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PLEDGE AND SECURITY AGREEMENT
<br />THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of this
<br />day of April, 2011, from GARDENS EAST LIMITED PARTNERSHIP, a1 Minnesota limited
<br />partnership the "Borrower" or "Pledgor") in favor of WELLS FARGO BANK, NATIONAL
<br />ASSOCIATION,, a national banking association, as trustee with respect to the hereinafter
<br />described Bonds the "Trustee") and MUNIMAE PORTFOLIO SERVICES, LLC, a
<br />Maryland limited liability company the "Servicing Agent" the Trustee and the Servicing
<br />Agent are hereinafter referred to individually or collectively, as the context may require,, and
<br />together with their respective successors and assigns, as the "Secured Pam'").
<br />R F.CTT A T.q
<br />WHEREAS, pursuant to and in accordance with the Act and the Trust Indenture by and
<br />between the Issuer and the Trustee dated as of July 1, 2007 (the "Trust Indenture"), the Issuer
<br />issued and sold its Multifamily Housing Revenue Bonds (Centennial Apartments Project), Series
<br />2007 in the principal amount of $,12,000,000 (the "Bonds"'), to fund a loan in the principal
<br />amount of the Bonds to the Borrower to finance the acquisition, rehabilitation and equipping of
<br />an approximately 190-unit multifamily residential rental development located in the State of
<br />Minnesota and known as Centennial Gardens Apartments; and
<br />WHEREAS,, the Issuer loaned the proceeds of the Bonds to the Borrower pursuant to
<br />that certain Loan and Financing Agreement (the "Loan and Financing Agreement"), dated as
<br />of July 1, 2007 between the Issuer and the Borrower (the "Loan"), . and
<br />WHEREAS,, at the request of the Borrower, the Servicing Agent and the Sole Holder
<br />agreed to extend the Outside Conversion Date of the Bonds, provided the Borrower satisfies the
<br />following conditions (i), pays a nonrefundable monthly extension fee equal to $,10,000 per month
<br />in accordance with the requirements set forth in a First Supplemental Trust Indenture, dated as of
<br />the date hereof, between the Issuer and the Trustee, with the consent of the Borrower, the Sole
<br />Holder and the Servicing Agent (the "Supplemental Indenture", and together with the Trust
<br />Indenture,, hereinafter referred to as the "Indenture"),, (ii), pledges a security interest in the
<br />capital contribution from the Investor limited partner of the Borrower in an amount equal to
<br />$,50,,000 as additional security for the Borrower's Obligations, and (iii), posts an irrevocable letter
<br />of credit in the amount of $,480 �p I 000 as additional security for the Borrower's Obligations; and
<br />WHEREAS,, simultaneously with the execution of this Agreement, the Borrower will
<br />execute and deliver the Supplemental Indenture and a First Supplemental Loan and Financing
<br />Agreement, dated as of the date hereof, by and among the Borrower, the Issuer, the Trustee, and
<br />each Key Principal, with the consent of the Sole Holder and the Servicing Agent (the
<br />"Supplemental Financing Agreement",, and together with the Loan and Financing Agreement,
<br />the "Financing Agreement").
<br /># 420053
<br />011367-0283
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