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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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    <B><FONT style="font-size: 9pt">As filed with the Securities and
    Exchange Commission on May&#160;13, 2010</FONT></B>
</DIV>

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    <B><FONT style="font-size: 9pt"><!-- /XBRL,dc -->Registration
    <FONT style="white-space: nowrap">No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</FONT></FONT></B>
</DIV>

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    <B><FONT style="font-size: 14pt">UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION</FONT></B>
</DIV>

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    <B><FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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    <B><FONT style="font-size: 18pt"><FONT style="white-space: nowrap">Form&#160;S-1</FONT></FONT></B>
</DIV>

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    <B><FONT style="font-size: 12pt">REGISTRATION
    STATEMENT</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">UNDER</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">THE SECURITIES ACT OF
    1933</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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    <B><FONT style="font-size: 22pt">MUNI FUNDING COMPANY OF
    AMERICA, LLC</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Exact name of registrant as
    specified in its charter)</FONT></I>
</DIV>

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    <TD width="32%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
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    <B>Delaware<BR>
    </B><FONT style="font-size: 8pt">(<I>State or other jurisdiction
    of<BR>
    incorporation or organization</I>)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>6199<BR>
    </B><FONT style="font-size: 8pt">(<I>Primary Standard
    Industrial<BR>
    Classification Code Number</I>)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>26-0308831<BR>
    </B><FONT style="font-size: 8pt">(<I>I.R.S. Employer<BR>
    Identification Number</I>)
    </FONT>
</TD>
</TR>
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    <B><FONT style="font-size: 9pt">Muni Funding Company of America,
    LLC</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">2929 Arch Street</FONT></B>
</DIV>

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    <B><FONT style="font-size: 9pt">17th Floor</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Philadelphia, Pennsylvania
    19104</FONT></B>
</DIV>

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    <B><FONT style="font-size: 9pt"><FONT style="white-space: nowrap">(215)&#160;701-9641</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Address, including zip code,
    and telephone number, including area code, of registrant&#146;s
    principal executive offices) </FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Michael Barnes</FONT></B>
</DIV>

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    <B><FONT style="font-size: 9pt">Chairman and Chief Executive
    Officer</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Muni Funding Company of America,
    LLC</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt"><FONT style="white-space: nowrap">c/o&#160;Muni</FONT>
    Capital Management, LLC</FONT></B>
</DIV>

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    <B><FONT style="font-size: 9pt">780 Third Avenue</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">29th Floor</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">New York, NY 10017</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt"><FONT style="white-space: nowrap">(212)&#160;758-6201</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Name, address, including zip
    code, and telephone number, including area code, of agent for
    service)</FONT></I>
</DIV>

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    <B><I><FONT style="font-size: 9pt">Copies to:</FONT></I></B>
</DIV>

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<TD align="center" valign="top">
    <B>Michael R. Littenberg,&#160;Esq.<BR>
    Schulte Roth&#160;&#038; Zabel LLP<BR>
    919 Third Avenue<BR>
    New York, NY 10022<BR>
    <FONT style="white-space: nowrap">(212)&#160;756-2000</FONT><BR>
    Fax:
    <FONT style="white-space: nowrap">(212)&#160;593-5955</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Alan I. Annex,&#160;Esq.<BR>
    Neil Novikoff,&#160;Esq.<BR>
    Greenberg Traurig LLP<BR>
    200 Park Avenue<BR>
    New York, NY 10166<BR>
    (212) 801-9200<BR>
    Fax: (212) 801-6400</B>
</TD>
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</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of commencement of proposed sale to the
    public:</B>&#160;&#160;As soon as practicable after the
    effective date of this registration statement.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of the securities being registered on this Form are to be
    offered on a delayed or continuous basis pursuant to
    Rule&#160;415 under the Securities Act of 1933 check the
    following
    box.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is filed to register additional securities for an
    offering pursuant to Rule&#160;462(b) under the Securities Act,
    please check the following box and list the Securities Act
    registration statement number of the earlier effective
    registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    &#147;large accelerated filer,&#148; &#147;accelerated
    filer&#148; and &#147;smaller reporting company&#148; in Rule
    12b-2 of the Exchange Act. (Check one):
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="21%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="21%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
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<TR valign="bottom">
<TD nowrap align="center" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Large&#160;accelerated&#160;filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Accelerated&#160;filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <FONT style="white-space: nowrap">Non-accelerated&#160;filer&#160;</FONT><FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT><BR>
    (Do&#160;not&#160;check&#160;if&#160;a&#160;smaller&#160;reporting&#160;company)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Smaller&#160;Reporting&#160;company&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 9pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CALCULATION
    OF REGISTRATION FEE</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="78%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterright -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterright -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
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<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Amount of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Title of Each Class of<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Offering<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Registration<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Security being Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Price(1)(2)</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Fee(3)</B>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top" style="border-top: 1px solid #000000">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Class&#160;A Common Shares&#160;Representing Limited Liability
    Company Interests(2)
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    $
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    28,750,000
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    $
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    2,049.88
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 9pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 9pt">Estimated solely for the purpose of
    calculating the registration fee.
    </FONT></TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 9pt">(2)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 9pt">Includes&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares representing limited liability
    company interests, which may be issued upon exercise of a
    <FONT style="white-space: nowrap">45-day</FONT>
    option granted to the underwriters to cover over-allotments, if
    any.
    </FONT></TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 9pt">(3)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 9pt">Calculated pursuant to
    Rule&#160;457(o) under the Securities Act of 1933.
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section&#160;8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section&#160;8(a), may determine.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD>
<FONT style="font-size: 10pt; font-family: Arial, Helvetica; color: #E8112D">The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D">SUBJECT TO COMPLETION, DATED
    MAY&#160;13, 2010</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">$25,000,000</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 20pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Class&#160;A Common
    Shares&#160;Representing Limited Liability Company
    Interests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This is the initial public offering of Class&#160;A common
    shares of Muni Funding Company of America, LLC. We are
    selling&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares representing limited liability
    company interests, which we refer to as our &#147;Class&#160;A
    common shares.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Muni Funding Company of America, LLC is a specialty finance
    company that focuses on the investment in the debt instruments
    of non-profit and municipal entities primarily through direct
    and indirect acquisition of tax-exempt mortgage revenue bonds or
    other obligations (secured primarily by interests in real
    estate), assets derived from such bonds or other assets as
    described herein. We are externally managed and advised by Muni
    Capital Management, LLC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following this offering, Muni Funding Company of America, LLC
    will have two classes of shares, Class&#160;A common shares and
    Class&#160;B common shares representing limited liability
    company interests, which we refer to as our &#147;Class&#160;B
    common shares.&#148; The rights of the holders of Class&#160;A
    common shares and Class&#160;B common shares are identical,
    except with respect to voting and conversion rights. Each
    Class&#160;A common share is entitled to one vote per share.
    Each Class&#160;B common share is entitled to ten votes per
    share and is convertible at any time into one Class&#160;A
    common share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, there has been no public market for our
    Class&#160;A common shares. The initial public offering price of
    the Class&#160;A common shares is expected to be between
    $&#160;&#160;&#160;&#160;&#160; and
    $&#160;&#160;&#160;&#160;&#160; per share. We intend to apply to
    have our Class&#160;A common shares listed on The NASDAQ Stock
    Market LLC under the symbol
    &#145;&#145;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    .&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters have an option to purchase a maximum
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    additional Class&#160;A common shares from us to cover
    over-allotments of Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our Class&#160;A common shares involves risks.
    See &#147;Risk Factors&#148; on page&#160;9.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Underwriting<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Price to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Discounts and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Proceeds to<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Public</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Commissions</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Issuer</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Per Share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Delivery of the Class&#160;A common shares will be made on or
    about&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 18pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Ladenburg
    Thalmann&#160;&#038; Co. Inc.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 18pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-size: 10pt; font-family: 'Times New Roman', Times">The
    date of this prospectus
    is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010
    </FONT>
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>SUMMARY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>RISK FACTORS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>CAUTIONARY NOTE&#160;REGARDING FORWARD-LOOKING
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>USE OF PROCEEDS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>DIVIDEND POLICY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>CAPITALIZATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>SELECTED FINANCIAL DATA</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>BUSINESS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    46
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>MANAGEMENT</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>PRINCIPAL SHAREHOLDERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    76
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>DESCRIPTION OF SECURITIES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>COMMON SHARES&#160;ELIGIBLE FOR FUTURE SALE</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    87
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>UNITED STATES FEDERAL INCOME AND ESTATE TAX
    CONSIDERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    88
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>UNDERWRITING</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    103
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>LEGAL MATTERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    105
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>EXPERTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    105
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>WHERE YOU CAN FIND ADDITIONAL INFORMATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    105
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>INDEX TO FINANCIAL STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y84510exv23w1.htm">EX-23.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y84510exv23w2.htm">EX-23.2</A></FONT></TD></TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information contained in this
    prospectus. We have not authorized anyone to provide you with
    different information. We are not making an offer of these
    securities in any state where the offer is not permitted. You
    should not assume that the information contained in this
    prospectus is accurate as of any date other than the date on the
    front cover page of this prospectus.
</DIV>
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<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary only highlights the more detailed information
    appearing elsewhere in this prospectus. As this is a summary, it
    does not contain all of the information that you should consider
    in making an investment decision. You should read this entire
    prospectus carefully, including the information under &#147;Risk
    Factors&#148; and our financial statements and the related notes
    included elsewhere in this prospectus, before investing.
    References in this prospectus to &#147;we,&#148; &#147;us,&#148;
    &#147;our,&#148; or &#147;our company&#148; refer to Muni
    Funding Company of America, LLC, a Delaware limited liability
    company; references to &#147;Muni Capital Management&#148; or
    &#147;our manager&#148; refer to Muni Capital Management, LLC, a
    Delaware limited liability company and our manager; references
    to &#147;Tricadia Holdings&#148; refer to Tricadia Holdings,
    L.P., a Delaware limited partnership; references to Tiptree
    refer to Tiptree Financial Partners, L.P. a Delaware limited
    partnership; references to &#147;Tiptree Capital&#148; refer to
    Tiptree Capital Management, LLC, a Delaware limited liability
    company; and references to &#147;Tricadia&#148; or
    &#147;Tricadia Capital&#148; refer to Tricadia Capital
    Management, LLC, a Delaware limited liability company. We refer
    to our Class&#160;A common shares and Class&#160;B common shares
    collectively as the &#147;common shares.&#148;</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a specialty finance company that focuses on the
    investment in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations, assets
    derived from such bonds or other assets as described herein. We
    are involved in a variety of businesses, including holding or
    acquiring tax-exempt obligations, mortgage-related holdings,
    interests in structured credit entities, derivative instruments,
    Build America Bonds, taxable bonds and other assets. We derive
    our income from interest on the assets held by us and our
    subsidiaries and from any gains on the sale of assets. Our
    assets are, in general, primarily secured by mortgages on the
    real estate held by the obligors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that a significant portion of the tax-exempt or other
    obligations underlying our assets or which we acquire directly
    will be issued by or on behalf of one of the following types of
    non-profit institutions, state authorities or other
    organizations:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Healthcare:</I>&#160;&#160;general and acute care hospitals,
    critical access hospitals, behavioral and primary healthcare
    providers, assisted living facilities, clinics, long-term care
    facilities and continuing care retirement communities;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Educational:</I>&#160;&#160;primary, secondary, technical and
    higher education institutions, including private, public,
    religious or independent schools;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Housing:</I>&#160;&#160;entities whose primary purpose is to
    own or capitalize federally exempt multifamily or single family
    residential rental properties, and state housing authorities
    which issue tax-exempt bonds in order to finance residential
    mortgage loans, including for affordable housing projects, in
    their states;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Infrastructure:</I>&#160;&#160;institutions related to power
    generation, utilities, roads, transportation, water, sewage and
    other aspects of public infrastructure;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Redevelopment/Tax Increment Financing
    Bonds:</I>&#160;&#160;debt service is paid by tax revenue
    generated from the area surrounding a redevelopment project
    without the revenue earmarked for the project itself being
    affected;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cultural:</I>&#160;&#160;museums, aquariums, zoos, botanical
    gardens, performing arts venues (such as opera, symphony, dance
    and theater) and public television and radio;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Research:</I>&#160;&#160;non-degree granting institutions
    whose primary purpose is research;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Philanthropic:</I>&#160;&#160;institutions whose primary
    purpose is to distribute funds to other entities, generally for
    humanitarian purposes;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Service/advocacy:</I>&#160;&#160;organizations that provide
    community and social services to different constituent groups,
    including social service organizations, professional
    associations and religious organizations.
</DIV>
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    <BR>
    1
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to The Bond Buyer, during calendar year 2009,
    approximately $409.2&#160;billion of long-term municipal
    obligations were issued, of which approximately
    $324.7&#160;billion were tax-exempt obligations and
    $84.5&#160;billion were taxable obligations. Overall, as of
    December&#160;31, 2009, there are approximately $2.8 trillion of
    municipal obligations outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Manager</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed and advised by Muni Capital
    Management. Muni Capital Management is a wholly-owned subsidiary
    of Tricadia Holdings. Prior to March&#160;18, 2009, we were
    managed by Cohen Municipal Capital Management, LLC, or the
    Former Manager. In February 2009, Tiptree acquired a controlling
    interest in us, and caused the assignment of our Management
    Agreement from the Former Manager to Muni Capital Management.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competitive
    Strengths</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that we have the following competitive advantages
    over other entities with business objectives similar to ours:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an experienced management team with significant tax-exempt and
    structured finance experience;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a disciplined acquisition process which is based on detailed
    credit analysis of obligors and underlying collateral;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    extensive contacts among originators of unrated tax-exempt
    obligations, which we believe will provide us with preferential
    access to these types of assets;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    significant ownership interest by our management team and
    alignment of our management team&#146;s interests and those of
    our shareholders.
</TD>
</TR>

</TABLE>
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    <BR>
    2
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Organizational
    Chart</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The organizational structure of our company, after giving effect
    to this offering, is set forth below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="y84510y8451001.gif" alt="(CHART)">
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Percentage ownership of the holders of all common shares assumes
    that the underwriter does not exercise its option to purchase
    additional shares. Class&#160;B shareholders other than Tiptree
    include officers and employees of Tiptree, our manager and
    affiliates of our manager, and our directors. Tiptree may also
    purchase Class&#160;A common shares pursuant to this offering.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    This is a taxable C corporation that invests in total return
    swaps and other derivative arrangements relating to tax-exempt
    bonds and engages in sales and trading of tax-exempt bonds.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    We may own interests in additional structured tax-exempt
    pass-through (&#147;STEP&#148;) entities as set forth in
    &#147;&#151;&#160;Our Strategy.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Percentage ownership of Muni Capital Management includes one
    performance share. See &#147;Description of
    Securities&#160;&#151; Performance Share.&#148;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Corporate
    Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our executive offices are located at 2929 Arch Street, 17th
    Floor, Philadelphia Pennsylvania 19104 and our telephone number
    is
    <FONT style="white-space: nowrap">(215)&#160;701-9641.</FONT>
    The executive offices of our manager are located at 780 Third
    Avenue, 29th Floor, New York, NY 10017 and our manager&#146;s
    telephone number is
    <FONT style="white-space: nowrap">(212)&#160;891-5025.</FONT>
</DIV>
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    <BR>
    3
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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    <B><FONT style="font-family: 'Times New Roman', Times">The
    Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Class A common shares offered </TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares(1)</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Shares to be outstanding immediately following this offering </TD>
    <TD></TD>
    <TD valign="bottom">
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Recapitalization </TD>
    <TD></TD>
    <TD valign="bottom">
    Immediately prior to this offering, we will effect a
    recapitalization to convert all of our outstanding common shares
    into newly designated Class&#160;B common shares on a
    <FONT style="white-space: nowrap">one-for-five</FONT>
    basis. After giving effect to the recapitalization, we will have
    outstanding no Class&#160;A common shares and
    37,416,669&#160;shares of our Class&#160;B common shares. All
    shares to be sold in this offering will be Class&#160;A common
    shares.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Class&#160;A common shares </TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares(2)</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Class&#160;B common shares </TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares.
    Tiptree, which
    owns&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Class&#160;B
    common shares, may also purchase Class&#160;A common shares
    pursuant to this offering.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Use of proceeds </TD>
    <TD></TD>
    <TD valign="bottom">
    We intend to use the net proceeds of this offering to implement
    our business strategy, including, without limitation, by
    investing in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations, assets
    derived from such bonds or other assets as described herein. We
    expect that a significant portion of the tax-exempt or other
    obligations underlying our assets or which we acquire directly
    will be issued by or on behalf of one of the following types of
    non-profit institutions, state authorities, or other
    organizations: (i)&#160;healthcare, (ii)&#160;educational,
    (iii)&#160;housing, (iv)&#160;infrastructure,
    (v)&#160;redevelopment/tax increment financing bonds,
    (vi)&#160;cultural, (vii)&#160;research and
    (viii)&#160;philanthropic.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    See &#147;Business&#160;&#151; Our Business Objective and
    Strategies&#148; and &#147;Use of Proceeds&#148; herein.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Voting Rights </TD>
    <TD></TD>
    <TD valign="bottom">
    Each Class&#160;A common share entitles its holder to one vote
    per share, thereby entitling holders of our Class&#160;A common
    shares to votes in the aggregate immediately after this
    offering, representing&#160;&#160;&#160;&#160;&#160;&#160;% of
    our combined voting power immediately after this offering. Each
    Class&#160;B common share entitles its holder to 10 votes per
    share, thereby entitling holders of Class&#160;B common shares
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    votes, representing&#160;&#160;&#160;&#160;&#160;% of our
    combined voting power immediately after this offering. Our
    Class&#160;B common shares generally vote together with our
    Class&#160;A common shares on all matters submitted to a vote of
    our shareholders. Each Class&#160;B common share is convertible
    at any time into one Class&#160;A common share.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Economic Rights </TD>
    <TD></TD>
    <TD valign="bottom">
    Pursuant to our limited liability company agreement, our
    Class&#160;A common shares and Class&#160;B common shares are
    entitled to equal economic rights.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Dividend policy </TD>
    <TD></TD>
    <TD valign="bottom">
    We intend to periodically distribute dividends to holders of our
    Class&#160;A common shares. All distributions from us will be
    made at the discretion of our board of directors, and will
    depend on a number of factors affecting us, including our
    profitability and timing </TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

</TABLE>
<!-- XBRL Pagebreak Begin -->
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    differences between the recognition of net income and the
    receipt of cash. See &#147;Dividend Policy.&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    We may adopt a dividend reinvestment plan that will permit the
    reinvestment of our dividends and other distributions on behalf
    of holders of Class&#160;A common shares who elect to
    participate in the plan. As a result, if our board of directors
    authorizes, and we declare, a cash dividend or other
    distribution, then holders of Class&#160;A common shares who
    have elected to participate in our dividend reinvestment plan
    will have their cash distribution reinvested in additional
    Class&#160;A common shares, rather than receiving the cash
    distribution.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Management Agreement </TD>
    <TD></TD>
    <TD valign="bottom">
    We are externally managed and have no employees, and therefore
    are advised by our manager pursuant to a management agreement,
    which is described herein. Our manager is responsible for
    providing us with senior management, managing our assets,
    administering our business activities and managing our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    We do not employ personnel and therefore rely on the resources
    of our manager to conduct our operations. Our manager uses the
    proceeds from a management fee in part to pay compensation to
    its officers and employees who, notwithstanding that certain of
    them also are our officers, receive no cash compensation
    directly from us. The management fee which we pay to the manager
    is comprised of a base management fee and a performance share,
    which are more fully described herein.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    See &#147;Management&#148; herein for further information.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Risk Factors </TD>
    <TD></TD>
    <TD valign="bottom">
    See &#147;Risk Factors&#148; and other information included in
    this prospectus for a discussion of factors you should carefully
    consider before deciding to invest in the Class&#160;A common
    shares.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Proposed NASDAQ Stock Market LLC Symbol </TD>
    <TD></TD>
    <TD valign="bottom">
    &#147;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Available Information </TD>
    <TD></TD>
    <TD valign="bottom">
    We have filed with the Securities and Exchange Commission
    (&#147;SEC&#148;) a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    under the Securities Act of 1933, as amended (the
    &#147;Securities Act&#148;), with respect to the securities we
    are offering by this prospectus. This prospectus does not
    contain all of the information included in the registration
    statement. For further information about us and our securities,
    you should refer to the registration statement and the exhibits
    and schedules filed with the registration statement. Whenever we
    make reference in this prospectus to any of our contracts,
    agreements or other documents, the references are materially
    complete but may not include a description of all aspects of
    such contracts, agreements or other documents, and you should
    refer to the exhibits attached to the registration statement for
    copies of the actual contract, agreement or other document.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Upon completion of this offering, we will be subject to the
    information requirements of the Securities Exchange Act of 1934,
    as amended (the &#147;Exchange Act&#148;), and will file annual,
    quarterly and current event reports, proxy statements and other
    information with the SEC. You can read our SEC filings,
    including the registration </TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

</TABLE>
<!-- XBRL Pagebreak Begin -->
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    statement, over the Internet at the SEC&#146;s website at
    www.sec.gov. You may also read and copy any document we file
    with the SEC at its public reference facility at
    100&#160;F&#160;Street, N.E., Washington,&#160;D.C. 20549.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    You may also obtain copies of the documents at prescribed rates
    by writing to the Public Reference Section of the SEC at
    100&#160;F&#160;Street, N.E., Washington,&#160;D.C. 20549.
    Please call the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    for further information on the operation of the public reference
    facilities.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    We maintain a website at <I><U>www.munifunding.com</U></I> and
    intend to make all of our annual, quarterly and current reports,
    proxy statements and other information available, free of
    charge, on or through our website. Information on our website is
    not incorporated into or part of this prospectus. You may also
    obtain such information free of charge by contacting us in
    writing at 2929 Arch Street,
    17<SUP style="font-size: 85%; vertical-align: top">th</SUP>

    Floor, Philadelphia, Pennsylvania 19104, Attention: Investor
    Relations.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    if the underwriter&#146;s option to purchase additional shares
    is exercised in full.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    if the underwriter&#146;s option to purchase additional shares
    is exercised in full.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, all information in this prospectus
    assumes no purchase of Class&#160;A common shares by Tiptree in
    this offering and the completion of the recapitalization
    described above.
</DIV>
<!-- XBRL Pagebreak Begin -->
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    FINANCIAL DATA</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents summary consolidated financial
    information as of December&#160;31, 2009 and 2008, for the years
    ended December&#160;31, 2009 and 2008 and for the period from
    June&#160;12, 2007 (commencement of operations) to
    December&#160;31, 2007. The summary consolidated financial
    information has been derived from our audited consolidated
    financial statements included elsewhere in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since the information presented below is only a summary and does
    not provide all of the information contained in our historical
    consolidated financial statements included elsewhere in this
    prospectus, including the related notes, you should read it in
    conjunction with &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; and our
    historical consolidated financial statements, including the
    related notes, included elsewhere in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>June&#160;12 (inception)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>to December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>For the Year Ended</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Statement of Operations:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Revenue</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,106,531
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,581,819
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,150,382
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    903,623
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,937,071
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,225,434
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,087,453
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,235,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,605,164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,111,993
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,276,477
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    962,670
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Amortization of financing costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,912
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    194,559
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Professional fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    374,727
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,047,694
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    963,373
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Insurance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    96,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    313,994
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    266,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Directors compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,627
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    391,570
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    268,986
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    200,241
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non cash incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,681,089
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,214,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,118,097
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,406,364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,021,533
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,487,067
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Realized gains (losses)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Unrealized gains (losses)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (81,112,777
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,464,711
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,241,926
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73,870,851
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,491,806
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net (decrease) increase in net assets resulting from
    operations before Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net (decrease) increase in net assets resulting from
    operations after Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35,100,790
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Basic net (decrease) increase in net assets from operations
    per share(1)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1.05
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Diluted net (decrease) increase in net assets from operations
    per share(1)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1.05
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<!-- XBRL Pagebreak End -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>As of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>As of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>As of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    128,116,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,560,219
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,367,353
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57,971,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,550,698
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,642,139
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,668,544
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Due to our manager
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    179,850
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,662
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    114,756
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued expenses and other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    234,830
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    354,924
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    338,679
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,215,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,847,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,847,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,416,669
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



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    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
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<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculation excludes performance share allocation.</TD>
</TR>

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    8
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<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

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    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investment in our Class&#160;A common shares involves a
    number of risks. Before making an investment decision, you
    should carefully consider the following risk factors, together
    with the other information contained in this prospectus. If any
    of the risks discussed in this prospectus were to occur, our
    business, financial condition, liquidity and results of
    operations could be materially and adversely affected. If this
    were to happen, the price of our Class&#160;A common shares
    could decline significantly, and you could lose all or a part of
    your investment. In connection with the forward-looking
    statements that also appear in this prospectus, you should also
    carefully review the cautionary statement referred to under
    &#147;Cautionary Statement Regarding Forward-Looking
    Statements.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Management and Our Relationship with Our
    Manager</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    dependent on our manager and may not find a suitable replacement
    if we terminate or our manager terminates our management
    agreement.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed by our manager, Muni Capital
    Management, pursuant to a management agreement, or Management
    Agreement. We and our subsidiaries have no employees and no
    separate facilities and are completely reliant on our manager,
    who has significant discretion as to the implementation and
    execution of our business strategies and risk management
    practices and provides or arranges for all of our administrative
    services. Investors who are not willing to rely on our manager
    should not invest in our Class&#160;A common shares. The
    employees, systems and facilities of our manager are utilized by
    other externally managed companies and funds advised by our
    manager and its affiliates, and we
    <FONT style="white-space: nowrap">and/or</FONT> our
    manager may not have sufficient access to such employees,
    systems and facilities in order for our manager to comply with
    its obligations under the Management Agreement. In addition, we
    are subject to the risk that our manager will terminate the
    Management Agreement and that no suitable replacement will be
    found.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    have a conflict of interest with our manager and its affiliates,
    which could result in decisions that are not in the best
    interests of our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to potential conflicts of interest arising out of
    our relationship with our manager and its affiliates, including
    its parent. All of our officers also serve as officers
    <FONT style="white-space: nowrap">and/or</FONT>
    directors of other affiliates of our manager. Accordingly, they
    will not be exclusively dedicated to our business. Furthermore,
    our Management Agreement with our manager is between related
    parties, and its terms, including fees payable, may not be as
    favorable to us as if it had been negotiated with an
    unaffiliated third party. In addition, our manager has no
    fiduciary obligation to our shareholders. Our Management
    Agreement with our manager does not prevent our manager and its
    affiliates from engaging in additional management or investment
    opportunities that compete with us. Affiliates of our manager
    may also engage in management or investment opportunities where
    such affiliates hold positions in securities or other assets
    that increase in value when certain assets we hold decrease in
    value. Our manager has and may engage in additional management
    or investment opportunities that have overlapping objectives
    with ours, and will face conflicts in the allocation of
    opportunities between us and its other businesses. Such
    allocation is at the discretion of our manager, and there is no
    guarantee that this allocation will be made in the best interest
    of our shareholders. The ability of our manager and its officers
    and employees to engage in other business activities also will
    reduce the time those individuals spend managing our company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the future, we may enter into additional transactions with
    our manager, its parent company, or its or their affiliates with
    the approval of our independent directors. Such transactions may
    not be as favorable to us as they would be if negotiated with
    independent third parties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Members
    of our management team have competing duties to other entities,
    which could result in them not devoting enough time to our
    affairs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The employees of our manager and its affiliates will not spend
    all of their time managing our business. They will allocate
    some, which may be a material portion, of their time to other
    businesses and activities of
</DIV>
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    <BR>
    9
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    our manager&#146;s other affiliates. Our manager is not required
    to cause its employees to devote a specific amount of time to
    our affairs. Accordingly, they may not devote sufficient time to
    our affairs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    departure of any of the members of senior management of our
    manager may adversely affect our ability to achieve our business
    objectives and our Management Agreement does not require the
    availability to us of any particular individuals.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that any of the employees of our manager or its
    affiliates that are responsible for the management of our
    business cease to be employed by our manager or any such
    affiliate for any reason, our manager may not be able to secure
    a suitable replacement on our behalf on a timely basis or at
    all. The departure of any such individual could adversely affect
    our ability to achieve our business objectives. In addition, the
    Management Agreement does not obligate that any particular
    individual&#146;s services be made available to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    manager will make decisions under very broad guidelines approved
    by our board of directors and our board of directors will not
    approve individual credit or asset acquisition decisions made by
    it.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager is authorized to follow very broad guidelines on
    behalf of our company and therefore have great latitude in
    determining our asset composition. Our board of directors
    periodically reviews these guidelines. However, it does not
    review all of our proposed or completed asset acquisitions. In
    addition, in conducting periodic reviews of selected assets, the
    board may rely primarily on information provided to us by our
    manager.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    manager and its affiliates collectively own in excess of a
    majority of our combined voting power and may vote in a manner
    that does not coincide with the interests of other
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, our manager, its officers and
    Tiptree, a diversified financial services holding company
    managed by an affiliate of our manager, collectively own 78.22%
    of the outstanding Class&#160;B common shares,
    representing&#160;&#160;&#160;&#160;&#160;% of our combined
    voting power. As a result, our manager, its officers and Tiptree
    have controlling voting power in any vote by holders of our
    common shares. Our manager, its officers and Tiptree may vote in
    a manner that does not coincide with the interests of other
    holders of common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    manager&#146;s base management fee is payable regardless of
    performance.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Management Agreement, our manager is entitled to a
    base management fee from us that is based on the amount of our
    equity (as defined in the Management Agreement), regardless of
    our performance. For example, we could pay our manager a base
    management fee for a specific period even if we experienced a
    net loss during the same period. This in turn could hurt both
    our ability to make distributions to our shareholders and the
    market price of our Class&#160;A common shares. In addition, the
    expenses for which our manager will be reimbursed are not
    subject to any cap.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    manager&#146;s incentive compensation may induce it to engage in
    higher risk activities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager&#146;s compensation and incentive structure may
    cause it to acquire higher risk assets or take other risks that
    it might otherwise not take with respect to the management of
    our company. In addition to its management fee, our manager
    holds a performance share, or Performance Share, that will
    entitle it to an allocation of our profits and cash
    distributions only if we exceed a specified performance
    threshold. The opportunity to receive distributions on the
    Performance Share may lead our manager to place undue emphasis
    on the maximization of net income at the expense of other
    criteria, such as management of credit risk or market risk, in
    order to generate more cash available for distribution. Assets
    with higher yield potential are generally riskier or more
    speculative. As consideration for the acquisition of the right
    to manage the company from the Former Manager, our manager will,
    beginning on March&#160;18, 2012 and until March&#160;18, 2022,
    remit to the former manager payments equal to 10% of our
    manager&#146;s revenue in excess of $1&#160;million (including
    the above-discussed Performance Share, and less certain
    adjustments).
</DIV>
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    <BR>
    10
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    termination of our Management Agreement by us will not be
    possible under some circumstances and would otherwise be
    difficult and costly.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may terminate the Management Agreement for cause (as defined
    in the Management Agreement) at any time. We may not terminate
    the Management Agreement, however, without cause before
    December&#160;31, 2010, the date on which its initial term
    expires. After December&#160;31, 2010, the Management Agreement
    will be automatically renewed for a one-year term on each
    anniversary date thereafter unless terminated for cause or as
    otherwise described in the Management Agreement. Under the
    Management Agreement, after December&#160;31, 2010, we may
    terminate the Management Agreement annually upon the affirmative
    vote of at least two-thirds of our independent directors, or by
    a vote of the holders of a majority of our outstanding common
    shares, based upon (1)&#160;unsatisfactory performance by our
    manager that is materially detrimental to us or (2)&#160;a
    determination that the management fee payable to our manager is
    not fair, subject to our manager&#146;s right to prevent such a
    termination under this clause&#160;(2) by accepting a mutually
    acceptable reduction of the management fee. Our manager will be
    provided 180&#160;days&#146; prior notice of any termination and
    will be paid a termination fee equal to three times the average
    annual base management fee for the two
    <FONT style="white-space: nowrap">12-month</FONT>
    periods immediately preceding the date of termination,
    calculated as of the end of the most recently completed fiscal
    quarter prior to the date of termination. In addition, we will
    be required to redeem the Performance Share for a price equal to
    three times the average annual allocations and distributions
    paid in respect of such Performance Share for the two
    <FONT style="white-space: nowrap">12-month</FONT>
    periods immediately preceding the date of termination. Thus, in
    some circumstances, we will be unable to terminate our
    Management Agreement. In other circumstances where we do have
    the right to terminate the Management Agreement, termination
    will result in substantial cost to us. In addition, we may also
    incur considerable legal cost resulting from potential
    litigation that may arise in connection with the termination of
    the management agreement. The costs and adverse effects of
    terminating the Management Agreement make it unlikely that we
    would terminate the Management Agreement, particularly without
    cause.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    manager&#146;s liability is limited under the Management
    Agreement, and we have agreed to indemnify our manager against
    certain liabilities, which may expose us to significant
    expense.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the Management Agreement, our manager will not
    assume any responsibility other than to render the services
    called for thereunder and will not be responsible for any action
    of our board of directors in following or declining to follow
    our manager&#146;s advice or recommendations. Our manager and
    its members, managers, officers and employees will not be liable
    to us, any of our subsidiaries, our directors, our shareholders
    or any shareholders of our subsidiaries for acts performed in
    accordance with and pursuant to the Management Agreement, except
    by reason of acts constituting bad faith, willful misconduct,
    gross negligence, or reckless disregard of their duties under
    the Management Agreement. We have agreed to indemnify our
    manager and its members, managers, officers and employees and
    each person controlling our manager with respect to all
    expenses, losses, damages, liabilities, demands, charges and
    claims arising from acts of such indemnified party not
    constituting bad faith, willful misconduct, gross negligence, or
    reckless disregard of duties, performed in good faith in
    accordance with and pursuant to the Management Agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    pay more fees to our manager if it ceases to manage the
    structured tax-exempt pass-through entities in which we acquire
    interests or if the portfolio base management fees paid to our
    manager are reduced.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that our manager will receive fees in its capacity as
    portfolio manager of the STEP entities, or other structured
    credit entities in which we acquire interests. A STEP is a
    special purpose entity that is structured as a partnership for
    U.S.&#160;federal income tax purposes and issues two or more
    classes of certificates to finance the acquisitions by the STEP
    of a portfolio of tax-exempt obligations. Our Management
    Agreement provides that the base management fee otherwise
    payable by us to our manager for any fiscal year will be
    reduced, but not below zero, by our proportionate share of the
    amount of any STEP or other structured credit portfolio base
    management fees that are paid to our manager for such year by
    the STEP or other structured credit entities in which we acquire
    interests, based on the percentage of the most junior class of
    certificates we hold in those STEP or other structured credit
    entities. If the STEP or other structured credit portfolio base
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    management fees paid to our manager are reduced, or if the
    portfolio management agreement between our manager and a STEP or
    other structured credit entity in which we acquire interests is
    terminated, then the amount of portfolio base management fees
    that would be offset to our benefit would be reduced. If this
    were to occur, we may pay more fees to our manager.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If our
    manager changes, derivative arrangements into which we may enter
    may terminate and financial institutions that provide our credit
    facilities, if any, may not provide future financing to
    us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The terms of total return swaps and other derivatives that we
    may acquire, as well as the terms of future credit facilities
    that we may enter into, may require that our current manager
    continue to manage our operations as a condition to the
    continuation of the swap or other derivative or credit facility,
    and such instruments may terminate or our obligations thereunder
    may be accelerated if our manager ceases to act in such
    capacity. If that were to occur, we may not be able to enter
    into replacement instruments on satisfactory terms or at all or
    satisfy our obligations under such instruments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Business and Our Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have a limited operating history and, accordingly, it is
    difficult to evaluate an investment in the Class&#160;A common
    shares. We may not be able to operate our business successfully
    or generate sufficient revenue to make or sustain distributions
    to shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We commenced operations in June 2007 and our existing manager
    became our manager during March 2009. We therefore have a
    limited operating history. It is difficult to evaluate our
    future prospects and an investment in the Class&#160;A common
    shares due to our limited operating history. We will be subject
    to the risks generally associated with any newer business,
    including the risk that we will not be able to successfully
    execute our business strategy. Our ability to execute our
    business strategy will depend on our ability to identify and
    acquire attractive assets that meet our criteria and our access
    to both debt and equity financing on acceptable terms. There can
    be no assurance that we will generate sufficient revenue from
    operations to pay our expenses and make or sustain distributions
    to holders of the Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to operate as a partnership under the Internal Revenue
    Code of 1986, as amended, or the Code, which will allow us to
    pass through our income, including our federally tax exempt
    income, and deductions to shareholders, and will be subject to
    various rules relating to partnerships. The partnership rules
    and regulations, particularly those relating to &#147;publicly
    traded partnerships,&#148; are highly technical and complex and
    the failure to comply with those rules and regulations could
    prevent us from qualifying as a partnership such that items of
    income and deduction would not pass through to our shareholders,
    our shareholders would be treated for U.S.&#160;federal tax
    purposes as shareholders in a corporation and distributions by
    us to our shareholders would constitute dividend income taxable
    to such holders to the extent of our earnings and profits. Our
    failure to comply with these rules and regulations could have a
    material adverse effect on our results of operations, financial
    condition and business. See &#147;&#151;&#160;Tax Risks&#148;
    below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not realize gains or income from our assets and our assets may
    decline in value.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We seek to generate both current income and capital
    appreciation. The assets that we acquire may not appreciate in
    value, however, and in fact, may decline in value, and the loans
    that we or our affiliates make and debt securities that we
    acquire may default on interest
    <FONT style="white-space: nowrap">and/or</FONT>
    principal payments. Market values of our assets may decline for
    a number of reasons, including due to liquidity issues, changes
    in prevailing market rates, increases in defaults, actual or
    perceived credit issues involving one or more borrowers,
    increases in voluntary prepayments for those assets that we have
    that are subject to prepayment risk, widening of credit spreads,
    actions by rating agencies, declines in the value of the
    collateral supporting debt and difficulty in valuing assets.
    Also, a decline in credit quality of assets where there is a
    significant risk that there will be a default or imminent
    default may force us to sell certain assets at a loss.
    Accordingly, we may not be able to realize gains or income from
    our assets and our assets may lose value. Any gains that we do
    realize may not be sufficient to offset any losses we
    experience. Furthermore, any income that we realize may not be
    sufficient to offset our expenses. Except for assets held by our
    subsidiaries and variable interest entities consolidated on
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    our balance sheet, we value our assets at fair value, which may
    result in significant fluctuations in our asset values.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    recent downturn in the credit markets has increased the cost of
    borrowing and has made financing difficult to obtain, each of
    which may have a material adverse effect on our results and
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Recent economic conditions have been unprecedented and
    challenging, and tight credit conditions and slow growth may, we
    believe, continue throughout 2010. Beginning with the third
    quarter of 2007, and throughout 2008 and 2009, continued
    concerns about the systemic impact of unemployment, inflation,
    energy costs, geopolitical issues, the availability and cost of
    credit, the U.S., European and other international mortgage
    markets, declining residential and commercial real estate
    markets, as well as several significant bankruptcies and
    government interventions in credit markets, have led to
    increased uncertainty and instability in global capital and
    credit markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of these conditions, the cost and availability of
    credit has been, and may continue to be, adversely affected in
    all markets in which we operate. Concern about the stability of
    the markets generally and the strength of counterparties
    specifically has led many lenders and institutional investors to
    reduce, and in some cases, cease, to provide funding to
    borrowers. Continued turbulence in the U.S., European and other
    international markets and economies may adversely affect our
    liquidity and financial condition. If these market and economic
    conditions continue, they may limit our ability to replace or
    renew maturing liabilities, or acquire additional liabilities,
    on a timely basis, access the capital markets to meet liquidity
    requirements and result in adverse effects on our financial
    condition and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    significant portion of our assets are illiquid or have limited
    liquidity, which may limit our ability to sell those assets at
    favorable prices or at all.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our assets generally are expected to be illiquid or have limited
    liquidity. As of December&#160;31, 2009, based on fair value,
    substantially all of our credit assets consisted of tax-exempt
    bonds and interests in structured transactions that have limited
    liquidity. It may be difficult for us to dispose of assets with
    limited liquidity rapidly, or at all, or at favorable prices.
    Historically, the trading volume in the tax-exempt bond market
    has been limited relative to other markets and transfers may
    require the consent of an agent or borrower. In addition, assets
    with limited liquidity may be more difficult to value and may
    trade at a substantial discount or experience more volatility
    than more liquid assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not limited in the amount of capital used to support, or
    the exposure to, any individual asset or any group of assets
    with similar characteristics or risks. As a result, our
    portfolio may be concentrated in a small number of assets or may
    be otherwise undiversified, increasing the risk of loss and the
    magnitude of potential losses to us and our shareholders if one
    or more of these assets perform poorly.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    change our business strategy without shareholder consent, which
    may result in a determination to pursue riskier business
    activities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may change our business strategy at any time without
    shareholder consent, which could result in our acquiring assets
    or pursuing a business strategy different from, and possibly
    riskier than, those contemplated by this prospectus. A change in
    our business strategy may increase our exposure to market
    fluctuations or certain other risks.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, while we anticipate that the majority of our assets
    will consist of tax-exempt bonds, structured credit entities and
    derivatives, we may own other credit or non-credit assets. These
    assets may have additional or different risks from those
    described herein, including the possibility that such assets may
    result in taxable income to shareholders.
</DIV>
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    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    declaration of distributions to our shareholders and the amount
    of such distributions are at the discretion of our board of
    directors and will depend upon certain factors affecting our
    operating results, some of which are beyond our
    control.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The declaration of distributions to our shareholders and the
    amount of such distributions are at the discretion of our board
    of directors. Our ability to make and sustain cash distributions
    is based on many factors, including our ability to successfully
    acquire assets in accordance with our business strategy, our
    ability to access additional capital on attractive terms to
    finance our assets, the return on our assets, operating expense
    levels and certain restrictions imposed by law. Some of these
    factors are beyond our control and a change in any such factor
    could affect our ability to make distributions. See
    &#147;Dividend Policy&#148; in this prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    expect that a significant portion of the tax-exempt obligations
    that we own will be unrated or rated below investment grade.
    Non-investment grade assets are higher risk assets that may be
    more likely to default than investment grade
    assets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that a significant portion of the tax-exempt
    obligations that we own will be unrated or rated below
    investment grade by one or more nationally recognized
    statistical rating organizations (Bal or lower by Moody&#146;s
    or BB+ or lower by Fitch or S&#038;P). Although these assets
    generally pay higher rates of interest than investment grade
    assets, they generally are higher risk and may be more likely to
    default, which cause income
    <FONT style="white-space: nowrap">and/or</FONT>
    principal losses. Other risks associated with non-investment
    grade assets include (i)&#160;greater vulnerability to adverse
    changes in the borrower&#146;s business, industry
    <FONT style="white-space: nowrap">and/or</FONT> to
    general economic conditions, (ii)&#160;call or redemption
    features that permit a borrower to prepay the security before it
    matures, which may result in the loss of expected income,
    (iii)&#160;non-investment grade obligations are often subject to
    extreme price fluctuations and negative economic developments
    may have a greater impact on these obligations than on other
    higher-rated fixed income obligations and
    (iv)&#160;non-investment grade obligations may be less liquid
    and subject to greater variability in pricing than higher-rated
    fixed income obligations even under normal economic conditions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Valuations
    of some of our assets are inherently uncertain, may be based on
    estimates, may fluctuate over short periods of time and/or may
    differ from the values that would have been used if a ready
    market for these assets existed.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The values of some of the assets in our portfolio are not
    readily determinable. We use two independent third-party
    valuation services to value these assets daily at market value,
    and changes in the market value of our assets directly impact
    our net income. Because such valuations are inherently
    uncertain, may fluctuate over short periods of time and may be
    based on estimates, such determinations of value may differ from
    the values that would have been used if a ready market for these
    assets existed or from the prices at which trades occur.
    Furthermore, while we believe the third-party valuation services
    we have retained are experienced, capable and credentialed, we
    do not manage the processes at such services nor have any
    control over the values they deliver. As such, we cannot
    necessarily or definitively verify the accuracy of such values
    generated by such services. The determination of market value
    has a material impact on our net earnings through recording
    unrealized appreciation or depreciation of assets. The value of
    our common shares could be adversely affected if the
    determinations of market value of these obligations are
    materially higher than the values that we ultimately realize
    upon their disposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Valuations of certain assets are often difficult to obtain or
    are unreliable. In general, dealers and valuation services
    heavily disclaim their valuations. Additionally, dealers may
    claim to furnish valuations only as an accommodation and without
    special compensation, and so they may disclaim any and all
    liability for any direct, incidental or consequential damages
    arising out of any inaccuracy or incompleteness in valuations,
    including any act of negligence or breach of any warranty.
    Depending on the complexity and illiquidity of an asset,
    valuations of the same asset can vary substantially from one
    dealer or pricing service to another. The valuation process has
    been particularly difficult recently as market events have made
    valuations of certain assets more difficult and unpredictable
    and the disparity of valuations provided by third-party dealers
    has widened.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    tax-exempt obligations in which we directly or indirectly hold
    interests present certain risks related to the special nature of
    such assets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    States, municipalities or public authorities issue tax-exempt
    obligations to obtain funds for various public purposes. The two
    principal classifications of tax-exempt obligations are general
    obligation and revenue bonds. General obligation bonds are
    secured by the issuer&#146;s pledge of its faith, credit and
    specified taxing power for the payment of principal and
    interest. The taxing power of any governmental entity may be
    limited, however, by provisions of its state constitution or
    laws, and an entity&#146;s creditworthiness will depend on many
    factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    global, national, regional
    <FONT style="white-space: nowrap">and/or</FONT> local
    macro-economic factors, including the continuing credit crisis
    and the overall rate of growth of the U.S.&#160;economy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unemployment levels within the obligor&#146;s tax base;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the size of the obligor&#146;s tax base, its potential erosion
    due to population declines, and its ability to increase taxes
    without eroding the tax base;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    natural disasters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    declines in the obligor&#146;s industrial base or inability to
    attract new industries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    legislative proposals
    <FONT style="white-space: nowrap">and/or</FONT> voter
    initiatives to limit ad valorem real property taxes and the
    extent to which the entity relies on federal or state aid;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    access to capital markets;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other factors beyond the obligor&#146;s control.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Revenue bonds are payable only from the designated revenues
    derived from a particular facility or class of facilities or, in
    some cases, from the proceeds of a special excise tax or other
    specific revenue sources such as payments from the user of the
    facility being financed. Accordingly, the timely payment of
    interest and the repayment of principal in accordance with the
    terms of the revenue or special obligation bond is a function of
    the economic viability of such facility or such revenue source.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The tax-exempt obligations in which we directly or indirectly
    hold interests may also include &#147;moral obligation&#148;
    bonds, which are typically issued by special purpose public
    authorities. If an issuer of moral obligation bonds is unable to
    meet its obligations, the repayment of such bonds becomes a
    moral, but not a legal, obligation of the state or municipality
    in question.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the tax-exempt bonds in which we directly or
    indirectly hold interests may include certificates of
    participation, or COPs, issued by government authorities or
    entities to finance the acquisition or construction of
    equipment, land
    <FONT style="white-space: nowrap">and/or</FONT>
    facilities. COPs represent participations in a lease, an
    installment purchase contract or a conditional sales contract,
    which we collectively refer to as lease obligations, relating to
    such equipment, land or facilities. Although lease obligations
    do not constitute general obligations of the obligor for which
    the obligor&#146;s unlimited taxing power is pledged, a lease
    obligation is frequently backed by the obligor&#146;s covenant
    to budget for, appropriate and make the payments due under the
    lease obligation. However, certain lease obligations contain
    &#147;non-appropriation&#148; clauses which provide that the
    obligor has no obligation to make lease or installment purchase
    payments in future years unless money is appropriated for such
    purpose on a yearly basis. Although
    &#147;non-appropriation&#148; lease obligations are secured by
    the leased property, disposition of the property in the event of
    foreclosure might prove difficult and the value of the property
    may be insufficient to issue lease obligations.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    tax-exempt obligations in which we directly or indirectly hold
    interests will be subject to credit risk, market risk, interest
    rate risk, selection risk, call and redemption risk and tax
    risk, and the occurrence of any one of these risks may
    materially and adversely affect the value of our assets or our
    results of operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The tax-exempt obligations in which we directly or indirectly
    hold interests will be subject to credit risk, market risk,
    interest rate risk, selection risk, call and redemption risk and
    tax risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit risk is the risk that the obligor will be unable to repay
    principal or pay interest when due. In this regard, investing in
    non-investment grade obligations is riskier than investing in
    higher quality tax-exempt instruments. In addition, market value
    fluctuations may be larger and more frequent. Changes in the
    underlying obligor&#146;s credit rating or the market&#146;s
    perception of its creditworthiness will affect the market value
    of our credit assets of that obligor. The degree of credit risk
    depends on the terms of the tax-exempt obligation as well as on
    the financial condition of the obligor in respect thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market risk is the risk that one or more markets to which our
    assets relate will decline in value, including the possibility
    that such markets will deteriorate sharply and unpredictably,
    which decline will likely impair the market value of the related
    tax-exempt obligations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to fixed-rate obligations, interest rate risk is
    the risk that the market value of these obligations will change
    in response to changes in the interest rate environment or other
    developments that may affect the tax-exempt bond market
    generally. When market interest rates go up, the market value of
    existing fixed rate obligations goes down and obligations with
    longer maturities are typically affected more by changes in
    interest rates than obligations with shorter maturities. Because
    market interest rates continue to be at or near their lowest
    levels in many years, there is a greater risk that prevailing
    interest rates increase in the future and, as a result, that
    these obligations will decline in market value. With respect to
    floating-rate obligations, interest rate risk is the risk that
    defaults on these obligations will increase during periods of
    rising interest rates and, during periods of declining interest
    rates, that obligors may exercise their option to prepay
    principal earlier than scheduled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Selection risk is the risk that our manager may select assets
    that underperform the tax-exempt bond market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Call and redemption risk is the risk that the obligor of a
    tax-exempt obligation will exercise its right to call the
    obligation for redemption before it matures. If this happens, we
    may lose expected income and our shareholders would be exposed
    to reinvestment risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tax risk is the risk that events occurring after the date of
    issuance of a tax-exempt obligation may cause the interest on
    such obligation to be includable in gross income for
    U.S.&#160;federal income tax purposes. See &#147;&#151;&#160;Tax
    Risks&#148; below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of public information available about the tax-exempt
    assets we expect to directly or indirectly hold is generally
    less than that for corporate equities or taxable bonds, and our
    results of operations may, therefore, be more dependent on the
    analytical abilities of our manager than if we held interests in
    other types of assets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    structured credit entities in which we may acquire interests and
    the counterparties under derivative arrangements to which we are
    party may not be able to acquire attractive eligible tax-exempt
    bonds.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may acquire interests in STEP and other types of structured
    credit entities backed by tax-exempt bonds and total return
    swaps and other derivative arrangements relating to tax-exempt
    bonds. We would therefore be subject to the risk that a
    structured credit entity or a derivative counterparty may not be
    able to acquire or identify a sufficient amount of eligible
    tax-exempt bonds to maximize the efficiency of a STEP issuance,
    other structured credit transaction or derivative arrangement.
    In addition, disruptions in the capital markets generally, or in
    the structured credit or derivatives markets specifically, may
    make the issuance of a STEP or another structured credit
    transaction or a derivative transaction less attractive or even
    impossible. If we are unable to finance the acquisition of
    tax-exempt bonds on a long-term basis using structured credit
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    entities or invest in derivative arrangements relating to
    tax-exempt bonds, or if doing so is not economical, we may be
    required to seek less attractive investments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increases
    in interest rates could negatively affect the value of our
    assets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Changes in the general level of interest rates may affect our
    net income to the extent there is a difference between the
    income earned on our assets in structured credit entities owning
    and derivative arrangements, if any, related to tax-exempt
    bonds, on the one hand, and the distributions to other holders
    of certificates issued by such structured credit vehicles and
    payments to our derivative counterparties, on the other. Changes
    in the level of interest rates also can affect, among other
    things, our ability to successfully implement our strategy and
    the value of our assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Due to the prolonged economic crisis and recession,
    U.S.&#160;interest rates have recently been at or near historic
    lows. However, it is anticipated that once the overall
    U.S.&#160;economy displays consistent and pronounced signs of
    recovery, U.S.&#160;interest rates will increase. In the event
    of a significant rising interest rate environment or economic
    downturn, our assets may decrease in value
    <FONT style="white-space: nowrap">and/or</FONT>
    defaults on our assets may increase and result in losses that
    would adversely affect our liquidity and operating results.
    Interest rates are highly sensitive to many factors, including
    governmental monetary and tax policies, domestic and
    international economic and political conditions, and other
    factors beyond our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating results will depend in large part on differences
    between the income earned on our assets, net of credit losses,
    and our operating expenses. Under certain circumstances, the
    income from the tax-exempt bonds underlying our structured
    credit assets and derivative arrangements, if any, may respond
    more slowly to interest rate fluctuations than will the amount
    of the distributions to other holders of certificates issued by
    such structured credit entities and payments to our derivative
    counterparties. Consequently, changes in interest rates,
    particularly short-term interest rates, may significantly
    influence our net income. Increases in these rates will tend to
    decrease our net income and the market value of our assets.
    Interest rate fluctuations resulting in structured credit
    vehicle distributions and derivative payments exceeding the
    income on our assets would result in operating losses for us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Most
    of our assets will be directly or indirectly subject to risks
    particular to real property.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit assets that are directly or indirectly secured by a lien
    on real property (or the equity interests in an entity that owns
    real property) may, upon the occurrence of a default on the
    loan, result in our acquiring ownership of the property.
    Investments in real property or real property-related assets are
    subject to varying degrees of risk. The value of each property
    is affected significantly by its ability to generate cash flow
    and net income, which in turn depends on the amount of income
    that can be generated net of expenses required to be incurred
    with respect to the property. The income from these properties
    may be adversely affected by a number of risks, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acts of God, including hurricanes, earthquakes, floods and other
    natural disasters, which may result in uninsured losses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acts of war or terrorism, including the consequences of
    terrorist attacks;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    adverse changes in national and local economic and real estate
    conditions (including business layoffs or downsizing, industry
    slowdowns and changing demographics);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an oversupply of (or a reduction in demand for) space in
    properties in geographic areas where our assets are concentrated
    and the attractiveness of particular properties to prospective
    tenants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in governmental laws and regulations, fiscal policies
    and zoning ordinances and the related costs of compliance
    therewith and the potential for liability under applicable
    laws;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    costs of remediation and liabilities associated with
    environmental conditions such as indoor mold, and the potential
    for uninsured or underinsured property losses.
</TD>
</TR>

</TABLE>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many expenditures associated with properties (such as operating
    expenses and capital expenditures) cannot be reduced when there
    is a reduction in income from the properties. Adverse changes in
    these factors may have a material adverse effect on the ability
    of our borrowers to pay their loans, as well as on the value
    that we can realize from properties we own or acquire, and may
    reduce or eliminate our ability to make distributions to
    shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Insurance
    on the real estate underlying our credit assets may not cover
    all losses.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are certain types of losses, generally of a catastrophic
    nature, such as earthquakes, floods, hurricanes, terrorism or
    acts of war, that may be uninsurable or not economically
    insurable. Inflation, changes in building codes and ordinances,
    environmental considerations and other factors, including
    terrorism or acts of war, also might make the insurance proceeds
    insufficient to repair or replace a property if it is damaged or
    destroyed. Under such circumstances, the insurance proceeds
    received might not be adequate to restore our economic position
    with respect to the affected real property. Any uninsured loss
    could result in both loss of cash flow and a reduction in asset
    value.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    be exposed to environmental liabilities with respect to
    properties to which we take title.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the course of our business, we may take title to real estate,
    and, if we do take title, we could be subject to environmental
    liabilities with respect to these properties. In such a
    circumstance, we may be held liable to a governmental entity or
    to third parties for property damage, personal injury,
    investigation and
    <FONT style="white-space: nowrap">clean-up</FONT>
    costs incurred by these parties in connection with environmental
    contamination, or may be required to investigate or clean up
    hazardous or toxic substances or chemical releases at a
    property. The costs associated with investigation or remediation
    activities could be substantial. In addition, the presence of
    hazardous substances may adversely affect an owner&#146;s
    ability to sell real estate or borrow using real estate as
    collateral. To the extent that an owner of an underlying
    property becomes liable for removal costs, the ability of the
    owner to make debt payments may be reduced, which in turn may
    materially adversely affect the value of the relevant
    mortgage-related assets held by us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not be able to acquire structured credit assets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our strategy, we expect to acquire interests in STEPs
    and other structured credit entities that hold tax-exempt
    obligations. Our ability to generate gains and income partly
    depends on our ability to acquire interests in such entities. If
    market or other factors limit the ability of such entities to
    use significant amounts of leverage, they may not be an
    attractive acquisition opportunity for us and we may not be able
    to make acquisitions or other investments that provide
    attractive returns.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    significant portion of our structured credit assets could
    consist of junior and residual interests that will be
    subordinate in right of payment and in liquidation to the more
    senior interests issued by the structured credit
    entities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that a significant portion of any structured credit
    assets that we acquire will consist of junior and residual
    certificates issued by the structured credit entities. These
    junior and residual certificates will be subordinated in right
    of payment and in liquidation to the other, more senior
    certificates and will not be secured by specific assets. There
    can be no assurance that these vehicles will generate sufficient
    income from their underlying portfolios of tax-exempt bonds to
    pay distributions to us or that they would have sufficient
    assets to pay any distributions to which we would otherwise be
    entitled in the event of the liquidation. As a result, we may
    not recover some or all of our investments in these junior and
    residual certificates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    use of STEP or other structured credit financings with
    collateralization requirements may have a negative impact on our
    cash flow and may trigger certain termination provisions in the
    related structured transaction documents.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that the terms of certain of our STEP or other
    structured credit transactions will generally provide that the
    principal amount of the tax-exempt bonds must exceed the face
    amount of the related STEP
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    certificates to be issued by the STEP by a certain amount. We
    anticipate that the STEP certificates&#146; terms will provide
    that, if certain delinquencies
    <FONT style="white-space: nowrap">and/or</FONT>
    losses exceed the specified levels based on the analysis by the
    rating agencies (or any financial guaranty insurer) of the
    characteristics of the tax-exempt bonds underlying the STEP
    certificates, the required level of collateralization may be
    increased or may be prevented from decreasing as would otherwise
    be permitted if losses or delinquencies did not exceed those
    levels. Other tests, based on delinquency levels or other
    criteria, may restrict our ability, as the holder of the most
    junior STEP certificates, to receive cash distributions from
    tax-exempt bonds underlying the STEP certificates. The
    performance tests may not be satisfied. We cannot predict the
    actual terms of the STEP delinquency tests, collateralization
    requirements, cash flow release mechanisms or other significant
    factors regarding the calculation of net income to us. Failure
    to obtain favorable terms with regard to these matters may
    materially and adversely affect our earnings Furthermore, if the
    tax-exempt bonds held in STEPs fail to perform as anticipated,
    our earnings may be adversely affected and our expenses related
    to collateralization requirements or other credit enhancement
    expenses associated with our STEP financings will increase.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    significant portion of any future STEP entities may be backed by
    tax-exempt bonds issued by or on behalf of non-profit
    institutions and state authorities in the healthcare, education,
    cultural, philanthropic, research, service/advocacy,
    infrastructure and housing sectors and any adverse trends that
    affect these sectors may adversely affect our STEP and other
    structured credit entities in general.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A significant portion of our future STEP issuances and other
    structured credit transactions may be backed by tax-exempt bonds
    issued by or on behalf of non-profit institutions and state
    authorities in the healthcare, education, cultural,
    philanthropic, research, service/advocacy, infrastructure and
    housing sectors. Any adverse trends that affect these sectors or
    the value of these tax-exempt bonds will adversely impact the
    value of our interests in our STEP and other structured credit
    entities. Certain of these adverse trends are described below in
    &#147;&#151;&#160;Risks Relating to Tax-Exempt Bonds.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Prepayment
    rates on tax-exempt bonds could negatively affect the value of
    our assets, which could result in reduced earnings or losses and
    negatively affect the cash available for distribution to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The value of our structured credit assets and derivative
    arrangements, if any, related to tax-exempt bonds may be
    adversely affected by prepayment rates of the underlying bonds.
    For example, higher than expected prepayment rates will likely
    result in tax-exempt bonds that were acquired at a premium to
    diminish in value. Prepayment rates are influenced by changes in
    current interest rates and a variety of economic, political,
    geographic and other factors beyond our control. Consequently,
    such prepayment rates cannot be predicted with certainty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Borrowers tend to prepay their financings faster when interest
    rates decline. In these circumstances, the money received from
    the prepayments may be reinvested at lower prevailing interest
    rates. Conversely, borrowers tend not to prepay their financings
    when interest rates increase. Consequently, money that would
    have otherwise been received from prepayments would be unable to
    be reinvested at the higher prevailing interest rates. This
    volatility in prepayment rates may result in reduced earnings or
    losses for us and negatively affect the cash available for
    distribution to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Interest
    rate risk may cause greater volatility in our
    earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are currently party to an interest rate swap agreement with
    Tiptree, the holder of the majority of our outstanding common
    shares and an affiliate of our manager, further described in
    &#147;Business&#160;&#151; Our Assets&#160;&#151; Derivative
    Assets.&#148; Furthermore, the STEP and other structured credit
    entities in which we acquire interests and the counterparties
    under derivative arrangements to which we are a party, if any,
    may engage in certain hedging transactions in an effort to limit
    their exposure to changes in interest rates, which may expose
    our assets to risks associated with these transactions. They may
    utilize instruments such as forward contracts and interest rate
    swaps, caps, collars and floors to seek to hedge against
    fluctuations in the relative values of the tax-exempt bonds that
    underlie our assets from changes in market interest rates.
    Hedging against a decline in the values of these tax-exempt
    bonds does not eliminate the possibility of fluctuations in the
    values of these bonds or prevent losses if the values of these
    bonds decline. However, hedging can establish other positions
</DIV>
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    designed to gain from those same developments, thereby
    offsetting the decline in the value of these bonds. Hedging
    transactions may also limit the opportunity for gain if the
    value of the bonds increases. Moreover, these entities and
    counterparties may not be able to hedge against an interest rate
    fluctuation that is generally anticipated at an acceptable price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The success of these risk mitigation transactions will depend on
    the entities&#146; and counterparties&#146; ability to structure
    and execute effective hedges for the underlying tax-exempt
    bonds, based on changes to interest rates, credit spreads and
    other financial market changes. Therefore, while these entities
    and counterparties may enter into these transactions to seek to
    reduce interest rate risks, unanticipated changes in interest
    rates may result in poorer overall performance for our assets
    than if they had not engaged in any hedging transactions. In
    addition, the degree of correlation between price movements of
    the instruments used in a hedging strategy and price movements
    in the underlying tax-exempt bonds being hedged may vary.
    Moreover, for a variety of reasons, these entities and
    counterparties may not establish a perfect correlation between
    such hedging instruments and the bonds being hedged. Any such
    imperfect correlation may prevent these entities and
    counterparties from achieving the intended hedge and expose our
    investments to risk of loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accounting for hedges under generally accepted accounting
    principles in the United States, or U.S.&#160;GAAP, is extremely
    complicated. We may inadvertently fail to account for hedges
    properly in accordance with U.S.&#160;GAAP on our financial
    statements or may fail to qualify for hedge accounting, either
    of which could have a material adverse effect on our earnings.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Risk
    mitigation arrangements may adversely affect the returns from
    our assets and may cause volatility in our earnings, which could
    adversely affect cash available for distribution to our
    shareholders, and may also result in taxable gains or taxable
    income to our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The risk mitigation activities of the STEP and other structured
    credit entities in which we acquire interests and the
    counterparties under derivative arrangements to which we are a
    party will vary in scope based on the level and volatility of
    interest rates, the type of underlying tax-exempt bonds held and
    other changing market conditions. Interest rate hedging may fail
    to protect or could adversely affect us because, among other
    things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest rate hedging can be expensive, particularly during
    periods of rising and volatile interest rates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    available interest rate hedging may not correspond directly with
    the interest rate risk for which protection is sought;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the duration of the hedge may not match the duration of the
    related asset;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the credit quality of the party owing money on the hedge may be
    downgraded to such an extent that it impairs our structured
    credit entities&#146; or our derivative counter-party&#146;s
    ability to sell or assign its side of the hedging
    transaction;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the party owing money in the hedging transaction may default on
    its obligation to pay.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Such risk mitigation activities may adversely affect the returns
    from our assets and may cause volatility in our earnings, which
    could adversely affect cash available for distribution to our
    shareholders. In addition, such hedging activities may also
    result in taxable gains or taxable income to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    competitive pressures we face as a result of operating in a
    highly competitive market could adversely affect
    us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to significant competition. A substantial number
    of entities (including entities managed by our manager and its
    other affiliates) compete with us, including specialty finance
    companies, banks, insurance companies, mutual funds, hedge
    funds, institutional investors, individual investors, lenders
    and other entities seeking to invest in tax-exempt bonds. Many
    of our competitors are substantially larger than we are and have
    considerably greater financial, technical and marketing
    resources than we have. Some competitors may have a lower cost
    of funds, enhanced operating efficiencies and access to funding
    sources that are not available to us. In addition, some of our
    competitors may have higher risk tolerances or different risk
    assessments, which
</DIV>
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    could allow them to consider a wider variety of opportunities
    and establish more relationships than we can. The competitive
    pressures we face may have a material adverse effect on us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Competition may limit the number of suitable opportunities
    available to us. It may also result in higher prices, lower
    yields and a narrower spread of yields over our borrowing costs,
    making it more difficult for us to acquire assets on attractive
    terms. In addition, competition for desirable assets could delay
    the deployment of the proceeds from this offering, which may in
    turn reduce our earnings per share and negatively affect our
    ability to maintain our distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">To the
    extent we utilize warehouse credit facilities, secured lines of
    credit and other short term financing arrangements in the
    future, we may be subject to certain related
    risks.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent we utilize warehouse credit facilities, secured
    lines of credit and other short term financing arrangements in
    the future, we may be subject to certain risks relating to such
    financing arrangements, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    these financing arrangements may subject us to an increased risk
    of loss, adversely affecting our returns and reducing cash
    available for distribution to our shareholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest expense on such arrangements will not be deductible by
    us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an increase in our borrowing costs of these financing
    arrangements relative to the income we receive on our assets may
    adversely affect our profitability, which may negatively affect
    cash available for distribution to our shareholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    these financing arrangements may contain covenants that restrict
    our operations, and any default under these arrangements would
    inhibit our ability to grow our business and increase
    revenues;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we could suffer losses beyond our committed capital under
    warehouse facilities, which could adversely affect us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, any future indebtedness that we incur may contain
    restrictive covenants that impose operating and other
    restrictions on us or one or more of our subsidiaries, including
    restrictions on our ability to make distributions to
    shareholders. These covenants may limit our ability, or the
    ability of one or more of our subsidiaries, to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur or guarantee additional debt;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    create or incur liens;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    engage in mergers and sales of substantially all of our assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make loans, acquisitions or investments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make distributions on our shares unless we maintain specified
    financial covenants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    engage in transactions with affiliates;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    otherwise engage in operations as currently contemplated or as
    may be contemplated in the future.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    rely, in part, on analytical models and other data to analyze
    potential asset acquisition and disposition opportunities and to
    manage our portfolio. Such models and other data may be
    incorrect, misleading or incomplete, which could cause us to
    purchase assets that do not meet our expectations or to make
    asset management decisions that are not consistent with our
    strategy.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager relies on analytical models (both proprietary and
    third-party models), and information and data supplied by third
    parties. These models and data may be used to value assets or
    potential asset acquisitions and dispositions and also in
    connection with our asset management activities. If these models
    and data prove to be incorrect, misleading or incomplete, any
    decisions made in reliance thereon could expose us to potential
    risks. For example, data may be incorrect, incomplete or
    misleading, may be modeled based on simplifying assumptions that
    lead to errors, may be incorrectly reported or subject to
    interpretation or may be
</DIV>
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    outdated. Our manager&#146;s reliance on these models and data
    may induce it to purchase certain assets at prices that are too
    high, to sell certain other assets at prices that are too low,
    or to miss favorable opportunities. Similarly, any hedging
    activities, such as total return swaps, that are based on faulty
    models and data may prove to be unsuccessful.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some models may be predictive in nature. The use of predictive
    models has inherent risks. For example, such models may
    incorrectly forecast future behavior, leading to potential
    losses. In addition, the predictive models used by our manager
    may differ substantially from those models used by other market
    participants, with the result that valuations based on these
    predictive models may be substantially higher or lower for
    certain assets than actual market prices. Furthermore, because
    predictive models are usually construed based on historical data
    supplied by third parties, the success of relying on such models
    may depend heavily on the accuracy and reliability of the
    supplied historical data, and, in the case of predicting
    performance in scenarios with little or no historical precedent
    (such as extreme broad-based declines in home prices or deep
    economic recessions), such models may have little or no
    predictive value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All valuation models rely on correct market data inputs. If
    incorrect market data is entered into even a well-founded
    valuation model, the resulting valuations will be incorrect.
    However, even if market data is inputted correctly, &#147;model
    prices&#148; will often differ substantially from market prices,
    especially for securities with complex characteristics or whose
    values are particularly sensitive to various factors. If our
    market data inputs are incorrect or our model prices differ
    substantially from market prices, we may be adversely effected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Accounting
    rules for certain of our transactions are highly complex and
    involve significant judgment and assumptions. Changes in
    accounting interpretations or assumptions could adversely impact
    our financial statements.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accounting rules for transfers of financial assets, structured
    credit transactions, consolidation of variable interest
    entities, and other aspects of our anticipated operations are
    highly complex and involve significant judgment and assumptions.
    These complexities could lead to delay in preparation of
    financial information. Changes in accounting interpretations or
    assumptions could impact our financial statements, possibly
    materially.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    acquire total return swaps and other derivative arrangements
    that could expose us to contingent liabilities in the
    future.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Part of our strategy may involve entering into total return
    swaps and other derivative arrangements that could require us to
    fund cash payments in certain circumstances such as the early
    termination of the swap or other derivative caused by an event
    of default or other early termination event, or the decision by
    a counterparty to request margin securities we are contractually
    owed under the terms of the swap or other derivative. The amount
    due would be equal to the unrealized loss of the open swap
    positions with the respective counterparty and could also
    include other fees and charges. These economic losses would be
    reflected in our results of operations and our ability to fund
    these obligations would depend on the liquidity of our assets
    and access to capital at the time. The need to fund these
    obligations could adversely impact our financial condition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    investments in total return swaps, if any, may subject us to
    certain additional risks. Furthermore, we may not be able to
    renew any total return swaps that we may enter into, which could
    adversely impact our investment strategy.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The total rate of return of a portfolio of tax-exempt bonds on
    which a swap is based may exhibit substantial volatility and may
    be positive or negative in any given period. In the event that
    the total rate of return is negative and we are receiving the
    total rate of return of that portfolio of tax-exempt bonds in
    our part of a swap agreement, we would be required to make a
    payment to the counterparty in addition to that required on the
    other, generally floating rate, part of the swap agreement.
    Also, unusual market conditions affecting the portfolio of
    tax-exempt bonds on which the swap is based may prevent the
    total rate of return from being
</DIV>
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    calculated, in which case other provisions in the swap agreement
    may be invoked which could cause us to lose some of the
    anticipated benefit from the swap or otherwise reduce our return.
</DIV>

