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WHEREAS, pursuant to the terms of the Financing Agreement, the City will use the proceeds of the � sale of Bonds to acquire from the Trustee and amend and restate a loan of the � proceeds of the Prior Bonds and the Financing Agreement evidencing such loan in the principal � amount of $23,390,000 (the "Bond Mortgage Loan") to the Borrower in connection with the Project. � The Borrower will use the proceeds of the Bond Mortgage Loan to effect the refinancing of the Project � by refunding the Prior Bonds, the payment in full of the Prior Taxable Debt, the financing of certain � capital improvements to the Project, and to pay certain costs of issuance of the Bonds. The Borrower's � repayment obligations in respect of the Bond Mortgage Loan will be evidenced by a Bond Mortgage � Note, dated June 26, 2009 (the "Bond Mortgage Note"), executed by the Borrower and delivered to the � City, which Bond Mortgage Note will be endorsed by the City to the Trustee pursuant to the Indenture. � WHEREAS, the Borrower will cause to be delivered to the Trustee on the date of issuance of the � Bonds a direct-pay Credit Enhancement Agreement, to be dated on or after June 1, 2009 (the "Credit � Enhancement Agreement"), between the Federal Home Loan Mortgage Corporation ("Freddie Mac") � and the Trustee, which will provide for. (i) draws in an amount equal to loan repayments due from the � Borrower with respect to the Bond Mortgage Loan; and (ii) liquidity draws by the Trustee to the extent � remarketing proceeds are insufficient to pay the purchase price of Bonds tendered for purchase if the � Bonds are issued as variable rate bonds for the period that the Bonds bear interest at a variable rate. � WHEREAS, Oak Grove Commercial Mortgage, LLC, a Delaware limited liability company (the � "Servicer") will act as initial servicer for the Bond Mortgage Loan. � WHEREAS, to evidence the Borrower's reimbursement obligations to Freddie Mac for draws made � under the Credit Enhancement Agreement, the Borrower and Freddie Mac will enter into a � Reimbursement and Security Agreement, to be dated on or after June 1, 2009 (the "Reimbursement � Agreement"). � WHEREAS, to secure the Borrower's reimbursement obligations to Freddie Mac under the � Reimbursement Agreement and to secure the Borrower's obligations to the Issuer and the Trustee under � the Financing Agreement, the Borrower will execute and deliver to the Issuer and Freddie Mac an � Amended and Restated Multifamily Mortgage, Assignment of Rents, Security Agreement and Fixture � Financing Statement, to be dated on or after June 1, 2009 (the "Mortgage"), with respect to the Proj ect. � The Issuer will assign its interests in the Mortgage to the Trustee pursuant to an Assignment of � Amended and Restated Multifamily Mortgage, Assignment of Rents, Security Agreement and Fixture � Financing Statement, dated on or after June 1, 2009 (the "Mortgage Assignment"). � WHEREAS, the City, the Trustee and Freddie Mac propose to enter into an Assignment and � Intercreditor Agreement, to be dated on or after June 1, 2009 (the "Intercreditor Agreement"), in � connection with Freddie Mac's provision of credit enhancement under the Credit Enhancement � Agreement. � WHEREAS, the City, the Trustee, the Borrower and Freddie Mac propose to enter into a � Consolidation Agreement, to be dated on or after June 1, 2009 (the "Consolidation Agreement"), in connection with the Proj ect. Page 5 of 11