained,  all
material and appropriate  approvals  pertaining to, any applicable laws,  rules,
regulations  and  orders,  including,   without  limitation,  all  governmental,
environmental,  ERISA retiree health benefits,  workers'  compensation and other
requirements, regulations and laws and shall not contravene any charter, by-law,
debt  instrument or other material  Contractual  Obligation of the Account Party
and its Subsidiaries or of Charter Mac and its Subsidiaries.

               (p) Legal  and other  Opinions.  The  Issuing  Bank and the Agent
shall have  received an opinion  addressed to the Issuing Bank and the Agent and
dated as of the Agreement Date, in form and substance reasonably satisfactory to
the Agent and the Issuing  Bank,  from the Account  Party's  counsel,  Greenberg
Traurig, LLP.


                                      -19-
<PAGE>


               (q)  Payment of Fees.  The  Account  Party shall have paid to the
Agent all fees and expenses required to be paid upon or prior to the Restatement
Effective Date, as applicable, pursuant to the Existing Reimbursement Agreement,
this Agreement and the other Credit Documents.

               (r) No Event of Default.  There shall not be any Event of Default
under any of the Credit Documents.

               (s) Additional  Documents.  The Account Party shall have provided
such  additional  instruments and documents to the Agent and/or the Issuing Bank
as the Agent, the Issuing Bank or their counsel may have reasonably requested.

               (t) Further Assurances. In addition to the execution and delivery
of this  Agreement  and the other  Credit  Documents,  the  Account  Party shall
execute  such other  documentation  as may be required  by the Agent  and/or the
Issuing Bank.

        SECTION 1.29     Addition of Eligible Lease-Up Bonds to Letter of Credit
Facility.  Without  limiting any other provision of this  Agreement,  including,
without limitation,  the provisions of Section 2.1(e)(ii)(c) above, the addition
of Eligible  Lease-Up Bonds to the Letter of Credit Facility as Covered Eligible
Bonds after the  Restatement  Effective  Date  (including in  connection  with a
substitution  under Section 2.1(f)) shall be subject to the satisfaction of each
of the following conditions precedent,  unless specifically waived in writing by
Agent:

               (a)  Representations  True;  No  Event  of  Default.  Each of the
representations  and warranties and covenants of the Account Party  contained in
this Agreement and/or the other Credit Documents shall be true as of the date as
of which  they  were  made and  shall  also be true at and as of the time of the
issuance of the L/C Schedule  including such additional  Covered Eligible Bonds,
with the same effect as if made at and as of that time  (except to the extent of
changes resulting from transactions contemplated and permitted by this Agreement
and the other Credit  Documents and changes  occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse,  and except
to the extent that such  representations  and warranties  relate expressly to an
earlier date) and no Event of Default shall have occurred and be continuing. The
Issuing  Bank and the Agent  shall have  received a  certificate  of the Account
Party signed by an authorized officer of the Account Party to such effect (to be
included in the applicable Bond Eligibility Determination Request).

               (b) No Legal  Impediment.  No change  shall have  occurred in any
Legal Requirement or  interpretations  thereof that in the reasonable opinion of
the Issuing  Bank would make it illegal  for the  Issuing  Bank to issue the L/C
Schedule with such additional Eligible Covered Bonds.

               (c) Governmental Regulation. The Agent and the Issuing Bank shall
have received such statements in substance and form  reasonably  satisfactory to
the Agent and the


                                      -20-
<PAGE>


Issuing  Bank as they  shall  require  for the  purpose of  compliance  with any
applicable  regulations  of the  Comptroller  of the  Currency  or the  Board of
Governors of the Federal Reserve System.

               (d) Proceedings and Documents. All proceedings in connection with
the transactions  contemplated by this Agreement, the other Credit Documents and
all  other  documents  incident  thereto  shall be  reasonably  satisfactory  in
substance  and in form to the Issuing  Bank and the Agent,  and the Issuing Bank
and the Agent shall have received all information and such counterpart originals
or certified or other copies of such documents as they may reasonably request.

               (e) No Adverse  Changes.  There shall not have been any  material
adverse change in the financial condition,  business,  or affairs of the Account
Party since the Agreement  Date which in the Agent's or the Issuing  Bank's good
faith judgment may jeopardize in a material  manner the ability of Account Party
to perform fully its obligations under each applicable Credit Document.

               (f)  Other  Certificates.  The  Agent  shall  have  received  and
approved  such other  documents  and  certificates  as the Agent may  reasonably
request, in form and substance reasonably  satisfactory to the Agent,  including
from the Administrative Agent.

                                   ARTICLE 7.

                           AUTHORIZED REPRESENTATIVES.
                           ---------------------------

        SECTION 1.30     Continuing Authority of Authorized Representatives. The
Agent and the Issuing Bank are authorized to rely upon the continuing  authority
of  the  Persons  hereafter   designated  by  the  Account  Party   ("Authorized
Representatives")  to bind Account Party with respect to all matters  pertaining
to the  Letter of  Credit  (including  any L/C  Schedule)  and the other  Credit
Documents  including,  but not limited to, the  submission of requests to add or
withdraw  Eligible  Lease-Up Bonds to or from the Letter of Credit  Facility and
certificates  with regard thereto.  Such  authorization may be changed only upon
written notice to Agent  accompanied  by evidence,  reasonably  satisfactory  to
Agent,  of the  authority of the person giving such notice and such notice shall
be effective not sooner than five (5) Business Days following receipt thereof by
Agent.  The  Authorized  Representatives  as of the Agreement Date are listed on
Schedule 7. The Agent  shall have a right of  approval,  not to be  unreasonably
withheld or delayed,  over the identity of the Authorized  Representatives so as
to assure the Agent and the Issuing Bank that each Authorized  Representative is
a responsible and senior official of Account Party.

                                   ARTICLE 8.

                              OBLIGATIONS ABSOLUTE.
                              ---------------------


                                      -21-
<PAGE>


        SECTION 1.31     Obligations  Absolute.  The  Obligations of the Account
Party  under  this  Agreement  and the  other  Credit  Documents  are  absolute,
unconditional,  and irrevocable,  and shall be performed  strictly in accordance
with the terms hereof under all  circumstances  whatsoever,  including,  without
limitation, the following:

               (a) any  lack of  validity  or  enforceability,  or  restriction,
restraint,  or stay of the enforcement of this Agreement,  the Letter of Credit,
or any other Credit Document, or any Transaction Document;

               (b) any amendment or waiver of, or any consent to departure from,
all or the Letter of Credit or any of the other Credit Documents;

               (c) the existence of any claim, set-off,  defense, or other right
which the Account Party may have at any time against any beneficiary  (including
either  Beneficiary) of the Letter of Credit,  the Issuing Bank, the Agent,  any
Participant or any other Person, whether in connection with the Credit Documents
or the transactions contemplated by this Agreement;

               (d) payment by the Issuing  Bank of the Letter of Credit  against
presentation of a demand,  draft or certificate or other document which does not
strictly  comply  with the terms of such  Letter of Credit,  including,  without
limitation,  any good faith  honoring  of a Drawing  under the Letter of Credit,
which  Drawing   possibly  could  have  been  dishonored  based  upon  a  strict
construction of the terms of the Letter of Credit;

               (e) any draft,  demand,  certificate or other document  presented
under  the  Letter  of Credit  proving  to be  forged,  fraudulent,  invalid  or
insufficient in any respect or any statement  therein being untrue or inaccurate
in any respect;

               (f) any other  circumstance or happening  whatsoever,  whether or
not similar to any of the foregoing,  that might, but for the provisions of this
Section,  constitute  a legal or equitable  discharge  of, or provide a right of
setoff against, the Account Party's obligations hereunder; and/or

               (g) the fact that any Event of Default shall have occurred and be
continuing.

        SECTION 1.32     No  Liability  on Account of  Issuance  or  Transfer of
Letter of Credit. Unless caused by the gross negligence or willful misconduct of
the Issuing Bank, the Agent or any  Participant,  as determined by a final order
of a court of competent  jurisdiction  in a proceeding to which such Person is a
party  which  is  not  subject  to  further  appeal,  none  of  the  Agent,  the
Participants,  or the Issuing Bank shall have any liability or responsibility by
reason of or in  connection  with the  issuance  or  transfer  of the  Letter of
Credit, the issuance of any participations thereunder, or any payment or failure
to  make  any  payment  thereunder  (irrespective  of any  of the  circumstances
referred  to above),  or any  error,  omission,  interruption,  loss or delay in
transmission or delivery of any draft,  notice or other  communication  under or
relating  to the Letter of Credit  (including  any  document  required to make a
Drawing  thereunder),


                                      -22-
<PAGE>


any error in interpretation  of technical terms or any consequence  arising from
causes  beyond the control of the Issuing  Bank.  The parties  hereto  expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent  jurisdiction
in a proceeding  to which the Issuing  Bank is a party),  the Issuing Bank shall
have no liability for its acts or omissions hereunder.

        SECTION 1.33     Other Persons Not Liable. All parties to this Agreement
are looking solely to the Account Party and its assets for the  satisfaction  of
the Obligations. The Board of Trustees, the Manager, and the Shareholders of the
Account Party (each as defined in the Equity Issuer Trust Agreement,  as amended
from  time to time)  shall not have any  liability  for the  obligations  of the
Account Party under this Agreement.

                                   ARTICLE 9.

                         WARRANTIES AND REPRESENTATIONS.
                         -------------------------------

        The Account Party  warrants and  represents to the Agent and the Issuing
Bank for the express purpose of inducing the Agent and the Issuing Bank to enter
into  this  Agreement,  to cause  the  issuance  of the  Letter of Credit by the
Issuing Bank,  and to otherwise  complete all of the  transactions  contemplated
hereby, that, as of the Agreement Date as follows:

        SECTION 1.34     Transaction   Documents.    The   representations   and
warranties  made by the Account Party and, to the extent relating to any Covered
Eligible  Bond,  by  either  of the  Beneficiaries,  in  any of the  Transaction
Documents  to which they  respectively  are a party were true and  correct  when
made, and are true and correct as of the Agreement Date (except to the extent of
changes   resulting  from   transactions   contemplated  and  permitted  by  the
Transaction  Documents and changes  occurring in the ordinary course of business
that singly or in the aggregate are not  materially  adverse,  and except to the
extent that such  representations  and warranties relate expressly to an earlier
date), and are hereby incorporated by reference for the benefit of the Agent and
the Issuing Bank as if fully set forth herein.

        SECTION 1.35     No Event of Default.  No event of default  under any of
the  Insurance  Agreement,  the  Liquidity  Facility  or any  other  Transaction
Document has occurred and is continuing,  and the Account Party has not received
any notice  under any of the  foregoing  that an event has  occurred  which will
constitute such an event of default upon the expiration of any applicable  grace
or cure period.

        SECTION  1.36    Financial  Information.  True and  complete  copies  of
financial statements of the Account Party and Charter Mac have been delivered to
the  Agent  and the  Issuing  Bank and the same  fairly  present  the  financial
condition  of such Person as of the date  thereof  and no  material  and adverse
change has occurred in such  financial  condition  since the date  thereof.  All
financial  statements  of such Persons  hereafter  furnished to the Agent or the
Issuing Bank shall be true and complete  copies thereof and shall fairly present
the financial condition of such Person as of the date thereof.


                                      -23-
<PAGE>


        SECTION 1.37     No  Violations.  The  establishment  of the  Letter  of
Credit  Facility,  the  issuance  of the  Letter of Credit,  and the  subsequent
payment and performance of the  Obligations  evidenced and secured by the Credit
Documents did not and shall not constitute a violation of, or conflict with, any
Legal  Requirement,  Contractual  Obligations  (including  with  respect  to the
Transaction Documents), or organizational document to which Account Party and/or
Charter Mac is a party or by which it or its property is or may be bound.

        SECTION 1.38     No Litigation.

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

               (b)  Other  Charter  Entities.   There  are  no  actions,  suits,
proceedings  or  investigations  of any kind pending or, to the knowledge of the
Account  Party,  threatened,  against any other Charter Entity before any court,
tribunal or administrative  agency or board with respect to any Covered Eligible
Bond that, if adversely  determined,  would reasonably be expected to, either in
any case or in the aggregate,  materially adversely affect such Covered Eligible
Bond and/or the ability of the Account Party and/or Charter Mac to perform their
respective obligations and liabilities under this Agreement, the Joinder to this
Agreement, and the Credit Documents to which they respectively are a party.

        SECTION 1.39     Franchises, Patents, Copyrights, Etc. The Account Party
and Charter Mac each possess all franchises,  patents,  copyrights,  trademarks,
trade  names,  Licenses  and  Permits,  and rights in respect of the  foregoing,
adequate for the conduct of its business substantially as now conducted, without
known conflict with any rights of others.

        SECTION 1.40     Good Title and No Liens.  The Account Party and Charter
Mac, respectively,  are the lawful owners of their respective assets and are and
will be the  lawful  owner of such  assets,  free and  clear  of all  liens  and
encumbrances of any nature  whatsoever other than those permitted in conjunction
with the Liquidity  Facility,  the  Insurance  Agreement,  similarly  structured
securitization vehicles, or otherwise in connection with the conduct of business
by the Account Party and Charter Mac in the ordinary course of their  respective
businesses.

        SECTION 1.41     Entity Matters.


                                      -24-
<PAGE>


               (a)  Organization.

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

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

               (b)  Ownership, Subsidiaries and Taxpayer Identification Numbers.

                         (i) The Account  Party,  indirectly,  is a wholly-owned
        Subsidiary of Charter Mac, and, other than outstanding Preferred Shares,
        no additional ownership interests,  or rights or instruments convertible
        into such ownership  interests,  exist. True and complete copies of each
        of the  agreements  listed on Schedule  9.8(b)(i) have been furnished to
        the Agent by the Account Party.

                         (ii) The  taxpayer  identification  numbers  and  state
        organizational   numbers  (if  applicable)  of  the  Account  Party  are
        accurately stated in Schedule 9.8(b)(ii).

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

               (c)  Authorization.  The execution,  delivery and  performance of
this Agreement  (and the Joinder by Charter Mac) and the other Credit  Documents
to  which  the  Account  Party  is  to  become  a  party  and  the  transactions
contemplated  hereby and  thereby  (i) are within the  authority  of the Account
Party and Charter  Mac, as  applicable,  (ii) have been duly  authorized  by all
necessary  statutory trust proceedings,  (iii) do not conflict with or result in
any breach or contravention of any Legal  Requirement to which the Account Party
or  Charter  Mac,  as  applicable,  is  subject or any  judgment,  order,  writ,
injunction,  license  or  permit  applicable  to such  Person,  and  (iv) do not
conflict with any  provision of such the Account  Party's or Charter  Mac's,  as
applicable,  organization  documents or other charter documents or bylaws of, or
any


                                      -25-
<PAGE>


Contractual  Obligation  of, the Account  Party or Charter  Mac, as  applicable,
except where such  conflict  would not have a materially  adverse  effect on the
business, assets or financial condition of such Person.

        SECTION 1.42     Valid  and  Binding.   Each  of  the  Credit  Documents
constitutes the legal, valid and binding  obligations of the Account Party under
the respective  Credit  Documents to which it is a party, in accordance with the
respective terms thereof, subject to bankruptcy,  insolvency and similar laws of
general  application  affecting  the rights and remedies of creditors  and, with
respect to the availability of the remedies of specific enforcement,  subject to
the discretion of the court before which any proceeding therefor may be brought.

        SECTION 1.43     Deferred  Compensation  and ERISA.  Neither the Account
Party nor any ERISA  Affiliate has any pension,  profit  sharing,  stock option,
insurance or other  arrangement or plan for employees covered by Title IV of the
Employment  Retirement  Security  Act  of  1974,  as now  or  hereafter  amended
("ERISA")  except as may be designated to Agent in writing by Account Party from
time to time ("ERISA  Plan") and no  "Reportable  Event" as defined in ERISA has
occurred and is now continuing with respect to any such ERISA Plan. The issuance
of Letter of Credit,  the performance by Account Party of its obligations  under
the Credit  Documents,  and Account Party's  conducting of its operations do not
and will not violate any provisions of ERISA.

        SECTION 1.44     No  Materially  Adverse  Contracts,  Etc.  None  of the
Account Party,  Charter Mac, or any of their respective  Subsidiaries is subject
to any charter,  corporate or other legal restriction,  or any judgment, decree,
order,  rule or  regulation  that has or is  expected  in the  future  to have a
materially adverse effect on the business, assets or financial condition of such
Person.  None of the Account  Party,  Charter  Mac,  or any of their  respective
Subsidiaries is a party to any contract or agreement that has or is expected, in
the  judgment of the such  Person's  officers,  to have any  materially  adverse
effect on the business of such Person or such Person's Subsidiaries.

        SECTION 1.45     Compliance With Other  Instruments,  Laws, Etc. None of
the Account Party,  Charter Mac, or any of their  respective  Subsidiaries is in
violation  of any  provision  of its  charter or other  organization  documents,
by-laws,  or  any  Contractual   Obligations  (including  with  respect  to  the
Transaction Documents) or Legal Requirements, in any of the foregoing cases in a
manner  that  could  result  in  the  imposition  of  substantial  penalties  or
materially and adversely affect the financial condition,  properties or business
of such Person or such Person's Subsidiaries.

        SECTION 1.46     Tax Status.  The Account Party and Charter Mac (a) have
made or filed all federal and state  income and all other tax  returns,  reports
and  declarations  required by any jurisdiction to which such Person is subject,
and (b) has paid all taxes and other governmental  assessments and charges shown
or determined to be due on such returns, reports and declarations,  except those
being contested in good faith and by appropriate  proceedings for which adequate
reserves have been established.  Except for taxes being contested as provided in


                                      -26-
<PAGE>


clause (b),  above,  there are no unpaid taxes in any material amount claimed to
be due by the taxing  authority  of any  jurisdiction,  and the  officers of the
foregoing Persons know of no basis for any such claim.

        SECTION 1.47     Holding  Company and Investment  Company Acts.  Neither
the  Account  Party nor any of its  Subsidiaries  is a "holding  company",  or a
"subsidiary  company" of a "holding  company",  or an  "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935;  nor  is it an  "investment  company",  or an  "affiliated  company"  or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.

        SECTION 1.48     Certain  Transactions.  Except as set forth in Schedule
9.15 hereof, as of the date of this Agreement,  none of the officers,  trustees,
directors,  or employees of the Account  Party or any of its  Subsidiaries  is a
party to any  transaction  with  the  Account  Party or any of its  Subsidiaries
(other than for services as employees,  officers and  directors),  including any
contract,  agreement  or  other  arrangement  providing  for the  furnishing  of
services to or by, providing for rental of real or personal property to or from,
or otherwise  requiring  payments to or from any officer,  trustee,  director or
such employee or any  corporation,  partnership,  trust or other entity in which
any officer, trustee,  director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.

        SECTION 1.49     Credit  Documents.   All  of  the  representations  and
warranties  of the  Account  Party  made in the  Credit  Documents  are true and
correct in all material respects.

        SECTION 1.50     No Material Change.  There has been no material adverse
change in the  financial  condition,  business,  affairs of Account Party and/or
Charter  Mac  since  the  date of its last  financial  statement  most  recently
delivered to the Agent.

        SECTION 1.51     No Broker or Finder.  Neither  the Account  Party,  nor
anyone on behalf  thereof has dealt with any broker,  finder or other  person or
entity who or which may be  entitled  to a broker's  or  finder's  fee, or other
compensation, payable by the Agent, the Issuing Bank, or any of the Participants
in connection with this Letter of Credit Facility.

        SECTION 1.52     Background  Information  and  Certificates.  All of the
factual  information  contained  or  referred  to in this  Agreement  and in the
Exhibits and Schedules to this Agreement,  and in the certificates  furnished to
the Agent by or on behalf of Account Party in connection  with this Agreement or
any other Credit  Document is true and complete in all  material  respects,  and
omits no material fact necessary to make the same not misleading.

        SECTION 1.53     Reaffirmation. Each request by the Account Party to add
an Eligible Lease-Up Bond to the Letter of Credit Facility: (i) shall constitute
an  affirmation  by  Account  Party  that  the  foregoing   representations  and
warranties  are true and  correct as of the date of such  request  (except as to
matters  specifically  disclosed  in writing to the Agent and the  Issuing  Bank
prior to or simultaneously  with such written request,  and except to the extent
of


                                      -27-
<PAGE>


changes resulting from transactions contemplated and permitted by this Agreement
and the other Credit  Documents and changes  occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse,  and except
to the extent that such  representations  and warranties  relate expressly to an
earlier  date)  and,  unless  Agent and the  Issuing  Bank are  notified  to the
contrary prior to the date of the addition of such Eligible Lease-Up Bond to the
Letter of Credit  Facility,  will be so on the date of such  addition,  and (ii)
shall  constitute  the  representation  and  warranty of Account  Party that the
information  set forth in each such request is true and complete in all material
respects, and omits no material fact necessary to make the same not misleading.

        SECTION 1.54     Existing   Reimbursement    Agreement.   All   of   the
representations  and warranties made by or on behalf of the Account Party in the
Existing  Reimbursement  Agreement were, when made, true, correct, and complete,
and are, as of the Agreement Date, and will be, as of the Restatement  Effective
Date, true, correct and complete, except as to matters specifically disclosed in
writing to the Agent and the  Issuing  Bank  prior to the  Agreement  Date,  and
except to the extent of changes  resulting from  transactions  contemplated  and
permitted by the Existing  Reimbursement  Agreement and the Credit Documents and
changes  occurring  in the  ordinary  course of  business  that singly or in the
aggregate  are not  materially  adverse,  and  except  to the  extent  that such
representations and warranties relate expressly to an earlier date.

                                  ARTICLE 10.