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    In addition, we will not be treated as the owner of the
    underlying portfolio of tax-exempt bonds subject to the total
    return swaps in which we may invest for tax or financial
    reporting purposes, and any income earned by us from any total
    return swap will be taxable to us. Moreover, the terms of any
    swap agreement will not contractually obligate the swap
    counterparty to own the tax-exempt bonds in the reference
    portfolio or, in the event such counterparty does own such
    reference bonds, to sell such bonds to us or a STEP and the
    counterparty could sell the tax-exempt bonds in the secondary
    market or retain them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, in response to recent market conditions, federal and
    state legislators have discussed the proposal and enactment of
    certain regulatory reforms that may affect the derivatives
    market. If applicable laws and regulations are passed that
    affect total return swaps or other derivative instruments that
    may be within our strategy, our rate of return on such assets,
    or our ability to enter into swaps could be adversely affected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, we may wish to renew the total return swaps, which
    are for specified terms, as they mature. However, there is a
    limited number of providers of such swaps, and there is no
    assurance the initial swap providers will choose to renew the
    swaps, and, if they do not renew, that we would be able to
    obtain suitable replacement providers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may invest, through our wholly-owned subsidiary, in a limited
    number of total return swaps and our business and our financial
    performance may be materially harmed if those resources are not
    available to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have in the past invested, and may in the future invest, in the
    residual certificates of tender option bond programs, and may be
    subject to risks relating to our ownership of residual
    certificates of such tender option bond programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In a typical tender option bond program, tax-exempt bonds
    identified by a dealer are deposited in a special purpose
    vehicle, usually a trust. The tender option bond trust issues
    two classes of securities: (i)&#160;floating rate certificates,
    with an aggregate face value approximately equal to the market
    value of the underlying tax-exempt bonds, entitling the holders
    to a variable interest rate based on prevailing short-term
    tax-exempt rates, which is reset periodically based on changes
    in short-term interest rates, and (ii)&#160;a residual
    certificate, which establishes an economically leveraged
    position in the underlying tax-exempt bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a holder of residual certificates under tender option bond
    programs, we could incur significant costs in respect of any
    event requiring the redemption of the related floating rate
    certificates. Such costs could arise, for example, in connection
    with our obligation to reimburse a dealer for payments made by
    the dealer to a liquidity provider under a liquidity facility
    that entitles the holders of floating rate certificates to
    tender the certificates for repurchase at 100% of their face
    amount plus accrued interest. We may also be subject to certain
    collateral requirements and asset tests related to the
    obligations under the reimbursement agreements, the hedge
    agreements and certain related synthetic instruments. Our
    failure to meet these collateral requirements or asset tests may
    constitute a default under the related agreements and could
    result in substantial payments or losses by us, depending on
    market conditions at the time of default. In addition, some of
    the residual certificates are callable by the tender option bond
    trust upon the occurrence of certain events. These events
    typically include bankruptcy of the tender option bond trust,
    non-payment of any of the underlying tax-exempt bonds, a
    downgrading of the rating of the underlying tax-exempt bonds and
    a change in the tax treatment of the underlying tax-exempt
    bonds. If any residual certificates are redeemed, the redemption
    price may be less than the original cost of the redeemed
    residual certificates. Also, upon redemption of a residual
    certificate in which we have an interest, we may be unable to
    invest in other assets within a reasonable period of time.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Actual
    default rates on the categories of credit assets held by us may
    be higher than historical default rates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The historical performance of the types of assets that we hold
    or may hold is not necessarily indicative of their future
    performance. Should increases in default rates or decreases in
    recovery rates occur with respect to
</DIV>
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    the types of assets that we hold, the actual default rates with
    respect to the assets in our portfolio may be significantly
    greater than, or the actual recovery rates with respect to the
    assets in our portfolio may be significantly less than, the
    hypothetical default rates and recovery rates that we used in
    purchasing these assets. If this were to occur, any debt issued
    by special purpose vehicles or alternative instruments used to
    finance these assets may be impaired and any subordinated debt
    and equity interests that we hold in any such vehicles may not
    receive distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    credit ratings of the assets we hold are only opinions and not
    guarantees of future performance or market value.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit ratings of assets and securities that we may hold
    represent the rating agencies&#146; opinions regarding the
    credit quality of those assets and are not a guarantee of future
    performance. Rating agencies attempt to evaluate the safety of
    principal and interest payments and do not evaluate the risks of
    fluctuations in market value; therefore, ratings may not
    accurately reflect the true risks of holding an asset. In
    addition, rating agencies may fail to make timely changes in
    credit ratings in response to subsequent events, so that an
    obligor&#146;s current financial condition may be better or
    worse than a rating indicates. The credit ratings of the assets
    we purchase also may change over time.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    due diligence may not reveal all of an entity&#146;s liabilities
    and may not reveal other weaknesses in their
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Before we acquire interests or invest directly in tax-exempt
    obligations issued by or on behalf of an entity, we will rely on
    our manager to assess the potential acquisition. There can be no
    assurance that our manager will conduct any specific level of
    due diligence, or that, among other things, our manager&#146;s
    due diligence processes will uncover all relevant facts or that
    any purchase will be successful, which could result in losses on
    these assets, which, in turn, could adversely affect our
    business, financial condition and results of operations and our
    ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    highly dependent on information systems provided by third
    parties.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business is highly dependent on communications and
    information systems that are supplied
    <FONT style="white-space: nowrap">and/or</FONT>
    managed by third parties. Any failure or interruption of our
    systems could cause delays or other problems in our activities,
    which could have a material adverse effect on our operating
    results and negatively affect the market price of our
    Class&#160;A common shares and our ability to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">All of
    our back office operations are outsourced.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We rely on our manager and its affiliates to perform
    substantially all of our back office operations. A portion of
    these services are in turn provided to them (or their
    affiliates) by Mariner Investment Group, LLC, or Mariner,
    pursuant to a services agreement that may be terminated without
    our consent. If our manager ceases to act in that capacity, we
    would be required to make alternative arrangements for the
    performance of these services. In addition, if the services
    agreement between Mariner and our affiliate is terminated, we
    may not be able to obtain these services at reasonable rates or
    at all. We do not have a written contract with Mariner with
    respect to the services that it provides to us directly, so it
    may cease providing services to us at any time without cost or
    penalty.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    and Legal Risks of Our Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Maintenance
    of our Investment Company Act of 1940 exemption imposes limits
    on our operations, which may adversely affect our
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to continue to conduct our operations so that we are
    not required to register as an investment company under the
    Investment Company Act of 1940, as amended (the &#147;Investment
    Company Act&#148;). We expect many of our subsidiaries to rely
    on the exemptions from registration under:
    (i)&#160;Section&#160;3(c)(5)(C) of the Investment Company Act
    available to companies primarily engaged in purchasing or
    otherwise acquiring mortgages and other liens on, and interests
    in, real estate; or (ii)&#160;Sections&#160;3 (c)(5)(A) or
    (B)&#160;of the Investment
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Company Act available to companies primarily engaged in sales
    financing, factoring or making loans to manufacturers or
    retailers for purchases of specified merchandise or services
    (together, with companies relying on Section&#160;3(c)(5(C),
    &#147;3(c)(5) Businesses&#148;). In turn, we intend to conduct
    our operations so that we qualify for the exception from the
    definition of investment company provided for under
    Section&#160;3(c)(6) of the Investment Company Act with respect
    to diversified holding companies primarily engaged in 3(c)(5)
    Businesses and other businesses that are exempted from
    regulation under the Investment Company Act. Because the SEC
    staff has issued little interpretive guidance with respect to
    Section&#160;3(c)(6), there can be no assurance that the SEC or
    its staff will not change its view on the interpretation of
    Section&#160;3(c)(6) or that they would otherwise agree with our
    analysis, which, in either case, could cause us to adjust our
    investment strategy. Any such adjustment to our investment
    strategy would have a material adverse effect on us. In
    addition, certain of our subsidiaries, including certain STEP
    issuers, may also seek to rely on the Investment Company Act
    exemption under
    <FONT style="white-space: nowrap">Rule&#160;3a-7</FONT>
    provided to certain structured financing vehicles that pool
    income-producing assets and issue securities backed by those
    assets. Such structured financings may not engage in portfolio
    management practices resembling those employed by mutual funds.
    As a result of these restrictions, certain of our STEP
    subsidiaries may suffer losses on their assets and we may suffer
    losses on our investments in those STEP subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are required to register under the Investment Company Act,
    we would become subject to substantial regulation with respect
    to our capital structure (including our ability to use
    leverage), management, operations, transactions with affiliated
    persons (as defined in the Investment Company Act), and
    portfolio composition, including restrictions with respect to
    diversification and industry concentration and other matters.
    Registration under the Investment Company Act would likely limit
    our ability to follow our current investment and financing
    strategies, impair our ability to make distributions to our
    common shareholders and, as a result, cause a decline in the
    price of our common shares. See &#147;Business&#160;&#151;
    Regulatory Environment.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Investors
    will not have the protections associated with ownership of
    shares in an investment company registered under the Investment
    Company Act.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not registered as an investment company under the
    Investment Company Act. Consequently, investors in the Company
    will not have the regulatory protections provided to investors
    in investment companies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Risks</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    believe we are a partnership for U.S. federal income tax
    purposes and are solely relying on advice rendered by a
    nationally recognized accounting firm in making this
    determination Partnership status requires a facts and
    circumstances determination and if we are incorrect in our
    determination, we would be required to pay tax at corporate
    rates on any portion of our net income that does not constitute
    <FONT style="white-space: nowrap">tax-exempt</FONT>
    income, and distributions by us to our shareholders would be
    taxable dividends to the extent of our current and accumulated
    earnings and profits.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently classify ourselves as a partnership for
    U.S.&#160;federal income tax purposes. So long as we qualify as
    a partnership we will be able to pass through our income,
    including our federally tax-exempt income, and deductions to our
    shareholders. Our qualification as a partnership for
    U.S.&#160;federal income tax purposes involves the application
    of numerous technical provisions under which there is a lack of
    direct authority. In general, if a partnership is &#147;publicly
    traded&#148; (as defined in the Code) it will be treated as a
    corporation for U.S.&#160;federal income tax purposes. We expect
    to be treated as a publicly traded partnership. A publicly
    traded partnership will, however, be taxed as a partnership, and
    not as a corporation for U.S.&#160;federal income tax purposes,
    so long as 90% or more of its gross income for each taxable year
    constitutes &#147;qualifying income&#148; within the meaning of
    Section&#160;7704(d) of the Code and the partnership is not
    registered under the Investment Company Act. We refer to this
    exception as the &#147;qualifying income exception.&#148;
    Qualifying income generally includes rents, dividends, interest
    and capital gains from the sale or other disposition of stocks,
    bonds and real property. In addition, qualifying income
    generally also includes income from a notional principal
    contract (which may include certain derivatives like a total
    return swap) if the income from the reference obligation would
    be qualifying income. In determining whether interest is treated
    as qualifying
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    income for purposes of these rules, interest income derived from
    a &#147;financial business&#148; and income and gains derived by
    a &#147;dealer&#148; in securities are not treated as qualifying
    income. We believe that we have and will continue to act as an
    investor with respect to our tax-exempt bond investments and
    that we have not and will not engage in a financial business,
    although there is no clear guidance on what constitutes a
    financial business under the tax law. We have taken the position
    that for purposes of determining whether we are in a financial
    business, portfolio investing activities that we engage in have
    not and will not cause us to be engaged in a financial business
    or to be considered a &#147;dealer&#148; in securities and that
    the activities of our taxable subsidiaries have not been (and
    will not be) attributable to us. Prospective investors should
    carefully note that we could be treated as if we were engaged in
    a financial business if the activities of our taxable
    subsidiaries, such as MFCA Funding, Inc., were attributed to us.
    It should be noted that such subsidiaries are taxable C
    corporations subject to income tax on their net income, and such
    subsidiaries are intended to engage in significant transactions
    with third parties in the operation of their businesses.
    Contrary to our belief, the IRS could assert that our activities
    constitute a financial business. If our activities constitute a
    financial business or cause us to be treated as a dealer, there
    is a substantial risk that more than 10% of our gross income
    would not constitute qualifying income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If less than 90% of our gross income constitutes qualifying
    income, for any reason (including as a result of a taxable
    subsidiary&#146;s financing business being attributed to us),
    other than a failure that is determined to be inadvertent and
    that is cured within a reasonable time after discovery, or if we
    were registered under the Investment Company Act, our items of
    income and deduction would not pass through to our shareholders
    and our shareholders would be treated for U.S.&#160;federal
    income tax purposes as stockholders in a corporation. We would
    be required to pay income tax at corporate rates on any portion
    of our net income that did not constitute tax-exempt income. In
    addition, a portion of our federally tax-exempt income may be
    included in determining our alternative minimum tax liability.
    Distributions by us to our shareholders would constitute
    dividend income taxable to such holders to the extent of our
    current and accumulated earnings and profits, which would
    include tax-exempt income as well as any taxable income we might
    have, and the payment of these distributions would not be
    deductible by us. These consequences would have a significant
    adverse effect on us, our shareholders and the value of our
    shares. Prospective investors should consult their own tax
    advisors regarding these potential material adverse tax
    consequences.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    ability to allocate and distribute to our shareholders income
    that is exempt from U.S. federal income tax will depend on the
    exclusion from gross income of the interest income that we
    receive on the bonds in which we invest. A portion of the
    interest income we earn will likely be taxable in many states
    and localities and may be includable in our shareholders&#146;
    calculation of AMT.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have not and will not directly or indirectly acquire a
    tax-exempt bond unless the bond receives, or there has been
    issued previously, an opinion of nationally recognized bond
    counsel which was delivered on the date of issuance of that
    security that interest on such security will be exempt from
    regular U.S.&#160;federal income taxation. We have assumed the
    continuing correctness of, the opinions of bond counsel relating
    to the exclusion of interest income from gross income for
    U.S.&#160;federal income tax purposes and have not relied on any
    other external advisors in determining such exclusion from gross
    income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Events occurring after the date of issuance of a tax-exempt
    bond, however, may cause the interest on such tax-exempt bond to
    be includable in gross income for U.S.&#160;federal income tax
    purposes. For example, the IRS establishes certain requirements,
    such as restrictions on the investment of the proceeds of the
    bond issue, limitations on the use of proceeds of such issue and
    the property financed by such proceeds, and the payment of
    certain excess earnings to the federal government, that must be
    met after the issuance of a tax-exempt bond for interest on such
    tax-exempt bond to remain excludible from gross income for
    U.S.&#160;federal income tax purposes. The issuers and the
    underlying obligors of the tax-exempt bonds generally covenant
    to comply with such requirements and the opinion of bond counsel
    generally assumes continuing compliance with such requirements.
    In addition, for tax-exempt bonds the proceeds of which are
    loaned to a charitable organization described in
    section&#160;501(c)(3) of the Code, the continued exclusion of
    interest from gross income for U.S.&#160;federal income tax
    purposes depends on the continuing exempt status of the
    charitable organization borrower. Failure to comply with these
    continuing requirements, however, may cause the interest on a
    tax-
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exempt bond to be includable in gross income for
    U.S.&#160;federal income tax purposes retroactive to its date of
    issue regardless of when such noncompliance occurs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the IRS has an ongoing enforcement program that
    involves the audit of tax-exempt bonds to determine whether an
    issue of bonds satisfies all of the requirements that must be
    met for the interest on such bonds to be excludible from gross
    income for U.S.&#160;federal income tax purposes. From time to
    time, some of the tax-exempt bonds we own directly or indirectly
    may become the subject of such an audit by the IRS, and the IRS
    may determine that the interest on such securities is includable
    in gross income for U.S.&#160;federal income tax purposes either
    because the IRS has taken a legal position adverse to the
    conclusion reached by bond counsel in its opinion pertaining to
    the bond issue or as a result of an action taken or not taken
    after the date of the bond issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest on a bond, other than a bond the proceeds of which are
    loaned to a charitable organization described in
    Section&#160;501(c)(3) of the Code, will not be excluded from
    gross income during any period in which we are a
    &#147;substantial user&#148; of the underlying property or a
    person &#147;related to&#148; a &#147;substantial user.&#148; We
    or one of our affiliates, as applicable, will be a related
    person of a substantial user for this purpose if, among other
    things, we directly, or indirectly by attribution, own more than
    a specified percentage of the capital or profits interest in the
    substantial user. The attribution rules under U.S.&#160;federal
    income tax law are complex and the preceding sentence is not
    intended to be a complete summary of their application. We do
    not expect to be a &#147;substantial user&#148; of the
    properties financed with the proceeds of the mortgage revenue
    bonds or person &#147;related to&#148; a &#147;substantial
    user.&#148; There can be no assurance, however, that the IRS
    would not challenge such a conclusion. If such challenge were
    successful, the interest received on any bond for which we were
    treated as a &#147;substantial user&#148; or a &#147;related
    party&#148; thereto would be includable in federally taxable
    gross income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If interest paid on any tax-exempt bond in which we invest
    directly or indirectly is determined to be taxable subsequent to
    our acquisition of such interests or bond, the IRS may demand
    that our shareholders pay U.S.&#160;federal income tax on the
    interest income allocated to them, thereby adversely reducing
    our shareholders&#146; yield.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A determination that interest on a tax-exempt bond we own
    directly or indirectly is includable in gross income for
    U.S.&#160;federal income tax purposes retroactively to its date
    of issue may cause a portion of prior years&#146; interest
    allocations received by our shareholders to be taxable to those
    shareholders in the year of allocation. Even if the interest
    income we earn is exempt from U.S.&#160;federal income tax, such
    income will likely be taxable in many states and localities. In
    addition, interest on tax-exempt bonds generally is an item of
    tax preference for purposes of the AMT, however interest on
    tax-exempt 501(c)(3) bonds is generally only includable in the
    determination of AMT for our corporate shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    will have to pay some taxes and may be subject to others, which
    may reduce the cash available for distribution to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even if we qualify to be taxed as a partnership for
    U.S.&#160;federal income tax purposes, our taxable subsidiaries
    organized as C corporations, such as MFCA Funding, Inc., will be
    required to pay some U.S.&#160;federal, state and local taxes on
    their income and property. In addition, to the extent such
    taxable subsidiaries earn tax-exempt interest income, such
    income will be a preference item and will be includable in the
    determination of the subsidiaries&#146; AMT liability. To the
    extent our taxable subsidiaries are required to pay
    U.S.&#160;federal, state or local taxes, or AMT, we will have
    less cash available for distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    generate taxable income which will be allocated to our
    shareholders, and depending upon the nature of our operations,
    such income could be substantial.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders generally will be taxable on income allocable to
    them where such income does not constitute tax-exempt interest
    income. It should be noted that we intend to invest in taxable
    bonds as well as financial products that do not produce
    tax-exempt interest income. Accordingly, depending upon the
    nature of our activities, taxable income allocated to our
    shareholders could be substantial. We will receive dividend
    income from our taxable subsidiaries, such as MFCA Funding, Inc.
    Such income will be taxable as ordinary
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    portfolio income to our shareholders. We will also generate
    capital gains upon our or our structured credit vehicles&#146;
    sale of our tax-exempt bonds, which will be allocated to our
    shareholders and taxable as capital gain. In addition, to the
    extent that we purchase tax-exempt bonds with &#147;market
    discount&#148; (generally, where we purchase such bond at less
    than the price at which it was issued) we will be taxed on any
    accrued market discount at the time we receive principal
    payments on such tax-exempt bonds or upon the sale or redemption
    of such bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Thus, a shareholder may have to pay taxes regardless of the
    amount of cash we distribute to shareholders. In addition, a
    shareholder will likely have a significant amount of
    &#147;phantom income&#148; to the extent it participates in the
    dividend reinvestment plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Certain
    interest expense allocated by us to holders of our shares will
    not be deductible for U.S. federal income tax
    purposes.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will likely incur interest expense in connection with our
    investment activities. U.S.&#160;federal income tax law
    generally disallows any deduction for interest paid by a
    taxpayer on indebtedness incurred or continued for the purpose
    of purchasing or carrying a tax-exempt obligation. A purpose to
    carry tax-exempt obligations will be inferred whenever a
    taxpayer owns tax-exempt obligations and has outstanding
    indebtedness which is neither directly connected with personal
    expenditures nor incurred in connection with the active conduct
    of a trade or business. The IRS may take the position that a
    shareholder&#146;s allocable portion of any interest that we pay
    on our borrowings
    <FONT style="white-space: nowrap">and/or</FONT> any
    interest paid by a shareholder on indebtedness incurred to
    purchase our shares should be viewed in whole or in part as
    incurred to enable such shareholder to continue carrying
    tax-exempt obligations and, therefore, the deduction of any such
    interest by a shareholder should be disallowed in whole or in
    part.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Complying
    with certain tax-related requirements may cause us to forego
    otherwise attractive business or investment opportunities or
    enter into borrowings or financings we may not have otherwise
    entered into.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order for us to remain treated as a partnership for
    U.S.&#160;federal income tax purposes, and not as an association
    or publicly traded partnership taxable as a corporation, at
    least 90% of our gross income each taxable year must consist of
    interest, dividends, capital gains and other types of
    &#147;qualifying income.&#148; In order to comply with these
    requirements, we (and our subsidiaries) may be required to
    invest through corporations
    <FONT style="white-space: nowrap">and/or</FONT>
    forego attractive business or investment opportunities.
    Furthermore, to avoid being deemed to be engaged in a financial
    business for U.S.&#160;federal income tax purposes, we will be
    precluded from directly engaging in loan origination activities.
    Thus, compliance with these requirements may adversely affect
    our ability to operate solely to maximize profits.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    structure involves complex provisions of U.S. federal income tax
    law for which no clear precedent or authority is available, and
    which is subject to potential change, possibly on a retroactive
    basis. Any such change could result in adverse consequences to
    the holders of Class&#160;A common shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;federal tax treatment of holders of our
    Class&#160;A common shares depends in some instances on
    determinations of fact and interpretations of complex provisions
    of U.S.&#160;federal income tax law for which no clear precedent
    or authority are available. Holders of Class&#160;A common
    shares also should be aware that the U.S.&#160;federal income
    tax rules are constantly under review by Congress and the IRS,
    possibly resulting in unfavorable precedent or authority on
    issues for which there was previously no clear precedent or
    authority as well as revised interpretations of established
    concepts. The IRS pays close attention to the proper application
    of tax laws to partnerships and investments in tax-exempt
    securities. The present U.S.&#160;federal income tax treatment
    of an investment in our Class&#160;A common shares may be
    modified by administrative, legislative or judicial
    interpretation at any time, and any such action may affect
    investments made by us. As an example, in the event variable
    rate certificates issued by tender option bond trusts were
    characterized as loans bearing taxable interest rather than as
    partnership interests, we would likely lose this method of
    financing our acquisition of tax-exempt bonds, which could have
    an adverse impact on our ability to generate revenue. We and
    holders of our Class&#160;A common shares could be adversely
    affected by this or any other such change in, or any new, tax
    law, regulation or interpretation.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    be subject to adverse legislative or regulatory tax changes that
    could reduce the market price of our Class&#160;A common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time, the U.S.&#160;federal income tax laws or
    regulations governing partnerships or the administrative
    interpretations of those laws or regulations may be amended. We
    cannot predict when or if any new U.S.&#160;federal income tax
    law, regulation or administrative interpretation, or any
    amendment to any existing U.S.&#160;federal income tax law,
    regulation or administrative interpretation, will be adopted,
    promulgated or become effective and any such law, regulation or
    interpretation may take effect retroactively. We and our
    shareholders could be adversely affected by any such change in,
    or any new, U.S.&#160;federal income tax law, regulation or
    administrative interpretation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    currently receive certain tax relief as a &#147;qualified
    business&#148; under the State of Pennsylvania Keystone
    Opportunity Zone, Keystone Opportunity Expansion Zone and
    Keystone Opportunity Improvement Zone Act. There is no assurance
    that we would continue to receive such tax relief under such
    act, and, as such, we may be subject to certain penalties and/or
    recapture under such act.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The State of Pennsylvania enacted the Keystone Opportunity Zone,
    Keystone Opportunity Expansion Zone and Keystone Opportunity
    Improvement Zone Act by providing qualified businesses certain
    tax benefits in order to revive economically distressed urban
    and rural communities. Currently, we are a &#147;qualified
    business&#148; under such Act, and receive tax relief
    thereunder. However, in order to receive tax relief, a company
    must apply for such relief on an annual basis. There can be no
    assurance that we would continue to qualify under such Act. If
    we cease to qualify, such as by relocating our executive office
    from its current location, which is situated in an
    &#147;opportunity zone,&#148; we may be subject to certain tax
    penalties
    <FONT style="white-space: nowrap">and/or</FONT>
    recapture under the Act.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to This Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">There
    currently is no public market for our Class&#160;A common
    shares, an active trading market may never develop and the
    market price of the shares may be volatile.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There currently is no public market for our shares and there can
    be no assurance that an active trading market for our shares
    will develop. We expect that the Class&#160;A common shares will
    be listed on the NASDAQ Stock Market LLC under the symbol
    &#147;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    .&#148; Even if an active trading market develops, the market
    price of our Class&#160;A common shares may be highly volatile
    and could be subject to wide fluctuations. Some of the factors
    that could negatively affect our share price include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    general market and economic conditions, including disruptions,
    downgrades, credit events and perceived problems in the credit
    markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    actual or anticipated variations in our quarterly operating
    results or distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in our asset composition or business strategy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    write-downs or perceived credit or liquidity issues affecting
    our assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    market perception of our company, our business and our assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our level of indebtedness
    <FONT style="white-space: nowrap">and/or</FONT>
    adverse market reaction to any indebtedness we incur in the
    future;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    additions or departures of our manager&#146;s key personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in market valuations of similar companies;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    speculation in the press or investment community.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">To the
    extent a market for our Class&#160;A common shares develops,
    shares eligible for future sale may have adverse effects on our
    share price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tiptree owns in the aggregate approximately 27,617,687 of our
    Class&#160;B common shares or 73.81% of the outstanding
    Class&#160;B common shares. Each Class&#160;B common share is
    convertible at any time into one Class&#160;A
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    common share. Tiptree may also purchase Class&#160;A common
    shares pursuant to this offering. We cannot predict the effect,
    if any, of future sales of shares, whether by us, Tiptree or
    other shareholders, or the availability of shares for future
    sale, on the market price of our Class&#160;A common shares. We
    also may issue from time to time additional Class&#160;A common
    shares and we may grant demand or piggyback registration rights
    in connection with such issuances. Sales of substantial amounts
    of Class&#160;A common shares or the perception that such sales
    could occur may adversely affect the prevailing market price for
    our Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Certain
    provisions of our operating agreement and bylaws could hinder,
    delay or prevent a change of control of our
    company.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement and bylaws contain provisions that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    entitle holders of Class&#160;B common shares to 10 votes per
    share on all matters to be voted on by the shareholders in
    general;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permit us to issue, without any further vote or action by our
    shareholders, preferred shares in one or more series and, with
    respect to each series, to fix the number of shares, the
    relative powers, preferences and rights, and the qualifications,
    limitations or restrictions applicable to such shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    limit our shareholders&#146; ability to call special meetings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    limit our shareholders&#146; ability to remove directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide exclusive authority to the board of directors to
    establish the number of directorships and fill vacancies on our
    board of directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    set forth advance notice procedures for shareholders&#146;
    nominations of directors and proposals for consideration at
    meetings of shareholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make Section&#160;203 of Delaware General Corporation Law
    applicable to business combinations with interested shareholders
    under certain circumstances;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide exclusive authority to our board of directors to amend
    our bylaws.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For more information, see &#147;Description of Securities.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Because
    our voting control is concentrated among the holders of
    Class&#160;B common shares, the market price of Class&#160;A
    common shares may be adversely affected by disparate voting
    rights.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holders of Class&#160;A common shares and Class&#160;B
    common shares have identical rights, except that holders of
    Class&#160;A common shares are entitled to one vote per share,
    while holders of Class&#160;B common shares are entitled to 10
    votes per share on all matters to be voted on by shareholders in
    general. This differential in the voting rights could adversely
    affect the market price of our Class&#160;A common shares.
    Tiptree holds a significant majority of our combined voting
    power through its ownership of Class&#160;B common shares and,
    by virtue of our dual class structure, will continue to do so
    even if it owns substantially less than a majority of our
    outstanding common shares. Furthermore, we would not be able to
    engage in actions that require a consent of a majority of our
    shareholders, including the election of directors, amendment of
    our operating agreement, and any sale of all or substantially
    all of our assets, merger or other change of control
    transaction, without the consent of Tiptree. Tiptree&#146;s
    interests may conflict with the interests of holders of other
    shares, and it has no duty to act in accordance with the
    interests of any other shareholders. Tiptree may also purchase
    Class&#160;A common shares pursuant to this offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    a &#147;controlled company&#148; within the meaning of the
    NASDAQ Stock Market LLC rules and, as a result, will qualify
    for, and intend to rely on, exemptions from certain corporate
    governance requirements. You will not have the same protections
    afforded to shareholders of companies that are subject to such
    requirements.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After completion of this offering, Tiptree will control a
    majority of the combined voting power of our outstanding common
    shares. As a result, we are a &#147;controlled company&#148;
    within the meaning of the NASDAQ Stock Market LLC corporate
    governance standards. Under these rules, if more than 50% of the
    voting power
</DIV>
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    <BR>
    30
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of a listed company is held by an individual, group or another
    company, the listed company is a &#147;controlled company&#148;
    and may elect not to comply with certain corporate governance
    requirements, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requirement that a majority of the board of directors
    consist of independent directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requirement that we have a nominating/corporate governance
    committee that is composed entirely of independent
    directors;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requirement that we have a compensation committee that is
    composed entirely of independent directors.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following this offering, we intend to utilize the exemption from
    the requirement that a majority of the Board of Directors
    consist of independent directors. Accordingly, you will not have
    the same protections afforded to shareholders of companies that
    are subject to all of the corporate governance requirements of
    the NASDAQ Stock Market LLC.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to maintain effective internal controls could have a
    material adverse effect on our business in the future, our
    access to capital markets and the price of our common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the Sarbanes-Oxley Act of 2002, beginning with our
    annual report filed with the SEC for the year ending
    December&#160;31, 2011, management will be required to deliver a
    report that assesses the effectiveness of our internal control
    over financial reporting and our independent registered public
    accounting firm will be required to deliver an attestation
    report on management&#146;s assessment of, and the operating
    effectiveness of, our internal control over financial reporting
    in conjunction with their opinion on our audited financial
    statements. Any failure to maintain adequate internal control
    over financial reporting or to implement required, new or
    improved controls, or difficulties encountered in their
    implementation, could cause us to report material weaknesses or
    other deficiencies in our internal control over financial
    reporting and could result in a more than remote possibility of
    errors or misstatements in our consolidated financial statements
    that would be material. If we or our independent registered
    public accounting firm were to conclude that our internal
    control over financial reporting were not effective, investors
    could lose confidence in our reported financial information and
    the price of our Class&#160;A common shares could decline. Our
    failure to achieve and maintain effective internal controls
    could have a material adverse effect on our business in the
    future, our access to the capital markets and investors&#146;
    perception of us. In addition, material weaknesses in our
    internal controls could require significant expense and
    management time to remediate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    issue common shares, options and other share-based awards under
    our 2007 Equity Incentive Plan or equity incentive plans we may
    establish in the future, which may dilute shareholder value and
    cause the price of our Class&#160;A common shares to
    decline.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer shares, options and other share-based awards under
    our 2007 Equity Incentive Plan, or other equity incentive plans
    we may establish in the future, to our executive officers and
    directors. If the options that we issue are exercised, or the
    restricted shares or other shares-based compensation that we
    issue vest, and those shares are sold into the public market,
    the market price of our Class&#160;A common shares may decline.
    In addition, the availability of common shares for award under
    our 2007 Equity Incentive Plan, or the grant of shares, options,
    restricted shares or other forms of shares-based compensation,
    may adversely affect the market price of our Class&#160;A common
    shares.
</DIV>
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    <BR>
    31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    NOTE&#160;REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The statements contained in this prospectus that are not purely
    historical are forward-looking statements. Our forward-looking
    statements include, but are not limited to, statements regarding
    our or our management&#146;s expectations, hopes, beliefs,
    intentions or strategies regarding the future. In addition, any
    statements that refer to projections, forecasts or other
    characterizations of future events or circumstances, including
    any underlying assumptions, are forward-looking statements. The
    words &#147;anticipates,&#148; &#147;believe,&#148;
    &#147;continue,&#148; &#147;could,&#148; &#147;estimate,&#148;
    &#147;expect,&#148; &#147;intends,&#148; &#147;may,&#148;
    &#147;might,&#148; &#147;plan,&#148; &#147;possible,&#148;
    &#147;potential,&#148; &#147;predicts,&#148;
    &#147;project,&#148; &#147;should,&#148; &#147;would&#148; and
    similar expressions may identify forward-looking statements, but
    the absence of these words does not mean that a statement is not
    forward-looking. Forward-looking statements in this prospectus
    may include, for example, statements about:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our dependence on Muni Capital Management and inability to find
    a suitable replacement if Muni Capital Management were to
    terminate its Management Agreement with us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the existence of conflicts of interest in our relationship with
    Muni Capital Management
    <FONT style="white-space: nowrap">and/or</FONT> its
    affiliates, which could result in decisions that are not in the
    best interest of holders of common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our business strategy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to compete in the marketplace;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to acquire assets and realize gains or income from
    such assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    market trends;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to obtain future financing arrangements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in interest rates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to make future distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    limitations imposed on our business by our exemption under the
    Investment Company Act;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the lack of a trading market for the Class&#160;A common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    general volatility of the securities markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to maintain effective internal controls;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in governmental regulations, tax laws and tax rates and
    other similar matters which may affect us and holders of the
    Class&#160;A common shares.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The forward-looking statements contained in this prospectus are
    based on our current expectations and beliefs concerning future
    developments and their potential effects on us. There can be no
    assurance that future developments affecting us will be those
    that we have anticipated. These forward-looking statements
    involve a number of risks, uncertainties (some of which are
    beyond our control) or other assumptions that may cause actual
    results or performance to be materially different from those
    expressed or implied by these forward-looking statements. These
    risks and uncertainties include, but are not limited to, those
    factors described under the heading &#147;Risk Factors.&#148;
    Should one or more of these risks or uncertainties materialize,
    or should any of our assumptions prove incorrect, actual results
    may vary in material respects from those projected in these
    forward-looking statements. We undertake no obligation to update
    or revise any forward-looking statements, whether as a result of
    new information, future events or otherwise, except as may be
    required under applicable securities laws.
</DIV>
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    <BR>
    32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='104'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The net proceeds we will receive from the sale
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares in this offering will be
    approximately $&#160;&#160;&#160;&#160;&#160;&#160;million (or
    approximately $&#160;&#160;&#160;&#160;&#160;&#160;million if
    the underwriters fully exercise their option to purchase
    additional shares), after deducting the underwriters&#146;
    discount of approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million (or approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million if the underwriters
    fully exercises its option to purchase additional shares).
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to use the net proceeds of this offering to implement
    our business strategy, including, without limitation, by
    investing in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations, assets
    derived from such bonds or other assets as described herein. We
    expect that a significant portion of the tax-exempt or other
    obligations underlying our assets or which we acquire directly
    will be issued by or on behalf of one of the following types of
    non-profit institutions, state authorities, or other
    organizations: (i)&#160;healthcare, (ii)&#160;educational,
    (iii)&#160;housing, (iv)&#160;infrastructure,
    (v)&#160;redevelopment/tax increment financing bonds,
    (vi)&#160;cultural, (vii)&#160;research and
    (viii)&#160;philanthropic. See &#147;Business&#160;&#151; Our
    Business Objective and Strategies&#148;. Until used in the
    growth of our business and the implementation of our business
    strategy, we intend to invest the net proceeds of this offering
    in readily marketable interest-bearing securities or may hold
    such proceeds in the form of cash.
</DIV>

<A name='105'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DIVIDEND
    POLICY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to periodically distribute dividends to holders of our
    Class&#160;A common shares. Holders of Class&#160;A common
    shares and Class&#160;B common shares will share ratably (based
    on the number of common shares held) in any dividend declared by
    our board of directors out of funds legally available therefor,
    subject to any statutory or contractual restrictions on the
    payment of dividends, the dividend rights of the Performance
    Share and to any restrictions on the payment of dividends
    imposed by the terms of any preferred shares we may issue in the
    future. All distributions from us will be made at the discretion
    of our board of directors, and will depend on a number of
    factors affecting us, including:
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our financial condition;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    general business conditions;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    actual results of operations;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the timing of the deployment of our capital;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our debt service requirements;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    availability of cash distributions from our subsidiaries;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our operating expenses;
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any contractual, legal and regulatory restrictions on the
    payment of distributions by us to holders of the common shares
    or by our subsidiaries to us;&#160;and
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other factors our board of directors in its discretion deem
    relevant.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may adopt a dividend reinvestment plan that will permit the
    reinvestment of our dividends and other distributions on behalf
    of holders of Class&#160;A common shares who elect to
    participate in the plan. As a result, if our board of directors
    authorizes, and we declare, a cash dividend or other
    distribution, then holders of Class&#160;A common shares who
    have elected to participate in our dividend reinvestment plan
    will have their cash distribution reinvested in additional
    Class&#160;A common shares, rather than receiving the cash
    distribution.
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to make distributions is subject to certain
    restrictions under the Delaware Limited Liability Company Act,
    or Delaware LLC Act. Under the Delaware LLC Act, a limited
    liability company generally is not permitted to make a
    distribution if, after giving effect to the distribution, the
    liabilities of the company will exceed the value of the
    company&#146;s assets. In addition, it is possible that some of
    our future financing arrangements could contain provisions
    restricting our ability to make distributions. Holders of common
    shares generally will be subject to U.S.&#160;federal income tax
    (and any applicable state and local taxes) on their respective
    allocable shares of our net taxable income regardless of the
    timing or amount of distributions we make to the holders of our
    common shares.
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We made distributions to the holders of our common shares of
    $0.24 per share for the period from January&#160;1, 2008 through
    December&#160;31, 2008 and $0.08 per share for the period from
    June&#160;12, 2007 (commencement of operations) through
    December&#160;31, 2007, which we paid to the then holders of our
    common shares. For the period from January&#160;1, 2009 through
    December&#160;31, 2009, we did not make any distributions to
    holders of our common shares.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth our cash and cash equivalents and
    capitalization as of December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on an actual basis;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on an as adjusted basis to give effect to the consummation of
    this offering (assuming an aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares are purchased) and the application of
    proceeds therefrom, after deducting estimated expenses of
    $&#160;&#160;&#160;&#160;&#160;.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read the information above and below in connection
    with &#147;Use of Proceeds&#148; and our consolidated financial
    statements and related notes and other financial information
    included in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="71%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As Adjusted</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(Unaudited)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,367,353
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Membership interests:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common shares, no par value per share; unlimited shares
    authorized, 37,394,169
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    outstanding, respectively
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    186,656,412
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Unvested restricted common shares, no par value per share;
    60,000&#160;shares authorized, 22,500 and 22,500&#160;shares
    outstanding, respectively
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,375
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earnings / (deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (84,796,238
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,732,992
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,732,992
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    90,215,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SELECTED
    FINANCIAL DATA</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents selected consolidated financial
    information as of December&#160;31, 2009 and 2008, for the years
    ended December&#160;31, 2009 and 2008 and for the period from
    June&#160;12, 2007 (commencement of operations) to
    December&#160;31, 2007. The selected consolidated financial
    information has been derived from our audited consolidated
    financial statements included elsewhere in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since the information presented below is only a summary and does
    not provide all of the information contained in our historical
    consolidated financial statements included elsewhere in this
    prospectus, including the related notes, you should read it in
    conjunction with &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; and our
    historical consolidated financial statements, including the
    related notes, included elsewhere in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="57%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>June&#160;12<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(Inception)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>For the Year Ended</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>to December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Revenue</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,106,531
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,581,819
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,150,382
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    903,623
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,937,071
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,225,434
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,087,453
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,235,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,605,164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,111,993
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,276,477
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    962,670
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Amortization of financing costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,912
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    194,559
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Professional fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    374,727
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,047,694
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    963,373
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Insurance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    96,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    313,994
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    266,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Directors compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,627
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    391,570
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    268,986
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    200,241
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non cash incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,681,089
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,214,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,118,097
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,406,364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,021,533
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,487,067
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Realized gains (losses)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Unrealized gains (losses)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (81,112,777
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,464,711
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,241,926
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73,870,851
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,491,806
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net (decrease) increase in net assets resulting from
    operations before Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net (decrease) increase in net assets resulting from
    operations after Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35,100,790
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Basic net (decrease) increase in net assets from operations
    per share(1)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1.05
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Diluted net (decrease) increase in net assets from operations
    per share(1)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1.05
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="60%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>As of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>As of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>As of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    128,116,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,560,219
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,367,353
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57,971,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,550,698
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,642,139
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,668,544
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Due to our manager
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    179,850
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,662
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    114,756
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued expenses and other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    234,830
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    354,924
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    338,679
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,215,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Number of outstanding shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,847,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,847,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,416,669
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculation excludes performance share allocation.</TD>
</TR>

</TABLE>
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    36
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT&#146;S
    DISCUSSION AND ANALYSIS OF<BR>
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were organized as a Delaware limited liability company on
    April&#160;27, 2007. We began operations on June&#160;12, 2007
    upon the completion of an offering of common shares of limited
    liability interests in a private offering to qualified
    institutional buyers in accordance with Rule&#160;144A under the
    Securities Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a specialty finance company that focuses on the
    investment in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations (secured
    primarily by interests in real estate), assets derived from such
    bonds or other assets as described herein. Our objective is to
    generate attractive risk-adjusted returns and predictable cash
    distributions. We seek to achieve this objective by
    (i)&#160;acquiring interests in structured credit entities which
    own debt obligations, the interest on which is exempt from
    U.S.&#160;federal income taxation; (ii)&#160;investing in total
    return swaps and other derivative arrangements relating to tax
    exempt securities; and (iii)&#160;making direct investments in
    tax exempt securities. We may also invest in securities that are
    subject to federal income tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed and advised by Muni Capital
    Management. Muni Capital Management is a wholly-owned subsidiary
    of Tricadia Holdings. Prior to March&#160;18, 2009, we were
    managed by Cohen Municipal Capital Management, LLC (the
    &#147;Former Manager&#148;), a subsidiary of Cohen Brothers,
    LLC. In February 2009, Tiptree Financial Partners, a private
    partnership currently managed by Tiptree Capital, acquired a
    controlling interest in us, and caused the assignment of our
    Management Agreement from the Former Manager to Muni Capital
    Management. Currently, Tiptree owns approximately 73.81% of our
    outstanding Class&#160;B common shares
    representing&#160;&#160;&#160;&#160;&#160;% of our combined
    voting power immediately after this offering, and may also
    purchase Class&#160;A common shares pursuant to this offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Critical
    Accounting Policies and Estimates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our consolidated financial statements have been prepared by
    management in accordance with U.S.&#160;GAAP. Our significant
    accounting policies are fundamental to understanding our
    financial condition and results of operations because some of
    these policies require that we make significant estimates and
    assumptions that may affect the value of our assets or
    liabilities and our financial results. The following critical
    accounting policies have been identified because they have the
    potential to have a material impact on our financial statements,
    and because they are based on assumptions which are used in the
    accounting records to reflect, at a specific point in time,
    events whose ultimate outcome will not be known until a later
    date. Actual results could differ from these estimates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we conduct our operations so that we are not required
    to register as an investment company under the Investment
    Company Act, for financial reporting purposes we are an
    investment company and we follow the AICPA Audit and Accounting
    Guide for Investment Companies, or Audit Guide. Accordingly,
    investments are carried at fair value with changes in fair value
    reflected in the consolidated statements of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Principles
    of Consolidation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our consolidated financial statements include the accounts of
    our company and our wholly owned subsidiary MFCA Funding, Inc.
    All intercompany transactions have been eliminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We review each investment that we make under a control based
    framework in accordance with ASC Topic 810. If we determine that
    we control the investee and the investee itself meets the
    definition of an investment company under the Audit Guide, we
    consolidate the investee. Otherwise, we will report our equity
    investment at fair value as required by the Audit Guide.
</DIV>
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    <BR>
    37
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Fair
    Value of Financial Instruments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fair value is used to measure our financial instruments. The
    fair value of a financial instrument is the amount that would be
    received to sell an asset or paid to transfer a liability in an
    orderly transaction between market participants at the
    measurement date, also known as the exit price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have adopted ASC Topic 820 (formerly SFAS&#160;No.&#160;157,
    <I>Fair Value Measurements</I>). ASC Topic 820 establishes a
    fair value hierarchy that prioritizes the inputs to valuation
    techniques used to measure fair value. The hierarchy gives the
    highest priority to unadjusted quoted prices in active markets
    for identical assets or liabilities (Level&#160;1 measurements)
    and the lowest priority to unobservable inputs (Level&#160;3
    measurements). The three levels of the fair value hierarchy are
    described below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Level&#160;1&#160;&#151; Financial assets and liabilities whose
    values are based on unadjusted quoted prices in active markets
    that are accessible at the measurement date for identical,
    unrestricted assets or liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Level&#160;2&#160;&#151; Financial assets and liabilities whose
    values are based on one or more of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Quoted prices for similar assets or liabilities in
    active markets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Quoted prices for identical or similar assets or
    liabilities in nonactive markets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Pricing models whose inputs are observable for
    substantially the full term of the asset or liability;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Pricing models whose inputs are derived principally
    from or corroborated by observable market data through
    correlation or other means for substantially the full term of
    the asset or liability.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Level&#160;3&#160;&#151; Financial assets and liabilities whose
    values are based on prices or valuation techniques that require
    inputs that are both significant to the fair value measurement
    and unobservable. These inputs reflect management&#146;s own
    assumptions about the assumptions a market participant would use
    in pricing the asset or liability.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A financial instrument&#146;s level within the fair value
    hierarchy is based on the lowest level of input that is
    significant to the fair value measurement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following is a description of the valuation methodologies used
    for instruments measured at fair value, as well as the general
    classification of such instruments pursuant to the valuation
    hierarchy.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Investments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We invest in debt obligations, the interest on which is exempt
    from U.S.&#160;federal income taxation. In some cases we
    purchase the investments directly and in other cases we invest
    in a special purpose trust which holds the assets. From time to
    time, we may also invest in certain derivative contracts. We
    record all of our investments at fair value.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Direct
    Investment in Tax Exempt Securities</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, fair value is determined by obtaining quotations
    from independent pricing services. In most cases, quotes are
    obtained from two pricing services and the average of the quotes
    is used. The independent pricing services determine their quotes
    using observable inputs such as current interest rates, specific
    issuer information and other market data for such securities.
    Therefore, our estimate of fair value is subject to a high
    degree of variability based upon market conditions, the
    availability of specific issuer information and the assumptions
    made. Due to the inherent uncertainty of valuation, these
    estimated fair values may differ from the actual price obtained
    through sales. The valuation inputs used to arrive at fair value
    for such debt obligations are generally classified within
    Level&#160;2 or Level&#160;3 of the valuation hierarchy. The
    difference between the cost basis in the investment and the fair
    value is included in the unrealized gains/(losses)&#160;&#151;
    investments.
</DIV>
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    <BR>
    38
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Investment
    in Trusts</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will invest in a trust in order to acquire tax exempt
    securities. The trust will acquire the bonds and finance the
    purchase by issuing junior and senior certificates. In general,
    we will purchase all of the junior certificates and third party
    investors will purchase the senior certificates. In valuing our
    investment in junior certificates we will generally use one of
    two techniques:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Asset
    Based Valuation</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will value all of the underlying assets of the trust as noted
    in the previous section above. We will then deduct from this,
    the fair value of the senior certificates of the trust. The
    senior certificates have a stated rate of interest. In addition,
    the certificate holder is entitled to a pro-rata share of 20% of
    the appreciation of the financial assets owned by the trust over
    an agreed upon threshold amount, or Gain Share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the senior certificates is calculated by using
    either pricing quotes from independent pricing services or
    internally prepared pricing models. Depending on the inputs to
    these models, this will generally be classified as either
    Level&#160;2 or Level&#160;3 financial instruments in the
    valuation hierarchy. Any fair value estimate will include any
    Gain Share owed to the senior certificates. Any change in fair
    value of the junior certificates will be recorded as a component
    of unrealized gains/(losses)&#160;&#151; investments in the
    consolidated statements of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Cash Flow
    Based Valuation</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will determine a valuation of the junior certificates by
    estimating the residual cash flows it will receive and applying
    an appropriate discount rate. In general, a cash flow based
    valuation will be considered a Level&#160;3 valuation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each circumstance is unique, but in general, we utilize an asset
    based valuation. We will use a cash flow based valuation in
    cases where the asset based valuation yields a result close to
    zero (or a negative amount) yet the residual interest is still
    generating cash flow and is expected to do so for the
    foreseeable future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The &#147;Net Carry&#148; or net investment earned by the trust
    is comprised of the income earned on the tax exempt securities
    acquired by the trust offset by the stated interest paid to the
    senior certificates. This Net Carry is recorded on an accrual
    basis and is recorded as a component of income-investments in
    the consolidated statements of operations. Any accrued and
    unpaid Net Carry is included as a component of receivables in
    the consolidated statements of assets and liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Interest
    Rate Swap</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the interest rate swaps is either included in
    derivative asset or derivative liability in the consolidated
    statement of assets and liabilities. Fair value is determined by
    obtaining broker or counterparty quotes. Because there were
    observable inputs used to arrive at these quoted market prices,
    we considered the interest rate swaps to be Level&#160;2
    financial instruments within the valuation hierarchy. The change
    in the unrealized loss is included as a component of unrealized
    gains/(losses)&#160;&#151; derivatives in the consolidated
    statements of operations. The periodic payments or receipts
    under our interest rate swap contracts are recorded as an
    increase or decrease in interest expense or income in the
    consolidated statements of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Income
    Taxes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe we have operated to qualify and expect to continue to
    operate as a partnership for U.S.&#160;federal income tax
    purposes. As a partnership, we will not pay federal income tax
    and will be treated as a pass through entity. However, MFCA
    Funding Inc., a wholly owned subsidiary of our company, is
    organized as a C-corporation for U.S.&#160;federal income tax
    purposes and will pay federal income tax. Further, we may be
    subject to certain state and local income taxes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to MFCA Funding Inc., deferred tax assets and
    liabilities are determined using the asset and liability method
    whereby deferred tax assets and liabilities are established for
    future tax consequences of
</DIV>
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    <BR>
    39
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    temporary differences between the financial statement carrying
    amounts of assets and liabilities and their tax basis. Deferred
    tax assets and liabilities are measured using enacted tax rates
    expected to apply to taxable income in years in which those
    temporary differences are expected to reverse. A valuation
    allowance is established when necessary to reduce a deferred tax
    asset to the amount expected to be realized. As of
    December&#160;31, 2009 and 2008, we had recorded a 100%
    valuation allowance against the deferred tax asset in each
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We evaluate tax positions taken or expected to be taken in the
    course of preparing our tax returns to determine whether the tax
    positions are &#147;more-likely than-not&#148; of being
    sustained by the applicable tax authority. Our tax benefit or
    tax expense is adjusted accordingly for tax positions not deemed
    to meet the more-likely than-not threshold in the current year.
    We record interest and penalties associated with audits as a
    component of income before income taxes. Penalties are recorded
    as an operating expense, and interest expense is recorded as
    interest expense in the statements of operations. We incurred no
    interest and penalties for the period from inception to
    December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Share-Based
    Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We issued share based compensation to the directors and
    employees of the Former Manager and we account for such
    issuances as equity-settled transactions using the methodology
    prescribed by ASC Topic 718 (formerly SFAS&#160;No.&#160;123(R),
    <I>Share Based Compensation</I>, and Emerging Issues Task force
    (EITF)
    <FONT style="white-space: nowrap">No.&#160;96-18,</FONT>
    <I>Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services)</I>. Non-cash incentive compensation to
    employees was $471,966 and $876,422 for the years ended
    December&#160;31, 2009 and 2008, respectively, and $942,232 for
    the period June&#160;12, 2007 (commencement of operations)
    through December&#160;31, 2007. Share based compensation for
    directors was $50,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employees of our Former Manager received LTIP shares. LTIP
    shares are a special class of limited liability company
    interests whereby, upon the occurrence of certain events, we
    will revalue our assets and an increase in the valuation will be
    allocated first to the holders of the LTIP shares to equalize
    the capital accounts of each LTIP share with the capital account
    of each common share. Upon equalization of the capital accounts,
    the LTIP shares will achieve full parity with the common shares
    and, to the extent the LTIP shares are vested, can be converted
    into common shares (a
    <FONT style="white-space: nowrap">&#147;book-up</FONT>
    event&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, we offered to exchange existing LTIP shares, or
    old LTIPs, for new LTIP shares, or new LTIPs, at a rate of
    <FONT style="white-space: nowrap">one-for-two.</FONT>
    Under the terms of the LTIP shares, we revalued our assets upon
    the occurrence of certain specified events, and any increase in
    valuation from the time of grant until such event were allocated
    first to the holders of the LTIP shares to equalize the capital
    accounts of each LTIP share with the capital account of a common
    share. Upon equalization of the capital accounts, the LTIP
    shares achieved full parity with the common shares for all
    purposes, including with respect to subsequent allocations and
    distributions, including, to the extent vested, liquidating
    distributions. If such parity is reached, vested LTIP shares
    become convertible into an equal number of common shares and
    have all the rights of common shares following conversion. Such
    parity was reached and vested LTIP shares were converted into an
    equal number of common shares. Under the old LTIPs the
    performance target was $10.00 per share. Under the new LTIPs the
    performance target was $1.25 per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At a meeting of our board of directors held on July&#160;23,
    2009, the directors approved the issuance of common shares in
    partial payment of a Performance Share allocation to our
    manager. These shares were valued at $2.01 per share, which is
    higher than the LTIP shares&#146; performance target of $1.25
    per share. The issuance of these shares constituted a
    <FONT style="white-space: nowrap">&#147;book-up</FONT>
    event&#148; and the vested LTIP shares became eligible for
    conversion to common shares. All LTIP shares were converted to
    common shares as of December&#160;31, 2009 and no LTIP shares
    are currently outstanding. We did not record any compensation
    expense in connection with the LTIP exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Non-management directors received restricted common shares.
    Quarterly distributions on each restricted common share, whether
    vested or not, will be the same as those made on common shares.
    The restricted shares are subject to restrictions on transfer
    during the vesting period. In general, unvested restricted
    shares
</DIV>
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    40
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    will vest upon a change of control or other liquidation. The
    fair value of the restricted common shares as of the grant date
    is being amortized to share based compensation over the three
    year vesting period of the underlying grants, net of assumed
    forfeitures.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recent
    Accounting Pronouncements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued ASC Topic 860, <I>Transfers and
    Servicing </I>(formerly Statement of Financial Accounting
    Standards (SFAS) No.&#160;166, <I>Accounting for Transfers of
    Financial Assets </I>&#151;&#160;an amendment of FASB Statement
    No.&#160;140)&#160;and ASC Topic 810 (formerly
    SFAS&#160;No.&#160;167, <I>Amendments to FASB Interpretation
    No.&#160;46(R)</I>),which changed the accounting for
    securitizations and variable interest entities, or VIEs. ASC
    Topic 860 eliminates the concept of a qualified special purpose
    entity, or QSPE, which is an off-balance sheet trust that meets
    the qualifications in SFAS&#160;140, changes the requirements
    for derecognizing financial assets, and requires additional
    disclosures about transfers of financial assets, including
    securitization transactions and continuing involvement with
    transferred financial assets. ASC Topic 810 will change the
    determination of whether and when a VIE, should be consolidated.
    ASC Topic 860 and ASC Topic 810 are effective for fiscal years
    beginning after November&#160;15, 2009. We are currently
    evaluating the impact that ASC Topic 860 and ASC Topic 810 will
    have on the consolidated financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In August 2009, the FASB issued Accounting Standards Update, or
    ASU, <FONT style="white-space: nowrap">2009-5,</FONT>
    Fair Value Measurements and Disclosures&#160;&#151; Measuring
    Liabilities at Fair Value, which amends ASC Topic 820 to provide
    further guidance on how to measure the fair value of a
    liability. ASU
    <FONT style="white-space: nowrap">2009-5</FONT>
    primarily sets forth the types of valuation techniques to be
    used to value a liability when a quoted price in an active
    market for the identical liability is not available. In these
    circumstances, ASU
    <FONT style="white-space: nowrap">2009-5&#160;states</FONT>
    that a company can apply the quoted price of an identical or
    similar liability when traded as an asset, or other valuation
    techniques that are consistent with principles of ASC Topic 820.
    ASU <FONT style="white-space: nowrap">2009-5</FONT>
    will be effective for the next reporting period and we do not
    expect such adoption to have a material effect on the
    consolidated financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued ASC Topic 855, <I>Subsequent
    Events (</I>formerly SFAS&#160;No.&#160;165), which establishes
    general standards of accounting for, and disclosing, events that
    occur after the balance sheet date but before the financial
    statements are issued or available to be issued. ASU Topic 855
    requires the disclosure of the date through which an entity has
    evaluated subsequent events and the basis for that date, i.e.
    whether the date represents the date the financial statements
    were issued or were available to be issued.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2010, the FASB issued Accounting Standards Update, or
    ASU, <FONT style="white-space: nowrap">2010-6,</FONT>
    Fair Value Measurements and Disclosures&#160;&#151; Improving
    Disclosures about Fair Value Measurements, which amends ASC
    Topic 820 to provide further guidance on how to provide greater
    levels of disaggregation of asset classes. ASU
    <FONT style="white-space: nowrap">2010-6</FONT>
    primarily requires that transfers in and out of Level&#160;1 and
    Level&#160;2 be disclosed, that investment activities within
    Level&#160;3 be disclosed on a gross basis, and that disclosure
    be provided on valuation techniques and inputs used for fair
    value measurements. ASU
    <FONT style="white-space: nowrap">2010-6</FONT> will
    be effective for the next reporting period and we do not expect
    such adoption to have a material effect on the consolidated
    financial statements and footnotes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Results
    of Operations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal sources of operating revenue are derived from
    interest, realized and unrealized gains on our portfolio of
    tax-exempt revenue bonds. Our expenses consist primarily of
    management fees, professional fees, incentive compensation,
    amortization of financing costs, and general and administrative
    expenses.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A summary of our results of operations for the two years in the
    period ended December&#160;31, 2009 and the period from
    June&#160;12, 2007 (commencement of operations) to
    December&#160;31, 2007 is as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="57%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>June&#160;12<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(inception)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>For the Year Ended</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>to December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Revenue</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,106,531
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,581,819
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,150,382
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    903,623
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income-other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,937,071
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,225,434
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,087,453
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,235,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,605,164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,111,993
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,276,477
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    962,670
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Amortization of financing costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,912
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    194,559
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Professional fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    374,727
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,047,694
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    963,373
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Insurance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    96,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    313,994
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    266,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Directors compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,627
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    391,570
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    268,986
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    200,241
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non cash incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,681,089
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,214,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,118,097
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,406,364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,021,533
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,487,067
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Realized (losses)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Unrealized (losses) gains</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (81,112,777
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,464,711
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,241,926
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73,870,851
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,491,806
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net (decrease) increase in net assets resulting from
    operations before Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net (decrease) increase in net assets resulting from
    operations after Performance Share Allocation</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35,100,790
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Realized
    and Unrealized Gains from Investments and
    Derivatives</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the period from January&#160;1, 2009 through
    December&#160;31, 2009, we had total net realized and unrealized
    gains from investments and derivatives of $35.5&#160;million. We
    had unrealized gains of $54.5&#160;million from appreciation in
    value of our interests in the Class&#160;B Certificates of
    Non-Profit Preferred Funding Trust&#160;II (&#147;NPPF II&#148;)
    and the Merrill Lynch Trusts (as defined below), our direct
    investments in tax-exempt bonds and an interest rate swap. We
    had a realized loss of $0.5&#160;million from the sale of
    tax-exempt bonds, and a realized loss of $18.5&#160;million from
    the sale of the Class&#160;B Certificates of certain trusts
    issued by Merrill Lynch (the &#147;Merrill Lynch Trusts&#148;)
    back to Merrill Lynch, as discussed below in
    &#147;&#151;&#160;Revenue.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the period from January&#160;1, 2008 through
    December&#160;31, 2008, we had total net realized and unrealized
    losses from investments and derivatives of $112.7&#160;million.
    We had unrealized losses of $81.1&#160;million from
</DIV>
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    <BR>
    42
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    depreciation in the value of our interests in the NPPF II
    Class&#160;B Certificates and our direct investments in
    tax-exempt bonds. We had an unrealized gain of $7.2&#160;million
    from appreciation in value of derivatives.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the period from June&#160;12, 2007 (commencement of
    operations) through December&#160;31, 2007, we had total net
    realized and unrealized losses from a total return swap
    derivative of $20.5&#160;million, consisting of
    $2.7&#160;million of realized losses and $17.8&#160;million of
    unrealized losses.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Revenue</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Total revenue for the period from January&#160;1, 2009 through
    December&#160;31, 2009 was $8.6&#160;million, primarily earned
    from interest income from our investment in the NPPF II
    Class&#160;B Certificates and our direct investments in
    tax-exempt bonds. Total revenue for the period from
    January&#160;1, 2008 through December&#160;31, 2008 was
    $10.2&#160;million, consisting of $8.1&#160;million earned from
    interest income from our investment in the NPPF II Class&#160;B
    Certificates, investment in the Merrill Lynch Trusts
    Class&#160;B Certificates described above and our direct
    investments in tax-exempt bonds, $1.2&#160;million interest
    earned on cash balances, and $0.9&#160;million interest earned
    from a total return swap. Total revenue for the period from
    June&#160;12, 2007 (commencement of operations) through
    December&#160;31, 2007 was $5.1&#160;million, consisting of
    $3.8&#160;million interest earned on cash balances, and
    $1.3&#160;million interest earned from a total return swap and
    tender option bond program.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Expenses</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal operating expenses include management fees,
    professional fees, including accounting and legal fees,
    insurance, directors&#146; compensation, general and
    administrative expenses and incentive compensation. Total
    expenses were $3.1&#160;million, $5.2&#160;million and
    $2.7&#160;million for the years ended December&#160;31, 2009 and
    2008, and the period from June&#160;12, 2007 (commencement of
    operations) through December&#160;31, 2007, respectively. The
    significant decline in expenses in 2009 as compared to 2008 was
    principally the result of (i)&#160;lower legal fees, (ii)&#160;a
    reduction in the number of directors of our company and
    (iii)&#160;a reduction in incentive compensation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Management expenses consisted of $1.0&#160;million,
    $1.3&#160;million and $1.1&#160;million for the years ended
    December&#160;31, 2009 and 2008, and the period from
    June&#160;12, 2007 (commencement of operations) through
    December&#160;31, 2007, respectively. See
    &#147;Management&#160;&#151; Our Manager&#148; for a description
    of the Management Agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Management
    Agreement with Muni Capital Management</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed and advised by our manager pursuant to
    the Management Agreement, which is described under
    &#147;Management&#160;&#151; Our Manager.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Performance
    Share Allocation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the period from January&#160;1, 2009 through
    December&#160;31, 2009, we had Performance Share allocation of
    $5.9&#160;million, $2.1&#160;million paid in cash and
    $3.8&#160;million paid in common shares. Prior periods did not
    have Performance Share allocations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Net
    Increase (Decrease) in Net Assets Resulting from Operations
    after Performance Share Allocation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the period from January&#160;1, 2009 through
    December&#160;31, 2009, we had a net increase in net assets
    resulting from operations after Performance Share allocation of
    $35.1&#160;million or $1.30 per weighted average basic and
    diluted common shares outstanding, primarily from appreciation
    in value of our various tax exempt assets. For the period from
    January&#160;1, 2008 through December&#160;31, 2008, we had a
    net decrease in net assets resulting from operations after
    Performance Share allocation of $107.7&#160;million or $6.24 per
    weighted average basic and diluted common shares outstanding,
    primarily from depreciation in value of our various tax exempt
    assets. For the period from June&#160;12, 2007 (commencement of
    operations) through December&#160;31, 2007, we had a net
    decrease in net assets resulting from operations after
    Performance Share allocation of $18.1&#160;million or
</DIV>
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    <BR>
    43
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    $1.05 per weighted average basic and diluted common shares
    outstanding, primarily from depreciation in value of our total
    return swap.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We calculate basic net increase (decrease) in net assets
    resulting from operations per share by dividing net (decrease)
    increase in net assets from operations for the period by the
    weighted average common shares outstanding for the period, which
    includes common shares outstanding, as well as vested restricted
    common shares and vested LTIP shares that have achieved parity.
    Diluted net increase (decrease) in net assets from operations
    per share takes into account the effect of unvested restricted
    common shares and unvested LTIP shares and vested LTIP shares
    that have not achieved parity, unless they are anti-dilutive.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, 22,500 restricted shares had not
    vested and all LTIP shares had been converted to common shares.
    As of December&#160;31, 2008, 15,000 restricted shares and
    246,584 LTIP shares had not vested and 320,331 LTIP shares had
    vested. Both basic and fully diluted shares outstanding include
    the unrestricted common shares outstanding during the years
    ended December&#160;31, 2009 and December&#160;31, 2008. Fully
    diluted shares outstanding also includes the dilutive effect of
    unvested restricted common shares, vested LTIP shares that have
    not achieved parity and unconverted LTIP shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the year ended December&#160;31, 2008, we determined that
    the unvested restricted common shares and unvested LTIP shares
    and the vested LTIP shares that have not achieved parity are
    anti-dilutive. Therefore, the weighted average shares
    outstanding on a fully diluted basis are the same as the
    weighted average shares outstanding used for basic net
    (decrease) increase in net assets from operations per share.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Distributions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We made distributions of $0.24 per share for the period from
    January&#160;1, 2008 through December&#160;31, 2008 and $0.08
    per share for the period from June&#160;12, 2007 (commencement
    of operations) through December&#160;31, 2007, which we paid to
    the then holders of common shares. For the period from
    January&#160;1, 2009 through December&#160;31, 2009, we did not
    make any distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidity
    and Capital Resources</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, we had cash and cash equivalents
    of $29.1&#160;million and restricted cash of $0.3&#160;million
    which is not available to us. At December&#160;31, 2009, we had
    outstanding liabilities including management fees and other
    liabilities of $0.5&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that our liquidity level is sufficient to enable us
    to meet our anticipated liquidity requirements for at least the
    next twelve months.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cash
    Flows from Operations</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net cash provided by operating activities for the period
    January&#160;1, 2009 through December&#160;31, 2009 was $45,782,
    consisting of investment income of $9.7&#160;million, net
    purchases of investments of $7.1&#160;million, and general and
    administrative expenses of $2.5&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net cash used in operating activities for the period
    January&#160;1, 2008 through December&#160;31, 2008 was
    $114.3&#160;million, consisting of investment and interest
    income of $7.1&#160;million, restricted cash collateral released
    by a counterparty of $29.0&#160;million, net purchases of
    investments of $106.9&#160;million, net realized losses on
    termination of derivatives of $38.8&#160;million and general and
    administrative expenses of $4.0&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net cash used in operating activities for the period
    June&#160;12, 2007 (commencement of operations) through
    December&#160;31, 2007 was $29.4&#160;million, consisting of
    investment income of $3.7&#160;million, collateral posted with a
    total return swap counterparty of $29.0&#160;million, realized
    losses on the termination of derivatives of $2.0&#160;million
    and general and administrative expenses of 2.1&#160;million.
</DIV>
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    <BR>
    44
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cash
    Flows from Financing Activities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net cash provided by financing activities provided net cash
    of $19.5&#160;million for the period January&#160;1, 2009
    through December&#160;31, 2009, consisting of $21.6&#160;million
    from the issuance of common shares (net of costs of $173,005)
    and $2.1&#160;million cash used to pay the Performance Share
    allocation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net cash used in financing activities used net cash of
    $4.3&#160;million for the period January&#160;1, 2008 through
    December&#160;31, 2008, primarily due to distributions to common
    and LTIP shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net cash provided by financing activities provided net cash
    of $157.5&#160;million for the period June&#160;12, 2007
    (commencement of operations) through December&#160;31, 2007,
    consisting of $158.9&#160;million from the issuance of common
    shares (net of costs of $13.5&#160;million) and
    $1.4&#160;million of cash used for distributions to common and
    LTIP shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Off-Balance
    Sheet Arrangements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, we did not have any off-balance
    sheet arrangements, as defined by SEC rules.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Contractual
    Obligations</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, we owed our manager $114,756 for
    the payment of management fees and reimbursable expenses
    pursuant to the Management Agreement. The initial term of the
    Management Agreement expires on December&#160;31, 2010, and is
    automatically renewed for a one-year term on each anniversary
    date thereafter unless terminated as set forth in the Management
    Agreement. As such, we have a contractual obligation to pay our
    manager an estimated management fee of $1.3&#160;million based
    on the asset value as of December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Qualitative
    and Quantitative Information About Market Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are exposed to credit risk and interest rate risk related to
    the interests we hold in tax-exempt bonds. Interest rates may be
    affected by economic, geo-political, monetary and fiscal policy,
    market supply and demand and other factors generally outside our
    control, and such factors may be highly volatile. Our interest
    rate risk sensitive assets and liabilities and financial
    derivatives typically are held for long-term investment and not
    held for sale purposes. Our intent in investing in STEP and
    other structured credit transactions is to limit interest rate
    risk by matching the terms of our investment assets with the
    terms of our liabilities and, to the extent necessary, through
    the use of hedging instruments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We hold interests in tax-exempt bonds that are either floating
    rate or fixed rate. Floating rate tax-exempt bonds are generally
    priced at a fixed spread over an index such as a percentage of
    The London Inter Bank Offered Rate, or LIBOR, Bond Market
    Association, or BMA, or Municipal Market Data, or MMD, that
    reprices either quarterly, every 30&#160;days, weekly or daily
    based upon movements in effect at each measurement date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Increases or decreases in LIBOR, BMA or MMD may result in
    corresponding increases or decreases in our interest income and
    distributions payable to holders of certificates issued by STEPs
    and tender option bond trusts and payments to counter-parties
    under total return swaps, thereby mitigating the net earnings
    impact on our overall portfolio. For example, &#147;AAA&#148;
    MMD, a benchmark municipal interest rate, declined from 5.04% on
    January&#160;2, 2009 to 4.13% on December&#160;31, 2009. As a
    result, the average price of the MFCA portfolio as a percentage
    of par increased from 64.0% to 77.5%. In the event that
    long-term interest rates increase, the value of fixed rate
    tax-exempt bonds would be diminished. We may consider hedging
    this risk in the future if the benefit outweighs the cost of the
    hedging strategy. Such changes in interest rates would not have
    a material effect on the income of these bonds, which generally
    will be held to maturity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We seek to manage our credit risk through underwriting and
    credit analyses that are performed in advance of acquiring an
    investment. The tax-exempt bonds that we may consider as
    reference assets for total return swaps and for future STEP and
    other structured credit transactions are subjected to a
    comprehensive credit analysis process.
</DIV>
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<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">BUSINESS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a specialty finance company that focuses on the
    investment in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations (secured
    primarily by interests in real estate), assets derived from such
    bonds or other assets as described herein. We are involved in a
    variety of businesses, including holding or acquiring tax exempt
    obligations, mortgage-related holdings, interests in structured
    credit transactions, derivative instruments, Build America Bonds
    and other assets. We derive our income from interest on the
    assets held by us and our subsidiaries and from any gains on the
    sale of assets. Our assets are, in general, primarily secured by
    mortgages on the real estate held by the obligors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We specialize in acquiring direct and indirect debt interests in
    middle-market non-profit and municipal borrowers that are, in
    general, primarily secured by mortgages backed by the real
    estate interests of such borrowers, and often secured by the
    pledges of gross revenue of such borrowers and a debt service
    reserve fund as well, although we may invest in debt instruments
    not secured by either real estate or the cash flows of a
    non-profit entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are organized as a Delaware limited liability company and we
    believe we have operated and intend to operate in a manner to
    qualify as a partnership for U.S.&#160;federal income tax
    purposes. This structure allows us to combine the limited
    liability, governance and management characteristics of a
    corporation with the pass-through tax features of a partnership.
    As a result, the income we generate generally will pass through
    to our shareholders. One or more of our subsidiaries may be
    organized as taxable C corporations that will be subject to
    applicable U.S.&#160;federal, state and local income tax on
    their earnings. Our wholly-owned subsidiary, MFCA Funding, Inc.,
    which is a taxable C corporation, may enter into derivative
    arrangements or engage, directly or through such derivative
    arrangements, in sales and trading activities. See
    &#147;Material Federal Income Tax Consequences&#148; for
    additional information concerning the tax consequences of an
    investment in our Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our portfolio of assets, as of December&#160;31, 2009, consisted
    of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    five tax-exempt obligations issued by or on behalf of
    middle-market non-profit entities with an aggregate market value
    of approximately $17.3&#160;million and an aggregate notional
    balance of approximately $19.8&#160;million, secured by first
    mortgages or deeds of trust in the real property held by such
    entities as well as, in many cases, a pledge of the
    obligor&#146;s gross revenue and a one-year debt service reserve
    fund; two of these obligations are held by MFCA Funding, Inc.,
    our wholly-owned subsidiary;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    approximately $40.7&#160;million by notional balance of junior
    trust certificates of NPPF II, a STEP which owns 20 tax-exempt
    obligations primarily issued by or on behalf of non-profit
    entities; NPPF II is a consolidated subsidiary of ours, having
    an aggregate notional balance of approximately
    $137.5&#160;million;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an interest rate swap with a notional amount of
    $5.0&#160;million obligating us to pay a fixed rate of interest
    in return for receiving a floating rate of interest tied to
    LIBOR, with a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    gain of approximately $27,000;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    cash and cash equivalents of approximately $29.4&#160;million.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary component of our revenue is net interest income, or
    the difference between the interest income on our interest
    earning assets and the interest cost of our borrowings. Our net
    interest income totaled $8.6&#160;million for the twelve months
    ended December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;&#151;&#160;Our Assets&#148; for additional
    information concerning our assets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Manager and its Affiliates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed and advised by Muni Capital
    Management. Muni Capital Management is a wholly-owned subsidiary
    of Tricadia Holdings. Prior to March&#160;18, 2009, we were
    managed by the Former
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Manager. In February 2009, Tiptree acquired a controlling
    interest in us, and caused the assignment of our Management
    Agreement from the Former Manager to Muni Capital Management.
    Currently, Tiptree owns approximately 73.81% of our outstanding
    Class&#160;B common shares
    representing&#160;&#160;&#160;&#160;&#160;&#160;% of our
    combined voting power immediately after this offering, and may
    also purchase Class&#160;A common shares pursuant to this
    offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tricadia is an asset management firm founded in 2003 by Michael
    Barnes and Arif Inayatullah. Tricadia is based in New York, New
    York, has approximately $5&#160;billion in assets under
    management and employs approximately 50 professionals.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Market
    Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Middle
    Market Non-Profit Entities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Part of our focus is on obligations issued by or on behalf of
    501(c)(3) non-profit public charities that have between
    $5&#160;million and $25&#160;million in annual revenues, which
    we refer to as &#147;middle market&#148; non-profit entities.
    These obligations are generally secured by first mortgages or
    deeds of trust on the real property held by the entities, may be
    additionally secured by the pledges of gross revenue of such
    entities and a debt service reserve fund. Based on data set
    forth in The Nonprofit Almanac 2008, which is based on
    Form&#160;990 reporting from 2005, approximately 400,709
    reporting charitable tax-exempt entities controlled
    approximately $1.1 trillion of assets. These charitable
    tax-exempt 501(c)3 organizations constitute a portion of the
    target market of our company, and include, among others,
    hospitals, schools, universities, multi-family housing,
    redevelopment districts, clinics and theaters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that obligations issued by or on behalf of these
    entities can be an attractive asset for us since many of these
    entities have strong management, have strong support since they
    provide important services to their communities and typically
    are able to provide a mortgage or revenue pledge as security for
    their obligations. Furthermore, we believe that the debt
    obligations of middle-market non-profit entities generally are
    attractive assets because they often exhibit favorable credit
    characteristics and predictable payments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Middle-market, non-profit entities often find it difficult to
    raise capital in the traditional capital markets as a result of
    their size, the complex nature of their business or regulatory
    framework and because they do not seek to raise large amounts of
    money. As a result, these borrowers have traditionally relied on
    local commercial banks to provide financing. Our manager has the
    expertise to selectively identify and purchase obligations of
    these obligors in the secondary market and can offer them
    financing alternatives in the primary market.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Revenue
    Bonds</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that a significant portion of the middle-market
    tax-exempt obligations that we acquire will be revenue bonds,
    which are secured primarily by a first mortgage or deed of trust
    on the non-profit entity&#146;s real property, as well as the
    operating revenues of the non-profit entity and a debt service
    reserve fund. These obligations generally will not be secured by
    a pledge of the taxing power of the nominal governmental issuer
    of the obligations. Therefore, the repayment of these
    obligations will depend entirely on the revenues of the
    nonprofit or any private guarantor of the obligations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Municipally-Owned
    Obligations</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We occasionally finance projects owned by municipal entities,
    such as county-owned hospitals, that cannot grant a mortgage on
    the property financed. We would therefore seek to secure
    available collateral, such as a leasehold mortgage or a lien on
    accounts receivable, or obtain a pledge that assets cannot be
    encumbered by other lenders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General
    Obligation Bonds and Structured Finance
    Opportunities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may also acquire &#147;general obligation&#148; or long-term
    government-issued bonds. General obligation bonds, unlike
    revenue bonds, are secured by the governmental issuer&#146;s
    pledge of its faith, credit and taxing
</DIV>
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    47
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    power, which may be limited or unlimited, for the payment of
    principal and interest and, as a result, are generally more
    highly rated than revenue bonds, consisting primarily of ratings
    category &#147;A&#148; and higher-rated issues. According to the
    Bond Buyer&#146;s Annual Bond Sales and Annual Note Sales
    statistical archive, there were approximately $4.193 trillion of
    long-term and short-term general obligation bonds and notes
    issued during the ten-year period between January&#160;1, 2000
    and December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may seek to enhance our returns from these types of bonds by
    depositing all or a portion of the beneficial interests in such
    bonds in structured finance trusts. Prior to the tightening
    conditions in the credit and lending environments experienced
    since August 2007, investors were able to take advantage of the
    historically low default rates of general obligation tax-exempt
    bonds and other highly-rated or enhanced tax-exempt obligations
    to obtain financing in the short-end of the municipal bond
    marketplace. An investor could then earn the spread between such
    financing and their residual position with limited capital risk
    and limited expected volatility.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of ongoing instability in this marketplace, we
    believe that there will be continued price volatility in the
    underlying assets, resulting in opportunities to acquire
    performing assets at favorable prices, although we also believe
    that we may continue to be faced with insufficient access to
    adequate term financing. We believe that our knowledge of the
    marketplace will enable us to opportunistically take advantage
    of continuing dislocations in this market.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Market
    Trends and Opportunities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The dislocation in the capital markets that began in 2007
    affected the municipal obligations market by reducing liquidity
    and initially driving up yields in all rating categories.
    According to The Bond Buyer, reported assets in municipal bond
    funds declined from an all-time high of $397.55&#160;billion in
    September 2008 to $336.94&#160;billion in December 2008. This
    decline resulted from $9.1&#160;billion in outflows from the
    funds and the remainder from market losses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From January 1 through December&#160;21, 2009, municipal bond
    funds have reported inflows of $77.38&#160;billion according to
    The Bond Buyer. These inflows, together with market appreciation
    of $42.39&#160;billion, lifted the industry-wide valuation of
    the assets of municipal bond funds to $463.59&#160;billion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although there was an increase in municipal bond assets in 2009,
    various factors have contributed to a decline in yield. Since
    the Federal Reserve cut its benchmark interest rate to a range
    of zero to 0.25% on December&#160;16, 2008, the Revenue Bond
    Index declined 127&#160;basis points from 6.22% on
    December&#160;18, 2008 to 4.95% on December&#160;30, 2009. In
    addition, the popularity of Build America Bonds, or BABs, which
    were created by the American Recovery and Reinvestment Tax Act
    enacted on February&#160;17, 2009, has contributed to a decline
    in yield in 2009. BABs are issued by selected municipalities as
    an alternative to tax-exempt bonds. Since BABs are taxable
    bonds, they reduce the supply of tax-exempt bonds and increase
    demand for other tax-exempt bonds. From April&#160;15, 2009, the
    first date BABs were issued, to December&#160;31, 2009,
    $63.9&#160;billion of BABs were issued, representing 20% of all
    long-term municipal issuance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, we believe that there still are attractive
    opportunities to acquire tax-exempt municipal obligations. The
    decline in the use of insurance for investment grade and
    non-investment grade tax-exempt obligations has increased the
    opportunities to buy obligations that generate yield both in the
    primary and secondary markets. A number of insurers have exited
    the market since 2007, and the Bond Buyer reports that the
    percentage of bonds issued with insurance was 8.5% through
    December 2009, down from a peak of over 50% in 2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, over a longer time period, from June&#160;28, 2007
    to February&#160;28, 2010, yields on tax-exempt obligations have
    increased both in nominal terms and relative to 30&#160;year
    Treasury bonds. In nominal terms, according to the Bond
    Buyer&#146;s Revenue Bond Index, yields on tax exempt bonds
    increased from 4.71% to 4.95%. Relative to Treasury bonds, over
    the same period, the spread increased from -50&#160;basis points
    to +33&#160;basis points. The interest rate spread between
    general obligation bonds and revenue bonds, based on the Bond
    Buyer&#146;s 20 Bond GO and Revenue Bond Indices, increased from
    11&#160;basis points to 60&#160;basis points over the same time
    period. The reduction in the number of active bond insurers, the
    increased interest rates for tax-
</DIV>
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    48
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exempt bonds and the increased spread for revenue bonds relative
    to government obligation bonds all have created attractive
    opportunities to acquire tax-exempt obligations in both the
    primary and secondary markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also may directly invest in BABs, which typically offer
    higher yields than tax-exempt obligations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competitive
    Strengths</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Experienced Management Team.</I>&#160;&#160;Members of our
    management team have significant tax-exempt and structured
    finance experience. They have been involved in tax-exempt
    financings in a variety of capacities, including originating and
    structuring such financings. Members of our management
    originated and structured Non-Profit Preferred Funding
    Trust&#160;I, a $416.5 million, multi-tranche&#160;STEP
    transaction that, since its issuance and as of December&#160;31,
    2009, has made all cash distributions as expected. The
    management team also structured NPPF II, a $182.6 STEP
    transaction, which issued Class&#160;B junior certificates that
    we currently hold. In addition, members of our management team
    were involved in the formation of our company and NPPF II, which
    owns tax-exempt bonds issued by or on behalf of non-profit
    obligors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Disciplined Acquisition Process.</I>&#160;&#160;We believe
    that we and our manager employ a sophisticated and disciplined
    underwriting process, which is based on detailed credit analysis
    of obligors and underlying collateral. Our manager performs an
    extensive and detailed due diligence process for each proposed
    <FONT style="white-space: nowrap">and/or</FONT>
    planned transaction, as discussed in &#147;&#151;&#160;Credit
    Analysis and Risk Management&#148; below. Our manager has
    significant expertise in analyzing the operations and financial
    statements of non-profit institutions that issue or are
    otherwise obligors of tax-exempt instruments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Primary Market Origination Network.</I>&#160;&#160;Our
    manager has developed extensive contacts among originators of
    unrated tax-exempt obligations, which we believe will provide us
    with preferential access to these types of assets. This network
    includes regional and local broker-dealers and independent
    financial advisors. This network may result in favorable pricing
    on asset acquisitions and originations, which could produce
    greater returns to investors. Furthermore, we also intend to
    utilize this network to partner with such broker-dealers in the
    structuring and marketing of structured products.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Significant Ownership Interest by Our Management
    Team.</I>&#160;&#160;Our management team (excluding
    Tiptree&#146;s holdings) owns in the aggregate approximately
    1,835,984 common shares, or approximately 4.91% of our common
    shares outstanding after giving effect to this offering. We
    believe that our management team&#146;s interests and those of
    our shareholders are aligned, since we believe that the
    significant equity interest held by our management team
    encourages them to focus on building long term value and a
    strong franchise.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Business Objective and Strategies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business objective is to acquire municipal obligations
    (which in many cases are primarily secured by mortgages of real
    property or deeds of trust secured by real property),
    mortgage-related holdings and other assets, a portion of which
    we expect will consist of pass-through income exempt from
    U.S.&#160;federal income tax. We intend to seek to achieve this
    objective through acquisitions of the following types of assets:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    tax-exempt obligations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interests in non-recourse, low leverage structured credit
    entities that own tax-exempt obligations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    total return swaps and other derivative arrangements relating to
    tax-exempt obligations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    BABs;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest rate and credit hedges to reduce price volatility and
    risk.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may also opportunistically acquire from time to time assets
    that are within our manager&#146;s areas of expertise and
    experience but do not relate to tax-exempt obligations or BABs,
    subject to maintaining our classification as a partnership for
    U.S.&#160;federal income tax purposes and our exemption from
    registration under the Investment Company Act.
</DIV>
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    49
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our governing instruments do not limit the types of assets we
    may acquire. The tax-exempt obligations that we acquire may be
    investment grade or non-investment grade and may be rated or
    unrated. As described below, these obligations may be issued to
    obtain funds for various public purposes, including the
    construction of a wide range of public facilities, refunding of
    outstanding obligations and obtaining funds for general
    operating expenses and loans to other public institutions and
    facilities. In addition, obligations that we acquire may be
    issued by or on behalf of public authorities to finance
    privately owned or operated facilities, including facilities for
    the local furnishing of electricity or gas or sewage, solid
    waste disposal or other specialized facilities. We also may
    enter into total return swaps that are subject to tax on the
    income earned under the swap. In addition, we may acquire
    tax-exempt obligations that are subject to alternative minimum
    tax, and may also acquire opportunistically from time to time
    assets that generate taxable income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A discussion of the material federal income tax implications of
    the ownership of our Class&#160;A common shares is set forth in
    &#147;Material U.S.&#160;Federal Income Tax Considerations&#148;
    below. Potential investors should also consult their own tax
    advisors in determining the federal, state, local, foreign or
    any other tax consequences regarding the ownership of our
    Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we do not actively seek to trade our assets, from time
    to time we may take advantage of marketplace opportunities and
    dispose of assets prior to their stated maturity or prior to the
    termination date of a structured credit entity. In 2009, such
    dispositions resulted in realized losses of $19.0&#160;million.
    However, this amount was in excess of the carrying value of
    these assets and the dispositions resulted in a net increase to
    our net asset value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary types of assets that we intend to acquire are
    described below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax-Exempt
    Obligations</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that a significant portion of the tax-exempt
    obligations that we acquire directly or which comprise our
    underlying assets will be unrated or rated below investment
    grade by one or more nationally recognized rating agencies
    (&#147;Baa3&#148; or lower by Moody&#146;s or &#147;BBB-&#148;
    or lower by Fitch or Standard&#160;&#038; Poor). We may under
    certain circumstances obtain private ratings on unrated
    tax-exempt obligations. We expect that a significant portion of
    the tax-exempt obligations underlying our assets or which we
    acquire directly will be issued by or on behalf of one of the
    following types of nonprofit institutions or state authorities:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>healthcare:</I>&#160;&#160;general and acute care hospitals,
    critical access hospitals, behavioral and primary healthcare
    providers, assisted living facilities, clinics, long-term care
    facilities and continuing care retirement communities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>educational:</I>&#160;&#160;primary, secondary, technical and
    higher education institutions, including private, public,
    religious or independent schools;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>housing:</I>&#160;&#160;entities whose primary purpose is to
    own or capitalize federally exempt multifamily or single family
    residential rental properties, and state housing authorities
    which issue tax-exempt bonds in order to finance residential
    mortgage loans, including for affordable housing projects, in
    their states;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>cultural:</I>&#160;&#160;museums, aquariums, zoos, botanical
    gardens, performing arts venues (such as opera, symphony, dance
    and theater) and public television and radio;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>research:</I>&#160;&#160;non-degree granting institutions
    whose primary purpose is research;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>philanthropic:</I>&#160;&#160;institutions whose primary
    purpose is to distribute funds to other entities, generally for
    humanitarian purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>service/advocacy:</I>&#160;&#160;organizations that provide
    community and social services to different constituent groups,
    including social service organizations, professional
    associations and religious organizations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>infrastructure:</I>&#160;&#160;institutions related to power
    generation, utilities, roads, transportation, water, sewage and
    other aspects of public infrastructure;&#160;and
</TD>
</TR>

