TRUST AGREEMENT

by and among

MUNIMAE TE BOND SUBSIDIARY, LLC
as Trustor

MUNIMAE PORTFOLIO SERVICES, LLC
as Servicer

and

U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee

Dated as of November 1, 2006

Relating to

$192,486,341.05

TEBS Tax-Exempt Multifamily Housing Certificates,

Series 2006A

Consisting of

$191,535,000 Class A Certificates

$951,341.05 Class B Certificate

1

TRUST AGREEMENT

This TRUST AGREEMENT, dated as of November 1, 2006 (this Agreement), is by and among MUNIMAE TE BOND SUBSIDIARY, LLC, as trustor (in such capacity, together with its successors and assigns, the Trustor), MUNIMAE PORTFOLIO SERVICES, LLC, as servicer (in such capacity, together with its successors and assigns, the Servicer), and U.S. BANK TRUST NATIONAL ASSOCIATION, as trustee (in such capacity, together with its successors and assigns, the Trustee).

WHEREAS, the Trustor has deposited with the Trustee on the date of the execution and delivery hereof, certain tax-exempt multifamily housing revenue bonds (or certificates evidencing ownership interests therein) listed on Schedule I hereto (the Bonds) and pursuant to the terms hereof has provided for the creation, execution and delivery of certain TEBS Tax-Exempt Multifamily Housing Certificates, Series 2006A (the Certificates), evidencing undivided ownership interests in the Bonds, including future principal, premium, if any, and interest payments with respect to such Bonds;

WHEREAS, pursuant to that certain Credit Enhancement Agreement, dated as of November 1, 2006 (the Credit Enhancement Agreement), Municipal Mortgage Investments III, LLC, a Maryland limited liability company (the Credit Enhancement Provider), (i) has guaranteed on a limited recourse basis (a) the full and punctual payment when due (whether at stated maturity, upon acceleration or otherwise) of the interest on the Bonds in an amount up to the amount necessary to make any and all distributions set forth in Sections 4.02(a)(i) and 4.02(a)(ii) hereof, (b) the full and punctual payment of the tender price, scheduled principal payment or the redemption price, as applicable, when due on the Bonds in connection with any remarketing, scheduled principal payment or redemption (including any mandatory sinking fund redemption) thereof on or prior to the Final Distribution Date (as defined herein) in an amount up to the amount necessary to make any and all distributions set forth in Section 4.03(a)(i) hereof and (c) upon the occurrence of a Trust Termination Event or the Final Distribution Date (each as defined herein), the full and punctual payment when due (whether at stated maturity, upon acceleration, redemption or tender) of the interest on or principal or tender price of the Bonds in an amount up to the amount necessary to make any and all distributions set forth in Sections 4.02(a)(i), 4.02(a)(ii) and 4.03(a)(ii) hereof and (ii) has pledged certain multifamily housing revenue bonds (or certificates evidencing ownership interests therein) listed on Schedule I thereto (the Credit Enhancement Assets) to the Trustee, as pledgee, and delivered the Credit Enhancement Assets to the Trustee, as custodian (in such capacity, the Credit Enhancement Custodian), to provide security for the Credit Enhancement Providers obligations under the Credit Enhancement Agreement;

WHEREAS, the Servicer agrees to act as the servicer of the Bonds on behalf of the Holders of the Certificates and to carry out the duties set forth herein pertaining to the Certificates; and

WHEREAS, the Trustee agrees to act as the trustee of the Bonds on behalf of the Holders of the Certificates and to carry out the duties set forth herein pertaining to the Certificates;

NOW, THEREFORE, for and in consideration of the premises and the mutual promises contained in this document, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

Section 1.01. Certain Definitions. The following terms shall have the following meanings, unless the context otherwise requires:

Accrued Certificate Distributions shall mean, with respect to each Class A Certificate on any date, accrued and unpaid distributions at the applicable Certificate Rate on the Certificate Balance thereof.

Act of Bankruptcy shall mean, with respect to any Person, (i) a petition for involuntary bankruptcy shall have been filed against such Person, which either shall result in an order granting the bankruptcy relief requested in such petition (including but not limited to an order for relief under Chapter 7, 9 or 11 under the Bankruptcy Code) or shall remain undismissed and unstayed for a period of 60 days; (ii) a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding, or for the winding up or liquidation of its affairs, shall have been entered against such Person, which shall remain undismissed and unstayed for a period of 60 days; (iii) the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of such Person or of a substantial part of its property for purposes of distributing such Persons assets or winding up such Persons affairs which shall remain unstayed for a period of 60 days; or (iv) such Person shall have: (a) commenced a voluntary action under applicable bankruptcy laws, (b) filed a petition seeking to take advantage of any other laws, domestic or foreign, to effect such Persons bankruptcy, insolvency, reorganization, debt adjustment, winding up or composition or adjustment of debts, (c) consented to or failed to contest for 60 days a petition filed against it in an involuntary case under such bankruptcy laws or other laws, (d) taken any formal action which results in a written statement of action duly approved by an authorized committee or governing body, as appropriate, that admits without condition such Persons inability to make payments on its debts as they become due, (e) generally not been paying principal of or interest on its material obligations as they become due (except as a result of a dispute regarding such obligations), or (f) made a general assignment for the benefit of creditors.

Agent Member shall mean a member of, or participant in, the Securities Depository and, at any time when DTC is the Securities Depository, shall include a DTC Participant as such term is used in the rules and regulations of DTC.
 

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