                                   COVENANTS.
                                   ----------

        SECTION 1.55     Affirmative Covenants.  The Account Party covenants and
agrees  that from the date  hereof  and so long as the Letter of Credit or other
Obligations remain outstanding, as follows:

               (a) Punctual Payment.  The Account Party will duly and punctually
pay or cause to be paid the principal and interest on Drawings and all interest,
fees and other  Obligations  provided for in this  Agreement,  all in accordance
with the terms of this Agreement and the Letter of Credit,  as well as all other
sums owing pursuant to the Credit Documents.

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

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

               (d)  Compliance  with  Transaction  Documents.  The Account Party
shall comply, and shall cause its Subsidiaries to comply,  fully with all of the
terms and conditions of


                                      -28-
<PAGE>


the Transaction Documents to which each is party and otherwise to remain in good
standing with MBIA.

               (e) Bond  Documents.  The Account Party shall,  at the request of
the Agent,  provide  the Agent with copies of all Bond  Documents  and any other
requested  information  relating to Covered  Eligible Bonds and the related Bond
Collateral, all of which shall be true, correct and complete.

               (f) Notices.

                   (i)   Ineligible   Bond  Status.   The  Account   Party  will
immediately  notify  the  Agent  in  writing  if  and  when  either  Beneficiary
determines  that any Covered  Eligible Bond has been deemed an  Ineligible  Bond
under the Insurance Agreement.

                   (ii) Defaults.

                          (a) The Account Party will  promptly  notify the Agent
                   in writing of the occurrence of any Event of Default known to
                   the Account Party.

                          (b) If any Person shall give any notice to the Account
                   Party (or to any  Subsidiary  of the  Account  Party,  if the
                   Account  Party has,  or, if in the  exercise  of  appropriate
                   diligence as the parent of such Subsidiary, reasonably should
                   have had, actual knowledge  thereof) or take any other action
                   involving the Account  Party (or involving any  Subsidiary of
                   the Account  Party,  if the Account Party has, or, if, in the
                   exercise  of  appropriate  diligence  as the  parent  of such
                   Subsidiary,  reasonably  should  have had,  actual  knowledge
                   thereof)  in respect  of a claimed  default  (whether  or not
                   constituting an event of default) under any note, evidence of
                   indebtedness,   indenture  or  other  obligation,  including,
                   without limitation,  the Insurance  Agreement,  the Liquidity
                   Facility or any other Transaction  Document, to which or with
                   respect to which the Account Party or any of its Subsidiaries
                   is a party or obligor,  whether as principal  or surety,  and
                   such  default  would  permit  the  holder  of  such  note  or
                   obligation or other  evidence of  indebtedness  to accelerate
                   the  maturity  thereof,   which  acceleration  would  have  a
                   material  adverse  effect on the Account  Party,  the Account
                   Party shall  forthwith  give  written  notice  thereof to the
                   Agent  describing  the notice or action and the nature of the
                   claimed default.

                          (c) The  Account  Party  will  provide  the Agent with
                   copies of any notices  required to be provided by any Charter
                   Entity to MBIA  pursuant to Section  3.4(d) of the  Insurance
                   Agreement.


                                      -29-
<PAGE>


                          (d) The Account Party will  promptly  notify the Agent
                   in writing of the  occurrence  of any event of default  under
                   any of the Bond  Documents  relating  to a  Covered  Eligible
                   Bond.

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

                   (iv) Notice of Litigation  and  Judgments.  The Account Party
will, and will cause each of its Subsidiaries, Charter Mac, and any Subsidiaries
of Charter  Mac to,  give  notice to the Agent and the  Issuing  Bank in writing
(within ten (10) days of the date on which any such Person  shall  become  aware
thereof) of any litigation or proceedings  threatened or any pending  litigation
and proceedings affecting such Person or to which such Person is or is to become
a party involving an amount in controversy exceeding $5,000,000.00 or that could
reasonably  be expected to have a materially  adverse  effect on such Person and
stating the nature and status of such  litigation  or  proceedings.  The Account
Party  will,  and  will  cause  each  of  its  Subsidiaries,  Charter  Mac,  any
Subsidiaries of Charter Mac to, give notice to the Agent and the Issuing Bank in
writing  in form and  detail  satisfactory  to the  Agent and the  Issuing  Bank
(within ten (10) days of the date on which any such Person  shall  become  aware
thereof) of any judgment in excess of  $5,000,000.00  not covered by  insurance,
final or otherwise, against such Persons.

               (g)  Financial  Statements  and Reports.  The Account Party shall
furnish or cause to be furnished to the Agent from time to time,  the  following
financial  statements and reports and other information,  all in form, manner of
presentation and substance reasonably acceptable to Agent:

                   (i) Monthly  Statements.  As soon as practicable,  but in any
event not later than forty- five days (45) days after the end of each month, the
Servicer's Report for each Covered Eligible Bond (including any Covered Eligible
Bond that is secured by a Property which has become a Stabilized Property during
the period covered by such  Servicer's  Report).  The Agent and the Issuing Bank
shall be  entitled  to  conclusively  rely on each  Servicer's  Report  as being
accurate and complete, absent manifest error.

                   (ii) Quarterly Statements.  To the extent not included in the
Servicer's  Report,  as soon as  practicable,  but in any event  not later  than
forty-five  (45) days after the end of each fiscal quarter of the Account Party,
a  report  providing  detailed   operating   statements  and  occupancy  reports
respecting  each  Property  securing a Covered  Eligible  Bond,  all in form and
substance satisfactory to the Agent and the Issuing Bank.

                   (iii) Compliance Certificate.  Concurrently with the delivery
of  the  financial  statements  referred  to in  Section  10.1(g)(ii)  above,  a
certificate of an Authorized


                                      -30-
<PAGE>


Representative  stating  that, to the best of such  Authorized  Representative's
knowledge,  the Account  Party  during such period  observed or performed in all
material  respects all of its covenants and other  agreements,  and satisfied in
all material respects every material  condition,  contained in this Agreement to
be  observed,   performed   or  satisfied  by  it,  and  that  such   Authorized
Representative has obtained no knowledge of any Event of Default. With each such
quarterly  compliance  certificate,  the Account Party shall include  worksheets
showing  the  calculation  of the  estimated  fair value of its  investments  in
revenue bonds, using the methodology described in Annex M-2 to Exhibit M.

                   (iv)  Additional  Financial  Information.  From time to time,
within a  reasonable  time  after the  request,  such other  financial  data and
information as the Agent or the Issuing Bank may reasonably request.

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

                (i) Insurance. Schedule10.1(i) sets forth all presently existing
insurance  maintained  by the Account  Party.  The Account  Party will  maintain
insurance  with  respect  to  its  properties,   and  will  cause  each  of  its
Subsidiaries  to  maintain  with  financially  sound  and  reputable   insurers,
insurance  with  respect  to such  properties  and  its  business  against  such
casualties  and  contingencies  as  shall  be in  accordance  with  the  general
practices of  businesses  engaged in similar  activities  in similar  geographic
areas and in amounts,  containing such terms, in such forms and for such periods
as may be reasonable  and prudent and as otherwise  required by the  Transaction
Documents.

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

                (k) Compliance with Laws, Contracts, Licenses, and Permits.

                   (i) The Account  Party will  comply  with (x) all  applicable
Legal  Requirements  now  or  hereafter  in  effect  wherever  its  business  is
conducted,  (y) the provisions of its Constituent Documents,  and (z) all of its
Contractual  Obligations (including with respect to the Transaction  Documents).
If at any time while any


                                      -31-
<PAGE>


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

                   (ii) Without  limiting the generality of subclause (i) above,
the Account Party shall at all times comply with the Preferred  Shares Covenants
in  effect  as of the  Existing  Reimbursement  Agreement  Date and set forth on
Exhibit F hereto,  which is incorporated by reference  herein and made a part of
this Agreement,  whether or not such Preferred Shares Covenants (or any of them)
hereafter  are in any way  modified  or waived by the  holders of the  Preferred
Shares.

               (l) Indemnification Against Payment of Brokers' Fees. The Account
Party agrees to defend, indemnify and hold harmless the Agent, the Issuing Bank,
and each of the Participants from and against any and all liabilities,  damages,
penalties,  costs,  and  expenses,  relating in any manner to any  brokerage  or
finder's fees in respect of the Letter of Credit  Facility  (except as resulting
from any arrangements or agreements made with any broker or finder by the Agent,
the Issuing Bank, or any Participant).

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

               (n) Place for Records;  Inspection. The Account Party and Charter
Mac shall  maintain  all of its  business  records at the address  specified  in
Section  14.1  of  this  Agreement  with  respect  to the  Account  Party.  Upon
reasonable  notice and at  reasonable  times during  normal  business  hours the
Agent, the Issuing Bank and each Participant  shall have the right (through such
agents or  consultants  as the Agent,  the Issuing Bank or any  Participant  may
designate) to examine the Account  Party's and Charter  Mac's  property and make
copies of and  abstracts  from the Account  Party's  and Charter  Mac's books of
account, correspondence and other records and to discuss its financial and other
affairs with any of its senior officers and any accountants hired by the Account
Party,  it being agreed that the Agent,  the Issuing  Bank and each  Participant
shall not divulge information obtained from such examination to others except to
any  Participant,  transferee  or  proposed  transferee,  holder or  prospective
holder, participant or prospective participant, or if required to do so by Legal
Requirements or in connection with  administering the Letter of Credit Facility,
enforcing  their  rights  and  remedies  under the Credit  Documents  and in the
conduct,  operation  and  regulation  of their  respective  banking  and lending
businesses (which may include,  without limitation,  the transfer of the Issuing
Bank's  interest  in the  Letter  of  Credit or the  issuance  of  participation
interests therein).  Any transferee of the Issuing Bank's interest in the Letter
of Credit or any holder of a participation  interest in the Letter of Credit, or
any  participant  in or  assignee  of any  Participant's  Commitment,  shall  be
entitled to deal with such information in the same manner and in connection with
any subsequent


                                      -32-
<PAGE>


transfer  by the  Issuing  Bank of its  interest  in the  Letter of Credit or of
further participation  interests therein, or by a Participant of its interest in
or a participation in its interest in such Participant's  Commitment;  provided,
however, any such Participant,  transferee, holder or participant shall be bound
by the confidentiality provisions of this Section 10.1(n).

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

               (p)  Indemnification.  The Account Party shall indemnify and hold
harmless  the  Agent,  the  Issuing  Bank,  and the  Participants  and all those
claiming  by,  through or under the Agent,  the  Issuing  Bank,  and each of the
Participants (singly and collectively, the "Indemnified Party") from and against
any and all claims, actions and suits whether groundless or otherwise,  and from
and  against any and all  liabilities,  losses,  damages  and  expenses of every
nature and  character  arising out of this  Agreement or any of the other Credit
Documents or the transactions contemplated hereby ("Damages") including, without
limitation (i) any actual or proposed use by


                                      -33-
<PAGE>


the Account Party or any of its  Subsidiaries of the Letter of Credit,  (ii) the
Account  Party's or any of its  Subsidiaries'  entering into or performing  this
Agreement or any of the other Credit Documents, and/or (iii) with respect to the
Account Party and its Subsidiaries  and their respective  properties and assets,
the  violation  of any  Legal  Requirement,  in  each  case  including,  without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of  internal  counsel  incurred  in  connection  with  any  such  investigation,
litigation or other  proceeding;  provided,  however,  that no Indemnified Party
shall  be  entitled  to  indemnification  if a court of  competent  jurisdiction
finally  determines  (all  appeals  having been  exhausted  or waived) that such
Indemnified Party acted in bad faith, with willful misconduct, gross negligence,
or material breach of this Agreement,  the Letter of Credit, or any other Credit
Document.  No  Indemnified  Party  shall be entitled to settle or enter into any
accommodation  in respect of any such  claim,  action or suit  without the prior
written consent of the Account Party (and any  Indemnified  Party so settling or
accommodating  without  the  Account  Party's  consent  shall not be entitled to
indemnification therefor),  provided, however, if the Account Party shall refuse
to provide its  written  consent to a requested  settlement,  the Account  Party
shall,  as collateral  for  potential  payment of the full amount of the claimed
Damages, provide either a letter of credit in favor of the Indemnified Party, on
terms and conditions  satisfactory to the Agent, in its sole discretion,  or, as
cash  collateral,  cash or cash  equivalents,  any of which shall be in the full
amount of the claimed Damages,  together with all anticipated costs and expenses
(including reasonable attorneys' fees and expenses) anticipated by the Agent, in
its sole  discretion,  to accrue in  connection  with the defense  and  possible
payment of the  claimed  Damages.  If the Account  Party  fails to provide  such
required  collateral,  or fails to  respond  to a  request  for a  consent  to a
settlement,  within five (5) Business Days of when first requested by the Agent,
the Indemnified Party shall be entitled to settle the claim as it proposed,  and
the Account Party shall be liable for the full amount thereof  together with all
related Damages. In litigation,  or the preparation  therefor,  the Issuing Bank
and the Agent (including for the benefit of the Participants)  shall be entitled
to select their own counsel  and, in addition to the  foregoing  indemnity,  the
Account  Party agrees to pay promptly the  reasonable  fees and expenses of such
counsel.  If, and to the extent that the  obligations of the Account Party under
this Section 10.1(p) are unenforceable for any reason,  the Account Party hereby
agrees to make the maximum  contribution  to the payment in satisfaction of such
obligations  which is permissible  under  applicable law. The provisions of this
Section  10.1(p) shall survive the expiry or other  termination of the Letter of
Credit and the termination of the obligations of the Issuing Bank hereunder.

               (q)  Amendments  to Credit  Documents.  The  Account  Party shall
provide the Beneficiaries, MBIA, and the Administrative Agent with copies of all
amendments to this Agreement and any other Credit Document.

        (r)  Account  Party  Financial  Covenants.  For so long as the Letter of
Credit or other Obligations remain outstanding:

                   (i) Adjusted  Tangible Net Worth.  The Account Party shall at
all times  maintain  (to be tested  as of the last day of each  fiscal  quarter,
commencing with the Account


                                      -34-
<PAGE>


Party's fiscal quarter  ending March 31, 2003) a minimum  Adjusted  Tangible Net
Worth  of not less  than the sum of (i)  $375,000,000,  plus  (ii)  seventy-five
percent  (75%) of the offering  proceeds of any  issuances  of Equity  Interests
after  January 1, 2003 (net of the costs and expenses  actually  incurred by the
Account Party in connection with such equity issuances).

                   (ii) Fixed  Charges.  The Account  Party shall not permit the
ratio of its consolidated (i) Adjusted EBITDA, divided by (ii) Fixed Charges, to
be less than 2.5 to 1.0, for any fiscal quarter (to be tested as of the last day
of each fiscal  quarter,  commencing  with the Account  Party's  fiscal  quarter
ending March 31, 2003).

                   (iii)  Leverage.  The Account  Party shall not, and shall not
permit any of its Subsidiaries to, breach the leverage  covenant (which is to be
determined  on a  consolidated  basis  as  between  the  Account  Party  and its
Subsidiaries)  included as a Preferred  Shares Covenant  (Paragraph 2 of Exhibit
F), or fail to observe each and every other Preferred Shares Covenant.

               (s) Further  Assurances.  The Account Party will cooperate  with,
and will cause each of its  Subsidiaries,  to  cooperate  with the Agent and the
Issuing Bank and execute such further  instruments  and documents as the Issuing
Bank or the Agent shall  reasonably  request to carry out to their  satisfaction
the transactions  contemplated by this Agreement,  the Letter of Credit, and the
other Credit Documents.

               (t)  Revenue  Bond  Valuation.   For  the  purpose  of  financial
statement  presentation,  the Account  Party will estimate the fair value of its
investments  in revenue  bonds using the  methodology  described in Annex M-2 to
Exhibit M or as may be required to be modified by changes in GAAP,  and will not
materially  deviate from such  methodology.  The Account  Party shall notify the
Agent of any  changes in GAAP which  would  require a change in the  methodology
described in Annex M-2 to Exhibit M..


     SECTION 1.56        Negative  Covenants.  The Account  Party  covenants and
agrees,  from the date  hereof  and so long as the  Letter  of  Credit  or other
Obligations remain outstanding, as follows:

               (a) Liens. The Account Party will not, and will not permit any of
its  Subsidiaries  to, create,  incur or assume any Lien upon or with respect to
any  Covered  Eligible  Bond  other  than  pursuant  to any  of the  Transaction
Documents.

               (b)  Merger;  Sale of Assets.  The  Account  Party shall not be a
party to any merger or  consolidation,  or purchase or otherwise  acquire all or
substantially  all  of  the  assets  or  any  stock  of  any  class  of,  or any
partnership,  joint venture or other equity  interest in, any other  Person,  or
sell,   transfer,   convey,  or  lease  (in  one  transaction  or  a  series  of
transactions) all or substantially all of its assets.


                                      -35-
<PAGE>


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

               (d) No Material Modifications. The Account Party shall not permit
any Material Change to Transaction Documents, or any material modification of or
waiver with respect to, any Covered  Eligible Bond and/or the Bond  Documents or
Bond  Collateral  relating to the Property  securing such Covered  Eligible Bond
unless any such  modification  shall have first been  approved in writing by the
Agent.  The Account Party shall timely provide the Agent with copies any and all
modifications and amendments to any of the foregoing.

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

               (f)  Effect of  Amendment.  If, as a result of any  amendment  or
modification  to the  Transaction  Documents,  the Agent  determines  that it is
necessary or  desirable to modify the terms,  conditions,  and  definitions  set
forth in this  Agreement,  then the Account Party shall execute and deliver such
other and further  instruments,  documents,  and agreements as may be reasonably
requested by the Agent.

                                  ARTICLE 11.

                               EVENTS OF DEFAULT.
                               ------------------

        The following  provisions deal with Events of Default and certain rights
of the Agent and the Issuing Bank following an Event of Default.

        SECTION 1.57     Events of Default. Each of the following events, unless
cured within any applicable  grace period set forth or referred to below in this
Section 11.1, shall constitute an "Event of Default."

               (a)  Failure  to Pay.  The  Account  Party  shall fail to pay any
principal  and interest of the Drawings or any other  Obligation as and when the
same shall become due and payable;

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


                                      -36-
<PAGE>


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

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

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

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

               (g)  Judgments.   There  shall  remain  in  force,  undischarged,
unsatisfied and unstayed,  for more than  forty-five  (45) days,  whether or not
consecutive,  any uninsured  final judgment  against the Account Party or any of
its  Subsidiaries  that,  with  other  outstanding  uninsured  final  judgments,
undischarged,  against the Account Party or any of its  Subsidiaries  exceeds in
the aggregate $500,000;

               (h)  Cancellation  of  Credit  Documents.  If any  of the  Credit
Documents shall be canceled,  terminated,  revoked or rescinded or any action at
law, suit or in equity or other legal


                                      -37-
<PAGE>


proceeding  to cancel,  revoke or rescind any of the Credit  Documents  shall be
commenced by or on behalf of the Account  Party or any of its  Subsidiaries,  or
any  court or any  other  governmental  or  regulatory  authority  or  agency of
competent  jurisdiction  shall make a  determination  that, or issue a judgment,
order,  decree or  ruling  to the  effect  that,  any one or more of the  Credit
Documents is illegal,  invalid or  unenforceable  in  accordance  with the terms
thereof;

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

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

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

               (l) Change in Control.  The  occurrence of a Change in Control of
either the Account Party or Charter Mac;

               (m) Regarding Charter Mac. The occurrence of any of the foregoing
Events of Default described in subsections (c), (d), (e), (f), (g), (i), and (k)
above,  with respect to Charter Mac, as if Charter Mac were the "Account  Party"
described therein;

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

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

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

               (q) Transaction Documents.  The occurrence of an event of default
caused by a Charter Entity under the Transaction Documents, or the occurrence of
any other event of default under the Transaction  Documents if the occurrence of
such event of default  materially  adversely  affects any Covered  Eligible Bond
and/or materially  adversely affects the ability of the Account Party to perform
its obligations and liabilities  pursuant to this Agreement and any other Credit
Document; or


                                      -38-
<PAGE>


               (r)  Failure  to Pay  Dividends.  Subject  to the  provisions  of
Section  10.2(e),  the  Account  Party  shall fail to pay,  as and when the same
become due, any  dividends  required to be paid to the holders of the  Preferred
Shares in  accordance  with the  terms and  conditions  of the  Account  Party's
Constituent Documents.

        SECTION 1.58     Certain  Remedies.  If an Event of Default shall occur
and be continuing:

               (a) Establishment of Funded Reserve. The Account Party shall fund
the Cash  Collateral  Account  with an amount equal to the  aggregate  Allocable
Share of the Maximum  Credit  Amount of all then Covered  Eligible  Bonds.  Such
funds shall either be (i) returned to the Account Party (x) if the Account Party
cures such Event of Default to the  complete  satisfaction  of the Agent and the
Issuing Bank,  (y) upon the  occurrence of the  Expiration  Date with no Drawing
having been made at such time and no Unpaid Drawings or other  Obligations  then
outstanding,  or (z) with respect to the Allocable  Share of the Maximum  Credit
Amount  relating  to  any  particular   Covered  Eligible  Bond,  such  Bond  is
voluntarily  withdrawn  pursuant to a Bond Withdrawal Notice, or (ii) applied by
the Agent to the Obligations upon the funding by the Issuing Bank of any Drawing
(the Issuing Bank hereby  acknowledging that it is unconditionally  obligated to
fund any  conforming  Drawing  whether  or not such  cash  Collateral  may be so
applied at such time).

               (b)  Accelerate  Debt.  Agent may, and with the  direction of the
Requisite   Participants  shall,  declare  the  Obligations  evidenced  by  this
Agreement and the other Credit Documents  immediately due and payable  (provided
that in the case of the  occurrence  of an event set forth in Sections  11.1 (e)
and 11.1(f) such acceleration shall be automatic).

               (c)  Pursue  Remedies.  Agent  may  pursue  any and all  remedies
provided for hereunder,  or under any one or more of the other Credit Documents.
No  failure on the part of the Agent or the  Issuing  Bank to  exercise,  and no
delay in  exercising,  any right  hereunder or under any other  Credit  Document
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right  hereunder  or under  any other  Credit  Document  preclude  any other
further exercise thereof of any remedies provided by law.