</TABLE>
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    50
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Redevelopment/Tax Increment Financing (&#147;TIF&#148;)
    Bonds:</I>&#160;&#160;debt service is paid by tax revenue
    generated from the area surrounding a redevelopment project
    without the revenue earmarked for the project itself being
    affected.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our tax-exempt assets may also include &#147;moral
    obligation&#148; bonds, which typically are issued by special
    purpose public authorities. If an issuer of moral obligation
    bonds is unable to meet its obligations, the repayment of the
    bonds becomes a moral, but not a legal, obligation of the state
    or municipality in question.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our tax-exempt assets may include COPs issued by
    government authorities or entities to finance the acquisition or
    construction of equipment, land
    <FONT style="white-space: nowrap">and/or</FONT>
    facilities. COPs represent participations in a lease, an
    installment purchase contract or a conditional sales contract,
    which we collectively refer to as lease obligations, relating to
    such equipment, land or facilities. Although lease obligations
    do not constitute general obligations of the obligor for which
    the obligor&#146;s unlimited taxing power is pledged, a lease
    obligation is frequently backed by the obligor&#146;s covenant
    to budget for, appropriate and make the payments due under the
    lease obligation. However, certain lease obligations contain
    &#147;non-appropriation&#148; clauses which provide that the
    obligor has no obligation to make lease or installment purchase
    payments in future years unless money is appropriated for such
    purpose on a yearly basis. Although
    &#147;non-appropriation&#148; lease obligations are secured by
    the leased property, disposition of the property in the event of
    foreclosure might prove difficult and the value of the property
    may be insufficient to issue lease obligations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We generally do not expect to directly acquire any tax-exempt
    obligations originated by our manager. We do, however, expect
    that any STEP and other structured credit entities in which we
    acquire an interest will hold tax-exempt obligations that were
    originated by our manager and later sold to such vehicles. We
    also expect the reference portfolios relating to our total
    return swaps, if any, to include tax-exempt obligations
    originated by our manager.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">STEP
    and Other Structured Credit Entities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our strategy, we may acquire interests in STEPs or
    other structured credit entities that hold tax-exempt
    obligations. We expect that these obligations will be primarily
    secured, in general, by mortgages or deeds of trust backed by
    the real estate interests of such borrowers, and often secured
    by the operating revenues of such borrowers, as well as a debt
    service reserve fund. We expect that most of these vehicles will
    be managed by our manager, although we may opportunistically
    acquire interests in structured credit entities managed by third
    parties. The underlying assets held by these entities may
    consist of tax-exempt obligations originated by our manager or
    third parties and later sold to them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A STEP is a special purpose entity that is structured as a
    partnership for U.S.&#160;federal income tax purposes and issues
    two or more classes of certificates to finance the acquisition
    by the STEP of a portfolio of tax-exempt obligations. The
    classes of certificates issued by the STEP have differing levels
    of priority with respect to distributions of the income
    generated by the assets held by the STEP. We may acquire all or
    a portion of the junior STEP certificates issued by such
    entities. We may also acquire all or a portion of the more
    senior classes of certificates. In the event we acquire at least
    a majority of the most junior class of certificates, these STEP
    and other structured credit entities will be treated as our
    subsidiaries. It is our current expectation that, based on the
    interests we expect to own in STEP issuers, they will be treated
    as our subsidiaries and we will be required to consolidate all
    of the assets of the STEP issuer on our balance sheet and its
    income, net of minority interests, on our income statement.
    However, we are not required to purchase any minimum amount of
    interests in a STEP. To the extent we elect to purchase less
    than a majority of the most junior class of certificates in a
    STEP, that vehicle is not expected to be part of our
    consolidated results and will instead be treated as a minority
    interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager may receive management fees from STEP or other
    structured credit entities for which it serves as manager. Such
    fees will be paid by the issuers, and any STEP certificates that
    we purchase will be at a price net of any placement fees payable
    to placement agents. The base management fee otherwise payable
    by us to our manager pursuant to the Management Agreement for
    any fiscal year may be reduced, but not below zero, by our
    proportionate share of the amount of any STEP or other
    structured credit portfolio management fees that are paid to our
    manager during such year by STEP or other structured credit
    entities in
</DIV>
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    51
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    which acquire an interest, based on the percentage of the most
    junior class of certificates we hold in such entities; provided,
    however, that our manager reserves its right, to the extent
    contractually permitted, to charge us its full base management
    fee with respect to STEP or other structured credit entities for
    which it serves as manager.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Taxable
    Municipal Bonds</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may acquire taxable municipal bonds. Taxable municipal bonds
    are issued for issuers or projects that do not qualify for
    tax-exempt financing. The creation of BABs by the American
    Recovery and Reinvestment Tax Act expanded the issuance of
    taxable municipal bonds to approximately 20% of all municipal
    bonds issued during 2009. BABs allow a 35% interest payment
    subsidy (or up to a 45%&#160;subsidy with respect to certain
    &#147;recovery zones&#148; which have significant poverty,
    unemployment, foreclosure rates or are generally distressed) by
    the U.S.&#160;federal government with respect to issuances by
    municipalities and state-owned institutions. We may acquire
    taxable municipal obligations rated investment grade as well as
    unrated or below investment grade. We expect that the taxable
    municipal obligations that we may acquire will be issued by or
    on behalf of the types of institutions or authorities similar to
    those that issue tax-exempt obligations, as described above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Total
    Return Swaps</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may enter into total return swaps as a means of making
    economically leveraged acquisitions of portfolios of tax-exempt
    obligations. A total return swap is a bilateral financial
    contract where one party makes regular payments based on a fixed
    or variable rate, while the other party makes payments based on
    the return of an underlying asset (which need not be owned by
    either party), which includes both the income it generates and
    any capital gains.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the specified termination date of a swap, the swap
    counterparty will be required to pay us a portion of the
    positive total return (interest and capital gains/losses on the
    underlying portfolio of obligations less financing costs and
    adjusted for hedge gains/losses) derived from the portfolio.
    Alternatively, if the portfolio has suffered losses, we will
    share in the losses up to our agreed exposure. In addition, a
    total return swap may contain certain termination and default
    provisions that require us to transfer additional amounts to the
    swap counterparty or post cash collateral under certain
    circumstances. We will not be treated as the owner of the
    underlying portfolio subject to a total return swap for tax or
    financial reporting purposes, and any income earned by us from
    the total return swap will be taxable to us. We generally expect
    that the term of any total return swap that we may acquire will
    range from six months to one year. We may hold total return
    swaps through MFCA Funding, Inc., our wholly-owned subsidiary.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tender
    Option Bond Programs</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may use tender option bond programs as a means of acquiring
    some tax-exempt obligations purchased in secondary market
    transactions. In tender option bond programs, tax-exempt bonds
    or STEP certificates are deposited in a special purpose vehicle,
    which typically issues two classes of certificates:
    (1)&#160;floating rate certificates, with an aggregate face
    value approximately equal to the market value of the underlying
    assets, entitling the holders to a variable interest rate based
    on prevailing short-term tax-exempt rates; and (2)&#160;a
    residual certificate, which is designed to provide its holder
    with a return similar to what the holder might have realized if
    it had directly financed the underlying assets. The holders of
    the floating rate certificates have the right to tender their
    certificates for repurchase at a price equal to the face amount
    of the certificates, plus accrued interest, on any date on which
    the floating rate is reset. We would likely retain the residual
    certificates in these programs. Generally, we may use tender
    option bond programs as a means of acquiring bonds that have
    credit ratings ranging from &#147;AAA&#148; to &#147;BBB.&#148;
    We may also use tender option bond programs as a means of
    financing our acquisition of &#147;AAA&#148;-rated certificates
    issued by our STEP or other structured credit subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While we do not currently participate in any tender option bond
    programs, we have done so in the past.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Strategies</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may also acquire other types of assets consistent with our
    overall business objective, directly or through the purchase of
    interests in structured transactions. These assets may include,
    but are not limited to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    short-term &#147;taxable tail&#148; bonds that finance the cost
    of issuance of related tax-exempt obligations, with a security
    interest that may be senior to such tax-exempt obligations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    asset-backed obligations backed by interests in student
    loans;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    tax credits.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These or other assets that we acquire may result in taxable
    income to investors in our Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Operating
    History</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were formed on April&#160;23, 2007 and commenced operations
    in June 2007 upon completion of a private offering of 17,250,100
    common shares at $10 per share, resulting in net proceeds of
    approximately $159&#160;million. At the completion of the
    offering, we entered into a management agreement with the Former
    Manager, a subsidiary of Cohen&#160;&#038; Company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Purchase
    of Common Shares by Tiptree and Transfer of Management
    Agreement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On February&#160;5, 2009, Tiptree acquired 10,170,830
    outstanding common shares in negotiated private transactions,
    representing approximately 57% of the common shares outstanding
    as of such date, at an average price of approximately $1.26 per
    common share. As a result of the additional transactions
    described below, as of December&#160;31, 2009, Tiptree owned
    27,617,687 common shares, representing approximately 74% of our
    outstanding common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On March&#160;18, 2009, the Former Manager, Cohen Brothers, LLC,
    Tricadia Capital and our manager entered into an assignment and
    assumption agreement that provided for the assignment of the
    Management Agreement to our manager. In consideration for the
    assignment, beginning on March&#160;18, 2012, for a 10&#160;year
    period, our manager has agreed to make payments to
    Cohen&#160;&#038; Company equal to 10% of the revenue earned by
    our manager in excess of $1&#160;million, subject to certain
    adjustments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Subsequent
    Tiptree Tender Offer and Company Rights Offering</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;12, 2009, Tiptree commenced a tender offer to
    purchase all of our outstanding common shares for the purchase
    price of $1.00 per common share. The tender offer expired on
    June&#160;19, 2009. Tiptree purchased 2,443,550 common shares
    through the tender offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Also on May&#160;12, 2009, we issued subscription rights to the
    then holders of our common shares and LTIP shares to purchase up
    to an aggregate of 18,116,964 new common shares at the price of
    $1.20 per common share. We completed the rights offering on
    June&#160;26, 2009, issuing 18,116,964 new common shares and
    raising $21.7&#160;million before taking into account the
    expenses of the offering. We used the net proceeds from the
    rights offering for working capital and general corporate
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the foregoing transactions, we also offered
    one replacement LTIP share with a performance target of $1.25
    per LTIP share in exchange for two then-outstanding LTIP shares
    with a performance target of $10.00 per LTIP share. LTIP
    shareholders exchanged 566,915 LTIP shares with a performance
    target of $10.00 per LTIP share for 283,458 new LTIP shares with
    a performance target of $1.25 per LTIP share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For additional information concerning our LTIP shares, see
    &#147;Management&#160;&#151; Compensation&#160;&#151; Equity
    Compensation.&#148;
</DIV>
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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax-Exempt
    Obligations</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We hold five tax-exempt obligations issued by or on behalf of
    middle-market non-profit entities with an aggregate par amount
    of approximately $20&#160;million and a market value of
    approximately $17&#160;million as of December&#160;31, 2009. Two
    of the obligations are held by MFCA Funding, Inc., our
    wholly-owned subsidiary. All of the obligations are pledged as
    further support to the holder of the class&#160;A certificates
    of NPPF II, as described below. We may terminate the pledge in
    exchange for a payment of $7&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These tax-exempt obligations are, in general, primarily secured
    by a first mortgage or deed of trust on the real property held
    by the borrower, and often also secured by the pledges of gross
    revenue of such borrower as well as a debt service reserve fund.
    The financial covenants of these tax-exempt obligations
    typically require borrowers to demonstrate satisfactory debt
    service coverage and typically restrict or limit financial
    disbursements during the term of the obligation. Standard
    covenants also may include, but may not be limited to,
    compliance with days cash on hand, and additional long term debt
    and short-term debt thresholds. In most transactions, the
    borrower also covenants to provide quarterly unaudited financial
    statements, an annual audit and quarterly and annual
    certificates of compliance with all covenants. None of the
    tax-exempt obligations held directly or indirectly by MFCA are
    in payment default, nor have any of the tax-exempt bonds drawn
    on the debt service reserve fund for payment on the obligations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">STEP
    and Other Structured Credit Assets</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An important part of our initial strategy was to acquire the
    first-loss tranches of STEPs. These STEPs typically include the
    tax-exempt obligations as described in &#147;&#151;&#160;Tax
    Exempt Obligations&#148; above. The subsequent dislocation in
    the structured finance market has reduced the demand for STEPs
    with multiple tranches.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On February&#160;21, 2008, NPPF II, a newly-created trust,
    acquired a portfolio of tax-exempt obligations with a then
    current par value of $185.7&#160;million. A majority of these
    obligations had previously been held at Deutsche Bank as part of
    the reference portfolio for a total return swap between MFCA
    Funding, Inc. and Deutsche Bank. NPPF II issued junior
    class&#160;B certificates and senior class&#160;A certificates
    to finance the purchase. We purchased all of the class&#160;B
    certificates, which had an original face value of
    $56.2&#160;million, for $64.5&#160;million. The class&#160;A
    certificates, which had an original face value of
    $118.1&#160;million, were purchased by an affiliate of Deutsche
    Bank.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of the class&#160;A certificates are entitled to receive
    interest distributions at a rate of 3% per annum plus a variable
    rate of not less than 78% of the expected net residual income
    from NPPF II. Holders of the class&#160;B certificates are
    entitled to receive the remaining distributions from NPPF II.
    Holders of the class&#160;A certificates are entitled to receive
    all scheduled sinking fund payments and unscheduled redemptions,
    net of gain share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trust agreement governing NPPF II initially required a
    mandatory auction of the assets of NPPF II starting on
    February&#160;5, 2009. This auction date of the underlying
    obligations has been extended until February&#160;20, 2011. We
    contributed $8&#160;million of capital to the trust which was
    used to pay down the principal balance of the senior
    certificates. We have the right to extend the auction date for
    an additional one-year period if we make a $10&#160;million
    prepayment in respect of the class&#160;A certificates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Proceeds from dispositions of tax exempt obligations held by
    NPPF II, net of gain share, will be split between the two
    classes of certificates. If the majority holder of the
    class&#160;A certificates approves of the disposition, the
    proceeds will be distributed 80% to the class&#160;A
    certificates and 20% to the class&#160;B certificates. If the
    majority holder of the class&#160;A certificates does not
    approve of the disposition, the class&#160;A certificates will
    receive the greater of 80% of the par value of the tax exempt
    obligation and 80% of the proceeds from the disposition. During
    fiscal year 2009, $50.2&#160;million of the face amount of
    senior certificates was redeemed as a result of dispositions
    within the portfolio. Scheduled paydowns of the tax-exempt
    obligations held by NPPF II are initially paid 100% to the
    holders of the class&#160;A certificates.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    54
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Derivative
    Assets</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On July&#160;14, 2009, we entered into an interest rate swap for
    the purpose of hedging portfolio-wide interest rate risk with
    Tiptree, as a
    <FONT style="white-space: nowrap">&#147;back-to-back&#148;</FONT>
    swap with Morgan Stanley Capital Services Inc., or Morgan
    Stanley. Twice each year, on January 16 and July&#160;16,
    beginning on January&#160;16, 2010 and continuing through
    July&#160;16, 2019, we will pay to Tiptree, the swap
    counterparty (and Tiptree will remit to Morgan Stanley), a fixed
    rate of 3.6475% based on a notional amount of $5,000,000, and
    four times each year, on January&#160;16, April&#160;16, July 16
    and October&#160;16, beginning on October&#160;16, 2009 and
    continuing through July&#160;16, 2019, the swap counterparty
    will pay to us an amount equal to a floating rate of three-month
    LIBOR based on the notional amount. As of April&#160;19, 2010,
    we have paid an aggregate of $365,959 to the swap counterparty
    (with $277,000 consisting of margin payments and $88,959
    consisting of interest payments) and received swap interest
    payments in an aggregate amount of $9,593 from the swap
    counterparty pursuant to the interest rate swap. All amounts we
    paid to Tiptree pursuant to the interest rate swap were
    thereafter remitted by Tiptree to Morgan Stanley.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have a portfolio of federally tax-exempt revenue bonds which
    have been issued to provide construction or long-term financing
    for nonprofit corporations. The nonprofit corporations financed
    by us include, among others, health care, educational, and
    social service organizations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, we held direct or indirect
    interests in 25 tax-exempt revenue bonds representing 22
    separate borrowers. The total par amount of directly held bonds
    was $19.7&#160;million as of December&#160;31, 2009 and the fair
    market value was $17.2&#160;million. We also own the
    class&#160;B junior certificates of NPPF II. NPPF II is a STEP
    that issued class&#160;A senior certificates and class&#160;B
    junior certificates. The total par amount of bonds held in NPPF
    II was $137.5&#160;million and the fair market value was
    $106.6&#160;million. Deutsche Bank owns the class&#160;A senior
    certificates of NPPF II, the fair market value of which was
    $65.9&#160;million as of December, 31 2009. The class&#160;B
    junior certificates we hold had a fair market value of
    $40.7&#160;million as of December&#160;31, 2009. See &#147;STEP
    and Other Structured Credit Assets&#148; above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The tax-exempt bonds that we hold directly or indirectly
    generally have limited liquidity and do not trade in an active
    secondary market. All of the bonds are secured by
    (1)&#160;either a first lien mortgage or a negative pledge on
    the property, (2)&#160;a pledge of gross revenues
    <FONT style="white-space: nowrap">and/or</FONT>
    (3)&#160;a debt service reserve fund which is required to be
    funded with at least 12&#160;months of principal and interest.
    The debt service reserve funds for all borrowers except the
    obligor under the Sierra Canyon tax-exempt obligation, or
    Sierra, are fully funded. Sierra paid quarterly debt service
    from the debt service reserve fund for the quarters ending
    April&#160;30, 2009 and January&#160;31, 2010. These amounts
    were replenished within 90&#160;days. Sierra drew on the debt
    service reserve fund for the quarterly debt service payment due
    May&#160;1, 2010 and Sierra management has informed our manager
    that it expects to replenish this draw within 90&#160;days. The
    trustee of the tax-exempt obligation informed our manager that
    it believes that these draws do not constitute a default under
    the underlying documents as long as the funds are replenished
    within the 90&#160;day period.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    55
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes our tax-exempt obligation
    holdings as of December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CONSOLIDATED
    SCHEDULE&#160;OF INVESTMENTS<BR>
    As of December&#160;31, 2009</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Obligor<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Obligor<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Par<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Proportional<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fair<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Tax Exempt Bonds</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>City</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>State</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Coupon</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Maturity</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Ownership(4)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Investments in trusts&#160;&#151; NPPF II
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Education:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    21st Century Charter School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Colorado
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Oct-32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,550,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,491,940
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Project
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Springs
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Sacramento Country Day School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Sacramento
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.65
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,530,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,366,208
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Sierra Canyon High School Foundation(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Chatsworth
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    May-32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,882,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,065,200
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Maranatha High School(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Pasadena
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.25
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,900,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,260,937
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Maine Central Institute
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Pittsfield
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    ME
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,440,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    99
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,487,731
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Education
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,122,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28,672,016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Health Care Acute:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Yampa Valley Medical
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Steamboat Springs
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.13
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,798,413
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Center(1)(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Labette County Medical Center(1)(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Parsons
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    684,536
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    UMass Memorial Medical Center(1)(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Worchester
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jul-33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,920,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,711,129
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    West Penn Allegheny Health System(1)(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Pittsburgh
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    PA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.38
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Nov-40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,530,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,456,506
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Health Care Acute
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,700,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,650,584
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Health Care Behavioral:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Cope Community Services(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Tucson
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    AZ
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.13
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,385,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,347,969
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Madison Center(1)(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    South Bend
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    IN
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.25
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,289,130
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Alternatives Unlimited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Whitinsville
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,895,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    99
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,010,383
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Family Guidance Center for Behavioral Healthcare
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    St. Joseph
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,335,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,840,426
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    NHS III Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Lafayette
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    PA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Oct-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,740,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,281,043
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Health Care Behavioral
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31,355,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,768,951
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Social Services:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Goodwill of San&#160;Joaquin Valley
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Stockton
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.85
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,405,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,596,585
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Guadalupe Centers
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Kansas City
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.15
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,430,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,224,021
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Tri-County Community Action Program
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Berlin
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NH
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,592,451
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Social Services
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,935,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,413,057
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Other Non Profit:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Global Country of World
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Maharishi Vedic City
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    IA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,460,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,253,253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Peace
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Global Country of World
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Maharishi Vedic City
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    IA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.80
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,145,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    815,572
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Peace
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    YMCA of the Capital Area
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Baton Rouge
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    LA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.25
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,755,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,003,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Other Non Profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28,360,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,072,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Investments of NPPF II
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    137,472,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    106,577,328
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    56
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL Table Pagebreak -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Obligor<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Obligor<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Par<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Proportional<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fair<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Tax Exempt Bonds</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>City</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>State</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Coupon</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Maturity</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Ownership(4)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Class&#160;A Senior Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65,856,685
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65,856,685
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Class&#160;B Junior Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    71,615,575
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40,720,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Direct Investments in Tax Exempt Securities held by MFCA, LLC(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Health Care Acute:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Labette County Medical Center(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Parsons
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    319,450
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Health Care Acute
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    319,450
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Health Care Behavioral:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Florida Care Properties(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Allen
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    TX
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,510,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,535,129
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Health Care
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,510,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,535,129
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Behavioral
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Direct Investments in Tax Exempt Securities held by MFCA,
    LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,860,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,854,579
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Direct Investments in Tax Exempt Securities held by Funding
    Inc.(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Other Non Profit:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Cardiovascular Research Foundation(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    New York
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NY
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.40
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jan-35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,516,840
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 24pt">
    Project CURE
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Centennial
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,905,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,879,069
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total Direct Investments in Tax Exempt Securities held by
    Funding Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,905,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,395,909
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 32pt">
    Total investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    91,380,575
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    57,971,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    MFCA holds less than 50% of the bonds outstanding and, as a
    result, cannot unilaterally direct bondholder rights and
    remedies in the event of a default.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    These bonds may trade in an active secondary market.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Bonds are pledged to support the class&#160;A senior
    certificates of NPPF II.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Determined as current par outstanding divided by original
    issuance size.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Below is a brief summary of each of the tax-exempt obligations
    directly or indirectly held by us as of December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">COPE
    Community Services.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    COPE Community Services (formerly known as COPE Behavioral
    Services) is a behavioral health care organization operating
    from nearly twenty locations throughout Tucson, Arizona. Bond
    proceeds were primarily used to fund the construction and
    renovation of several facilities, fund a capitalized interest
    fund, fund a debt service reserve fund and pay costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">21st
    Century Charter School Project.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    21st&#160;Century Charter School Project (GEO Foundation
    Holdings) manages 21st&#160;Century Charter School, a charter
    school located in Colorado Springs, Colorado operating grades
    kindergarten through twelfth. Bond proceeds were primarily used
    to refinance existing debt and to pay for costs of issuance. The
    right to foreclose on the mortgage is held for seven years from
    the date of issuance, which is until October&#160;4, 2014, by
    the purchasers of new market tax credits that partially funded
    the transaction. After seven years, the right to foreclose on
    the mortgage reverts to the bondholders.
</DIV>
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    57
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Sacramento
    Country Day School.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sacramento Country Day School is an independent, co-educational,
    college preparatory school located in Sacramento, California
    serving pre-kindergarten through grade 12. Bond proceeds were
    primarily used to construct a new lower school building,
    refurbish existing classroom space, refinance existing debt and
    to fund a debt service reserve fund and to pay for costs of
    issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Sierra
    Canyon High School Foundation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sierra Canyon High School Foundation is an independent,
    coeducational day school located in Chatsworth, California,
    operating grades early kindergarten through twelfth. Bond
    proceeds were primarily used to fund the construction of the
    current upper school campus, fund a debt service reserve fund
    and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Goodwill
    Industries of San&#160;Joaquin Valley.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Goodwill Industries of San&#160;Joaquin Valley, or Goodwill,
    located in Stockton, California, is one of the 184 member
    organizations that provide job training and placement services
    to assist people with employment barriers in becoming
    self-sufficient. Goodwill does this by operating retail stores
    and other businesses in the community that provide
    <FONT style="white-space: nowrap">on-the-job</FONT>
    training and fund&#160;Goodwill&#146;s programs. Bond proceeds
    were primarily used for the acquisition and improvement of two
    buildings, fund a debt service reserve fund and to pay for costs
    of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Global
    Country of World Peace.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Global Country of World Peace&#146;s primary mission is to
    promote world peace. Bond proceeds were primarily used to
    reimburse the company, located in Maharishi Vedic City, Iowa,
    for prior capital expenditures, fund new construction of several
    peace centers across the country, fund capitalized interest and
    a debt service reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Maranatha
    High School.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Maranatha High School is a non-denominational, Christian
    coeducational high school located in Pasadena, California. Bond
    proceeds were primarily used to refinance existing debt,
    renovate classroom space, purchase a contiguous property,
    reimburse prior capital expenditures, fund capitalized interest
    and a debt service reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Yampa
    Valley Medical Center.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Yampa Valley Medical Center, located in Steamboat Springs,
    Colorado, provides health care and related services to residents
    and visitors of Northern Colorado. Bond proceeds were primarily
    used to expand the existing hospital facility and acquisition of
    upgraded medical equipment, fund a debt service reserve fund and
    to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Madison
    Center.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Madison Center, established in 1949, provides behavioral
    healthcare services in St. Joseph, Elkhart, LaPorte, Marshall
    and Porter Counties in northern Indiana. Bond proceeds were
    primarily used to purchase or reimburse the cost of certain land
    for expansion of its existing campus, construct a child and
    adolescent center and geriatric psychiatric facility, undertake
    other demolition, construction and renovation projects on the
    South Bend, Indiana campus, fund a debt service reserve fund and
    to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Labette
    County Medical Center.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Labette County Medical Center is a County-owned, non-profit
    hospital, located in Parsons, Kansas. Bond proceeds were
    primarily used to refinance existing debt, finance renovations
    and additions to the existing hospital buildings, fund a debt
    service reserve fund and to pay costs of issuance. The bond is
    held by NPPF II,
</DIV>
<!-- XBRL Paragraph Pagebreak -->
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    as to 69.2% of our aggregate interest therein, and as a direct
    investment of our company, as to 31.8% of our aggregate interest
    therein. The bonds held as a direct investment are pledged to
    support the class&#160;A certificates of NPPF II.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">YMCA
    of the Capital Area.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    YMCA of the Capital Area, located in Baton Rouge, Louisiana,
    provides programs that include physical education classes, after
    school care, summer camp programs and youth leadership to their
    constituents through eight service sites. Bond proceeds were
    primarily used to renovate and construct several multipurpose
    facilities, fund a debt service reserve fund and to pay for
    costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">UMass
    Memorial Medical Center.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    UMass Memorial Medical Center is an integrated health care
    delivery system that operates, among other facilities, a 725-bed
    acute care hospital, located in Worcester, Massachusetts. Bond
    proceeds were primarily used for building expansions, fund a
    debt service reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Alternatives
    Unlimited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Alternatives Unlimited provides residential and employment
    services to adults with developmental or psychiatric
    disabilities. Located in Whitinsville, Massachusetts, the agency
    works with special need individuals in 44 different communities
    throughout central Massachusetts. Bond proceeds were primarily
    used to refinance existing debt, reimburse the organization for
    prior capital expenditures, fund a debt service reserve fund and
    to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Maine
    Central Institute.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Maine Central Institute (MCI)&#160;is a coeducational private
    day and boarding school for students in grades nine through
    postgraduate which was founded in 1866 and is located in
    Pittsfield, Maine. Bond proceeds were primarily used to finance
    renovation and expansion of the current dining area,
    construction of a student center, upgrade of existing telephone
    and computer capabilities, renovation of space to provide
    additional staff housing, refinancing existing debt and to fund
    a debt service reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Guadalupe
    Centers.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Guadalupe Centers, or GCI, is a nonprofit community service
    provider and charter school located in Kansas City, Missouri.
    The mission of GCI is to improve the quality of life for
    individuals in the Latino communities of greater Kansas City.
    GCI is a nonsectarian organization with two major affiliations:
    The Heart of America United Way and the National Council of
    La&#160;Raza. Bond proceeds were primarily used to refinance
    outstanding debt, expand the preschool childcare facility for a
    charter school, fund a debt service reserve fund and to pay for
    costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Family
    Guidance Center for Behavioral Healthcare.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Family Guidance Center for Behavioral Healthcare, located in St.
    Joseph, Missouri, provides services in crisis intervention,
    children, youth and adult mental health, family planning and
    chemical dependency. Bond proceeds were primarily used to
    purchase and renovate a building to house administrative offices
    and adult and children outpatient counseling services, fund a
    debt service reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tri
    County Community Action Program.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tri-County Community Action Program, located in Berlin, New
    Hampshire, provides social services for youths, families and
    seniors. Bond proceeds were primarily used to refinance existing
    debt, fund a debt service reserve fund and to pay for costs of
    issuance.
</DIV>
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    <BR>
    59
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">West
    Penn Allegheny Health System.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    West Penn Allegheny Health System controls and oversees the
    operation of 17 affiliates which together comprise the Health
    System. Located in Pittsburgh, Pennsylvania, the Health System
    is a diversified, nonprofit, integrated health care delivery
    system providing health care services to residents of Western
    Pennsylvania, Eastern Ohio and Northern West Virginia. Bond
    proceeds were primarily used to recapitalize the Company and
    fund prior and future capital expenditures, fund a debt service
    reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">NHS
    III Properties.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NHS III Properties, located in Lafayette Hill, Pennsylvania, is
    a wholly owned subsidiary of Northwestern Human Services, the
    largest non-profit provider of community-based mental health
    services, mental retardation program, and other human services
    to the publicly funded sector in Pennsylvania. Bond proceeds
    were primarily used to refinance outstanding indebtedness, fund
    a debt service reserve fund and to pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Florida
    Care Properties.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Florida Care Properties is a behavioral healthcare organization
    that owns and operates five adult training centers in
    Mississippi and one in Florida. Bond proceeds were primarily
    used to acquire the six training facilities, fund a debt service
    reserve fund and to pay for costs of issuance. The company holds
    one bond supported by a training center in Mississippi and one
    bond supported by a training center in Florida.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cardiovascular
    Research Foundation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cardiovascular Research Foundation, located in New York, New
    York, is a private research medical foundation dedicated to
    promoting advances in cardiovascular medicine, specifically
    interventional cardiology, and the diagnosis and treatment of
    endovascular disorders. Bond proceeds were primarily used for
    the acquisition and renovation of a parcel of land and an
    existing building, to fund a debt service reserve fund and to
    pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Project
    CURE (Benevolent Healthcare Foundation).</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Project CURE (Benevolent Healthcare Foundation), located in
    Centennial, Colorado, is a humanitarian relief organization that
    collects medical surplus supplies and equipment and donates it
    to developing countries. Bond proceeds were primarily used to
    refinance existing debt, fund a debt service reserve fund and to
    pay for costs of issuance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Financing Strategy</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to employ moderate leverage on a non-recourse basis in
    connection with our acquisitions of interests in STEPs and other
    structured credit entities, which may include tender option bond
    trusts. Our NPPF II transaction, for example, consists of two
    tranches of securities, with the senior tranche similar to
    traditional bank portfolio lending, without the use of credit
    ratings or sophisticated cash flow or collateralization
    tranching techniques. We may pursue similar financing strategies
    for other portfolios.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may also engage in total return swaps to provide us with
    economically leveraged returns, although any income we earn
    under such swaps will be fully taxable to us or result in our
    passing through taxable income to shareholders, including
    holders of our Class&#160;A common shares. For additional
    information concerning this part of our strategy, see
    &#147;&#151;&#160;Our Business Objective and
    Strategies&#160;&#151; Total Return Swaps&#148; above.
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we may employ more traditional methods of
    financing, currently expected to consist primarily of the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Warehouse Credit Facilities.</I>&#160;&#160;Warehouse credit
    facilities generally require the borrower to maintain cash
    collateral on deposit with the warehouse lenders and are secured
    by the assets acquired. We would expect that these facilities
    would be structured so that we would not be deemed to be the tax
    owner of the obligations. If we were deemed to be the tax owner
    of the obligations, we would not be able to deduct the interest
    payments on the financing. We generally expect that the terms of
    these facilities would range from six months to one year.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Secured Lines of Credit.</I>&#160;&#160;These lines of credit
    would be secured by the assets acquired.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Credit
    Analysis and Risk Management</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager has an asset acquisition committee and our
    wholly-owned subsidiary, MFCA Funding, Inc., has a credit
    committee, as discussed below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additional information regarding each committee, as well as our
    independent directors, is set forth under &#147;Management.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Due
    Diligence</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our asset acquisition process includes due diligence conducted
    by our manager.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our due diligence with respect to obligations secured by, in
    whole or in part, real-estate related assets begins with an
    initial review process by our manager, focusing on potential
    investment returns, competitive positioning and property
    fundamentals. If the asset passes our initial screening and
    meets our risk-adjusted return targets, our manager will proceed
    with more detailed underwriting, due diligence and risk
    assessment. This process will include in-depth market research
    and the development of a comprehensive investment analysis and
    financial model. Careful attention will be paid to the following
    factors, among other things, with respect to the real
    estate-related assets of the borrower
    <FONT style="white-space: nowrap">and/or</FONT> the
    operations of the borrower: (i)&#160;geographic location and
    property type, (ii)&#160;condition and use of the property,
    (iii)&#160;market growth demographics, (iv)&#160;historical
    performance, (v)&#160;current and projected cash flow,
    (vi)&#160;potential for capital appreciation,
    (vii)&#160;prospects for liquidity through sale, financing or
    refinancing of the asset and (viii)&#160;tax considerations. We
    will also generally seek to condition our obligation to close
    the purchase of investment in any such asset on the delivery of
    certain documents, which may include (i)&#160;evidence of
    marketable title, subject to such liens and encumbrances as are
    acceptable to us, and (ii)&#160;title insurance policies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our due diligence process may also include reviewing third-party
    revenue sources such as external contracts, service
    arrangements, pledges, philanthropic support and other items,
    and reviewing publicly available information about the obligor.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Ongoing
    Monitoring</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager has the primary responsibility for monitoring our
    assets for potential impairment issues. The surveillance process
    includes a regular review of market conditions and public
    announcements by obligors, ongoing dialogues with obligors, a
    periodic review of collateral statistics and performance,
    meetings to discuss credit performance and a watch list.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Insurance</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we acquire tax-exempt obligations that are secured by real
    property, we will seek to ensure that the properties are covered
    by adequate insurance provided by reputable companies, with
    commercially reasonable deductibles, limits and policy
    specifications customarily carried for similar properties. There
    are, however, certain types of losses that may be either
    uninsurable or not economically insurable, such as losses due to
    floods, storms, riots, terrorism or acts of war. If an uninsured
    loss occurs, we could lose our invested capital in, and
    anticipated profits from, the asset.
</DIV>
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<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competition</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that our manager&#146;s industry expertise and
    relationships provide us with a competitive advantage. This
    expertise helps us to assess risks and determine appropriate
    pricing for potential assets. In addition, we believe that our
    manager&#146;s relationships and reputation enable us to
    effectively identify and compete for attractive asset
    acquisition opportunities.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, in acquiring our assets, we compete with mutual funds,
    closed-end funds, specialty finance companies, hedge funds,
    insurance companies, institutional investors, investment banking
    firms, financial institutions and other entities. New
    competitors continually emerge, including competitors
    specifically focused on purchasing tax-exempt assets. A
    proliferation of companies that are similar to ours may increase
    the competition for equity capital and thereby adversely affect
    the market value of our Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many of our competitors are significantly larger than us, have
    greater access to capital and other resources and may possess
    other competitive advantages. Some of our competitors may be
    able to accept more risk than we can. In addition, some of our
    competitors may have higher risk tolerances or different risk
    assessments, which could allow them to consider a wider variety
    of assets than we do. They may also enjoy significant
    competitive advantages that result from, among other things, a
    lower cost of capital and better operating efficiencies.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Competition may limit the number of suitable asset acquisition
    opportunities available to us. It may also result in higher
    prices, lower yields and a narrower spread of yields over our
    borrowing costs, making it more difficult for us to acquire
    assets on attractive terms. In addition, competition for
    desirable assets could delay the investment of proceeds from
    this offering in desirable assets, which may in turn reduce our
    earnings per share and negatively affect our ability to maintain
    our dividend distributions.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our affiliates may establish or manage other entities in the
    future that compete with us for assets. If any present or future
    affiliated investment entities have a business focus similar to
    ours, we may compete with those entities for access to the
    benefits that our relationship with our affiliates provides to
    us, including access to business opportunities. For example,
    certain funds managed by affiliates of our manager currently
    invest in tax-exempt obligations similar to the tax-exempt
    obligations in which we invest. We cannot assure you that, under
    such circumstances, our manager will allocate the most
    attractive opportunities to us.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Environment</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    Requirements</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that we have been organized and have operated so that
    we have qualified, and will continue to qualify, to be treated
    for U.S.&#160;federal income tax purposes as a partnership and
    not as an association or a publicly traded partnership taxable
    as a corporation. Our determination is based solely on advice
    rendered to us by a nationally recognized accounting firm. In
    general, an entity that is treated as a partnership for
    U.S.&#160;federal income tax purposes is not subject to
    U.S.&#160;federal income tax at the entity level. Consequently,
    as a holder of our Class&#160;A common shares, you will be
    required to take into account your allocable share of items of
    our income, gain, loss, deduction and credit for our taxable
    year ending within or with your taxable year, regardless of
    whether we make cash distributions on a current basis with which
    to pay any resulting tax.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Investment
    Company Act Exclusions</FONT></I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to continue to conduct our operations so that we are
    not required to register as an investment company under the
    Investment Company Act. We expect many of our subsidiaries to
    rely on the exemption from registration under
    Section&#160;3(c)(5)(C) of the Investment Company Act available
    to companies primarily engaged in purchasing or otherwise
    acquiring mortgages and other liens on, and interests in, real
    estate (as described in more detail below). Additionally,
    certain subsidiaries may rely on the exemptions available under
    Sections&#160;3(c)(5)(A) or (B)&#160;of the Investment Company
    Act for companies that are primarily engaged in one or more of
    the following businesses: (i)&#160;purchasing or otherwise
    acquiring notes, drafts, acceptances, open accounts receivable,
    and other obligations representing part or all of the sales
    price of merchandise, insurance and services; and
    (ii)&#160;making loans to manufacturers, wholesalers, and
    retailers of, and to prospective purchasers of, specified
    merchandise, insurance, and services. In turn, we intend to
    conduct our operations so that we qualify for the exception from
    the definition of investment company provided for under
    Section&#160;3(c)(6) of the Investment Company Act.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3(c)(6) of the Investment Company Act excepts from
    the definition of an investment company any company primarily
    engaged, directly or through majority-owned subsidiaries, in one
    or more of the 3(c)(5) Businesses, or in one or more of such
    businesses (from which not less than 25% of such company&#146;s
    gross income during its last fiscal year was derived) together
    with an additional business or businesses other than investing,
    reinvesting, owning, holding or trading in securities. We may
    rely on Section&#160;3(c)(6) to the extent we engage directly,
    or through our &#147;majority-owned subsidiaries,&#148; in
    3(c)(5) Businesses, including engaging in purchasing or
    otherwise acquiring directly mortgages or interests secured
    primarily by mortgages or deeds of trust and other liens and
    interests in real estate. The SEC staff has issued little
    interpretive guidance with respect to Section&#160;3(c)(6) and
    any guidance published by the staff could require us to adjust
    our strategy accordingly. However, under the current
    interpretation of the term &#147;primarily engaged&#148; used by
    the SEC and the SEC staff, Section&#160;3(c)(6) excepts a
    company from the definition of investment company if that
    company devotes at least 55% of its assets to, and derives at
    least 55% of its income from, a combination of (1)&#160;3(c)(5)
    Businesses, from which the company derived at least 25% of its
    gross income during its last fiscal year, and (2)&#160;an
    additional business or businesses other than investing,
    reinvesting, owning, holding or trading in securities.
    Accordingly, we intend to conduct our operations to meet these
    asset and income requirements.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The determination of whether an entity is a majority-owned
    subsidiary of ours is made by us. The Investment Company Act
    defines a majority-owned subsidiary of a person as a company 50%
    or more of the outstanding voting securities of which are owned
    by such person, or by another company which is a majority-owned
    subsidiary of such person. The Investment Company Act further
    defines voting securities as any security presently entitling
    the owner or holder thereof to vote for the election of
    directors of a company. We will treat companies, including STEP
    issuers, in which we own at least a majority of the voting
    equity as majority-owned subsidiaries for purposes of
    Section&#160;3(c)(6) of the Investment Company Act. Because
    there is little guidance in this area, there can be no assurance
    that the SEC or its staff will not change its view on the
    interpretation of Section&#160;3(c)(6) or that they would
    otherwise agree with our analysis, which, in either case, could
    cause us to adjust our investment strategy. Any such adjustment
    to our investment strategy would have a material adverse effect
    on us.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As noted, we expect many of our subsidiaries (including certain
    STEP issuers) to rely on the exemptions from registration under
    Section&#160;3(c)(5) of the Investment Company Act, and in
    particular, Section&#160;3(c)(5)(C) available to companies
    primarily engaged in purchasing or otherwise acquiring mortgages
    and other liens on, and interests in, real estate.
    Section&#160;3(c)(5)(C) of the Investment Company Act excepts
    from the definition of the term investment company any person
    who is not engaged in the business of issuing redeemable
    securities,
    <FONT style="white-space: nowrap">face-amount</FONT>
    certificates of the installment type or periodic payment plan
    certificates, and who is primarily engaged in the business of
    purchasing or otherwise acquiring mortgages and other liens on
    and interests in real estate. In order to qualify for this
    exemption, at least 55% of a company&#146;s portfolio must be
    composed of mortgages and other liens on and interests in real
    estate (collectively, &#147;qualifying assets&#148;) and at
    least 80% of the company&#146;s portfolio must be composed of
    real estate-related assets. Qualifying assets include mortgage
    loans and obligations secured primarily by a first mortgage or
    deed of trust on the real property held by the borrower,
    mortgage-backed securities that represent the entire ownership
    in a pool of mortgage loans and other interests in real estate.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that our subsidiaries relying on
    Section&#160;3(c)(5)(C) (and our company, to the extent we
    engage in such activities directly) will adhere to guidance
    published by the SEC staff (and on our analyses of such
    guidance) to determine which assets are &#147;qualifying
    assets&#148; and &#147;real estate-related assets.&#148; For
    instance, consistent with such guidance, tax-exempt revenue
    bonds primarily secured by mortgage loans or deeds of trust in
    real property constitute qualifying assets. To the extent that
    the SEC staff publishes new or different guidance with respect
    to these matters, we may be required to adjust our strategy
    accordingly. Thus, these limitations could result in us or the
    subsidiary holding assets we might wish to sell or selling
    assets we might wish to hold.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of our subsidiaries may also seek to rely on the
    exemptions under Sections&#160;3(c)(5)(A) or (B)&#160;of the
    Investment Company Act available to companies primarily engaged
    in sales financing, factoring or making loans to manufacturers
    or retailers for purchases of specified merchandise or services.
    We expect that our subsidiaries relying on
    Sections&#160;3(c)(5)(A) or (B)&#160;will adhere to guidance
    published by the SEC staff (and on our analyses of such
    guidance) to determine the types of financings, loans or
    receivables that may be held.
</DIV>
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    <BR>
    63
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, certain of our subsidiaries, including certain
    STEP issuers, may seek to rely on the Investment Company Act
    exemption under
    <FONT style="white-space: nowrap">Rule&#160;3a-7</FONT>
    provided to certain structured financing vehicles that pool
    income-producing assets and issue securities backed by those
    assets. Such structured financings may not engage in portfolio
    management practices resembling those employed by mutual funds.
    Accordingly, our STEP subsidiaries that rely on
    <FONT style="white-space: nowrap">Rule&#160;3a-7</FONT>
    will be subject to a trust agreement which contains specific
    guidelines and restrictions limiting the discretion of the STEP
    issuer and the portfolio manager. In particular, the agreements
    will prohibit the STEP issuer from acquiring and disposing of
    assets primarily for the purpose of recognizing gains or
    decreasing losses resulting from market value changes. Certain
    sales and purchases of assets, such as dispositions of an
    underlying asset that has gone into default or is at risk of
    imminent default, may be made so long as the STEP issuers do not
    violate the guidelines contained in the trust agreements and are
    not based primarily on changes in market value. The proceeds of
    permitted dispositions may be reinvested in underlying assets
    that are consistent with the credit profile of the STEP vehicle
    under specific and predetermined guidelines. In addition, absent
    obtaining further guidance from the SEC, substitutions of assets
    may not be made solely for the purpose of enhancing our
    investment returns as the holders of the most junior
    certificates issued by the STEP issuer. As a result of these
    restrictions, certain of our STEP subsidiaries may suffer losses
    on their assets and we may suffer losses on our investments in
    those STEP subsidiaries.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to meet the tests for compliance with
    Section&#160;3(c)(6) (including if we or our subsidiaries
    relying on Section&#160;3(c)(5) fail to meet the tests
    applicable under that subsection and from the SEC&#146;s related
    guidance), we may be deemed to be an investment company. As we
    seek to invest the net proceeds of this offering , we may rely
    for our exemption from registration under the Investment Company
    Act upon
    <FONT style="white-space: nowrap">Rule&#160;3a-2,</FONT>
    which provides a safe harbor exemption, not to exceed one year,
    for companies that have a bona fide intent to be engaged in an
    excepted activity but that temporarily fail to meet the
    requirements for another exemption from registration as an
    investment company. As required by the rule, our board of
    directors will adopt a resolution declaring our bona fide intent
    to be engaged in excepted activities. Reliance upon
    <FONT style="white-space: nowrap">Rule&#160;3a-2</FONT>
    is permitted only once every three years. As a result, if we
    fail to meet the tests for compliance with Section&#160;3(c)(6),
    or if we otherwise fail to maintain our exclusion from
    registration and another exemption is not available, we may be
    required to register as an investment company, or we may be
    required to acquire
    <FONT style="white-space: nowrap">and/or</FONT>
    dispose of assets in order to meet the applicable tests. Any
    such asset acquisitions or dispositions may be of assets that we
    would not acquire or dispose of in the ordinary course of our
    business, may be at unfavorable prices or may impair our ability
    to make distributions to shareholders and result in a decline in
    the price of our common shares.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are required to register under the Investment Company Act,
    we would become subject to substantial regulation with respect
    to our capital structure (including our ability to use
    leverage), management, operations, transactions with affiliated
    persons (as defined in the Investment Company Act), and
    portfolio composition, including restrictions with respect to
    diversification and industry concentration and other matters.
    Registration under the Investment Company Act would likely limit
    our ability to follow our current investment and financing
    strategies, impair our ability to make distributions to our
    common shareholders and, as a result, cause a decline in the
    price of our Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Legal
    Proceedings</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are no legal proceedings pending against us or to which we
    are a party.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Offices</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal executive offices are located at 2929 Arch Street,
    17th Floor, Philadelphia, Pennsylvania 19104. Our manager&#146;s
    principal executive offices are at 780 Third Avenue, 22nd Floor,
    New York, New York 10017.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We lease our principal executive offices from the Former
    Manager. We do not own any real property.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Employees</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not have any employees. Our business is managed by
    employees of our manager under the Management Agreement.
</DIV>
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    <BR>
    64
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='110'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Manager</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed and advised by our manager pursuant to
    the Management Agreement, which is described below. As more
    fully described below under &#147;&#151;&#160;The Management
    Agreement&#160;&#151; Responsibilities of our Manager,&#148; our
    manager is responsible for providing us with senior management,
    managing our assets, administering our business activities and
    managing our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our manager is a wholly-owned subsidiary of Tricadia Holdings.
    Tricadia Holdings is an asset management firm founded in 2003 by
    Michael Barnes and Arif Inayatullah. Tricadia Holdings is based
    in New York, New York, has approximately $5&#160;billion in
    assets under management and employs approximately 50
    professionals.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Directors
    and Executive Officers</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors consists of five
    directors,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;of
    whom are considered independent under the NASDAQ Listing Rules.
    We intend to appoint additional directors prior to the
    consummation of this offering. Because we are a &#147;controlled
    company&#148; under the NASDAQ Listing Rules, we are not
    required to have a majority of independent directors.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the terms of the Management Agreement, our manager
    provides us with our executive officers. In addition to serving
    as officers of our company and our subsidiaries, all of our
    executive officers are employees of Tricadia or one or more of
    the affiliates or entities that it manages.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding our
    directors and executive officers:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="43%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="52%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Age</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael Barnes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    44
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Chairman and Chief Executive Officer; Director
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Geoffrey Kauffman
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    51
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    President; Director
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Christopher Conley
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    55
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Chief Operating Officer
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Julia Wyatt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    52
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Chief Financial Officer and Secretary
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Daniel G. Cohen
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    40
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Andrew Gordon
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    56
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Thomas J. Reilly, Jr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    70
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following describes the experience of our non-management
    directors. Biographies of our executive officers are set forth
    under &#147;&#151;&#160;The Management Team.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="71%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Background Summary</B>
</DIV>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Daniel G. Cohen
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Mr.&#160;Cohen served as our chairman from our formation in 2007
    through March 2009. He is currently the chairman and chief
    executive officer of Cohen&#160;&#038; Company, an investment
    firm specializing in credit-related fixed income products and
    investments, and has served in such capacity since 2001. From
    2001 to 2006, Mr.&#160;Cohen also served as chief executive
    officer of Cohen&#160;&#038; Company. Mr.&#160;Cohen holds
    similar management positions in certain investment advisory
    subsidiaries and the broker-dealer subsidiary of
    Cohen&#160;&#038; Company. Mr.&#160;Cohen has been chairman of
    the board of directors of The Bancorp, Inc., a bank holding
    company, since 2000 and served as its chief executive officer
    from 1999 to 2000. From 2000 until 2006, Mr.&#160;Cohen served
    on the board of directors of TRM Corporation, an operator of
    automated teller machines, and as its Chairman from 2003 until
    2006. From 1995 to 2000, Mr.&#160;Cohen served as an officer of
    Resource America, an asset management company, serving as its
    chief operating officer from 1998 to 2000. From 1997 to 1999,
    Mr.&#160;Cohen was a director of Jefferson Bank of Pennsylvania,
    a commercial bank. Mr.&#160;Cohen was selected to serve as one
    of our directors because he is the chairman of the Former
    Manager and has extensive experience and familiarity with us. In
    addition, he has extensive experience in investments and board
    service.
</TD>
</TR>
</TABLE>
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    <BR>
    65
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL Table Pagebreak -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="71%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Background Summary</B>
</DIV>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Andrew Gordon
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Mr.&#160;Gordon has served as a director since March 2009. He is
    currently Managing Partner of Gordon Financial Advisors LLC, a
    boutique investment bank he founded in 2008. He is also CEO of
    SPiN Global Management LLC, a table tennis focused enterprise
    that he founded in 2008. Prior to forming Gordon Financial
    Advisors, Mr.&#160;Gordon was a Managing Director in JP
    Morgan&#146;s Financial Institutions Investment Banking Group
    from 2004 through 2007, where he led a team of investment
    bankers focused on delivering JP Morgan&#146;s products and
    services to the asset management sector, particularly equity and
    debt capital raising and mergers and acquisitions. Prior to JP
    Morgan, Mr.&#160;Gordon was a Managing Director at Lehman
    Brothers from 1987 through 1996, where he focused on the
    financial institutions sector, and a Managing Director at Credit
    Suisse First Boston from 1997 through 2000, where he led Credit
    Suisse First Boston&#146;s asset management investment banking
    coverage effort. He also served as chief operating officer of
    two asset managers, Lehman Brothers Global Asset Management,
    from 1992 through 1996, and Trilogy Advisors, from 2000 through
    2003. While at Lehman Brothers Global Asset Management,
    Mr.&#160;Gordon served as chairman of the board of its mutual
    fund complex. Mr.&#160;Gordon received his B.A. from Columbia
    College and his M.B.A. from Columbia Business School, where he
    was a member of the Beta Gamma Sigma Honor Society.
    Mr.&#160;Gordon was selected to serve as one of our directors
    because he has significant financial and investment experience.
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Thomas J. Reilly, Jr.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Mr.&#160;Reilly has served as a director since June 2007. He is
    currently retired from active employment. Mr.&#160;Reilly was a
    member of the board of trustees of Taberna Realty Finance Trust,
    a specialty finance REIT, from April 2005 until December 2006.
    From 1965 to 1996, Mr.&#160;Reilly worked in public accounting
    at Arthur Andersen LLP, providing audit and consulting services
    to multinational companies in the manufacturing, professional
    services, construction and distribution industries.
    Mr.&#160;Reilly was a partner at Arthur Andersen from 1976 to
    1996 and was head of the Philadelphia office audit division from
    1979 to 1986. Mr.&#160;Reilly currently serves as a director and
    audit committee chair of Astea International, Inc., a global
    provider of service management solutions, a director and audit
    committee chair for inTEST Corporation, a designer, manufacturer
    and marketer of semiconductor automatic test equipment, a member
    of the advisory board of World Affairs Council of Philadelphia,
    and former president of Center City Residents Association.
    Mr.&#160;Reilly received his B.S. in economics with a major in
    accounting from Villanova University in 1961. Mr.&#160;Reilly
    was selected to serve as one of our directors because he has a
    strong background in accounting and finance as well as extensive
    experience in board service.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Independent
    Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Messrs.&#160;Reilly
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    are independent directors within the meaning of the NASDAQ
    Listing Rules.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Board
    Committees</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to the consummation of this offering, we anticipate that
    our board of directors will establish an audit committee, as
    discussed below. Our board of directors may not have any other
    committees and we expect that the full board of directors will
    take action on compensation, director nomination and corporate
    governance matters where necessary or appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The audit committee will be comprised of
    Messrs.&#160;Reilly,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
    Mr.&#160;Reilly will chair the committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The audit committee will be responsible for, among other things,
    engaging independent public accountants, reviewing with the
    independent public accountants the plans and results of the
    audit engagement,
</DIV>
<!-- XBRL Paragraph Pagebreak -->
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    66
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    approving professional services provided by the independent
    public accountants, reviewing the independence of the
    independent public accountants, considering the range of audit
    and non-audit fees and reviewing the adequacy of our internal
    accounting controls.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mr.&#160;Reilly will serve as the Company&#146;s audit committee
    financial expert, as such term is defined by the Sarbanes-Oxley
    Act of 2002.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we are a &#147;controlled company&#148; under the NASDAQ
    Listing Rules, we are not required to have a compensation
    committee or nominating and corporate governance committee
    comprised of independent directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Compensation
    Interlocks</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of our executive officers has a relationship that would
    constitute an interlocking relationship with executive officers
    or directors of another entity or insider participation in
    compensation decisions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Executive
    Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Compensation
    Discussion and Analysis</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are externally managed and have no employees. Because the
    Management Agreement provides that our manager is responsible
    for managing our affairs, our executive officers, who are
    employees of our manager and its other affiliates, do not
    receive cash compensation from us for serving as our executive
    officers. In their capacities as officers or employees of our
    manager or its other affiliates, they devote a portion of their
    time to our affairs as is required for the performance of the
    duties of our manager under the Management Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We pay our manager a management fee, and our manager uses the
    proceeds from the management fee in part to pay compensation to
    its officers and employees. It is our understanding that the
    compensation paid to our executive officers by our manager or
    its other affiliates is not allocated in a manner that would
    allow us to determine that portion of their compensation that is
    related to the services performed for us and that portion that
    is related to services performed for other entities. See
    &#147;&#151;&#160;The Management Agreement&#160;&#151;
    Performance Share&#148; for information with respect to the
    transfer by our manager of shares of our common stock to our
    executive officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have not included tabular disclosure concerning compensation
    to our named executive officers since we do not provide them
    with cash or other compensation and have not provided them with
    equity compensation within the period or otherwise required to
    be reported in tabular form.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Director
    Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Members of our board of directors who are employees of any of
    our affiliates, whom we refer to as excluded directors, do not
    receive compensation for serving on the board of directors. Each
    other director, whom we refer to as a non-excluded director,
    receives an annual retainer of $20,000 (which includes all board
    meetings attended in person or telephonically), payable $10,000
    in cash and $10,000 in restricted common shares. Non-excluded
    directors who are members of the audit committee receive an
    additional $10,000 cash retainer, with an additional $5,000 cash
    retainer payable to the chairperson of the audit committee. We
    do not intend to compensate directors for additional committee
    meetings that occur on a date different from a full board of
    directors meeting date. We also reimburse all of our directors
    for their travel expenses incurred in connection with their
    attendance at full board and committee meetings.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    67
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our non-excluded directors are eligible to receive shares,
    options and other share-based awards. See &#145;&#145;&#151;
    Equity Compensation&#148; below.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    of Directors in 2009</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The table below indicates the compensation earned by our
    non-excluded directors for 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="45%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Fees Earned<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Share-Based<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>or Paid in Cash</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Awards(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Daniel G. Cohen
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Andrew Gordon
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31,650
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39,150
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Thomas J. Reilly, Jr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14,750
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,375
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30,125
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the aggregate grant date fair value of the award as
    calculated in accordance with FASB ASC Topic 718.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Equity
    Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with our initial offering in June 2007, common
    shares were reserved for certain officers and employees of the
    Former Manager as LTIP shares. LTIP shares were a special class
    of limited liability company interest that had the same rights
    to voting and distributions as the common shares, but did not
    have any rights to liquidating distributions until they were
    converted into common shares. Holders of LTIP shares were
    entitled to convert their LTIP shares into an equal number of
    common shares if, in certain circumstances, the valuation of our
    assets exceeded a specified threshold that we refer to as the
    &#147;performance target.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2009, the LTIP shares became eligible to be converted
    into common shares because we issued to our manager common
    shares valued at $2.01 per Share, exceeding the performance
    target of $1.25, as partial payment for a performance fee for
    the second quarter of 2009. All of the holders of the LTIP
    shares elected to convert their LTIP shares into common shares,
    and there are currently no LTIP shares outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer shares, options and other share-based awards under
    our 2007 Equity Incentive Plan, or other equity incentive plans
    we may establish in the future, to our executive officers and
    directors. We
    anticipate&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    that&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    of our common shares will be reserved for equity incentive
    awards at the time of this offering. The terms and conditions of
    awards will be determined by our board of directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Management
    Team</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the terms of the Management Agreement, our manager
    provides us with our management team. The following describes
    the experience of our executive officers and other members of
    the management team.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="71%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name/Position at the Company</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Background Summary</B>
</DIV>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Michael Barnes<BR>
    <I>Chief Executive Officer and Chairman</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our Chief Executive Officer and Chairman of our board of
    directors since March 2009, Mr.&#160;Barnes is a founding
    partner of Tricadia. Prior to the formation of Tricadia in 2003,
    Mr.&#160;Barnes spent two years as Head of Structured Credit
    Arbitrage within UBS Principal Finance LLC, a wholly owned
    subsidiary of UBS Warburg, which conducts proprietary trading on
    behalf of the firm. Mr.&#160;Barnes joined UBS in 2000 as part
    of the merger between UBS and PaineWebber Inc. Prior to joining
    UBS, Mr.&#160;Barnes was a Managing Director and Global Head of
    the Structured Credit Products Group of PaineWebber. Prior to
    joining PaineWebber in 1999, he spent 12&#160;years at Bear,
    Stearns&#160;&#038; Co. Inc., the last five of which he was head
    of their Structured Transactions Group. Mr.&#160;Barnes received
    his A.B. from Columbia College.
</TD>
</TR>
</TABLE>
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    <BR>
    68
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<!-- Table Width Row BEGIN -->
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    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="71%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name/Position at the Company</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Background Summary</B>
</DIV>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    Geoffrey Kauffman<BR>
    <I>President</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our President and a member of the board of directors since March
    2009, Mr.&#160;Kauffman has been a Managing Director of Tricadia
    since 2005 and the President and Chief Operating Officer of
    Tiptree since its inception in 2007. Since joining Tricadia in
    2005, Mr.&#160;Kauffman has been overseeing a variety of
    strategic acquisition opportunities and permanent capital
    projects, including the development of Tiptree. Prior to joining
    Tricadia, from 2002 to 2004, Mr.&#160;Kauffman was a partner
    with the Shidler Group in a similar capacity, with his primary
    focus being the development of a credit derivative products
    company (CDPC). Before joining the Shidler Group, from 1997 to
    2001, Mr.&#160;Kauffman was involved in the launch of the CGA
    Group of companies, which originated financial guarantee
    contracts. From 1997 through 1999, he was the President, Chief
    Underwriting Officer and Principal Representative of CGA
    Bermuda, Ltd, the CGA Group&#146;s Bermuda based insurance
    subsidiary. From 2000 to 2001, he was the President and Chief
    Executive Officer of CGA Investment Management. Prior to joining
    CGA, Mr.&#160;Kauffman was at AMBAC and the MBIA / AMBAC
    International joint venture in 1995 and 1996, where he helped
    develop their international structured finance department. Prior
    to AMBAC, from 1989 to 1995, Mr.&#160;Kauffman was with
    FGIC&#146;s ABS group and helped establish that business,
    focusing on CDOs, asset backed securities and multi-seller
    conduit programs. Prior to FGIC, Mr.&#160;Kauffman worked in the
    Investment Banking Division of Marine Midland Bank (now HSBC),
    where he focused on middle market mergers and acquisitions and
    structured finance. Mr.&#160;Kauffman holds a B.A. (Psychology)
    from Vassar College and an M.B.A. (Finance) from Carnegie Mellon
    University.
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Christopher Conley<BR>
    <I>Chief Operating Officer</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our Chief Operating Officer, since 2009, Mr.&#160;Conley was a
    Managing Director at Cohen&#160;&#038; Company Securities, LLC
    and co-head of the municipal finance platform for
    Cohen&#160;&#038; Company from 2007 through 2009. Previously,
    beginning in 1997, Mr.&#160;Conley was president of Nonprofit
    Capital, LLC, which he founded to meet the capital needs of
    acute care, rural healthcare, behavioral healthcare and
    long-term care facilities through a national funding program.
    Prior to establishing Nonprofit Capital, LLC, Mr.&#160;Conley
    was a senior vice president at Tucker Anthony&#160;&#038;
    Company from 1995 to 1997, where he led the municipal bond
    securitization effort. Prior to Tucker Anthony, Mr.&#160;Conley
    was senior vice president in charge of the Healthcare Group at
    Lehman Brothers in New York from 1983 to 1995, where he
    completed financing for healthcare facilities of all types,
    including multi-hospital systems, community based hospitals,
    academic medical centers, behavioral healthcare providers and
    long-term care facilities. Before that, Mr.&#160;Conley was
    employed in the Healthcare Group in Booz, Allen&#160;&#038;
    Hamilton&#146;s New York office from 1980 to 1983. Apart from
    his business activities, Mr.&#160;Conley has served as chairman
    of the board of Our Lady of Mercy Medical Center in the Bronx,
    New York, and has served on the finance committee of Catholic
    Health Initiatives (CHI), a multi-state $6&#160;billion revenue
    health system. Mr.&#160;Conley is a graduate of the University
    of Notre Dame, where he obtained a B.A. in anthropology, and was
    awarded a Masters of Health Administration from Duke University.
</TD>
</TR>
</TABLE>
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    <BR>
    69
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL Table Pagebreak -->

