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' Agency, as their interests may appear, by a certain Assignment of Deed of Trust dated. , 1988 (the Deed of Trust and Assignment of Deed of Trust are referred to collectively herein as the "Deed of Trust "); and WHEREAS, MBIA has agreed to issue its policy of municipal bond guaranty insurance (the "Policy") on the Bonds unconditionally guaranteeing the timely payment of scheduled principal of and interest on the. Bonds to the Co- Trustee (without regard to any acceleration of the due date of such principal or interest), which the Co- Trustee may call upon to pay principal of and interest on the Bonds; and WHEREAS, as a condition to the delivery of its Policy, MBIA has required the Developer to agree to reimburse MBIA for any payments made under its Policy as the result of the failure of the Developer to pay principal or interest on the Note; and WHEREAS, the Developer has agreed to designate MBIA as co -payee on the Note, in order to evidence its obligation to reimburse MBIA for certain amounts as more fully set out herein; and WHEREAS, the Developer has agreed to designate MBIA as co- beneficiary on the Deed of Trust to evidence and secure the Developer's obligation to MBIA hereunder and under the Note; NOW, THEREFORE, in consideration of the premises and the mutual promises set forth below, MBIA and the Developer agree that all capitalized terms not otherwise defined herein shall have the meaning assigned thereto in the Indenture, and further as follows: ARTICLE I REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEVELOPER The Developer represents and warrants to and covenants with MBIA that: (a) The Developer is a organized and existing under the laws of the State of California. (b) The Developer has the power to execute and deliver this Agreement, the Deed of Trust, the Note and the Regulatory Agreement (all as defined in the Indenture if not otherwise defined herein) (together, 2