               (d) Power of Attorney.  For the purpose of exercising  the rights
granted by this  Article 11, as well as any and all other rights and remedies of
Agent,  Account Party hereby irrevocably  constitutes and appoints Agent (or any
agent designated by the Agent) its true and lawful  attorney-in-fact,  with full
power of substitution,  exercisable upon and following any Event of Default,  to
execute,  acknowledge and deliver any instruments and to do and perform any acts
in the name and on behalf of Account Party.

        SECTION 1.59     Written Waivers. If an Event of  Default  is  waived in
accordance  with  applicable  provisions  of this  Agreement,  as evidenced by a
specific written instrument


                                      -39-
<PAGE>


executed by an authorized officer of Agent, the Event of Default so waived shall
be deemed to have never occurred.

                                  ARTICLE 12.

                                    SET-OFF.
                                    --------

        SECTION 1.60     Set-Off.   If  an  Event  of  Default   occurs  and  is
continuing,  any  deposits,  balances or other sums  credited by or due from the
Agent or the Issuing  Bank,  or from any  Affiliate  of the Agent or the Issuing
Bank,  to the  Account  Party  may,  to the  fullest  extent not  prohibited  by
applicable  law,  at any  time  or from  time to  time,  without  regard  to the
existence,  sufficiency or adequacy of any other collateral,  and without notice
or compliance  with any other  condition  precedent now or hereafter  imposed by
statute,  rule of law or otherwise,  all of which are hereby waived, be set off,
appropriated  and applied by the Agent,  the  Issuing  Bank,  or such  Affiliate
against any or all of Account Party's Obligations irrespective of whether demand
shall have been made and although such  obligations  may be  unmatured,  in such
manner  as the  Agent  or the  Issuing  Bank or such  Affiliate  in its sole and
absolute  discretion may determine.  Within five (5) Business Days of making any
such set off,  appropriation or application,  the Agent agrees to notify Account
Party  thereof,  provided  the failure to give such notice  shall not affect the
validity of such set off or appropriation or application.  ANY AND ALL RIGHTS TO
REQUIRE  AGENT TO  EXERCISE  ITS RIGHTS OR  REMEDIES  WITH  RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LETTER OF CREDIT,  PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH  DEPOSITS,  CREDITS OR OTHER PROPERTY OF THE ACCOUNT
PARTY, ARE HEREBY  KNOWINGLY,  VOLUNTARILY AND IRREVOCABLY  WAIVED.  The Issuing
Bank agrees with each other  Person that (a) if an amount to be set off is to be
applied to indebtedness  of the Account Party to such Person,  such amount shall
be applied ratably to such other indebtedness and to the Obligations, and (b) if
such Person shall receive from the Account Party,  whether by voluntary payment,
exercise of the right of setoff, counterclaim,  cross action, enforcement of any
claim by  proceedings  against the Account Party at law or in equity or by proof
thereof in  bankruptcy,  reorganization,  liquidation,  receivership  or similar
proceedings,  or  otherwise,  and shall  retain and apply to the  payment of the
amounts to be paid to such Person any amount in excess of its ratable portion of
the  payments  received by the  Issuing  Bank and all of the  Participants  with
respect to Unpaid  Drawings  or other  Obligations,  such  Person will make such
disposition and arrangements with the others with respect to such excess, either
by  way  of  distribution,   participation,  pro  tanto  assignment  of  claims,
subrogation or otherwise as shall result in each Person  receiving in respect of
the  Unpaid  Drawings  or  other  Obligations,   its  proportionate  payment  as
contemplated by this Agreement;  provided that if all or any part of such excess
payment  is  thereafter   recovered  from  such  Person,  such  disposition  and
arrangements  shall be rescinded  and the amount  restored to the extent of such
recovery, but without interest.

        SECTION 1.61     Right to Freeze.  The Issuing  Bank and the Agent shall
also have the right,  at their  respective  option,  upon the  occurrence of any
event which would  entitle the Issuing  Bank or the Agent to set off or debit as
set forth in Section 12.1, to freeze, block or


                                      -40-
<PAGE>


segregate any such  deposits,  balances and other sums so that Account Party may
not access, control or draw upon the same.

        SECTION 1.62     Additional  Rights.  The  rights  of the  Agent and the
Issuing  Bank,  and each  Affiliate of the Agent and the Issuing Bank under this
Article  12 are in  addition  to, and not in  limitation  of,  other  rights and
remedies, including other rights of set off, which the Agent or the Issuing Bank
may have.

                                  ARTICLE 13.

                         THE AGENT AND THE PARTICIPANTS
                         ------------------------------

        SECTION 1.63     Rights, Duties and Immunities of the Agent.

               (a) Appointment of Agent.  Each  Participant and the Issuing Bank
hereby  irrevocably  designates and appoints Fleet as Agent of such  Participant
and  the  Issuing  Bank  to act as  specified  herein  and in the  other  Credit
Documents,  and each such  Participant  and the Issuing Bank hereby  irrevocably
authorizes the Agent to take such actions, exercise such powers and perform such
duties as are expressly delegated to or conferred upon the Agent by the terms of
this Agreement and the other Credit  Documents,  together with such other powers
as are reasonably  incidental thereto.  The Agent agrees to act as such upon the
express  conditions  contained  in this Article 13. The Agent shall not have any
duties or  responsibilities  except those  expressly  set forth herein or in the
other Credit  Documents,  nor shall it have any fiduciary  relationship with any
Participant  or the Issuing Bank,  and no implied  covenants,  responsibilities,
duties,  obligations  or  liabilities  shall  be read  into  this  Agreement  or
otherwise exist against the Agent.  The provisions of this Article 13 are solely
for the benefit of the Agent,  the  Participants,  and the Issuing Bank, and the
Account Party shall not have any rights as a third party  beneficiary  of any of
the provisions hereof,  nor, in the absence of any specific written agreement to
the contrary,  shall the Account Party be directly  obligated to any Participant
under this Agreement or any other Credit Document.

               (b)  Administration  of Letter of Credit  Facility by Agent.  The
Agent shall be responsible for  administering the Letter of Credit Facility on a
day-to-day basis. In the exercise of such administrative duties, the Agent shall
use the same  diligence  and  standard of care that is  customarily  used by the
Agent with respect to the issuance of similar letter of credit facilities by the
Agent solely for its own  account.  The Issuing  Bank and each  Participant,  as
applicable,  delegates  to the  Agent  the full  right  and  authority  on their
respective behalf to take the following  specific actions in connection with its
administration of the Letter of Credit Facility:

               (i) to receive all  payments  of  principal,  interest,  fees and
        other  charges paid by, or on behalf of, the Account  Party and,  except
        for fees to which the Agent or the Issuing  Bank are  entitled for their
        own respective  accounts  pursuant to the Credit Documents or otherwise,
        to  distribute  all such funds to the Agent,  the  Issuing  Bank and the
        respective Participants as provided for hereunder;


                                      -41-
<PAGE>


               (iii)  to keep and  maintain  complete  and  accurate  files  and
        records  of all  material  matters  pertaining  to the  Letter of Credit
        Facility,  and make such files and records  available for inspection and
        copying by each  Participant  and its  respective  employees  and agents
        during normal business hours upon reasonable  prior notice to the Agent;
        and

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

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

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

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


                                      -42-
<PAGE>


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

               (f) Notice of Event of Default.  The Agent shall not be deemed to
have  knowledge or notice of the  occurrence of any Event of Default  unless the
Agent  has  actual  knowledge  of  the  same  or  has  received  notice  from  a
Participant, the Issuing Bank, or the Account Party referring to this Agreement,
describing  such Event of Default and  stating  that such notice is a "notice of
default." In the event that the Agent obtains such actual  knowledge or receives
such a  notice,  the Agent  shall  give  prompt  notice  thereof  to each of the
Participants.  The Agent shall take such  action  with  respect to such Event of
Default as shall be reasonably directed by the Requisite  Participants or all of
the  Participants,  as may be applicable.  Unless and until the Agent shall have
received such direction, the Agent may (but shall not be obligated to) take such
action,  or refrain from taking such  action,  with respect to any such Event of
Default as it shall deem advisable in the best interest of the Participants.

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

               (h) Agent's  Reimbursement and Indemnification.  The Participants
agree to reimburse  and  indemnify  the Agent,  ratably in  proportion  to their
respective Commitments,  for (i) any amounts not reimbursed by the Account Party
for which the Agent is entitled to reimbursement by the Account Party under this
Agreement or the other Credit Documents, (ii) any other expenses incurred by the
Agent  on  behalf  of the  Participants  in  connection  with  the  preparation,
execution,  delivery,  administration,  amendment,  waiver and/or enforcement of
this  Agreement  and the other  Credit  Documents,  and  (iii) any  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or  disbursements  of any kind and nature  whatsoever which may imposed
on, incurred by or asserted  against the Agent in any way relating to or arising
out of this  Agreement  or the other  Credit  Documents  or any  other  document
delivered in connection  therewith or any transaction  contemplated  thereby, or
the enforcement of


                                      -43-
<PAGE>


any of the terms hereof or thereof, provided that no Participant shall be liable
for any of the foregoing to the extent that they arise from the gross negligence
or willful misconduct of the Agent. If any indemnity  furnished to the Agent for
any  purpose  shall,  in the  opinion of the Agent,  be  insufficient  or become
impaired,  the  Agent  may call  for  additional  indemnity  and  cease,  or not
commence,  to do the action indemnified against until such additional  indemnity
is furnished.

               (i)  Agent  in  its  Individual  Capacity.  With  respect  to its
Commitment as a Participant,  and the respective  advances made by it, the Agent
shall  have the same  rights  and powers  hereunder  and under any other  Credit
Document as any  Participant and may exercise the same as though it were not the
Agent and/or the Issuing  Bank,  and the term  "Participant"  or  "Participants"
shall,  unless  the  context  otherwise  indicates,  include  the  Agent  in its
individual  capacity.  The Agent and its  subsidiaries and affiliates may accept
deposits from, lend money to, and generally  engage in any kind of commercial or
investment  banking,  trust,  advisory or other business with the Account Party,
Charter Mac, or any  Subsidiary or Affiliate of the Account Party or Charter Mac
as if it were not the Agent and/or the Issuing Bank hereunder.

               (j) Successor  Agent.  The Agent may resign at any time by giving
thirty (30) days' prior written  notice to the  Participants,  the Issuing Bank,
and Account Party. The Requisite Participants,  for good cause, may remove Agent
at any time by giving thirty (30) days' prior written  notice to the Agent,  the
Issuing  Bank,  the  Account  Party  and the other  Participants.  Upon any such
resignation  or  removal,  the  Requisite  Participants  shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Requisite Participants and accepted such appointment within thirty (30) days
after the  retiring  Agent's  giving  notice  of  resignation  or the  Requisite
Participants'  giving  notice of removal,  as the case may be, then the retiring
Agent may  appoint,  on  behalf of the  Account  Party and the  Participants,  a
successor  Agent.  Each such  successor  Agent shall be a financial  institution
which meets the requirements of an Eligible Assignee. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent,  such successor Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring  Agent,  and the retiring  Agent shall be  discharged
from its duties and obligations  hereunder and under the other Credit Documents.
After any retiring Agent's resignation hereunder, the provisions of this Article
13 shall  continue in effect for its benefit in respect of any actions  taken or
omitted to be taken by it while it was acting as the Agent hereunder.

               (k) Duties in the Case of Enforcement. In case one or more Events
of  Default  have  occurred  and  shall  be  continuing,   and  whether  or  not
acceleration of the Obligations  shall have occurred,  the Agent may, and shall,
at the request, or upon the consent, of the Requisite Participants or all of the
Participants,  as may be  applicable,  and provided that the  Participants  have
given to the Agent such additional  indemnities and assurances  against expenses
and  liabilities  as the Agent may  reasonably  request,  proceed to enforce the
provisions  of this  Agreement  and the other Credit  Documents  respecting  the
disposition  of all or any part of the  Collateral and the exercise of any legal
or  equitable  rights or  remedies as it may have  hereunder  or under any other
Credit  Document or otherwise by virtue of applicable law, or to refrain from


                                      -44-
<PAGE>


so acting if similarly requested by the Requisite Participants.  The Agent shall
be fully  protected in so acting or refraining  from acting upon the instruction
of the Requisite  Participants or all of the Participants,  as maybe applicable,
and such instruction shall be binding upon all the  Participants.  The Requisite
Participants or all of the  Participants,  as may be applicable,  may direct the
Agent in writing as to the method and the extent of any such  disposition or the
exercise  of any other  right or remedy,  the  Participants  hereby  agreeing to
indemnify and hold the Agent harmless from all costs and liabilities incurred in
respect  of all  actions  taken or omitted in  accordance  with such  direction,
provided  that the Agent need not comply with any such  direction  to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or  commercially  unreasonable in any applicable  jurisdiction.  The
Agent may, in its discretion but without obligation, in the absence of direction
from  the  Requisite  Participants  or  all  of  the  Participants,  as  may  be
applicable,  take such interim actions as it believes  necessary to preserve the
rights of the  Issuing  Bank and the  Participants  hereunder  and in and to the
Letter of Credit and/or any Collateral securing the Obligations,  including, but
not limited to,  petitioning a court for  injunctive  relief,  appointment  of a
receiver  or  preservation  of the  proceeds  of  any  Collateral.  Each  of the
Participants  acknowledges and agrees that no individual Participant (other than
the Issuing Bank in its capacity as such) may separately enforce or exercise any
of the provisions of any of the Credit Documents other than through the Agent.

        SECTION 1.64     Respecting Issuance of Letter of Credit and Payments.

               (a)  Participations  in  Letter  of  Credit.  On  and  as of  the
Agreement  Date,  and on each  date  hereafter  as of which a Person  becomes  a
Participant  hereunder,  the  Issuing  Bank  shall be  deemed  to have  sold and
transferred to each  Participant,  and each Participant then becoming such shall
be deemed  irrevocably  and  unconditionally  to have purchased from the Issuing
Bank,  without  recourse or warranty,  an undivided  interest and  participation
effective  as  of  such  date,  in a  percentage  equal  to  such  Participant's
Commitment Percentage, in the Letter of Credit (including each L/C Schedule from
time to time issued hereunder), the Letter of Credit Fee and the Unused Facility
Fee, each Drawing disbursed  thereunder and the obligations of the Account Party
under,  and the rights and benefits of the Issuing Bank  hereunder and under the
other Credit Documents (including the benefit of all representations, warranties
and  covenants  of the Account  Party),  this  Agreement  with  respect  thereto
(although all direct funding  obligations  under the Letter of Credit  Agreement
shall  continue to be the sole  responsibility  of the Issuing  Bank).  Upon any
change in the Participants'  Commitment  Percentages there shall be an automatic
adjustment  to the  participations  pursuant to this Section 13.2 to reflect the
new Commitment  Percentages.  In determining  whether to pay under the Letter of
Credit, the Issuing Bank shall have no obligation  relative to the Participants,
other than to confirm  that any  documents  required to be  delivered  under the
Letter  of  Credit  appear  to have  been  delivered  and that  they  appear  to
substantially  comply  on their  face  with the  requirements  of the  Letter of
Credit.  Any action taken or omitted to be taken by the Issuing Bank under or in
connection  with the  Letter of Credit,  if taken or  omitted in the  absence of
gross  negligence  or willful  misconduct  (as finally  determined by a court of
competent  jurisdiction),  shall not create for the Issuing  Bank any  resulting
liability to the Account  Party,  any  Participant  or any other Person.  If the
Issuing Bank makes any payment  under the Letter of Credit and the Account Party
shall not have


                                      -45-
<PAGE>


reimbursed  such amount in full to the Issuing Bank within two (2) Business Days
pursuant to Section 3.1, the Issuing Bank shall promptly  notify the Agent,  and
the Agent shall  promptly  notify each  Participant  of such  failure,  and each
Participant shall promptly and  unconditionally pay to the Agent for the benefit
of such Issuing Bank the amount of such Participant's  Commitment  Percentage of
such  unreimbursed  payment  in Dollars  and in same day funds.  If the Agent so
notifies a  Participant  prior to 11:00 A.M.  (Boston time) on any Business Day,
such  Participant  shall  make  available  to the Agent for the  benefit  of the
Issuing Bank, in Dollars, such Participant's Commitment Percentage of the amount
of such payment on such Business Day in same day funds; provided,  however, that
no  Participant  shall be  obligated  to pay to the Agent for the benefit of the
Issuing  Bank its  Commitment  Percentage  of such  unreimbursed  amount for any
wrongful payment made by the Issuing Bank under the Letter of Credit as a result
of acts or omissions  constituting willful misconduct or gross negligence on the
part  of the  Issuing  Bank  (as  finally  determined  by a court  of  competent
jurisdiction).  If and to the extent such Participant shall not have so made its
Commitment  Percentage of the amount of such payment  available to the Agent for
the benefit of the Issuing Bank, such Participant agrees to pay to the Agent for
the benefit of the Issuing Bank, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Agent for the benefit of the Issuing Bank at the overnight  Federal Funds
Rate for the first three days and at the Default Rate for each day thereafter.

               (b) Nature of Obligations of Participants. The obligations of the
Participants  hereunder are several and not joint. Failure of any Participant to
fulfill  its  obligations  hereunder  shall not result in any other  Participant
becoming  obligated  to  pay  to the  Issuing  Bank  more  than  its  Commitment
Percentage  of any  Drawing,  nor shall such  failure  release or  diminish  the
obligations of any other Participant to fund its Commitment  Percentage provided
herein. The obligation of the Issuing Bank to honor any conforming Drawing under
the  Letter  of  Credit  shall  not be  affected  by  any  such  failure  by any
Participant to fulfill its obligations  hereunder.  Further,  the obligations of
the  Participants  to make  payments to the Agent for the benefit of the Issuing
Bank with respect to the Letter of Credit shall be  irrevocable  and not subject
to any  qualification or exception  whatsoever  (except for any wrongful payment
made by the  Issuing  Bank  under  the  Letter  of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Issuing Bank (as finally  determined by a court of competent  jurisdiction)) and
shall be made in  accordance  with the terms and  conditions  of this  Agreement
under all circumstances,  including,  without  limitation,  any of the following
circumstances:

                         (i) any  lack of  validity  or  enforceability  of this
        Agreement or any of the other Credit Documents;

                         (ii) the  existence  of any claim,  setoff,  defense or
        other right which any the Account  Party or any of its  Subsidiaries  or
        Affiliates  may  have  at  any  time  against  either  Beneficiary,  any
        transferee  of the  Letter of Credit  (or any  Person  for whom any such
        transferee may be acting), the Agent, the Issuing Bank, any Participant,
        or any other Person,  whether in  connection  with this  Agreement,  the
        Letter of Credit, the transactions  contemplated herein or any unrelated
        transactions  (including any underlying transaction


                                      -46-
<PAGE>


between or among the  Account  Party,  or any  Subsidiary  or  Affiliate  of the
Account Party and the Beneficiaries);

                         (iii) any  draft,  certificate  or any  other  document
        presented  under the Letter of Credit proving to be forged,  fraudulent,
        invalid or  insufficient  in any respect or any statement  therein being
        untrue or inaccurate in any respect; or

                         (iv) the occurrence of any Event of Default.

               (c) Payments to Agent.  All payments of principal of and interest
respecting any Unpaid Drawing shall be made to the Agent by the Account Party or
any  other  obligor  or  guarantor  for  the  account  of the  Issuing  Bank  in
immediately  available funds as provided in this Agreement.  Except as otherwise
expressly  provided herein,  the Agent agrees to use its reasonable best efforts
to promptly to distribute to the Issuing Bank and to each Participant  which has
funded its Commitment Percentage of any Unpaid Drawing, on the same Business Day
upon which each such  payment is made (if  received  prior to 2:00 p.m.  on such
Business  Day),  such  Person's  proportionate  share of each  such  payment  in
immediately  available  funds,  excluding  Liquidation  Proceeds  which shall be
distributed in accordance with Section 13.2(d) below.  The Agent shall upon each
distribution  promptly  notify  the  Issuing  Bank and each  Participant  of the
amounts  distributed  to it  applicable  to  principal  of, and interest on, the
proportionate  share held by the  applicable  Person.  Each payment to the Agent
under the first  sentence  of this  Section  shall  constitute  a payment by the
Account Party to the Issuing  Bank,  and any such payment to the Agent shall not
be considered  outstanding for any purpose after the date of such payment by the
Account  Party to the Agent  without  regard to whether or when the Agent  makes
distribution  thereof as provided  above.  If any payment  received by the Agent
from the Account Party is insufficient to pay both all accrued  interest and all
principal  then due and owing,  the Agent shall first apply such  payment to all
outstanding  interest  until paid in full and shall then apply the  remainder of
such  payment to all  principal  then due and owing,  and shall  distribute  the
payment to each  Participant  accordingly.  As between the Issuing Bank and each
Participant,  all interest in respect of any Unpaid  Drawing shall be solely for
the account of the Issuing Bank up to the time that the Agent has received  such
Participant's payment of its Commitment Percentage of such Unpaid Drawing.

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

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

        Second:       To the Issuing  Bank,  towards any  expenses for which the
                      Issuing  Bank is  entitled  to  reimbursement  under  this
                      Agreement or the other Credit  Documents  not  theretofore
                      paid to the Issuing Bank.


                                      -47-
<PAGE>


        Third:        To the Issuing  Bank and the  Participants  in  accordance
                      with their  proportional share based upon their respective
                      Commitment  Percentages  until  the  Issuing  Bank and all
                      Participants  have  been  paid in full all  principal  and
                      interest  respectively  due to the  Issuing  Bank and such
                      Participants  respecting  their  respective  participation
                      interests  in the Unpaid  Drawings,  with the Issuing Bank
                      and each  Participant  applying such proceeds for purposes
                      of this Agreement first against the outstanding  principal
                      balance due to the Issuing  Bank and such  Participant  in
                      respect of their respective participation interests in the
                      Unpaid  Drawings  and then to accrued and unpaid  interest
                      due to the Issuing Bank and such Participant in respect of
                      their  respective  participation  interests  in the Unpaid
                      Drawings.