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<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
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    <TD width="71%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name/Position at the Company</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Background Summary</B>
</DIV>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Julia Wyatt<BR>
    <I>Chief Financial Officer and Secretary</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our Chief Financial Officer and Secretary since 2009,
    Ms.&#160;Wyatt is also the Chief Financial Officer of Tricadia.
    Prior to joining Tricadia in 2005, from 1996 to 2005,
    Ms.&#160;Wyatt was the Chief Financial Officer of Havell Capital
    Management (HCM), a specialized investment management firm
    dedicated to managing funds in fixed income markets. During her
    tenure with HCM, Ms.&#160;Wyatt was responsible for all
    non-investment related aspects of the firm, including financial,
    legal, regulatory and client services. Prior to HCM, from 1992
    to 1996, Ms.&#160;Wyatt was a senior member of the fixed income
    management group with Neuberger Berman. Previously, from 1987 to
    1991, she was employed by Morgan Grenfell Capital Management,
    where she was the Treasurer and Director of Client Services.
    Ms.&#160;Wyatt obtained her C.P.A. license during her years from
    1980 to 1988, with Deloitte&#160;&#038; Touche, spending the
    last two years in the Executive Office Research Department.
    Ms.&#160;Wyatt has a B.S. in Accounting from the University of
    Utah.
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Eileen Mullin<BR>
    <I>Senior Analyst</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our Senior Analyst since 2009, Ms.&#160;Mullin leads the group
    that performs in-depth credit analysis of all potential
    borrowers in the municipal finance sector. Previously, from 2005
    to 2009, she was a director at Cohen&#160;&#038; Company.
    Ms.&#160;Mullin worked as a health care analyst for Prudential
    Investment Advisor&#146;s nine tax-exempt funds from 1994 to
    1995. She also was a member of Moody&#146;s Investors
    Service&#146;s Public Finance Division from 1991 to 1994. in the
    Health Care Group, where she had responsibility for Moody&#146;s
    new and ongoing health care ratings in thirteen States. Prior to
    that time, starting in 1987, Ms.&#160;Mullin was an investment
    banker in the health care finance group for both Kidder,
    Peabody&#160;&#038; Co. and Bear, Stearns and Co. From 1985 to
    1987, she worked in the Debt Issuance Unit of the New York State
    Medical Care Facilities Finance Agency, which was the largest
    health care issuer in the country. She has also worked as an
    independent consultant from 1995 to 2005, providing credit
    analyses for other individuals and companies. Ms.&#160;Mullin
    received her undergraduate degree from Smith College and a
    Master&#146;s in Business Administration from Boston University.
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    Ellen Curry<BR>
    <I>Controller</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our Controller, Ms.&#160;Curry previously served as a Director
    at Core Management, Inc., a construction management company,
    where she was dedicated to finance, accounting and business
    oversight and worked from 2002 to 2007. From 1999 to 2002,
    Ms.&#160;Curry, as President of Corporate Financial Consulting
    at Foresight Solutions, analyzed the viability of real estate
    development projects, developed operating budgets and prepared
    presentations for lending institutions, and managed the income
    tax accounting and tax investment strategy for a financial
    guaranty reinsurer. Prior to that time, Ms.&#160;Curry had
    senior roles at American Business Financial Services and Enhance
    Financial Services Group and was employed by Goldman Sachs,
    Thomson McKinnon Securities and PricewaterhouseCoopers.
    Ms.&#160;Curry is a CPA and received her MBA in Finance, Magna
    Cum Laude, from the Leonard N. Stern School of Business at New
    York University. Ms.&#160;Curry attended the International
    Management Program at the Australian Graduate School of
    Management and received her BBA in Accounting, Summa Cum Laude,
    from Baruch College.
</TD>
</TR>
</TABLE>
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    <BR>
    70
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="71%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name/Position at the Company</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Background Summary</B>
</DIV>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Daniel DiBono<BR>
    <I>Vice President</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Our Vice President, Mr.&#160;DiBono is primarily responsible for
    surveillance of our existing credits as well as other areas of
    operations and structuring. Mr.&#160;DiBono is also a member of
    the group that performs in-depth credit analysis on potential
    borrowers in the municipal finance sector. Mr.&#160;DiBono was
    previously a Vice President at Cohen&#160;&#038; Company from
    2007 to 2009 and was responsible for closing all directly
    originated tax-exempt bond transactions. Mr.&#160;DiBono&#146;s
    experience includes turnaround management, financial forecasting
    and business plan development in the corporate sector and
    business development in the financial services sector. In 2002,
    Mr.&#160;DiBono received a Bachelor of Science in Business
    Administration from the State University of New York at Albany,
    concentrating in Finance and Marketing.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Management Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are party to the Management Agreement, which is dated as of
    June&#160;12, 2007. The Management Agreement initially was with
    the Former Manager and assigned to the current manager on
    March&#160;18, 2009, following the purchase by Tiptree, an
    affiliate of our manager, of a majority of our then-outstanding
    common shares. For further information concerning the
    assignment, see &#147;Business&#160;&#151; Operating
    History.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Responsibilities
    of Our Manager</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the terms of the Management Agreement, our manager
    is required to provide us with our management team, along with
    appropriate support personnel to provide the management services
    to be provided by our manager to us, the members of which team
    shall have as a primary responsibility the management of us and
    shall devote such of their time to our management as the board
    of directors reasonably deems necessary and appropriate,
    commensurate with our level of activity from time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the Management Agreement, our manager is responsible
    for approving our acquisition of municipal obligations and other
    assets, administering our business and managing our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations. The Management Agreement requires our manager to
    manage our business affairs in conformity with the policies and
    the asset acquisition guidelines that are approved by at least a
    majority of our independent directors and monitored by the board
    of directors. Among other things, our manager is responsible for
    (i)&#160;the selection, purchase, monitoring and sale of our
    portfolio assets, (ii)&#160;our financing and risk management
    activities and (iii)&#160;providing us with asset advisory
    services. Our manager is responsible for our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations and performs (or causes to be performed) such
    services and activities relating to our assets and operations as
    may be appropriate, including, without limitation, the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;serving as our consultant with respect to the periodic
    review of the asset acquisition and credit criteria and
    parameters for our acquisitions, borrowings and operations, any
    modifications to which must be approved by a majority of our
    independent directors, and other policies for the approval of
    our board of directors;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;investigating, analyzing and selecting possible asset
    acquisition opportunities;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;with respect to prospective asset acquisitions,
    conducting negotiations with borrowers, sellers and purchasers
    and their respective agents, representatives and investment
    bankers;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;engaging and supervising, on our behalf and at our
    expense, independent contractors who provide investment banking,
    mortgage brokerage, securities brokerage and other financial
    services and such other services as may be required relating to
    our assets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;negotiating on our behalf for the sale, exchange or
    other disposition of any of our assets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;coordinating and managing operations of any joint
    venture or co-investment interests held by us and conducting all
    matters with any joint venture or co-investment partners;
</DIV>
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    <BR>
    71
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (7)&#160;providing executive and administrative personnel,
    office space and office services required in rendering services
    to us;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (8)&#160;administering our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations and performing and supervising the performance of
    such other administrative functions necessary to our management
    as may be agreed upon by our manager and the board of directors,
    including the collection of revenues and the payment of our
    debts and obligations and maintenance of appropriate computer
    services to perform such administrative functions;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (9)&#160;communicating on our behalf with the holders of any of
    our equity or debt securities as required to satisfy the
    reporting and other requirements of any governmental bodies or
    agencies or trading markets and to maintain effective relations
    with such holders;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (10)&#160;counseling us in connection with policy decisions to
    be made by our board of directors;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (11)&#160;evaluating hedging strategies and engaging in hedging
    activities on our behalf, consistent with our status as a
    partnership and with our asset acquisition guidelines;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (12)&#160;counseling us regarding the maintenance of our
    qualification as a partnership for U.S.&#160;federal income tax
    purposes and monitoring compliance with the requirements for
    maintaining such qualification;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (13)&#160;counseling us regarding the maintenance of our
    exemption from the Investment Company Act and monitoring
    compliance with the requirements for maintaining an exemption
    thereunder;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (14)&#160;assisting us in developing criteria for asset
    purchases that are specifically tailored to our business
    objectives and making available to us its knowledge and
    experience with respect to tax-exempt bonds and other assets,
    STEP and tender option bond programs and other structured credit
    entities;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (15)&#160;representing and making recommendations to us in
    connection with the purchase and finance of and commitment to
    purchase and finance tax-exempt bonds and other assets, STEP
    certificates, tender option bond program certificates and
    interests in other structured credit entities, and in connection
    with the sale and commitment to sell such assets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (16)&#160;selecting broker-dealers to effect transactions on our
    behalf;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (17)&#160;monitoring the operating performance of our assets and
    providing periodic reports with respect thereto to our board of
    directors, including comparative information with respect to
    such operating performance and budgeted or projected operating
    results;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (18)&#160;investing and reinvesting any money and securities of
    ours (including investing in short-term investments pending the
    acquisition of other assets, payment of fees, costs and
    expenses, or payments of dividends or distributions to our
    shareholders as such dividends or distributions may be
    authorized or approved by our board of directors), and advising
    us as to our capital structure and capital raising;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (19)&#160;causing us to retain qualified accountants (subject to
    approval of the audit committee of our board of directors) and
    legal counsel, as applicable, to assist in developing
    appropriate accounting procedures, compliance procedures and
    testing systems with respect to financial reporting obligations
    and compliance with the Code and to conduct quarterly compliance
    reviews with respect thereto;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (20)&#160;causing us to qualify to do business in all applicable
    jurisdictions and to obtain and maintain all appropriate
    licenses;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (21)&#160;assisting us in complying with all regulatory
    requirements applicable to us in respect of our business
    activities, including preparing or causing to be prepared all
    financial statements required under applicable regulations and
    contractual undertakings and all reports and documents, if any,
    required under the Exchange Act;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (22)&#160;taking all necessary actions to enable us to make
    required tax filings and reports;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (23)&#160;handling and resolving all claims, disputes or
    controversies (including all litigation, arbitration, settlement
    or other proceedings or negotiations) in which we may be
    involved or to which we may be
</DIV>
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    subject arising out of our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations, subject to such limitations or parameters as may be
    imposed from time to time by the board of directors;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (24)&#160;using commercially reasonable efforts to cause
    expenses incurred by or on our behalf to be commercially
    reasonable or commercially customary and within any budgeted
    parameters or expense guidelines set by our board of directors
    from time to time;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (25)&#160;advising us with respect to obtaining appropriate
    warehouse or other financings for our assets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (26)&#160;advising us with respect to and structuring long-term
    financing vehicles for our portfolio of assets, and offering and
    selling securities publicly or privately in connection with any
    such structured financing;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (27)&#160;performing such other services as may be required from
    time to time for management and other activities relating to us
    and our assets as our board of directors shall reasonably
    request or our manager or our board of directors shall deem
    appropriate under the particular circumstances;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (28)&#160;using commercially reasonable efforts to cause us to
    comply with all applicable laws.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limitation
    of Liability</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the Management Agreement, our manager has not
    assumed any responsibility other than to render the services
    called for thereunder in good faith and will not be responsible
    for any action of our board of directors in following or
    declining to follow our manager&#146;s advice or
    recommendations. Our manager and its members, managers,
    officers, directors, employees and affiliates will not be liable
    to us, any of our subsidiaries, our directors, our shareholders
    or any shareholders or partners of our subsidiaries for acts
    performed in accordance with and pursuant to the Management
    Agreement, except by reason of acts constituting bad faith,
    willful misconduct, gross negligence or reckless disregard of
    their duties under the Management Agreement. We have agreed to
    indemnify our manager and its members, and their respective
    managers, officers, directors, employees and affiliates and each
    person controlling our manager with respect to all expenses,
    losses, damages, liabilities, demands, charges and claims
    arising from acts of such indemnified party not constituting bad
    faith, willful misconduct, gross negligence or reckless
    disregard of duties, performed in good faith in accordance with
    and pursuant to the Management Agreement. Our manager has agreed
    to indemnify us, our shareholders, directors, officers,
    employees and each other person, if any, controlling us with
    respect to all expenses, losses, damages, liabilities, demands,
    charges and claims arising from acts of our manager constituting
    bad faith, willful misconduct, gross negligence or reckless
    disregard of its duties under the Management Agreement. As
    required by the Management Agreement, our manager carries errors
    and omissions insurance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Term
    and Termination</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial term of the Management Agreement expires on
    December&#160;31, 2010, and shall be automatically renewed for a
    one-year term on each anniversary date thereafter unless
    terminated as described below. Our independent directors will
    review our manager&#146;s performance annually and, following
    the initial term, the Management Agreement may be terminated
    annually (upon 180&#160;days&#146; notice) upon the affirmative
    vote of at least two-thirds of our independent directors, or by
    a vote of the holders of a majority of our outstanding common
    shares, based upon (i)&#160;unsatisfactory performance that is
    materially detrimental to us or (ii)&#160;a determination that
    the management fee payable to our manager is not fair, subject
    to our manager&#146;s right to prevent such a termination
    pursuant to clause&#160;(ii) by accepting a reduction of the
    management fee agreed to by at least two-thirds of our
    independent directors and our manager. We must provide
    180&#160;days&#146; prior notice of any such termination and our
    manager will be paid a termination fee equal to three times the
    average annual base management fee for the two
    <FONT style="white-space: nowrap">12-month</FONT>
    periods preceding the date of termination, calculated as of the
    end of the most recently completed fiscal quarter prior to the
    date of termination (and annualized for any partial year), which
    may make it costly and difficult for us to terminate the
    Management Agreement. In addition, we will be required to redeem
    the Performance Share held by our manager for a price equal to
    three
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    times the average annual distributions paid in respect of such
    Performance Share for the two
    <FONT style="white-space: nowrap">12-month</FONT>
    periods immediately preceding the date of termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may also terminate the Management Agreement without payment
    of the termination fee with 30&#160;days&#146; prior written
    notice for cause, which is defined as (i)&#160;our
    manager&#146;s continued material breach of any provision of the
    Management Agreement following a period of 30&#160;days after
    written notice thereof, (ii)&#160;our manager&#146;s engagement
    in any act of fraud, misappropriation of funds or embezzlement
    against us, (iii)&#160;our manager&#146;s gross negligence,
    willful misconduct or reckless disregard in the performance of
    its duties under the Management Agreement, (iv)&#160;the
    commencement of any proceeding relating to our manager&#146;s or
    Tricadia&#146;s bankruptcy, insolvency, dissolution, or similar
    matters that is not withdrawn within 60&#160;days, (v)&#160;the
    entry of a court order or decree respecting our manager&#146;s
    or Tricadia&#146;s bankruptcy or insolvency, or our manager or
    Tricadia ceasing to pay its debts as they become due or making a
    general assignment for its creditors or (vi)&#160;a change of
    control (as defined in the Management Agreement), other than
    certain permitted changes of control, of our manager or
    Tricadia. Cause does not include unsatisfactory performance,
    even if that performance is materially detrimental to our
    business. Our manager may terminate the Management Agreement,
    without payment of the termination fee, in the event we become
    regulated as an investment company under the Investment Company
    Act. Furthermore, our manager may decline to renew the
    Management Agreement for any reason by providing us with
    180&#160;days&#146; written notice. Our manager may also
    terminate the Management Agreement upon 60&#160;days&#146;
    written notice if we default in the performance of any material
    term of the Management Agreement and the default continues for a
    period of 30&#160;days after written notice to us, whereupon we
    would be required to pay our manager a termination fee.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Management
    Fee</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not employ personnel and therefore rely on the resources
    of our manager to conduct our operations. Our manager uses the
    proceeds from its management fee in part to pay compensation to
    its officers and employees who, notwithstanding that certain of
    them also are our officers, receive no cash compensation
    directly from us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Base
    Management Fee</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We pay our manager a base management fee, or Base Management
    Fee, monthly in arrears in an amount equal to 1/12 of our equity
    multiplied by 1.50%. We believe that the Base Management Fee is
    comparable to the base management fee received by the managers
    of comparable externally managed specialty finance companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of calculating the Base Management Fee, our
    &#147;equity&#148; means, for any month, the sum of the net
    proceeds from any issuance of our common shares, after deducting
    any underwriting or initial purchaser&#146;s discounts and
    commissions or placement fees and other expenses and costs
    relating to the issuance, plus (or minus) our retained earnings
    (or deficit) at the end of such month (without taking into
    account any non-cash equity compensation expense incurred in
    current or prior periods), which amount shall be reduced by any
    amount that we pay for the repurchases of our common shares. The
    foregoing calculation of the Base Management Fee will be
    adjusted to exclude one-time events pursuant to changes in
    U.S.&#160;GAAP, as well as non-cash charges, after discussion
    between our manager and our independent directors and approval
    by a majority of our independent directors in the case of
    non-cash charges.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Base Management Fee is required to be calculated by our
    manager within 15 business days after the end of each month and
    such calculation is required to be promptly delivered to us. We
    are obligated to pay the Base Management Fee within 20 business
    days after the end of each month.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Management Agreement provides that the Base Management Fee
    payable to our manager for any fiscal year will be reduced, but
    not below zero, by our proportionate share of the amount of any
    STEP and other structured credit portfolio management fees that
    are paid to our manager for such year by the STEP and other
    structured credit entities in which we acquire invest, based on
    the percentage of the most junior class of certificates we hold
    in such STEP and other structured credit entities. Any other
    fees paid to our manager and its affiliates will not reduce the
    amount of fees we pay under the Management Agreement.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Performance
    Share</FONT></I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have awarded our manager a Performance Share in our company
    that represents a special limited liability company interest
    that entitles our manager to a special allocation of our profits
    and cash distributions if we exceed a specified performance
    threshold. The Performance Share entitles our manager to an
    allocation of profits and cash distributions, payable quarterly
    in arrears, in an amount equal to the product of: (i)&#160;20%
    of the dollar amount by which (a)&#160;our consolidated net
    income, before distributions on the Performance Share, per
    weighted average common share for such quarter, exceeds
    (b)&#160;an amount equal to the product of (1)&#160;the weighted
    average of the prices per share of our common shares in any
    equity offerings by us, including this offering, multiplied by
    (2)&#160;the greater of (A)&#160;2.0% and (B)&#160;0.75% plus
    one-fourth of the ten-year MMD Index (a benchmark index
    customarily used in pricing municipal bonds) for such quarter
    multiplied by (ii)&#160;the weighted average number of common
    shares outstanding in such quarter. The foregoing calculation
    will be adjusted to exclude one-time events pursuant to changes
    in U.S.&#160;GAAP, as well as non-cash charges, after approval
    by a majority of our independent directors in the case of
    non-cash charges. &#147;Net income&#148; is determined by
    calculating the net income available to owners of common shares
    before non-cash equity compensation expense, each computed in
    accordance with U.S.&#160;GAAP. As consideration for the
    acquisition of the right to manage the company from the Former
    Manager, our manager will, beginning on March&#160;18, 2012 and
    until March&#160;18, 2022, remit to the former manager payments
    in respect of our manager&#146;s revenue in excess of
    $1&#160;million (including the above-discussed Performance
    Share, and less certain adjustments).
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have from time to time issued common shares to our manager in
    lieu of making cash distributions owed to our manager as
    described above. Our manager has from time to time compensated
    our executive officers with common shares it received from us as
    described above.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Reimbursement
    of Expenses</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although our manager&#146;s employees perform certain legal,
    accounting, due diligence tasks and other services that outside
    professionals or outside consultants otherwise would perform,
    our manager will not be paid or reimbursed for the time required
    in performing such tasks.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will pay all operating expenses, except those specifically
    required to be borne by our manager under the Management
    Agreement. The expenses required to be paid by us include, but
    are not limited to: transaction costs incident to the
    acquisition, disposition and financing of our assets; legal,
    tax, accounting, consulting, administrative and other similar
    service fees and expenses; the compensation and expenses of our
    directors; the cost of directors&#146; and officers&#146;
    liability insurance; the costs associated with the establishment
    and maintenance of any credit facilities, tender option bond
    programs and other financing arrangements and other indebtedness
    of ours (including commitment fees, accounting fees, legal fees,
    closing and other costs); expenses associated with other
    securities offerings of our company; expenses relating to making
    distributions to our shareholders; the costs of printing and
    mailing proxies and reports to our shareholders; costs
    associated with any computer software or hardware, electronic
    equipment or purchased information technology services from
    third party vendors that is used solely for us; costs incurred
    by employees and agents of our manager and its affiliates for
    travel on our behalf; costs and expenses incurred with respect
    to market information systems and publications, research
    publications and materials; settlement, clearing and custodial
    fees and expenses; expenses of our transfer agent; the costs of
    maintaining compliance with all federal, state and local rules
    and regulations or any other regulatory agency; all taxes and
    license fees; and all insurance costs incurred by us or on our
    behalf. In addition, we will be required to pay our <I>pro rata
    </I>portion of rent, telephone, utilities, office furniture,
    equipment, machinery and other office, internal and overhead
    expenses of our manager and its affiliates required for our
    operations. Except as noted above, our manager is responsible
    for all costs incident to the performance of its duties under
    the Management Agreement, including compensation of our
    manager&#146;s employees and other related expenses.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Conflicts
    of Interest</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is subject to certain conflicts of interest relating
    to Tricadia and its affiliates, including our manager. See
    &#147;Risk Factors&#160;&#151; Risks Relating to Our Management
    and Our Relationship with Our Manager&#148; and
    &#147;Business&#160;&#151; Competition&#148;
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PRINCIPAL
    SHAREHOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding beneficial
    ownership of our common shares by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each person who is known by us to beneficially own 5% or more of
    the outstanding common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each of our named executive officers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each of our directors;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all executive officers and directors as a group.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, we
    have&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Class&#160;B
    common shares outstanding, including 281,458 restricted common
    shares issued under our 2007 Equity Incentive Plan and one
    Performance Share held by Muni Capital Management. The amounts
    and percentage of common shares beneficially owned are reported
    on the basis of regulations of the SEC governing the
    determination of beneficial ownership of securities. Under these
    rules, a person is deemed to be a &#147;beneficial owner&#148;
    of a security if that person has or shares &#147;voting
    power,&#148; which includes the power to vote or to direct the
    voting of such security, or &#147;investment power,&#148; which
    includes the power to dispose of or to direct the disposition of
    such security. A person is also deemed to be a beneficial owner
    of any securities of which that person has a right to acquire
    beneficial ownership within 60&#160;days. Under these rules,
    more than one person may be deemed a beneficial owner of the
    same securities, and a person may be deemed to be a beneficial
    owner of securities as to which such person has no economic
    interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, we believe that all persons named in
    the table have sole voting and investment power with respect to
    all common shares beneficially owned by them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="40%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=10 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=10 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=10 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=10 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=11 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=11 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=11 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=11 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="15" nowrap align="center" valign="bottom">
    <B>Shares Beneficially Owned Prior to the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="15" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>%<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="15" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficial Ownership After the Offering(3)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>%<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Class A Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Class B Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Class A Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Class B Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Voting<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Voting<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Address of Beneficial Owner(2)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Power</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Power</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Tiptree Financial Partners, L.P.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,617,687
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    73.81
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    73.81
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael Barnes(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,304,546
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.49
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.31
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Geoffrey Kauffman
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    200,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.53
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.53
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Christopher Conley
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    92,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.25
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.25
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Julia Wyatt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,188
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.03
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.03
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Daniel G. Cohen(5)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.40
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.40
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Andrew Gordon(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.04
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.04
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Thomas J. Reilly, Jr.(7)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.06
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.06
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All executive officers and directors as a group (7 individuals)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,729,051
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.62
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.62
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1%</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Percentage of total voting power represents combined voting
    power with respect to all of our Class&#160;A common shares and
    Class&#160;B common shares. Each holder of a Class&#160;B common
    share will be entitled to ten votes per share of a Class&#160;B
    common share and each holder of a Class&#160;A common share will
    be entitled to one vote per share of a Class&#160;A common
    share, in each case on all matters submitted to our shareholders
    for a vote. The holder of the Class&#160;A common shares and the
    Class&#160;B common shares vote together as a single class on
    all matters submitted to a vote of our shareholders, except as
    may otherwise be required by law. Each Class&#160;B common share
    is convertible at any time into one Class&#160;A common share.
    See &#147;Description of Securities.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Unless otherwise indicated, the business address of each of the
    beneficial owners is 780 Third Avenue, 29th Floor, New York, New
    York 10017. Each beneficial owner directly holds such
    person&#146;s common shares.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Assumes the sale
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares in this offering, but not the
    exercise of the underwriters&#146; over-allotment option.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes (i)&#160;1,238,863 Class&#160;B common shares, or 3.31%
    of the issued and outstanding Class&#160;B common shares as of
    the date hereof, beneficially owned by Michael Barnes and
    (ii)&#160;65,683 Class&#160;B common shares, or 0.18% of the
    issued and outstanding Class&#160;B common shares as of the date
    hereof, owned by the JC Family Trust under agreement dated
    February&#160;3, 2009, for which Michael Barnes&#146; children
    are primary beneficiaries.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    The business address of Daniel G. Cohen is
    <FONT style="white-space: nowrap">c/o&#160;Taberna</FONT>
    Capital, 450 Park Avenue, 11th Floor, New York, New York 10022.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes 2,500 vested Class&#160;B common shares and 12,500
    unvested Class&#160;B common shares. The business address of
    Andrew Gordon is
    <FONT style="white-space: nowrap">c/o&#160;GFA</FONT>
    LLC, 205 Third Avenue, 19th Floor, New York, New York 10003.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes 15,000 vested Class&#160;B common shares and 7,500
    unvested Class&#160;B common shares. The business address of
    Thomas J. Reilly, Jr. is 3910 Dempsey Lane, Huntingdon Valley,
    Pennsylvania 19006.</TD>
</TR>

</TABLE>

<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Management
    Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As previously described, we are managed by Muni Capital
    Management under the Management Agreement, pursuant to which,
    among other things, Muni Capital Management receives a base fee,
    is eligible to receive an incentive allocation and is entitled
    to the reimbursement of certain expenses. See
    &#147;Management&#160;&#151; The Management Agreement&#148; for
    more information concerning the terms of the Management
    Agreement and the management fees. Muni Capital Management is a
    wholly-owned subsidiary of Tricadia Holdings. Tricadia Holdings
    also wholly-owns Tiptree Capital, the manager of Tiptree, which
    owns approximately 73.81% of our outstanding Class&#160;B common
    shares, representing&#160;&#160;&#160;&#160;&#160;&#160;% of our
    combined voting power immediately after this offering, and may
    purchase Class&#160;A common shares pursuant to this offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification
    Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into indemnification agreements with our
    directors and officers that obligate us to indemnify them to the
    maximum extent permitted by Delaware law and pay such
    persons&#146; expenses in defending any civil or criminal
    proceedings in advance of final disposition of such proceeding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tiptree
    Tender Offer and Company Rights Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;12, 2009, Tiptree commenced a tender offer to
    purchase all of our outstanding common shares for the purchase
    price of $1.00 per share. The tender offer expired on
    June&#160;19, 2009. Tiptree purchased 2,443,550 common shares
    through the tender offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Also on May&#160;12, 2009, we issued subscription rights to the
    then holders of our common shares and LTIP shares to purchase up
    to an aggregate of 18,116,964 new common shares at the price of
    $1.20 per share. We completed the rights offering on
    June&#160;26, 2009, issuing 18,116,964 new common shares and
    raising $21.7&#160;million before taking into account the
    expenses of the offering. We used the net proceeds from the
    rights offering for working capital and general corporate
    purposes. Tiptree purchased 14,901,307 common shares in
    connection with the rights offering. As of December&#160;31,
    2009, all outstanding LTIP shares were converted to common
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the consummation of this offering, we intend to enter into
    a registration rights agreement with Tiptree pursuant to which
    Tiptree will have certain demand and piggyback registration
    rights.
</DIV>
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    <BR>
    77
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interest
    Rate Swap</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On July&#160;14, 2009, we entered into an interest rate swap for
    the purpose of hedging portfolio-wide interest rate risk with
    Tiptree, as a
    <FONT style="white-space: nowrap">&#147;back-to-back&#148;</FONT>
    swap with Morgan Stanley Capital Services Inc. Twice each year,
    on January 16 and July&#160;16, beginning on January&#160;16,
    2010 and continuing through July&#160;16, 2019, we will pay to
    Tiptree, as the swap counterparty (and Tiptree will remit to
    Morgan Stanley), a fixed rate of 3.6475% based on a notional
    amount of $5,000,000, and four times each year, on
    January&#160;16, April&#160;16, July 16 and October&#160;16,
    beginning on October&#160;16, 2009 and continuing through
    July&#160;16, 2019, the swap counterparty will pay to us an
    amount equal to a floating rate of three-month LIBOR based on
    the notional amount. As of April&#160;19, 2010, we have paid
    $365,959 in an aggregate amount to the swap counterparty (with
    $277,000 consisting of margin payments and $88,959 consisting of
    interest payments) and received swap interest payments in an
    aggregate amount of $9, 593 from the swap counterparty pursuant
    to the interest rate swap. All amounts we paid to Tiptree
    pursuant to the interest rate swap were thereafter remitted by
    Tiptree to Morgan Stanley.
</DIV>

<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF SECURITIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary description of our common shares,
    certain provisions of Delaware law and certain provisions of our
    certificate of formation, operating agreement and bylaws.
    Because it is only a summary, it may not contain all the
    information that is important to you. For a description you
    should refer to our certificate of formation, operating
    agreement and bylaws, which are filed as exhibits to the
    registration statement of which this prospectus is a part, and
    to the applicable provisions of the Delaware LLC Act.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Immediately prior to this offering, we will effect a
    recapitalization to convert all of our outstanding common shares
    into newly designated Class&#160;B common shares on a
    <FONT style="white-space: nowrap">one-for-five</FONT>
    basis. After giving effect to the recapitalization, we will have
    outstanding no Class&#160;A common shares and
    37,416,669&#160;shares of our Class&#160;B common shares. All
    shares to be sold in this offering will be Class&#160;A common
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement provides that our board of directors
    (without any further vote or action by our shareholders) may
    cause us to issue an unlimited amount of common shares, an
    unlimited amount of LTIP shares, one Performance Share and an
    unlimited amount of preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon consummation of this offering, there will
    be&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares, assuming no exercise of the
    underwriters&#146; option to purchase up to an
    additional&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Class&#160;A
    common shares, 37,416,669 Class&#160;B common
    shares,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;restricted
    common shares, one Performance Share, no LTIP shares and no
    preferred shares outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each Class&#160;A common share is equivalent to a Class&#160;B
    common share for purposes of economic rights. Our operating
    agreement provides that each Class&#160;B common share is
    convertible at any time, at the option of the holder, into one
    Class&#160;A common share. Our Class&#160;A common shares are
    not convertible into any other shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon consummation of this offering and payment in full of the
    consideration payable with respect to the Class&#160;A common
    shares, the holders of such shares shall not be liable to us to
    make any additional capital contributions with respect to such
    shares, except to the extent that a shareholder receives a
    distribution in violation of the Delaware LLC Act. See
    &#147;&#151;&#160;Limited Liability.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No holder of common shares will be entitled to preemptive,
    redemption or conversion rights, sinking fund or cumulative
    voting rights.
</DIV>
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    <BR>
    78
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holders of our Class&#160;A common shares and Class&#160;B
    common shares have identical voting rights except that each
    Class&#160;A common share, which will be the only class of
    shares publicly traded, is entitled to one vote per share while
    each Class&#160;B common share is entitled to 10 votes per
    share, in each case on all matters submitted to a vote of our
    shareholders. Generally, except with respect to extraordinary
    corporate transactions, certain amendments to our operating
    agreement, liquidation and the election and removal of
    directors, all matters to be voted on by our shareholders must
    be approved by a majority (or, in the case of election of
    directors, by a plurality) of the votes cast by all common
    shares present in person or represented by proxy. Extraordinary
    corporate transactions, liquidation and the removal of directors
    for cause must be approved by at least a majority of the votes
    entitled to be cast by our shareholders generally in the
    election of directors. See &#147;&#151;&#160;Amendment of Our
    Operating Agreement and Bylaws&#148; for a discussion of
    approval rights with regard to such amendments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dividend
    Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of Class&#160;A common shares and Class&#160;B common
    shares will share ratably (based on the number of common shares
    held) in any dividend declared by our board of directors out of
    funds legally available therefor, subject to any statutory or
    contractual restrictions on the payment of dividends, the
    dividend rights of the Performance Share and to any restrictions
    on the payment of dividends imposed by the terms of any
    preferred shares we may issue in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Liquidation
    Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon our dissolution, liquidation or winding up, after payment
    in full of all amounts required to be paid to creditors and to
    the holders of preferred shares having liquidation preferences,
    if any, the holders of our Class&#160;A common shares and
    Class&#160;B common shares will be entitled to receive our
    remaining assets available for distribution ratably in
    accordance with and to the extent of positive balances in their
    respective capital accounts after taking into account certain
    adjustments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Matters</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of our merger or consolidation with or into another
    entity in connection with which our common shares are converted
    into or exchangeable for shares of stock, other securities or
    property (including cash), all holders of common shares will
    thereafter be entitled to receive the same kind and amount of
    shares of stock and other securities and property (including
    cash). Under our operating agreement, in the event of an
    inadvertent partnership termination in which the IRS has granted
    us limited relief, each holder of our common shares also is
    obligated to make such adjustments as are required by the IRS to
    maintain our status as a partnership.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LTIP
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    LTIP shares are a special class of limited liability company
    interest in our company. The rights of holders of LTIP shares
    are subject to our operating agreement. As of December&#160;31,
    2009, all outstanding LTIP shares were converted to common
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dividend,
    Liquidation and Conversion Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Quarterly cash distributions on each LTIP share, whether vested
    or not, will be the same as those made on our common shares.
    LTIP shares have full parity with our common shares with respect
    to the payment of regular and special periodic or other
    distributions and distribution of assets upon liquidation,
    dissolution or winding up. Under the terms of the LTIP shares,
    each LTIP share shall be revalued to maintain parity with our
    common shares upon the occurrence of certain adjustment events.
    These events consist of: (i)&#160;a distribution by us on all
    outstanding common shares in equity securities, (ii)&#160;a
    subdivision of our outstanding common shares into a greater or
    smaller number of equity securities or (iii)&#160;the
    reclassification or recapitalization of our outstanding common
    shares. Upon the occurrence of one of these adjustment events,
    any increase in valuation
</DIV>
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    <BR>
    79
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    from the time of grant until such event will be allocated first
    to the holders of the LTIP shares to equalize the capital
    accounts of each LTIP share with the capital account of a common
    share to reflect a
    <FONT style="white-space: nowrap">one-to-one</FONT>
    correspondence between the LTIP shares and the common shares.
    Upon equalization of the capital accounts, the LTIP shares will
    achieve full parity with the common shares for all purposes,
    including with respect to subsequent allocations and
    distributions, including, to the extent vested, liquidating
    distributions. If such parity is reached, vested LTIP shares may
    be converted into an equal number of common shares, and may
    thereafter enjoy all the rights of common shares. Until and
    unless such parity is reached, the value that will be realized
    upon a liquidation of our company for a given number of vested
    LTIP shares will be less than the value of an equal number of
    our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holders of LTIP shares have the same voting rights as a
    holder of common shares, as well as certain additional voting
    rights with respect to certain amendments to the operating
    agreement that will affect them adversely as a class, unless the
    holders of common shares are similarly affected by such
    amendment.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Performance
    Share</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Performance Share held by our manager is a special limited
    liability company interest in our company. No further
    Performance Share will be authorized for issuance to our
    manager, although we may issue Performance Shares to a successor
    manager, if any.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A holder of a Performance Share may not transfer any of its
    rights with respect to the Performance Share without the consent
    of our board of directors, which consent the board may withhold
    in its sole discretion. However, no consent of the board is
    required for a transfer or assignment by our manager of its
    Performance Share or the right to receive distributions pursuant
    to its Performance Share to its affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dividend
    Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Performance Share will entitle our manager to an allocation
    of profits, and cash distributions payable quarterly in arrears,
    in an amount, not less than zero, equal to the product of:
    (i)&#160;20% of the dollar amount by which (a)&#160;our
    consolidated net income, before distributions on the Performance
    Share, per weighted average common share for such quarter,
    exceeds (b)&#160;an amount equal to the product of (A)&#160;the
    weighted average of the prices per share of our common shares in
    any equity offerings by us, including this offering, multiplied
    by (B)&#160;the greater of (1)&#160;2.0% and (2)&#160;0.75% plus
    one-fourth of the ten-year MMD index for such quarter,
    multiplied by (ii)&#160;the weighted average number of common
    shares outstanding in such quarter. To the extent distributions
    are payable on the Performance Share, those distributions shall
    have a priority over the payment of dividends on our common
    shares. The foregoing calculation shall be adjusted to exclude
    one-time events pursuant to changes in U.S.&#160;GAAP, as well
    as non-cash charges, after approval by a majority of our
    independent directors in the case of non-cash charges. &#147;Net
    income&#148; is determined by calculating the net income
    available to owners of common shares before non-cash equity
    compensation expense, each computed in accordance with
    U.S.&#160;GAAP. As consideration for the acquisition of the
    right to manage our company from the Former Manager, our manager
    will, beginning on March&#160;18, 2012 and until March&#160;18,
    2022, remit to the former manager payments in respect of our
    manager&#146;s revenue in excess of $1&#160;million (including
    the above-discussed Performance Share, and less certain
    adjustments).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Voting
    Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Performance Share will generally not be entitled to vote on
    matters submitted to our shareholders, except with respect to
    certain amendments to the operating agreement that will affect
    it adversely as a class.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Redemption</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we terminate the Management Agreement without cause or as a
    result of a non-renewal by us of the Management Agreement or if
    our manager terminates the Management Agreement due to our
    default, we are required to redeem the Performance Share held by
    our manager for an amount equal to three times the average
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    annual distributions paid in respect of such Performance Share
    for the two
    <FONT style="white-space: nowrap">12-month</FONT>
    periods immediately preceding the date of termination.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our operating agreement, our board of directors (without
    any further vote or action by our shareholders) is authorized to
    provide for the issuance from time to time of an unlimited
    amount of one or more classes or series of preferred shares.
    Unless required by law or by any stock exchange, if applicable,
    any such authorized preferred shares will be available for
    issuance without further action by our common shareholders. Our
    board of directors is authorized to fix the number of shares,
    the relative powers, preferences and rights, and the
    qualifications, limitations or restrictions applicable to each
    class or series thereof by resolution authorizing the issuance
    of such class or series. As of the date of this prospectus, no
    preferred shares are outstanding and we have no current plans to
    issue any preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We could issue a series of preferred shares that could,
    depending on the terms of the series, impede or discourage an
    acquisition attempt or other transaction that some, or a
    majority, of holders of common shares might believe to be in
    their best interests or in which holders of common shares might
    receive a premium for their common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent and registrar for our Class&#160;A common
    shares is American Stock Transfer&#160;&#038;
    Trust&#160;Company, LLC.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Listing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to apply to have our common shares listed on The
    Nasdaq Stock Market LLC under the symbol
    &#145;&#145;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#148;.
    We cannot assure you that our Class&#160;A common shares will
    be, or will continue to be, listed on The Nasdaq Stock Market
    LLC.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Operating
    Agreement and Bylaws</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Organization
    and Duration</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were formed on April&#160;23, 2007, and will remain in
    existence until dissolved in accordance with our operating
    agreement. See &#147;&#151;&#160;Termination and
    Dissolution.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Purpose</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our operating agreement, we are permitted to engage in any
    business activity that lawfully may be conducted by a limited
    liability company organized under Delaware law and, in
    connection therewith, to exercise all of the rights and powers
    conferred upon us pursuant to the operating agreement relating
    to such business activity; provided, however, that, except if
    our board of directors determines that it is no longer in our
    best interests, our management shall not cause us to engage,
    directly or indirectly, in any business activity that our board
    of directors determines would cause us to be treated as an
    association taxable as a corporation or otherwise taxable as an
    entity for U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Agreement
    to be Bound by our Operating Agreement; Power of
    Attorney</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By purchasing a Class&#160;A common share, you will be admitted
    as a member of our limited liability company and will be bound
    by the provisions of, and deemed to be a party to, our operating
    agreement. Pursuant to this agreement, each shareholder and each
    person who acquires a common share from a shareholder grants to
    our chief executive officer and our secretary a power of
    attorney to, among other things, execute and file documents
    required for our qualification, continuance or dissolution. The
    power of attorney also grants our chief executive officer and
    our secretary the authority to make certain amendments to, and
    to execute and deliver such other documents as may be necessary
    or appropriate to carry out the provisions or purposes of, our
    operating agreement.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Duties
    of Officers and Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement provides that, except as may otherwise
    be provided by the operating agreement or by our bylaws, our
    property, affairs and business shall be managed under the
    direction of our board of directors. Pursuant to our bylaws, our
    board of directors has the power to appoint our officers and
    such officers have the authority to exercise the powers and
    perform the duties specified in our bylaws or as may be
    specified by our board of directors. See &#147;Management.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement further provides that the authority and
    function of our board of directors and officers shall be
    identical to the authority and functions of a board of directors
    and officers of a corporation organized under the Delaware
    General Corporation Law, or DGCL, except as expressly modified
    by the terms of the operating agreement. Finally, our operating
    agreement provides that except as specifically provided therein
    or as required by the Delaware LLC Act, the fiduciary duties and
    obligations owed to our members shall be the same as the
    respective duties and obligations owed by officers and directors
    of a corporation organized under the DGCL to their corporation
    and shareholders, respectively.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement does not expressly modify the duties and
    obligations owed by officers and directors under the DGCL.
    However, there are certain provisions in our operating agreement
    regarding exculpation and indemnification of our officers and
    directors that differ from the DGCL. First, our operating
    agreement provides that to the fullest extent permitted by
    applicable law our directors or officers will not be liable to
    us. Under the DGCL, a director or officer would be liable to us
    for (i)&#160;breach of duty of loyalty to us or our
    shareholders, (ii)&#160;intentional misconduct or knowing
    violations of the law that are not done in good faith,
    (iii)&#160;improper redemption of shares or declaration of a
    dividend or (iv)&#160;a transaction from which the director
    derived an improper personal benefit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Second, our operating agreement provides that we indemnify our
    directors and officers for acts or omissions to the fullest
    extent permitted by law. Under the DGCL, a corporation can only
    indemnify directors and officers for acts or omissions if the
    director or officer acted in good faith, in a manner he
    reasonably believed to be in the best interests of the
    corporation, and, in a criminal action, if the officer or
    director had no reasonable cause to believe his conduct was
    unlawful. See &#147;Limitations on Liability and Indemnification
    of Our Directors and Officers.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Size
    and Election of Board of Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement and bylaws provide that the number of
    directors may be established, increased or decreased by our
    board of directors but may not be fewer than one. Our operating
    agreement and bylaws currently provide that our directors will
    be elected at each annual meeting of shareholders to serve until
    the next annual meeting of shareholders and until their
    successors are duly elected and qualify. Except as may be
    provided by the board of directors in setting the terms of any
    class or series of preferred shares, any and all vacancies on
    the board of directors may be filled only by the affirmative
    vote of a majority of the remaining directors in office, even if
    the remaining directors do not constitute a quorum, and any
    director elected to fill a vacancy shall serve for the remainder
    of the full term of the directorship in which such vacancy
    occurred and until a successor is elected and qualifies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Removal
    of Members of Our Board of Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement provides that a director may be removed,
    but only for cause, by the affirmative vote of at least a
    majority of the votes entitled to be cast by our shareholders
    generally in the election of our directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Special
    Meetings of Shareholders; Advance Notice of Director Nominations
    and New Business</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our bylaws provide that special meetings of shareholders may be
    called by our board of directors, the chairman of our board, our
    chief executive officer or president. Additionally, our bylaws
    provide that, subject to the satisfaction of certain procedural
    and information requirements by the shareholders requesting the
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    meeting, a special meeting of shareholders must be called by our
    secretary upon the written request of shareholders entitled to
    cast not less than a majority of all the votes entitled to be
    cast at such meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our bylaws provide that with respect to an annual meeting of
    shareholders, nominations of persons for election to our board
    of directors and the proposal of business to be considered by
    shareholders may be made only (i)&#160;pursuant to our notice of
    the meeting, (ii)&#160;by or at the direction of our board of
    directors, or (iii)&#160;by any shareholder who is entitled to
    vote at the meeting and has complied with the advance notice
    procedures set forth in our bylaws. Our bylaws provide that,
    with respect to special meetings of our shareholders, only the
    business specified in our notice of meeting may be brought
    before the meeting, and nominations of persons for election to
    our board of directors may be made only (a)&#160;pursuant to our
    notice of the meeting, (b)&#160;by or at the direction of our
    board of directors, or (c)&#160;provided that our board of
    directors has determined that directors shall be elected at the
    meeting, by any shareholder who is entitled to vote at the
    meeting and has complied with the advance notice procedures set
    forth in our bylaws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purpose of requiring shareholders to give advance notice of
    nominations and other proposals is to afford our board of
    directors the opportunity to consider the qualifications of the
    proposed nominees or the advisability of the other proposals
    and, to the extent considered necessary by our board of
    directors, to inform shareholders and make recommendations
    regarding the nominations or other proposals. The advance notice
    procedures also permit a more orderly procedure for conducting
    our shareholder meetings.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limited
    Liability</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">Section&#160;18-607(c)</FONT>
    of the Delaware LLC Act provides that a member who receives a
    distribution from a Delaware limited liability company and knew
    at the time of the distribution that the liabilities of the
    company exceeded the fair value of its assets shall be liable to
    the company for the amount of the distribution for three years.
    <FONT style="white-space: nowrap">Section&#160;18-607(a)</FONT>
    of the Delaware LLC Act provides that a limited liability
    company may not make a distribution to a member if, after the
    distribution, all liabilities of the company, other than
    liabilities to members on account of their shares and
    liabilities for which the recourse of creditors is limited to
    specific property of the company, would exceed the fair value of
    the assets of the company. For the purpose of determining the
    fair value of the assets of a company,
    <FONT style="white-space: nowrap">Section&#160;18-607(a)</FONT>
    of the Delaware LLC Act provides that the fair value of property
    subject to liability for which recourse of creditors is limited
    shall be included in the assets of the company only to the
    extent that the fair value of that property exceeds the
    nonrecourse liability. Under
    <FONT style="white-space: nowrap">Section&#160;18-704(b)</FONT>
    of the Delaware LLC Act, an assignee who becomes a substituted
    member of a company is liable for the obligations of his
    assignor to make contributions to the company, except the
    assignee is not obligated for liabilities unknown to him at the
    time the assignee became a member and that could not be
    ascertained from the operating agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limitations
    on Liability and Indemnification of Our Directors and
    Officers</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to our operating agreement, we have agreed to indemnify
    each of our directors and officers, to the fullest extent
    permitted by law, against all expenses and liabilities
    (including judgments, fines, penalties, interest, amounts paid
    in settlement with our approval and counsel fees and
    disbursements on a solicitor and client basis) arising from the
    performance of any of their obligations or duties in connection
    with their service to us or the operating agreement, including
    in connection with any civil, criminal, administrative,
    investigative or other action, suit or proceeding to which any
    such person may hereafter be made party by reason of being or
    having been one of our directors or officers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Amendment
    of Our Operating Agreement and Bylaws</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amendments to our operating agreement may be proposed only by or
    with the consent of our board of directors. To adopt a proposed
    amendment, our board of directors is required to seek written
    approval of the holders of the number of shares required to
    approve the amendment or call a meeting of our shareholders to
    consider and vote upon the proposed amendment. Except as set
    forth below, an amendment must be approved by at least a
    majority of the votes entitled to be cast by our shareholders
    generally in the election of directors
</DIV>
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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and, in general, to the extent that such amendment would have a
    material adverse effect on the holders of any class or series of
    shares, by the holders of a majority of the holders of such
    class or series.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Prohibited Amendments.</I>&#160;&#160;No amendment may be
    made that would:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increase the obligations of any shareholder without such
    shareholder&#146;s consent, unless approved by at least a
    majority of the type or class of shares so affected;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide that we are not dissolved upon an election to dissolve
    our limited liability company by our board of directors that is
    approved by at least a majority of the votes entitled to be cast
    by our shareholders generally in the election of directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    change the term of our existence;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    give any person the right to dissolve our limited liability
    company other than our board of directors&#146; right to
    dissolve our limited liability company with the approval by at
    least a majority of the votes entitled to be cast by our
    shareholders generally in the election of directors.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The provision of our operating agreement preventing the
    amendments having the effects described in any of the clauses
    above can be amended upon the approval by at least two-thirds of
    the votes entitled to be cast by our shareholders generally in
    the election of directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>No Shareholder Approval.</I>&#160;&#160;Our board of
    directors may generally make amendments to our operating
    agreement without the approval of any shareholder or assignee to
    reflect:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change in our name, the location of our principal place of our
    business, our registered agent or our registered office;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the admission, substitution, withdrawal or removal of
    shareholders in accordance with our operating agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger of our company or any of its subsidiaries into, or
    the conveyance of all of our assets to, a newly-formed entity if
    the sole purpose of that merger or conveyance is to effect a
    mere change in our legal form into another limited liability
    entity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change that our board of directors determines to be necessary
    or appropriate for us to qualify or continue our qualification
    as a company in which our members have limited liability under
    the laws of any state or to ensure that we will not be treated
    as an association taxable as a corporation or otherwise taxed as
    an entity for U.S.&#160;federal income tax purposes other than
    as we specifically so designate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that our board of directors determines, based upon
    the advice of counsel, to be necessary or appropriate to prevent
    us, members of our board, or our officers, agents or trustees
    from in any manner being subjected to the provisions of the
    Investment Company Act, the Investment Advisers Act of 1940, or
    &#147;plan asset&#148; regulations adopted under the Employment
    Retirement Income Security Act, as amended, whether or not
    substantially similar to plan asset regulations currently
    applied or proposed;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment that our board of directors determines to be
    necessary or appropriate for the authorization or issuance of
    additional securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any amendment expressly permitted in our operating agreement to
    be made by our board of directors acting alone;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an amendment effected, necessitated or contemplated by a merger
    agreement that has been approved under the terms of our
    operating agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any amendment that our board of directors determines to be
    necessary or appropriate for the formation by us of, or our
    investment in, any corporation, partnership or other entity, as
    otherwise permitted by our operating agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change in our fiscal year or taxable year and related
    changes;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other amendments substantially similar to any of the matters
    described in the clauses above.
</TD>
</TR>

</TABLE>
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    <BR>
    84
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our board of directors may make amendments to our
    operating agreement without the approval of any shareholder if
    our board of directors determines that those amendments:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    do not adversely affect the shareholders (including any
    particular class or series of shares as compared to other
    classes or series of shares) in any material respect;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    are necessary or appropriate to satisfy any requirements,
    conditions or guidelines contained in any opinion, directive,
    order, ruling or regulation of any federal or state agency or
    judicial authority or contained in any federal or state statute;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    are necessary or appropriate to facilitate the trading of shares
    or to comply with any rule, regulation, guideline or requirement
    of any securities exchange on which the shares are or will be
    listed for trading, compliance with any of which our board of
    directors deems to be in the best interests of us and our
    shareholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    are necessary or appropriate for any action taken by our board
    of directors relating to splits or combinations of shares under
    the provisions of our operating agreement;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    are required to effect the intent of the provisions of our
    operating agreement or are otherwise contemplated by our
    operating agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our bylaws provide that our board of directors has the exclusive
    power to adopt, alter or repeal the bylaws or make new bylaws.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Merger,
    Sale or Other Disposition of Assets</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors is generally prohibited, without the
    prior approval of at least a majority of the votes entitled to
    be cast by our shareholders generally in the election of
    directors, from causing us to, among other things, sell,
    exchange or otherwise dispose of all or substantially all of our
    assets in a single transaction or a series of related
    transactions, or approving on our behalf the sale, exchange or
    other disposition of all or substantially all of our assets,
    provided that our board of directors may mortgage, pledge,
    hypothecate or grant a security interest in all or substantially
    all of our assets without the approval of any shareholder. Our
    board of directors may also sell all or substantially all of our
    assets under a foreclosure or other realization upon the
    encumbrances above without that approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the conditions specified in our operating agreement are
    satisfied, our board of directors may merge our company or any
    of its subsidiaries into, or convey all of our assets to, a
    newly-formed entity if the sole purpose of that merger or
    conveyance is to effect a mere change in our legal form into
    another limited liability entity, in each case without any
    approval of our shareholders. The shareholders are not entitled
    to dissenters&#146; rights of appraisal under the operating
    agreement or applicable Delaware law in the event of a merger or
    consolidation, a sale of all or substantially all of our assets
    or any other similar transaction or event.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Termination
    and Dissolution</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will continue as a limited liability company until terminated
    under our operating agreement. We will dissolve upon:
    (i)&#160;the election of our board of directors to dissolve us,
    if approved by at least a majority of the votes entitled to be
    cast by our shareholders generally in the election of directors;
    (ii)&#160;the sale, exchange or other disposition of all or
    substantially all of our assets; (iii)&#160;the entry of a
    decree of judicial dissolution of our limited liability company;
    or (iv)&#160;at any time that we no longer have any
    shareholders, unless our business is continued in accordance
    with the Delaware LLC Act.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    Elections</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement provides our board of directors with the
    power to decide whether to make various tax elections on behalf
    of our company. In this regard, if our board of directors
    determines that it is no longer in our best interests to
    continue as a partnership for U.S.&#160;federal income tax
    purposes, our board of directors may elect to treat us as an
    association or as a publicly traded partnership taxable as a
    corporation for U.S.&#160;federal (and applicable state) income
    tax purposes. See &#147;Risk Factors&#160;&#151; Tax Risks&#148;
    for a discussion of certain risks to our classification as a
    publicly traded partnership not taxable as a corporation.
</DIV>
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    <BR>
    85
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Books
    and Reports</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are required to keep appropriate books of our business at our
    principal offices. The books will be maintained for both tax and
    financial reporting purposes or a basis that permits the
    preparation of financial statements in accordance with generally
    accepted accounting principals. For financial reporting purposes
    and tax purposes, our fiscal year and our tax year are the
    calendar year, unless otherwise determined by our board of
    directors in accordance with the Code. We have agreed to use
    reasonable efforts to furnish holders of Class&#160;A common
    shares with tax information (including
    <FONT style="white-space: nowrap">Schedule&#160;K-1)</FONT>
    as promptly as possible, which describes allocable share of our
    income, gain, loss and deduction for our preceding taxable year.
    In preparing this information, we will use various accounting
    and reporting conventions to determine their allocable share of
    income, gain, loss and deduction. Delivery of this information
    by us may be subject to delay as a result of the late receipt of
    any necessary tax information from an investment in which we
    hold an interest. It is therefore possible that, in any taxable
    year, our shareholders will need to apply for extensions of time
    to file their tax returns.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Potential
    Anti-Takeover Effects of Our Operating Agreement and
    Bylaws</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of certain provisions of our
    operating agreement and bylaws that may be deemed to have an
    anti-takeover effect and may delay, deter or prevent a tender
    offer or takeover attempt that a shareholder might consider to
    be in its best interest, including those attempts that might
    result in a premium over the market price for the interests held
    by shareholders.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Authorization
    to Issue an Unlimited Number of Shares</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operating agreement authorizes us to issue an unlimited
    number of shares for the consideration and on the terms and
    conditions established by our board of directors without the
    approval of any holders of our shares. Future issuances of
    shares or equity securities may be utilized for a variety of
    purposes, including future public offerings to raise additional
    capital, acquisitions and employee benefit plans. Our ability to
    issue additional shares and other equity securities could render
    more difficult or discourage an attempt to obtain control over
    us by means of a proxy contest, tender offer, merger or
    otherwise.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dual
    class structure</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our Class&#160;B common shares have ten votes per share, while
    Class&#160;A common shares, which is the class of common shares
    being sold in this offering and which will be the only class of
    shares publicly traded, have one vote per share. After the
    offering, our manager, its officers and Tiptree, an affiliate of
    our manager, collectively will own 78.22% of the outstanding
    Class&#160;B common shares. Because of our dual class structure,
    our Class&#160;B shareholders will continue to be able to
    control all matters submitted to our shareholders for approval
    even if they come to own significantly less than 50% of the
    shares of our outstanding common shares. This concentrated
    control could discourage others from initiating any potential
    sale of all or substantially all of our assets, merger, or other
    change of control transaction that other shareholders may view
    as beneficial.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Delaware
    Business Combination Statute&#160;&#151;
    Section&#160;203</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a limited liability company organized under Delaware law.
    Some provisions of Delaware law may delay or prevent a
    transaction that would cause a change in our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;203 of the DGCL, which restricts certain business
    combinations with interested shareholders in certain situations,
    does not apply to limited liability companies unless they elect
    to utilize it. Our operating agreement does not currently elect
    to have Section&#160;203 of the DGCL apply to us. In general,
    this statute prohibits a publicly held Delaware corporation from
    engaging in a business combination with an interested
    shareholder for a period of three years after the date of the
    transaction by which that person became an interested
    shareholder, unless the business combination is approved in a
    prescribed manner. For purposes of Section&#160;203, a business
    combination includes a merger, asset sale or other transaction
    resulting in a financial benefit to the interested shareholder,
    and an interested shareholder is a person who, together with
    affiliates and associates, owns, or within three years prior,
    did own, 15% or more of voting shares.
</DIV>
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    <BR>
    86
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Provisions of Our Operating Agreement and Bylaws</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain other provisions of our operating agreement and bylaws
    may make a change in control of our company more difficult to
    effect. For example, the provision in our operating agreement
    regarding the removal of directors, when coupled with the
    provision in our bylaws authorizing our board of directors to
    fill vacant directorships, will preclude shareholders from
    removing incumbent directors and filling the vacancies created
    by such removal with their own nominees except upon a
    substantial affirmative vote. In addition, the advance notice
    provisions for shareholder nominations and proposals in our
    bylaws may also delay a change of control. Although the bylaws
    do not give our board of directors the power to disapprove
    timely shareholder nominations and proposals, they may have the
    effect of precluding a contest for the election of directors or
    proposals for other action if the proper procedures are not
    followed, and of discouraging or deterring a third party from
    conducting a solicitation of proxies to elect its own slate of
    directors to our board of directors or to approve its own
    proposal.
</DIV>