        Fourth:To all applicable   Participants   in   accordance   with   their
                      proportional share based upon their respective  Commitment
                      Percentages  until all Participants have been paid in full
                      all  other  amounts  due to such  Participants  under  the
                      Letter of Credit Facility.

        Fifth:        To the  Account  Party  or such  other  Persons  as may be
                      entitled to claim Liquidation Proceeds.

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

               (f)  Setoff.  If the  Issuing  Bank shall  exercise  any right of
setoff  against a deposit  balance or other account of the Account Party held by
the Issuing Bank on account of the  obligations  of the Account Party under this
Agreement,  the  Issuing  Bank shall  remit to the Agent all such sums  received
pursuant to the exercise of such right of setoff,  and the Agent shall apply all
such sums for the benefit of the Issuing Bank and the Participants  hereunder in
accordance with the terms of this Agreement.

               (g)  Distribution  by Agent.  If, in the  opinion  of the  Agent,
distribution  of any amount  received by it in such capacity  hereunder or under
any of the other Credit  Documents  might involve any liability,  it may refrain
from making  distribution  until its right to make distribution  shall have been
adjudicated  by a court of competent  jurisdiction  or has been  resolved by the
mutual consent of the Issuing Bank and all Participants.  In addition, the Agent
may


                                      -48-
<PAGE>


request full and complete indemnity,  in form and substance  satisfactory to it,
prior to making  any such  distribution.  If a court of  competent  jurisdiction
shall  adjudge that any amount  received and  distributed  by the Agent is to be
repaid,  each  person to whom any such  distribution  shall have been made shall
either repay to the Agent its  proportionate  share of the amount so adjudged to
be repaid or shall pay over to the same in such  manner  and to such  persons as
shall be determined by such court.

               (h)  Delinquent  Participant.  If for any reason any  Participant
shall fail or refuse to abide by its obligations under this Agreement, including
without  limitation its obligation to make available to Agent its pro rata share
respecting  any Unpaid  Drawings,  funding  requirements,  expenses or setoff (a
"Delinquent  Participant") and such failure is not cured within ten (10) days of
receipt  from the Agent of written  notice  thereof,  then,  in  addition to the
rights and remedies  that may be  available  to Agent,  the Issuing Bank and the
other Participants, at law or in equity, and not in limitation thereof, (i) such
Delinquent  Participant's  right to  participate  in the  administration  of, or
decision-making rights related to, the Letter of Credit Facility, this Agreement
or the other Credit  Documents  shall be  suspended  during the pendency of such
failure or refusal,  and without  limiting the generality of the  foregoing,  at
such time as a Participant  becomes a Delinquent  Participant,  such  Delinquent
Participant's  right to vote on  matters  which are  subject  to the  consent or
approval  of  the  Requisite  Participants  or all  the  Participants  shall  be
immediately  suspended  until  such  time  as the  Participant  is no  longer  a
Delinquent  Participant,   and  during  the  period  of  such  suspension,   the
calculation  of Required  Participants  shall be made without  reference to such
Delinquent   Participant's   Commitment   Percentage,   and  (ii)  a  Delinquent
Participant  shall be deemed to have  assigned any and all payments due to it in
respect of its  participation  interest in the Letter of Credit,  this Agreement
and the other  Credit  Documents,  whether  on  account  of  outstanding  Unpaid
Drawings,   interest,  fees  or  otherwise,  to  the  remaining   non-Delinquent
Participants for application to, and reduction of, their proportionate shares of
all  outstanding  Unpaid  Drawings  until,  as a result of  application  of such
assigned  payments,  the  Participants'   respective  pro  rata  shares  of  all
outstanding  Unpaid Drawings shall have returned to those in effect  immediately
prior to such  delinquency  and without giving effect to the nonpayment  causing
such delinquency. The Delinquent Participant's decision-making and participation
rights and rights to payments  as set forth in clauses (i) and (ii)  hereinabove
shall be restored only upon the payment by the Delinquent Participant of its pro
rata share of any Unpaid Drawings, funding requirements, or expenses as to which
it is  delinquent,  together with interest  thereon at the Default Rate from the
date when originally due until the date upon which any such amounts are actually
paid. The  Delinquent  Participant  also shall pay to the Agent,  within two (2)
Business Days of demand, all costs and expenses,  including without  limitation,
attorneys'  fees and  expenses,  incurred  by the Agent or the  Issuing  Bank in
connection with such delinquency.

        The  non-Delinquent  Participants shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash  consideration  (pro rata,  based on the  respective  Commitments  of those
Participants  electing to  exercise  such  right) the  Delinquent  Participant's
Commitment to reimburse the Issuing Bank for future  Unpaid  Drawings  under the
Letter of Credit (the "Future  Commitment").  Upon any such  purchase of the pro
rata share of


                                      -49-
<PAGE>


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

        SECTION 1.65     Assignment and Participation.

               (a)  Conditions to Assignment by  Participants  and Issuing Bank.
Except as provided  herein,  each Participant may assign to one or more Eligible
Assignees  all or a  portion  of its  interests,  rights  and  obligations  as a
Participant  under this Agreement  (including all or a portion of its Commitment
Percentage  and  Commitment  and the same  portion  of  Unpaid  Drawings),  upon
satisfaction  of the  following  conditions:  (i) the Agent and the Issuing Bank
shall have given its prior written consent to such  assignment,  and provided no
Event of Default has occurred and is  continuing,  the Account  Party shall have
given its prior written consent to such  assignment,  which consent shall not be
unreasonably  withheld  or  delayed;  (ii)  each such  assignment  shall be of a
constant,  and not a  varying,  percentage  of all the  assigning  Participant's
rights and obligations  under this Agreement,  (iii) each assignment shall be in
an amount that is at least $5,000,000.00 and is a whole multiple of $250,000.00,
and (iv) the parties to such assignment  shall execute and deliver to the Agent,
for  recording in the Register  (as  hereinafter  defined),  an  Assignment  and
Acceptance,  substantially  in the form of Exhibit G hereto (an  "Assignment and
Acceptance").  Upon such execution, delivery, acceptance and recording, from and
after the effective date  specified in each  Assignment  and  Acceptance,  which
effective  date shall be at least  five (5)  Business  Days after the  execution
thereof,  (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Participant  hereunder,  and (y) the assigning  Participant shall, to the extent
provided in such  assignment  and upon payment to the Agent of the  registration
fee referred to in Section 13.3(c),  be released from its obligations under this
Agreement.  The Issuing Bank (in its capacity as such) may assign its interests,
rights,  and  obligations  hereunder  as the  Issuing  Bank  only with the prior
written  consent  of the  Agent  and the  Account  Party  (but  may  assign  its
interests,  rights,  and  obligations  hereunder  as a  Participant  as provided
above).

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

                    (i) other than the  representation  and warranty  that it is
        the legal and beneficial  owner of the interest  being assigned  thereby
        free and clear of any adverse claim, the assigning  Participant makes no
        representation or warranty, express or implied,


                                      -50-
<PAGE>


        and assumes no responsibility with respect to any statements, warranties
        or  representations  made in or in connection with this Agreement or the
        execution, legality, validity, enforceability,  genuineness, sufficiency
        or value of this  Agreement,  the  Letter of  Credit,  the other  Credit
        Documents or any other instrument or document  furnished pursuant hereto
        or the  attachment,  perfection or priority of any security  interest or
        mortgage;

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

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

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

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

                    (vi) such assignee appoints and authorizes the Agent to take
        such  action as agent on its behalf and to exercise  such  powers  under
        this  Agreement  and the other Credit  Documents as are delegated to the
        Agent by the terms hereof or thereof,  together  with such powers as are
        reasonably incidental thereto;

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

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

               (c) Register.  The Agent shall maintain a copy of each Assignment
and Acceptance  delivered to it and a register or similar list (the  "Register")
for the  recordation  of the names and  addresses  of the  Participants  and the
Commitment Percentage of, and principal


                                      -51-
<PAGE>


amount of  Unpaid  Drawings  owing to the  Participants  from time to time.  The
entries in the Register shall be conclusive,  in the absence of manifest  error,
and the  Account  Party,  the Agent and the  Participants  may treat each person
whose name is  recorded  in the  Register  as a  Participant  hereunder  for all
purposes of this  Agreement.  The Register  shall be available for inspection by
the Account Party and the  Participants  at any reasonable time and from time to
time upon reasonable  prior notice.  Upon each such  recordation,  the assigning
Participant  agrees  to  pay to  the  Agent  a  registration  fee in the  sum of
$5,000.00.

               (d)  Participations.  Each Participant may sell participations to
one or more banks or other  financial  institutions  in all or a portion of such
Participant's  rights and obligations  under this Agreement and the other Credit
Documents;  provided  that (i) each  such  participation  shall be in a  minimum
amount of $5,000,000.00, (ii) each participant shall meet the requirements of an
Eligible  Assignee,  (iii) any such sale or  participation  shall not affect the
rights and duties of the selling Participant hereunder to the Account Party, and
(iv) the only rights granted to the participant  pursuant to such  participation
arrangements with respect to waivers,  amendments or modifications of the Credit
Documents shall be the rights to approve  waivers,  amendments or  modifications
that would reduce the principal of or the interest rate on any Unpaid  Drawings,
extend the term or increase the amount of the Commitment of such  Participant as
it relates to such  participant,  reduce  the amount of any  commitment  fees to
which such  participant  is entitled or extend any regularly  scheduled  payment
date for  principal  or  interest.  The Issuing Bank may from time to time admit
additional   Participants   hereunder,  in  which  event  Schedule  A  shall  be
appropriately amended to reflect each such additional  Participant's  Commitment
and Commitment Percentage, and each such additional Participant shall (x) become
a party to this Agreement by signing an appropriate  joinder agreement,  and (y)
pay to each then  existing  Participant a portion of any amounts which they have
funded to the Issuing Bank  hereunder and which have not been paid or reimbursed
by the Account Party so that the aggregate of such amounts  outstanding shall be
in proportion to the  Commitment  Percentages of all  Participants  after giving
effect to the admission of the new Participant(s).

               (e)  Disclosure.  The  Account  Party  agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Participant may disclose  information  obtained by such Participant  pursuant to
this  Agreement  to  assignees  or  participants  and  potential   assignees  or
participants  hereunder;   provided  that  such  assignees  or  participants  or
potential  assignees or participants shall agree (i) to treat in confidence such
information unless such information otherwise becomes public knowledge, (ii) not
to disclose  such  information  to a third  party,  except as required by law or
legal  process  and (iii) not to make use of such  information  for  purposes of
transactions unrelated to such contemplated assignment or participation.

               (f)   Miscellaneous   Assignment   Provisions.    Any   assigning
Participant  shall  retain  its  rights to be  indemnified  pursuant  to Section
10.1(p) with respect to any claims or actions  arising prior to the date of such
assignment.  If any assignee  Participant is not incorporated  under the laws of
the United States of America or any state thereof,  it shall,  prior to the date
on which any  interest or fees are payable  hereunder  or under any of the other
Credit


                                      -52-
<PAGE>


Documents  for  its  account,  deliver  to  the  Account  Party  and  the  Agent
certification  as to its exemption  from  deduction or withholding of any United
States federal income taxes.  Anything  contained in this Section 13.3(f) to the
contrary  notwithstanding,  any  Participant  may at any time  pledge all or any
portion of its  interest  and rights  under this  Agreement to any of the twelve
Federal  Reserve Banks  organized under Section 4 of the Federal Reserve Act, 12
U.S.C.  Section 341. No such pledge or the enforcement thereof shall release the
pledgor  Participant  from its  obligations  hereunder or under any of the other
Credit Documents.

               (g) No Assignment by Account  Party.  The Account Party shall not
assign or  transfer  any of its  rights or  obligations  under any of the Credit
Documents without the prior written consent of each of the Participants.

        SECTION 1.66     Administrative Matters.

               (a) Amendment, Waiver, Consent, Etc. Except as otherwise provided
herein or as to any term or provision  hereof which  provides for the consent or
approval of the Agent  and/or the Issuing  Bank,  no term or  provision  of this
Agreement or any other Credit  Document may be changed,  waived,  discharged  or
terminated,  nor may any consent  required or permitted by this Agreement or any
other  Credit  Document  be  given,  unless  such  change,  waiver,   discharge,
termination  or  consent   receives  the  written   approval  of  the  Requisite
Participants.  The agreement of the Account Party shall not be necessary for any
amendment or modification of the agreements  herein among the Agent, the Issuing
Banks and the  Participants  which does not adversely  affect the Account Party.
Notwithstanding  the foregoing,  the unanimous  written  approval of the Issuing
Bank and of all the Participants (other than a Delinquent  Participant) shall be
required with respect to any proposed amendment, waiver, discharge, termination,
or consent which:

               (i) has the  effect of (v)  extending  the final date as of which
        additional  Eligible  Lease-Up  Bonds  may be  added  to  (including  by
        substitution)  the  Letter  of Credit  Facility,  or the due date of any
        principal payment of any Unpaid Drawing, (w) extending the expiry of the
        Letter of Credit beyond the applicable Expiration Date, (x) reducing the
        rate  or  extending  the  time of  payment  of  interest  or  fees,  (y)
        increasing or reducing the principal  amount  thereof,  or (z) otherwise
        postponing or forgiving any indebtedness thereunder,

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

               (iii) amends, modifies or waives any provisions of this paragraph
        13.4(a),

               (iv) amends,  modifies or waives any provisions of Section 2.1 or
        the definition of Maximum Credit Amount;

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


                                      -53-
<PAGE>


               (vi) except as otherwise provided in the Agreement (including due
        to the admission of any one or more  additional  Participants),  changes
        the amount of any Participant's Commitment or Commitment Percentage, or

               (vii)  releases  or waives any  guaranty  of the  Obligations  or
        indemnifications provided in the Credit Documents;

and  provided,  further,  that,  without the consent of the Agent or the Issuing
Bank, as applicable,  no such action shall amend,  modify or waive any provision
of this Article 13 or any other  provision of any Credit  Document which relates
to the rights or obligations of the Agent or the Issuing Bank, as applicable.

               (b) Deemed  Consent or Approval.  With  respect to any  requested
amendment,  waiver,  consent or other action which  requires the approval of the
Requisite  Participants  or all of the  Participants,  as the  case  may be,  in
accordance  with  the  terms of this  Agreement,  or if the  Agent  is  required
hereunder  to  seek,  or  desires  to  seek,   the  approval  of  the  Requisite
Participants  or  all  of the  Participants,  as  the  case  may  be,  prior  to
undertaking  a  particular  action or course of conduct,  the Agent in each such
case shall provide each  Participant with written notice of any such request for
amendment, waiver or consent or any other requested or proposed action or course
of conduct, accompanied by such detailed background information and explanations
as may be  reasonably  necessary to determine  whether to approve or  disapprove
such amendment,  waiver, consent or other action or course of conduct. The Agent
may (but  shall not be  required  to)  include  in any such  notice,  printed in
capital  letters or  boldface  type,  a legend  substantially  to the  following
effect:

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

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

                                  ARTICLE 14.

                               GENERAL PROVISIONS.
                               -------------------

        SECTION 1.67     Notices.  Except for the presentment of a Drawing under
the Letter of Credit for Drawings by the Beneficiary,  the notice provisions for
which are governed by Section  2.1(c) above and the Letter of Credit,  any other
notice or other  communication in


                                      -54-
<PAGE>


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

               If to Account Party:

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

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

                      Greenberg Traurig, LLP
                      2700 Two Commerce Square
                      2001 Market Street
                      Philadelphia, Pennsylvania 19103
                      Fax No.:(215) 988-7801
                      Attention: Michael Lehr, Esquire

               If to the Agent or the Issuing Bank:

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

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

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

               If to a  Participant:  To such  address for such  Participant  as
               appears on


                                      -55-
<PAGE>


                               Schedule A.

               If to the Administrative Agent:

                      Deutsche Bank National Trust Company
                      6879 Crumpler Boulevard
                      Olive Branch, Mississippi 38654
                      Attention: Dennis Gillespie
                      Fax No.: (662) 890-0114

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

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

        SECTION  1.68    Parties  Bound;  Integration.  The  provisions  of this
Agreement  and of each of the other Credit  Documents  shall be binding upon and
inure to the benefit of Account Party,  the Agent, the Issuing Bank, and each of
the  Participants  and  their  respective  successors  and  assigns,  except  as
otherwise  prohibited  by this  Agreement,  the Letter of Credit,  or any of the
other Credit Documents.

        This  Agreement is a contract by and among  Account  Party,  Agent,  the
Issuing Bank,  and each of the  Participants  for their mutual  benefit,  and no
third person  including  the  Beneficiary  or any Person to whom any Draw may be
paid hereunder for the account of the Account Party or Subsidiary of the Account
Party) shall have any right,  claim or interest against either Agent, any of the
Participants, or Account Party by virtue of any provision hereof.

        This  Agreement  is  intended by the  Account  Party,  the Agent and the
Participants as the final,  complete and exclusive statement of the transactions
evidenced by this Agreement.  Except with respect to the Existing  Reimbursement
Agreement  to the extent  provided  herein and as set forth in the other  Credit
Documents, all prior or contemporaneous promises, agreements and understandings,
whether oral or written,  are deemed to be superseded by this Agreement,  and no
party is relying on any  promise,  agreement or  understanding  not set forth in
this Agreement.

        SECTION 1.69     Waivers, Extensions and Releases. Any waiver, extension
or release at any time granted by the Agent  hereunder (with the approval of the
Requisite


                                      -56-
<PAGE>


Participants or all of the Participants, as may be applicable),  shall be deemed
to be made in pursuance and not in modification  hereof,  and any such waiver in
any instance,  or under any  particular  circumstance  shall not be considered a
waiver of such condition in any other instance or any other circumstance.

        SECTION 1.70     Governing Law; Severability.

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

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

               (c) Governing Law; Sealed Instruments. This Agreement and each of
the other Credit Documents shall in all respects be governed, construed, applied
and  enforced  in  accordance  with the  internal  laws of The  Commonwealth  of
Massachusetts  without  regard to  principles of conflicts of law and each shall
take effect as a sealed instrument.

               (d) Severability.  Any  determination  that any provision of this
Agreement or any application  thereof is invalid,  illegal,  or unenforceable in
any  respect  in any  instance  shall not  affect  the  validity,  legality,  or
enforceability  of  such  provision  in any  other  instance,  or the  validity,
legality, or enforceability of any other provision of this Agreement.

        SECTION 1.71     Consent to Jurisdiction.  THE ACCOUNT PARTY AGREES THAT
ANY  SUIT FOR THE  ENFORCEMENT  OF THIS  AGREEMENT  OR ANY OF THE  OTHER  CREDIT
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE  COMMONWEALTH OF  MASSACHUSETTS OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE  JURISDICTION
OF SUCH  COURT AND THE  SERVICE  OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
ACCOUNT BY MAIL AT THE ADDRESS  SPECIFIED  IN SECTION  14.1.  THE ACCOUNT  PARTY
HEREBY  WAIVES ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN  INCONVENIENT
COURT.

        SECTION 1.72     JURY TRIAL WAIVER. THE  ACCOUNT PARTY,  THE AGENT,  THE
ISSUING BANK, AND THE  PARTICIPANTS  (BY ACCEPTANCE OF THIS AGREEMENT)  MUTUALLY
HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVE THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY  LITIGATION  BASED  HEREON,  ARISING OUT OF,  UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS  CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE


                                      -57-
<PAGE>


OF  DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING,  WITHOUT  LIMITATION,  ANY  COURSE OF  CONDUCT,  COURSE OF  DEALINGS,
STATEMENTS  OR  ACTIONS  OF  THE  AGENT  OR  ANY  PARTICIPANT  RELATING  TO  THE
ADMINISTRATION  OF THE LETTER OF CREDIT  FACILITY OR  ENFORCEMENT  OF THE CREDIT
DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER  ACTION IN WHICH A JURY TRIAL  CANNOT BE OR HAS NOT BEEN  WAIVED.
EXCEPT AS PROHIBITED  BY LAW,  ACCOUNT PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR  RECOVER IN ANY  LITIGATION  ANY  SPECIAL,  EXEMPLARY,  PUNITIVE  OR
CONSEQUENTIAL  DAMAGES OR ANY DAMAGES  OTHER THAN,  OR IN  ADDITION  TO,  ACTUAL
DAMAGES.  THE ACCOUNT PARTY CERTIFIES THAT NO REPRESENTATIVE,  AGENT OR ATTORNEY
OF THE AGENT, THE ISSUING BANK, OR ANY PARTICIPANT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE,  THAT THE AGENT,  THE ISSUING BANK, OR ANY PARTICIPANT  WOULD NOT, IN
THE EVENT OF  LITIGATION,  SEEK TO ENFORCE  THE  FOREGOING  WAIVER.  THIS WAIVER
CONSTITUTES A MATERIAL  INDUCEMENT FOR PARTICIPANTS TO ACCEPT THIS AGREEMENT AND
ESTABLISH THE LETTER OF CREDIT FACILITY.

        SECTION 1.73     Survival.  All representations,  warranties,  covenants
and  agreements of Account Party herein or in any other Credit  Document,  or in
any notice, certificate, or other paper delivered by or on behalf of the Account
Party pursuant  hereto are  significant  and shall be deemed to have been relied
upon by the Agent and the Issuing Bank notwithstanding any investigation made by
the Agent or the Issuing Bank or on their behalf and shall  survive the delivery
of the  Credit  Documents  and the  issuance  of the  Letter of Credit  pursuant
thereto. No review or approval by the Agent, a Participant, or the Issuing Bank,
or by any of their  consultants  or  representatives,  of any  opinion  letters,
certificates by  professionals or other item of any nature shall relieve Account
Party or anyone else of any of the  obligations,  warranties or  representations
made by or on  behalf  of  Account  Party  under  any one or more of the  Credit
Documents.