<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">COMMON
    SHARES&#160;ELIGIBLE FOR FUTURE SALE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There currently is no public market for our Class&#160;A common
    shares. We cannot predict the effect, if any, that sales of
    Class&#160;A common shares or the availability of Class&#160;A
    common shares for sale will have on the market price of our
    common shares prevailing from time to time. Sales of substantial
    amounts of our Class&#160;A common shares in the public market,
    or the perception that such sales could occur, could adversely
    affect the prevailing market price of our Class&#160;A common
    shares. See &#147;Risk Factors&#160;&#151; Risks Related to this
    Offering.&#148; There currently is no public market for our
    Class&#160;A common shares, an active trading market may never
    develop and the market price of the Class&#160;A common shares
    may be volatile.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the completion of this offering, a total
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    common shares will be outstanding,
    including&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares and 37,416,669 Class&#160;B common
    shares, including 22,500 restricted common shares subject to a
    vesting period of three years from issuance. 7,500 of these
    restricted common shares vest and become transferable in each of
    2010, 2011 and 2012, subject to compliance with applicable
    securities laws.
    All&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Class&#160;A
    common shares sold in this offering, plus any Class&#160;A
    common shares sold upon exercise of the underwriters&#146;
    option to purchase additional shares, will be freely tradable in
    the public market without restriction or further registration
    under the Securities Act, except that any shares purchased by
    our affiliates, as that term is defined in Rule&#160;144 under
    the Securities Act, may generally only be sold in compliance
    with the limitations of Rule&#160;144, which is summarized below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The
    remaining&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    common shares, consisting of all of our Class&#160;B shares,
    will be &#147;restricted securities,&#148; as that term is
    defined in Rule&#160;144. These restricted securities are
    eligible for public sale only if they are registered under the
    Securities Act or if they qualify for an exemption from
    registration under Rule&#160;144 under the Securities Act, which
    is summarized below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The SEC adopted amendments to Rule&#160;144 effective on
    February&#160;15, 2008 applicable to securities acquired both
    before and after that date. Under these amendments, if six
    months has elapsed since the date of acquisition of restricted
    common shares by persons who are not our affiliates at the time
    of, or at any time during the three months preceding, a sale,
    and we have been a public reporting partnership under the
    Exchange Act for at least three months before the sale, the
    holder of such restricted common shares will be entitled to
    freely sell the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Persons who have held our restricted common shares for at least
    six months but who are affiliates at the time of, or at any time
    during the three months preceding, a sale, and provided we have
    been a public reporting company under the Exchange Act for at
    least three months before the sale, will be entitled to sell
    common shares, but subject to an additional restriction
    requiring that the number of common shares sold by such persons
    within any three-month period does not exceed 1% of the total
    number of common shares then outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales under Rule&#160;144 also may be subject to certain manner
    of sale provisions, notice requirements and the availability of
    current public information about us.
</DIV>
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    <BR>
    87
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNITED
    STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><U>CIRCULAR 230 NOTICE</U>. THE FOLLOWING NOTICE IS BASED ON
    U.S.&#160;TREASURY REGULATIONS GOVERNING PRACTICE BEFORE THE
    U.S.&#160;INTERNAL REVENUE SERVICE: (1)&#160;ANY
    U.S.&#160;FEDERAL TAX ADVICE CONTAINED HEREIN, INCLUDING ANY
    OPINION OF COUNSEL REFERRED TO HEREIN, IS NOT INTENDED OR
    WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE
    PURPOSE OF AVOIDING U.S.&#160;FEDERAL TAX PENALTIES THAT MAY BE
    IMPOSED ON THE TAXPAYER; (2)&#160;ANY SUCH ADVICE IS WRITTEN TO
    SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS DESCRIBED
    HEREIN (OR IN ANY SUCH OPINION OF COUNSEL); AND (3)&#160;EACH
    TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER&#146;S
    PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a general summary of certain U.S.&#160;federal
    income tax considerations relating to the acquisition, holding
    and disposition of our Class&#160;A common shares. For purposes
    of this section, under the heading &#147;Certain
    U.S.&#160;Federal Income Tax Considerations,&#148; references to
    &#147;we,&#148; &#147;us&#148; or &#147;our&#148; mean only Muni
    Funding Company of America, LLC and not our subsidiaries or
    other lower-tier entities, except as otherwise indicated. The
    following summary is based upon the Code, Treasury Regulations,
    current administrative interpretations and practices of the IRS
    (including administrative interpretations to and practices
    expressed in private letter rulings which are binding on the IRS
    only with respect to the particular taxpayers who requested and
    received these rulings) and judicial decisions, all as currently
    in effect and all of which are subject to differing
    interpretations or to change, possibly with retroactive effect.
    No assurance can be given that the IRS would not assert, or that
    a court would not sustain, a position contrary to any of the tax
    consequences described below. No advance ruling has been or will
    be sought from the IRS regarding the tax-exempt character of
    interest on our tax-exempt 501(c)(3) bonds or other investments,
    our classification as a partnership for U.S.&#160;federal income
    tax purposes or any other matter discussed in this summary. The
    summary is also based upon the assumption that our operation,
    and the operations of our subsidiaries and other lower-tier and
    affiliated entities, will, in each case, be in accordance with
    its applicable organizational documents and any representations
    <FONT style="white-space: nowrap">and/or</FONT>
    covenants to our tax advisors have been and will be complied
    with. This summary is for general information only, and does not
    purport to discuss all aspects of U.S.&#160;federal income
    taxation that may be important to a particular shareholder in
    light of its investment or tax circumstances or to shareholders
    subject to special tax rules, such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    U.S.&#160;expatriates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons who
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    our Class&#160;A common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    subchapter S&#160;corporations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    U.S.&#160;shareholders (as defined below) whose functional
    currency is not the U.S.&#160;dollar;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    financial institutions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    insurance companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    broker-dealers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    regulated investment companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    real estate investment trusts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    trusts and estates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    holders who receive our shares through the exercise of employee
    share options or otherwise as compensation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons holding our Class&#160;A common shares as part of a
    &#147;straddle,&#148; &#147;hedge,&#148; &#147;conversion
    transaction,&#148; &#147;synthetic security,&#148; or other
    integrated investment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons subject to the alternative minimum tax provisions of the
    Code;
</TD>
</TR>

</TABLE>
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    <BR>
    88
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons holding their interest through a partnership or similar
    pass-through entity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons holding a 10% or more (by vote or value) beneficial
    interest in us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    tax-exempt organizations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholders</FONT>
    (as defined below).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an entity or arrangement treated as a partnership for
    U.S.&#160;federal income tax purposes holds our shares, the
    U.S.&#160;federal income tax treatment of a partner in such
    partnership generally will depend upon the status of the partner
    and the activities of such partnership. A partner of a
    partnership holding our shares should consult its tax advisor
    regarding the U.S.&#160;federal income tax consequences to the
    partner of the acquisition, ownership and disposition of our
    shares by the partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary assumes that shareholders will hold our
    Class&#160;A common shares as capital assets, which generally
    means as property held for investment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the following discussion, a
    U.S.&#160;shareholder is a shareholder that is (i)&#160;a
    citizen or resident of the United States, (ii)&#160;a
    corporation (or other entity taxable as a corporation) created
    or organized under the laws of the United States or any state
    thereof or the District of Columbia, (iii)&#160;an estate, the
    income of which is subject to U.S.&#160;federal income taxation
    regardless of its source, or (iv)&#160;a trust (a)&#160;the
    administration over which a U.S.&#160;court can exercise primary
    supervision and (b)&#160;all of the substantial decisions of
    which one or more U.S.&#160;persons have the authority to
    control. A
    <FONT style="white-space: nowrap">&#147;non-U.S.&#160;shareholder&#148;</FONT>
    is a person that is not a U.S.&#160;shareholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>THE U.S.&#160;FEDERAL INCOME TAX TREATMENT OF OUR
    SHAREHOLDERS DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT
    AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S.&#160;FEDERAL
    INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY IS
    AVAILABLE. IN ADDITION, THE TAX CONSEQUENCES OF HOLDING OUR
    SHARES&#160;TO ANY PARTICULAR SHAREHOLDER WILL DEPEND ON THE
    SHAREHOLDER&#146;S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED
    TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S.&#160;FEDERAL,
    STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES TO
    YOU, IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, OF ACQUIRING,
    HOLDING, AND DISPOSING OF OUR SHARES.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Partnership Classification.</I>&#160;&#160;We believe that we
    have operated, and intend to continue to operate as a
    partnership and not as an association or publicly traded
    partnership taxable as a corporation for U.S.&#160;federal
    income tax purposes. We have solely relied on the advice of a
    nationally recognized accounting firm in making this
    determination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should be aware that our determination of partnership status
    and any tax advice of external advisors are not binding on the
    IRS, and no assurance can be given that the IRS will not
    challenge our determination. Any advice we have received has
    also been based on various assumptions relating to our
    organization, operation, assets and activities, and that all
    factual representations and statements set forth in all relevant
    documents, records and instruments are true and correct, that
    all actions described in this prospectus will be completed in a
    timely fashion and that we will at all times operate in
    accordance with the method of operation described in our
    operating agreement and this prospectus, and is conditioned upon
    the factual representations and covenants that have been made by
    us, MFCA Funding Inc., and our former and current manager
    regarding our and MFCA Funding Inc.&#146;s organization,
    operation, assets and activities (past, present and
    contemplated).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While we believe that we have operated and we intend to continue
    to operate so that we will qualify to be treated for
    U.S.&#160;federal income tax purposes as a partnership, and not
    as an association or a publicly traded partnership taxable as a
    corporation, given the highly complex nature of the rules
    governing partnerships, the ongoing importance of factual
    determinations, the lack of direct guidance with respect to the
    application of tax laws to the activities we are undertaking and
    the possibility of future changes in our circumstances, we
    cannot give any assurance that we have qualified or we will
    qualify as a partnership for any particular year. Our taxation
    as a partnership depends on our continuing ability to meet,
    through actual operating results, the &#147;qualifying income
    exception&#148; (as described below).
</DIV>
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    <BR>
    89
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;7704 of the Code, &#147;publicly traded
    partnerships&#148; are generally treated and taxed as
    corporations for U.S.&#160;federal income tax purposes. A
    publicly traded partnership is any partnership the interests in
    which are traded on an established securities market or which
    are readily tradable on a secondary market (or the substantial
    equivalent thereof). The listing of our shares on The NASDAQ
    Stock Market LLC causes us to be treated as a publicly traded
    partnership. However, if 90% or more of the income of a publicly
    traded partnership during each taxable year consists of
    &#147;qualifying income&#148; and the partnership is not
    registered under the Investment Company Act, it will be treated
    as a partnership, and not as an association or publicly traded
    partnership taxable as a corporation, for U.S.&#160;federal
    income tax purposes (the &#147;qualifying income
    exception&#148;). Qualifying income generally includes rents,
    dividends, interest and capital gains from the sale or other
    disposition of stocks, bonds and real property. In addition,
    qualifying income generally also includes income from a notional
    principal contract (such as a total return swap) if the income
    from the reference obligation would be qualifying income. In
    determining whether interest is treated as qualifying income for
    purposes of these rules, interest income derived from a
    &#147;financial business&#148; and income and gains derived by a
    &#147;dealer&#148; in securities are not treated as qualifying
    income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have taken the position that for purposes of determining
    whether we are engaged in a financial business, portfolio
    investing activities that we engage in will not cause us to be
    engaged in a financial business or to be considered a
    &#147;dealer&#148; in securities. However, there is no clear
    guidance as to what constitutes a financial business for
    purposes of the publicly traded partnership regulations and it
    is possible that the IRS could assert that our activities
    constitute a financial business. Prospective investors should
    carefully note that we could also be treated as engaged in a
    financial business if the activities of our taxable
    subsidiaries, such as MFCA Funding, Inc., were attributed to us
    and we were deemed to conduct a financial business. It should be
    noted, however, that as taxable C corporations, our taxable
    subsidiaries, such as MFCA Funding Inc., are subject to
    corporate income tax on their net income, and are intended to
    engage in significant transactions with third parties in the
    operation of their businesses. Notwithstanding our belief to the
    contrary, there can be no assurance that the IRS would not
    successfully challenge our compliance with the qualifying income
    requirements and assert that we are a publicly traded
    partnership taxable as a corporation for U.S.&#160;federal
    income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7701(i) of the Code generally provides that any
    entity (or portion of an entity) that is a &#147;taxable
    mortgage pool&#148; (a &#147;TMP&#148;) will be treated as a
    corporation subject to U.S.&#160;federal income tax. Under such
    Section&#160;7701(i), any entity (or portion of an entity) will
    be a TMP if (i)&#160;substantially all of its assets consist of
    debt obligations, more than 50% of which are real estate
    mortgages (including mortgage-backed securities) (ii)&#160;such
    entity is an obligor under debt obligations (and possibly,
    certain types of equity) with two or more maturities, and
    (iii)&#160;under the terms of the entity&#146;s debt obligations
    (or an underlying arrangement), the payments on such debt
    obligations &#147;bear a relationship&#148; to the debt
    instruments held by the entity. These rules are intended to
    prevent income from escaping U.S.&#160;federal income tax when a
    mortgage pool is used to issue multiple mortgage backed
    securities through the use of an entity other than a real estate
    mortgage investment conduit or REMIC. We do not expect that
    greater than 50% of our (or any of our pass-through
    subsidiaries) assets will be mortgages. In addition, because of
    the absence of any relationship between the timing of payments
    on the tax-exempt bonds we hold and the timing of distributions
    on our shares we believe that neither we nor any of our
    pass-through subsidiaries will be treated as a TMP.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, for any reason (including by being treated as engaged in a
    financial business that a taxable subsidiary is engaged in), we
    become taxable as a corporation for U.S.&#160;federal income tax
    purposes, our items of income and deduction would not pass
    through to our shareholders and our shareholders would be
    treated for U.S.&#160;federal income tax purposes as
    stockholders in a corporation. We would be required to pay
    income tax at corporate rates on any portion of our net income
    that did not constitute tax-exempt income. In addition, a
    portion of our federally tax-exempt income may be included in
    determining our alternative minimum tax (&#147;AMT&#148;)
    liability. Distributions by us to our shareholders would
    constitute dividend income taxable to such shareholders as
    portfolio income, to the extent of our current and accumulated
    earnings and profits, which would include tax-exempt income as
    well as any taxable income we might have, and the payment of
    these distributions would not be deductible by us. These
    consequences would have a significant adverse effect on us,
</DIV>
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    our shareholders and the value of our shares. Prospective
    investors should consult their own tax advisors regarding these
    potential material adverse tax consequences.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at the end of any taxable year we fail to meet the qualifying
    income exception, we may still qualify as a partnership if we
    are entitled to relief under the Code for an inadvertent
    termination of partnership status. This relief will be available
    if (i)&#160;the failure is cured within a reasonable time after
    discovery, (ii)&#160;the failure is determined by the IRS to be
    inadvertent, and (iii)&#160;we agree to make such adjustments
    (including adjustments with respect to our shareholders) or to
    pay such amounts as are determined by the IRS. It is not
    possible to state whether we would be entitled to this relief in
    any or all circumstances. It also is not clear under the Code
    whether this relief is available for our first taxable year as a
    publicly traded partnership. If this relief provision is not
    applicable to a particular set of circumstances involving us, we
    will not qualify as a partnership for U.S.&#160;federal income
    tax purposes. Even if this relief provision applies and we
    retain our partnership qualification, we or our shareholders
    (during the failure period) will be required to pay such amounts
    as determined by the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The remainder of this discussion assumes that we will qualify to
    be taxed as a partnership for U.S.&#160;federal income tax
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Taxation of Our Shareholders on our Profits and
    Losses.</I>&#160;&#160;By reason of our taxation as a
    partnership for U.S.&#160;federal income tax purposes, we will
    not be subject to U.S.&#160;federal income tax. We will file an
    annual partnership information return with the IRS, which
    reports the results of our operations. Each shareholder, in
    computing its U.S.&#160;federal income tax liability for a
    taxable year, will be required to take into account its
    allocable share of items of our income, gain, loss, deduction
    and credit for our taxable year ending within or with the
    taxable year of such shareholder, regardless of whether the
    shareholder has received any distributions. It is possible that
    the U.S.&#160;federal income tax liability of a shareholder with
    respect to its allocable share of our earnings in a particular
    taxable year could exceed the cash distributions to the
    shareholders for the year, thus requiring an
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    tax payment by the shareholder. The characterization of an item
    of our income, gain, loss, deduction or credit will generally be
    determined at the partnership level (rather than at the
    shareholder level).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of &#147;phantom income&#148; a shareholder may
    recognize would likely significantly increase to the extent a
    shareholder elects to participate in a dividend reinvestment
    plan in respect of its shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that a significant portion of our revenues will
    consist of tax-exempt income. There are risks that certain
    amounts of income that we report as tax-exempt income may not
    qualify for such treatment. See &#147;&#151;&#160;Nature of our
    Business Activities&#160;&#151; Tax-Exempt Bonds&#148; and
    &#147;Risk Factors&#160;&#151; Tax Risks&#160;&#151; Our ability
    to allocate and distribute to our shareholders income that is
    exempt from U.S.&#160;federal income tax will depend on the
    exclusion from gross income of the interest income that we
    receive on the bonds in which we invest. A portion of the
    interest income we earn will likely be taxable in many states
    and localities and may be includable in our shareholders&#146;
    calculation of Alternative Minimum Tax.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our future investment strategy, prospective
    shareholders should note that we also expect to invest in fully
    taxable bonds and other fixed income securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocation of Profits and Losses.</I>&#160;&#160;Under our
    operating agreement, the Company&#146;s net capital appreciation
    or net capital depreciation for each accounting period is
    allocated among the shareholders and to their capital accounts
    without regarding to the amount of income or loss actually
    recognized by us for U.S.&#160;federal income tax purposes. The
    operating agreement provides that for each of our fiscal years,
    items of income, gain, loss, deduction or credit recognized by
    us will be allocated among our shareholders in accordance with
    their allocable shares of our items of income, gain, loss,
    deduction and credit. A shareholder&#146;s allocable share of
    such items will be determined by our operating agreement,
    provided such allocations either have &#147;substantial economic
    effect&#148; or are determined to be in accordance with the
    shareholders&#146; interests. There can be no assurance however,
    that the particular methodology of allocations used by us will
    be accepted by the IRS. If such allocations are successfully
    challenged by the IRS, the allocation of our tax items among the
    shareholders may be affected.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;706 of the Code generally requires that items of
    partnership income and deductions be allocated between
    transferors and transferees of partnership interests on a daily
    basis. We will apply certain assumptions and conventions in
    allocating income and deductions with respect to share transfers
    in an attempt to comply with applicable rules and report income,
    gain, deduction, loss and credit to shareholders in a manner
    that reflects such shareholders&#146; beneficial shares of our
    items. It is possible that transfers of shares could be
    considered to occur for U.S.&#160;federal income tax purposes
    when the transfer is completed without regard to our
    conventions. As a result of such allocation method, you may be
    allocated income even if you do not receive any distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If our conventions are not allowed by the Treasury Regulations
    (or only apply to transfers of less than all of a
    shareholder&#146;s shares) or if the IRS otherwise does not
    accept our conventions, the IRS may contend that our taxable
    income or losses must be reallocated among our shareholders. If
    such a contention were sustained, our shareholders&#146;
    respective tax liabilities would be adjusted possibly to the
    detriment of certain shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Adjusted Tax Basis of Our Shares.</I>&#160;&#160;Our
    distributions generally will not be taxable to a shareholder to
    the extent of such shareholder&#146;s adjusted tax basis in its
    shares. In addition, a shareholder is allowed to deduct its
    allocable share of our losses (if any) only to the extent of
    such shareholder&#146;s adjusted tax basis in its shares in the
    year in which the losses occur. A shareholder&#146;s adjusted
    tax basis is generally equal to the shareholder&#146;s aggregate
    purchase price for shares and is generally increased by the
    shareholder&#146;s allocable share of our items of income,
    including tax-exempt income, and gain. A shareholder&#146;s
    adjusted tax basis is generally decreased by (a)&#160;the
    shareholder&#146;s allocable share of our items of loss and
    deduction, including any nondeductible expenses, (b)&#160;the
    amount of cash distributed by us to the shareholder, and
    (c)&#160;our tax basis in property (other than cash) distributed
    by us to the shareholder. Moreover, a shareholder&#146;s
    adjusted tax basis will include the shareholder&#146;s allocable
    share of our liabilities, if any, and cash distributions will
    include the amount of any reduction in our liabilities that is
    allocated to the shareholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that a shareholder&#146;s allocable share of our
    losses is not allowed because the shareholder has insufficient
    adjusted tax basis in our shares, such disallowed losses may be
    carried over by the shareholder to subsequent taxable years and
    will be allowed if and to the extent of the shareholder&#146;s
    adjusted tax basis in our shares in subsequent taxable years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Mandatory Basis Adjustments.</I>&#160;&#160;We are generally
    required to adjust our tax basis in our assets in respect of all
    shareholders in cases of distributions that result in a
    &#147;substantial basis reduction&#148; (<I>i.e.</I>, in excess
    of $250,000) in respect of our property. We are also required to
    adjust the tax basis in our assets in respect of a transferee,
    in the case of a sale or exchange of an interest, or a transfer
    upon death, when there exists a &#147;substantial built-in
    loss&#148; (<I>i.e., </I>in excess of $250,000) in respect of
    our property immediately after the transfer. For this reason, we
    will require (i)&#160;a shareholder who receives a distribution
    from us in connection with a complete withdrawal, (ii)&#160;a
    transferee of our shares (including a transferee in case of
    death) and (iii)&#160;any other shareholder in appropriate
    circumstances to provide us with information regarding its
    adjusted tax basis in our shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Treatment of Distributions.</I>&#160;&#160;Cash distributions
    by us with respect to shares or in redemption of less than all
    of a shareholder&#146;s shares generally will not be taxable to
    such shareholder. Instead, such distributions will reduce, but
    not below zero, the adjusted tax basis in all of such
    shareholder&#146;s shares immediately before the distribution.
    If such distributions to a shareholder exceed the
    shareholder&#146;s adjusted tax basis in such shareholder&#146;s
    shares, the excess will be taxable to the shareholder as gain
    from a sale or exchange of shares (as described in
    &#147;&#151;&#160;Disposition of Shares&#148; below). The same
    treatment will apply to a shareholder who elects to participate
    in the dividend reinvestment plan where such shareholder will be
    treated for tax purposes as if the shareholder had chosen to
    receive such cash distributions outright. It is possible that
    partial redemptions made during the taxable year could result in
    taxable gain to a shareholder where no gain would otherwise have
    resulted if the same partial redemption were made at the end of
    the taxable year. A reduction in a shareholder&#146;s allocable
    share of our liabilities, and certain distributions of
    marketable securities by us, are treated as cash distributions
    for U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Disposition of Shares.</I>&#160;&#160;A sale or other taxable
    disposition of all or a part of a shareholder&#146;s shares
    (including in redemption for cash of all of the
    shareholder&#146;s shares) will be treated as a disposition of
    all or
</DIV>
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    part, as the case may be, of such shareholder&#146;s shares.
    Such sale or other disposition generally will result in the
    recognition of gain or loss in an amount equal to the
    difference, if any, between the amount realized on the
    disposition (including the shareholder&#146;s share of any
    indebtedness, if any, of ours) and the shareholder&#146;s
    adjusted tax basis in its shares (as described in
    &#147;&#151;&#160;Adjusted Tax Basis of Our Shares&#148; above).
    A shareholder&#146;s adjusted tax basis will be adjusted for
    this purpose by its allocable share of our income or loss for
    the year of such sale or other disposition. Any gain or loss
    recognized with respect to such sale or other disposition will
    generally be treated as capital gain or loss and will be
    long-term capital gain or loss if the shareholder&#146;s holding
    period for its shares exceeds one year. A portion of such gain,
    however, may be treated as ordinary income under the Code to the
    extent attributable to the shareholder&#146;s allocable share of
    unrealized gain or loss in our assets to the extent described in
    Section&#160;751 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders who purchase shares at different times and intend
    to sell all or part of the shares within a year of their most
    recent purchase are urged to consult their tax advisors
    regarding the application of certain &#147;split holding
    periods&#148; rules to them and the treatment of any gain or
    loss as long-term or short term capital gain or loss. For
    example, a selling shareholder may use the actual holding period
    of the portion of such shareholder&#146;s transferred shares,
    provided such shares are divided into identifiable shares with
    ascertainable holding periods, the selling shareholder can
    identify the portion of the shares transferred, and the selling
    shareholder elects to use the identification method for all
    sales or exchanges of our shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitation on Deductibility of Capital
    Losses.</I>&#160;&#160;Any capital losses generated by us (or
    upon a disposition of our shares) will generally be deductible
    by shareholders who are individuals only to the extent of such
    shareholders&#146; capital gains for the taxable year plus up to
    $3,000 of ordinary income ($1,500 in the case of a married
    individual filing a separate return). Capital losses of an
    individual taxpayer may generally be carried forward to
    succeeding tax years to offset capital gains and then ordinary
    income (subject to the $3,000 annual limitation). Capital losses
    of a corporate taxpayer may be offset only against capital
    gains, but unused capital losses may be carried back three years
    (subject to certain limitations) and carried forward five years.
    Prospective shareholders should consult their tax advisors
    regarding the deductibility of capital losses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Application of &#147;At Risk&#148; and Passive Activity
    Limitations on Deductions.</I>&#160;&#160;Individuals and
    certain closely held C corporations are allowed to deduct their
    allocable share of our losses (if any) only to the extent of
    each such shareholder&#146;s &#147;at risk&#148; amount in us at
    the end of the taxable year in which the losses occur. The
    amount for which a shareholder is &#147;at risk&#148; with
    respect to its interest generally is equal to its adjusted tax
    basis for such interest, less any amounts borrowed (x)&#160;in
    connection with its acquisition of such interest for which it is
    not personally liable and for which it has pledged no property
    other than its interest; (y)&#160;from persons who have a
    proprietary interest in us and from certain persons related to
    such persons; and (z)&#160;for which the shareholder is
    protected against loss through nonrecourse financing, guarantees
    or similar arrangements. To the extent that a shareholder&#146;s
    allocable share of our losses is not allowed because the
    shareholder has an insufficient amount at risk in us, such
    disallowed losses may be carried over by the shareholder to
    subsequent taxable years and will be allowed if and to the
    extent of the shareholder&#146;s at risk amount in subsequent
    years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Code restricts the deductibility of losses from a
    &#147;passive activity&#148; against certain income which is not
    derived from a passive activity. This restriction applies to
    individuals, personal service corporations and certain closely
    held corporations. It is not expected that we will generate any
    material amount of income or losses from &#147;passive
    activities&#148; for purposes of Section&#160;469 of the Code.
    Accordingly, income allocated by us to a shareholder generally
    may not be offset by the passive losses of such shareholder and
    losses allocated to a shareholder generally may not be used to
    offset passive income of such shareholder. Shareholders also
    should consult their tax advisors regarding the possible
    application to them of the limitations on the deductibility of
    losses from certain passive activities contained in
    Section&#160;469 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitation on Interest Deductions.</I>&#160;&#160;We will
    likely incur interest expense in connection with our operation
    of investing in tax-exempt obligations. Section&#160;265(a)(2)
    of the Code generally disallows any deduction for interest paid
    by a taxpayer on indebtedness incurred or continued for the
    purpose of purchasing or carrying a tax-exempt obligation. A
    purpose to carry tax-exempt obligations will be inferred
    whenever a taxpayer owns tax-exempt obligations and has
    outstanding indebtedness which is neither directly connected
    with personal expenditures nor incurred in connection with the
    active conduct of a trade or business. The IRS may take the
</DIV>
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    position that a shareholder&#146;s allocable portion of any
    interest that we pay on our borrowings
    <FONT style="white-space: nowrap">and/or</FONT> any
    interest paid by a shareholder on indebtedness incurred to
    purchase our shares should be viewed in whole or in part as
    incurred to enable such shareholder to continue carrying
    tax-exempt obligations and, therefore, the deduction of any such
    interest by a shareholder should be disallowed in whole or in
    part.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Further, a risk exists that the IRS may take the position that
    short term or longer term interests in our STEP subsidiaries or
    tender option bond programs are debt. We expect to receive or
    have received opinions from deal counsel in connection with such
    transactions to the effect that such interests are not debt for
    U.S.&#160;federal income tax purposes. If the IRS takes the
    position that such interests are debt and is successful in
    maintaining this position, however, interest paid to the holders
    of such interests would not be deductible by us as the holder of
    the residual interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event that any of our interest expense is not
    attributable to tax-exempt interest income, individuals and
    other noncorporate shareholders are allowed to deduct their
    allocable share of our &#147;investment interest&#148; (within
    the meaning of Section&#160;163(d) of the Code and the Treasury
    Regulations) only to the extent of each such shareholder&#146;s
    net investment income for the taxable year. A shareholder&#146;s
    net investment income generally is the excess, if any, of the
    shareholder&#146;s investment income from all sources (which is
    gross income from property held for investment) over investment
    expenses from all sources (which are deductions allowed that are
    directly connected with the production of investment income).
    Investment income excludes net capital gain attributable to the
    disposition of property held for investment, as well as
    &#147;qualified dividend income&#148; that is currently taxable
    at long-term capital gains, unless the shareholder elects to pay
    tax on such gain or income at ordinary income rates. To the
    extent that a shareholder&#146;s allocable share of our
    investment interest is not allowed as a deduction because the
    shareholder has insufficient net investment income, such
    disallowed investment interest may be carried over by the
    shareholder to subsequent taxable years and will be allowed if
    and to the extent of the shareholder&#146;s net investment
    income in subsequent years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a shareholder borrows to finance the purchase of the
    Class&#160;A common shares, any interest paid or accrued on the
    borrowing subject to the discussion above regarding the
    disallowance of deductions for interest incurred or continued
    for the purchase or carrying of tax-exempt obligations, will be
    allocated among our assets for purposes of determining the
    portion of such interest that is investment interest subject to
    the foregoing limitations or passive interest subject to the
    passive activity rules under Section&#160;469 of the Code. The
    portion of such interest allocated to property held for
    investment (such as stock in a corporation) will be treated as
    investment interest. Shareholders should consult their tax
    advisors regarding the application to them of the allocation of
    such interest among our assets. Since the amount of a
    shareholder&#146;s allocable share of our investment interest
    that is subject to this limitation will depend on the
    shareholder&#146;s aggregate investment interest and net
    investment income from all sources for any taxable year, the
    extent, if any, to which our investment interest will be
    disallowed under this rule will depend on each
    shareholder&#146;s particular circumstances each year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitation on Deduction of Certain Other
    Expenses.</I>&#160;&#160;We will incur various expenses in
    connection with our ongoing administration and operation.
    Payments for services generally are deductible if the payments
    are ordinary and necessary expenses, are reasonable in amount,
    and are for services performed during the year in which paid or
    accrued. Expenses which are allocable to tax-exempt interest
    income, however, are nondeductible to individual shareholders.
    We expect to adopt accounting policies for allocating our
    expenses, including the management fee paid to our manager,
    among the various segments of our business. There is no
    assurance that such policies will not be successfully challenged
    by the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent our expenses are not disallowed as described in
    the previous paragraph, an individual, estate or trust may
    deduct so-called &#147;miscellaneous itemized deductions,&#148;
    which include fees and other expenses of ours, only to the
    extent that such deductions exceed 2% of the adjusted gross
    income of the taxpayer. The amount of a shareholder&#146;s
    allocable share of such expenses that is subject to this
    disallowance rule will depend on the shareholder&#146;s
    aggregate miscellaneous itemized deductions from all sources and
    adjusted gross income for any taxable year. Thus, the extent, if
    any, to which such fees and expenses will be subject to
    disallowance will depend on each shareholder&#146;s particular
    circumstances each year. In addition, for taxable years
    beginning during or after 2011, the Code further restricts the
    ability of an individual with an adjusted gross income in
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    excess of a specified amount to deduct such investment expenses.
    Under such provision, there is a limitation on the deductibility
    of investment expenses in excess of 2% of adjusted gross income
    to the extent such excess expenses (along with certain other
    itemized deductions) exceed the lesser of (i)&#160;3% of the
    excess of the individual&#146;s adjusted gross income over the
    specified amount or (ii)&#160;80% of the amount of certain
    itemized deductions otherwise allowable for the taxable year.
    Moreover, such investment expenses are miscellaneous itemized
    deductions which are not deductible by a noncorporate taxpayer
    in calculating its AMT liability. A shareholder&#146;s share of
    our management fee and certain other expenses attributable to us
    will constitute miscellaneous itemized deductions for these
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is intended that the allocation of profits and cash
    distributions made to our manager with respect to the
    performance share is an allocable share of our earnings and not
    a fee. No assurance can be given however that the IRS could not
    recharacterize successfully the incentive allocations as a fee,
    in which case shareholders could be subject to the limitation on
    deductibility relating to miscellaneous itemized deductions and
    certain other itemized deductions of high income individuals
    with respect to such amount, as described above. Prospective
    shareholders are urged to consult their tax advisors regarding
    their ability to deduct expenses incurred by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our organizational expenses from 2007 are being amortized
    ratably over a period of 15&#160;years. Our syndication expenses
    (i.e., expenditures made in connection with the marketing and
    issuance of the shares, including placement fees) are neither
    deductible nor amortizable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Alternative Minimum Tax.</I>&#160;&#160;Interest on
    tax-exempt bonds generally is an item of tax preference for
    purposes of the AMT, however interest on qualified 501(c)(3)
    bonds is generally only includable in the determination of AMT
    for our corporate shareholders. To the extent interest on any of
    the tax-exempt bonds that we own is such an item of tax
    preference, a portion of the interest income allocated to our
    shareholders also will be a tax preference item. Shareholders
    should consult their tax advisors concerning the AMT
    consequences of holding our shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other U.S.&#160;Federal Income Tax
    Considerations.</I>&#160;&#160;Ownership of tax-exempt
    obligations may result in collateral tax consequences to certain
    taxpayers, including, without limitation, financial
    institutions, property and casualty insurance companies, certain
    foreign corporations doing business in the United States,
    certain S&#160;corporations with excess passive income,
    individual recipients of social security or railroad retirement
    benefits and individuals otherwise eligible for the earned
    income credit. Prospective purchasers of our shares should
    consult a tax advisor as to the applicability of any such
    collateral consequences.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Unrelated Business Taxable Income.</I>&#160;&#160;A
    shareholder that is a tax-exempt organization for
    U.S.&#160;federal income tax purposes and, therefore, generally
    exempt from U.S.&#160;federal income taxation, may nevertheless
    be subject to &#147;unrelated business income tax&#148; to the
    extent, if any, that its allocable share of our income consists
    of unrelated business taxable income, or UBTI. A tax-exempt
    partner in a partnership (or an entity treated as a partnership
    for U.S.&#160;federal income tax purposes) that regularly
    engages in a trade or business which is unrelated to the exempt
    function of the tax-exempt partner must include in computing its
    UBTI, its pro rata share (whether or not distributed) of such
    partnership&#146;s gross income derived from such unrelated
    trade or business. Moreover, such tax-exempt partner could be
    treated as earning UBTI to the extent that such entity derives
    income from &#147;debt-financed property,&#148; or if the
    partnership interest itself is debt financed. Debt-financed
    property means property held to produce income with respect to
    which there is &#147;acquisition indebtedness&#148; (i.e.,
    indebtedness incurred in acquiring or holding property).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Because we are under no obligation to minimize UBTI,
    tax-exempt shareholders are urged to consult their tax advisors
    concerning the possible U.S.&#160;federal, state, local and
    <FONT style="white-space: nowrap">non-U.S.&#160;tax</FONT>
    consequences arising from an investment in our shares.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Nature of our Business Activities.</I>&#160;&#160;We have
    invested and anticipate that we will invest directly and
    indirectly in a variety of assets, including, but not limited
    to, tax-exempt bonds, taxable bonds, and equity interests in
    taxable subsidiaries, such as MFCA Funding, Inc.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax-Exempt Bonds.</I>&#160;&#160;We have not and will not
    directly or indirectly acquire a tax-exempt bond unless we
    receive, or there has been issued previously, an opinion of
    nationally recognized bond counsel which was
</DIV>
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    delivered on the date of issuance of that security that interest
    on such security will be exempt from regular U.S.&#160;federal
    income taxation. We are not relying on any other external
    advisor in respect of the continuing correctness of, the
    opinions of bond counsel relating to the exclusion of interest
    income from gross income for U.S.&#160;federal income tax
    purposes and have merely assumed that such opinions received (or
    to be received) remain (or will remain) correct.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Events occurring after the date of issuance of a tax-exempt
    bond, however, may cause the interest on such tax-exempt bond to
    be includable in gross income for U.S.&#160;federal income tax
    purposes. For example, the IRS establishes certain requirements,
    such as restrictions on the investment of the proceeds of the
    bond issue, limitations on the use of proceeds of such issue and
    the property financed by such proceeds, and the payment of
    certain excess earnings to the federal government, that must be
    met after the issuance of a tax-exempt bond for interest on such
    tax-exempt bond to remain excludible from gross income for
    U.S.&#160;federal income tax purposes. The issuers and the
    underlying obligors of the tax-exempt bonds generally covenant
    to comply with such requirements and the opinion of bond counsel
    generally assumes continuing compliance with such requirements.
    In addition, for tax-exempt bonds the proceeds of which are
    loaned to a charitable organization described in
    section&#160;501(c)(3) of the Code, the continued exclusion of
    interest from gross income for U.S.&#160;federal income tax
    purposes depends on the continuing exempt status of the
    charitable organization borrower. Neither we nor our counsel
    will monitor compliance with such requirements. Failure to
    comply with these continuing requirements, however, may cause
    the interest on a tax-exempt bond to be includable in gross
    income for U.S.&#160;federal income tax purposes retroactive to
    its date of issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the IRS has an ongoing enforcement program that
    involves the audit of tax-exempt bonds to determine whether an
    issue of bonds satisfies all of the requirements that must be
    met for the interest on such bonds to be excludible from gross
    income for U.S.&#160;federal income tax purposes. From time to
    time, some of the tax-exempt bonds we own directly or indirectly
    may become the subject of such an audit by the IRS, and the IRS
    may determine that the interest on such securities is includable
    in gross income for U.S.&#160;federal income tax purposes either
    because the IRS has taken a legal position adverse to the
    conclusion reached by bond counsel in its opinion pertaining to
    the bond issue or as a result of an action taken or not taken
    after the date of the bond issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If interest paid on any tax-exempt bond in which we invest is
    determined to be taxable subsequent to our acquisition of such
    tax-exempt bond, the IRS may demand that our shareholders pay
    U.S.&#160;federal income tax on the interest income allocated to
    them, thereby adversely reducing our shareholders&#146; yield.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A determination that interest on a tax-exempt bond we own is
    includable in gross income for U.S.&#160;federal income tax
    purposes retroactively to its date of issue may, likewise, cause
    a portion of prior years&#146; interest allocations received by
    our shareholders to be taxable to those shareholders in the year
    of allocation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tax-exempt interest earned by us will generally be tax-exempt
    income to our shareholders. If any sale or other disposition of
    a tax-exempt bond produces a gain our shareholders would
    recognize taxable income. We believe that such gains will be
    capital gains because we intend to treat our interest in
    tax-exempt bonds as investments, and do not believe that we will
    be considered to be a dealer in tax-exempt bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest on a mortgage revenue bond we own, other than a bond
    the proceeds of which are loaned to a charitable organization
    described in Section&#160;501(c)(3) of the Code, will not be
    excluded from gross income during any period in which we are a
    &#147;substantial user&#148; of the properties financed with the
    proceeds of such mortgage revenue bond or a person related to
    such a &#147;substantial user.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A &#147;substantial user&#148; generally includes any underlying
    borrower and any person or entity that uses the financed
    properties on other than a de minimis basis. We would be related
    to a &#147;substantial user&#148; for this purpose if, among
    other things,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;the same person or entity owned more than a 50%
    interest in both us and in the properties financed with the
    proceeds of a bond owned by us or one of our
    subsidiaries;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;we owned a partnership or similar equity interest in
    the owner of a property financed with the proceeds of a bond
    owned by us or one of our subsidiaries.
</DIV>
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    We do not expect to be a &#147;substantial user&#148; of the
    properties financed with the proceeds of the mortgage revenue
    bonds or related parties thereto. There can be no assurance,
    however, that the IRS would not challenge such conclusion. If
    such challenge were successful, the interest received on any
    bond for which we were treated as a &#147;substantial user&#148;
    or a &#147;related party&#148; thereto would be includable in
    federally taxable gross income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Amortization of Bond Premium.</I>&#160;&#160;Section&#160;171
    of the Code requires amortization of any bond premium paid in
    connection with the acquisition of a tax-exempt bond. As bond
    premium is amortized, it reduces the holder of such bond&#146;s
    basis in the bond. Under the Treasury Regulations, bond premium
    is amortized on a constant yield basis in a manner consistent
    with the accrual of original issue discount. If tax-exempt bonds
    are acquired by us at a premium, the amortization of bond
    premium will affect our basis in the tax-exempt bonds, which in
    turn, will affect the computation of gain or loss upon the sale
    or other disposition of the tax-exempt bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Discount.</I>&#160;&#160;In general, market discount
    with respect to a taxable or tax-exempt bond is the amount (if
    any) by which the stated redemption price at maturity exceeds an
    investor&#146;s purchase price (except to the extent that such
    difference, if any, is attributable to original issue discount
    not yet accrued). Under current law, the accretion of market
    discount is taxable as ordinary income. Accrued market discount
    would be recognized by us as ordinary income when principal
    payments are received on the tax-exempt bonds or upon the sale
    or at redemption (including early redemption) of the tax-exempt
    bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Equity interests in our taxable subsidiaries including MFCA
    Funding, Inc. We will own interests in entities that are taxable
    as corporations for U.S.&#160;federal income tax purposes,
    including our interests in MFCA Funding, Inc. We will not be
    taxed directly on the earnings of such taxable corporations.
    Distributions of cash or other property from such a taxable
    corporate subsidiary will constitute dividends for
    U.S.&#160;federal income tax purposes to the extent paid from
    the current or accumulated earnings and profits (as determined
    under U.S.&#160;federal income tax principles) of such
    subsidiary. If the amount of a distribution by a taxable
    subsidiary exceeds its current and accumulated earnings and
    profits, such excess will be treated as a tax-free return of
    capital to the extent of our tax basis in our shares of such
    subsidiary, and thereafter will be treated as capital gain.
    Dividend income from our taxable subsidiaries, if any, will be
    passed through to our shareholders and will be taxable ordinary
    portfolio income. We may also elect to retain earnings at our
    taxable subsidiaries and use their growing capital base to
    support their activities. Currently, &#147;qualified dividend
    income&#148; received by individuals from certain domestic
    corporations is generally subject to a reduced U.S.&#160;federal
    income tax rate of 15% (for taxable years through 2010). This
    reduced rate will generally apply to dividend income received
    from our taxable subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our taxable subsidiaries will be subject to corporate level tax
    on their net taxable income at the current maximum corporate
    rate of 35%. The interest income from tax-exempt bonds held by
    our taxable subsidiaries will generally not be included in their
    taxable income. However, gains from the sale of tax-exempt
    bonds, market discount recognized with respect to bonds and
    amounts earned pursuant to derivatives will be included in our
    taxable subsidiaries&#146; taxable income. In calculating their
    taxable income, our taxable subsidiaries will generally not be
    permitted to deduct expenses incurred in acquiring or carrying
    its tax-exempt bonds. Our taxable subsidiaries&#146; tax-exempt
    interest income, if any, will also be subject to the AMT.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, it is possible that the IRS may not agree with our
    determinations as to which expenses are allocable to our
    corporate subsidiaries and which expenses are allocable to us or
    our other subsidiaries. If all or a portion of the expenses that
    we allocate to our corporate subsidiaries are determined not to
    be deductible by those subsidiaries, they could be required to
    pay additional tax, as well as interest and penalties. We may
    acquire tax-exempt bonds from MFCA Funding, Inc. If the IRS
    determined that the purchase prices that we paid to MFCA
    Funding, Inc. were less than the amounts that would be payable
    if such corporation were not related to us, additional tax, as
    well as interest and penalties could be imposed on MFCA Funding,
    Inc.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Total Return Swaps.</I>&#160;&#160;Our taxable subsidiaries,
    such as MFCA Funding, Inc., have entered into, and may enter
    into, various total return swap transactions referencing
    tax-exempt bonds. The law is not entirely clear in respect of
    total return swaps and the tax treatment of a particular swap
    depends on the overall facts and circumstances in respect of
    such swap. We generally believe that a long position under a
    total return swap in respect of tax-exempt bonds is not tax
    ownership in respect of such underlying reference tax-exempt
    bonds
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    although the IRS could disagree with this position. Any income
    from any total return swap is expected to be fully taxable to a
    subsidiary such as MFCA Funding, Inc. to the extent it engages
    in such transaction or will result in taxable income being
    allocated to our shareholders to the extent we enter into a
    total return swap respected as a notional principal contract
    directly or through a pass-through subsidiary.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Elections.</I>&#160;&#160;Under Section&#160;754 of the
    Code, a partnership may elect to have the basis of its assets
    adjusted in the event of a distribution of property to a partner
    or in the event of a transfer of its shares by sale or exchange
    or as a result of the death of a partner. Pursuant to the terms
    of our operating agreement, our Tax Matters Partner (as defined
    below), in its sole discretion, is authorized to make such an
    election. Any such election, once made, cannot be revoked
    without the IRS&#146;s consent. We have not made the election
    permitted by Section&#160;754 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The calculations under Section&#160;754 of the Code are complex,
    and there is little legal authority concerning the mechanics of
    the calculations, particularly in the context of publicly traded
    partnerships. To help reduce the complexity of those
    calculations and the resulting administrative costs to us, we
    apply certain conventions in determining and allocating basis
    adjustments. The use of such conventions may result in the basis
    adjustments that do not exactly reflect a shareholder&#146;s
    purchase price for its shares. It is possible that the IRS will
    successfully assert that the conventions utilized by us do not
    satisfy the technical requirements of the Code or the Treasury
    Regulations and, thus, will require different basis adjustments
    to be made. If the IRS were to sustain such a position, a
    shareholder may have adverse tax consequences.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Constructive Termination.</I>&#160;&#160;Subject to the
    electing large partnership rules described below, we will be
    considered to have terminated for U.S.&#160;federal income tax
    purposes, if there is a sale or exchange of 50% or more of the
    total interest in our capital and profits within a
    <FONT style="white-space: nowrap">12-month</FONT>
    period. Our termination would result in the closing of our
    taxable year for all of our shareholders. In the case of a
    shareholder reporting on a taxable year other than the fiscal
    year ending on our year end, the closing of our taxable year may
    result in more than 12&#160;months of our taxable income or loss
    being includable in the shareholder&#146;s taxable income for
    the year of termination. We would be required to make new tax
    elections after termination, including a new tax election under
    Section&#160;754 of the Code. A termination could also result in
    penalties if we were unable to determine that the termination
    had occurred. Moreover, a termination might either accelerate
    the application of, or subject us to, any tax legislation
    enacted before the termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Reporting.</I>&#160;&#160;We currently use the calendar
    year as our taxable year for U.S.&#160;federal income tax
    purposes. Under certain circumstances which we currently believe
    are unlikely to apply, a taxable year other than the calendar
    year may be required. We have and will continue to file a
    partnership return with the IRS, as required, for each calendar
    year, with respect to income, gain, loss, deduction and other
    items derived by us during such year. We will use our best
    efforts to furnish to each shareholder, by as promptly as
    possible after the close of each calendar year, specific tax
    information, including a
    <FONT style="white-space: nowrap">Schedule&#160;K-1,</FONT>
    which describes such person&#146;s share of our income, gain,
    loss and deduction for our preceding taxable year. Delivery of
    this information may be subject to delay depending on the timing
    of our receipt of such information from an investment in which
    we hold an interest, and accordingly it is likely that
    U.S.&#160;shareholders should anticipate the need to file
    annually with the IRS (and certain states) a request for an
    extension past April 15 or the otherwise applicable due date for
    their income tax return for the taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In preparing this information, we will take various accounting
    and reporting positions, some of which are described in this
    summary, to determine such person&#146;s share of income, gain,
    loss and deduction. We cannot assure you that those positions
    will yield a result that conforms to the requirements of the
    Code, the Treasury Regulations or administrative interpretations
    of the IRS. In addition, we can not assure prospective
    shareholders that the IRS will not successfully contend that
    those positions are impermissible. Any successful challenge by
    the IRS could negatively affect the value of an investor&#146;s
    Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A shareholder must file a statement with the IRS identifying the
    treatment of any item on his U.S.&#160;federal income tax return
    that is not consistent with the treatment of the item on our
    return. Intentional or negligent disregard of this consistency
    requirement may subject a shareholder to substantial penalties.
</DIV>
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    <BR>
    98
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Persons who hold our shares as a nominee for another person are
    required to furnish to us:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the name, address and taxpayer identification number of the
    beneficial owner and the nominee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the beneficial owner is:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;a person that is not a United States person;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;a foreign government, an international organization or
    any wholly owned agency or instrumentality of either of the
    foregoing;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;a tax-exempt entity;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount and description of shares held, acquired or
    transferred for the beneficial owner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    specific information including the dates of acquisitions and
    transfers, means of acquisitions and transfers, and acquisition
    cost for purchases, as well as the amount of net proceeds from
    sales.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Brokers and financial institutions are required to furnish
    additional information, including whether they are United States
    persons and specific information on Class&#160;A common shares
    they acquire, hold or transfer for their own account. A penalty
    of $50 per failure, up to a maximum of $100,000 per calendar
    year, is imposed by the Code for failure to report that
    information to us. The nominee is required to supply the
    beneficial owner of the Class&#160;A common shares with the
    information furnished to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Audits.</I>&#160;&#160;Under the Code, adjustments in tax
    liability with respect to our items generally will be made at
    our level in a partnership proceeding rather than in separate
    proceedings with each shareholder. Tiptree (or another
    shareholder designated by our Board of Directors) will represent
    us as our &#147;Tax Matters Partner&#148; during any audit and
    in any dispute with the IRS. Each shareholder will be informed
    of the commencement of an audit of our company. In general, the
    tax matters partner may enter into a settlement agreement with
    the IRS on behalf of, and that is binding upon, the shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Adjustments resulting from an IRS audit may require each
    shareholder to adjust a prior year&#146;s liability, and
    possibly may result in an audit of his return. Any audit of a
    shareholder&#146;s return could result in adjustments not
    related to our returns as well as those related to our returns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Tax Matters Partner will make some elections on our behalf
    and on behalf of our shareholders. In addition, the Tax Matters
    Partner can extend the statute of limitations for assessment of
    tax deficiencies against shareholders for items in our returns.
    The Tax Matters Partner may bind a shareholder with less than a
    1% profits interest in us to a settlement with the IRS unless
    that shareholder elects, by filing a statement with the IRS, not
    to give that authority to the Tax Matters Partner. The Tax
    Matters Partner may seek judicial review, by which all the
    shareholders are bound, of a final partnership administrative
    adjustment and, if the Tax Matters Partner fails to seek
    judicial review, judicial review may be sought by any
    shareholder having at least a 1% interest in profits or by any
    group of shareholders having in the aggregate at least a 5%
    interest in profits. However, only one action for judicial
    review will go forward, and each shareholder with an interest in
    the outcome may participate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Elective Procedures for Large
    Partnerships.</I>&#160;&#160;The Code allows large partnerships
    to elect streamlined procedures for income tax reporting. This
    election, if made, would reduce the number of items that must be
    separately stated on the IRS Schedules K-1 that are issued to
    shareholders, and such Schedules K-1 would have to be provided
    on or before the first March 15 following the close of each
    taxable year. In addition, this election would prevent us from
    suffering a &#147;technical termination&#148; (which would close
    our taxable year) if within a 12&#160;month period there is a
    sale or exchange of 50% or more of our total interests. If we
    make such an election, IRS audit adjustments will flow through
    to shareholders for the year in which such adjustments take
    effect rather than the year to which the adjustment relates. In
    addition, we, rather than our shareholders individually,
    generally will be liable for any interest and penalties that
    result from such audit adjustment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="white-space: nowrap">Non-U.S.&#160;Shareholders.</FONT></I><FONT style="white-space: nowrap">&#160;&#160;Non-U.S.&#160;shareholders</FONT>
    generally will be subject to U.S.&#160;withholding tax at a 30%
    rate on the gross amount of their allocable share of our
    dividend income, certain &#147;dividend equivalent
    payments&#148;, any taxable interest income and any other fixed
    or determinable annual or periodical income
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    received from sources within the United States if such income is
    not treated as effectively connected with a trade or business
    within the United States. We generally would be required to
    withhold and pay over to the IRS such 30% withholding tax. The
    30% rate may be reduced or eliminated under the provisions of an
    applicable income tax treaty between the United States and the
    country in which such
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    reside or are organized, provided the
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    provides us with the required certification (generally, on IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN).</FONT>
    The 30% withholding tax does not apply to certain portfolio
    interest on obligations of U.S.&#160;persons allocable to
    certain shareholders who are
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    (provided certain requirements are met and the required
    certification is made by the
    <FONT style="white-space: nowrap">non-U.S.&#160;person).</FONT>
    Moreover, shareholders who are
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    generally are not subject to U.S.&#160;tax on their allocable
    share of our capital gains if (i)&#160;such gains are not
    effectively connected with the conduct of a U.S.&#160;trade or
    business of such
    <FONT style="white-space: nowrap">non-U.S.&#160;persons;</FONT>
    (ii)&#160;a tax treaty is applicable and such gains are not
    attributable to a permanent establishment in the United States
    maintained by such
    <FONT style="white-space: nowrap">non-U.S.&#160;persons;</FONT>
    or (iii)&#160;such
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    are individuals who are not present in the United States for 183
    or more days during the taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">Non-U.S.&#160;persons</FONT>
    treated as engaged in a U.S.&#160;trade or business are
    generally subject to U.S.&#160;federal income tax at the
    graduated rates applicable to U.S.&#160;persons on their net
    income which is considered to be effectively connected with such
    U.S.&#160;trade or business.
    <FONT style="white-space: nowrap">Non-U.S.&#160;persons</FONT>
    that are corporations may also be subject to a 30% branch
    profits tax on such effectively connected income. The 30% rate
    applicable to branch profits may be reduced or eliminated under
    the provisions of an applicable income tax treaty between the
    United States and the country in which the
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    resides or is organized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While we expect that our method of operation will not result in
    us generating significant amounts of income treated as
    effectively connected with the conduct of a U.S.&#160;trade or
    business with respect to shareholders who are
    <FONT style="white-space: nowrap">non-U.S.&#160;persons,</FONT>
    there can be no assurance that the IRS will not assert
    successfully that some portion of our income is properly treated
    as effectively connected income with respect to such
    shareholders. If a shareholder who is a
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    were treated as being engaged in a U.S.&#160;trade or business
    in any year in connection with an investment in our shares, such
    shareholder generally would be required to (i)&#160;file a
    U.S.&#160;federal income tax return for such year reporting its
    allocable share, if any, of our income or loss effectively
    connected with such trade or business and (ii)&#160;pay
    U.S.&#160;federal income tax at regular U.S.&#160;tax rates on
    any such income. Moreover, a shareholder who is a corporate
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    might be subject to a U.S.&#160;branch profits tax on its
    allocable share of our effectively connected income, if any. In
    addition, we would be required to withhold and pay over to the
    IRS certain amounts with respect to any
    <FONT style="white-space: nowrap">non-U.S.&#160;person&#146;s</FONT>
    allocable share of our effectively connected income, if any. Any
    amount so withheld would be creditable against such
    <FONT style="white-space: nowrap">non-U.S.&#160;person&#146;s</FONT>
    U.S.&#160;federal income tax liability, and such
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    could claim a refund to the extent that the amount withheld
    exceeded such
    <FONT style="white-space: nowrap">non-U.S.&#160;person&#146;s</FONT>
    U.S.&#160;federal income tax liability for the taxable year.
    Finally, if we are engaged in a U.S.&#160;trade or business, a
    portion of any gain recognized by a shareholder who is a
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    on the sale or exchange of its Class&#160;A common shares may be
    treated for U.S.&#160;federal income tax purposes as effectively
    connected income, and hence such
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    may be subject to U.S.&#160;federal income tax on the sale or
    exchange of its Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, different rules from those described above apply in
    the case of
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    subject to special treatment under U.S.&#160;federal income tax
    law, including a
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    (i)&#160;who has an office or fixed place of business in the
    United States or is otherwise carrying on a U.S.&#160;trade or
    business; (ii)&#160;who is an individual present in the United
    States for 183 or more days or has a &#147;tax home&#148; in the
    United States for U.S.&#160;federal income tax purposes; or
    (iii)&#160;who is a former citizen or resident of the United
    States.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Prospective shareholders who are
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    are urged to consult their tax advisors with regard to the
    U.S.&#160;federal income tax consequences to them of acquiring,
    holding and disposing of the Class&#160;A common shares, as well
    as the effects of state, local and
    <FONT style="white-space: nowrap">non-U.S.&#160;tax</FONT>
    laws.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Certain Reporting Obligations.</I>&#160;&#160;Certain
    shareholders that own (directly or indirectly) over 50% of the
    capital or profits of us may be required to file Form&#160;TD
    F90-22.1 (an &#147;<U>FBAR</U>&#148;) with respect to any
    investments in foreign financial accounts, which may include
    <FONT style="white-space: nowrap">non-U.S.&#160;investment</FONT>
    entities. Failure to file a
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    required FBAR may result in civil and criminal penalties.
    Shareholders should consult with their own advisors as to
    whether they are obligated to file an FBAR with respect to an
    investment in our shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Shelter Regulations.</I>&#160;&#160;In certain
    circumstances, a shareholder who disposes of an interest in a
    transaction resulting in the recognition by such shareholder of
    significant losses in excess of certain threshold amounts may be
    obligated to disclose its participation in such transaction (a
    &#147;reportable transaction&#148;) in accordance with recently
    issued regulations governing tax shelters and other potentially
    tax-motivated transactions (the &#147;Tax Shelter
    Regulations&#148;). In addition, an investment in us may be
    considered a &#147;reportable transaction&#148; if, for example,
    we recognize certain significant losses in the future.
    Shareholders should consult their tax advisors concerning any
    possible disclosure obligation under the Tax Shelter Regulations
    with respect to the disposition of our shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Certain State, Local and Foreign Income Tax
    Matters.</I>&#160;&#160;In addition to the U.S.&#160;federal
    income tax considerations described above, shareholders should
    consider potential state, local, and foreign tax consequences of
    an investment in our shares and are urged to consult their tax
    advisor in this regard. The rules for some states and localities
    for computing
    <FONT style="white-space: nowrap">and/or</FONT>
    reporting taxable income may differ from the federal rules.
    Interest income that is tax-exempt for federal purposes may be
    taxable by some states and localities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the tax laws of certain states, we (or the entities in
    which we invest) may be subject to state income or franchise tax
    or other taxes that may be applicable to us. Such taxes will
    decrease the amount of income available to shareholders.
    Shareholders are advised to consult their tax advisors
    concerning the tax treatment of our company, and our effect on
    the shareholders, under the tax laws of the states applicable to
    us and such shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Both the substantive features and the filing requirements of
    state income taxation of shareholders will vary according to
    factors which include, but are not limited to the following:
    (i)&#160;the status of the shareholder; (ii)&#160;whether the
    state imposes personal or corporate income taxation or instead
    imposes a form of franchise, unincorporated business or
    occupational tax; (iii)&#160;whether the state will allow
    credits or exemptions for income taxes to which a shareholder is
    subject in the shareholder&#146;s state or other jurisdiction of
    residence; (iv)&#160;the level of personal exemptions or credits
    allowed by the state and whether those exemptions or credits are
    required to be prorated on the ratio of income from sources in
    the taxing state to total income; (v)&#160;whether the
    applicable tax rate structure is applied on the basis of income
    from sources in the taxing jurisdiction or the basis of total
    income of a nonresident taxpayer. We may be required to withhold
    state taxes from distributions to shareholders in some instances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Prospective shareholders are urged to consult their tax
    advisors with respect to the state and local tax consequences of
    acquiring, holding and disposing of the Class&#160;A common
    shares.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Backup Withholding.</I>&#160;&#160;We may be required in
    certain circumstances to backup withhold on certain payments
    paid to noncorporate holders of our shares who do not furnish us
    with their correct taxpayer identification number (in the case
    of individuals, their social security number) and certain
    certifications, or who are otherwise subject to backup
    withholding. If backup withholding were applicable to a
    shareholder, we would be required to withhold 28% on each
    distribution to such shareholder and to pay such amount to the
    IRS on behalf of such shareholder. Backup withholding is not an
    additional tax. Any amounts withheld from payments made to you
    may be refunded or credited against your U.S.&#160;federal
    income tax liability, if any, provided that the required
    information is furnished to the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Possible Withholding Taxes on Certain
    Payments.</I>&#160;&#160;Under recently enacted legislation, in
    order to avoid a U.S.&#160;withholding tax of 30% on certain
    payments (including payments of gross proceeds) made after
    December&#160;31, 2012 with respect to certain
    U.S.&#160;investments, foreign persons will generally be
    required to enter into an agreement with the IRS identifying
    certain direct and indirect U.S.&#160;equityholders or otherwise
    provide alternative certification. Prospective
    <FONT style="white-space: nowrap">non-U.S.&#160;investors</FONT>
    should consult their own tax advisors regarding the possible
    implications of this legislation on their investment in our
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>New Legislation or Administrative or Judicial
    Action.</I>&#160;&#160;The rules dealing with U.S.&#160;federal
    income taxation are constantly under review by persons involved
    in the legislative process, the IRS and the U.S.&#160;Treasury
    Department, frequently resulting in unfavorable precedent or
    authority on issues for which there
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    101
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    was previously no clear precedent or authority as well as
    revised interpretations of established concepts, statutory
    changes, revisions to regulations and other modifications and
    interpretations. No assurance can be given as to whether, or in
    what form, any proposals affecting us or our Class&#160;A common
    shares will be enacted. The IRS pays close attention to the
    proper application of tax laws to partnerships. The present
    U.S.&#160;federal income tax treatment of an investment in our
    Class&#160;A common shares may be modified by administrative,
    legislative or judicial interpretation at any time, and any such
    action may affect investments and commitments previously made.
    For example, changes to the U.S.&#160;federal income tax laws
    and interpretations thereof could make it more difficult or
    impossible to meet the qualifying income exception for us to be
    treated as a partnership that is not taxable as a corporation
    for U.S.&#160;federal income tax purposes. We and our common
    shareholders could be adversely affected by any such change in,
    or any new, tax law, regulation or interpretation.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    102
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ladenburg Thalmann&#160;&#038; Co. Inc. is acting as
    representative of the underwriters named below. Subject to the
    terms and conditions stated in the underwriting agreement dated
    the date of this prospectus, each underwriter named below has
    agreed to purchase, and we have agreed to sell to that
    underwriter, the number of Class&#160;A common shares set forth
    opposite the underwriter&#146;s name.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="85%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Class A<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Shares</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ladenburg Thalmann&#160;&#038; Co. Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriting agreement provides that the obligations of the
    underwriters to purchase the Class&#160;A common shares included
    in this offering are subject to approval of legal matters by
    counsel and to other conditions. The underwriters are obligated
    to purchase all the Class&#160;A common shares (other than those
    covered by the overallotment option described below) if they
    purchase any of the Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters propose to offer some of the Class&#160;A
    common shares directly to the public at the public offering
    price set forth on the cover page of this prospectus and some of
    the Class&#160;A common shares to dealers at the public offering
    price less a concession not to exceed
    $&#160;&#160;&#160;&#160;&#160; per Class&#160;A common share.
    The underwriting discount of $&#160;&#160;&#160;&#160;&#160; per
    Class&#160;A common share is equal
    to&#160;&#160;&#160;&#160;&#160;% of the initial offering price.
    If all of the Class&#160;A common shares are not sold at the
    initial offering price, the representative may change the public
    offering price and other selling terms. Investors must pay for
    any Class&#160;A common shares purchased on
    or&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    before&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010. The representative has advised us that the underwriters do
    not intend to confirm any sales to any accounts over which they
    exercise discretionary authority.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted to the underwriters an option, exercisable for
    45&#160;days from the date of this prospectus, to purchase up to
    an
    additional&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Class&#160;A common shares at the public offering price less the
    underwriting discount. The underwriters may exercise the option
    solely for the purpose of covering over-allotments, if any, in
    connection with this offering. To the extent such option is
    exercised, each underwriter must purchase a number of additional
    Class&#160;A common shares approximately proportionate to that
    underwriter&#146;s initial purchase commitment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and our directors and officers and Triptree and its directors
    and officers have agreed that, for a period of 180&#160;days
    from the date of this prospectus, that they will not, without
    the prior written consent of Ladenburg Thalmann&#160;&#038; Co.
    Inc., on behalf of the underwriters, offer, pledge, sell,
    contract to sell or otherwise dispose of or agree to sell or
    otherwise dispose of, directly or indirectly or hedge, any
    Class&#160;A common shares or any securities convertible into or
    exchangeable for Class&#160;A common shares, provided, however,
    that we may issue and sell Class&#160;A common shares pursuant
    to our dividend reinvestment plan. Ladenburg
    Thalmann&#160;&#038; Co. Inc. in its sole discretion may release
    any of the securities subject to these
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements at any time without notice.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The <FONT style="white-space: nowrap">180-day</FONT>
    period in the preceding paragraph will be extended if
    (i)&#160;during the last 17&#160;days of the
    <FONT style="white-space: nowrap">180-day</FONT>
    period we issue an earnings release or material news or a
    material event relating to us occurs or (ii)&#160;prior to the
    expiration of the
    <FONT style="white-space: nowrap">180-day</FONT>
    period, we announce that we will release earnings results during
    the <FONT style="white-space: nowrap">16-day</FONT>
    period beginning on the last day of the
    <FONT style="white-space: nowrap">180-day</FONT>
    period, in which case the restrictions described in the
    preceding sentence will continue to apply until the expiration
    of the
    <FONT style="white-space: nowrap">18-day</FONT>
    period beginning on the issuance of the earnings release or the
    announcement of the material news or the occurrence of the
    material event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Class&#160;A common shares offered by this prospectus,
    subject to notice of issuance, will be listed on the Nasdaq
    Stock Market LLC under the symbol
    &#145;&#145;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#148;.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    103
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the underwriting discounts to be paid
    to the underwriters in connection with this offering. These
    amounts are shown assuming both no exercise and full exercise of
    the underwriters&#146; option to purchase additional
    Class&#160;A common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="77%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>No Exercise</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Full Exercise</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Per Class&#160;A common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and Triptree have each agreed to indemnify the underwriters
    against certain liabilities, including liabilities under the
    Securities Act or to contribute to payments the underwriters may
    be required to make because of any of those liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain underwriters may make a market in the Class&#160;A
    common shares. No underwriter is, however, obligated to conduct
    market-making activities and any such activities may be
    discontinued at any time without notice, at the sole discretion
    of the underwriter. No assurance can be given as to the
    liquidity of, or the trading market for, the Class&#160;A common
    shares as a result of any market-making activities undertaken by
    any underwriter. This prospectus is to be used by any
    underwriter in connection with this offering and, during the
    period in which a prospectus must be delivered, with offers and
    sales of the Class&#160;A common shares in market-making
    transactions in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    market at negotiated prices related to prevailing market prices
    at the time of the sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with this offering, Ladenburg Thalmann&#160;&#038;
    Co. Inc., on behalf of the underwriters, may purchase and sell
    Class&#160;A common shares in the open market. These
    transactions may include short sales, syndicate covering
    transactions and stabilizing transactions. Short sales involve
    syndicate sales of Class&#160;A common shares in excess of the
    number of Class&#160;A common shares to be purchased by the
    underwriters in this offering, which creates a syndicate short
    position. &#147;Covered&#148; short sales are sales of
    Class&#160;A common shares made in an amount up to the number of
    Class&#160;A common shares represented by the underwriters&#146;
    over-allotment option. In determining the source of Class&#160;A
    common shares to close out the covered syndicate short position,
    the underwriters will consider, among other things, the price of
    Class&#160;A common shares available for purchase in the open
    market as compared to the price at which they may purchase
    Class&#160;A common shares through the overallotment option.
    Transactions to close out the covered syndicate short position
    involve either purchases of Class&#160;A common shares in the
    open market after the distribution has been completed or the
    exercise of the over-allotment option. The underwriters may also
    make &#147;naked&#148; short sales of Class&#160;A common shares
    in excess of the over-allotment option. The underwriters must
    close out any naked short position by purchasing Class&#160;A
    common shares in the open market. A naked short position is more
    likely to be created if the underwriters are concerned that
    there may be downward pressure on the price of Class&#160;A
    common shares in the open market after pricing that could
    adversely affect investors who purchase in this offering.
    Stabilizing transactions consist of bids for or purchases of
    Class&#160;A common shares in the open market while this
    offering is in progress.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters also may impose a penalty bid. Penalty bids
    permit the underwriters to reclaim a selling concession from a
    syndicate member when Ladenburg Thalmann&#160;&#038; Co. Inc.
    repurchases Class&#160;A common shares originally sold by that
    syndicate member in order to cover syndicate short positions or
    make stabilizing purchases.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any of these activities may have the effect of preventing or
    retarding a decline in the market price of Class&#160;A common
    shares. They may also cause the price of Class&#160;A common
    shares to be higher than the price that would otherwise exist in
    the open market in the absence of these transactions. The
    underwriters may conduct these transactions on the Nasdaq Stock
    Market LLC, or in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    market, or otherwise. If the underwriters commence any of these
    transactions, they may discontinue them at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that our portion of the total expenses of this
    offering, excluding the underwriting discounts, will be
    approximately $&#160;&#160;&#160;&#160;&#160;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A prospectus in electronic format may be made available on the
    websites maintained by one or more of the underwriters. The
    representative may agree to allocate a number of Class&#160;A
    common shares to underwriters for sale to their online brokerage
    account holders. The representative will allocate Class&#160;A
    common shares to
</DIV>
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    <BR>
    104
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    underwriters that may make Internet distributions on the same
    basis as other allocations. In addition, Class&#160;A common
    shares may be sold by the underwriters to securities dealers who
    resell Class&#160;A common shares to online brokerage account
    holders.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The sum of all compensation to the underwriters in connection
    with this offering of Class&#160;A common shares, including the
    underwriting discount, will not exceed 8.0% of the total public
    offering price of the Class&#160;A common shares sold in this
    offering.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate that, from time to time, certain underwriters may
    act as brokers or dealers in connection with the execution of
    our portfolio transactions after they have ceased to be
    underwriters and, subject to certain restrictions, may act as
    brokers while they are underwriters.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain underwriters may have performed investment banking and
    advisory services for us, Muni Capital Management and their
    affiliates from time to time, for which they have received
    customary fees and expenses. Certain underwriters may, from time
    to time, engage in transactions with or perform services for us,
    Muni Capital Management and their affiliates in the ordinary
    course of business.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The principal business address of Ladenburg Thalmann&#160;&#038;
    Co. Inc. is 520 Madison, 9th&#160;Floor, New York, New York
    10022.
</DIV>

<A name='117'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The validity of the securities offered by this prospectus will
    be passed upon by Schulte Roth&#160;&#038; Zabel LLP, New York,
    New York. In connection with this offering, Greenberg Traurig
    LLP, New York, New York is acting as counsel to the underwriters.
</DIV>

<A name='118'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Consolidated financial statements as of December&#160;31, 2008
    and for the year then ended and as of December&#160;31, 2007 and
    for the period June&#160;12, 2007 (Inception) to
    December&#160;31, 2007 of Muni Funding Company of America, LLC,
    included in this prospectus and elsewhere in the registration
    statement, have been so included in reliance upon the report of
    Grant Thornton LLP, independent registered public accountants,
    upon the authority of said firm as experts in giving said report.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements as of December&#160;31,
    2009 and for the year ended December&#160;31, 2009 included in
    this prospectus and elsewhere in the registration statement have
    been included in reliance upon the reports of KPMG LLP,
    independent registered public accounting firm, appearing
    elsewhere herein and upon the authority of said firm as experts
    in accounting and auditing.
</DIV>

<A name='119'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND ADDITIONAL INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    under the Securities Act with respect to the securities we are
    offering by this prospectus. This prospectus does not contain
    all of the information included in the registration statement.
    For further information about us and our securities, you should
    refer to the registration statement and the exhibits and
    schedules filed with the registration statement. Whenever we
    make reference in this prospectus to any of our contracts,
    agreements or other documents, the references are materially
    complete but may not include a description of all aspects of
    such contracts, agreements or other documents, and you should
    refer to the exhibits attached to the registration statement for
    copies of the actual contract, agreement or other document.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will be subject to the
    information requirements of the Exchange Act and will file
    annual, quarterly and current event reports, proxy statements
    and other information with the SEC. You can read our SEC
    filings, including the registration statement, over the Internet
    at the SEC&#146;s website at www.sec.gov. You may also read and
    copy any document we file with the SEC at its public reference
    facility at 100&#160;F&#160;Street, N.E., Washington,&#160;D.C.
    20549.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may also obtain copies of the documents at prescribed rates
    by writing to the Public Reference Section of the SEC at
    100&#160;F&#160;Street, N.E., Washington,&#160;D.C. 20549.
    Please call the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    for further information on the operation of the public reference
    facilities.
</DIV>
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    <BR>
    105
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<A name='120'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Audited
    Financial Statements<BR>
    December&#160;31, 2009 and 2008</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="95%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#300'>Report of Independent Registered Public
    Accounting Firm</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-2
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#301'>Consolidated Statements of Assets and
    Liabilities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-4
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#302'>Consolidated Schedule of Investments as of
    December&#160;31, 2009</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-5
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#303'>Consolidated Schedule of Investments as of
    December&#160;31, 2008</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-6
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#304'>Consolidated Statements of Operations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-7
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#305'>Consolidated Statements of Changes in Net
    Assets</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-8
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#306'>Consolidated Statements of Cash Flows</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-9
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#307'>Notes to Consolidated Financial Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-10
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Audited Financial Statements<BR>
    December&#160;31, 2007<BR>
    </B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#310'>Consolidated statement of assets and
    liabilities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-31
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#311'>Consolidated schedule of investments</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-32
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#312'>Consolidated statement of operations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-33
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#313'>Consolidated statement of changes in net
    assets</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-34
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#314'>Consolidated statement of cash flows</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-35
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#315'>Notes to consolidated financial statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    F-36
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-1
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='300'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Report of
    Independent Registered Public Accounting Firm</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Muni Funding Company of America, LLC:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have audited the accompanying consolidated statement of
    assets and liabilities, including the consolidated schedule of
    investments, of Muni Funding Company of America, LLC as of
    December&#160;31, 2009, and the related consolidated statements
    of operations, changes in net assets, and cash flows for the
    year ended December&#160;31, 2009. These consolidated financial
    statements are the responsibility of the Company&#146;s
    management. Our responsibility is to express an opinion on these
    consolidated financial statements based on our audit. The
    accompanying consolidated statement of assets and liabilities,
    including the schedule of investments as of December&#160;31,
    2008, and the related consolidated statements of operations,
    changes in net assets, and cash flows for the year end
    December&#160;31, 2008 were audited by other independent
    registered public accountants whose report thereon, dated
    March&#160;16, 2009, expressed an unqualified opinion on those
    financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We conducted our audit in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. An audit includes consideration
    of internal control over financial reporting as a basis for
    designing audit procedures that are appropriate in the
    circumstances, but not for the purpose of expressing an opinion
    on the effectiveness of the Company&#146;s internal control over
    financial reporting. Accordingly, we express no such opinion. An
    audit also includes examining, on a test basis, evidence
    supporting the amounts and disclosures in the financial
    statements, assessing the accounting principles used and
    significant estimates made by management, as well as evaluating
    the overall financial statement presentation. We believe that
    our audit provides a reasonable basis for our opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In our opinion, the consolidated financial statements referred
    to above present fairly, in all material respects, the financial
    position of Muni Funding Company of America, LLC as of
    December&#160;31, 2009, and the results of its operations, the
    changes in its net assets, and its cash flows for the year
    ended, in conformity with U.S.&#160;generally accepted
    accounting principles.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    /s/ KPMG LLP
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    New York, New York
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    February&#160;22, 2010
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='309'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Report of
    Independent Registered Public Accounting Firm</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Board of Directors and Shareholders
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Muni Funding Company of America, LLC
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have audited the accompanying consolidated statements of
    assets and liabilities of Muni Funding Company of America, LLC
    (a Delaware Limited Liability Company), including the
    consolidated schedules of investments, as of December&#160;31,
    2008 and 2007, and the related consolidated statements of
    operations, changes in net assets and cash flows for the year
    ended December&#160;31, 2008 and the period June&#160;12, 2007
    (Inception) to December&#160;31, 2007. These financial
    statements are the responsibility of the Company&#146;s
    management. Our responsibility is to express an opinion on these
    financial statements based on our audits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We conducted our audits in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. The Company is not required to
    have, nor were we engaged to perform an audit of its internal
    control over financial reporting. Our audit included
    consideration of internal control over financial reporting as a
    basis for designing audit procedures that are appropriate in the
    circumstances, but not for the purpose of expressing an opinion
    on the effectiveness of the Company&#146;s internal control over
    financial reporting. Accordingly, we express no such opinion. An
    audit also includes examining, on a test basis, evidence
    supporting the amounts and disclosures in the financial
    statements, assessing the accounting principles used and
    significant estimates made by management, as well as evaluating
    the overall financial statement presentation. We believe that
    our audits provide a reasonable basis for our opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In our opinion, the financial statements referred to above
    present fairly, in all material respects, the consolidated
    financial position of Muni Funding Company of America, LLC (a
    Delaware Limited Liability Company) as of December&#160;31, 2008
    and 2007, and the consolidated results of its operations,
    changes in net assets and cash flows for the year ended
    December&#160;31, 2008 and the period June&#160;12, 2007
    (Inception) to December&#160;31, 2007, in conformity with
    accounting principles generally accepted in the United States of
    America.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    /s/ GRANT THORNTON LLP
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Philadelphia, Pennsylvania
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    May&#160;13, 2010
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='301'><B><FONT style="font-family: 'Times New Roman', Times">
    <!-- XBRL,bs -->Consolidated Statements of Assets and
    Liabilities <!-- XBRL,body --><BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">December&#160;31,
    2009 and 2008</FONT></B></A>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,090,353
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,560,219
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Restricted cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    277,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investments, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57,971,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accrued interest receivables
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,302,965
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,420,243
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Derivative asset
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    358,775
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,668,544
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,642,139
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Due to the Manager (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    114,756
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,662
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accrued expenses and other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    338,679
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    354,924
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    453,435
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    404,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    90,215,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value per share (37,416,669 and 17,847,015&#160;shares
    outstanding, respectively)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements.
</DIV>
<!-- /XBRL,bs -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='302'><B><FONT style="font-family: 'Times New Roman', Times">
    <!-- XBRL,in -->Consolidated Schedule of Investments
    <!-- XBRL,body --><BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">December&#160;31,
    2009</FONT></B></A>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amortized<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Cusip</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>State</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Coupon</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Maturity</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>of Net Assets</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Par Value</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Cost</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Tax exempt bonds: (1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Investment in trusts&#160;&#151; NPPF 2:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Cope Community Services
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89874QAA6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    AZ
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.13
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.7
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,385,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,384,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,347,969
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    21st Century Charter School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    082445AA5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    AZ
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Oct-32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,550,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,549,814
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,491,940
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Sacramento Country Day School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    130795JV0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,331,239
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,366,208
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Sierra Canyon High School Foundation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54465NAB0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    May-32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,882,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,946,844
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,065,200
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Goodwill of San&#160;Joaquin Valley
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13033WD91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,405,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,404,711
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,596,585
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Global Country of World Peace
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    I 9648AEC5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,460,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,979,954
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,253,253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Maranatha High School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19645 RCA7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,900,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,899,561
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,260,937
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Yampa Valley Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19648AEU5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,224,824
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,798,413
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Global Country of World Peace
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1964745C0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,145,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,046,860
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    815,572
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Madison Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    790609ANI
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    IN
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,881,024
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,289,130
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Labette County Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    505392BU3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    768,836
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    684,536
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    YMCA of the Capital Area
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    546279327
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    LA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,755,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,754,151
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,003,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    UMass Memorial Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57586CLQ6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jul-33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,920,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,369,676
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,711,129
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Alternatives Unlimited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57583RTU9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,895,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,892,929
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,010,383
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Maine Central Institute
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56041NAL6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    ME
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,440,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,433,875
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,487,731
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Guadalupe Centers
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48503IFK9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,430,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,429,852
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,224,021
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Family Guidance Center for Behavioral Healthcare
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79076NAA0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,335,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,211,956
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,840,426
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Tri-County Community Action Program
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64468KBD7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NH
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,099,797
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,592,451
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 31pt">
    West Penn Allegheny Health System
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    01728AG83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    PA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Nov-40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,530,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,973,945
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,456,506
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    NHS III Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    613609XN1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    PA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Oct-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,740,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,739,186
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,281,043
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 31pt">
    Total investments of NPPF 2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    118.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    137,472,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    135,323,677
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    106,577,328
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Class&#160;A Senior Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65537WAA2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73.0
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65,856,685
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65,856,685
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65,856,685
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 31pt">
    Class&#160;B Junior Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65537WABO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    71,615,575
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    69,466,992
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40,720,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Direct investments in tax exempt securities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Cardiovascular Research Foundation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    773557AH6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NY
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jan-35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,931,404
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,516,840
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Project CURE
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19648AGA7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,905,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,903,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,879,069
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Labette County Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    505392BU3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    356,932
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    319,450
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Florida Care Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    605279GU6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,035,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,069,817
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,538,876
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Florida Care Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    928104KK3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    VA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,475,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,481,778
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,996,253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 31pt">
    Direct investments in tax exempt securities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,765,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,743,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,488
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 31pt">
    Total investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64.2
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    91,380,575
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    89,210,173
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    57,971,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    All tax exempt securities held directly by the Company and in
    NPPF 2 are revenue bonds which are issued by a municipality or
    an authority on behalf of a nonprofit corporation to finance or
    refinance a specific project and are typically secured by a
    mortgage or a revenue pledge, or both, and a debt service
    reserve fund.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements.
</DIV>
<!-- /XBRL,in -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='303'><B><FONT style="font-family: 'Times New Roman', Times">
    <!-- XBRL,in -->Consolidated Schedule of Investments
    <!-- XBRL,body --><BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">December&#160;31,
    2008</FONT></B></A>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amortized<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Cusip</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>State</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Coupon</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Maturity</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>of Net Assets</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Par value</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Cost</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Tax exempt bonds:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Investment in trusts&#160;&#151; NPPF 2:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Cope Community Services
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89874QAA6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    AZ
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.13
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,445,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,444,656
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,611,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    21st Century Charter School Project
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    082445AA5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    AZ
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Oct-32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,550,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,549,846
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,170,248
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Sacramento Country Day School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    130795JV0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,330,696
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,547,838
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Sierra Canyon High School Foundation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54465NAB0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    May-32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,962,008
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,028,418
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,569,838
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Goodwill of San&#160;Joaquin Valley
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13033WD91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,455,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,454,721
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,243,478
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Global Country of World Peace
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19648AEC5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,360,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,837,667
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,223,009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Maranatha High School
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19645RCA7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,900,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,899,595
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,389,381
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Yampa Valley Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19648AEU5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,215,084
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,902,769
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Global Country of World Peace
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1964745C0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,945,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,418,073
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,663,071
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Madison Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    790609AN1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    IN
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,876,595
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,637,070
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Labette County Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    505392BU3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    769,199
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    449,370
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    YMCA of the Capital Area
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    546279J27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    LA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,885,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,884,183
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,383,535
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    UMass Memorial Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57586CLQ6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jul-33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,920,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,355,572
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,974,441
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Maine Central Institute
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56041NAL6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    ME
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,493,670
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,937,184
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Massachusetts St Dev Fin Agy Rev
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57583RTU9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,005,007
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,845,228
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Eaglecrest Senior Housing
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    778112AA0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MN
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jul-42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,505,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,024,658
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,762,569
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Guadalupe Centers
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    485031FK9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,430,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,429,878
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,734,550
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Family Guidance Ctr for Behavioral Hthcre
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79076NAA0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,415,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,277,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,980,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Tri-county Community Action Program
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64468KBD7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NH
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,125,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,124,804
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,379,964
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Oak Tree Foundation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34565IAD5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    OR
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Mar-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,245,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,163,937
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,287,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    West Penn Allegheny Health System
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    01728AG83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    PA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Nov-40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,530,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,964,492
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,540,482
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    NHS III Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    613609XN1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    PA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Oct-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,900,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,899,182
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,357,333
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Reedsburg Area Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    97710VH43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    WI
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jun-26
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,690,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,828,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,802,315
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Total investments of NPPF 2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    387.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    184,362,008
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    181,275,881
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    113,393,737
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Class&#160;A Senior Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65537WAA2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-09
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (387.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (116,077,410
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (116,077,410
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (113,393,737
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Investment in NPPF 2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    68,284,598
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,198,471
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Investment in trusts&#160;&#151; Merrill Lynch Trusts:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Class&#160;B certificate interests
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    708787AA4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,270,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,490,986
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    840,389
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Investment in Merrill Lynch Trusts
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,270,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,490,986
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    840,389
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Direct investments in tax exempt securities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Rockland Cnty NY Indl Dv Agy
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    773557AH6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NY
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Jan-35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,928,092
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,205,820
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Colorado Health Facs Auth Rev
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19648AGA7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    CO
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Feb-28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,905,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,903,292
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,794,859
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Labette County Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    505392BS8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,250,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,301,194
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    802,653
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Labette County Medical Center
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    505392BU3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    KS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Sep-37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    357,066
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    209,706
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Florida Care Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    605279GU6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    MS
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    I 1.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,180,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,217,400
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,341,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 15pt">
    Florida Care Properties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    928104KK3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    VA
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Aug-27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,605,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,612,317
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,108,375
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Direct investments in tax exempt securities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,290,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,319,361
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,462,513
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 23pt">
    Total investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52.3
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    110,844,598
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    107,008,818
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements.
</DIV>
<!-- /XBRL,in -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='304'><B><FONT style="font-family: 'Times New Roman', Times">
    <!-- XBRL,op -->Consolidated Statements of Operations
    <!-- XBRL,body --><BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Years
    ended December&#160;31, 2009 and 2008</FONT></B></A>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="72%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investment income:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Income&#160;&#151; investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,581,819
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,106,531
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Income&#160;&#151; total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    903,623
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Income&#160;&#151; other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,225,434
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,605,164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,235,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expenses:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Management fee (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    962,670
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,276,477
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Amortization of financing costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    194,559
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,912
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Professional fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    963,373
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,047,694
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Insurance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    266,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    313,994
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Directors compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    391,570
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Shareholder reporting and transfer agent
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,427
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86,703
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Other general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    184,814
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    182,283
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Non cash incentive compensation (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,118,097
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,214,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,487,067
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,021,533
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Realized losses:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net realized losses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrealized gains (losses):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,464,711
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (81,112,777
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Derivatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,241,926
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,491,806
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73,870,851
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net increase (decrease) in net assets resulting from operations
    before performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net increase (decrease) in net assets resulting from operations
    after performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35,100,790
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Basic net increase (decrease) in net assets from operations per
    share(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Diluted net increase (decrease) in net assets from operations
    per share(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Weighted average common shares outstanding&#160;&#151; basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31,649,890
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,256,289
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Weighted average common shares outstanding&#160;&#151; diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31,649,890
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,256,289
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions declared per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- /XBRL,op -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculation excludes performance share allocation</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidate financial statements.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='305'><B><FONT style="font-family: 'Times New Roman', Times">
    <!-- XBRL,se -->Consolidated Statements of Changes in Net Assets
    <!-- XBRL,body --><BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Years
    ended December&#160;31, 2009 and 2008</FONT></B></A>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="72%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Increase (decrease) in net assets resulting from operations:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,487,067
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,021,533
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized losses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,829,108
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,491,806
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73,870,851
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net increase (decrease) in net assets resulting from operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Decrease in net assets resulting from distributions to
    shareholders:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions to common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,147,224
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions to LTIP shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (152,400
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total decrease in net assets resulting from distributions to
    shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,299,624
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Increase in net assets from share transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Increase in net assets from issuance of common shares, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,404,800
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Vesting of incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total increase in net assets from share transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,876,766
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Decrease in net assets from performance share allocation:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Performance share allocation paid in cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,083,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Performance share allocation paid in shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3,837,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total decrease in net assets from performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net increase (decrease) in net assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,977,556
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (111,101,628
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net assets, beginning of year
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net assets, end of year
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    90,215,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements.
</DIV>
<!-- /XBRL,se -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='306'><B><FONT style="font-family: 'Times New Roman', Times">
    <!-- XBRL,cf -->Consolidated Statements of Cash Flows
    <!-- XBRL,body --><BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Years
    ended December&#160;31, 2009 and 2008</FONT></B></A>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="72%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash flows from operating activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net increase (decrease) in net assets resulting from operations
    before performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Adjustments to reconcile net increase (decrease) in net assets
    resulting from operations before performance share allocation to
    net cash flows used in operating activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,491,806
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    73,870,851
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Non cash incentive compensation (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net realized losses(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,957,635
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,228
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Purchase of investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (50,220,728
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (106,931,326
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Sale of investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43,150,379
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Amortization of bond discount
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (90,804
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (77,492
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Change in operating assets and liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    (Increase) decrease in accrued interest receivables
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,117,278
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3,070,097
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    (Increase) decrease in restricted cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (277,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    (Increase) decrease in other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    358,775
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (275,025
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Increase (decrease) due to the Manager
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,094
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (130,188
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Increase (decrease) in accrued expenses and other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16,245
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    120,094
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 50pt">
    Net cash provided by (used in) operating activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (114,256,959
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash flows from financing activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Proceeds from issuance of common shares, net of costs of $173,005
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,567,352
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions to common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,147,224
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions to LTIP shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (152,400
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Performance share allocation paid in cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,083,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 50pt">
    Net cash provided by (used in) financing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,484,352
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,299,624
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 50pt">
    Net increase (decrease) in cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,530,134
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (118,556,583
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents, beginning of year
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,560,219
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128,116,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents, end of year
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,090,353
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,560,219
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Supplemental disclosures of noncash financing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Performance share allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,837,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    In 2008, net realized losses on the Statements of Cash Flows
    includes $38,228 of realized loss from the sale of Tender Option
    Bonds, which is included in the $38,829,108 of net realized
    losses on derivatives on the Statements of Operations.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-9
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='307'><B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL STATEMENTS<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">December&#160;31,
    2009 and 2008</FONT></B></A>
</DIV>
</A>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(1)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Organization
    and Nature of Operations</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Muni Funding Company of America, LLC (the &#147;Company&#148;)
    was organized as a Delaware Limited Liability Company on
    April&#160;27, 2007. The Company began operations on
    June&#160;12, 2007 upon the completion of an offering of common
    shares of limited liability interests (Common Shares) in a
    private offering to qualified institutional buyers in accordance
    with Rule&#160;144A under the Securities Act of 1933.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is a specialty finance holding company that invests
    directly or indirectly in U.S.&#160;federally tax exempt bonds
    with the objective of generating attractive risk-adjusted
    returns and predictable cash distributions. The Company seeks to
    achieve this objective by (1)&#160;acquiring interests in
    structured credit vehicles which own debt obligations, the
    interest on which is exempt from U.S.&#160;federal income
    taxation; (2)&#160;investing in total return swaps and other
    derivative arrangements relating to tax exempt securities; and
    (3)&#160;making direct investments in tax exempt securities. The
    Company may also invest in securities that are subject to
    federal income tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is externally managed and advised by Tricadia
    Municipal Management, LLC (the &#147;Manager&#148;). The Manager
    is a wholly-owned subsidiary of Tricadia Holdings, L.P.
    (together with its predecessors and subsidiaries
    &#147;Tricadia&#148;). Prior to March&#160;18, 2009, the Company
    was managed by Cohen Municipal Capital Management, LLC (the
    &#147;Former Manager&#148;), a subsidiary of Cohen Brothers, LLC
    (&#147;Cohen and Company&#148;). In February 2009, Tiptree
    Financial Partners, L.P. (&#147;Tiptree&#148;), a private
    partnership managed by Tricadia, acquired a controlling interest
    in the Company. Currently, Tiptree owns approximately 75% of the
    outstanding Common Shares of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has selected December 31 as its fiscal year-end. The
    Company has no stated date of dissolution.
</DIV>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(2)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    of Significant Accounting Policies</FONT></B>
</TD>
</TR>

</TABLE>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying consolidated financial statements have been
    prepared by management in accordance with accounting principles
    generally accepted in the United States of America
    (U.S.&#160;GAAP).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although the Company conducts its operations so that the Company
    is not required to register as an investment company under the
    Investment Company Act, for financial reporting purposes the
    Company is an investment company and follows the AICPA Audit and
    Accounting Guide for Investment Companies (the Audit Guide).
    Accordingly, investments are carried at fair value with changes
    in fair value reflected in the consolidated statements of
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(a)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Use of
    Estimates</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The preparation of financial statements in conformity with
    U.S.&#160;GAAP requires management to make assumptions and
    estimates that affect the reported amounts in the consolidated
    financial statements and the accompanying notes. Actual results
    could differ from those estimates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(b)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Principles
    of Consolidation</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying consolidated financial statements include the
    accounts of the Company and its wholly owned subsidiary MFCA
    Funding, Inc. (Funding, Inc.). All intercompany transactions
    have been eliminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;24, 2003, the Financial Accounting Standards
    Board (FASB) issued Accounting Standards Codification
    (&#147;ASC&#148;) Topic 810, <I>Consolidation </I>(formerly
    Interpretation No.&#160;46 (Revised December 2003),
    <I>Consolidation of Variable Interest Entities
    </I>(FIN&#160;46R)), to clarify the application of Accounting
    Research Bulletin (ARB) No. 51, <I>Consolidated Financial
    Statements </I>(ARB 51), as amended by FASB Statement
    No.&#160;94, <I>Consolidation of All Majority-Owned Subsidiaries
    </I>(SFAS&#160;No.&#160;94). However, the effective date of
</DIV>
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    <BR>
    F-10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    FIN&#160;46R was deferred for investment companies (including
    nonregistered investment companies) that are accounting for
    investments in accordance with the Audit Guide.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;11, 2007, the FASB clarifies that those entities
    which account for themselves as investment companies under the
    Audit Guide are not subject to the consolidation requirements of
    FIN&#160;46R.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company reviews each investment that it makes under a
    control based framework in accordance with ASC Topic 810. If the
    Company determines it controls the investee and the investee
    itself meets the definition of an investment company under the
    Audit Guide, the Company consolidates the investee. Otherwise,
    the Company will report its equity investment at fair value as
    required by the Audit Guide.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(c)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Recent
    Accounting Developments</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued ASC Topic 860, <I>Transfers and
    Servicing </I>(formerly Statement of Financial Accounting
    Standards (SFAS) No.&#160;166, <I>Accounting for Transfers of
    Financial Assets </I>&#151;&#160;an amendment of FASB Statement
    No.&#160;140)&#160;and ASC Topic 810, (formerly
    SFAS&#160;No.&#160;167, Amendments to FASB Interpretation
    No.&#160;46(R)), which change the accounting for securitizations
    and VIEs. ASC Topic 860 eliminates the concept of a QSPE,
    changes the requirements for derecognizing financial assets, and
    requires additional disclosures about transfers of financial
    assets, including securitization transactions and continuing
    involvement with transferred financial assets. ASC Topic 810
    will change the determination of whether and when a VIE should
    be consolidated. ASC Topic 860 and ASC Topic 810 are effective
    for fiscal years beginning after November&#160;15, 2009. The
    Company is currently evaluating the impact that ASC Topic 860
    and ASC Topic 810 will have on the consolidated financial
    statements.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In August 2009, the FASB issued Accounting Standards Update
    (&#147;ASU&#148;)
    <FONT style="white-space: nowrap">2009-5,</FONT> Fair
    Value Measurements and Disclosures&#160;&#151; Measuring
    Liabilities at Fair Value, which amends ASC Topic 820 to provide
    further guidance on how to measure the fair value of a
    liability. ASU
    <FONT style="white-space: nowrap">2009-5</FONT>
    primarily sets forth the types of valuation techniques to be
    used to value a liability when a quoted price in an active
    market for the identical liability is not available. In these
    circumstances, ASU
    <FONT style="white-space: nowrap">2009-5&#160;states</FONT>
    that a company can apply the quoted price of an identical or
    similar liability when traded as an asset, or other valuation
    techniques that are consistent with principles of ASC Topic 820.
    ASU <FONT style="white-space: nowrap">2009-5</FONT>
    will be effective for the next reporting period and the Company
    does not expect such adoption to have a material effect on the
    consolidated financial statements.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued ASC Topic 855, <I>Subsequent
    Events </I>(formerly SFAS&#160;No.&#160;165), which establishes
    general standards of accounting for, and disclosing events that
    occur after the balance sheet date but before the financial
    statements are issued or available to be issued. It requires the
    disclosure of the date through which an entity has evaluated
    subsequent events and the basis for that date, i.e., whether the
    date represents the date the financial statements were issued or
    were available to be issued. Subsequent events have been
    evaluated through February&#160;22, 2010, the issuance date of
    our financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(d)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Cash
    and Cash Equivalents</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cash and cash equivalents consist of cash held at banks as well
    as short term investments with an original maturity of three
    months or less, as defined in ASC Topic 230, <I>Statement of
    Cash Flows</I>.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(e)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Restricted
    Cash</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Restricted cash represents cash collateral posted with
    counterparties. Income earned on restricted cash balances is
    included as a component of income&#160;&#151; other in the
    consolidated statements of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(f)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Financial
    Instruments</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fair value is used to measure the Company&#146;s financial
    instruments. The fair value of a financial instrument is the
    amount that would be received to sell an asset or paid to
    transfer a liability in an orderly transaction between market
    participants at the measurement date, also known as the exit
    price.
</DIV>
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    <BR>
    F-11
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair values of the Company&#146;s assets and liabilities
    which qualify as financial instruments under ASC Topic 825
    (formerly SFAS&#160;No.&#160;107, <I>Disclosures about Fair
    Value of Financial Instruments)</I>, approximate the carrying
    amounts presented in the consolidated statements of assets and
    liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has adopted ASC Topic 820 (formerly
    SFAS&#160;No.&#160;157, <I>Fair Value Measurements)</I>). ASC
    Topic 820 establishes a fair value hierarchy that prioritizes
    the inputs to valuation techniques used to measure fair value.
    The hierarchy gives the highest priority to unadjusted quoted
    prices in active markets for identical assets or liabilities
    (Level&#160;1 measurements) and the lowest priority to
    unobservable inputs (Level 3 measurements). The three levels of
    the fair value hierarchy under ASC Topic 820 are described below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Level&#160;1</I>&#160;&#151; Financial assets and liabilities
    whose values are based on unadjusted quoted prices in active
    markets that are accessible at the measurement date for
    identical, unrestricted assets or liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Level&#160;2</I>&#160;&#151; Financial assets and liabilities
    whose values are based on one or more of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Quoted prices for similar assets or liabilities in
    active markets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Quoted prices for identical or similar assets or
    liabilities in nonactive markets;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Pricing models whose inputs are observable for
    substantially the full term of the asset or liability;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Pricing models whose inputs are derived principally
    from or corroborated by observable market data through
    correlation or other means for substantially the full term of
    the asset or liability.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Level&#160;3</I>&#160;&#151; Financial assets and liabilities
    whose values are based on prices or valuation techniques that
    require inputs that are both significant to the fair value
    measurement and unobservable. These inputs reflect
    management&#146;s own assumptions about the assumptions a market
    participant would use in pricing the asset or liability.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A financial instrument&#146;s level within the fair value
    hierarchy is based on the lowest level of input that is
    significant to the fair value measurement. See note&#160;6 for a
    discussion of the impact of adopting ASC Topic 820.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following is a description of the valuation methodologies used
    for instruments measured at fair value, as well as the general
    classification of such instruments pursuant to the valuation
    hierarchy.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company invests in debt obligations, the interest on which
    is exempt from U.S.&#160;federal income taxation. In some cases
    the Company purchases the investments directly; and in other
    cases the Company invests in a special purpose trust which holds
    the assets. From time to time, the Company may also invest in
    certain derivative contracts. The Company records all of its
    investments at fair value.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Direct
    Investment in Tax Exempt Securities</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, fair value is determined by obtaining quotations
    from independent pricing services. In most cases, quotes are
    obtained from two pricing services and the average of both
    quotes is used. The independent pricing services determine their
    quotes using observable inputs such as current interest rates,
    specific issuer information and other market data for such
    securities. Therefore, the Company&#146;s estimate of fair value
    is subject to a high degree of variability based upon market
    conditions, the availability of specific issuer information and
    the assumptions made. Due to the inherent uncertainty of
    valuation, these estimated fair values may differ from the
    actual price obtained through sales. The valuation inputs used
    to arrive at fair value for such debt obligations are generally
    classified within Level&#160;2 or 3 of the valuation hierarchy.
    The difference
</DIV>
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    <BR>
    F-12
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    between the cost basis in the investment and the fair value is
    included in the unrealized gains/(losses)&#160;&#151;
    investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The income earned on the tax exempt securities is recorded on an
    accrual basis and included as a component of income-investments
    in the consolidated statements of operations. Any accrued and
    unpaid income is included as a component of receivables in the
    consolidated statements of assets and liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Investment
    in Trusts</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company will invest in a trust in order to acquire tax
    exempt securities. The trust will acquire the bonds and finance
    the purchase by issuing junior and senior certificates. In
    general, the Company will purchase all of the junior
    certificates and third party investors will purchase the senior
    certificates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In valuing its investment, the junior certificates, the Company
    will generally use one of two techniques:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Asset
    Based Valuation</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company will value all of the underlying assets of the trust
    as noted in the previous section above. The Company will then
    deduct from this, the fair value of the senior certificates of
    the trust. The senior certificates have a stated rate of
    interest. In addition, the certificate holder is entitled to a
    pro-rata share of 20% of the appreciation of the financial
    assets owned by the trust over an agreed upon threshold amount
    (&#147;Gain Share&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the senior certificates is calculated by using
    either pricing quotes from independent pricing services or
    internally prepared pricing models. Depending on the inputs to
    these models, this will generally be classified as either
    Level&#160;2 or Level&#160;3 financial instruments in the
    valuation hierarchy. Any fair value estimate will include any
    Gain Share owed to the senior certificates. Any change in fair
    value of the junior certificates will be recorded as a component
    of unrealized gains/(losses)&#160;&#151; investments in the
    consolidated statements of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Cash Flow
    Based Valuation</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company will determine a valuation of the junior
    certificates by estimating the residual cash flows it will
    receive and applying an appropriate discount rate. In general, a
    cash flow based valuation will be considered a Level&#160;3
    valuation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each circumstance is unique, but in general, the company will
    default to an asset based valuation. The Company will use a cash
    flow based valuation in cases where the asset based valuation
    yields a result close to zero (or a negative amount) yet the
    residual interest is still generating cash flow and is expected
    to for the foreseeable future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The &#147;Net Carry&#148; of the trust is comprised of the
    income earned on the tax exempt securities acquired by the trust
    offset by the stated interest paid to the senior certificates.
    This Net Carry is recorded on an accrual basis and is recorded
    as a component of income-investments in the consolidated
    statements of operations. Any accrued and unpaid Net Carry is
    included as a component of receivables in the consolidated
    statements of assets and liabilities. See note&#160;9 and
    note&#160;10.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">III.
    Interest Rate Swap</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has entered into interest rate swaps. Interest rate
    swap contracts represent the contractual exchange of fixed and
    floating rate payments based on a notional amount and a
    referenced interest rate. The Company uses interest rate swaps
    to hedge all or a portion of the interest rate risk associated
    with its investments.
</DIV>
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    <BR>
    F-13
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the interest rate swaps is either included in
    derivative asset or derivative liability in the consolidated
    statements of assets and liabilities. Fair value is determined
    by obtaining broker or counterparty quotes. Because there were
    observable inputs used to arrive at these quoted market prices,
    the Company considered the interest rate swaps to be
    Level&#160;2 financial instruments within the valuation
    hierarchy. The change in the unrealized loss is included as a
    component of unrealized gains/(losses)&#160;&#151; derivatives
    in the consolidated statements of operations. The periodic
    payments or receipts under the Company&#146;s interest rate swap
    contracts are recorded as an increase or decrease in interest
    expense or income in the consolidated statements of operations.
    See Note&#160;7 for further discussion of the Company&#146;s
    interest rate swap activities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(g)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Income
    Taxes</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company qualifies as a partnership for U.S.&#160;federal
    income tax purposes. As a partnership, the Company will not pay
    federal income tax and will be treated as a pass through entity.
    However, MFCA Funding Inc. (&#147;Funding Inc.&#148;), a wholly
    owned subsidiary of the Company is organized as a C-corporation
    for U.S.&#160;federal income tax purposes and will pay federal
    income tax. Further, the Company may be subject to certain state
    and local income taxes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Deferred tax assets and liabilities are determined using the
    asset and liability method in accordance with ASC Topic 740
    (formerly SFAS&#160;No.&#160;109, <I>Accounting for Income
    Taxes)</I>, under this method, deferred tax assets and
    liabilities are established for future tax consequences of
    temporary differences between the financial statement carrying
    amounts of assets and liabilities and their tax basis. Deferred
    tax assets and liabilities are measured using enacted tax rates
    expected to apply to taxable income in years in which those
    temporary differences are expected to reverse. A valuation
    allowance is established when necessary to reduce a deferred tax
    asset to the amount expected to be realized. As of
    December&#160;31, 2009 and 2008, the Company had recorded a 100%
    valuation allowance against the deferred tax asset in each
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with ASC Topic 740 (FIN&#160;No.&#160;48,
    <I>Accounting for Uncertainty in Income Taxes</I>), the Company
    evaluates tax positions taken or expected to be taken in the
    course of preparing its tax returns to determine whether the tax
    positions are &#147;more-likely than-not&#148; of being
    sustained by the applicable tax authority. The Company&#146;s
    tax benefit or tax expense is adjusted accordingly for tax
    positions not deemed to meet the more-likely than-not threshold
    in the current year. The Company records interest and penalties
    associated with audits as a component of income before income
    taxes. Penalties are recorded as an operating expense, and
    interest expense is recorded as interest expense in the
    consolidated statements of operations. The Company incurred no
    interest and penalties for the period from inception to
    December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(h)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Securities
    Transactions and Income</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Purchases and sales of investments and derivatives are recorded
    on a trade date basis. During the period between the trade date
    and settlement date, any money due to or from the counterparty
    will be recorded either as a component of receivables or accrued
    expenses and other liabilities in the consolidated statements of
    assets and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Realized gains and losses are determined using the average cost
    method, when partial positions are sold or unscheduled paydowns
    are received. Interest income, adjusted for the accretion of
    discounts, and expenses are recorded on the accrual basis.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(i)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Net
    Increase (Decrease) in Net Assets from Operations</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with ASC Topic 260 (formerly
    SFAS&#160;No.&#160;128, <I>Earnings per Share</I>), the Company
    presents both basic and diluted net increase (decrease) in net
    assets from operations (EPS) in its consolidated financial
    statements and footnotes thereto. Basic net increase (decrease)
    in net assets from operations (Basic EPS)
</DIV>
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    <BR>
    F-14
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    excludes dilution and is computed by dividing net income or loss
    allocable to common shareholders by the weighted average number
    of common shares, including shares that were issued as
    compensation, such as vested restricted shares and vested LTIP
    shares that have achieved parity, outstanding for the period.
    Diluted net increase (decrease) in net assets from operations
    (Diluted EPS) reflect the potential additional dilution of
    unvested restricted shares and unvested and vested LTIP shares
    that have not achieved parity issued as compensation if they are
    not anti-dilutive. See note&#160;11.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Effective January&#160;1, 2009, the Company calculates EPS using
    the two-class method which is an earnings allocation formula
    that determines EPS for common shares and participating
    securities. Unvested share-based payment awards that contain
    non-forfeitable rights to distributions or distribution
    equivalents (whether paid or unpaid) are participating
    securities and shall be included in the computation of EPS using
    the two-class method. Accordingly, all earnings (distributed and
    undistributed) are allocated to common shares and participating
    securities based on their respective rights to receive
    distributions. See note&#160;11.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(j)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Share-Based
    Compensation</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company issued share based compensation to its directors and
    employees of its Former Manager and accounts for such issuances
    as equity-settled transactions using the methodology prescribed
    by ASC Topic 718 (formerly SFAS&#160;No.&#160;123(R), <I>Share
    Based Compensation</I>, and Emerging Issues Task force (EITF)
    <FONT style="white-space: nowrap">No.&#160;96-18,</FONT>
    Accounting <I>for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services)</I>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employees of the Company&#146;s Former Manager and certain
    independent members of the credit committee of Funding, Inc.
    received long term incentive profit shares (LTIP shares). LTIP
    shares are a special class of limited liability company
    interests whereby upon the occurrence of certain events, the
    Company will revalue its assets and an increase in the valuation
    will be allocated first to the holders of the LTIP shares to
    equalize the capital accounts of each LTIP share with the
    capital account of each common share. Upon equalization of the
    capital accounts, the LTIP shares will achieve full parity with
    the common shares and, to the extent the LTIP shares are vested,
    can be converted into common shares (a
    <FONT style="white-space: nowrap">&#147;book-up</FONT>
    event&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At a meeting of the Board of Directors of the Company held on
    July&#160;23, 2009, the directors approved the issuance of
    common shares in partial payment of a performance share
    allocation to the Manager. These shares were valued at $2.01 per
    share, which is higher than the LTIP shares&#146; performance
    target of $1.25 per share. The issuance of these shares
    constituted a
    <FONT style="white-space: nowrap">&#147;book-up</FONT>
    event&#148; and the vested LTIP shares became eligible for
    conversion to common shares of the Company. All LTIP shares were
    converted to common shares as of December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Nonmanagement directors received restricted common shares.
    Quarterly distributions on each restricted common share, whether
    vested or not, will be the same as those made on common shares.
    The restricted shares are subject to restrictions on transfer
    during the vesting period. In general, unvested restricted
    shares will vest early upon change of control or other
    liquidation. The fair value of the restricted common shares as
    of the grant date is being amortized to share based compensation
    over the three year vesting period of the underlying grants net
    of assumed forfeitures.
</DIV>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(3)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Related
    Party Transactions</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Management Contract.</I>&#160;&#160;The Company has no
    employees and relies upon its Manager to conduct its operations
    pursuant to its management agreement dated June&#160;12, 2007
    (the Management Agreement). On March&#160;18, 2009, the Former
    Manager and Tricadia entered into an Assignment and Assumption
    Agreement that provided for the assignment of the Management
    Agreement to the Manager. The Manager is responsible for
    (i)&#160;the selection, purchase, monitoring and sale of
    portfolio investments; (ii)&#160;developing and implementing
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the Company&#146;s financing and risk management policies;
    (iii)&#160;providing the Company with investment advisory
    services; and (iv)&#160;carrying out the day to day operations
    of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<I>Base Management Fee:</I>&#160;&#160;The Company pays
    the Manager a base management fee on a monthly basis equal to
    1/12th&#160;of the Company&#146;s US GAAP basis equity x 1.50%.
    The US GAAP basis equity shall exclude one time events pursuant
    to changes in US GAAP and other noncash charges (subject to the
    approval of the Company&#146;s independent directors). To date,
    the Company has not sought approval for any one time events or
    noncash charges. The Company accrues this expense on a monthly
    basis. Base management fees for the years ended
    December&#160;31, 2009 and December&#160;31, 2008 were $962,670
    and $1,276,477, respectively, and are separately reported in the
    consolidated statements of operations. The management fees
    remaining payable at December&#160;31, 2009 and
    December&#160;31, 2008 were $112,856 and $35,541, respectively,
    and are included as a component of due to the Manager in the
    consolidated statements of assets and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The monthly base management fee payable will be reduced (but not
    below zero) by the proportionate share of the amount of any
    management fees paid to the Manager or its affiliates by a
    structured tax exempt partnership (STEP) or other structured
    credit vehicle in which the Company invests. The proportionate
    share is based on the percentage of the most junior class of
    certificates the Company holds in any STEP or other structured
    credit vehicle. Origination fees, structuring fees, or placement
    fees paid to the Manager and its affiliates will not reduce the
    base management fee. No such fees were incurred for the years
    ended December&#160;31, 2009 and 2008.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<I>Performance Share Allocation
    </I>(PSA).&#160;&#160;The Company will pay the Manager incentive
    compensation in the form of an allocation of profits to the
    performance share (on a quarterly basis) equal to the product of
    (i)&#160;20% of the amount by which (a)&#160;consolidated net
    income per weighted average common share exceeds (b)&#160;the
    weighted average offering price of all common shares issued by
    the Company multiplied by the quarterly benchmark rate, as
    defined, and (ii)&#160;the weighted average number of common
    shares outstanding in such quarter. This amount is paid through
    a special allocation of assets to the performance share after
    the end of the quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The quarterly benchmark is equal to the greater of (i)&#160;2%
    or (ii)&#160;0.75% plus the 10&#160;year Municipal Market Data
    (MMD)&#160;index for the quarter. The performance share
    calculation will be adjusted to exclude one-time events pursuant
    to changes in U.S.&#160;GAAP, as well as other noncash charges
    (subject to the approval of the Company&#146;s independent
    directors). To date, the Company has not sought approval for any
    one time events or noncash charges. The Company accrues this
    expense on a quarterly basis. PSA approved by the board of
    directors for the years ended December&#160;31, 2009 and 2008 is
    summarized below and are separately reported in the consolidated
    statements of assets and liabilities and the consolidated
    statements of operations.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Performance
    Share Allocation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="82%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    For the quarter ended:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    March 31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,200,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    June 30
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,082,691
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    September 30
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,636,862
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December 31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Company&#146;s First Amended and Restated Limited
    Liability Company Agreement, the Company is required to pay PSA
    to the Manager. The Board of Directors considered the
    Company&#146;s need for capital and the implications of issuing
    common shares in lieu of a cash distribution and determined that
    each PSA should be paid as a combination of cash and common
    shares of the Company. Each quarterly PSA was paid as summarized
    below:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Performance
    Share Allocation Payments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>For the Quarter Ended</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>March&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>June&#160;30,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>September&#160;30,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total PSA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,200,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,082,691
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,636,862
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    PSA paid in cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,200,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    883,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    PSA paid in common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,200,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    882,691
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,753,862
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value per share before PSA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Shares issued in payment of PSA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    553,407
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    438,712
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    721,528
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Swap with Tiptree.</I>&#160;&#160;On
    July&#160;14, 2009, the Company entered into a 10&#160;year
    interest rate swap for the purpose of hedging portfolio-wide
    interest rate risk. The counterparty for the swap is Tiptree.
    The Company will make semi-annual interest payments to Tiptree
    based on a fixed rate of 3.6475% and a notional amount of
    $5,000,000. Tiptree will make quarterly interest payments based
    on a floating rate of three-month LIBOR and a notional amount of
    $5,000,000. The fair value of the interest rate swap is $27,095
    at December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Expense Reimbursements.</I>&#160;&#160;From time to time, the
    Manager will pay certain of the Company&#146;s expenses and the
    Company will reimburse the Manager. Total reimbursement payments
    to Tricadia for general and administrative expenses for the
    period from March&#160;18, 2009 through December&#160;31, 2009
    were $447. Total reimbursement payments to the Former Manager
    for general and administrative expenses for the period from
    January&#160;1, 2009 through March&#160;17, 2009 and for the
    year ended December&#160;31, 2008 were $16,780 and $146,477,
    respectively. Unpaid amounts due to the Managers for
    reimbursement at December&#160;31, 2009 and 2008 were $0 and
    $14,121, respectively, and were included as a component of due
    to the Manager in the consolidated statements of assets and
    liabilities.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(4)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">General
    and Administrative Expenses</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company pays its own general and administrative expenses.
    The Manager is responsible for paying its employees compensation
    and benefits (with the exception of share based compensation
    described above). In general, the Company is responsible for all
    other general and administrative expenses for its operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These include (but are not limited to): transaction costs
    incidental to the acquisition, disposition and financing of
    investments; legal, tax, accounting, consulting, and other
    similar service fees and expenses; compensation and expenses of
    the Company&#146;s directors; the cost of directors&#146; and
    officers&#146; liability insurance; the costs associated with
    the establishment and maintenance of any credit facilities,
    tender option bond programs, and other financing arrangements
    and other indebtedness (including commitment fees, accounting
    fees, legal fees, closing and other costs); expenses associated
    with security offerings; expenses associated with making
    distributions to shareholders; the costs of printing and mailing
    proxies and reports to the Company&#146;s shareholders; costs
    associated with computer software or hardware; electronic
    equipment or purchased information technology services from
    third party vendors which is used solely by the Company; all
    regulatory costs incurred by the Company; and all taxes and
    insurance expense incurred by the Company or on its behalf.
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the Company is required to pay its pro rata share
    of rent, telephone, utilities, office furniture, equipment,
    machinery and other office, internal and overhead expenses of
    the Manager which is required for the Company&#146;s operations.
    See note&#160;3.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These expenses may be paid directly out of Company funds or,
    from time to time, will be paid by the Manager and the Company
    will reimburse the Manager.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(5)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Income
    Taxes</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At December&#160;31, 2009, the taxable subsidiary had net
    operating loss carry forwards for tax purposes of $1,016,842 and
    net capital loss carry forwards of $24,914,455. The net
    operating losses may be carried forward to reduce taxable income
    through the years 2027 of $651,733, 2028 of $245,589, and 2029
    of $119,520. The net capital losses may be carried forward to
    reduce capital gains through the years 2012 of $2,710,351 and
    2013 of $22,204,104.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Items that gave rise to deferred tax assets and liabilities at
    December&#160;31, 2009 and 2008, were comprised of the
    following: for 2009, unrealized gains on municipal bonds, and
    net operating loss carry forward; and for 2008, unrealized
    losses on municipal bonds, net operating loss carry forward, and
    net capital loss carryforward. The gross deferred tax asset
    balance as of December&#160;31, 2009 and 2008 was approximately
    $9,554,314 and $9,999,668, respectively. A 100% valuation has
    been established against the deferred tax assets because it is
    more likely than not that the Company will be unable to utilize
    the loss carry forwards before their respective expiration dates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The components of the net deferred tax asset are summarized
    below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="73%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred tax asset:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Unrealized losses on municipal bonds
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    478,361
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    965,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net capital loss carryforward
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,720,058
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,720,058
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net operating loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    355,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    314,063
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,554,314
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,999,668
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Less:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Valuation allowance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,554,314
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,999,668
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The federal income tax benefit at the U.S.&#160;federal income
    tax rate of 35% is the income tax benefit reflected in the
    consolidated statements of operations which has been offset by a
    100% valuation allowance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income tax expense consisted of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current tax expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred tax expense (credit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    445,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,867,369
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Change in valuation allowance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (445,354
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,867,369
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net deferred tax expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->
<!-- XBRL,n -->
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(6)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Fair
    Value of Financial Instruments</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon adoption of ASC Topic 820, the Company did not record a
    transition adjustment as the Company already had previously
    recorded its assets and its liabilities at fair value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assets and liabilities measured at fair value on a recurring
    basis including the senior certificates for which the Company
    has elected the fair value option are summarized below (see
    <FONT style="white-space: nowrap">note&#160;2-f</FONT>
    for a description of the three levels of the valuation hierarchy:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="51%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Quoted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Significant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Prices in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Significant<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Active<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Observable<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Unobservable<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>2008<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Markets<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Inputs<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Inputs<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 3)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investments, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="45%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Quoted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Significant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Prices in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Significant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Active<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Observable<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Unobservable<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>2009<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Markets<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Inputs<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Inputs<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 3)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investments, at fair value(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    57,971,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,488
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    40,720,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Derivative, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    See the consolidated schedule of investments for detailed
    categorization.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents additional information about assets
    and liabilities measured at fair value on a recurring basis and
    for which the Company has utilized Level&#160;3 inputs to
    determine fair value for the years ended December&#160;31, 2008
    and 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="36%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Net<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unrealized<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Realized/<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Transfers in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Purchases<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Gains and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;1,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unrealized<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>and/or Out,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>and Sales and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(Losses) Still<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Losses</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Net, of Level 3</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Other, Net(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Held(2)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Investment in NPPF2, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (65,198,471
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    63,758,256
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,440,215
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (65,198,471
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Investment in Merrill Lynch Trusts, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (19,650,597
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,483,117
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,869
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    840,389
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (19,650,597
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Direct Investment in Tax Exempt Securities, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (6,856,848
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,319,326
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,462,513
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (6,856,848
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Total Investments, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (91,705,916
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    105,560,699
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,448,119
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (91,705,916
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Primarily comprised of return of investments of underlying
    assets of the Trusts&#160;&#151; NPPF 2 and the underlying
    assets of the Merrill Lynch Trusts and the direct investments in
    tax exempt securities offset by the partial redemption of
    Class&#160;A certificates of NPPF 2 and the Class&#160;A
    certificates of the Merrill Lynch Trusts.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the amount of total gains or losses for the period,
    included in earnings, attributable to the change in unrealized
    gains (losses) relating to assets classified as Level&#160;3
    that are still held at December&#160;31, 2008.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-19
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="35%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Net<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unrealized<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Realized/<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Transfers in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Purchases<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Gains and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;1,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unrealized<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>and/or Out,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>and Sales and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(Losses) Still<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Gains</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Net, of Level 3</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Other, Net</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Held(1)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Investment in NPPF 2, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36,452,122
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,268,521
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    40,720,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (28,746,349
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Investment in Merrill Lynch Trusts, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    840,389
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,650,597
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (20,490,986
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Direct Investments in Tax Exempt Securities, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,462,513
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,364,155
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,250,488
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,576,180
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Total Investments, at fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,302,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    60,466,874
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (17,250,488
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (17,798,645
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    40,720,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (28,746,349
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the amount of total gains or losses for the period,
    included in earnings, attributable to the change in unrealized
    gains (losses) relating to assets classified as Level&#160;3
    that are still held at December&#160;31, 2009.</TD>
</TR>

</TABLE>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(7)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Derivative
    Contracts</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company utilizes derivative financial instruments as part of
    its overall investment activities. Investments in derivative
    contracts are subject to additional risk that can result in a
    loss of all or part of an investment. The Company&#146;s
    derivative activities are primarily classified by underlying
    interest rate risk. In addition to this interest rate exposure,
    the Company is also subject to additional counterparty risk
    should its counterparties fail to meet the contract terms.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest Rate Swaps
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is exposed to interest rate risk when there is an
    unfavorable change in the value of investments as a result of
    adverse movements in the market interest rates. The Company
    enters into interest rate swap contracts to protect against such
    adverse movements in the interest rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest rate swaps are contracts whereby counterparties
    exchange different rates of interest on a specified notional
    amount for a specified period of time. The payment flows are
    usually netted against each other, with the difference being
    paid by one party to the other. The Company enters into these
    contracts so as to minimize the underlying interest rate
    exposure of the investment portfolio. The Company is required to
    post cash collateral for the benefit of the counterparty. This
    is included as a component of restricted cash in the
    consolidated statements of assets and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The volume of the Company&#146;s interest rate derivative
    activities has been extremely low. Specifically, there were no
    outstanding contracts as of December&#160;31, 2008 and only one
    contract was entered into in 2009. This contract remains
    outstanding as of December&#160;31, 2009. This very limited
    interest rate activity is consistent with the limited trading
    activity within the Company&#146;s investment portfolio.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table identifies the fair value amounts of
    derivative instruments included in the consolidated statements
    of assets and liabilities as derivative contracts, categorized
    by primary underlying risk, at
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F-20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    December&#160;31, 2009. Balances are presented on a gross basis,
    prior to the application of the impact of counterparty and
    collateral netting.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ASSET
    DERIVATIVES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="63%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Interest Rate<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Contract Risk</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Contract Risk</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Swap contracts
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table identifies the net gain and loss amounts
    included in the consolidated statements of operations as net
    gain (loss) from derivative contracts, categorized by primary
    underlying risk, for the year ended December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CHANGE IN
    UNREALIZDED GAINS / (LOSSES) ON DERIVATIVES RECOGNIZED</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="63%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Interest Rate<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Contract Risk</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Contract Risk</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Swap contracts
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(8)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Restricted
    Cash</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Restricted cash is comprised of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="85%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    IRS collateral deposit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    277,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    277,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The interest rate swap collateral deposit represents cash posted
    with Morgan Stanley as credit support. The amount will be
    returned when the interest rate swap is terminated.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(9)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NPPF
    2</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NPPF 2 was created in 2008 and made its initial acquisition of a
    portfolio of tax exempt securities by issuing Class&#160;A
    Senior Certificates (the &#147;senior certificates) and
    Class&#160;B Junior Certificates (the &#147;junior
    certificates&#148;) to finance this purchase. The Company
    purchased all of the junior certificates. These certificates are
    carried at fair value and are included as a component of
    investments in the consolidated statements of assets and
    liabilities. The fair value of the junior certificates is the
    fair value of the tax exempt securities owned by NPPF 2 less the
    fair value of the senior certificates issued by NPPF 2. See
    <FONT style="white-space: nowrap">note&#160;2-f</FONT>
    <I>Investments in Trusts </I>for the Company&#146;s methodology
    in determining fair value of the assets and liabilities of NPPF
    2.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trust agreement required a mandatory auction of the assets
    of the trust in February 2009. On February&#160;27, 2009, the
    Company and the holder of the senior certificates of NPPF 2
    agreed to extend the mandatory auction of the trust&#146;s
    assets until February 2011. The Company agreed to contribute
    $8&#160;million of capital to the trust which was used to pay
    down the principal balance of the senior certificates. In
    addition, the Company agreed to undertake contributing
    additional value, the deficit restoration requirement, to the
    trust at the time of liquidation of the trust to the extent that
    asset values are insufficient to fully redeem the senior
    certificates. This undertaking is supported by the deposit of
    $19.8&#160;million par value of bonds currently held by the
    Company into a collateral account for the benefit of the trust.
    The Company receives the periodic income payments from these
    bonds and the proceeds of any maturities or sales are paid to
    the holder of the senior certificates as a reduction of par.
    This represents all of the Company&#146;s bonds that are not
    held in trusts. The
</DIV>
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<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    senior certificate holder has agreed that the Company&#146;s
    obligation to contribute to the deficit restoration can be
    satisfied at the Company&#146;s option at any time if the
    Company contributes an additional $7&#160;million in cash
    collateral to the trust, at which point the $19.8&#160;million
    of bonds would be released. The Company can further extend the
    auction until February 2012, if it contributes an additional
    $10&#160;million in collateral into the trust (either in cash or
    securities reasonably acceptable to the senior certificate
    holder). The Class&#160;A Certificate Rate (Priority Income
    Distribution) was increased from 2.85% to 3.00% fixed for the
    remaining period until auction. In addition, a significant
    portion of the income proceeds was allocated to reduce the
    outstanding principal balance of the senior certificates,
    leaving approximately 13.35% of income proceeds for distribution
    to the junior certificate holder. In addition, if the individual
    assets of the trust are liquidated for more than their amortized
    cost, certificate holder is entitled to 20% of the Disposition
    Gain as determined in accordance with the U.S.&#160;Internal
    Revenue Code (i.e. the Gain Share for NPPF 2).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proceeds of the mandatory auction are required to be used to
    redeem the senior certificates. If the bids received by the
    trustee do not exceed the face amount of the senior certificates
    (currently $65.9&#160;million), the auction fails. Upon a failed
    auction, the interest rate payable to the senior certificates
    increases to a floating rate based on the rolling
    <FONT style="white-space: nowrap">30-day</FONT>
    average of the USD-SIFMA Municipal Swap Index, subject to a
    maximum rate which will not exceed the aggregate amount of
    income during the distribution period, and the auction is
    repeated weekly until successful.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The senior certificates are recourse only to the assets of the
    trust and the Company&#146;s bonds that are not held in trusts
    as described above. If the assets of the trust became worthless
    or the trust otherwise could not redeem the senior certificates,
    the net loss to the Company would be the net carrying value of
    the junior certificates of the trust, plus the net carrying
    value of direct investments in bonds included in the
    consolidated statements of assets and liabilities and any
    accrued and unpaid interest receivable on the Company&#146;s
    investment in NPPF2 and the direct investments in bonds. As of
    December&#160;31, 2009, the junior certificates are recorded at
    a fair value of $40.7&#160;million. The accrued Net Carry
    related to the junior certificates is included in receivables
    and is recorded at a carrying value of $2.8&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During 2009, $50.2&#160;million of the face amount of senior
    certificates were redeemed as a result of dispositions within
    the portfolio.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(10)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Merrill
    Lynch Trusts</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;8, 2008, the Company and Merrill Lynch agreed to
    create four new trusts (the Merrill Lynch Trusts) that acquired
    four bonds previously financed as part of a Tender Option Bond
    program by issuing Class&#160;A Senior Certificates (the senior
    certificates) and Class&#160;B Junior Certificates (the junior
    certificates) to finance this purchase.. The Company purchased
    the junior certificates and Merrill Lynch Capital Services
    (Merrill) purchased the senior certificates of the trusts. The
    Company paid approximately $20.5&#160;million in aggregate for
    all the junior certificates and Merrill paid $79.6&#160;million
    for the senior certificates for a total purchase price of
    $100.1&#160;million. The total par value of the four bonds was
    $100.9&#160;million. The total fair value of the bonds at the
    time was approximately $81&#160;million. The junior certificates
    had been carried at fair value and were included as a component
    of investments in the consolidated statements of assets and
    liabilities as of December&#160;31, 2008. The fair value of the
    junior certificates was a cash flow based valuation because the
    asset based valuation yielded a result of zero but the residual
    interest was still generating cash flow.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The junior certificates received the residual income comprised
    of: the income from the bonds, less the interest on the senior
    certificates, and less any expenses of the trusts. On
    October&#160;9, 2009, the Company sold the junior certificates
    to Merrill for approximately $2,032,000. At the time of the
    sale, the bonds underlying the four trusts were valued at
    $77.8&#160;million, which was less the par amount of the senior
    certificates of $79.2&#160;million. The junior certificates at
    the time were valued at $204,740 based on the estimated future
    cash flow from the trusts through the final distribution dates.
    The Company realized a loss of $18.5&#160;million which
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-22
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    was recorded upon the sale and is included as a component of net
    realized loss&#160;&#151; investments in the consolidated
    statements of operations. Although the Company recorded a net
    realized loss, the sale resulted in a net increase to the net
    asset value of the Company of junior certificates at the time of
    the sale.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(11)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Equity
    Shares</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is organized as a limited liability company and is
    taxed as a partnership. The Company currently has the following
    classes of membership interests:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Membership
    Interests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="63%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outstanding at December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Authorized</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Unlimited
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,394,169
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,265,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    690,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined total of restricted common shares and LTIP shares
    authorized is currently fixed at 750,000. Accordingly, the
    Company may issue more restricted common shares than listed
    above as authorized as long as the combined total is less than
    or equal to 750,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<I>Unrestricted Common Shares.</I>&#160;&#160; The
    unrestricted common shares are each entitled to one vote per
    share and participate pro rata in quarterly distributions. In
    general, except for extraordinary corporate transactions,
    certain amendments to the operating agreement, liquidation, and
    the election and removal of directors, all matters voted on by
    the shareholders require a simple majority of votes cast. In the
    case of election of directors, a plurality of votes cast in
    person or by proxy is required. In the case of extraordinary
    corporate transactions, liquidation and removal of directors for
    cause, a majority of all votes entitled to be cast is required.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company completed a Rights Offering for 18,116,964 new
    common shares on June&#160;26, 2009. One subscription right was
    issued for the purchase of one common share at a price of $1.20
    per share to holders of common shares and LTIP shares. Tiptree
    purchased 14,901,307&#160;shares and the Manager purchased
    810,798&#160;shares in the Rights Offering. The Company raised
    $21.6&#160;million after the expenses of the offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<I>Restricted Common Shares.</I>&#160;&#160;The
    restricted common shares are identical to normal common shares
    except that they are subject to vesting. To date, all restricted
    common shares have been issued to directors of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<I>LTIP Shares.</I>&#160;&#160;As of July&#160;23, 2009,
    the LTIP shares have achieved parity with the common shares and
    became eligible for conversion to common shares. As of
    December&#160;31, 2009, all outstanding LTIP shares were
    converted to common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company completed a voluntary exchange of LTIP shares on
    June&#160;26, 2009 whereby existing LTIP shares with a
    performance target of $10.00 were exchanged for new LTIP shares
    with a performance target $1.25. The exchange ratio was
    <FONT style="white-space: nowrap">one-for-two,</FONT>
    such that one new LTIP share was issued for every two existing
    LTIP shares tendered. 566,915 existing LTIP shares were tendered
    and 283,458 new LTIP shares were issued. There were no changes
    to capital balances as a result of the LTIP Exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;<I>Preferred Shares.</I>&#160;&#160;The Company&#146;s
    board of directors is authorized to issue an unlimited amount of
    one or more classes or series of preferred shares without
    further action or approval from the common shareholders. The
    board of directors is authorized to fix the number of shares,
    relative powers, preference and rights, and the qualifications,
    limitations or restrictions applicable to each class or series
    by resolution.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-23
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has granted the Manager one performance share. The
    performance share is entitled to a special allocation of profits
    as described in note&#160;3. The performance share is generally
    not entitled to vote.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a limited liability company, the shareholder interests noted
    above are generally limited in their liability to the extent of
    each shareholder&#146;s investment in the Company. (The Company
    has no stated date of dissolution.) The following table shows
    the Company&#146;s share activity for the periods presented:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shares
    Outstanding</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Forfeiture of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Nonvested<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Membership Interests</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Vested</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,265,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LTIP shares:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Vested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    298,331
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    320,331
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Nonvested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    615,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (298,331
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (70,085
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    246,584
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    637,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (70,085
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,917,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (70,085
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,847,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Rollforward
    of Components of Members&#146; Equity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="30%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Noncash<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Distributions</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Earnings</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    892,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    776,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,668,654
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earnings/(deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,050
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (125,817,476
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,433,368
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,299,624
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,732,992
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    876,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (4,299,624
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (107,678,426
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-24
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shares
    Outstanding</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="28%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Issuance in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Lieu of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Conversion of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Performance<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Issuance as<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>LTIP Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Rights<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Share-Based<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>LTIP<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>to Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Membership Interests</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Allocation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Vested</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exchange</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,265,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,116,964
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,713,647
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    283,458
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,394,169
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    LTIP shares:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Vested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    320,331
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    246,584
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (283,457
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (283,458
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Nonvested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    246,584
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (246,584
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (283,457
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (283,458
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,847,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,116,964
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,713,647
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (283,457
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37,416,669
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Rollforward
    of Components of Members&#146; Equity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="21%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=10 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=10 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=10 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=10 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Issuance in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Lieu of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Conversion of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Performance<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Performance<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Noncash<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>LTIP Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Rights<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Share<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>to Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Allocation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Allocation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Vested</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Earnings</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21,567,352
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,837,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    300,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,982,245
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    186,656,412
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,375
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (300,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,375
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,668,654
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    313,591
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,982,245
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Earnings/(deficit) before
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Performance Share Allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (125,817,476
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (84,796,238
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Performance Share Allocation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Distributions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,732,992
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,732,992
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,237,553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21,567,352
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (5,920,448
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,837,448
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    471,966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41,021,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    90,215,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(12)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Net
    Increase (Decrease) in Net Assets from Operations Per
    Share</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company calculates basic net increase (decrease) in net
    assets from operations per share by dividing net increase
    (decrease) in net assets from operations for the period by the
    weighted average shares of its common shares outstanding for the
    period, which includes common shares outstanding, as well as
    vested restricted common shares and vested LTIP shares that have
    achieved parity. Diluted net increase (decrease) in net assets
    from operations per share takes into account the effect of
    unvested restricted common shares and unvested LTIP shares and
    vested LTIP shares that have not achieved parity unless they are
    anti-dilutive.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the year ended December&#160;31, 2008, the Company
    determined that the unvested restricted common shares and
    unvested LTIP shares and the vested LTIP shares that have not
    achieved parity are anti-dilutive. Therefore, the weighted
    average shares outstanding on a fully diluted basis are the same
    as the weighted average shares outstanding used for basic net
    increase (decrease) in net assets from operations per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, 22,500 restricted shares had not
    vested and all LTIP shares had been converted to common shares.
    As of December&#160;31, 2008, 15,000 restricted shares and
    246,584 LTIP shares had not vested. Both basic and fully diluted
    shares outstanding include the unrestricted common shares
    outstanding during the years ended December&#160;31, 2009 and
    December&#160;31, 2008. Fully diluted shares outstanding also
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-25
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    includes the dilutive effect of unvested restricted common
    shares, vested LTIP shares that have not achieved parity and
    unconverted LTIP shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company does not include the performance share issued to the
    Manager (see note&#160;10)&#160;in either the fully diluted net
    increase (decrease) in net assets from operations per share or
    basic net increase (decrease) in net assets from operations per
    share calculation as it does not participate in the net profits
    or distributions of the Company. See note&#160;3 for a
    description of Performance Share Allocation recorded for the
    year ended December&#160;31, 2009.
</DIV>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(13)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Share
    Based Compensation</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2007, the Company issued 30,000 restricted common shares
    to its directors. The Company valued the restricted common
    shares at $10 per share, the offering price of unrestricted
    common shares on June&#160;12, 2007. The value of the restricted
    common shares issued is being amortized to noncash incentive
    compensation over the vesting period of the underlying grants,
    net of assumed forfeitures. The vesting period is three years
    and the amortization is calculated on a straight line basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2007, August 2007 and November 2007, the Company issued
    637,000 LTIP shares to nonemployees of the Company in exchange
    for services to be provided. The fair values of the LTIP shares
    are being amortized to share based compensation over the vesting
    period of the underlying grants net of assumed forfeitures. In
    addition, the Company records an adjustment at the end of each
    reporting period to account for changes in fair value of the
    Company&#146;s common shares until the LTIP shares are vested.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The LTIP shares were issued as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    a.&#160;345,000 LTIP shares were issued on June&#160;26, 2007
    and vest over the period ending on June&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    b.&#160;267,000 LTIP shares were issued on August&#160;9, 2007
    and vest over the period ending on June&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    c.&#160;25,000 LTIP shares were issued on November&#160;15, 2007
    and vest over the period ending on September&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the year ended December&#160;31, 2008, 15,000 restricted
    common shares and 298,331 LTIP shares became vested. As of
    December&#160;31, 2008, 15,000 restricted shares and 246,584
    LTIP shares were unvested.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the December&#160;31, 2008 ending net asset value per
    share, the remaining share based compensation expense to be
    recognized over the remaining vesting period is $392,079 for
    LTIP shares and $150,000 for restricted shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On February&#160;5, 2009, in connection with the acquisition of
    a controlling interest of the Company by Tiptree the remaining
    unvested restricted shares and LTIP shares became vested and the
    Company recorded $419,083 of compensation expense.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In April 2009 and July 2009, the Company issued 22,500
    restricted common shares to its directors. The Company valued
    the restricted common shares at the most recent ending net asset
    value per share. The value of the restricted common shares
    issued is being amortized to noncash incentive compensation over
    the vesting period of the underlying grants, net of assumed
    forfeitures. The vesting period is three years and the
    amortization is calculated on a straight line basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The restricted common shares were issued as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    a.&#160;7,500 restricted shares were issued on April&#160;14,
    2009 at a value of $2.17 per share and vest over a three year
    period.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-26
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    b.&#160;15,000 restricted shares were issued on July&#160;23,
    2009 at a value of $2.05 per share and vest over a three year
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the Company offered to exchange existing LTIP
    shares (old LTIPs) for new LTIP shares (new LTIPs) at a rate of
    <FONT style="white-space: nowrap">one-for-two.</FONT>
    Under the terms of the LTIP shares, the Company will revalue its
    assets upon the occurrence of certain specified events, and any
    increase in valuation from the time of grant until such event
    will be allocated first to the holders of the LTIP shares to
    equalize the capital accounts of each LTIP share with the
    capital account of a common share of the Company. Upon
    equalization of the capital accounts, the LTIP shares will
    achieve full parity with the common shares for all purposes,
    including with respect to subsequent allocations and
    distributions, including, to the extent vested, liquidating
    distributions. If such parity is reached, (obtaining a
    performance target) vested LTIP shares may be converted into an
    equal number of common shares, and the holders may thereafter
    enjoy all the rights of shareholders of the Company. Under the
    old LTIPs the performance target was $10.00 per share. Under the
    new LTIPs the performance target was $1.25 per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All holders of outstanding LTIP shares elected to convert to new
    LTIPs. The Company did not record any compensation expense in
    connection with the LTIP exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At a meeting of the Board of Directors of the Company held on
    July&#160;23, 2009, the directors approved the issuance of
    common shares in partial payment of a performance share
    allocation to Tricadia Municipal Management, LLC, the
    Company&#146;s Manager. These shares were valued at $2.01 per
    share, which was higher than the new LTIP shares&#146;
    performance target of $1.25 per share. This was a
    <FONT style="white-space: nowrap">&#147;book-up</FONT>
    event&#148; and vested LTIP shares became eligible for
    conversion to common shares of the Company. All LTIP shares were
    converted to common shares as of December&#160;31, 2009. The
    company did not record any compensation expense in connection
    with the conversions of LTIP shares to common shares.
</DIV>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(14)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Commitments
    and Contingencies</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(a)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnifications</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the normal course of business, the Company enters into
    contracts that contain a variety of indemnifications. The
    Company&#146;s maximum exposure under these arrangements is
    unknown. However, the Company does not expect claims or losses
    pursuant to these contracts and expects the risk of loss to be
    remote. Thus no amounts have been accrued related to such
    indemnifications.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(b)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Management
    Contract</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial term of the Company&#146;s management contract with
    the Manager expires on December&#160;31, 2010 and automatically
    renews for a one year term at each anniversary thereafter. The
    contract may only be terminated after giving 180&#160;days
    notice, if at least two-thirds of the Company&#146;s independent
    directors or the holders of at least a majority of the
    outstanding common shares vote not to automatically renew.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Company were to terminate the management contract without
    cause, it would be required to pay a termination fee to the
    Manager equal to three times the average annual base management
    fee for the two 12&#160;month periods preceding the date of
    termination (annualized for any partial year period). In
    addition, the Company would need to redeem the performance share
    at an amount equal to three times the average performance share
    payments for the preceding two 12&#160;month periods.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The contract can be terminated with cause without paying the
    termination fees described above. Cause is narrowly defined and
    does not include unsatisfactory performance, even if that
    performance is materially detrimental to the Company&#146;s
    business.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-27
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(c)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights Agreement</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company entered into a registration rights agreement with
    the Former Manager whereby there would be a reduction in the
    level of management fees that the Company would pay the Manager
    if the Company failed to timely file a registration statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company did not file a resale shelf registration statement
    by March&#160;31, 2008. Accordingly, the base management fee
    payable to the Manager was reduced beginning on April&#160;1,
    2008 as described above through June&#160;28, 2008, and
    subsequently resumed to the original level of 1.50% from
    June&#160;28, 2008 to December&#160;31, 2008.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">(d)&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">NPPF 2
    Auction</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described in note&#160;9, the NPPF 2 trust was originally
    scheduled to auction its assets in February 2009. The Company
    has executed a term sheet to extend the auction until February
    2011 with an option to extend to February 2012.
</DIV>
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(15)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Risk
    Management</FONT></B>
</TD>
</TR>