        SECTION 1.74     Cumulative  Rights. All of the rights of the Agent, the
Issuing Bank and the  Participants  hereunder and under each of the other Credit
Documents  and any other  agreement  now or  hereafter  executed  in  connection
herewith  or  therewith,  shall  be  cumulative  and  may be  exercised  singly,
together,  or in such  combination  as the Agent may  determine in its sole good
faith judgment.

        SECTION 1.75     Claims Against Agent, Issuing Bank, or Participants.

               (a) Account  Party Must  Notify.  The Agent and the Issuing  Bank
shall  not be in  default  under  this  Agreement,  or under  any  other  Credit
Document,  unless a  written  notice  specifically  setting  forth  the claim of
Account  Party shall have been given to the Agent and the Issuing  Bank  (except
that Account Party shall have no obligation to provide such Persons with written
notice that a Drawing has been  dishonored  by the Issuing  Bank) within  thirty
(30) days


                                      -58-
<PAGE>


after  Account  Party  first  had  actual  knowledge  or  actual  notice  of the
occurrence  of the event which Account Party alleges gave rise to such claim and
the Agent and the Issuing Bank does not remedy or cure the default, if any there
be, with  reasonable  promptness  thereafter.  Such actual  knowledge  or actual
notice  shall refer to what was  actually  known by, or  expressed  in a written
notification furnished to, any Authorized Representative.

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

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

        SECTION 1.76     Counterparts.  This  Agreement  and each  other  Credit
Document may be executed in several  counterparts,  each of which when  executed
and delivered is an original,  but all of which  together  shall  constitute one
instrument.  In making  proof of this  agreement,  it shall not be  necessary to
produce or account for more than one such  counterpart  which is executed by the
party against whom enforcement of such Agreement is sought.

        SECTION 1.77     Time Of the Essence.  Time  is of the  essence  of each
provision of this Agreement and each other Credit Document.

        SECTION 1.78     No Oral Change.  This  Agreement  and each of the other
Credit Documents may only be amended, terminated, extended or otherwise modified
by a writing signed by the party against which  enforcement is sought (except no
such  writing  shall be  required  for any party  which,  pursuant to a specific
provision of any Credit Document, is


                                      -59-
<PAGE>


required to be bound by changes without such party's assent).  In no event shall
any oral agreements, promises, actions, inactions, knowledge, course of conduct,
course of  dealings  or the like be  effective  to amend,  terminate,  extend or
otherwise modify this Agreement or any of the other Credit Documents.

        SECTION 1.79     Monthly  Statements.  While Agent may issue invoices or
other statements on a monthly or periodic basis (a "Statement"), it is expressly
acknowledged  and  agreed  that:  (i) the  failure  of the  Agent to  issue  any
Statement  on one or  more  occasions  shall  not  affect  the  Account  Party's
obligations  to make payments  under the Credit  Documents as and when due; (ii)
the inaccuracy of any Statement shall not be binding upon the Agent, the Issuing
Bank, or the Participants and so the Account Party shall always remain obligated
to pay the full amount(s)  required  under the Credit  Documents as and when due
notwithstanding  any  provision  to the  contrary  contained  in any  Statement;
provided,  however,  no Event of Default  shall be deemed to have  occurred as a
result of the Account Party's  failure to have paid the full amount(s)  required
under the  Credit  Documents,  if (x) such  failure  is a result of the  Account
Party's good faith reliance on an inaccurate  Statement,  which Statement on its
face was not patently  erroneous or contradicted in the books and records of the
Account  Party with respect to the Credit  Documents,  and (y) the Account Party
pays to the Agent the correct amount owed under the Credit  Documents within two
(2) Business  Days from the date that the Agent  provides the Account Party with
notice that the Statement on which the Account Party relied was  inaccurate  and
provides the Account Party with a corrected Statement;  (iii) all Statements are
issued for  information  purposes  only and shall never  constitute  any type of
offer, acceptance, modification, or waiver of the Credit Documents or any of the
Agent's or the  Issuing  Bank's  rights or remedies  thereunder;  and (iv) in no
event shall any Statement  serve as the basis for, or a component of, any course
of dealing,  course of conduct, or trade practice which would modify,  alter, or
otherwise affect the express written terms of the Credit Documents.

        SECTION 1.80     Acknowledgment   of   Joinder.    The   Account   Party
acknowledges  and  consents to the terms and  conditions  of the Joinder to this
Agreement  which has been executed by Charter Mac and further  acknowledges  and
agrees that the terms and  conditions  of the  Joinder  are hereby  incorporated
herein by reference.

        [Remainder of page intentionally blank. Signature page follows.]


                                      -60-
<PAGE>


   [Signature page to Amended and Restated Reimbursement Agreement dated as of
                                March 31, 2003]


        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly  executed  and  delivered as an  agreement  under seal by their  respective
officers thereunto duly authorized as of the date first written.

                                        CHARTER MAC EQUITY ISSUER TRUST
                                        (As Account Party)
                                        By: Charter MAC Corporation, its Manager

                                               By_______________________________
                                               Name:____________________________
                                               Title:___________________________


                                        FLEET NATIONAL BANK
                                        (As Agent, Issuing Bank, and a
                                        Participant)

                                        By______________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                        CITICORP USA, INC.
                                        (As a Participant)

                                        By______________________________________
                                        Name:___________________________________
                                        Title:__________________________________


                                       S-1
<PAGE>


                                   Joinder of
                  Charter Municipal Mortgage Acceptance Company

        Reference  is made to that certain  Amended and  Restated  Reimbursement
Agreement dated as of March 31, 2003 (the  "Agreement") by and among Charter Mac
Equity  Issuer Trust as Account  Party,  Fleet  National  Bank as Agent (in such
capacity,  the "Agent") for itself, the Issuing Bank, and the Participants,  and
as  the  Issuing  Bank  (in  such  capacity,   the  "Issuing  Bank"),   and  the
Participants. Unless otherwise defined herein, all capitalized terms used herein
shall have the meaning set forth in the Agreement.

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

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

        16.   Charter  Mac   acknowledges   and  confirms  the   warranties  and
representations made specifically on its behalf by the Account Party pursuant to
the Agreement;

        17.  Charter  Mac agrees to comply  with the  affirmative  and  negative
covenants  set forth in  Article 10 of the  Agreement  which  specifically  make
reference to an obligation of Charter Mac;

        18. Charter Mac  acknowledges  and agrees that an Event of Default shall
occur if (x) Charter Mac fails to comply  with the  Charter Mac  Covenants,  (y)
Charter Mac fails to comply with the  affirmative  and  negative  covenants  set
forth in Article 10 of the Agreement  which  specifically  make  reference to an
obligation of Charter Mac, or (z) any of the events described in Section 11.1 of
the Agreement which make specific reference to Charter Mac shall have occurred;

        19. Charter Mac further covenants and agrees from the date hereof and so
long as the  Letter of  Credit or other  Obligations  remain  outstanding,  that
Charter Mac shall not, so long as a


                                      J/S-1
<PAGE>


Default  or an Event of  Default  has  occurred  and is  continuing,  permit the
Account Party to make any payments or  distributions to any Person on account of
the Account  Party's Equity  Interests nor shall Charter Mac accept any payments
or distributions on account of the Account Party's Equity Interests; and

        20. By executing and delivering this Agreement,  which incorporates this
Joinder  by  reference,  the  Agent,  the  Issuing  Bank  and  the  Participants
acknowledge  and agree that  Charter Mac does not have any, and that Charter Mac
shall never have any,  personal  liability to the Agent, the Issuing Bank or the
Participants on account of a Default or Event of Default under this Agreement, a
breach  by  Charter  Mac of any of the  Charter  Mac  Covenants,  or a breach by
Charter Mac of any of the  provisions  of the Agreement  which are  incorporated
into this Joinder by reference, and that the Agent's, the Issuing Bank's and the
Participants' sole recourse on account of the occurrence of any of the foregoing
events shall be to exercise their rights and remedies  against the Account Party
and the Collateral as provided for in the Agreement.

        Executed as a sealed instrument as of March 31, 2003.

                                            CHARTER MUNICIPAL MORTGAGE
                                            ACCEPTANCE COMPANY
                                            By: Charter Mac Corporation,
                                                   Its Manager

                                                   By___________________________
                                                   Name:________________________
                                                   Title:_______________________


                                      J/S-2
<PAGE>


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

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


        "Account Party" has the meaning defined in the Preamble.

        "Actual Annual Debt Service" means, with respect to any Covered Eligible
Bond, or portion  thereof,  for any  consecutive  twelve (12) month period,  the
aggregate amount of interest on and principal of such Covered Eligible Bonds, or
portion thereof required to be paid for such period.

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

        "Adjusted  Debt Service"  means,  with respect to any Eligible  Lease-Up
Bond, the quotient of (x) the  Annualized  NOI for such Eligible  Lease-Up Bond,
divided by (y) 1.1.

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

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


                                      A-3
<PAGE>


        "Adjusted  Principal Amount" means, with respect to any Covered Eligible
Bond,  at any time of  determination,  the  quotient  of (x) the  Adjusted  Debt
Service for such  Covered  Eligible  Bond,  divided by (y) the Constant for such
Covered Eligible Bond.

        "Administration  and Custody  Agreement"  means the amended and restated
administration and custody agreement, dated as of December 1, 2000, by and among
the Origination  Trust, the  Administrative  Agent, the Owner Trust,  acting for
itself and by,  for and on behalf of each  Owner  Trust  Series,  the  Liquidity
Collateral Agent, the Liquidity  Collateral  Subagent and the Servicer,  as such
agreement may be amended, restated, modified or supplemented from time to time.

        "Administrative  Agent"  means the  Administrative  Agent and  Custodian
pursuant to the Administration  and Custody  Agreement,  presently Deutsche Bank
National Trust Company.

        "Affiliate"  means,  for  any  Person,  any  other  Person  directly  or
indirectly  controlling,  controlled  by, or under  common  control  with,  that
Person.  For  the  purposes  of  this  definition,  "control"  (including,  with
correlative  meanings,  the terms  "controlling,"  "controlled  by," and  "under
common control with"), as applied to any Person, means the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and  policies  of  that  Person,   whether  through  the  ownership  of,  voting
securities, by contract. or otherwise.

        "Agent" means Fleet National Bank,  acting as agent for the Participants
and, as may be applicable from time to time, the Issuing Bank.

        "Agreement"  means this  Amended and Restated  Reimbursement  Agreement,
including  the  Schedules  and  Exhibits  hereto  as the same may  hereafter  be
amended, modified, extended, severed, assigned, substituted, renewed or restated
from time to time.

        "Agreement Date" means the date as of which this Agreement is dated.

        "Allocable Share Calculation  Certificate"  means the certificate in the
form of Exhibit I,  delivered  by the  Account  Party to the Agent  pursuant  to
Section  2.1(e)(ii)(a)   reflecting  the  Account  Party's  calculation  of  the
Allocable  Share of the Maximum Credit Amount for each Covered  Eligible Bond to
be  covered  by the L/C  Schedule  to be issued on the then next  Quarterly  L/C
Re-Schedule Date.

        "Allocable  Share of the Maximum Credit Amount" means, as of the time of
determination  as to a Covered  Eligible  Bond, the amount of the Maximum Credit
Amount  allocated to such Covered  Eligible Bond on the Applicable L/C Schedule,
which amount, as of the date of,  initially,  the Initial Issuance Date, and the
Quarterly L/C Re-Schedule  Date  thereafter,  is the difference  between (x) the
then  outstanding  principal  amount of such Covered Eligible Bond, less (y) the
Adjusted Principal Amount of such Covered Eligible Bond.


                                      A-4
<PAGE>


        "Alternate  Liquidity Facility" means any instrument  delivered pursuant
to Section  9.2 of the  Certificate  Trust  Agreement  in lieu of the  Liquidity
Agreement.

        "Annualized NOI" means, with respect to any Covered Eligible Bond, as of
the date of calculation,  the annualized Net Operating  Income  generated by the
Property  securing  such  Covered  Eligible  Bond,  based  upon the  actual  Net
Operating  Income  generated by the subject  Property for the previous three (3)
consecutive calendar months.

        "Applicable  L/C Schedule"  means,  at any time,  the then most recently
issued L/C Schedule.

        "Applicable   Unused  Facility  Fee  Percentage"  means  the  applicable
percentage  set forth below  determined  by reference to the  applicable  Unused
Facility Percentage:

<TABLE>
<CAPTION>

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

Unused Facility Percentage                       Applicable Unused Facility Fee Percentage
-----------------------------------------------------------------------------------------------
<S>                                              <C>
If Unused Facility Percentage is greater than    0.20% per annum
or equal to 50%
-----------------------------------------------------------------------------------------------
If Unused Facility Percentage is less than 50%   0.10% per annum
-----------------------------------------------------------------------------------------------
</TABLE>

        "Assignment and Acceptance" is defined in Section 13.3(a).

        "Authorized  Representatives"  is  defined  in  Section 7 and  listed on
Schedule 7 .

        "Beneficiary(ies)" is defined in Section 2.1(a)(i).

        "Bond" means each issue of mortgage  revenue bonds identified by Charter
Mac and Charter  Equity from time to time on the Bond  Schedule,  including each
Supplemental  Bond,  Seasoned Bond,  Nonseasoned  Bond and each Eligible Bond so
identified.

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

        "Bond  Documents"  means with respect to each Bond,  those  instruments,
mortgages, indentures, agreements,  guaranties,  certificates or other writings,
now or  hereafter  evidencing  or securing  the  obligations  of the Bond Issuer
and/or any Bond Obligor in respect of such Bond.

        "Bond Eligibility  Determination Request" means a request in the form of
Exhibit J  delivered  by the  Account  Party to the Agent in  connection  with a
request that one or more


                                      A-5
<PAGE>


Eligible  Lease-Up  Bonds be  included  as Covered  Eligible  Bonds  pursuant to
Section 2.1(e)(ii)(c) or 2.1(f)(ii).

        "Bond  Issuer"  means  with  respect  to each  Bond,  the state or local
government unit, authority or instrumentality that is the issuer of such Bond.

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

        "Bond Schedule" means the schedule attached to the Charter  Contribution
Agreement,  the Charter Equity Contribution  Agreement and the Origination Trust
Contribution  Agreement as Exhibit A, and the schedule attached to the Insurance
Agreement as Exhibit B, as the same may be supplemented from time to time.

        "Bond Warehousing  Facility" means that certain  Tax-Exempt Bond Line of
Credit  and  Security  Agreement  dated as of March  26,  2003 by and  among the
Account Party,  Fleet National  Bank, in its capacity as  Administrative  Agent,
Wachovia Bank,  National  Association,  as Syndication  Agent, Fleet Securities,
Inc. and Wachovia Securities,  Inc., as Co-Lead Arrangers, and the Lenders party
thereto, as amended and in effect.

        "Bond  Withdrawal  Notice"  means a notice from the Account Party to the
Agent in the form of Exhibit K, pursuant to Sections  2.1(e)(ii)(b),  2.1(f)(i),
or 2.1(g), indicating that the Account Party wishes to eliminate or withdraw one
or more identified Covered Eligible Bonds from the Applicable L/C Schedule as of
the date specified  therein,  with the written  consent of the applicable  Owner
Beneficiary,  confirming  that no Drawing is then pending,  or thereafter may be
made, in respect of such Bond (unless such Bond  thereafter is again accepted as
a Covered  Eligible Bond by the Agent pursuant to the  applicable  provisions of
this Agreement).

        "Business  Day"  means  any day of the  year on which  offices  of Fleet
National  Bank  in  Boston,  Massachusetts,  or  of  the  Issuing  Bank  in  the
jurisdiction  in which  the  Drawing  Office is  located,  are not  required  or
authorized  by law to be closed for  business.  If any day on which a payment is
due is not a  Business  Day,  then  the  payment  shall  be due on the  next day
following which is a Business Day. Further, if there is no corresponding day for
a payment in the given calendar month (e.g.,  there is no "February 30th"),  the
payment shall be due on the last Business Day of the calendar month.

        "Cash  Collateral  Account"  means  any  one or more  checking,  deposit
account, or other demand daily depository account established with the Agent and
maintained by the Account  Party,  upon which the Agent,  for the benefit of the
Issuing  Bank and the  Participants,  shall  at all  times  be  granted  a first
priority, perfected security interest to and in all funds at any time on deposit
therein pursuant to a Cash Collateral Pledge Agreement.


                                      A-6
<PAGE>


        "Cash  Collateral  Pledge  Agreement"  means  any  pledge  and  security
agreement  required to be executed and delivered by the Account  Party,  each in
form and substance  satisfactory to the Agent,  pursuant to which the Agent, for
the  benefit of the  Issuing  Bank and the  Participants,  shall at all times be
granted a first priority, perfected security interest to and in all funds at any
time on  deposit in the Cash  Collateral  Account,  as the same may be  amended,
modified,  extended,  severed, assigned,  substituted,  renewed or restated from
time to time.

        "Certificate  Trust" means  Charter MAC Floater  Certificate  Trust I, a
Delaware business trust, its successors and assigns.

        "Certificate Trust Agent" means Deutsche Bank National Trust Company, as
Certificate Trust Agent,  pursuant to the Certificate  Trust Agreement,  for the
Certificate Trust.

        "Certificate  Trust  Agreement"  means the second  amended and  restated
trust agreement, dated as of December 1, 2000, by and among the Owner Trust, the
Tender Agent and  Certificate  Trust Agent,  and Wilmington  Trust  Company,  as
Certificate  Trustee,  as the same may be  amended,  modified,  supplemented  or
assigned from time to time.

        "Certificate Trust Series" means a separate series established from time
to time by the  Certificate  Trust for each series of Low  Floater  Certificates
pursuant to a Certificate Trust Series Supplement.

        "Certificate  Trust Series  Supplement" means for each Certificate Trust
Series,  the Supplement to Second  Amended and Restated  Trust  Agreement of the
Certificate Trust Agreement  pursuant to which such series is established,  with
deletions  and  modifications  as are  necessary  to  reflect  the  terms of the
applicable Certificate Trust Series.

        "Certificate  Trustee"  means,  with respect to the  Certificate  Trust,
Wilmington Trust Company, not in its individual capacity,  but solely as trustee
of the Certificate Trust.

        "Change in  Control"means  the  occurrence of any of the following  with
respect to the Account Party and Charter Mac, as applicable:

        (a) as to the Account Party:

               (i) any Person or group of Persons (within the meaning of Section
13 or 14 of the  Securities  Exchange  Act) is or becomes the  beneficial  owner
(within the meaning of Rule 13d-3  promulgated  by the  Securities  and Exchange
Commission under the Securities  Exchange Act) of the common shares (and not the
Preferred Shares) representing a majority of total voting power of the aggregate
outstanding  common shares of the Account Party normally entitled to vote in the
election of directors of the Account Party, or

               (ii)  during  any  period of  twelve  (12)  consecutive  calendar
months,  individuals who were directors of the Account Party on the first day of
such period (together


                                      A-7
<PAGE>


with any new directors  whose  election by the board of directors of the Account
Party or whose  nomination for election by the shareholders of the Account Party
was approved by a vote of a majority of the  directors  then still in office who
were either  directors  at the  beginning  of such  period or whose  election or
nomination  for election  was  previously  so approved)  cease for any reason to
constitute a majority of the board of directors of the Account Party.

        (b) as to Charter  Mac: (i) any merger or  consolidation  of Charter Mac
with or into any  Person  or any sale,  transfer  or other  conveyance,  whether
direct or indirect, of all or substantially all of the assets of Charter Mac, on
a consolidated  basis, in one  transaction or a series of related  transactions,
if, immediately after giving effect to such transaction,  any Person or group of
Persons (within the meaning of Section 13 or 14 of the Securities  Exchange Act)
is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange  Commission under the Securities Exchange Act) of
the common  shares  representing  a majority  of the total  voting  power of the
aggregate outstanding  securities of the transferee or surviving entity normally
entitled  to vote in the  election  of  directors,  managers,  or  trustees,  as
applicable,  of the transferee or surviving entity,  (ii) any Person or group of
Persons (within the meaning of Section 13 or 14 of the Securities  Exchange Act)
is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange  Commission under the Securities Exchange Act) of
the common shares representing a majority of total voting power of the aggregate
outstanding  common  shares of  Charter  Mac  normally  entitled  to vote in the
election of directors of Charter Mac,  (iii) during any period of 12 consecutive
calendar months,  individuals who were directors of Charter Mac on the first day
of such period  (together with any new directors  whose election by the board of
directors of Charter Mac or whose nomination for election by the stockholders of
Charter Mac was approved by a vote of a majority of the directors  then still in
office  who were  either  directors  at the  beginning  of such  period or whose
election or nomination  for election was  previously so approved)  cease for any
reason to  constitute  a majority of the board of  directors  of Charter Mac, or
(iv) the sale or  disposition,  whether  directly or indirectly,  by Charter Mac
and/or its Subsidiaries  (whether pursuant to a single  transaction or series of
related  transaction) of tangible assets  representing  more than 25% of Charter
Mac's Tangible Assets (as defined in the Charter Mac Covenants),  as of the date
of such sale or disposition.

        "Charter   Contribution   Agreement"  means  the  amended  and  restated
contribution agreement, dated as of December 1, 2000, by and between Charter Mac
and the Origination Trust, as such agreement may be amended, restated,  modified
or supplemented from time to time.

        "Charter  Entity"  means  each  of  Charter  Mac,  Charter  Equity,  the
Origination  Trust,  the Owner Trust,  any Owner Trust Series,  the  Certificate
Trust and any Certificate Trust Series.

        "Charter  Equity"  means  Charter MAC Equity  Issuer  Trust,  a Delaware
business trust.