</TABLE>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the ordinary course of business, the Company manages a
    variety of risks including market risk and credit risk. The
    Company identifies, measures, and monitors risk through various
    control mechanisms including diversifying exposures and
    activities across a variety of instruments, markets, and
    counterparties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market risk is the risk of potential adverse changes in the
    value of financial instruments and their derivatives because of
    changes in market conditions, such as interest rate movements
    and volatility in security prices. The Company manages market
    risk through the use of risk management strategies and various
    analytical monitoring techniques that evaluate the effect of
    cash instruments and derivative contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit risk is the risk the counterparties may fail to fulfill
    their obligations or that the collateral value becomes
    inadequate. The Company attempts to minimize its counterparty
    risk exposure by monitoring the size of its credit exposure to
    and the creditworthiness of its counterparties.
</DIV>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(16)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Concentrations
    of Credit Risk</FONT></B>
</TD>
</TR>

</TABLE>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cash and Cash Equivalents.</I>&#160;&#160;As of
    December&#160;31, 2009, the Company held substantially all of
    its cash and cash equivalents with U.S.&#160;Bank. If
    U.S.&#160;Bank failed under its obligation as custodian of these
    funds, the Company could lose a portion or all of its
    unrestricted cash balances with U.S.&#160;Bank.
</DIV>
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(17)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Distributions</FONT></B>
</TD>
</TR>