        "Charter Equity  Contribution  Agreement" means the amended and restated
contribution  agreement,  dated as of December 1, 2000,  by and between  Charter
Equity and the Origination


                                      A-8
<PAGE>


Trust, as such agreement may be amended, restated, modified or supplemented from
time to time.

        "Charter Equity  Ineligible  Bond" has the meaning given to such term in
Section 5 of the Charter Equity Contribution Agreement.

        "Charter  Ineligible Bond" has the meaning given to such term in Section
5 of the Charter Contribution Agreement.

        "Charter Mac" means Charter Municipal  Mortgage  Acceptance  Company,  a
Delaware  statutory  trust,  of  which  the  Account  Party  is  a  wholly-owned
Subsidiary  (with  Charter  Mac being the  indirect  owner of 100% of the common
equity interests of the Account Party).

        "Charter Mac Covenants" are set forth on Exhibit M attached hereto.

        "Code" shall mean the  Internal  Revenue  Code of 1986,  as amended,  or
corresponding provisions of subsequent revenue laws.

        "Collateral"  means all of the  property,  rights and  interests  of the
Account Party,  that are subject to any security  interests and liens heretofore
or hereafter created by any of the Credit Documents.

        "Commitment"  means,  with respect to each  Participant,  the amount set
forth as such Participant's "Commitment" on Schedule A hereto, as may be amended
from time to time by the Agent as provided in Section 13.3 in connection  with a
Participant's   assignment  of  its   Commitment  or  the  admission  of  a  new
Participant.

        "Commitment  Percentage"  means, with respect to each  Participant,  the
percentage  set forth on Schedule A hereto as such  Participant's  percentage of
the aggregate  Commitments  of all of the  Participants,  as may be amended from
time to time by the Agent as provided in Section 13.3.

        "Consolidated" or  "consolidated"  means with reference to any term used
herein,  for any Person at any date,  any  Subsidiary  or other  Person which is
consolidated with such first Person in accordance with GAAP, including,  without
limitation   with  respect  to  the  accounts  of  the  Account  Party  and  all
Subsidiaries and/or Affiliates thereof.

        "Constant"  means, with respect to any Covered Eligible Bond at the time
such Bond first  becomes a Covered  Eligible  Bond,  the  quotient of (x) Actual
Annual Debt  Service for such  Covered  Eligible  Bond,  divided by (y) the then
outstanding principal amount of such Covered Eligible Bond.

        "Constituent  Documents" means, with respect to any Person, its articles
or certificate of incorporation, governing instrument, trust agreement, charter,
resolutions, constitution, by-laws,


                                      A-9
<PAGE>


partnership  agreements,  organizational  documents,  limited  liability company
agreements,  or such other  document as may govern such  entity's  formation  or
organization.

        "Contractual  Obligation"  means,  for any Person,  any provision of any
security issued by that Person or of any material indenture,  mortgage,  deed of
trust,  contract,  undertaking,  agreement,  or other  instrument  to which such
Person is a party or by which it or any of its  properties  is bound or to which
it or any of its properties is subject.

        "Covered Eligible Bond" means, at any time of determination, an Eligible
Lease-Up Bond which is included on the then  Applicable L/C Schedule as amended,
or to be amended.

        "Covered  Eligible Bond Report"  means a report  prepared by the Account
Party  in the  form  of  Exhibit  B  hereto,  to be  included  as a part of each
Servicer's Report, which report shall contain, without limitation,  with respect
to (i)  Covered  Eligible  Bonds,  such  information  as shall be  necessary  to
calculate the respective  Allocable  Share of Maximum Credit Amount of each such
Covered Eligible Bond and the Projected  Stabilization Date of each such Covered
Eligible  Bonds,  and (ii)  Eligible  Lease-Up  Bonds  which the  Account  Party
proposes to include as a Covered  Eligible Bond on the next L/C  Schedule,  such
information as shall be necessary to calculate the proposed  Allocable  Share of
Maximum  Credit  Amount  for such  Eligible  Lease-Up  Bond,  and the  Projected
Stabilization Date of such Eligible Lease-Up Bond.

        "Credit  Documents" means singly and collectively,  this Agreement,  the
Letter of  Credit,  the Cash  Collateral  Pledge  Agreement,  and such other and
further  instruments,   documents,  and  agreements,  whether  now  existing  or
hereafter  arising,  between the Account Party and the Agent, the  Participants,
and/or  the  Issuing  Bank  in any way  relating  to the  foregoing,  all as may
hereafter  be  amended,  modified,  extended,  severed,  assigned,  substituted,
renewed or restated from time to time, and including,  as the context  requires,
the Existing Reimbursement Agreement.

        "Credit  Rating"  means the rating  assigned  by a Rating  Agency to the
Issuing Bank's  long-term  obligations  (bank deposits,  bank notes,  letters of
credit, etc.).

        "Damages" is defined in Section 10.1(p).

        "Debt Service" means, for any period, determined on a consolidated basis
(A) the Account Party's Interest Expense for such period, plus (B) the aggregate
amount of regularly  scheduled or mandatory  principal  payments of Indebtedness
(excluding  optional  prepayments and balloon principal payments due on maturity
in respect of any  Indebtedness)  required  to be made during such period by the
Account  Party or any of its  Subsidiaries  (and,  if such period is less than a
full twelve month  period,  annualized  by taking the sum of all of the payments
required to be made during  such  period and during any  immediately  subsequent
periods required to create a full twelve month test period).


                                      A-10
<PAGE>


        "Default  Rate" means that  interest rate which is four percent (4%) per
annum above the Prime Rate.

        "Delinquent Participant" is defined in Section 13.2(h).
        "Dollars" or" $" means  dollars in lawful  currency of the United States
of America.

        "Drawing"  means each drawing  under the Letter of Credit in  accordance
with the terms hereof.

        "Drawing  Event" means (a) there has occurred,  and is continuing at the
time of reference,  a Stabilization  Failure with respect to a Covered  Eligible
Bond, or (b) the Expiration  Date has occurred and at such time there remain any
Covered  Eligible Bonds that are secured by Properties  which are not Stabilized
Properties.

        "Drawing  Notice"  means,  as  applicable,  an Expiry  Draw  Notice or a
Stabilization Failure Draw Notice.

        "Drawing Office" means the office for presentation of Drawings under the
Letter  of  Credit  located  at  Fleet  Services,  1  Fleet  Way,  Scranton,  PA
18507-1999,  Attn:  Global  Trade  Operations  Department  - Standby  Unit,  Fax
Number:(570) 330-4186 or such other location as the Issuing Bank may announce as
its  Drawing  Office  from time to time by notice to the  Beneficiaries  and the
Administrative Agent.

        "Eligible  Assignee"  means (a) a  Participant,  (b) an Affiliate of any
Participant,  or (c) a bank, an insurance  company,  a fund, or other  financial
institution.

        "Eligible Bond" means, at any time of  determination,  any Bond which is
identified  as an  Eligible  Bond  on the  Bond  Schedule  (whether  held by the
Origination  Trust or the Owner Trust at such time of  determination)  and as to
which all of the  representations  and warranties of Charter Mac and the Account
Party  contained in Section 4 of the Charter Equity  Contribution  Agreement and
Charter  Contribution  Agreement,  respectively,  are true,  and are not, in any
material and adverse respect, false, incorrect or misleading.

        "Eligible Lease-Up Bond" means, at any time of determination, a Lease-Up
Bond which meets the following criteria, as determined by the Agent:

               (a) the Property benefits from the federal low income housing tax
credit  and  100%  of the  residential  units  are set  aside  to be  rented  to
qualifying low income tenants;

               (b) the equity owner of the Property securing such Bond has fully
syndicated or sold the low income housing tax credits, and the return on the low
income housing tax credit equity shall not be enhanced in any way by Charter Mac
and/or any of Charter Mac's Affiliates; and


                                      A-11
<PAGE>


               (c) at such time,  the Projected  Stabilization  Date has not yet
occurred with respect to the Property securing such Bond.

        "Eligible Lease-Up Bond Supporting Documentation" means, with respect to
any Eligible  Lease-Up Bond, (i) operating  statements for the Property securing
such Bond for the most  recently  ended three (3)  consecutive  month period for
which such  information  is available  to the Account  Party (the third month of
which shall have ended no later than two (2) calendar  months before the subject
Quarterly L/C Re-Schedule  Date (e.g.,  for the Quarterly L/C  Re-Schedule  Date
occurring  on March 31 in any year,  the last  month  covered  by the  operating
statements  can be no  earlier  than  January  31 of such  year),  (ii) the Bond
Documents for such Bond, together with copies of schedules and exhibits thereto,
(iii) the Account Party's investment  committee book relating to such Bond, (iv)
a  Covered  Eligible  Bond  Report  including  such  Bond,  and (v)  such  other
information as the Agent may reasonably require.

        "Eligible  Lease-Up Bond  Termination  Date" means the date on which the
Agent determines that an Eligible Lease-Up Bond has become an Ineligible Project
Bond.

        "Equity  Interests"  of any Person means any and all shares,  interests,
rights to purchase, warrants, options,  participation or other equivalents of or
interest in (however  designated)  corporate stock or other equity participation
of such Person,  including,  without limitation,  any preferred  interests,  any
limited or general  partnership  interest,  and any  limited  liability  company
membership interests.

        "Equity  Issuer Trust  Agreement"  means the Amended and Restated  Trust
Agreement dated as of June 29, 2000, by and among the Managing Trustees, Charter
Municipal Mortgage Acceptance  Company,  Wilmington Trust Company, as Registered
Trustee, and Related Charter, L.P., as Manager relating to the Account Party.

        "ERISA" and "ERISA Plan" are each defined in Section 9.10.

        "ERISA  Affiliate"  means any corporation  which is a member of the same
controlled  group of  corporations  (within the meaning of Section 414(b) of the
Code) as the  Account  Party,  or any trade or  business  which is under  common
control  (within  the  meaning of Section  414(c) of the Code) with the  Account
Party, or any organization  which is required to be treated as a single employer
with the Account Party under Section 414(m) or 414(o) of the Code.

        "Event of Default" is defined in Section 11.1.

        "Existing  Reimbursement  Agreement"  is defined in the Recitals to this
Agreement.

        "Existing Reimbursement Agreement Date" means December 10, 2002.

        "Expiration Date" means, initially, 5:00 p.m. (local time at the Drawing
Office) on  December  9, 2003.  Such date is subject to  extension  pursuant  to
Section 2.2.


                                      A-12
<PAGE>


        "Expiry Draw Notice" means a  certificate  of the  Administrative  Agent
directed  to the  Issuing  Bank  under  the  Letter  of  Credit  (including  the
Applicable L/C Schedule) and complying with the requirements  thereof certifying
that the  Expiration  Date has  occurred  or will  occur not later than five (5)
Business Days from the date of such notice, and the Administrative Agent desires
to draw on the Letter of Credit.

        "Expiry  Drawing" means a Drawing under and in accordance with the terms
and conditions of the Letter of Credit made by the  Administrative  Agent on the
Expiration Date, or on a date that is no more than five (5) Business Days before
the  Expiration  Date,  with  respect to then  Covered  Eligible  Bonds that are
secured by Properties which are not as of such time Stabilized Properties.

        "Extension Period" is defined in Section 2.2.

        "Federal Funds Rate" means for any period,  a fluctuating  interest rate
equal for each day during  such period to the  weighted  average of the rates on
overnight Federal Funds  transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding  Business Day) by the Federal Reserve
Bank of New York,  or, if such rate is not so  published  for any day which is a
Business Day, the average of the  quotations  for such day on such  transactions
received by the Agent from three Federal  Funds  brokers of recognized  standing
selected by the Agent.

        "Financial  Statements" means balance sheets and statements of earnings,
and statements of cash flows and accompanying  footnotes (as may be applicable),
of the Account Party or Charter Mac, as the case may be,  prepared in accordance
with GAAP.

        "Fixed  Charges"  means,  measured  as of the last day of each  calendar
quarter, without duplication, an amount for the then ending quarter equal to the
sum for such period of the Account Party's  consolidated (A) Debt Service,  plus
(B) Preferred Dividends, plus (C) program fees associated with the TOPS Program,
Merrill Lynch P-Floats, and other similar securitization programs.

        "Funding  Instructions"  means the wire  transfer  of the  proceeds of a
conforming Drawing in accordance with the following instructions:

                                    Deutsche Bank
                                    ABA # 021-001-033
                                    for credit to account # 01419647
                                    Attention: Dennis Gillespie

        "Generally  Accepted  Accounting  Principles" or "GAAP" means  generally
accepted  accounting  principles as in effect from time to time set forth in the
opinions and pronouncements of the Accounting  Principles Board and the American
Institute of Certified Public  Accountants


                                      A-13
<PAGE>


and the  statements and  pronouncements  of the Financial  Accounting  Standards
Board, or in such other statements by such other entity as may be in general use
by significant segments of the accounting profession, determined on the basis of
such  principles in effect on the date hereof and consistent  with those used in
the  preparation  of the audited  financial  statements of the Account Party and
Charter Mac for the fiscal year ended December 31, 2001, provided to the Agent.

        "Governmental  Authority"  means any nation or government,  any federal,
state, city, town,  municipality,  county, local or other political  subdivision
thereof   or   thereto   and  any   department,   commission,   board,   bureau,
instrumentality,  agency  or other  entity  exercising  executive,  legislative,
judicial, regulatory or administrative functions.

        "Governmental  Authorization" means any permit, license,  authorization,
plan,  directive,  consent order, or consent decree of or from any  Governmental
Authority.

        "Indebtedness" means all obligations,  contingent and otherwise, that in
accordance with Generally  Accepted  Accounting  Principles should be classified
upon the  consolidated  balance sheet of a Account Party and the Account Party's
Subsidiaries as liabilities,  or to which reference  should be made by footnotes
thereto,  including  in any  event and  whether  or not so  classified:  (a) all
obligations  for borrowed  money or other  extensions  of credit  whether or not
secured or unsecured,  absolute or contingent,  including,  without  limitation,
unmatured  reimbursement  obligations  with  respect  to  letters  of  credit or
guarantees  issued for the account of or on behalf of the Account  Party and its
Subsidiaries  and all obligations  representing  the deferred  purchase price of
property;  (b) all obligations  evidenced by bonds,  notes,  debentures or other
similar  instruments;  (c) all  liabilities  secured  by any  mortgage,  pledge,
security interest, lien, charge, or other encumbrance existing on property owned
or acquired subject thereto,  whether or not the liability secured thereby shall
have  been  assumed;  (d) all  guarantees,  endorsements  and  other  contingent
obligations  whether direct or indirect in respect of  indebtedness of others or
otherwise,  including any  obligations  with respect to puts,  swaps,  and other
similar  undertakings,  any  obligation  to supply  funds to or in any manner to
invest in, directly or indirectly,  the debtor, to purchase indebtedness,  or to
assure the owner of indebtedness  against loss, through an agreement to purchase
goods,  supplies,  or services  for the  purpose of enabling  the debtor to make
payment of the indebtedness held by such owner or otherwise, and the obligations
to  reimburse  the  issuer in respect  of any  letters  of credit;  and (e) that
portion of all  obligations  arising under capital leases that is required to be
capitalized  on the  consolidated  balance  sheet of the  Account  Party and its
Subsidiaries;  but excluding,  in all events obligations arising under operating
leases and accounts payable arising in the ordinary course of business.

        "Indemnified Party" is defined in Section 10.1(p).

        "Ineligible  Bonds" means all Charter  Ineligible Bonds,  Charter Equity
Ineligible Bonds and Owner Trust Ineligible Bonds.

        "Ineligible  Project  Bond"  means a Bond  which  had  been an  Eligible
Lease-Up  Bond,  the  Property  securing  which  fails to  become  a  Stabilized
Property,  as determined solely and


                                      A-14
<PAGE>


exclusively  by  the  Agent,   within  ninety  (90)  days  after  the  Projected
Stabilization Date for such Property.

        "Initial Issuance Date" means December 11, 2002, being the date on which
all  conditions  for the  issuance  of the Letter of Credit  under the  Existing
Reimbursement Agreement were satisfied or waived in writing by the Agent and the
Letter of Credit was first issued.

        "Initial L/C Schedule" means the L/C Schedule issued by the Issuing Bank
upon the  issuance  of the  Letter  of Credit on the  Initial  Issuance  Date in
accordance  with  the  applicable  provisions  of  the  Existing   Reimbursement
Agreement,  which L/C Schedule was  superseded by L/C Schedule No. 2, which,  in
turn will be superseded by L/C Schedule No. 3 on the Agreement Date.

        "Insurance   Agreement"   means  the  amended  and  restated   insurance
agreement,  dated as of  December 1, 2000,  by and among  Charter  Mac,  Charter
Equity,  MBIA, the Origination Trust, the Owner Trust, acting for itself and by,
for and on behalf of each Owner Trust Series, the Certificate Trust,  acting for
itself  and by,  for  and on  behalf  of  each  Certificate  Trust  Series,  the
Administrative  Agent,  the Servicer and the Liquidity  Agent, as such agreement
may be amended, restated, modified or supplemented from time to time.

        "Intangible Assets" means, at the time of determination, those assets of
the  Account  Party  and its  Subsidiaries  on a  consolidated  basis  that,  in
accordance with GAAP, are properly classifiable as intangible assets, including,
but not limited to, goodwill,  franchises,  licenses, patents, trademarks, trade
names and copyrights.

        "Interest  Expense  means,  for any period,  the sum  (calculated  on an
annualized  basis),  on a consolidated  basis of (A) all  consolidated  interest
expense of the  Account  Party  determined  in  accordance  with GAAP,  plus (B)
capitalized  interest not covered by an interest  reserve from a loan  facility,
plus (C) the  allocable  portion  (based on  liability)  of any  accrued or paid
interest  incurred on any obligation for which any entity in the Account Party's
consolidated  group is wholly or  partially  liable  under  repayment,  interest
carry,  or performance  guarantees,  or other relevant  liabilities  (including,
without  limitation,  accrued  or paid  interest  characterized  on the  Account
Party's  balance  sheet  from time to time as  "minority  interest  in income of
subsidiary"),  provided that no expense shall be included more than once in such
calculation even if it falls within more than one of the foregoing categories.

        "Investment"  means the  acquisition  of any real or  tangible  personal
property or of any stock or other  security,  any loan,  advance,  bank deposit,
money  market fund,  contribution  to capital,  extension of credit  (except for
accounts  receivable  arising in the ordinary  course of business and payable in
accordance  with  customary  terms) , or  purchase  or  commitment  or option to
purchase or otherwise acquire real estate or tangible personal property or stock
or  other  securities  of any  party  or any  part  of the  business  or  assets
comprising such business, or any part thereof.


                                      A-15
<PAGE>


        "IS98" is defined in Section 5.5(a).

        "Issuing Bank" is defined in the Preamble.

        "Joinder" means the joinder to this Agreement executed by Charter Mac.

        "L/C  Schedule"  means the schedule of Covered  Eligible Bonds issued by
the Issuing Bank in  accordance  with the  provisions  of this  Agreement on the
Initial Issuance Date and on each Quarterly L/C Re-Schedule  Date,  constituting
an  integral  part of the Letter of  Credit,  and to be in the form of Exhibit D
hereto, and specifying for each Covered Eligible Bond the Allocable Share of the
Maximum Credit Amount therefor, the Owner Beneficiary thereof, and the Projected
Stabilization Date for the Project securing such Bond.

        "L/C  Schedule  No.  3"  means  the L/C  Schedule  to be  issued  on the
Agreement  Date (to  supersede  L/C  Schedule  No.  2), in the form of Exhibit C
hereto.

        "L/C Schedule Request  Certificate" means the certificate in the form of
Exhibit H to be delivered by the Account Party to the Agent  pursuant to Section
2.1(e)(ii) prior to each Quarterly L/C Re-Schedule Date.

        "Late Charges" is defined in Section 3.3.

        "Lease-Up  Bond" means an Eligible Bond that is secured by an affordable
multifamily project which is not a Stabilized Property and, as determined by the
Agent:  (a) the  construction of such project has been  substantially  completed
(including  all phases of such  project),  except  solely for the  completion of
minor "punch list" items,  such that all residential units thereof are habitable
and rentable, and permanent certificates of occupancy (or temporary certificates
of  occupancy  if  approved  by the  Agent,  in the  Agent's  sole and  absolute
discretion)  for  such  projects  (for  all  phases)  have  been  issued  by the
appropriate   Governmental   Authority   having   jurisdiction   to  issue  such
certificates, (b) the letter of credit supporting the construction financing for
the Project has terminated, and (c) the project is in the lease-up phase.

        "Legal  Requirements"  means all applicable  statutes,  laws,  treaties,
ordinances, licenses, rules, regulations,  orders, writs, injunctions,  decrees,
judgments, opinions, and interpretations of any Governmental Authority.

        "Letter of Credit"  means that certain  Standing  Letter of Credit dated
December 11, 2002, (and including L/C Schedule No. 2 dated December 31, 2002), a
copy of which as in effect  immediately  prior to the Agreement  Date is annexed
hereto as Exhibit E , issued by the Issuing Bank in accordance with and upon the
terms  and  conditions  of  the  Existing  Reimbursement  Agreement,  and  to be
maintained  in  accordance  with and  upon  the  terms  and  conditions  of this
Agreement,  for the  account  of the  Account  Party and for the  benefit of the
Beneficiary  (the  Administrative   Agent  from  and  after  the  Permitted  L/C
Transfer),  with a face amount equal to the  aggregate  Allocable  Shares of the
Maximum Credit Amount of all Covered Eligible Bonds


                                      A-16
<PAGE>


from time to time, but in no event to exceed the Maximum  Credit Amount,  as the
same  may  hereafter  be  amended,   modified,   extended,   severed,  assigned,
substituted,  renewed or restated from time to time. There shall be incorporated
into the Letter of Credit from time to time the then  Applicable  L/C  Schedule,
which shall constitute an integral part of the Letter of Credit.

        "Letter of Credit Facility" is defined in Section 2.1(a).

        "Letter of Credit Fee" is defined in Section 4.1.

        "Licenses and Permits" means all licenses,  permits,  authorizations and
agreements issued by or agreed to by any Governmental Authority, or by any other
Person, as may be required pursuant to any Legal Requirement.

        "Lien" means any interest in property securing an obligation owed to, or
a claim by, a Person other than the owner of the property, whether such interest
is based on common law, statute or contract.  The term "Lien" shall also include
reservations,  exceptions, encroachments,  easements, rights-of-way,  covenants,
conditions,  restrictions,  leases and other title  exceptions and  encumbrances
affecting the property.

        "Liquidation  Proceeds"  means  amounts  received by the Agent,  for the
benefit of the Issuing Bank and the Participants,  in the exercise of the rights
and remedies under the Credit Documents.

        "Liquidity  Agent" means the agent for the Liquidity  Banks  pursuant to
the Liquidity Agreement,  initially Bayerische Landesbank Girozentrale, New York
Branch, its successor and assigns.

        "Liquidity   Agreement"   means  the  amended  and  restated   liquidity
agreement,  dated as of December 1, 2000,  by and among the Owner Trust,  acting
for itself and by, for and on behalf of each Owner Trust Series, the Certificate
Trust,  acting for itself  and by, for and on behalf of each  Certificate  Trust
Series,  the Tender Agent, the Certificate Trust Agent, the Liquidity Agent, the
Liquidity  Banks  named  therein  and MBIA,  as such  agreement  may be amended,
restated, modified or supplemented from time to time.

        "Liquidity  Bank" and "Liquidity  Banks" have the meanings given to such
terms in the first paragraph of the Liquidity Agreement.

        "Liquidity  Collateral  Agent"  means  the  Liquidity  Collateral  Agent
pursuant to the Liquidity Pledge and Security Agreement, initially the Liquidity
Agent.

        "Liquidity  Collateral Subagent" means the Liquidity Collateral Subagent
pursuant to the Liquidity Pledge and Security Agreement,  initially Deutche Bank
National Trust Company.


                                      A-17
<PAGE>


        "Liquidity Facility" means the revolving line of credit described in the
Liquidity Agreement,  and any Alternate Liquidity Facility, as the same shall be
modified, supplemented, amended or extended in accordance with the terms thereof
and of the Certificate Trust Agreement.

        "Liquidity Pledge and Security Agreement" means the amended and restated
liquidity  pledge and security  agreement,  dated as of December 1, 2000, by and
among the Origination Trust, the Owner Trust,  acting for itself and by, for and
on behalf of each Owner Trust Series, the Certificate  Trust,  acting for itself
and  by,  for  and on  behalf  of  each  Certificate  Trust  Series,  MBIA,  the
Administrative  Agent, the Liquidity  Agent, the Liquidity  Collateral Agent and
the Liquidity Collateral Subagent,  as such agreement may be amended,  restated,
modified or supplemented from time to time.

        "Liquidity  Provider"  means the Liquidity  Banks named in the Liquidity
Agreement  and the issuer of any  Alternate  Liquidity  Facility,  together with
their respective successors and assigns.

        "London  Banking  Day" means any day on which  dealings  in  deposits in
Dollars are transacted in the London interbank market.

        "Low Floater  Certificates"  means the Low Floater  Certificates  issued
from time to time by all of the Certificate Trust Series pursuant to Section 6.1
of the Certificate Trust Agreement and the Certificate Trust Series Supplements.

        "Material  Change to  Transaction  Documents"  means  any  modification,
amendment  or waiver to any  Transaction  Document  which  materially  adversely
affects  any  Covered  Eligible  Bond  (including,   without   limitation,   any
modification,  amendment or waiver which  modifies any  definitions of any terms
which have the same meaning  herein)  and/or  materially  adversely  affects the
Agent,  the Issuing Bank or the ability of the Account  Party or Charter Mac (as
to the  Joinder)  to  perform  their  respective  obligations  pursuant  to this
Agreement and the other Credit Documents to which such Person is a party.

        "Maximum    Credit   Amount"   means    Thirty-Five    Million   Dollars
($35,000,000.00).
        "MBIA"  means MBIA  Insurance  Corporation,  a New York stock  insurance
company and any successor thereto.

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

        "Mortgage  Warehousing Facility" means that certain Mortgage Warehousing
Credit and Security  Agreement  dated as of December 24, 2001 by and among Fleet
National  Bank,  as Agent for a  syndicate  of  Lenders,  such  Lenders,  and PW
Funding,   Inc.,  Cambridge  Healthcare  Funding,  Inc.,  and  Larson  Financial
Resources, Inc., as amended and in effect.


                                      A-18
<PAGE>


        "Net Operating Income" means, for any period, as to any Property (a) all
gross revenues  received from the operation of such Property  during such period
(including,  without limitation,  payments received from insurance on account of
business or rental interruption and condemnation proceeds from any temporary use
or occupancy,  in each case to the extent  attributable  to the period for which
such Net Operating Income is being  determined,  but excluding any proceeds from
the sale or other  disposition of any part or all of such Property;  or from any
financing or refinancing of such Property;  or from any condemnation of any part
or all of such Property  (except for temporary use or occupancy);  or on account
of a casualty to the property  (other than payments from insurance on account of
business or rental interruption);  or any security deposits paid under leases of
all or a part of such Property,  unless forfeited by tenants;  and similar items
or  transactions  the  proceeds of which under GAAP are deemed  attributable  to
capital), minus (b) all reasonable and customary property operating, maintenance
and repair costs, leasing and administrative costs, management fees and, without
double  counting,  real estate taxes and  insurance  premiums paid or accrued on
account of such Property  (whether by direct payment or by deposit into reserves
for future  payment),  exclusive of capital  expenditures.  When calculating Net
Operating  Income,  there shall be no deduction for any non cash items,  such as
depreciation.  The  calculation  of Net Operating  Income shall be in accordance
with the Account Party's historical method for calculating Net Operating Income,
including  for  reporting  to MBIA or the  Liquidity  Banks,  and  otherwise  in
accordance with accepted, customary industry practice.

        "Nonapproved  Bond" has the meaning given to such term in Section 4.3 of
the Insurance Agreement.

        "Nonseasoned  Bond"  means a Bond,  which may be an  Eligible  Bond or a
Supplemental  Bond,  that  has  been  approved  or  pre-approved  by  MBIA  as a
Nonseasoned Bond in accordance with Section 4.3 of the Insurance Agreement.

        "Notice for Payment"  has the meaning  given to such term in each of the
Surety Bonds.

        "Obligations" means all indebtedness, obligations and liabilities of the
Account Party to the Agent and/or the Issuing Bank from time to time,  direct or
indirect,  joint or  several,  absolute  or  contingent,  matured or  unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law, or  otherwise,  arising or incurred  under this  Agreement or any of the
other Credit  Documents or otherwise in respect of a Drawing under the Letter of
Credit.

        "Origination  Trust" means Charter MAC  Origination  Trust I, a Delaware
business trust, its successors and assigns.

        "Origination  Trust  Agreement"  means the Second  Amended and  Restated
Trust  Agreement,  dated as of  December 1, 2000,  by and  between the  Managing
Trustees, and Wilmington Trust Company, as Registered Trustee, as such agreement
may be amended, modified, supplemented or assigned from time to time.


                                      A-19
<PAGE>


        "Origination  Trust  Certificate"  means  a  certificate  issued  by the
Origination Trust evidencing a 100% beneficial  ownership interest in and to the
Origination Trust.

        "Origination  Trust  Contribution   Agreement"  means  the  amended  and
restated  contribution  agreement,  dated as of December 1, 2000, by and between
the Origination Trust and the Owner Trust,  acting for itself and by, for and on
behalf of each Owner Trust Series,  as such agreement may be amended,  restated,
modified or supplemented from time to time.

        "Origination Trust Management  Agreement" means the amended and restated
management  agreement,  dated  as of  December  1,  2000,  by  and  between  the
Origination  Trust and the Manager,  as amended  from time to time,  pursuant to
which the  Manager  will be engaged  by the  Origination  Trust to  conduct  the
business  and  affairs of the  Origination  Trust upon the terms and  conditions
therein.

        "Owner  Beneficiary"  means,  as  to  any  Covered  Eligible  Bond,  the
Beneficiary which owns such Bond.

        "Owner  Trust"  means  Charter  MAC Owner  Trust I, a Delaware  business
trust, its successors and assigns.

        "Owner Trust  Agreement"  means the second  amended and  restated  trust
agreement,  dated as of December 1, 2000, by and among  Charter MAC  Origination
Trust I, the Managing  Trustees,  and Wilmington  Trust  Company,  as Registered
Trustee,  as such agreement may be amended,  modified,  supplemented or assigned
from time to time.

        "Owner  Trust  Ineligible  Bond" has the  meaning  given to such term in
Section 5 of the Origination Trust Contribution Agreement.

        "Owner  Trust  Management  Agreement"  means the  amended  and  restated
management  agreement  dated as of  December  1, 2000,  by and between the Owner
Trust and the  Manager,  as  amended  from time to time,  pursuant  to which the
Manager  will be engaged by the Owner Trust to conduct the  business and affairs
of the Owner Trust upon the terms and conditions therein.

        "Owner Trust Series" means a separate  series  established  from time to
time by the Owner Trust for each  Certificate  Trust Series pursuant to an Owner
Trust Series Supplement.

        "Owner Trust Series  Supplement" means, for each Owner Trust Series, the
Supplement  to Second  Amended and Restated  Trust  Agreement of the Owner Trust
Agreement  pursuant  to which such series is  established,  with  deletions  and
modifications  as are  necessary  to reflect the terms of the  applicable  Owner
Trust Series.

        "Participant" or "Participants"  means, singly and collectively,  on any
date of determination,  the financial  institutions named as such on Schedule A,
and,  subject to the terms and conditions of this  Agreement,  their  respective
successors and assigns, provided, however, no


                                      A-20
<PAGE>


Person  shall be  admitted  to the Letter of Credit  Facility  as a  Participant
unless (x) the Agent and the Issuing Bank shall have first  consented in writing
to such  admission,  and (y)  provided no Event of Default has  occurred  and is
continuing,  the Account  Party shall have also  consented to such  admission in
writing, which consent shall not be unreasonably withheld or delayed.

        "Permitted L/C Transfer" is defined in Section 5.7.

        "Person" means any legal person, including any individual,  corporation,
limited liability company, partnership,  joint venture, association, joint stock
company,  trust,  unincorporated  organization  or  government  or any agency or
political subdivision thereof.

        "Preferred Dividends" means, for any period, without duplication of such
amounts  as  constitute  intercompany  debts  or  distributions,  the sum of (A)
dividends or distributions  due and payable or accrued during such period on the
Preferred  Shares issued by Account Party, and (B)  distributions  which are the
functional equivalent of preferred dividends (i.e., which the issuer is required
to make  prior to  distributions  on  another  class or other  classes of equity
interests)  and which are due and  payable  or  accrued  during  such  period on
preferred equity interests issued by Account Party or a Subsidiary.

        "Preferred  Shares" means Series A, Series A-1,  Series A-2, Series A-3,
Series B,  Series B-1,  and Series B-2  preferred  shares  issued by the Account
Party,  and any other  "preferred  shares" issued by the Account Party after the
date  hereof in  accordance  with,  and as defined in, the Equity  Issuer  Trust
Agreement.

        "Preferred  Shares Covenants" means the covenants set forth in Article 8
of the Equity Issuer Trust Agreement, as in effect on the Existing Reimbursement
Agreement Date and set forth in Exhibit F hereto.

        "Prime Rate" means the variable per annum rate of interest so designated
from time to time by Fleet  National Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily  represent the lowest or best rate being
charged to any customer.

        "Projected  Stabilization  Date" means,  as to any  Property  securing a
Bond, the date as of which the Account Party anticipates that such Property will
become a Stabilized  Property,  as agreed to in writing by the Beneficiaries and
the Account Party and is the date which is set forth on the first Applicable L/C
Schedule to include such  Property as such  Property's  Projected  Stabilization
Date.

        "Property"  means with respect to each Bond,  all real property which is
subject to any lien securing the  obligations of the Bond Issuer and/or any Bond
Obligor in respect of such Bond.

        "Quarterly L/C Re-Schedule Date" means each March 31, June 30, September
30 and December 31 occurring  on and after the  Agreement  Date and prior to the
Expiration Date,


                                      A-21
<PAGE>


provided,  however,  if such day is not a  Business  Day,  then  the  applicable
Quarterly L/C Re-Schedule Date shall be the next Business Day thereafter.

        "Rating Agency" means either Moody's or S&P.

        "Register" is defined in Section 13.3(c).

        "Registered  Trustee" means,  with respect to the Origination  Trust and
the Owner Trust,  Wilmington Trust Company, not in its individual capacity,  but
solely as trustee of the  Origination  Trust or the Owner Trust, as the case may
be.

        "Reportable Event" is defined in Section 9.10.

        "Requisite  Participants"  means as of any date (i) if there are two (2)
or fewer Participants holding Commitments,  "Requisite  Participants" shall mean
all of such  Participants,  or (ii) if there are more than two (2)  Participants
holding  Commitments,  "Requisite  Participants"  shall  mean  the  Participants
holding at least sixty-five percent (65%) of the outstanding principal amount of
the Unpaid Drawing on such date; and if no such  principal is  outstanding,  the
Participants whose aggregate Commitments  constitute at least sixty-five percent
(65%) of the Total Available Commitments.

        "Restatement  Effective  Date" means the date as of which this Agreement
becomes effective.

        "S&P" means Standard & Poor's Ratings Services.

        "Seasoned  Bond"  means  a  Bond,  which  may be an  Eligible  Bond or a
Supplemental  Bond,  that (i) is secured by a  Stabilized  Property and (ii) has
been  approved  or  pre-approved  in  writing  by  MBIA  as a  Seasoned  Bond in
accordance with Section 4.3 of the Insurance Agreement.

        "Servicer" means the party acting as Servicer  pursuant to the Servicing
Agreement, currently Charter MAC Corporation, a Delaware corporation.

        "Servicer's  Report" has the meaning given to such term in the Servicing
Agreement,  and shall include,  without  limitation,  the Covered  Eligible Bond
Report.

        "Servicing  Agreement"  means the Second Amended and Restated  Servicing
Agreement,  dated as of  December  1,  2000,  by and  among  the  Servicer,  the
Origination Trust, the Owner Trust,  acting for itself and by, for and on behalf
of each Owner Trust Series,  and  acknowledged by the  Administrative  Agent and
MBIA, as such agreement may be amended, restated,  modified or supplemented from
time to time.


                                      A-22
<PAGE>


        "Stabilization  Confirmation"  means,  as to any  Property  securing  an
Eligible  Lease-Up  Bond,  written   certification  from  the  applicable  Owner
Beneficiary  and the Account  Party in the form of Exhibit L that such  Property
has become a Stabilized Property.

        "Stabilization  Failure" means , as to any Covered  Eligible Bond,  that
the Property  securing  such Covered  Eligible  Bond did not become a Stabilized
Property  as  of  the  date  which  is  six  (6)  months  after  the   Projected
Stabilization Date for such Property.

        "Stabilization  Failure Drawing" means a Drawing under and in accordance
with the terms and  conditions  of the  Letter of  Credit  pursuant  to  Section
2.1(c)(i)  of  this  Agreement  made  with  the  presentation  of  a  conforming
Stabilization Failure Draw Notice.

        "Stabilization   Failure  Draw  Notice"  means  a  certificate   of  the
Administrative  Agent  directed to the  Issuing  Bank under the Letter of Credit
(including  the  Applicable  L/C Schedule) and complying  with the  requirements
thereof certifying that, as to a Covered Eligible Bond, a Stabilization  Failure
has occurred and is continuing.

        "Stabilized   Property"   means  a  Property   that,   at  any  time  of
determination,  (i) maintains and has  maintained  occupancy of no less than 85%
for each of the immediately  preceding  three (3) months,  and (ii) produces and
has produced revenues  available to pay debt service over principal and interest
expenses  of the  related  Bond in a ratio  of at least  1.10:1  for each of the
immediately  preceding  three  (3)  months,  as  evidenced  by  a  Stabilization
Confirmation respecting such Property.

        "Statement" is defined in Section 14.13.

        "Subsidiary" means any corporation,  association, partnership, trust, or
other  business  entity of which  the  designated  parent  shall at any time own
directly or indirectly  through a Subsidiary or Subsidiaries at least a majority
(by  number  of  votes  or  controlling  interests)  of the  outstanding  Voting
Interests of such entity.

        "Supplemental Bonds" means all Bonds owned by the Origination Trust that
(i) are not  Eligible  Bonds and as a result have not been  assigned to an Owner
Trust Series,  (ii) have been repurchased from an Owner Trust Series as a result
of becoming  Owner Trust  Ineligible  Bonds,  but are eligible to be held by the
Origination  Trust or (iii) are  Bonds  owned by the  Origination  Trust for any
reason other than those listed in (i) and (ii) above.

        "Tender Agent" means Deutsche Bank National Trust Company, its permitted
successors and assigns.

        "TOPS  Program"  means the Account  Party's  MBIA  Private  Label Tender
Option Program.


                                      A-23
<PAGE>


        "Total Assets"  means,  at the time of  determination  all assets of the
Account  Party  and its  Subsidiaries  on a  consolidated  basis  determined  in
accordance with GAAP.
        "Total Available  Commitments" means, at the time of determination,  the
sum of the Commitments of the Participants at such time.

        "Total Liabilities" means, at the time of determination, all liabilities
of the Account Party and its Subsidiaries on a consolidated  basis determined in
accordance  with GAAP and all  indebtedness  and  contingent  obligations of the
Account Party and its  Subsidiaries on a consolidated  basis,  whether or not so
classified,  including all redemption obligations, hedging and swap liabilities,
and off-balance  sheet  financial  transactions as to which there is recourse to
the Account  Party or a Subsidiary  provided,  however,  for purposes of valuing
liabilities  incurred in the ordinary course of business pursuant to any hedging
agreement  and  not  for  speculation   which  are  included  under  GAAP,  such
liabilities  shall  be  valued  on  the  basis  of  the  net  hedging  liability
thereunder.

        "Transaction  Document"  means  each  of the  Insurance  Agreement,  the
Administration and Custody Agreement,  the Charter Contribution  Agreement,  the
Charter  Equity  Contribution  Agreement,  the  Origination  Trust  Contribution
Agreement, the Origination Trust Agreement, the Owner Trust Agreement, the Owner
Trust Series Supplements, the Certificate Trust Agreement, the Certificate Trust
Series Supplements,  the Liquidity  Agreement,  the Certificate Surety Bond, the
Liquidity Surety Bond, and the Liquidity Pledge and Security Agreement.

        "Transaction Party" means each of MBIA, Charter Mac, Charter Equity, the
Origination  Trust,  the Owner Trust,  each Owner Trust Series,  the Certificate
Trust, each Certificate Trust Series, the Administrative  Agent, the Certificate
Trust Agent, the Servicer,  the Manager, the Liquidity Agent (in its capacity as
agent for the Liquidity Banks), the Liquidity Collateral Agent and the Liquidity
Collateral Subagent.

        "UCC" means the Uniform  Commercial  Code in effect from time to time in
The Commonwealth of Massachusetts or any other applicable jurisdiction.

        "Unpaid  Drawing"  means the  amount  of any  Drawing  disbursed  by the
Issuing  Bank from the time of such  disbursement  until the  Account  Party has
reimbursed the Issuing Bank for such Drawing.

        "Unused Commitment" means, at any time, an amount equal to the remainder
of (a) the Maximum Commitment Amount,  less (b) the aggregate Allocable Share of
the Maximum Commitment Amount of all Covered Eligible Bonds at such time.

        "Unused Facility Fee" is defined in Section 4.2.

        "Unused Facility  Percentage"  means, for any period, an amount equal to
the  remainder of (a) 100% minus (b) that  percentage  (expressed  as a decimal)
obtained by dividing (i) the average


                                      A-24
<PAGE>


daily amount of the Allocable Share of the Maximum Credit Amount for all Covered
Eligible  Bonds during such  period,  by (ii) the Maximum  Credit  Amount of the
Letter of Credit Facility.

        "Voting  Interest"  means  stock or similar  interests,  of any class or
classes (however designated),  the holders of which are at the time entitled, as
such  holders,  (a) to vote for the election of a majority of the  directors (or
persons  performing   similar   functions)  of  the  corporation,   partnership,
association,  trust or other business entity involved, or (b) to control, manage
or conduct the business of the corporation,  partnership,  association, trust or
other business entity involved.


                                      A-25
<PAGE>


                                    EXHIBIT M
                              CHARTER MAC COVENANTS
                              ---------------------

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

2.      Adjusted Tangible Net Worth. For so long as the Letter of Credit remains
outstanding and any Obligation or any portion  thereof remains unpaid,  or other
obligations  under any of the Credit  Documents  are  outstanding  , Charter Mac
shall at all times  maintain  (to be  tested  as of the last day of each  fiscal
quarter) a minimum  Adjusted  Tangible Net Worth of not less than the sum of (i)
$475,000,000,  plus (ii) seventy-five  percent (75%) of the offering proceeds of
any  issuances of Equity  Interests  after January 1, 2003 (net of the costs and
expenses  actually  incurred  by  Charter  Mac in  connection  with such  equity
issuances). As used herein:

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

        b. "Total Assets" means, at the time of determination  (a) all assets of
Charter  Mac  and  its  Subsidiaries  on  a  consolidated  basis  determined  in
accordance  with  GAAP,  plus  (b) to  the  extent  not  otherwise  included  in
determining  "Total Assets," Charter Mac's  proportionate  share of the tangible
assets of its Minority Holdings determined in accordance with GAAP.

        c.  "Total  Liabilities"  means,  at the time of  determination  (a) all
liabilities  of  Charter  Mac  and  its  Subsidiaries  on a  consolidated  basis
determined  in  accordance  with  GAAP  and  all   indebtedness  and  contingent
obligations of Charter Mac and its Subsidiaries on a consolidated basis, whether
or not so  classified,  including all redemption  obligations,  hedging and swap
liabilities,  and off-balance sheet financial  transactions as to which there is
recourse to Charter Mac or a  Subsidiary,  plus (b) to the extent not  otherwise
included in "Total Liabilities,"  Charter Mac's proportionate share of the total
liabilities  of its Minority  Holdings as determined  in  accordance  with GAAP;
provided, however, for purposes of valuing the following liabilities referred to
in this subsection  (iii) which are not included under GAAP, the following shall
apply:

               (i) No amount shall be included  for exposure  derived from PWF's
contingent  loss  sharing  liability  to Fannie Mae under the DUS  Product  Line
(until the loss has occurred and has been  recognized  on Charter Mac's books in
accordance with GAAP).


                                      M-26
<PAGE>


               (ii) With respect to any tax credit  investment fund sponsored by
Charter Mac or an Affiliate  of Charter Mac, as to which  Charter Mac provides a
specified  yield  guaranty to the  investors in such fund ("Yield  Guarantees"),
"Total  Liabilities"  shall include an amount equal to (A) 10% of the total fund
size (based on total  investment  commitments)  until such time as each property
within  the  fund has  received  its IRS Form  8609  (or  applicable  comparable
replacement form) and has commenced  delivering tax credits to the fund, and (B)
5% of the total fund size  thereafter.  If any asset  within a fund pool becomes
impaired  during the period while the Yield Guaranty  applicable to such fund is
outstanding,  then, in addition to the  foregoing,  100% of the present value of
the liability  attributable to such  impairment  amount shall be included within
"Total Liabilities" (without duplication of any amount otherwise attributable to
such impairment in determining "Total Liabilities")).

               (iii) With respect to letter of credit reimbursement  commitments
issued by ventures in which  Charter Mac or an Affiliate of Charter Mac holds an
interest,  supporting  letters of credit  enhancing  tax exempt bonds  financing
multi-family  housing projects  ("Enhancement  Programs"),  "Total  Liabilities"
shall  include an amount  equal to (x) with  respect to programs  other than the
Credit Re Mortgage Capital, L.L.C. Credit Enhancement Program Agreement dated as
of January 27, 1998 (the  "Credit Re  Program"),  15% of Charter  Mac's  maximum
contractual  indemnification  obligation  to the  venture  (100%  of any  actual
indemnification obligation arising upon the occurrence of a loss event), and (y)
with  respect to the Credit Re  Program,  5% with  respect to any  portfolio  of
properties in respect of which such  commitments have been issued as of December
24, 2002, and 15% with respect to any other properties, of Charter Mac's maximum
contractual  indemnification  obligation  to the  venture  (100%  of any  actual
indemnification obligation arising upon the occurrence of a loss event).

               (iv)  Liabilities  incurred  in the  ordinary  course of business
pursuant to any Interest  Rate  Protection  Agreement  and not for  speculation,
shall be valued on the basis of the net hedging liability thereunder.

        d. "Intangible Assets" means, at the time of determination, those assets
of Charter Mac and its Subsidiaries on a consolidated  basis that, in accordance
with GAAP, are properly  classifiable as intangible assets,  including,  but not
limited to, goodwill, franchises, licenses, patents, trademarks, trade names and
copyrights.

        e. "Minority  Holdings"  means any Person in which Charter Mac or any of
its Subsidiaries,  directly or indirectly,  has an ownership interest, but which
is not required  under GAAP to be  consolidated  with Charter Mac for  financial
reporting purposes.

        f. "Taxable Tail Amount" means, at the time of determination, the amount
of so-called "taxable tails" then included in "Total Assets."


                                      M-27
<PAGE>


        h. "Taxable Tail Adjustment Amount" means, at the time of determination,
an  amount  equal to 80% of the then  Taxable  Tail  Amount,  but in no event to
exceed four percent (4%) of the amount of Total Assets at such time.

        i. "PWF" means PWF Funding Inc., a Delaware corporation.

        j.  "PWF  Subsidiaries"  means  any  Subsidiaries   created  by  PWF  in
accordance with the provisions of Section 7.17 of the loan agreement  evidencing
the Mortgage Warehousing Facility.

3.      Liquidity. Charter Mac shall at all times maintain unrestricted cash and
        Cash Equivalents of not less than $5,000,000.00.

        As used herein and, as the case may be, elsewhere in this Guaranty,  the
term "Cash  Equivalents"  shall mean (i) securities issued or directly and fully
guaranteed  or  insured  by the  United  States  of  America  or any  agency  or
instrumentality  thereof  (provided that the full faith and credit of the United
States of America is pledged in support  thereof) having  maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S.  dollar  denominated  (or foreign  currency  fully  hedged) time  deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit  of (y) any  domestic  commercial  bank of  recognized  standing  having
capital and surplus in excess of $250,000,000  or (z) any bank whose  short-term
commercial  paper rating from S&P is at least A-1 or the  equivalent  thereof or
from Moody's is at least P-1 or the  equivalent  thereof (any such bank being an
"Approved  Bank"),  in each case with  maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing  within  twelve months of the date of
acquisition,  (iv) repurchase agreements with a bank or trust company (including
the Agent, Issuing Bank and the Participants) or a recognized  securities dealer
having  capital and  surplus in excess of  $500,000,000  for direct  obligations
issued by or fully  guaranteed by the United States of America,  (v) obligations
of any state of the United States or any political  subdivision  thereof for the
payment of the  principal  and  redemption  price of and interest on which there
shall have been  irrevocably  deposited  Government  Obligations  maturing as to
principal  and  interest  at times and in amounts  sufficient  to  provide  such
payment,  (vi) auction  preferred stock rated in the highest  short-term  credit
rating  category by S&P or Moody's and (vii) U.S.  dollar  denominated  time and
demand  deposit  accounts or money market  accounts  with those  domestic  banks
meeting the  requirements  of item (y) or (z) of clause (ii) above and any other
domestic  commercial banks insured by the FDIC with an aggregate  balance not to
exceed $100,000 in the aggregate at any time at any such bank.

4.      Fixed   Charges.   Charter  Mac  shall  not  permit  the  ratio  of  its
consolidated (i) Adjusted EBITDA, divided by (ii) Fixed Charges, to be less than
1.75 to 1.0,  for any fiscal  quarter,  commencing  with  Charter  Mac's  fiscal
quarter ending March 31, 2003. As used herein:


                                      M-28
<PAGE>


        a. "Adjusted EBITDA" means, measured as of the last day of each calendar
quarter,  without  duplication,  and in accordance with GAAP, the amount derived
from (A) for such  quarter then ended,  Charter  Mac's  consolidated  net income
(before  deduction of preferred stock dividend payments and minority interest in
income of subsidiaries  (as so characterized on Charter Mac's balance sheet from
time to time)),  plus (B) Interest  Expense  (including under the Loan) for such
period,  (C) plus the amount of income tax expense  deducted in calculating  net
income for that  period,  minus (D) the  amount of income  taxes  actually  paid
during that period, plus (E) depreciation, amortization and other non-cash items
deducted in calculating net income for that period,  minus (F) non-cash  revenue
included  in  calculating  net income for that  period,  minus (G) to the extent
included in determining  net income,  any unrealized  gain in respect of revenue
bonds or hedging transactions,  all of the foregoing as determined in accordance
with GAAP for such period,  plus (H) all program fees  associated  with the TOPS
Program in respect of such period,  minus (I) any and all special  distributions
to its  Affiliate  management  company  in  respect  of such  period,  plus  (J)
extraordinary  losses for such period as  determined  in  accordance  with GAAP,
minus (K)  extraordinary  gains for such period as determined in accordance with
GAAP,  plus (L) to the extent  not  otherwise  included  in  "Adjusted  EBITDA,"
Charter Mac's  proportionate  share of Adjusted EBITDA of its Minority  Holdings
for such period  (determined  in a manner  consistent  with this  definition  of
"Adjusted  EBITDA,"  but  without  regard to item (L)),  plus (M)  non-recurring
litigation  expenses and  expenses  related to  transactions  outside of Charter
Mac's normal business  activities  which were terminated  prior to consummation,
minus (N) non-recurring income.

        b. "Fixed Charges"  means,  measured as of the last day of each calendar
quarter, without duplication, an amount for the then ending quarter equal to the
sum for such period of Charter Mac's  consolidated  (A) Debt  Service,  plus (B)
Preferred Dividends, plus (C) program fees associated with the TOPS Program.

        c. "Debt Service"  means,  for any period,  determined on a consolidated
basis (A) Charter Mac's Interest Expense for such period, plus (B) the aggregate
amount of regularly  scheduled or mandatory  principal  payments of Indebtedness
(excluding  optional  prepayments and balloon principal payments due on maturity
in  respect of any  Indebtedness)  required  to be made  during  such  period by
Charter Mac or any Person in Charter  Mac's  consolidated  group  (and,  if such
period is less than a full twelve month period,  annualized by taking the sum of
all of the  payments  required  to be made  during  such  period  and during any
immediately  subsequent  periods  required  to create a full  twelve  month test
period).

        d. "Interest  Expense" means, for any period,  the sum (calculated on an
annualized  basis),  on a consolidated  basis of (A) all  consolidated  interest
expense of Charter Mac determined in accordance  with GAAP, plus (B) capitalized
interest not covered by an interest  reserve from a loan facility,  plus (C) the
allocable  portion (based on liability) of any accrued or paid interest incurred
on any  obligation for which any entity in Charter Mac's  consolidated  group is
wholly or partially  liable under  repayment,  interest  carry,  or  performance
guarantees,  or  other  relevant  liabilities  (including,  without  limitation,
accrued or paid interest  characterized on Charter Mac's balance sheet from time
to time as "minority interest in income of subsidiary"),


                                      M-29
<PAGE>


provided that no expense  shall be included  more than once in such  calculation
even if it falls within more than one of the foregoing categories.

        e. "Preferred  Dividends" means, for any period,  without duplication of
such amounts as constitute  intercompany debts or distributions,  the sum of (A)
dividends  or  distributions  due and  payable or accrued  during such period on
preferred  stock issued by a  Subsidiary,  and (B)  distributions  which are the
functional equivalent of preferred dividends (i.e., which the issuer is required
to make  prior to  distributions  on  another  class or other  classes of equity
interests)  and which are due and  payable  or  accrued  during  such  period on
preferred equity interests issued by a Subsidiary.

        i. "TOPS  Program"  means  Charter  Mac's  Private  Label Tender  Option
Program.

5.      Total  Liabilities.  Charter  Mac  shall  not  permit  at any  time  its
consolidated  Total Liabilities to exceed sixty percent (60%) of the fair market
value of its  consolidated  Total Assets as reflected on Charter  Mac's  balance
sheet from time to time.

6.      Indebtedness.  Charter  Mac  itself  will  not  create,  incur,  assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than any of the following:

        a.  Under its  guaranty  of  obligations  of its  Subsidiaries  to Fleet
National Bank, as Agent and the lenders under each of (x) the  Acquisition  Line
Facility and (y) the Mortgage  Warehousing  Facility,  or a replacement mortgage
warehousing facility in favor of PWF and the PWF Subsidiaries, to the extent the
establishment  of  such  replacement  facility  would  not  (A)  result  in  the
acceleration of the loans under the Acquisition Line Facility, or (B) constitute
an Event of Default under the Mortgage Warehousing Facility;

        b. Under its guaranty of  obligations of Charter Mac  Corporation  under
that certain Stock Purchase  Agreement dated as of October 24, 2001, as amended,
by and among the Charter Mac Corporation and the former stockholders of PWF;

        c. Current liabilities of Charter Mac incurred in the ordinary course of
business  (including  all  liabilities  under the TOPS Program and Charter Mac's
P-FLOATS/RITES  Program or similar secured  financing  program) but not incurred
through (A) the  borrowing of money,  or (B) the  obtaining of credit except for
credit on an open account  basis  customarily  extended and in fact  extended in
connection with normal purchases of goods and services;

        d.  Indebtedness  existing on the date of this  Agreement and listed and
described on Annex M-1 hereto;

        e. Secured purchase money debt or capitalized lease obligations;


                                      M-30
<PAGE>


        f.  Indebtedness to Fannie Mae,  Freddie Mac, GNMA, FHA or other parties
with whom Charter Mac or its Subsidiaries originate, sell, repurchase or service
Mortgage  Loans,  to the extent  directly  relating  to or  arising  out of such
origination, sale, repurchase, or servicing in the ordinary course of business;

        g.  Indebtedness  secured by real property  acquired upon foreclosure of
mortgages,  to the extent directly related to such real property,  not in excess
of the fair market value thereof,  and reasonably  expected by Charter Mac to be
recovered from the sale or the disposition of the subject real property;

        h.  Unsecured  Indebtedness  for borrowed money incurred in the ordinary
course of business and not exceeding  $750,000,  plus  intercompany  liabilities
which have a maturity date which is later than the Expiration Date and which are
subordinated to the Obligations pursuant to subordination  agreements reasonably
satisfactory  to the Agent which shall permit  repayment as long as (A) no Event
of Default  then  exists,  and (B) no Event of  Default  would  thereupon  occur
(including on a pro forma basis as if applicable financial covenants were tested
as of the date of such repayment);

        i.  Indebtedness  incurred in the ordinary course of business secured by
one or more specific  assets,  in each  instance the  principal  amount of which
shall not exceed the GAAP book value of the subject asset(s);

        j.  Liabilities  in the ordinary  course of business under Charter Mac's
(A) credit enhancement products supporting multi-family housing project bonds or
other financing of multi-family housing projects, and (B) Yield Guarantees;

        k.  Guaranties  provided for the benefit of Subsidiaries in the ordinary
course of business;

        l. Liabilities  incurred pursuant to Hedging  Agreements in the ordinary
course of business and not for speculation; and

        m. As to PWF and the PWF Subsidiaries,  indebtedness permitted according
to the  terms  of the  PWF  Covenants  (but  without  duplication  of any of the
applicable foregoing exceptions in clause (a) through (l)).

7.      Financial  Information.  Charter  Mac  shall  deliver  or  cause  to  be
delivered to Agent (and the Agent shall  promptly  deliver copies to the Issuing
Bank and each of the Participants) quarterly and annual financial statements for
Charter Mac in form and substance reasonably  satisfactory to the Agent, Issuing
Bank and the  Participants  as soon as available and in all events no later than
ninety (90) days after the close of each fiscal year for annual  statements  and
forty-five  (45) days after the close of each quarter for  quarterly  statements
(including for the fourth fiscal quarter,  which shall be subject to normal year
end audit  adjustments).  The  quarterly  financial  statements  shall include a
consolidated and  consolidating  (as relating to Charter Mac


                                      M-31
<PAGE>


Corporation  and PWF (and the PWF  Subsidiaries))  balance sheet and the related
consolidated and  consolidating  (as relating to Charter Mac Corporation and PWF
(and the PWF  Subsidiaries))  statements of income and retained  earnings and of
cash flows for such period and the portion of the applicable fiscal year through
the end of such period.  The annual  statements shall include a consolidated and
consolidating  (as  relating  to Charter  Mac  Corporation  and PWF (and the PWF
Subsidiaries)) balance sheets and the related consolidated and consolidating (as
relating  to  Charter  Mac  Corporation  and PWF  (and  the  PWF  Subsidiaries))
statements of income and retained  earnings and of cash flows,  setting forth in
each case in  comparative  form the figures  for the  previous  year,  without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, and shall be audited by independent  certified public
accountants  of  nationally  recognized  standing  reasonably  acceptable to the
Agent.  Both the annual and quarterly  statements shall be certified as true and
correct by an authorized financial officer of Charter Mac. Additionally, Charter
Mac will:

        a.  promptly  supply the Agent  (and the Agent  promptly  shall  provide
copies  to  the  Issuing  Bank  and  the  Participants)  with  such  information
concerning its affairs and property as the Agent,  Issuing Bank or a Participant
(through the Agent) may hereafter reasonably request from time to time.

        b.  promptly  notify the Agent of any condition or event of which it has
knowledge which constitutes (or which upon the giving of notice or lapse of time
or both would constitute) (A) an Event of Default under the Agreement, including
any  event or  circumstance  which  results  in the  information  which has been
provided by it to Agent,  Issuing Bank or the  Participants  including an untrue
statement of material  fact or omitting to state any  material  fact or any fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were made, not materially  misleading and in such event Charter
Mac shall  promptly  furnish to the Agent (and the Agent  promptly shall forward
copies to the Issuing Bank and each Participant)  updated or revised information
which will correct such untrue statement or include such omitted fact; or (B) an
event of default by Charter  Mac or any  Subsidiary  under any  indebtedness  or
other Contractual  Obligation of such Person,  where such event of default would
reasonably  be  expected  to have a  material  adverse  effect on the  business,
operation, or properties of such Person, or as to the Account Party, its ability
to perform its obligations to the Agent,  Issuing Bank or the Participants under
any Credit Document.

        c.  deliver  to the  Agent,  together  with  the  quarterly  and  annual
financial statements,  a Compliance  Certificate signed by its treasurer,  chief
financial  officer or chief  accounting  officer  showing the  calculations  and
computations necessary to determine compliance by Charter Mac with its covenants
hereunder and stating that, to such officer's knowledge,  no Default or Event of
Default exists hereunder or under the Credit Documents, or if, to such officer's
knowledge,  any such Default or Event of Default exists,  stating the nature and
status  thereof.  With each such quarterly  Compliance  Certificate  Charter Mac
shall  include  (A)  summary  information,  calculations,   information,  and  a
description of occurrences relevant to the applicable financial covenants herein
concerning the applicable Taxable Tail Amount, Yield Guarantees, and


                                      M-32
<PAGE>


Enhancement  Programs,  and  (B)  worksheets  showing  the  calculation  of  the
estimated fair value of its investments in revenue bonds,  using the methodology
described  in Annex M-2 .
        d. at any time during regular business hours after reasonable  notice to
Charter Mac permit the Agent, Issuing Bank and any Participant,  or any of their
representatives to have access to and examine all of its books and records.

        e.  permit  the  Agent,  Issuing  Bank  and  any  Participant  or  their
respective  representatives  to copy,  at Charter  Mac's sole cost,  and to make
abstracts from any and all of such books and records.

        f. promptly furnish to the Agent copies (with sufficient copies for each
Participant,  which the Agent promptly shall furnish to each Participant) of all
(A) filings by it with the  Securities  and Exchange  Commission or any national
securities  exchange,  including  reports  on forms 10K and 10Q,  (B)  financial
statements,  reports and proxy statements  furnished by it to its  shareholders,
and (C) other information concerning Charter Mac as is reasonably requested from
time to time by the Agent, Issuing Bank or any of the Participants  (through the
Agent).

        g. within  sixty (60) days prior to each  fiscal  year end,  provide the
Agent with detailed operating  projections for Charter Mac and its Subsidiaries,
in form reasonably satisfactory to the Agent.

        h. promptly (and in any event within ten (10) Business  Days) notify the
Agent of all new Yield  Guarantees  and  Enhancement  Programs,  and provide the
Agent with copies of all relevant  documents  related  thereto,  it being agreed
that the Agent shall not divulge  information  obtained from such examination to
others  except in connection  with Legal  Requirements  and in  connection  with
administering  the  Letter of Credit  Facility  (including  providing  copies to
Participants),  enforcing its rights and remedies under the Credit Documents and
in the conduct,  operation and regulation of their banking and lending  business
(which may include, without limitation,  the transfer of the Letter of Credit or
of participation interests therein).

8.      Material  Adverse  Change.  There shall not occur any  material  adverse
change in the financial condition of Charter Mac.

9.      Liens.  Other  than in favor of the Fleet  National  Bank,  as Agent (on
behalf of the Lenders)  pursuant to the Acquisition  Line Facility,  in no event
will  Charter Mac pledge or grant a security  interest in any of its shares from
time to time of  Charter  Mac  Corporation  in favor of any  Person,  or grant a
negative pledge therein in favor of any Person.

10.     Revenue  Bond  Valuation.   For  the  purpose  of  financial   statement
presentation,  Charter Mac will  estimate the fair value of its  investments  in
revenue bonds using the  methodology  described in Annex M-2 hereto or as may be
required to be modified by changes in GAAP, and will not materially deviate from
such  methodology.  Charter  Mac shall  notify the Agent of any  changes in GAAP
which would require a change in the methodology described in Annex M-2.


                                      M-33
<PAGE>


11.     Mergers, Etc.  Charter Mac shall  not  be  a  party  to  any  merger  or
consolidation,  or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership,  joint venture or other
equity interest in, any other Person,  or sell,  transfer,  convey, or lease (in
one transaction or a series of  transactions)  all or  substantially  all of its
assets (x) if, after giving  effect to the  occurrence  of any of one (1) of the
foregoing  events,  a Change of Control with respect to Charter Mac shall occur,
(y) if the  aggregate  value of the assets of Charter  Mac which are to be sold,
transferred,  conveyed or leased (after giving effect to the value of any assets
which were the subject of any sale, transfer, conveyance or lease which may have
previously  permitted  pursuant  to the terms  and  conditions  hereof)  exceeds
twenty-five  percent  (25%) of  total  value of all the  assets  (calculated  in
accordance  with  GAAP) of  Charter  Mac  prior to giving  effect to such  sale,
transfer,  conveyance  or  lease  transaction,  and (z) if,  in the  case of any
acquisition  of the  assets or any  stock of any  class of, or any  partnership,
joint venture or other equity  interest in, any other Person which is engaged in
(x) a  business  which is not a  business  in  which  Charter  Mac is  currently
engaged,  or  (y) a  business  which  is  not a  business  contemplated  by  the
Constituent  Documents of Charter Mac (the  "Acquired  Assets"),  the  aggregate
value of such Acquired Assets shall not exceed five percent (5%) of value of the
total assets (calculated in accordance with GAAP) of Charter Mac prior to giving
effect to the acquisition of the Acquired Assets.


                                      M-34

</TEXT>
</DOCUMENT>