</TABLE>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The cash distributions were comprised of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="82%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,140,824
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,400
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Holders of LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    152,400
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,299,624
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-28
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2009 and 2008</B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->
<!-- XBRL,n -->
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(18)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Financial
    Highlights</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with the Audit Guide, the per share information
    and ratios to average net assets are presented below for each
    period:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Per Share
    Operating Performance</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Beginning net asset value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net realized losses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.51
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2.18
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized gains (losses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.46
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4.14
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total from investment operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (6.04
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Issuance of rights offering, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other share transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.09
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dilutive effect of rights offering and other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.48
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions to shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.24
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Performance share allocations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.16
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ending net asset value per share outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The per share amounts above are calculated based on the
    Company&#146;s shares outstanding as well as its unvested
    restricted stock and its vested and unvested LTIP shares. The
    LTIP shares are included because they are eligible to receive
    distributions and the performance share is excluded.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Ratios to
    Average Net Assets</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.53
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.31
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Noncash incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.95
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.35
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.71
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.14
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total return
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.84
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (79.77
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The above ratios for the years ended December&#160;31, 2009 and
    2008 are calculated by dividing income or expenses as applicable
    by the monthly average of net assets ($63.0&#160;million and
    $97.5&#160;million, respectively).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Total return is calculated by dividing the quarterly net
    increase (decrease) in net assets from operations by beginning
    net assets for the period on a compounded basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The per share information, ratios and total return above are
    calculated based on the shareholder group taken as a whole. An
    individual shareholder&#146;s results may vary from those shown
    above due to the timing of capital transactions.
</DIV>
<!-- /XBRL,ns -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-29
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    AUDITED FINANCIAL STATEMENTS<BR>
    December&#160;31, 2007</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-30
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='310'><B><FONT style="font-family: 'Times New Roman', Times">CONSOLIDATED
    STATEMENT OF ASSETS AND LIABILITIES</FONT></B></A>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    </A><B>As of December&#160;31, 2007</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="86%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>ASSETS</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    128,116,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest receivable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,350,146
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    83,750
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,550,698
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>LIABILITIES</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrealized loss on total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,378,922
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrealized loss on basis swaps
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    417,915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Due to the Manager (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    179,850
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued expenses and other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    234,830
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,211,517
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net Assets</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value per share (17,917,100&#160;shares outstanding)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-31
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='311'><B><FONT style="font-family: 'Times New Roman', Times">CONSOLIDATED
    SCHEDULE&#160;OF INVESTMENTS</FONT></B></A>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    </A><B>As of December&#160;31, 2007</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="31%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="20%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Range of <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Expiration<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of Net<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Notional of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Derivatives</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Contracts</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Dates</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Assets</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Underlying</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Cost</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    TOB (Residual Certificates)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    Sep 2017 - Dec 2033
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100,900,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38,228
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total return swap:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Bonds
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    May 2008
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5.7
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    181,850,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7,999,404
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Interest rate swaps
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    May 2008
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (6.7
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    177,850,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,379,518
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    359,700,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,378,922
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Basis swaps
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    Nov 2019 and Nov 2032
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.3
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    87,750,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (417,915
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    548,350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38,228
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (17,796,837
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-32
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='312'><B><FONT style="font-family: 'Times New Roman', Times">CONSOLIDATED
    STATEMENT OF OPERATIONS</FONT></B></A>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    </A><B>For the Period from June&#160;12, 2007 (inception) to
    December&#160;31, 2007</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Revenue</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investment income&#160;&#151; TOB
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    142,391
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investment income&#160;&#151; total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,150,382
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Interest income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,794,680
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,087,453
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Management fee (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,111,993
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Professional fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    374,727
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Insurance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    96,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Directors compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,627
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Shareholder reporting and transfer agent
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,781
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Other general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    72,479
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Non cash incentive compensation (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,681,089
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,406,364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Realized and unrealized gains and (losses) from
    investments</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized losses on investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net unrealized losses on investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized and unrealized losses from investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (20,545,416
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net decrease in net assets resulting from operations</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic and diluted net decrease in net assets from operations per
    share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1.05
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Weighted average common shares outstanding&#160;&#151; basic and
    diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,219,668
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions declared per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.08
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-33
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='313'><B><FONT style="font-family: 'Times New Roman', Times">CONSOLIDATED
    STATEMENT OF CHANGES IN NET ASSETS</FONT></B></A>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    </A><B>For the Period from June&#160;12, 2007 (inception) to
    December&#160;31, 2007</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="86%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Decrease in net assets resulting from operations</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,406,364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized losses on investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,710,351
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net unrealized losses on investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,835,065
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Net decrease in net assets resulting from operations</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions to common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,382,408
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions to LTIP shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (50,958
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Total decrease in net assets resulting from distributions to
    shareholders</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,433,366
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Increase in net assets from share transactions</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Increase in net assets from issuance of common shares, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Increase in net assets from issuance of incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Total increase in net assets from share transactions</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    159,911,599
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net increase in net assets</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net assets, beginning of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Net assets, end of period</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-34
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='314'><B><FONT style="font-family: 'Times New Roman', Times">CONSOLIDATED
    STATEMENT OF CASH FLOWS</FONT></B></A>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    </A><B>For the Period from June&#160;12, 2007 (inception) to
    December&#160;31, 2007</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="86%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Cash flows from operating activities:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net decrease in net assets resulting from operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Adjustments to reconcile net decrease in net assets resulting
    from operations to net cash flows used in operating activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Unrealized loss on total return swap
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,378,922
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investment in TOB Residual Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (38,228
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Unrealized loss on TOB Residual Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,228
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Unrealized loss on basis swaps
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    417,915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Non cash incentive compensation (related party)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Change in operating assets and liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    (Increase) decrease in receivables
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,350,146
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    (Increase) decrease in restricted cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (29,000,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    (Increase) decrease in other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (83,750
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Increase (decrease) due to the Manager
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    179,850
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Increase (decrease) in accrued expense and other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    234,830
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net cash used in operating activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (29,419,199
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Cash flows from financing activities:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Proceeds from issuance of common shares, (net of costs of
    $13,531,633)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions to common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,382,408
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Distributions to LTIP shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (50,958
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net cash provided by financing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    157,536,001
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net change in cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128,116,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents, beginning of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    128,116,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to consolidated financial statements
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-35
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='315'><B><FONT style="font-family: 'Times New Roman', Times">NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></B></A>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    </A><B>December&#160;31, 2007</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;1&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">ORGANIZATION
    AND NATURE OF OPERATIONS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Municipal Funding Company of America, LLC (the
    &#147;Company&#148;), was organized as a Delaware Limited
    Liability Company on April&#160;27, 2007. The Company began
    operations on June&#160;12, 2007 upon the completion of an
    offering of common shares of limited liability interests
    (&#147;Common Shares&#148;) in a private offering to qualified
    institutional buyers in accordance with Rule&#160;144A under the
    Securities Act of 1933.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is a specialty finance holding company that is
    externally managed and advised by Cohen Municipal Capital
    Management, LLC, a subsidiary of Cohen Brothers, LLC
    (&#147;Cohen and Company&#148;). The Company invests directly or
    indirectly in U.S.&#160;federally tax-exempt bonds with the
    objective of generating attractive risk-adjusted returns and
    predictable cash distributions. The Company seeks to achieve
    this objective by (1)&#160;acquiring interests in structured
    credit vehicles which own debt obligations, the interest on
    which is exempt from U.S.&#160;federal income taxation;
    (2)&#160;investing in total return swaps and other derivative
    arrangements relating to tax exempt bonds; and (3)&#160;making
    direct investments in Tax Exempt Bonds. The Company may also
    invest in securities that are subject to federal income tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has selected December 31 as its fiscal year-end. The
    Company has no stated date of dissolution.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;2&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying consolidated financial statements have been
    prepared by management in accordance with accounting principles
    generally accepted in the United States of America (&#147;US
    GAAP&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although the Company conducts its operations so that the Company
    is not required to register as an investment company under the
    Investment Company Act, for financial reporting purposes we are
    an investment company and follow the AICPA Audit and Accounting
    Guide for Investment Companies (the &#147;Audit Guide&#148;).
    Accordingly, investments in securities are carried at fair value
    with changes in fair value reflected in the consolidated
    statement of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">A.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Use of
    Estimates</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The preparation of financial statements in conformity with US
    GAAP requires management to make assumptions and estimates that
    affect the reported amounts in the consolidated financial
    statements and the accompanying notes. Actual results could
    differ from those estimates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">B.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Principles
    of Consolidation</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying consolidated financial statements include the
    accounts of the Company and its wholly owned subsidiary MFCA
    Funding, Inc. (&#147;Funding, Inc.&#148;). All intercompany
    transactions have been eliminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;24, 2003, the Financial Accounting Standards
    Board (&#147;FASB&#148;) issued Interpretation No. 46 (Revised
    December 2003), <I>Consolidation of Variable Interest Entities
    </I>(&#147;FIN&#160;46R&#148;), to clarify the application of
    Accounting Research Bulletin (&#147;ARB&#148;) No.&#160;51,
    <I>Consolidated Financial Statements</I> (&#147;ARB 51&#148;),
    as amended by FASB Statement No.&#160;94, <I>Consolidation of
    All Majority-Owned Subsidiaries</I> (&#147;SFAS&#160;94&#148;).
    However, the effective date of FIN&#160;46R was deferred for
    investment companies (including non-registered investment
    companies) that are accounting for investments in accordance
    with the Audit Guide.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;11, 2007, the FASB issued FASB Staff Position
    <FONT style="white-space: nowrap">FIN&#160;46R-(7)</FONT>
    Application of <I>FASB Interpretation No.&#160;46(R) </I>to
    Investment Companies
    <FONT style="white-space: nowrap">(&#147;FIN&#160;46R-7&#148;).</FONT>
    <FONT style="white-space: nowrap">FIN&#160;46R-7</FONT>
    clarifies that those entities which account for themselves as
    investment companies under the Audit Guide are not subject to
    the consolidation requirements of FIN&#160;46R.
</DIV>
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    <BR>
    F-36
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company reviews each investment that it makes under a
    control based framework in accordance with ARB 51 and
    SFAS&#160;94. If the Company determines it controls the investee
    and the investee itself meets the definition of an investment
    company under the Audit Guide, the Company consolidates the
    investee. Otherwise, the Company will report its equity
    investment at fair value as required by the Audit Guide.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">C.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Fair
    Value of Financial Instruments</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair values of the Company&#146;s assets and liabilities
    which qualify as financial instruments under Statement of
    Financial Accounting Standard No.&#160;107, <I>Disclosures about
    Fair Value of Financial Instruments
    </I>(&#147;SFAS&#160;107&#148;) approximate the carrying amounts
    presented in the consolidated statement of assets and
    liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">D.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Recent
    Accounting Developments</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In September 2006, the FASB issued SFAS&#160;No.&#160;157,
    <I>Fair Value Measurements </I>(&#147;SFAS&#160;157&#148;). This
    standard establishes a single authoritative definition of fair
    value, sets out a framework for measuring fair value, and
    requires additional disclosures about fair value measurements.
    SFAS&#160;157 applies to fair value measurements already
    required or permitted by existing standards. SFAS&#160;157 is
    effective for financial statements issued for fiscal years
    beginning after November&#160;15, 2007 and interim periods
    within those fiscal years. Management believes the impact of
    SFAS&#160;157 will not be material to the Company&#146;s
    financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In February 2007, the FASB issued SFAS&#160;No.&#160;159, <I>The
    Fair Value Option for Financial Assets and Financial Liabilities
    </I>(&#147;SFAS&#160;159&#148;). This standard provides
    companies the option of reporting certain financial instruments
    at fair value which were previously carried at cost or not
    recognized on the financial statements. This Statement is
    effective as of the beginning of an entity&#146;s first fiscal
    year that begins after November&#160;15, 2007. Management
    believes the impact of SFAS&#160;159 will not be material to the
    Company&#146;s financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On June&#160;11, 2007, the American Institute of Certified
    Public Accountants (AICPA) issued SOP
    <FONT style="white-space: nowrap">07-01,</FONT>
    <I>Clarification of the Scope of the Audit and Accounting Guide
    &#147;Investment Companies&#148; and Accounting by Parent
    Companies and Equity Method Investors for Investments in
    Investment Companies</I>
    <FONT style="white-space: nowrap">(&#147;SOP&#160;07-01&#148;).</FONT>
    <FONT style="white-space: nowrap">SOP&#160;07-01</FONT>
    also provides guidance for determining whether investment
    company accounting applied by a subsidiary or equity method
    investee should be retained in the financial statements of the
    parent company or an equity method investor.
    <FONT style="white-space: nowrap">SOP&#160;07-01</FONT>
    was to be effective for fiscal years beginning after
    December&#160;15, 2007 with early adoption encouraged. However
    due to various implementation issues that surfaced in practice
    since the SOP was issued in 2007, the FASB decided, in February
    2008, to issue FASB Staff Position
    <FONT style="white-space: nowrap">SOP&#160;07-1-1</FONT>
    which indefinitely defers the effective date of
    <FONT style="white-space: nowrap">SOP&#160;07-1.</FONT>
    Based on its review of
    <FONT style="white-space: nowrap">SOP&#160;07-01</FONT>
    as issued by the AICPA on June&#160;11, management concluded
    that adoption of
    <FONT style="white-space: nowrap">SOP&#160;07-01</FONT>
    would not have a material impact to its financial statements.
    However, given that modifications may be made prior to final
    adoption of
    <FONT style="white-space: nowrap">SOP&#160;07-01,</FONT>
    management can not determine the impact to the Company&#146;s
    financial statements at this time.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">E.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Cash
    and Cash Equivalents</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cash and cash equivalents consist of cash held at banks as well
    as short term investments with original maturity of three months
    or less as defined in SFAS&#160;95, <I>Statement of Cash
    Flows.</I>
</DIV>
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    <BR>
    F-37
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">F.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Restricted
    Cash</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Restricted cash represents cash collateral posted with
    counterparties. Income earned on restricted cash balances is
    included as a component of revenue in the consolidated statement
    of operations in the same line item as the income earned on the
    underlying security the restricted cash is supporting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">G.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Investments</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the ordinary course of business, the Company has entered into
    off-balance sheet derivatives. These derivatives involve, to
    varying degrees, elements of credit and market risk in excess of
    the amount recorded on the consolidated statement of assets and
    liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All derivatives are carried at fair value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Total Return Swap (&#147;TRS&#148;).</I>&#160;&#160;The
    Company, through its wholly-owned subsidiary Funding, Inc., has
    made an investment in a TRS. Under the terms of the TRS, the
    counterparty investment bank and Funding, Inc. will identify
    tax-exempt bonds that will serve as the reference portfolio for
    the swap. The counterparty is not obligated to, but may,
    actually own the bonds in the reference portfolio. The actual
    owner of the underlying bonds is able to declare the income
    received from the bonds as tax exempt. However, Funding Inc. is
    not the owner of the underlying portfolio of tax-exempt bonds.
    That is, Funding Inc. has a derivative interest in the
    underlying reference bonds but is not the owner. Therefore, any
    income earned by the TRS will be taxable to Funding, Inc.
    Funding, Inc. is required to post cash collateral for the
    benefit of the counterparty. The TRS is non-recourse to Funding,
    Inc. and Funding, Inc.&#146;s total loss, at any one point in
    time, is limited to the cash collateral posted at that time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The total return of the TRS has two components: (1)&#160;the
    &#147;Net Carry&#148; which represents the income generated by
    the reference bonds less a cost of financing which is agreed
    upon between the counterparty and Funding, Inc. and (2)&#160;the
    change in the underlying fair value of the reference bonds and
    related interest rate hedges.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company includes the collateral posted for the TRS as
    restricted cash in the consolidated statement of assets and
    liabilities. The value of the TRS is calculated by the
    counterparty by obtaining quoted market prices on the underlying
    bonds and interest rate hedges. The Company includes this value
    as either unrealized gain or unrealized loss on total return
    swap in the consolidated statement of assets and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Net Carry is recognized as a component of investment
    income&#160;&#151; total return swap and the change in the
    underlying value of the reference bonds is recognized as an
    unrealized gain or loss on investments in the consolidated
    statement of operations. Any unrealized gain or loss will be
    realized either at termination of the TRS or when a reference
    bond is removed from the TRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tender Option Bond Program
    (&#147;TOB&#148;).</I>&#160;&#160;The Company makes investments
    in TOBs. A TOB is a trust that acquires tax exempt bonds in the
    secondary market. Each TOB finances this purchase by issuing
    senior floating tax exempt securities (&#147;Senior
    Certificate&#148;) and junior residual interest tax exempt
    securities (&#147;Residual Certificate&#148;). The Senior
    Certificate holders are entitled to a variable rate of interest
    which is reset on a weekly basis by the remarketing agent based
    on market conditions. The Residual Certificate holders are
    entitled to the residual income (i.e. the income generated by
    the underlying bonds less the amount due to the Senior
    Certificate holders less fees and expenses incurred by the
    trust). In each TOB the Company has invested in to date,
    realized gains and losses on the underlying bonds are shared as
    follows: If the underlying bonds are sold for a gain, the Senior
    Certificate holders are entitled to 5% of the gain and the
    Residual Certificate holders are entitled to 95% of the gain. If
    the underlying bonds are sold for a loss, 100% of the loss is
    borne by the Residual Certificate holder up to its initial
    investment.
</DIV>
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    <BR>
    F-38
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company currently purchases 100% of the Residual Certificate
    securities in each TOB in which it invests. The Senior
    Certificate holders have the right to put their securities back
    to the TOB. The Senior Certificate holders&#146; right to put
    their securities back to the TOB terminates upon certain events,
    including (i)&#160;payment default of the underlying bonds;
    (ii)&#160;bankruptcy of the bond issuers; (iii)&#160;if the
    rating of the bonds falls below certain levels; (iv)&#160;an
    event that causes interest of the bonds to be taxable; and
    (v)&#160;bankruptcy of the guarantor of the bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the TOB is required to acquire the Senior Certificates and,
    if the remarketing agent cannot remarket them, the TOB can draw
    on a liquidity facility provided by a third party liquidity
    provider. The Company may enter into a shortfall agreement
    whereby it agrees to reimburse the third party liquidity
    provider for losses suffered under its obligations under the
    liquidity facility. Each shortfall agreement is unique and may
    provide for full recourse to the Company or limited recourse. To
    date, the Company has not entered into a shortfall agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The value of the TOB Residual Certificates is calculated by
    obtaining values on the underlying bonds of the TOB. The Company
    uses an independent pricing service or quotes from independent
    broker dealers to value the underlying bonds. If the bonds have
    increased in value as compared to the cost paid by the TOB, the
    Company will increase the fair value of the TOB Residual
    Certificates by 95% of the increase in the value of the
    underlying bonds. If the bonds have decreased in value, the
    Company will reduce the fair value of the TOB Residual
    Certificate by 100% of the decline in value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Company has not executed a shortfall agreement, the
    Company will not reduce the fair value of the TOB Residual
    Certificates below zero. However, if the Company has a shortfall
    agreement, the Company will reduce the fair value of the TOB
    Residual Certificates below zero resulting in a net unrealized
    loss on Residual Certificates in the consolidated statement of
    assets and liabilities. Any reduction in value of the TOB
    Residual Certificates will be limited to the maximum obligation
    the Company has agreed to under the shortfall agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the TOB Residual Certificates is either
    included as net unrealized gain or net unrealized loss on
    Residual Certificates in the consolidated statement of assets
    and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The residual income received under the Residual Certificates is
    recorded as a component of investment income&#160;&#151; TOB.
    The change in the value of the TOB Residual Certificates is
    included as either unrealized gain or loss on investments in the
    consolidated statement of operations. Any unrealized gain or
    loss will be realized at termination of the TOB.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Basis Swaps.</I>&#160;&#160;The Company has entered into two
    basis swap arrangements. A basis swap is an interest rate swap
    which involves the exchange of two floating rate financial
    instruments (that is, a floating-floating interest rate swap
    under which the floating rate payments are referenced to
    different bases).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the case of the basis swaps entered into by the Company, no
    cash is exchanged at the outset of the contract and no principal
    payments are made by either party. A single net payment will be
    made by one counterparty at each due date. The payments commence
    in February of 2010 and are made quarterly thereafter until
    termination. The potential loss for the Company on the basis
    swaps is unlimited.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the basis swaps is either included in
    unrealized gain or unrealized loss on basis swap in the
    consolidated statement of assets and liabilities. Fair value is
    determined by obtaining quotes from the counterparty. The change
    in the unrealized loss is included as a component of net
    unrealized losses on investments in the consolidated statement
    of operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company enters into basis swaps in order to hedge interest
    rate risk related to bonds held on balance sheet or as part of
    the reference portfolio of the TRS.
</DIV>
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    <BR>
    F-39
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">H.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Income
    Taxes</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company qualifies as a partnership for U.S.&#160;federal
    income tax purposes. As a partnership, the Company will not pay
    federal income tax and will be treated as a pass through entity.
    However, a certain wholly-owned subsidiary of the Company is
    organized as a C-corporation for U.S.&#160;federal income tax
    purposes and will pay federal income tax. Further, the Company
    may be subject to certain state and local income taxes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Deferred tax assets and liabilities are determined using the
    asset and liability method in accordance with Statement of
    Financial Accounting Standards (&#147;SFAS&#148;) No.&#160;109,
    &#147;<I>Accounting for Income Taxes</I>.&#148; Under this
    method, deferred tax assets and liabilities are established for
    future tax consequences of temporary differences between the
    financial statement carrying amounts of assets and liabilities
    and their tax basis. Deferred tax assets and liabilities are
    measured using enacted tax rates expected to apply to taxable
    income in years in which those temporary differences are
    expected to reverse. A valuation allowance is established when
    necessary to reduce deferred tax amounts to the amount expected
    to be realized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with FASB Interpretation No.&#160;48,
    <I>Accounting for Uncertainty in Income Taxes </I>(&#147;FIN
    48&#148;), the Company evaluates tax positions taken or expected
    to be taken in the course of preparing its tax returns to
    determine whether the tax positions are
    &#147;more-likely-than-not&#148; of being sustained by the
    applicable tax authority. The Company&#146;s tax benefit or tax
    expense is adjusted accordingly for tax positions not deemed to
    meet the more-likely-than-not threshold in the current year. The
    Company records interest and penalties associated with audits as
    a component of income before income taxes. Penalties are
    recorded as an operating expense, and interest expense is
    recorded as interest expense in the statement of operations. The
    Company incurred no interest and penalties for the period ended
    December&#160;31, 2007.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Securities
    Transactions and Income</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Purchases and sales of derivatives are recorded on a trade date
    basis. During the period between the trade date and settlement
    date, any money due to or from the counterparty will be recorded
    either as a component of receivables or accrued expenses and
    other liabilities in the consolidated statement of assets and
    liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Realized gains and losses are determined using the average cost
    method, when partial positions are sold. Interest income and
    expenses are recorded on the accrual basis.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">J.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Net
    increase (decrease) in net assets from operations</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with SFAS&#160;No.&#160;128, <I>Earnings per Share
    </I>(&#147;SFAS&#160;128&#148;), the Company presents both basic
    and diluted net increase (decrease) in net assets from
    operations (&#147;EPS&#148;) in its consolidated financial
    statements and footnotes thereto. Basic net increase (decrease)
    in net assets from operations (&#147;Basic EPS&#148;) excludes
    dilution and is computed by dividing net income or loss
    allocable to common shareholders by the weighted average number
    of common shares, including vested restricted shares and vested
    LTIP shares issued as compensation, outstanding for the period.
    Diluted net increase (decrease) in net assets from operations
    (&#147;Diluted EPS&#148;) reflect the potential additional
    dilution of unvested restricted shares and unvested LTIP shares
    issued as compensation if they are not anti-dilutive. (See
    note&#160;6)
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">K.&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Share-Based
    Compensation</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company issues share based compensation to its directors and
    employees of its manager, Cohen Municipal Capital Management,
    LLC (&#147;Cohen&#148; or &#147;Manager&#148;) and accounts for
    such issuances as equity-settled transactions using the
    methodology prescribed by SFAS&#160;No.&#160;123(R) <I>Share
    Based Compensation </I>(&#147;SFAS&#160;123R&#148;) and Emerging
    Issues Task force (&#147;EITF&#148;)
    <FONT style="white-space: nowrap">No.&#160;96-18</FONT>
    <I>Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services</I>.
</DIV>
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    <BR>
    F-40
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employees of the Company&#146;s Manager and certain independent
    directors of the credit committee of Funding, Inc. receive long
    term incentive profit shares (&#147;LTIP shares&#148;). LTIP
    shares are a special class of limited liability company
    interests. Quarterly distributions on each LTIP share, whether
    vested or not, will be the same as those made on common shares.
    However, LTIP shares will not have full parity with common
    shares with respect to liquidating distributions. Under the
    terms of the LTIP shares, the Company will revalue its assets
    upon the occurrence of certain events, and any increase in
    valuation from the time of the grant until such event will be
    allocated first to the holders of the LTIP shares to equalize
    the capital accounts of each LTIP share with the capital account
    of each common share. Upon equalization of the capital accounts,
    the LTIP shares will achieve full parity with the common shares
    and, to the extent the LTIP shares are vested, can be converted
    into common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Non-management directors receive restricted common shares.
    Quarterly distributions on each restricted common share, whether
    vested or not, will be the same as those made on common shares.
    The restricted shares are subject to restrictions on transfer
    during the vesting period. In general, unvested restricted
    shares will vest early upon change of control or other
    liquidation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the restricted common shares as of the grant
    date is being amortized to share based compensation over the
    three year vesting period of the underlying grants net of
    assumed forfeitures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair values of the LTIP shares are being amortized on a
    straight line basis to share based compensation over the vesting
    period of the underlying grants net of assumed forfeitures. In
    addition, the Company records an adjustment at the end of each
    reporting period to account for changes in fair value of the
    Company&#146;s common shares until the LTIP shares are vested.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;3&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">RELATED
    PARTY TRANSACTIONS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>Management Contract</U>.</I>&#160;&#160;The Company has no
    employees and relies upon its Manager, Cohen Municipal Capital
    Management, LLC (&#147;Cohen&#148;), to conduct its operations
    pursuant to its management agreement dated June&#160;12, 2007
    (the &#147;Management Agreement&#148;). The Manager is
    responsible for (i)&#160;the selection, purchase, monitoring and
    sale of portfolio investments; (ii)&#160;developing and
    implementing the Company&#146;s financing and risk management
    policies; (iii)&#160;providing the Company with investment
    advisory services; and (iv)&#160;carrying out the day to day
    operations of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <U>A.</U> <I>Base Management Fee:</I>&#160;&#160;The Company
    pays Cohen a base management fee on a monthly basis equal to
    1/12th of the Company&#146;s US GAAP basis equity x 1.50%. The
    US GAAP basis equity shall exclude one time events pursuant to
    changes in US GAAP and other non-cash charges (subject to the
    approval of the Company&#146;s independent directors). To date,
    the Company has not sought approval for any one time events or
    non-cash charges. The Company accrues this expense on a monthly
    basis. Cohen agreed to charge no management fee to the Company
    for the month of June 2007. Base management fees for the period
    from July&#160;1, 2007 to December&#160;31, 2007 were $1,111,993
    and are separately reported in the consolidated statement of
    operations. The management fees remaining payable at
    December&#160;31, 2007 were $164,366 and are included as a
    component of due to Manager in the consolidated statement of
    assets and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The base management fee otherwise payable in any fiscal year
    will be reduced (but not below zero), by the proportionate share
    of the amount of any management fees paid to Cohen or its
    affiliates by a structured tax exempt partnership
    (&#147;STEP&#148;) or other structured credit vehicle in which
    the Company invests. The proportionate share is based on the
    percentage of the most junior class of certificates the Company
    holds in any STEP or other structured credit vehicle.
    Origination fees, structuring fees, or placement fees paid to
    Cohen and its affiliates will not reduce the base management fee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <U>B.</U> <I>Incentive Fee:</I>&#160;&#160;The Company will pay
    Cohen incentive compensation (on a quarterly basis) equal to the
    product of (i)&#160;20% of the amount by which
    (a)&#160;consolidated net income per weighted average common
</DIV>
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    <BR>
    F-41
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    share exceeds (b)&#160;the weighted average offering price of
    all common shares issued by the Company multiplied by the
    quarterly benchmark rate, as defined, and (ii)&#160;the weighted
    average number of common shares outstanding in such quarter.
    This amount is paid through a special allocation of income to
    the performance share issued. (See note&#160;6)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The quarterly benchmark is equal to the greater of (i)&#160;2%
    or (ii)&#160;0.75% plus the 10&#160;year Municipal Market Data
    (&#147;MMD&#148;) index for the quarter. The performance share
    calculation will be adjusted to exclude one-time events pursuant
    to changes in US GAAP, as well as other non-cash charges
    (subject to the approval of the Company&#146;s independent
    directors). To date, the Company has not sought approval for any
    one time events or non-cash charges. The Company accrues this
    expense on a quarterly basis. No incentive fees have been
    incurred for the period from June&#160;12, 2007 to
    December&#160;31, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>Realized loss on TRS</U></I>.&#160;&#160;Prior to the
    Company&#146;s formation, Cohen entered into a TRS with a
    counterparty bank and began to identify reference bonds for the
    benefit of the Company. In August 2007, the TRS was assigned
    from Cohen to the Company. At that time, the accumulated mark to
    market loss on Cohen&#146;s interest in the TRS was $3,028,794.
    In order to approve the assignment and renewal of the TRS, the
    counterparty required that this loss be realized and funded. As
    part of the assignment, Cohen and the Company agreed to split
    that loss and each bear one half of the loss. This arrangement
    was approved by the independent directors of the Company.
    Accordingly, the Company recorded a $1,514,397 realized loss in
    its consolidated statement of operations. In addition, as part
    of the assignment and renewal, the counterparty required of the
    Company, a higher level of collateral and modified other terms
    of the TRS agreement. The Company posted $19,000,000 of
    collateral with the counterparty at that time and the
    counterparty returned to Cohen the collateral it had posted
    previously. The Company subsequently posted an additional
    $10,000,000 of collateral for the benefit of the counterparty
    prior to year end.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>Expense reimbursements</U></I>.&#160;&#160;From time to
    time, Cohen will pay certain of the Company&#146;s expenses and
    the Company will reimburse Cohen. Total reimbursement payments
    to Cohen for general and administrative expenses for the period
    from commencement of operations to December&#160;31, 2007 are
    $118,171. Unpaid amounts due to the Manager for reimbursement
    are $15,484 and are included as a component of due to Manager in
    the consolidated statement of assets and liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;4&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">GENERAL
    AND ADMINISTRATIVE EXPENSES</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company pays its own general and administrative expenses.
    Cohen is responsible for paying its employees compensation and
    benefits (with the exception of share based compensation
    described above). In general, the Company is responsible for all
    other general and administrative expenses for its operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These include (but are not limited to): transaction costs
    incidental to the acquisition, disposition and financing of
    investments; legal, tax, accounting, consulting, and other
    similar service fees and expenses; compensation and expenses of
    the Company&#146;s directors; the cost of directors&#146; and
    officers&#146; liability insurance; the costs associated with
    the establishment and maintenance of any credit facilities,
    tender option bond programs, and other financing arrangements
    and other indebtedness (including commitment fees, accounting
    fees, legal fees, closing and other costs); expenses associated
    with security offerings; expenses associated with making
    distributions to shareholders; the costs of printing and mailing
    proxies and reports to the Company&#146;s shareholders; costs
    associated with computer software or hardware; electronic
    equipment or purchased information technology services from
    third party vendors which is used solely by the Company; all
    regulatory costs incurred by the Company; and all taxes and
    insurance expense incurred by the Company or on its behalf. In
    addition, the Company is required to pay its pro rata share of
    rent, telephone, utilities, office furniture, equipment,
    machinery and other office, internal and overhead expenses of
    Cohen which is required for the Company&#146;s operations (See
    note 3).
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-42
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These expenses may be paid directly out of Company funds or,
    from time to time, will be paid by Cohen and the Company will
    reimburse Cohen.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;5&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">INCOME
    TAXES</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No provision was made for federal income tax for the period
    ended December&#160;31, 2007, since the Company&#146;s taxable
    subsidiary had a significant net operating loss. For the period
    ended December&#160;31, 2007, the taxable subsidiary incurred a
    net loss carry forward for tax purposes of $1,800,236. The net
    operating losses may be carried forward to reduce taxable income
    through the year 2012.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Temporary differences that give rise to deferred tax assets and
    liabilities at December&#160;31, 2007, were comprised of
    unrealized losses on the total return swap, the basis swap, and
    the net operating loss carry forward. The gross deferred tax
    asset balance as of December&#160;31, 2007 is approximately
    $7,132,299. A 100% valuation has been established against the
    deferred tax assets, as the utilization of the loss carry
    forwards cannot reasonably be assured.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The components of the net deferred tax asset are summarized
    below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December 31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred tax asset:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Unrealized losses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,502,217
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net operating loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    630,082
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,132,299
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Less:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Valuation allowance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7,132,299
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The federal income tax benefit at the U.S.&#160;federal income
    tax rate of 35.0% is the income tax benefit reflected in the
    consolidated statement of operations which has been offset by a
    100% valuation allowance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income tax expense consisted of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current tax expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred tax credit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7,132,299
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Change in valuation allowance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,132,299
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net Deferred tax credit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-43
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;6&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">EQUITY
    SHARES</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is organized as a limited liability company and is
    taxed as a partnership. The Company currently has the following
    classes of membership interests:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="76%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="8" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B><FONT style="font-size: 10pt">Membership Interests as of
    December&#160;31, 2007:</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Authorized</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outstanding</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Unlimited
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    690,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    637,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined total of restricted common shares and LTIP shares
    authorized is currently fixed at 750,000. Accordingly, the
    Company may issue more LTIPs or more restricted common shares
    than listed above as long as the combined total is less than or
    equal to 750,000. As of December&#160;31, 2007, all restricted
    common shares and 615,000 LTIP shares were unvested. 22,000
    LTIPs shares became vested during October and November 2007 upon
    separation of certain employees of Cohen.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>A.&#160;Unrestricted common shares.</I>&#160;&#160;The
    unrestricted common shares are each entitled to one vote per
    share and participate pro rata in quarterly distributions. In
    general, except for extraordinary corporate transactions,
    certain amendments to the operating agreement, liquidation, and
    the election and removal of directors, all matters voted on by
    the shareholders require a simple majority <I>of votes cast</I>.
    In the case of election of directors, a plurality <I>of votes
    cast </I>in person or by proxy is required. In the case of
    extraordinary corporate transactions, liquidation and removal of
    directors for cause, a majority of all votes <I>entitled to be
    cast </I>is required.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>B.&#160;Restricted common shares.</I>&#160;&#160;The
    restricted common shares are identical to normal common shares
    except that they are subject to vesting. To date, all restricted
    common shares have been issued to directors of the Company and
    its subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>C.&#160;LTIP shares.</I>&#160;&#160;LTIP shares represent a
    special class of limited liability interest. LTIP shares are
    subject to vesting. LTIP shares are entitled to the same voting
    rights and participation in quarterly dividends as common shares
    whether vested or not. LTIP shares will not have full parity
    with common shares with respect to liquidating distributions.
    Under the terms of the LTIP shares, the Company will revalue its
    assets upon the occurrence of certain events, and any increase
    in valuation from the time of the grant until such event will be
    allocated first to the holders of the LTIP shares to equalize
    the capital accounts of each LTIP share with the capital account
    of each common share. Upon equalization of the capital accounts,
    the LTIP shares will achieve full parity with the common shares
    and, to the extent the LTIP shares are vested, can be converted
    into common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>D.&#160;Preferred shares.</I>&#160;&#160;The Company&#146;s
    board of directors is authorized to issue an unlimited amount of
    one or more classes or series of preferred shares without
    further action or approval from the common shareholders. The
    board of directors is authorized to fix the number of shares,
    relative powers, preference and rights, and the qualifications,
    limitations or restrictions applicable to each class or series
    by resolution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has granted Cohen one performance share. The
    performance share is entitled to a special allocation of profits
    as described in Note&#160;3. The performance share is generally
    not entitled to vote.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-44
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a limited liability company, the shareholder interests noted
    above are generally limited in their liability to the extent of
    each shareholder&#146;s investment in the Company. The Company
    has no stated date of dissolution. The following table shows the
    Company&#146;s share activity for the period presented:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="32%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="24" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B><FONT style="font-size: 10pt">ROLLFORWARD OF SHARES
    OUTSTANDING</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Issuance as<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Initial<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Share Based<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Membership Interests</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Inception</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Distribution</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Earnings</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    637,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    637,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,250,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    667,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,917,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="23%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="24" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B><FONT style="font-size: 10pt">ROLLFORWARD OF COMPONENTS OF
    MEMBERS&#146; EQUITY</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Initial<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Offering,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Inception</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Net</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Vesting</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Distribution</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Earnings</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unrestricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted common shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LTIP shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    892,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    892,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earnings/(deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,433,366
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (19,572,418
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,969,367
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    942,232
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1,433,366
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (18,139,052
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    140,339,181
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;7&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NET
    INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER
    SHARE</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company calculates basic net increase (decrease) in net
    assets from operations per share by dividing net increase
    (decrease) in net assets from operations for the period by the
    weighted-average shares of its common shares outstanding for the
    period, which includes common shares outstanding as well as
    vested restricted common and vested LTIP shares. Diluted net
    increase (decrease) in net assets from operations per share
    takes into account the effect of unvested restricted common and
    unvested LTIP shares unless they are anti-dilutive.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the periods presented herein, the Company determined that
    the unvested restricted common and unvested LTIP shares are
    anti-dilutive. Therefore, the weighted average shares
    outstanding on a fully diluted basis are the same as the
    weighted average shares outstanding used for basic net increase
    (decrease) in net assets from operations per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2007, all restricted shares and 615,000
    LTIP shares had not vested. Accordingly both basic and fully
    diluted shares outstanding represent the unrestricted common
    shares outstanding and 22,000 vested LTIP shares outstanding for
    the period through December&#160;31, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company does not include the performance share issued to
    Cohen (see note&#160;6)&#160;in either the fully diluted net
    increase (decrease) in net assets from operations per share or
    basic net increase (decrease) in net assets from operations per
    share calculation as it does not participate in the net profits
    or dividends of the Company. Any amounts paid under the
    management agreement as part of the performance share would be
</DIV>
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    <BR>
    F-45
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    reported as an expense in the consolidated statement of
    operations. To date, the performance criteria have not been met
    and no expense has been recorded.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;8&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">SHARE
    BASED COMPENSATION</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June, 2007, the Company issued 30,000 restricted common
    shares to its directors. The Company valued the restricted
    common shares at $10 per share, the offering price of
    unrestricted common shares on June&#160;12, 2007. The value of
    the restricted common shares issued is being amortized to
    non-cash incentive compensation over the vesting period of the
    underlying grants; net of assumed forfeitures. The vesting
    period is three years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2007 and November 2007, the Company issued 637,000 LTIP
    shares to non-employees of the Company in exchange for services
    to be provided. The fair values of the LTIP shares are being
    amortized to share based compensation over the vesting period of
    the underlying grants net of assumed forfeitures. In addition,
    the Company records an adjustment at the end of each reporting
    period to account for changes in fair value of the
    Company&#146;s common shares until the LTIP shares are vested.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For vested LTIP shares, the Company values these shares based on
    the Company&#146;s most recent ending net asset value per share
    available in the month the LTIP shares vest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The LTIP shares were issued as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;345,000 LTIP shares were issued on June&#160;26, 2007
    and vest over the period ending on June&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;267,000 LTIP shares were issued on August&#160;9, 2007
    and vest over the period ending on June&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;25,000 LTIP shares were issued on November&#160;15, 2007
    and vest over the period ending on September&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the December&#160;31, 2007 ending net asset value per
    share, the remaining share based compensation expense to be
    recognized over the remaining vesting period is
    $4.1&#160;million.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;9&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">COMMITMENTS
    AND CONTINGENCIES</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnifications</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the normal course of business, the Company enters into
    contracts that contain a variety of indemnifications. The
    Company&#146;s maximum exposure under these arrangements is
    unknown. However, the Company does not expect claims or losses
    pursuant to these contracts and expects the risk of loss to be
    remote. Thus no amounts have been accrued related to such
    indemnifications.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Management
    contract</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial term of the Company&#146;s management contract with
    Cohen expires on December&#160;31, 2010 and automatically renews
    for a one year term at each anniversary thereafter. The contract
    may only be terminated after giving 180&#160;days notice, if at
    least two-thirds of the Company&#146;s independent directors or
    the holders of at least a majority of the outstanding common
    shares vote not to automatically renew.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Company were to terminate the management contract without
    cause, it would be required to pay a termination fee to Cohen
    equal to three times the average annual base management fee for
    the two 12&#160;month periods preceding the date of termination
    (annualized for any partial year period). In addition, the
    Company would need to redeem the performance share at an amount
    equal to three times the average performance share payments for
    the preceding two 12&#160;month periods.
</DIV>
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    <BR>
    F-46
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The contract can be terminated with cause without paying the
    termination fees described above. Cause is defined and does not
    include unsatisfactory performance, even if that performance is
    materially detrimental to the Company&#146;s business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tender
    option bonds&#160;&#151; shortfall agreement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2007, the Company had invested in
    several TOBs with a single financial institution as liquidity
    provider and remarketing agent (the &#147;Liquidity
    Provider&#148;). At the time the Company invested in the TOBs,
    the Company was in negotiations with respect to a shortfall as
    well as other agreements with the Liquidity Provider. The terms
    of the shortfall agreement were never agreed upon and no
    shortfall agreement was executed. In the absence of a shortfall
    agreement, the Company does not believe that it is obligated to
    reimburse the liquidity provider for any losses incurred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2007, the Company estimates the
    underlying value of the bonds of the TOB had declined in value
    by approximately $7.7&#160;million since the purchase by the
    TOB. However, because the Company has determined it has no
    obligation to reimburse the liquidity provider, the Company has
    not recorded a liability or net unrealized loss for this decline
    in value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company initially invested $38,228 for its investment in the
    TOB Residual Certificates. The Company currently carries this
    investment at zero in its consolidated financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accounting for contingencies is described in
    SFAS&#160;No.&#160;5, <I>Accounting for Contingencies
    </I>(&#147;SFAS&#160;5&#148;). In addition to disclosure of all
    contingencies, SFAS&#160;5 requires that a contingent liability
    be recognized when the outcome of the contingency rises to the
    level of probable and reasonably estimable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On March&#160;13, 2008, the Liquidity Provider issued a margin
    call to the Company in the amount of $21.5&#160;million which
    was comprised of $6.3&#160;million of initial margin and
    $15.2&#160;million representing the Liquidity Provider&#146;s
    estimate of the decline in value of the underlying bonds as of
    March&#160;13, 2008. The Company has notified the Liquidity
    Provider of its position that it has no obligation to post
    margin or to reimburse the liquidity provider for the decline in
    value of the underlying bonds. On March&#160;14, 2008, the
    Liquidity Provider served on the Company a Summons with Notice
    seeking $18.0&#160;million in damages presumably related to this
    dispute. The Company intends to defend this action vigorously.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company does not currently believe it is probable that an
    adverse judgment will be rendered. Therefore, no contingent
    liability is recorded. However, if an adverse judgment were
    rendered, the Company could be found to be liable for the net
    unrealized loss on the bonds in the TOB (estimated, by the
    Company, as $7.7&#160;million as of December&#160;31, 2007 and,
    by the Liquidity Provider, as $15.2&#160;million as of
    March&#160;13, 2008)&#160;and could incur additional legal and
    court costs. Furthermore, the value of the underlying bonds in
    the TOB varies based upon changes in market conditions;
    therefore, any ultimate liability could be greater than (or less
    than) the estimated unrealized loss as of December&#160;31, 2007
    or March&#160;13, 2008.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights Agreement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company entered into a registration rights agreement with
    Cohen. Terms and conditions of the agreement call for a
    reduction in the level of management fees that the Company will
    pay Cohen if the Company fails to timely file a registration
    statement. If the Company does not file a resale shelf
    registration statement by March&#160;31, 2008, the base
    management fee payable to Cohen will be reduced by 0.50% to
    1.00% from that date until the actual filing date of a shelf
    registration statement. In addition, the agreement calls for the
    Company to retain the allocation of profits or distributions
    associated with Cohen&#146;s performance share of the Company,
    after March&#160;31, 2008, if the resale shelf registration
    statement is not filed by March&#160;31, 2008, until the
    registration statement is filed, at which time the Company will
    pay all allocations and distributions currently due along with
    what Cohen earned during the period since March&#160;31, 2008.
    In the event the
</DIV>
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    <BR>
    F-47
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Company does not file the shelf registration statement by
    June&#160;12, 2008, the Company will further reduce Cohen&#146;s
    management fee by an additional 0.50% to 0.50%, for periods from
    June&#160;12, 2008 until the actual filing date. Once the
    registration statement is filed, the Company will resume paying
    Cohen management fees based on the original level of 1.50%.
    However any reduction in the base management fee during the time
    the registration statement is not filed will not be recaptured
    by Cohen. If the Company has endeavored in good faith to timely
    file the resale registration statement but is unable to make
    such filing as of the specified date as a result of
    circumstances outside the reasonable control of the Company,
    then these reductions in Cohen&#146;s management fee shall not
    apply. In addition, the Company&#146;s obligations under the
    registration rights agreement will terminate in their entirety
    when the Company&#146;s non-affiliated shareholders can sell
    their shares in the Company without restriction pursuant to
    Rule&#160;144 under the securities act of 1933, as amended.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;10&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    MANAGEMENT</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the ordinary course of business, the Company manages a
    variety of risks including market risk and credit risk. The
    Company identifies, measures, and monitors risk through various
    control mechanisms including diversifying exposures and
    activities across a variety of instruments, markets, and
    counterparties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market risk is the risk of potential adverse changes in the
    value of financial instruments and their derivatives because of
    changes in market conditions, such as interest movements and
    volatility in security prices. The Company manages market risk
    through the use of risk management strategies and various
    analytical monitoring techniques that evaluate the effect of
    cash instruments and derivative contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit risk is the risk the counterparties may fail to fulfill
    their obligations or that the collateral value becomes
    inadequate. The Company attempts to minimize its counterparty
    risk exposure by monitoring the size of its credit exposure to
    and the creditworthiness of counterparties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;11&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    INSTRUMENTS WITH OFF BALANCE SHEET RISK</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the normal course of its business, the Company trades various
    financial instruments and enters into various investment
    activities with off-balance sheet risk. These financial
    instruments may include total return swap arrangements, interest
    rate swaps, basis swaps and tender option bonds. Each of these
    financial instruments contains varying degrees of off-balance
    sheet risk whereby changes in the market values of the
    securities underlying the financial instruments or the
    Company&#146;s satisfaction of the related obligations may
    ultimately exceed the amount currently recorded in the
    consolidated statement of assets and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The contract amounts of these investments do not represent the
    Company&#146;s risk of loss due to counterparty nonperformance.
    The Company&#146;s exposure to credit risk is associated with
    counterparty nonperformance on these investments and is limited
    to the unrealized gains inherent in such contracts which are
    recognized in consolidated statement of assets and liabilities
    and the cash collateral on deposit, if any, with these
    counterparties. See note&#160;12.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is subject to interest rate risk. Generally, the
    value of the fixed income securities with fixed rates will
    change inversely with changes in interest rates. Even though the
    Company currently holds no fixed rate bonds on balance sheet,
    most of the reference bonds in the TRS are fixed rate. As
    interest rates rise, the market value of fixed rate fixed income
    securities, or derivatives based on the value of fixed rate
    fixed income securities such as the TRS, tends to decrease.
    Conversely, as interest rates fall, the market value of fixed
    rate fixed income securities tends to increase. It is the
    Company&#146;s policy to manage this risk primarily through swap
    arrangements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to floating-rate tax exempt bonds, interest rate
    risk is the risk that defaults on tax-exempt bonds will increase
    during periods of rising interest rates and, during periods of
    declining interest rates, that obligors may exercise their
    option to prepay principal earlier than scheduled. Such
    increases and decreases in
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-48
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    rates may result in corresponding increases or decreases in the
    Company&#146;s interest income and the distribution payables to
    holders of certificates issued by tender option trusts and
    payments to counterparties under the TRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Total
    return swap.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The TRS is accounted for at fair value and included either in
    unrealized gain or loss on total return swap on the consolidated
    statement of assets and liabilities. The Company has posted cash
    collateral for the benefit of the counterparty in the amount of
    $29,000,000. This cash collateral is included in restricted cash
    in the consolidated statement of assets and liabilities and
    represents the maximum potential loss to the Company under the
    TRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Basis
    Swaps</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November 2007, the Company entered into two basis swap
    arrangements. A basis swap is an interest rate swap which
    involves the exchange of two floating rate financial instruments
    (that is, a floating-floating interest rate swap under which the
    floating rate payments are referenced to different bases).
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the case of the basis swaps entered into by the Company, no
    cash is exchanged at the outset of the contract and no principal
    payments are made by either party. A single net payment will be
    made by one counterparty at each due date. The payments commence
    in February of 2010 and are made quarterly thereafter until
    termination.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    One basis swap with a notional of $60,500,000 terminates in
    November 2032. The second basis swap with a notional of
    $27,250,000 terminates in November 2019. The potential loss for
    the Company on the basis swaps is unlimited.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;12&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">CONCENTRATIONS
    OF CREDIT RISK</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Total return swap.</I>&#160;&#160;As of December&#160;31,
    2007, the Company maintains a TRS, including the related
    interest rate hedge agreements and interest basis swap
    agreements, with a single counterparty: Deutsche Bank. The fair
    value of the TRS is included in unrealized loss on TRS in the
    consolidated statement of assets and liabilities. In addition,
    the Company has provided the counterparty with $29,000,000 of
    cash collateral which is included in restricted cash in the
    consolidated statement of assets and liabilities. If Deutsche
    Bank failed to perform under their obligations of the TRS, the
    Company could lose the restricted cash it has posted as well as
    any unrealized gain on the TRS then outstanding. As of
    December&#160;31, 2007, the TRS is in a net unrealized loss
    position.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cash and cash equivalents.</I>&#160;&#160;As of
    December&#160;31, 2007, the Company held $128,106,782 of its
    cash and cash equivalents with U.S.&#160;Bank. If U.S.&#160;Bank
    failed under its obligation as custodian of these funds, the
    Company could lose a portion or all of its unrestricted cash
    balances with U.S.&#160;Bank.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>All other trading activities.</I>&#160;&#160;The
    Company&#146;s trading activities are primarily with brokers and
    financial institutions mentioned above. All securities
    transactions of the Company are cleared by multiple securities
    firms pursuant to customer agreements. At December&#160;31,
    2007, all the investments in the TRS and TOB are positions held
    with two of these brokers. The Company had substantially all of
    its individual counterparty concentrations with these brokers
    and their affiliates.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;13&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">DISTRIBUTIONS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November 2007, the Company&#146;s Board of Directors approved
    the initiation of a quarterly cash distribution, payable on the
    Company&#146;s common shares, restricted shares and LTIP shares.
    During the period from October&#160;1, 2007 to December&#160;31,
    2007, the quarterly cash distribution was $0.08 per share. The
    total
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-49
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    amount declared and paid was $1,433,366 comprised of $1,380,008
    to the common shareholders, $2,400 to the restricted common
    shareholders and $50,958 to the holders of LTIP shares.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;14&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    HIGHLIGHTS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with the Audit Guide, the per share information
    and ratios to average net assets are presented below:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="92%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="4" nowrap align="center" valign="bottom">
    <B><FONT style="font-size: 10pt">PER SHARE OPERATING
    PERFORMANCE<BR>
    </FONT></B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom" align="center">
<TD colspan="4" nowrap align="center" valign="bottom">
    <B>For the Period from June&#160;12, 2007 (inception) to
    December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Beginning net asset value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net realized losses on investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.15
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net unrealized losses on investments
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.00
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total from investment operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.02
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions to shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.08
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Share transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ending net asset value per share outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The per share amounts above are calculated based on the
    Company&#146;s shares outstanding as well as its unvested
    restricted stock and its vested and unvested LTIP shares. The
    LTIP shares are included because they are eligible to receive
    dividends and the performance share is excluded.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="92%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="4" nowrap align="center" valign="bottom">
    <B><FONT style="font-size: 10pt">RATIOS TO AVERAGE NET ASSETS<BR>
    </FONT></B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom" align="center">
<TD colspan="4" nowrap align="center" valign="bottom">
    <B>For the Period from June&#160;12, 2007 (inception) to
    December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.73
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.41
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non cash incentive compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.62
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.76
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.58
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total return
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.82
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The above ratios are calculated by dividing income or expenses
    as applicable by the monthly average of net assets
    ($152.1&#160;million) and are not annualized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Total return is calculated by dividing the quarterly net
    decrease in net assets from operations by beginning net assets
    for the period on a compounded basis and is not annualized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The per share information, ratios and total return above are
    calculated based on the shareholder group taken as a whole. An
    individual shareholder&#146;s results may vary from those shown
    above due to the timing of capital transactions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NOTE&#160;15&#160;&#151;
    </FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">SUBSEQUENT
    EVENT</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In February 2008, the Company declared and paid a dividend of
    $0.08 per share. The total distribution to be made is
    $1.4&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In February 2008, the Company terminated the TRS which resulted
    in a termination payment of $23.1&#160;million to the
    counterparty.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-50
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MUNI
    FUNDING COMPANY OF AMERICA, LLC<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;31, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In conjunction with the termination of the TRS, a newly formed
    trust, Non Profit Preferred Funding&#160;II (NPPF 2), purchased
    approximately $174.3&#160;million of securities (most of which
    were previously the reference portfolio of the TRS) including
    transaction costs and accrued interest. NPPF 2 issued two
    classes of equity securities to finance this purchase. The
    senior securities were issued in the amount of
    $118.1&#160;million and were purchased by the former
    counterparty to the TRS. The junior securities were issued in
    the amount of $56.2&#160;million and were purchased by the
    Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In March 2008, the Liquidity Provider issued a margin call to
    the Company and served on the Company a Summons with Notice
    seeking $18.0&#160;million in damages. See note&#160;9
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-51
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I><FONT style="font-size: 14pt">$25,000,000</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I><FONT style="font-size: 20pt">MUNI FUNDING COMPANY OF
    AMERICA, LLC</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I><FONT style="font-size: 14pt">Class&#160;A Common
    Shares&#160;Representing Limited Liability Company
    Interests</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 14%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 14%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 22pt">LADENBURG THALMANN&#160;&#038;
    CO. INC.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010 (25&#160;days after the date of this prospectus), all
    dealers that buy, sell or trade our securities, whether or not
    participating in this offering, may be required to deliver a
    prospectus. This is in addition to the dealers&#146; obligation
    to deliver a prospectus when acting as underwriters and with
    respect to their unsold allotments or subscriptions.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;II<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INFORMATION
    NOT REQUIRED IN PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>References to &#147;the company,&#148; &#147;the
    Registrant,&#148; &#147;we,&#148; &#147;us,&#148;
    &#147;our&#148; and similar expressions in this Part&#160;II
    refer to Muni Funding Company Of America, LLC.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;13.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Expenses of Issuance and Distribution</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the costs and expenses, other
    than the underwriting discount, payable by us in connection with
    the offering of the securities being registered. All amounts are
    estimates except the Securities and Exchange Commission
    registration fee and the Financial Industry Regulatory Authority
    filing fee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="89%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEC registration fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,049.88
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FINRA filing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,375.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NASDAQ Stock Market LLC application and listing fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing and engraving expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Miscellaneous
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;14.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Directors and Officers</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">Section&#160;18-108</FONT>
    of the Delaware Limited Liability Company Act provides that a
    limited liability company may indemnify any member or manager or
    other person from and against any and all claims and demands
    whatsoever. The section of the prospectus entitled
    &#147;Description of Securities&#160;&#151; Operating Agreement
    and Bylaws&#160;&#151; Limitations on Liability and
    Indemnification of Our Directors and Officers&#148; is
    incorporated herein by reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently maintain liability insurance for our directors and
    officers. Such insurance would be available to our directors and
    officers in accordance with its terms.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;15.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Recent
    Sales of Unregistered Securities</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On June&#160;12, 2007, 17,250,100 common shares representing
    membership interests, or common shares, were sold by us to
    Friedman, Billings, Ramsey&#160;&#038; Co. Inc. (the
    &#147;Initial Purchaser&#148;), at the price of $10.00 per
    share, in an offering exempt from registration pursuant to
    Section&#160;4(2) of the Securities Act. The Initial Purchaser
    resold these common shares to &#147;qualified institutional
    buyers,&#148; as defined in Rule&#160;144A under the Securities
    Act, and to certain persons outside the United States pursuant
    to Regulation&#160;S under the Securities Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On June&#160;12, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 30,000 restricted common shares. The recipients
    of these restricted common shares did not pay any consideration
    for these awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On June&#160;26, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 345,000 LTIP shares. The recipients of these
    LTIP shares did not pay any consideration for these awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On August&#160;9, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 267,000 LTIP shares. The recipients of these
    LTIP shares did not pay any consideration for these awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On November&#160;15, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 25,000 LTIP shares. The recipients of these
    restricted common shares did not pay any consideration for these
    awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On April&#160;14, 2009, pursuant to our 2007 Equity Incentive
    Plan, we granted 7,500 restricted common shares. The recipients
    of these restricted common shares did not pay any consideration
    for these awards.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On April&#160;14, 2009, we granted 553,407 common shares in lieu
    of a cash distribution owed to our manager pursuant to its
    ownership of the Performance Share. These shares were valued at
    $2.17 per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section&#160;4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On June&#160;26, 2009, we issued subscription rights to the then
    holders of common shares and LTIP shares to purchase up to an
    aggregate of 18,116,964 new common shares at the price of $1.20
    per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section&#160;4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On June&#160;26, 2009, we consummated an exchange offer pursuant
    to which one replacement LTIP share with a performance target of
    $1.25 per share was issued in exchange for two then-outstanding
    LTIP shares with a performance target of $10.00 per LTIP share.
    LTIP shareholders exchanged 566,915 LTIP shares with a
    performance target of $10.00 per LTIP share for 283,458 new LTIP
    shares with a performance target of $1.25 per LTIP share
    pursuant to such exchange offer. The exchange of these LTIP
    shares was exempt from registration under the Securities Act in
    reliance on Section&#160;4(2) of the Securities Act as a
    transaction by an issuer not involving a public offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On July&#160;23, 2009, pursuant to our 2007 Equity Incentive
    Plan, we granted 15,000 restricted common shares. The recipients
    of these restricted common shares did not pay any consideration
    for these awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On July&#160;23, 2009, we granted 438,712 common shares in lieu
    of a cash distribution owed to our manager pursuant to its
    ownership of the Performance Share. These shares were valued at
    $2.01 per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section&#160;4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;22, 2009, we granted 721,528 common shares in
    lieu of a cash distribution owed to our manager pursuant to its
    ownership of the Performance Share. These shares were valued at
    $2.43 per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section&#160;4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During our 2009 fiscal year, 246,584 LTIP shares were converted
    into 566,915 common shares valued at $3.50 per Share. The
    exchange of these LTIP shares was exempt from registration under
    the Securities Act in reliance on Section&#160;4(2) of the
    Securities Act as a transaction by an issuer not involving a
    public offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;16.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exhibits
    and Financial Statement Schedules</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The following exhibits are filed as part of this
    Registration Statement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>No.</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Certificate of Formation*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    First Amended and Restated Limited Liability Company Agreement*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Bylaws*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Specimen Share Certificate*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Schulte Roth&#160;&#038; Zabel LLP*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Management Agreement, dated as of June&#160;12, 2007, by and
    between Muni Funding Company of America, LLC and Muni Capital
    Management, LLC*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Assignment and Assumption Agreement, dated as of March&#160;18,
    2009, by and among Cohen Municipal Capital Management, LLC,
    Cohen Brothers, LLC, Muni Capital Management, LLC and Tricadia
    Capital Management, LLC*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Director and Officer Indemnification Agreement*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Grant Thornton LLP
</TD>
</TR>
</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL Table Pagebreak -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>No.</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of KPMG LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Schulte Roth&#160;&#038; Zabel LLP (included in
    Exhibit&#160;5.1)*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Powers of Attorney (included on signature page to this
    Registration Statement)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Charter of Audit Committee*
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;No financial statement schedules are required to be
    filed with this Registration Statement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;17.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The undersigned hereby undertakes to provide to the
    underwriters at the closing specified in the underwriting
    agreements, certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Insofar as indemnification for liabilities arising
    under the Securities Act may be permitted to directors, officers
    and controlling persons of the registrant pursuant to the
    foregoing provisions, or otherwise, the registrant has been
    advised that in the opinion of the Securities and Exchange
    Commission such indemnification is against public policy as
    expressed in the Securities Act and is, therefore,
    unenforceable. In the event that a claim for indemnification
    against such liabilities (other than the payment by the
    registrant of expenses incurred or paid by a director, officer
    or controlling person of the registrant in the successful
    defense of any action, suit or proceeding) is asserted by such
    director, officer or controlling person in connection with the
    securities being registered, the registrant will, unless in the
    opinion of its counsel the matter has been settled by
    controlling precedent, submit to a court of appropriate
    jurisdiction the question whether such indemnification by it is
    against public policy as expressed in the Securities Act and
    will be governed by the final adjudication of such issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The undersigned registrant hereby undertakes that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;For purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance upon Rule&#160;430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule&#160;424(b)(1) or (4)&#160;or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;For the purpose of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus shall be deemed to be a new registration
    statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be
    the initial <I>bona fide </I>offering thereof.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    II-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act, the
    Registrant certifies that it has duly caused this Registration
    Statement to be signed on its behalf by the undersigned,
    thereunto duly authorized, in the City of New York, State of New
    York, on the 13th&#160;day of May, 2010.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    MUNI FUNDING COMPANY OF AMERICA, LLC
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Michael
    Barnes</DIV>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 53%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Name:&#160;&#160;&#160;&#160;&#160;Michael Barnes
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="53%"></TD>
    <TD width="8%"></TD>
    <TD width="39%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    Title:&#160;
</TD>
    <TD align="left">
    Chairman and Chief Executive Officer
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the undersigned officers and directors of Muni Funding
    Company of America, LLC hereby severally constitute and appoint
    each of Michael Barnes and Geoffrey Kauffman as the
    attorneys-in-fact for the undersigned, in any and all
    capacities, with full power of substitution, to sign any and all
    pre- or post-effective amendments to this Registration
    Statement, any subsequent Registration Statement for the same
    offering which may be filed pursuant to Rule&#160;462(b) under
    the Securities Act of 1933, as amended, and any and all pre- or
    post-effective amendments thereto, and to file the same with
    exhibits thereto and other documents in connection therewith,
    with the Securities and Exchange Commission, granting unto said
    attorneys-in-fact full power and authority to do and perform
    each and every act and thing requisite and necessary to be done
    in and about the premises, as fully to all intents and purposes
    as he might or could do in person, hereby ratifying and
    confirming all that said attorneys-in-fact may lawfully do or
    cause to be done by virtue hereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act, this
    Registration Statement or Amendment has been signed by the
    following persons in the capacities and on the dates indicated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Michael
    Barnes</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Michael
    Barnes
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chairman and Chief Executive Officer (Principal Executive
    Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May 13, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Julia
    Wyatt</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Julia
    Wyatt
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chief Financial Officer<BR>
    (Principal Accounting and Financial Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May 13, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Geoffrey
    Kauffman</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Geoffrey
    Kauffman
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May 13, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Daniel
    G. Cohen</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Daniel
    G. Cohen
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May 13, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Andrew
    Gordon</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Andrew
    Gordon
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May 13, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Thomas
    J. Reilly, Jr.&#160;</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Thomas
    J. Reilly, Jr.&#160;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May 13, 2010
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXHIBIT&#160;INDEX</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>No.</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Certificate of Formation*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    First Amended and Restated Limited Liability Company Agreement*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Bylaws*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Specimen Share Certificate*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Schulte Roth &#038; Zabel LLP*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Management Agreement, dated as of June 12, 2007, by and between
    Muni Funding Company of America, LLC and Muni Capital
    Management, LLC*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Assignment and Assumption Agreement, dated as of March 18, 2009,
    by and among Cohen Municipal Capital Management, LLC, Cohen
    Brothers, LLC, Muni Capital Management, LLC and Tricadia Capital
    Management, LLC*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Director and Officer Indemnification Agreement*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Grant Thornton LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of KPMG LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Schulte Roth &#038; Zabel LLP (included in Exhibit
    5.1)*
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Powers of Attorney (included on signature page to this
    Registration Statement)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Charter of Audit Committee*
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
</BODY>
</HTML>
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sv1
Table of Contents
As filed with the Securities and
    Exchange Commission on May 13, 2010
Registration
No. 333-
UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
Washington, D.C.
    20549
Form S-1
REGISTRATION
    STATEMENT
UNDER
THE SECURITIES ACT OF
    1933
MUNI FUNDING COMPANY OF
    AMERICA, LLC
(Exact name of registrant as
    specified in its charter)
Delaware
(
State or other jurisdiction
    of
incorporation or organization
)
6199
(
Primary Standard
    Industrial
Classification Code Number
)
26-0308831
(
I.R.S. Employer
Identification Number
)
Muni Funding Company of America,
    LLC
2929 Arch Street
17th Floor
Philadelphia, Pennsylvania
    19104
(215) 701-9641
(Address, including zip code,
    and telephone number, including area code, of registrant's
    principal executive offices)
Michael Barnes
Chairman and Chief Executive
    Officer
Muni Funding Company of America,
    LLC
c/o Muni
Capital Management, LLC
780 Third Avenue
29th Floor
New York, NY 10017
(212) 758-6201
(Name, address, including zip
    code, and telephone number, including area code, of agent for
    service)
Copies to:
Michael R. Littenberg, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
(212) 756-2000
Fax:
(212) 593-5955
Alan I. Annex, Esq.
Neil Novikoff, Esq.
Greenberg Traurig LLP
200 Park Avenue
New York, NY 10166
(212) 801-9200
Fax: (212) 801-6400
Approximate date of commencement of proposed sale to the
    public:
As soon as practicable after the
    effective date of this registration statement.
If any of the securities being registered on this Form are to be
    offered on a delayed or continuous basis pursuant to
    Rule 415 under the Securities Act of 1933 check the
    following
    box.
o
If this Form is filed to register additional securities for an
    offering pursuant to Rule 462(b) under the Securities Act,
    please check the following box and list the Securities Act
    registration statement number of the earlier effective
    registration statement for the same
    offering.
o
If this Form is a post-effective amendment filed pursuant to
    Rule 462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.
o
If this Form is a post-effective amendment filed pursuant to
    Rule 462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.
o
Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    "large accelerated filer," "accelerated
    filer" and "smaller reporting company" in Rule
    12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
þ
(Do not check if a smaller reporting company)
Smaller Reporting company
o
CALCULATION
    OF REGISTRATION FEE
Proposed Maximum
Amount of
Title of Each Class of
Offering
Registration
Security being Registered
Price(1)(2)
Fee(3)
Class A Common Shares Representing Limited Liability
    Company Interests(2)
$
28,750,000
$
2,049.88
(1)
Estimated solely for the purpose of
    calculating the registration fee.
(2)
Includes          
    Class A common shares representing limited liability
    company interests, which may be issued upon exercise of a
45-day
option granted to the underwriters to cover over-allotments, if
    any.
(3)
Calculated pursuant to
    Rule 457(o) under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section 8(a), may determine.
Table of Contents
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED
    MAY 13, 2010
PROSPECTUS
$25,000,000
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Class A Common
    Shares Representing Limited Liability Company
    Interests
This is the initial public offering of Class A common
    shares of Muni Funding Company of America, LLC. We are
    selling          
    Class A common shares representing limited liability
    company interests, which we refer to as our "Class A
    common shares."
Muni Funding Company of America, LLC is a specialty finance
    company that focuses on the investment in the debt instruments
    of non-profit and municipal entities primarily through direct
    and indirect acquisition of tax-exempt mortgage revenue bonds or
    other obligations (secured primarily by interests in real
    estate), assets derived from such bonds or other assets as
    described herein. We are externally managed and advised by Muni
    Capital Management, LLC.
Following this offering, Muni Funding Company of America, LLC
    will have two classes of shares, Class A common shares and
    Class B common shares representing limited liability
    company interests, which we refer to as our "Class B
    common shares." The rights of the holders of Class A
    common shares and Class B common shares are identical,
    except with respect to voting and conversion rights. Each
    Class A common share is entitled to one vote per share.
    Each Class B common share is entitled to ten votes per
    share and is convertible at any time into one Class A
    common share.
Prior to this offering, there has been no public market for our
    Class A common shares. The initial public offering price of
    the Class A common shares is expected to be between
    $      and
    $      per share. We intend to apply to
    have our Class A common shares listed on The NASDAQ Stock
    Market LLC under the symbol
    ''          
    ."
The underwriters have an option to purchase a maximum
    of          
    additional Class A common shares from us to cover
    over-allotments of Class A common shares.
Investing in our Class A common shares involves risks.
    See "Risk Factors" on page 9.
Underwriting
Price to
Discounts and
Proceeds to
Public
Commissions
Issuer
Per Share
$
$
$
Total
$
$
$
Delivery of the Class A common shares will be made on or
    about          ,
    2010.
Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
Ladenburg
    Thalmann & Co. Inc.
The
    date of this prospectus
    is          ,
    2010
TABLE OF
    CONTENTS
Page
SUMMARY
1
RISK FACTORS
9
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
    STATEMENTS
32
USE OF PROCEEDS
33
DIVIDEND POLICY
33
CAPITALIZATION
34
SELECTED FINANCIAL DATA
35
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
37
BUSINESS
46
MANAGEMENT
65
PRINCIPAL SHAREHOLDERS
76
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
77
DESCRIPTION OF SECURITIES
78
COMMON SHARES ELIGIBLE FOR FUTURE SALE
87
UNITED STATES FEDERAL INCOME AND ESTATE TAX
    CONSIDERATIONS
88
UNDERWRITING
103
LEGAL MATTERS
105
EXPERTS
105
WHERE YOU CAN FIND ADDITIONAL INFORMATION
105
INDEX TO FINANCIAL STATEMENTS
F-1
EX-23.1
EX-23.2
You should rely only on the information contained in this
    prospectus. We have not authorized anyone to provide you with
    different information. We are not making an offer of these
    securities in any state where the offer is not permitted. You
    should not assume that the information contained in this
    prospectus is accurate as of any date other than the date on the
    front cover page of this prospectus.
Table of Contents
SUMMARY
This summary only highlights the more detailed information
    appearing elsewhere in this prospectus. As this is a summary, it
    does not contain all of the information that you should consider
    in making an investment decision. You should read this entire
    prospectus carefully, including the information under "Risk
    Factors" and our financial statements and the related notes
    included elsewhere in this prospectus, before investing.
    References in this prospectus to "we," "us,"
    "our," or "our company" refer to Muni
    Funding Company of America, LLC, a Delaware limited liability
    company; references to "Muni Capital Management" or
    "our manager" refer to Muni Capital Management, LLC, a
    Delaware limited liability company and our manager; references
    to "Tricadia Holdings" refer to Tricadia Holdings,
    L.P., a Delaware limited partnership; references to Tiptree
    refer to Tiptree Financial Partners, L.P. a Delaware limited
    partnership; references to "Tiptree Capital" refer to
    Tiptree Capital Management, LLC, a Delaware limited liability
    company; and references to "Tricadia" or
    "Tricadia Capital" refer to Tricadia Capital
    Management, LLC, a Delaware limited liability company. We refer
    to our Class A common shares and Class B common shares
    collectively as the "common shares."
Overview
We are a specialty finance company that focuses on the
    investment in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations, assets
    derived from such bonds or other assets as described herein. We
    are involved in a variety of businesses, including holding or
    acquiring tax-exempt obligations, mortgage-related holdings,
    interests in structured credit entities, derivative instruments,
    Build America Bonds, taxable bonds and other assets. We derive
    our income from interest on the assets held by us and our
    subsidiaries and from any gains on the sale of assets. Our
    assets are, in general, primarily secured by mortgages on the
    real estate held by the obligors.
We expect that a significant portion of the tax-exempt or other
    obligations underlying our assets or which we acquire directly
    will be issued by or on behalf of one of the following types of
    non-profit institutions, state authorities or other
    organizations:
Healthcare:
general and acute care hospitals,
    critical access hospitals, behavioral and primary healthcare
    providers, assisted living facilities, clinics, long-term care
    facilities and continuing care retirement communities;
Educational:
primary, secondary, technical and
    higher education institutions, including private, public,
    religious or independent schools;
Housing:
entities whose primary purpose is to
    own or capitalize federally exempt multifamily or single family
    residential rental properties, and state housing authorities
    which issue tax-exempt bonds in order to finance residential
    mortgage loans, including for affordable housing projects, in
    their states;
Infrastructure:
institutions related to power
    generation, utilities, roads, transportation, water, sewage and
    other aspects of public infrastructure;
Redevelopment/Tax Increment Financing
    Bonds:
debt service is paid by tax revenue
    generated from the area surrounding a redevelopment project
    without the revenue earmarked for the project itself being
    affected;
Cultural:
museums, aquariums, zoos, botanical
    gardens, performing arts venues (such as opera, symphony, dance
    and theater) and public television and radio;
Research:
non-degree granting institutions
    whose primary purpose is research;
Philanthropic:
institutions whose primary
    purpose is to distribute funds to other entities, generally for
    humanitarian purposes; and
Service/advocacy:
organizations that provide
    community and social services to different constituent groups,
    including social service organizations, professional
    associations and religious organizations.
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Table of Contents
According to The Bond Buyer, during calendar year 2009,
    approximately $409.2 billion of long-term municipal
    obligations were issued, of which approximately
    $324.7 billion were tax-exempt obligations and
    $84.5 billion were taxable obligations. Overall, as of
    December 31, 2009, there are approximately $2.8 trillion of
    municipal obligations outstanding.
Our
    Manager
We are externally managed and advised by Muni Capital
    Management. Muni Capital Management is a wholly-owned subsidiary
    of Tricadia Holdings. Prior to March 18, 2009, we were
    managed by Cohen Municipal Capital Management, LLC, or the
    Former Manager. In February 2009, Tiptree acquired a controlling
    interest in us, and caused the assignment of our Management
    Agreement from the Former Manager to Muni Capital Management.
Competitive
    Strengths
We believe that we have the following competitive advantages
    over other entities with business objectives similar to ours:
•
an experienced management team with significant tax-exempt and
    structured finance experience;
•
a disciplined acquisition process which is based on detailed
    credit analysis of obligors and underlying collateral;
•
extensive contacts among originators of unrated tax-exempt
    obligations, which we believe will provide us with preferential
    access to these types of assets; and
•
significant ownership interest by our management team and
    alignment of our management team's interests and those of
    our shareholders.
2
Table of Contents
Organizational
    Chart
The organizational structure of our company, after giving effect
    to this offering, is set forth below.
(1)
Percentage ownership of the holders of all common shares assumes
    that the underwriter does not exercise its option to purchase
    additional shares. Class B shareholders other than Tiptree
    include officers and employees of Tiptree, our manager and
    affiliates of our manager, and our directors. Tiptree may also
    purchase Class A common shares pursuant to this offering.
(2)
This is a taxable C corporation that invests in total return
    swaps and other derivative arrangements relating to tax-exempt
    bonds and engages in sales and trading of tax-exempt bonds.
(3)
We may own interests in additional structured tax-exempt
    pass-through ("STEP") entities as set forth in
    "— Our Strategy."
(4)
Percentage ownership of Muni Capital Management includes one
    performance share. See "Description of
    Securities — Performance Share."
Corporate
    Information
Our executive offices are located at 2929 Arch Street, 17th
    Floor, Philadelphia Pennsylvania 19104 and our telephone number
    is
(215) 701-9641.
The executive offices of our manager are located at 780 Third
    Avenue, 29th Floor, New York, NY 10017 and our manager's
    telephone number is
(212) 891-5025.
3
Table of Contents
The
    Offering
Class A common shares offered
shares(1)
Shares to be outstanding immediately following this offering
Recapitalization
Immediately prior to this offering, we will effect a
    recapitalization to convert all of our outstanding common shares
    into newly designated Class B common shares on a
one-for-five
basis. After giving effect to the recapitalization, we will have
    outstanding no Class A common shares and
    37,416,669 shares of our Class B common shares. All
    shares to be sold in this offering will be Class A common
    shares.
Class A common shares
shares(2)
Class B common shares
shares.
    Tiptree, which
    owns           Class B
    common shares, may also purchase Class A common shares
    pursuant to this offering.
Use of proceeds
We intend to use the net proceeds of this offering to implement
    our business strategy, including, without limitation, by
    investing in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations, assets
    derived from such bonds or other assets as described herein. We
    expect that a significant portion of the tax-exempt or other
    obligations underlying our assets or which we acquire directly
    will be issued by or on behalf of one of the following types of
    non-profit institutions, state authorities, or other
    organizations: (i) healthcare, (ii) educational,
    (iii) housing, (iv) infrastructure,
    (v) redevelopment/tax increment financing bonds,
    (vi) cultural, (vii) research and
    (viii) philanthropic.
See "Business — Our Business Objective and
    Strategies" and "Use of Proceeds" herein.
Voting Rights
Each Class A common share entitles its holder to one vote
    per share, thereby entitling holders of our Class A common
    shares to votes in the aggregate immediately after this
    offering, representing      % of
    our combined voting power immediately after this offering. Each
    Class B common share entitles its holder to 10 votes per
    share, thereby entitling holders of Class B common shares
    to          
    votes, representing     % of our
    combined voting power immediately after this offering. Our
    Class B common shares generally vote together with our
    Class A common shares on all matters submitted to a vote of
    our shareholders. Each Class B common share is convertible
    at any time into one Class A common share.
Economic Rights
Pursuant to our limited liability company agreement, our
    Class A common shares and Class B common shares are
    entitled to equal economic rights.
Dividend policy
We intend to periodically distribute dividends to holders of our
    Class A common shares. All distributions from us will be
    made at the discretion of our board of directors, and will
    depend on a number of factors affecting us, including our
    profitability and timing
4
Table of Contents
differences between the recognition of net income and the
    receipt of cash. See "Dividend Policy."
We may adopt a dividend reinvestment plan that will permit the
    reinvestment of our dividends and other distributions on behalf
    of holders of Class A common shares who elect to
    participate in the plan. As a result, if our board of directors
    authorizes, and we declare, a cash dividend or other
    distribution, then holders of Class A common shares who
    have elected to participate in our dividend reinvestment plan
    will have their cash distribution reinvested in additional
    Class A common shares, rather than receiving the cash
    distribution.
Management Agreement
We are externally managed and have no employees, and therefore
    are advised by our manager pursuant to a management agreement,
    which is described herein. Our manager is responsible for
    providing us with senior management, managing our assets,
    administering our business activities and managing our
day-to-day
operations.
We do not employ personnel and therefore rely on the resources
    of our manager to conduct our operations. Our manager uses the
    proceeds from a management fee in part to pay compensation to
    its officers and employees who, notwithstanding that certain of
    them also are our officers, receive no cash compensation
    directly from us. The management fee which we pay to the manager
    is comprised of a base management fee and a performance share,
    which are more fully described herein.
See "Management" herein for further information.
Risk Factors
See "Risk Factors" and other information included in
    this prospectus for a discussion of factors you should carefully
    consider before deciding to invest in the Class A common
    shares.
Proposed NASDAQ Stock Market LLC Symbol
"          "
Available Information
We have filed with the Securities and Exchange Commission
    ("SEC") a registration statement on
Form S-1
under the Securities Act of 1933, as amended (the
    "Securities Act"), with respect to the securities we
    are offering by this prospectus. This prospectus does not
    contain all of the information included in the registration
    statement. For further information about us and our securities,
    you should refer to the registration statement and the exhibits
    and schedules filed with the registration statement. Whenever we
    make reference in this prospectus to any of our contracts,
    agreements or other documents, the references are materially
    complete but may not include a description of all aspects of
    such contracts, agreements or other documents, and you should
    refer to the exhibits attached to the registration statement for
    copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the
    information requirements of the Securities Exchange Act of 1934,
    as amended (the "Exchange Act"), and will file annual,
    quarterly and current event reports, proxy statements and other
    information with the SEC. You can read our SEC filings,
    including the registration
5
Table of Contents
statement, over the Internet at the SEC's website at
    www.sec.gov. You may also read and copy any document we file
    with the SEC at its public reference facility at
    100 F Street, N.E., Washington, D.C. 20549.
You may also obtain copies of the documents at prescribed rates
    by writing to the Public Reference Section of the SEC at
    100 F Street, N.E., Washington, D.C. 20549.
    Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
    facilities.
We maintain a website at
www.munifunding.com
and
    intend to make all of our annual, quarterly and current reports,
    proxy statements and other information available, free of
    charge, on or through our website. Information on our website is
    not incorporated into or part of this prospectus. You may also
    obtain such information free of charge by contacting us in
    writing at 2929 Arch Street,
    17
th
Floor, Philadelphia, Pennsylvania 19104, Attention: Investor
    Relations.
(1)
if the underwriter's option to purchase additional shares
    is exercised in full.
(2)
if the underwriter's option to purchase additional shares
    is exercised in full.
Unless otherwise indicated, all information in this prospectus
    assumes no purchase of Class A common shares by Tiptree in
    this offering and the completion of the recapitalization
    described above.
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Table of Contents
SUMMARY
    FINANCIAL DATA
The following table presents summary consolidated financial
    information as of December 31, 2009 and 2008, for the years
    ended December 31, 2009 and 2008 and for the period from
    June 12, 2007 (commencement of operations) to
    December 31, 2007. The summary consolidated financial
    information has been derived from our audited consolidated
    financial statements included elsewhere in this prospectus.
Since the information presented below is only a summary and does
    not provide all of the information contained in our historical
    consolidated financial statements included elsewhere in this
    prospectus, including the related notes, you should read it in
    conjunction with "Management's Discussion and Analysis
    of Financial Condition and Results of Operations" and our
    historical consolidated financial statements, including the
    related notes, included elsewhere in this prospectus.
June 12 (inception)
to December 31,
For the Year Ended
2007
December 31, 2008
December 31, 2009
Statement of Operations:
Revenue
Income-investments
$
—
$
8,106,531
$
8,581,819
Income-total return swap
1,150,382
903,623
—
Income-other
3,937,071
1,225,434
23,345
Total revenue
5,087,453
10,235,588
8,605,164
Expenses
Management fee
1,111,993
1,276,477
962,670
Amortization of financing costs
—
38,912
194,559
Professional fees
374,727
2,047,694
963,373
Insurance
96,250
313,994
266,788
Directors compensation
65,627
391,570
58,500
Other general and administrative
90,260
268,986
200,241
Non cash incentive compensation
942,232
876,422
471,966
Total expenses
2,681,089
5,214,055
3,118,097
Net investment income
2,406,364
5,021,533
5,487,067
Realized gains (losses)
Investments
—
—
(18,957,635
)
Derivatives
(2,710,351
)
(38,829,108
)
—
Net unrealized gains (losses)
(2,710,351
)
(38,829,108
)
(18,957,635
)
Unrealized gains (losses)
Investments
—
(81,112,777
)
54,464,711
Derivatives
(17,835,065
)
7,241,926
27,095
Net unrealized gains (losses)
(17,835,065
)
(73,870,851
)
54,491,806
Net (decrease) increase in net assets resulting from
    operations before Performance Share Allocation
(18,139,052
)
(107,678,426
)
41,021,238
Performance Share Allocation
—
—
5,920,448
Net (decrease) increase in net assets resulting from
    operations after Performance Share Allocation
$
(18,139,052
)
$
(107,678,426
)
$
35,100,790
Basic net (decrease) increase in net assets from operations
    per share(1)
$
(1.05
)
$
(6.24
)
$
1.30
Diluted net (decrease) increase in net assets from operations
    per share(1)
$
(1.05
)
$
(6.24
)
$
1.30
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As of
As of
As of
December 31, 2007
December 31, 2008
December 31, 2009
Balance Sheet Data:
Cash and cash equivalents
$
128,116,802
$
9,560,219
$
29,367,353
Investments, at fair value
—
15,302,902
57,971,131
Total assets
158,550,698
29,642,139
90,668,544
Due to our manager
179,850
49,662
114,756
Accrued expenses and other liabilities
234,830
354,924
338,679
Net assets
140,339,181
29,237,553
90,215,109
Net asset value per share
7.83
1.64
2.41
Common shares outstanding
17,847,015
17,847,015
37,416,669
(1)
Calculation excludes performance share allocation.
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Table of Contents
RISK
    FACTORS
An investment in our Class A common shares involves a
    number of risks. Before making an investment decision, you
    should carefully consider the following risk factors, together
    with the other information contained in this prospectus. If any
    of the risks discussed in this prospectus were to occur, our
    business, financial condition, liquidity and results of
    operations could be materially and adversely affected. If this
    were to happen, the price of our Class A common shares
    could decline significantly, and you could lose all or a part of
    your investment. In connection with the forward-looking
    statements that also appear in this prospectus, you should also
    carefully review the cautionary statement referred to under
    "Cautionary Statement Regarding Forward-Looking
    Statements."
Risks
    Related to Our Management and Our Relationship with Our
    Manager
We are
    dependent on our manager and may not find a suitable replacement
    if we terminate or our manager terminates our management
    agreement.
We are externally managed by our manager, Muni Capital
    Management, pursuant to a management agreement, or Management
    Agreement. We and our subsidiaries have no employees and no
    separate facilities and are completely reliant on our manager,
    who has significant discretion as to the implementation and
    execution of our business strategies and risk management
    practices and provides or arranges for all of our administrative
    services. Investors who are not willing to rely on our manager
    should not invest in our Class A common shares. The
    employees, systems and facilities of our manager are utilized by
    other externally managed companies and funds advised by our
    manager and its affiliates, and we
and/or
our
    manager may not have sufficient access to such employees,
    systems and facilities in order for our manager to comply with
    its obligations under the Management Agreement. In addition, we
    are subject to the risk that our manager will terminate the
    Management Agreement and that no suitable replacement will be
    found.
We may
    have a conflict of interest with our manager and its affiliates,
    which could result in decisions that are not in the best
    interests of our shareholders.
We are subject to potential conflicts of interest arising out of
    our relationship with our manager and its affiliates, including
    its parent. All of our officers also serve as officers
and/or
directors of other affiliates of our manager. Accordingly, they
    will not be exclusively dedicated to our business. Furthermore,
    our Management Agreement with our manager is between related
    parties, and its terms, including fees payable, may not be as
    favorable to us as if it had been negotiated with an
    unaffiliated third party. In addition, our manager has no
    fiduciary obligation to our shareholders. Our Management
    Agreement with our manager does not prevent our manager and its
    affiliates from engaging in additional management or investment
    opportunities that compete with us. Affiliates of our manager
    may also engage in management or investment opportunities where
    such affiliates hold positions in securities or other assets
    that increase in value when certain assets we hold decrease in
    value. Our manager has and may engage in additional management
    or investment opportunities that have overlapping objectives
    with ours, and will face conflicts in the allocation of
    opportunities between us and its other businesses. Such
    allocation is at the discretion of our manager, and there is no
    guarantee that this allocation will be made in the best interest
    of our shareholders. The ability of our manager and its officers
    and employees to engage in other business activities also will
    reduce the time those individuals spend managing our company.
In the future, we may enter into additional transactions with
    our manager, its parent company, or its or their affiliates with
    the approval of our independent directors. Such transactions may
    not be as favorable to us as they would be if negotiated with
    independent third parties.
Members
    of our management team have competing duties to other entities,
    which could result in them not devoting enough time to our
    affairs.
The employees of our manager and its affiliates will not spend
    all of their time managing our business. They will allocate
    some, which may be a material portion, of their time to other
    businesses and activities of
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our manager's other affiliates. Our manager is not required
    to cause its employees to devote a specific amount of time to
    our affairs. Accordingly, they may not devote sufficient time to
    our affairs.
The
    departure of any of the members of senior management of our
    manager may adversely affect our ability to achieve our business
    objectives and our Management Agreement does not require the
    availability to us of any particular individuals.
To the extent that any of the employees of our manager or its
    affiliates that are responsible for the management of our
    business cease to be employed by our manager or any such
    affiliate for any reason, our manager may not be able to secure
    a suitable replacement on our behalf on a timely basis or at
    all. The departure of any such individual could adversely affect
    our ability to achieve our business objectives. In addition, the
    Management Agreement does not obligate that any particular
    individual's services be made available to us.
Our
    manager will make decisions under very broad guidelines approved
    by our board of directors and our board of directors will not
    approve individual credit or asset acquisition decisions made by
    it.
Our manager is authorized to follow very broad guidelines on
    behalf of our company and therefore have great latitude in
    determining our asset composition. Our board of directors
    periodically reviews these guidelines. However, it does not
    review all of our proposed or completed asset acquisitions. In
    addition, in conducting periodic reviews of selected assets, the
    board may rely primarily on information provided to us by our
    manager.
Our
    manager and its affiliates collectively own in excess of a
    majority of our combined voting power and may vote in a manner
    that does not coincide with the interests of other
    shareholders.
As of the date of this prospectus, our manager, its officers and
    Tiptree, a diversified financial services holding company
    managed by an affiliate of our manager, collectively own 78.22%
    of the outstanding Class B common shares,
    representing     % of our combined
    voting power. As a result, our manager, its officers and Tiptree
    have controlling voting power in any vote by holders of our
    common shares. Our manager, its officers and Tiptree may vote in
    a manner that does not coincide with the interests of other
    holders of common shares.
Our
    manager's base management fee is payable regardless of
    performance.
Under the Management Agreement, our manager is entitled to a
    base management fee from us that is based on the amount of our
    equity (as defined in the Management Agreement), regardless of
    our performance. For example, we could pay our manager a base
    management fee for a specific period even if we experienced a
    net loss during the same period. This in turn could hurt both
    our ability to make distributions to our shareholders and the
    market price of our Class A common shares. In addition, the
    expenses for which our manager will be reimbursed are not
    subject to any cap.
Our
    manager's incentive compensation may induce it to engage in
    higher risk activities.
Our manager's compensation and incentive structure may
    cause it to acquire higher risk assets or take other risks that
    it might otherwise not take with respect to the management of
    our company. In addition to its management fee, our manager
    holds a performance share, or Performance Share, that will
    entitle it to an allocation of our profits and cash
    distributions only if we exceed a specified performance
    threshold. The opportunity to receive distributions on the
    Performance Share may lead our manager to place undue emphasis
    on the maximization of net income at the expense of other
    criteria, such as management of credit risk or market risk, in
    order to generate more cash available for distribution. Assets
    with higher yield potential are generally riskier or more
    speculative. As consideration for the acquisition of the right
    to manage the company from the Former Manager, our manager will,
    beginning on March 18, 2012 and until March 18, 2022,
    remit to the former manager payments equal to 10% of our
    manager's revenue in excess of $1 million (including
    the above-discussed Performance Share, and less certain
    adjustments).
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The
    termination of our Management Agreement by us will not be
    possible under some circumstances and would otherwise be
    difficult and costly.
We may terminate the Management Agreement for cause (as defined
    in the Management Agreement) at any time. We may not terminate
    the Management Agreement, however, without cause before
    December 31, 2010, the date on which its initial term
    expires. After December 31, 2010, the Management Agreement
    will be automatically renewed for a one-year term on each
    anniversary date thereafter unless terminated for cause or as
    otherwise described in the Management Agreement. Under the
    Management Agreement, after December 31, 2010, we may
    terminate the Management Agreement annually upon the affirmative
    vote of at least two-thirds of our independent directors, or by
    a vote of the holders of a majority of our outstanding common
    shares, based upon (1) unsatisfactory performance by our
    manager that is materially detrimental to us or (2) a
    determination that the management fee payable to our manager is
    not fair, subject to our manager's right to prevent such a
    termination under this clause (2) by accepting a mutually
    acceptable reduction of the management fee. Our manager will be
    provided 180 days' prior notice of any termination and
    will be paid a termination fee equal to three times the average
    annual base management fee for the two
12-month
periods immediately preceding the date of termination,
    calculated as of the end of the most recently completed fiscal
    quarter prior to the date of termination. In addition, we will
    be required to redeem the Performance Share for a price equal to
    three times the average annual allocations and distributions
    paid in respect of such Performance Share for the two
12-month
periods immediately preceding the date of termination. Thus, in
    some circumstances, we will be unable to terminate our
    Management Agreement. In other circumstances where we do have
    the right to terminate the Management Agreement, termination
    will result in substantial cost to us. In addition, we may also
    incur considerable legal cost resulting from potential
    litigation that may arise in connection with the termination of
    the management agreement. The costs and adverse effects of
    terminating the Management Agreement make it unlikely that we
    would terminate the Management Agreement, particularly without
    cause.
Our
    manager's liability is limited under the Management
    Agreement, and we have agreed to indemnify our manager against
    certain liabilities, which may expose us to significant
    expense.
Pursuant to the Management Agreement, our manager will not
    assume any responsibility other than to render the services
    called for thereunder and will not be responsible for any action
    of our board of directors in following or declining to follow
    our manager's advice or recommendations. Our manager and
    its members, managers, officers and employees will not be liable
    to us, any of our subsidiaries, our directors, our shareholders
    or any shareholders of our subsidiaries for acts performed in
    accordance with and pursuant to the Management Agreement, except
    by reason of acts constituting bad faith, willful misconduct,
    gross negligence, or reckless disregard of their duties under
    the Management Agreement. We have agreed to indemnify our
    manager and its members, managers, officers and employees and
    each person controlling our manager with respect to all
    expenses, losses, damages, liabilities, demands, charges and
    claims arising from acts of such indemnified party not
    constituting bad faith, willful misconduct, gross negligence, or
    reckless disregard of duties, performed in good faith in
    accordance with and pursuant to the Management Agreement.
We may
    pay more fees to our manager if it ceases to manage the
    structured tax-exempt pass-through entities in which we acquire
    interests or if the portfolio base management fees paid to our
    manager are reduced.
We expect that our manager will receive fees in its capacity as
    portfolio manager of the STEP entities, or other structured
    credit entities in which we acquire interests. A STEP is a
    special purpose entity that is structured as a partnership for
    U.S. federal income tax purposes and issues two or more
    classes of certificates to finance the acquisitions by the STEP
    of a portfolio of tax-exempt obligations. Our Management
    Agreement provides that the base management fee otherwise
    payable by us to our manager for any fiscal year will be
    reduced, but not below zero, by our proportionate share of the
    amount of any STEP or other structured credit portfolio base
    management fees that are paid to our manager for such year by
    the STEP or other structured credit entities in which we acquire
    interests, based on the percentage of the most junior class of
    certificates we hold in those STEP or other structured credit
    entities. If the STEP or other structured credit portfolio base
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management fees paid to our manager are reduced, or if the
    portfolio management agreement between our manager and a STEP or
    other structured credit entity in which we acquire interests is
    terminated, then the amount of portfolio base management fees
    that would be offset to our benefit would be reduced. If this
    were to occur, we may pay more fees to our manager.
If our
    manager changes, derivative arrangements into which we may enter
    may terminate and financial institutions that provide our credit
    facilities, if any, may not provide future financing to
    us.
The terms of total return swaps and other derivatives that we
    may acquire, as well as the terms of future credit facilities
    that we may enter into, may require that our current manager
    continue to manage our operations as a condition to the
    continuation of the swap or other derivative or credit facility,
    and such instruments may terminate or our obligations thereunder
    may be accelerated if our manager ceases to act in such
    capacity. If that were to occur, we may not be able to enter
    into replacement instruments on satisfactory terms or at all or
    satisfy our obligations under such instruments.
Risks
    Related to Our Business and Our Assets
We
    have a limited operating history and, accordingly, it is
    difficult to evaluate an investment in the Class A common
    shares. We may not be able to operate our business successfully
    or generate sufficient revenue to make or sustain distributions
    to shareholders.
We commenced operations in June 2007 and our existing manager
    became our manager during March 2009. We therefore have a
    limited operating history. It is difficult to evaluate our
    future prospects and an investment in the Class A common
    shares due to our limited operating history. We will be subject
    to the risks generally associated with any newer business,
    including the risk that we will not be able to successfully
    execute our business strategy. Our ability to execute our
    business strategy will depend on our ability to identify and
    acquire attractive assets that meet our criteria and our access
    to both debt and equity financing on acceptable terms. There can
    be no assurance that we will generate sufficient revenue from
    operations to pay our expenses and make or sustain distributions
    to holders of the Class A common shares.
We intend to operate as a partnership under the Internal Revenue
    Code of 1986, as amended, or the Code, which will allow us to
    pass through our income, including our federally tax exempt
    income, and deductions to shareholders, and will be subject to
    various rules relating to partnerships. The partnership rules
    and regulations, particularly those relating to "publicly
    traded partnerships," are highly technical and complex and
    the failure to comply with those rules and regulations could
    prevent us from qualifying as a partnership such that items of
    income and deduction would not pass through to our shareholders,
    our shareholders would be treated for U.S. federal tax
    purposes as shareholders in a corporation and distributions by
    us to our shareholders would constitute dividend income taxable
    to such holders to the extent of our earnings and profits. Our
    failure to comply with these rules and regulations could have a
    material adverse effect on our results of operations, financial
    condition and business. See "— Tax Risks"
    below.
We may
    not realize gains or income from our assets and our assets may
    decline in value.
We seek to generate both current income and capital
    appreciation. The assets that we acquire may not appreciate in
    value, however, and in fact, may decline in value, and the loans
    that we or our affiliates make and debt securities that we
    acquire may default on interest
and/or
principal payments. Market values of our assets may decline for
    a number of reasons, including due to liquidity issues, changes
    in prevailing market rates, increases in defaults, actual or
    perceived credit issues involving one or more borrowers,
    increases in voluntary prepayments for those assets that we have
    that are subject to prepayment risk, widening of credit spreads,
    actions by rating agencies, declines in the value of the
    collateral supporting debt and difficulty in valuing assets.
    Also, a decline in credit quality of assets where there is a
    significant risk that there will be a default or imminent
    default may force us to sell certain assets at a loss.
    Accordingly, we may not be able to realize gains or income from
    our assets and our assets may lose value. Any gains that we do
    realize may not be sufficient to offset any losses we
    experience. Furthermore, any income that we realize may not be
    sufficient to offset our expenses. Except for assets held by our
    subsidiaries and variable interest entities consolidated on
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our balance sheet, we value our assets at fair value, which may
    result in significant fluctuations in our asset values.
The
    recent downturn in the credit markets has increased the cost of
    borrowing and has made financing difficult to obtain, each of
    which may have a material adverse effect on our results and
    operations.
Recent economic conditions have been unprecedented and
    challenging, and tight credit conditions and slow growth may, we
    believe, continue throughout 2010. Beginning with the third
    quarter of 2007, and throughout 2008 and 2009, continued
    concerns about the systemic impact of unemployment, inflation,
    energy costs, geopolitical issues, the availability and cost of
    credit, the U.S., European and other international mortgage
    markets, declining residential and commercial real estate
    markets, as well as several significant bankruptcies and
    government interventions in credit markets, have led to
    increased uncertainty and instability in global capital and
    credit markets.
As a result of these conditions, the cost and availability of
    credit has been, and may continue to be, adversely affected in
    all markets in which we operate. Concern about the stability of
    the markets generally and the strength of counterparties
    specifically has led many lenders and institutional investors to
    reduce, and in some cases, cease, to provide funding to
    borrowers. Continued turbulence in the U.S., European and other
    international markets and economies may adversely affect our
    liquidity and financial condition. If these market and economic
    conditions continue, they may limit our ability to replace or
    renew maturing liabilities, or acquire additional liabilities,
    on a timely basis, access the capital markets to meet liquidity
    requirements and result in adverse effects on our financial
    condition and results of operations.
A
    significant portion of our assets are illiquid or have limited
    liquidity, which may limit our ability to sell those assets at
    favorable prices or at all.
Our assets generally are expected to be illiquid or have limited
    liquidity. As of December 31, 2009, based on fair value,
    substantially all of our credit assets consisted of tax-exempt
    bonds and interests in structured transactions that have limited
    liquidity. It may be difficult for us to dispose of assets with
    limited liquidity rapidly, or at all, or at favorable prices.
    Historically, the trading volume in the tax-exempt bond market
    has been limited relative to other markets and transfers may
    require the consent of an agent or borrower. In addition, assets
    with limited liquidity may be more difficult to value and may
    trade at a substantial discount or experience more volatility
    than more liquid assets.
We are not limited in the amount of capital used to support, or
    the exposure to, any individual asset or any group of assets
    with similar characteristics or risks. As a result, our
    portfolio may be concentrated in a small number of assets or may
    be otherwise undiversified, increasing the risk of loss and the
    magnitude of potential losses to us and our shareholders if one
    or more of these assets perform poorly.
We may
    change our business strategy without shareholder consent, which
    may result in a determination to pursue riskier business
    activities.
We may change our business strategy at any time without
    shareholder consent, which could result in our acquiring assets
    or pursuing a business strategy different from, and possibly
    riskier than, those contemplated by this prospectus. A change in
    our business strategy may increase our exposure to market
    fluctuations or certain other risks.
In addition, while we anticipate that the majority of our assets
    will consist of tax-exempt bonds, structured credit entities and
    derivatives, we may own other credit or non-credit assets. These
    assets may have additional or different risks from those
    described herein, including the possibility that such assets may
    result in taxable income to shareholders.
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The
    declaration of distributions to our shareholders and the amount
    of such distributions are at the discretion of our board of
    directors and will depend upon certain factors affecting our
    operating results, some of which are beyond our
    control.
The declaration of distributions to our shareholders and the
    amount of such distributions are at the discretion of our board
    of directors. Our ability to make and sustain cash distributions
    is based on many factors, including our ability to successfully
    acquire assets in accordance with our business strategy, our
    ability to access additional capital on attractive terms to
    finance our assets, the return on our assets, operating expense
    levels and certain restrictions imposed by law. Some of these
    factors are beyond our control and a change in any such factor
    could affect our ability to make distributions. See
    "Dividend Policy" in this prospectus.
We
    expect that a significant portion of the tax-exempt obligations
    that we own will be unrated or rated below investment grade.
    Non-investment grade assets are higher risk assets that may be
    more likely to default than investment grade
    assets.
We expect that a significant portion of the tax-exempt
    obligations that we own will be unrated or rated below
    investment grade by one or more nationally recognized
    statistical rating organizations (Bal or lower by Moody's
    or BB+ or lower by Fitch or S&P). Although these assets
    generally pay higher rates of interest than investment grade
    assets, they generally are higher risk and may be more likely to
    default, which cause income
and/or
principal losses. Other risks associated with non-investment
    grade assets include (i) greater vulnerability to adverse
    changes in the borrower's business, industry
and/or
to
    general economic conditions, (ii) call or redemption
    features that permit a borrower to prepay the security before it
    matures, which may result in the loss of expected income,
    (iii) non-investment grade obligations are often subject to
    extreme price fluctuations and negative economic developments
    may have a greater impact on these obligations than on other
    higher-rated fixed income obligations and
    (iv) non-investment grade obligations may be less liquid
    and subject to greater variability in pricing than higher-rated
    fixed income obligations even under normal economic conditions.
Valuations
    of some of our assets are inherently uncertain, may be based on
    estimates, may fluctuate over short periods of time and/or may
    differ from the values that would have been used if a ready
    market for these assets existed.
The values of some of the assets in our portfolio are not
    readily determinable. We use two independent third-party
    valuation services to value these assets daily at market value,
    and changes in the market value of our assets directly impact
    our net income. Because such valuations are inherently
    uncertain, may fluctuate over short periods of time and may be
    based on estimates, such determinations of value may differ from
    the values that would have been used if a ready market for these
    assets existed or from the prices at which trades occur.
    Furthermore, while we believe the third-party valuation services
    we have retained are experienced, capable and credentialed, we
    do not manage the processes at such services nor have any
    control over the values they deliver. As such, we cannot
    necessarily or definitively verify the accuracy of such values
    generated by such services. The determination of market value
    has a material impact on our net earnings through recording
    unrealized appreciation or depreciation of assets. The value of
    our common shares could be adversely affected if the
    determinations of market value of these obligations are
    materially higher than the values that we ultimately realize
    upon their disposal.
Valuations of certain assets are often difficult to obtain or
    are unreliable. In general, dealers and valuation services
    heavily disclaim their valuations. Additionally, dealers may
    claim to furnish valuations only as an accommodation and without
    special compensation, and so they may disclaim any and all
    liability for any direct, incidental or consequential damages
    arising out of any inaccuracy or incompleteness in valuations,
    including any act of negligence or breach of any warranty.
    Depending on the complexity and illiquidity of an asset,
    valuations of the same asset can vary substantially from one
    dealer or pricing service to another. The valuation process has
    been particularly difficult recently as market events have made
    valuations of certain assets more difficult and unpredictable
    and the disparity of valuations provided by third-party dealers
    has widened.
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The
    tax-exempt obligations in which we directly or indirectly hold
    interests present certain risks related to the special nature of
    such assets.
States, municipalities or public authorities issue tax-exempt
    obligations to obtain funds for various public purposes. The two
    principal classifications of tax-exempt obligations are general
    obligation and revenue bonds. General obligation bonds are
    secured by the issuer's pledge of its faith, credit and
    specified taxing power for the payment of principal and
    interest. The taxing power of any governmental entity may be
    limited, however, by provisions of its state constitution or
    laws, and an entity's creditworthiness will depend on many
    factors, including:
•
global, national, regional
and/or
local
    macro-economic factors, including the continuing credit crisis
    and the overall rate of growth of the U.S. economy;
•
unemployment levels within the obligor's tax base;
•
the size of the obligor's tax base, its potential erosion
    due to population declines, and its ability to increase taxes
    without eroding the tax base;
•
natural disasters;
•
declines in the obligor's industrial base or inability to
    attract new industries;
•
legislative proposals
and/or
voter
    initiatives to limit ad valorem real property taxes and the
    extent to which the entity relies on federal or state aid;
•
access to capital markets; and
•
other factors beyond the obligor's control.
Revenue bonds are payable only from the designated revenues
    derived from a particular facility or class of facilities or, in
    some cases, from the proceeds of a special excise tax or other
    specific revenue sources such as payments from the user of the
    facility being financed. Accordingly, the timely payment of
    interest and the repayment of principal in accordance with the
    terms of the revenue or special obligation bond is a function of
    the economic viability of such facility or such revenue source.
The tax-exempt obligations in which we directly or indirectly
    hold interests may also include "moral obligation"
    bonds, which are typically issued by special purpose public
    authorities. If an issuer of moral obligation bonds is unable to
    meet its obligations, the repayment of such bonds becomes a
    moral, but not a legal, obligation of the state or municipality
    in question.
In addition, the tax-exempt bonds in which we directly or
    indirectly hold interests may include certificates of
    participation, or COPs, issued by government authorities or
    entities to finance the acquisition or construction of
    equipment, land
and/or
facilities. COPs represent participations in a lease, an
    installment purchase contract or a conditional sales contract,
    which we collectively refer to as lease obligations, relating to
    such equipment, land or facilities. Although lease obligations
    do not constitute general obligations of the obligor for which
    the obligor's unlimited taxing power is pledged, a lease
    obligation is frequently backed by the obligor's covenant
    to budget for, appropriate and make the payments due under the
    lease obligation. However, certain lease obligations contain
    "non-appropriation" clauses which provide that the
    obligor has no obligation to make lease or installment purchase
    payments in future years unless money is appropriated for such
    purpose on a yearly basis. Although
    "non-appropriation" lease obligations are secured by
    the leased property, disposition of the property in the event of
    foreclosure might prove difficult and the value of the property
    may be insufficient to issue lease obligations.
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The
    tax-exempt obligations in which we directly or indirectly hold
    interests will be subject to credit risk, market risk, interest
    rate risk, selection risk, call and redemption risk and tax
    risk, and the occurrence of any one of these risks may
    materially and adversely affect the value of our assets or our
    results of operations.
The tax-exempt obligations in which we directly or indirectly
    hold interests will be subject to credit risk, market risk,
    interest rate risk, selection risk, call and redemption risk and
    tax risk.
Credit risk is the risk that the obligor will be unable to repay
    principal or pay interest when due. In this regard, investing in
    non-investment grade obligations is riskier than investing in
    higher quality tax-exempt instruments. In addition, market value
    fluctuations may be larger and more frequent. Changes in the
    underlying obligor's credit rating or the market's
    perception of its creditworthiness will affect the market value
    of our credit assets of that obligor. The degree of credit risk
    depends on the terms of the tax-exempt obligation as well as on
    the financial condition of the obligor in respect thereof.
Market risk is the risk that one or more markets to which our
    assets relate will decline in value, including the possibility
    that such markets will deteriorate sharply and unpredictably,
    which decline will likely impair the market value of the related
    tax-exempt obligations.
With respect to fixed-rate obligations, interest rate risk is
    the risk that the market value of these obligations will change
    in response to changes in the interest rate environment or other
    developments that may affect the tax-exempt bond market
    generally. When market interest rates go up, the market value of
    existing fixed rate obligations goes down and obligations with
    longer maturities are typically affected more by changes in
    interest rates than obligations with shorter maturities. Because
    market interest rates continue to be at or near their lowest
    levels in many years, there is a greater risk that prevailing
    interest rates increase in the future and, as a result, that
    these obligations will decline in market value. With respect to
    floating-rate obligations, interest rate risk is the risk that
    defaults on these obligations will increase during periods of
    rising interest rates and, during periods of declining interest
    rates, that obligors may exercise their option to prepay
    principal earlier than scheduled.
Selection risk is the risk that our manager may select assets
    that underperform the tax-exempt bond market.
Call and redemption risk is the risk that the obligor of a
    tax-exempt obligation will exercise its right to call the
    obligation for redemption before it matures. If this happens, we
    may lose expected income and our shareholders would be exposed
    to reinvestment risk.
Tax risk is the risk that events occurring after the date of
    issuance of a tax-exempt obligation may cause the interest on
    such obligation to be includable in gross income for
    U.S. federal income tax purposes. See "— Tax
    Risks" below.
The amount of public information available about the tax-exempt
    assets we expect to directly or indirectly hold is generally
    less than that for corporate equities or taxable bonds, and our
    results of operations may, therefore, be more dependent on the
    analytical abilities of our manager than if we held interests in
    other types of assets.
The
    structured credit entities in which we may acquire interests and
    the counterparties under derivative arrangements to which we are
    party may not be able to acquire attractive eligible tax-exempt
    bonds.
We may acquire interests in STEP and other types of structured
    credit entities backed by tax-exempt bonds and total return
    swaps and other derivative arrangements relating to tax-exempt
    bonds. We would therefore be subject to the risk that a
    structured credit entity or a derivative counterparty may not be
    able to acquire or identify a sufficient amount of eligible
    tax-exempt bonds to maximize the efficiency of a STEP issuance,
    other structured credit transaction or derivative arrangement.
    In addition, disruptions in the capital markets generally, or in
    the structured credit or derivatives markets specifically, may
    make the issuance of a STEP or another structured credit
    transaction or a derivative transaction less attractive or even
    impossible. If we are unable to finance the acquisition of
    tax-exempt bonds on a long-term basis using structured credit
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entities or invest in derivative arrangements relating to
    tax-exempt bonds, or if doing so is not economical, we may be
    required to seek less attractive investments.
Increases
    in interest rates could negatively affect the value of our
    assets.
Changes in the general level of interest rates may affect our
    net income to the extent there is a difference between the
    income earned on our assets in structured credit entities owning
    and derivative arrangements, if any, related to tax-exempt
    bonds, on the one hand, and the distributions to other holders
    of certificates issued by such structured credit vehicles and
    payments to our derivative counterparties, on the other. Changes
    in the level of interest rates also can affect, among other
    things, our ability to successfully implement our strategy and
    the value of our assets.
Due to the prolonged economic crisis and recession,
    U.S. interest rates have recently been at or near historic
    lows. However, it is anticipated that once the overall
    U.S. economy displays consistent and pronounced signs of
    recovery, U.S. interest rates will increase. In the event
    of a significant rising interest rate environment or economic
    downturn, our assets may decrease in value
and/or
defaults on our assets may increase and result in losses that
    would adversely affect our liquidity and operating results.
    Interest rates are highly sensitive to many factors, including
    governmental monetary and tax policies, domestic and
    international economic and political conditions, and other
    factors beyond our control.
Our operating results will depend in large part on differences
    between the income earned on our assets, net of credit losses,
    and our operating expenses. Under certain circumstances, the
    income from the tax-exempt bonds underlying our structured
    credit assets and derivative arrangements, if any, may respond
    more slowly to interest rate fluctuations than will the amount
    of the distributions to other holders of certificates issued by
    such structured credit entities and payments to our derivative
    counterparties. Consequently, changes in interest rates,
    particularly short-term interest rates, may significantly
    influence our net income. Increases in these rates will tend to
    decrease our net income and the market value of our assets.
    Interest rate fluctuations resulting in structured credit
    vehicle distributions and derivative payments exceeding the
    income on our assets would result in operating losses for us.
Most
    of our assets will be directly or indirectly subject to risks
    particular to real property.
Credit assets that are directly or indirectly secured by a lien
    on real property (or the equity interests in an entity that owns
    real property) may, upon the occurrence of a default on the
    loan, result in our acquiring ownership of the property.
    Investments in real property or real property-related assets are
    subject to varying degrees of risk. The value of each property
    is affected significantly by its ability to generate cash flow
    and net income, which in turn depends on the amount of income
    that can be generated net of expenses required to be incurred
    with respect to the property. The income from these properties
    may be adversely affected by a number of risks, including:
•
acts of God, including hurricanes, earthquakes, floods and other
    natural disasters, which may result in uninsured losses;
•
acts of war or terrorism, including the consequences of
    terrorist attacks;
•
adverse changes in national and local economic and real estate
    conditions (including business layoffs or downsizing, industry
    slowdowns and changing demographics);
•
an oversupply of (or a reduction in demand for) space in
    properties in geographic areas where our assets are concentrated
    and the attractiveness of particular properties to prospective
    tenants;
•
changes in governmental laws and regulations, fiscal policies
    and zoning ordinances and the related costs of compliance
    therewith and the potential for liability under applicable
    laws; and
•
costs of remediation and liabilities associated with
    environmental conditions such as indoor mold, and the potential
    for uninsured or underinsured property losses.
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Many expenditures associated with properties (such as operating
    expenses and capital expenditures) cannot be reduced when there
    is a reduction in income from the properties. Adverse changes in
    these factors may have a material adverse effect on the ability
    of our borrowers to pay their loans, as well as on the value
    that we can realize from properties we own or acquire, and may
    reduce or eliminate our ability to make distributions to
    shareholders.
Insurance
    on the real estate underlying our credit assets may not cover
    all losses.
There are certain types of losses, generally of a catastrophic
    nature, such as earthquakes, floods, hurricanes, terrorism or
    acts of war, that may be uninsurable or not economically
    insurable. Inflation, changes in building codes and ordinances,
    environmental considerations and other factors, including
    terrorism or acts of war, also might make the insurance proceeds
    insufficient to repair or replace a property if it is damaged or
    destroyed. Under such circumstances, the insurance proceeds
    received might not be adequate to restore our economic position
    with respect to the affected real property. Any uninsured loss
    could result in both loss of cash flow and a reduction in asset
    value.
We may
    be exposed to environmental liabilities with respect to
    properties to which we take title.
In the course of our business, we may take title to real estate,
    and, if we do take title, we could be subject to environmental
    liabilities with respect to these properties. In such a
    circumstance, we may be held liable to a governmental entity or
    to third parties for property damage, personal injury,
    investigation and
clean-up
costs incurred by these parties in connection with environmental
    contamination, or may be required to investigate or clean up
    hazardous or toxic substances or chemical releases at a
    property. The costs associated with investigation or remediation
    activities could be substantial. In addition, the presence of
    hazardous substances may adversely affect an owner's
    ability to sell real estate or borrow using real estate as
    collateral. To the extent that an owner of an underlying
    property becomes liable for removal costs, the ability of the
    owner to make debt payments may be reduced, which in turn may
    materially adversely affect the value of the relevant
    mortgage-related assets held by us.
We may
    not be able to acquire structured credit assets.
As part of our strategy, we expect to acquire interests in STEPs
    and other structured credit entities that hold tax-exempt
    obligations. Our ability to generate gains and income partly
    depends on our ability to acquire interests in such entities. If
    market or other factors limit the ability of such entities to
    use significant amounts of leverage, they may not be an
    attractive acquisition opportunity for us and we may not be able
    to make acquisitions or other investments that provide
    attractive returns.
A
    significant portion of our structured credit assets could
    consist of junior and residual interests that will be
    subordinate in right of payment and in liquidation to the more
    senior interests issued by the structured credit
    entities.
We expect that a significant portion of any structured credit
    assets that we acquire will consist of junior and residual
    certificates issued by the structured credit entities. These
    junior and residual certificates will be subordinated in right
    of payment and in liquidation to the other, more senior
    certificates and will not be secured by specific assets. There
    can be no assurance that these vehicles will generate sufficient
    income from their underlying portfolios of tax-exempt bonds to
    pay distributions to us or that they would have sufficient
    assets to pay any distributions to which we would otherwise be
    entitled in the event of the liquidation. As a result, we may
    not recover some or all of our investments in these junior and
    residual certificates.
The
    use of STEP or other structured credit financings with
    collateralization requirements may have a negative impact on our
    cash flow and may trigger certain termination provisions in the
    related structured transaction documents.
We expect that the terms of certain of our STEP or other
    structured credit transactions will generally provide that the
    principal amount of the tax-exempt bonds must exceed the face
    amount of the related STEP
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certificates to be issued by the STEP by a certain amount. We
    anticipate that the STEP certificates' terms will provide
    that, if certain delinquencies
and/or
losses exceed the specified levels based on the analysis by the
    rating agencies (or any financial guaranty insurer) of the
    characteristics of the tax-exempt bonds underlying the STEP
    certificates, the required level of collateralization may be
    increased or may be prevented from decreasing as would otherwise
    be permitted if losses or delinquencies did not exceed those
    levels. Other tests, based on delinquency levels or other
    criteria, may restrict our ability, as the holder of the most
    junior STEP certificates, to receive cash distributions from
    tax-exempt bonds underlying the STEP certificates. The
    performance tests may not be satisfied. We cannot predict the
    actual terms of the STEP delinquency tests, collateralization
    requirements, cash flow release mechanisms or other significant
    factors regarding the calculation of net income to us. Failure
    to obtain favorable terms with regard to these matters may
    materially and adversely affect our earnings Furthermore, if the
    tax-exempt bonds held in STEPs fail to perform as anticipated,
    our earnings may be adversely affected and our expenses related
    to collateralization requirements or other credit enhancement
    expenses associated with our STEP financings will increase.
A
    significant portion of any future STEP entities may be backed by
    tax-exempt bonds issued by or on behalf of non-profit
    institutions and state authorities in the healthcare, education,
    cultural, philanthropic, research, service/advocacy,
    infrastructure and housing sectors and any adverse trends that
    affect these sectors may adversely affect our STEP and other
    structured credit entities in general.
A significant portion of our future STEP issuances and other
    structured credit transactions may be backed by tax-exempt bonds
    issued by or on behalf of non-profit institutions and state
    authorities in the healthcare, education, cultural,
    philanthropic, research, service/advocacy, infrastructure and
    housing sectors. Any adverse trends that affect these sectors or
    the value of these tax-exempt bonds will adversely impact the
    value of our interests in our STEP and other structured credit
    entities. Certain of these adverse trends are described below in
    "— Risks Relating to Tax-Exempt Bonds."
Prepayment
    rates on tax-exempt bonds could negatively affect the value of
    our assets, which could result in reduced earnings or losses and
    negatively affect the cash available for distribution to our
    shareholders.
The value of our structured credit assets and derivative
    arrangements, if any, related to tax-exempt bonds may be
    adversely affected by prepayment rates of the underlying bonds.
    For example, higher than expected prepayment rates will likely
    result in tax-exempt bonds that were acquired at a premium to
    diminish in value. Prepayment rates are influenced by changes in
    current interest rates and a variety of economic, political,
    geographic and other factors beyond our control. Consequently,
    such prepayment rates cannot be predicted with certainty.
Borrowers tend to prepay their financings faster when interest
    rates decline. In these circumstances, the money received from
    the prepayments may be reinvested at lower prevailing interest
    rates. Conversely, borrowers tend not to prepay their financings
    when interest rates increase. Consequently, money that would
    have otherwise been received from prepayments would be unable to
    be reinvested at the higher prevailing interest rates. This
    volatility in prepayment rates may result in reduced earnings or
    losses for us and negatively affect the cash available for
    distribution to our shareholders.
Interest
    rate risk may cause greater volatility in our
    earnings.
We are currently party to an interest rate swap agreement with
    Tiptree, the holder of the majority of our outstanding common
    shares and an affiliate of our manager, further described in
    "Business — Our Assets — Derivative
    Assets." Furthermore, the STEP and other structured credit
    entities in which we acquire interests and the counterparties
    under derivative arrangements to which we are a party, if any,
    may engage in certain hedging transactions in an effort to limit
    their exposure to changes in interest rates, which may expose
    our assets to risks associated with these transactions. They may
    utilize instruments such as forward contracts and interest rate
    swaps, caps, collars and floors to seek to hedge against
    fluctuations in the relative values of the tax-exempt bonds that
    underlie our assets from changes in market interest rates.
    Hedging against a decline in the values of these tax-exempt
    bonds does not eliminate the possibility of fluctuations in the
    values of these bonds or prevent losses if the values of these
    bonds decline. However, hedging can establish other positions
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designed to gain from those same developments, thereby
    offsetting the decline in the value of these bonds. Hedging
    transactions may also limit the opportunity for gain if the
    value of the bonds increases. Moreover, these entities and
    counterparties may not be able to hedge against an interest rate
    fluctuation that is generally anticipated at an acceptable price.
The success of these risk mitigation transactions will depend on
    the entities' and counterparties' ability to structure
    and execute effective hedges for the underlying tax-exempt
    bonds, based on changes to interest rates, credit spreads and
    other financial market changes. Therefore, while these entities
    and counterparties may enter into these transactions to seek to
    reduce interest rate risks, unanticipated changes in interest
    rates may result in poorer overall performance for our assets
    than if they had not engaged in any hedging transactions. In
    addition, the degree of correlation between price movements of
    the instruments used in a hedging strategy and price movements
    in the underlying tax-exempt bonds being hedged may vary.
    Moreover, for a variety of reasons, these entities and
    counterparties may not establish a perfect correlation between
    such hedging instruments and the bonds being hedged. Any such
    imperfect correlation may prevent these entities and
    counterparties from achieving the intended hedge and expose our
    investments to risk of loss.
Accounting for hedges under generally accepted accounting
    principles in the United States, or U.S. GAAP, is extremely
    complicated. We may inadvertently fail to account for hedges
    properly in accordance with U.S. GAAP on our financial
    statements or may fail to qualify for hedge accounting, either
    of which could have a material adverse effect on our earnings.
Risk
    mitigation arrangements may adversely affect the returns from
    our assets and may cause volatility in our earnings, which could
    adversely affect cash available for distribution to our
    shareholders, and may also result in taxable gains or taxable
    income to our shareholders.
The risk mitigation activities of the STEP and other structured
    credit entities in which we acquire interests and the
    counterparties under derivative arrangements to which we are a
    party will vary in scope based on the level and volatility of
    interest rates, the type of underlying tax-exempt bonds held and
    other changing market conditions. Interest rate hedging may fail
    to protect or could adversely affect us because, among other
    things:
•
interest rate hedging can be expensive, particularly during
    periods of rising and volatile interest rates;
•
available interest rate hedging may not correspond directly with
    the interest rate risk for which protection is sought;
•
the duration of the hedge may not match the duration of the
    related asset;
•
the credit quality of the party owing money on the hedge may be
    downgraded to such an extent that it impairs our structured
    credit entities' or our derivative counter-party's
    ability to sell or assign its side of the hedging
    transaction; and
•
the party owing money in the hedging transaction may default on
    its obligation to pay.
Such risk mitigation activities may adversely affect the returns
    from our assets and may cause volatility in our earnings, which
    could adversely affect cash available for distribution to our
    shareholders. In addition, such hedging activities may also
    result in taxable gains or taxable income to our shareholders.
The
    competitive pressures we face as a result of operating in a
    highly competitive market could adversely affect
    us.
We are subject to significant competition. A substantial number
    of entities (including entities managed by our manager and its
    other affiliates) compete with us, including specialty finance
    companies, banks, insurance companies, mutual funds, hedge
    funds, institutional investors, individual investors, lenders
    and other entities seeking to invest in tax-exempt bonds. Many
    of our competitors are substantially larger than we are and have
    considerably greater financial, technical and marketing
    resources than we have. Some competitors may have a lower cost
    of funds, enhanced operating efficiencies and access to funding
    sources that are not available to us. In addition, some of our
    competitors may have higher risk tolerances or different risk
    assessments, which
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could allow them to consider a wider variety of opportunities
    and establish more relationships than we can. The competitive
    pressures we face may have a material adverse effect on us.
Competition may limit the number of suitable opportunities
    available to us. It may also result in higher prices, lower
    yields and a narrower spread of yields over our borrowing costs,
    making it more difficult for us to acquire assets on attractive
    terms. In addition, competition for desirable assets could delay
    the deployment of the proceeds from this offering, which may in
    turn reduce our earnings per share and negatively affect our
    ability to maintain our distributions to our shareholders.
To the
    extent we utilize warehouse credit facilities, secured lines of
    credit and other short term financing arrangements in the
    future, we may be subject to certain related
    risks.
To the extent we utilize warehouse credit facilities, secured
    lines of credit and other short term financing arrangements in
    the future, we may be subject to certain risks relating to such
    financing arrangements, including:
•
these financing arrangements may subject us to an increased risk
    of loss, adversely affecting our returns and reducing cash
    available for distribution to our shareholders;
•
interest expense on such arrangements will not be deductible by
    us;
•
an increase in our borrowing costs of these financing
    arrangements relative to the income we receive on our assets may
    adversely affect our profitability, which may negatively affect
    cash available for distribution to our shareholders;
•
these financing arrangements may contain covenants that restrict
    our operations, and any default under these arrangements would
    inhibit our ability to grow our business and increase
    revenues; and
•
we could suffer losses beyond our committed capital under
    warehouse facilities, which could adversely affect us.
Furthermore, any future indebtedness that we incur may contain
    restrictive covenants that impose operating and other
    restrictions on us or one or more of our subsidiaries, including
    restrictions on our ability to make distributions to
    shareholders. These covenants may limit our ability, or the
    ability of one or more of our subsidiaries, to:
•
incur or guarantee additional debt;
•
create or incur liens;
•
engage in mergers and sales of substantially all of our assets;
•
make loans, acquisitions or investments;
•
make distributions on our shares unless we maintain specified
    financial covenants;
•
engage in transactions with affiliates; and
•
otherwise engage in operations as currently contemplated or as
    may be contemplated in the future.
We
    rely, in part, on analytical models and other data to analyze
    potential asset acquisition and disposition opportunities and to
    manage our portfolio. Such models and other data may be
    incorrect, misleading or incomplete, which could cause us to
    purchase assets that do not meet our expectations or to make
    asset management decisions that are not consistent with our
    strategy.
Our manager relies on analytical models (both proprietary and
    third-party models), and information and data supplied by third
    parties. These models and data may be used to value assets or
    potential asset acquisitions and dispositions and also in
    connection with our asset management activities. If these models
    and data prove to be incorrect, misleading or incomplete, any
    decisions made in reliance thereon could expose us to potential
    risks. For example, data may be incorrect, incomplete or
    misleading, may be modeled based on simplifying assumptions that
    lead to errors, may be incorrectly reported or subject to
    interpretation or may be
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outdated. Our manager's reliance on these models and data
    may induce it to purchase certain assets at prices that are too
    high, to sell certain other assets at prices that are too low,
    or to miss favorable opportunities. Similarly, any hedging
    activities, such as total return swaps, that are based on faulty
    models and data may prove to be unsuccessful.
Some models may be predictive in nature. The use of predictive
    models has inherent risks. For example, such models may
    incorrectly forecast future behavior, leading to potential
    losses. In addition, the predictive models used by our manager
    may differ substantially from those models used by other market
    participants, with the result that valuations based on these
    predictive models may be substantially higher or lower for
    certain assets than actual market prices. Furthermore, because
    predictive models are usually construed based on historical data
    supplied by third parties, the success of relying on such models
    may depend heavily on the accuracy and reliability of the
    supplied historical data, and, in the case of predicting
    performance in scenarios with little or no historical precedent
    (such as extreme broad-based declines in home prices or deep
    economic recessions), such models may have little or no
    predictive value.
All valuation models rely on correct market data inputs. If
    incorrect market data is entered into even a well-founded
    valuation model, the resulting valuations will be incorrect.
    However, even if market data is inputted correctly, "model
    prices" will often differ substantially from market prices,
    especially for securities with complex characteristics or whose
    values are particularly sensitive to various factors. If our
    market data inputs are incorrect or our model prices differ
    substantially from market prices, we may be adversely effected.
Accounting
    rules for certain of our transactions are highly complex and
    involve significant judgment and assumptions. Changes in
    accounting interpretations or assumptions could adversely impact
    our financial statements.
Accounting rules for transfers of financial assets, structured
    credit transactions, consolidation of variable interest
    entities, and other aspects of our anticipated operations are
    highly complex and involve significant judgment and assumptions.
    These complexities could lead to delay in preparation of
    financial information. Changes in accounting interpretations or
    assumptions could impact our financial statements, possibly
    materially.
We may
    acquire total return swaps and other derivative arrangements
    that could expose us to contingent liabilities in the
    future.
Part of our strategy may involve entering into total return
    swaps and other derivative arrangements that could require us to
    fund cash payments in certain circumstances such as the early
    termination of the swap or other derivative caused by an event
    of default or other early termination event, or the decision by
    a counterparty to request margin securities we are contractually
    owed under the terms of the swap or other derivative. The amount
    due would be equal to the unrealized loss of the open swap
    positions with the respective counterparty and could also
    include other fees and charges. These economic losses would be
    reflected in our results of operations and our ability to fund
    these obligations would depend on the liquidity of our assets
    and access to capital at the time. The need to fund these
    obligations could adversely impact our financial condition.
Our
    investments in total return swaps, if any, may subject us to
    certain additional risks. Furthermore, we may not be able to
    renew any total return swaps that we may enter into, which could
    adversely impact our investment strategy.
The total rate of return of a portfolio of tax-exempt bonds on
    which a swap is based may exhibit substantial volatility and may
    be positive or negative in any given period. In the event that
    the total rate of return is negative and we are receiving the
    total rate of return of that portfolio of tax-exempt bonds in
    our part of a swap agreement, we would be required to make a
    payment to the counterparty in addition to that required on the
    other, generally floating rate, part of the swap agreement.
    Also, unusual market conditions affecting the portfolio of
    tax-exempt bonds on which the swap is based may prevent the
    total rate of return from being
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calculated, in which case other provisions in the swap agreement
    may be invoked which could cause us to lose some of the
    anticipated benefit from the swap or otherwise reduce our return.
In addition, we will not be treated as the owner of the
    underlying portfolio of tax-exempt bonds subject to the total
    return swaps in which we may invest for tax or financial
    reporting purposes, and any income earned by us from any total
    return swap will be taxable to us. Moreover, the terms of any
    swap agreement will not contractually obligate the swap
    counterparty to own the tax-exempt bonds in the reference
    portfolio or, in the event such counterparty does own such
    reference bonds, to sell such bonds to us or a STEP and the
    counterparty could sell the tax-exempt bonds in the secondary
    market or retain them.
Moreover, in response to recent market conditions, federal and
    state legislators have discussed the proposal and enactment of
    certain regulatory reforms that may affect the derivatives
    market. If applicable laws and regulations are passed that
    affect total return swaps or other derivative instruments that
    may be within our strategy, our rate of return on such assets,
    or our ability to enter into swaps could be adversely affected.
Furthermore, we may wish to renew the total return swaps, which
    are for specified terms, as they mature. However, there is a
    limited number of providers of such swaps, and there is no
    assurance the initial swap providers will choose to renew the
    swaps, and, if they do not renew, that we would be able to
    obtain suitable replacement providers.
We may invest, through our wholly-owned subsidiary, in a limited
    number of total return swaps and our business and our financial
    performance may be materially harmed if those resources are not
    available to us.
We
    have in the past invested, and may in the future invest, in the
    residual certificates of tender option bond programs, and may be
    subject to risks relating to our ownership of residual
    certificates of such tender option bond programs.
In a typical tender option bond program, tax-exempt bonds
    identified by a dealer are deposited in a special purpose
    vehicle, usually a trust. The tender option bond trust issues
    two classes of securities: (i) floating rate certificates,
    with an aggregate face value approximately equal to the market
    value of the underlying tax-exempt bonds, entitling the holders
    to a variable interest rate based on prevailing short-term
    tax-exempt rates, which is reset periodically based on changes
    in short-term interest rates, and (ii) a residual
    certificate, which establishes an economically leveraged
    position in the underlying tax-exempt bonds.
As a holder of residual certificates under tender option bond
    programs, we could incur significant costs in respect of any
    event requiring the redemption of the related floating rate
    certificates. Such costs could arise, for example, in connection
    with our obligation to reimburse a dealer for payments made by
    the dealer to a liquidity provider under a liquidity facility
    that entitles the holders of floating rate certificates to
    tender the certificates for repurchase at 100% of their face
    amount plus accrued interest. We may also be subject to certain
    collateral requirements and asset tests related to the
    obligations under the reimbursement agreements, the hedge
    agreements and certain related synthetic instruments. Our
    failure to meet these collateral requirements or asset tests may
    constitute a default under the related agreements and could
    result in substantial payments or losses by us, depending on
    market conditions at the time of default. In addition, some of
    the residual certificates are callable by the tender option bond
    trust upon the occurrence of certain events. These events
    typically include bankruptcy of the tender option bond trust,
    non-payment of any of the underlying tax-exempt bonds, a
    downgrading of the rating of the underlying tax-exempt bonds and
    a change in the tax treatment of the underlying tax-exempt
    bonds. If any residual certificates are redeemed, the redemption
    price may be less than the original cost of the redeemed
    residual certificates. Also, upon redemption of a residual
    certificate in which we have an interest, we may be unable to
    invest in other assets within a reasonable period of time.
Actual
    default rates on the categories of credit assets held by us may
    be higher than historical default rates.
The historical performance of the types of assets that we hold
    or may hold is not necessarily indicative of their future
    performance. Should increases in default rates or decreases in
    recovery rates occur with respect to
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the types of assets that we hold, the actual default rates with
    respect to the assets in our portfolio may be significantly
    greater than, or the actual recovery rates with respect to the
    assets in our portfolio may be significantly less than, the
    hypothetical default rates and recovery rates that we used in
    purchasing these assets. If this were to occur, any debt issued
    by special purpose vehicles or alternative instruments used to
    finance these assets may be impaired and any subordinated debt
    and equity interests that we hold in any such vehicles may not
    receive distributions.
The
    credit ratings of the assets we hold are only opinions and not
    guarantees of future performance or market value.
Credit ratings of assets and securities that we may hold
    represent the rating agencies' opinions regarding the
    credit quality of those assets and are not a guarantee of future
    performance. Rating agencies attempt to evaluate the safety of
    principal and interest payments and do not evaluate the risks of
    fluctuations in market value; therefore, ratings may not
    accurately reflect the true risks of holding an asset. In
    addition, rating agencies may fail to make timely changes in
    credit ratings in response to subsequent events, so that an
    obligor's current financial condition may be better or
    worse than a rating indicates. The credit ratings of the assets
    we purchase also may change over time.
Our
    due diligence may not reveal all of an entity's liabilities
    and may not reveal other weaknesses in their
    operations.
Before we acquire interests or invest directly in tax-exempt
    obligations issued by or on behalf of an entity, we will rely on
    our manager to assess the potential acquisition. There can be no
    assurance that our manager will conduct any specific level of
    due diligence, or that, among other things, our manager's
    due diligence processes will uncover all relevant facts or that
    any purchase will be successful, which could result in losses on
    these assets, which, in turn, could adversely affect our
    business, financial condition and results of operations and our
    ability to make distributions to our shareholders.
We are
    highly dependent on information systems provided by third
    parties.
Our business is highly dependent on communications and
    information systems that are supplied
and/or
managed by third parties. Any failure or interruption of our
    systems could cause delays or other problems in our activities,
    which could have a material adverse effect on our operating
    results and negatively affect the market price of our
    Class A common shares and our ability to pay dividends.
All of
    our back office operations are outsourced.
We rely on our manager and its affiliates to perform
    substantially all of our back office operations. A portion of
    these services are in turn provided to them (or their
    affiliates) by Mariner Investment Group, LLC, or Mariner,
    pursuant to a services agreement that may be terminated without
    our consent. If our manager ceases to act in that capacity, we
    would be required to make alternative arrangements for the
    performance of these services. In addition, if the services
    agreement between Mariner and our affiliate is terminated, we
    may not be able to obtain these services at reasonable rates or
    at all. We do not have a written contract with Mariner with
    respect to the services that it provides to us directly, so it
    may cease providing services to us at any time without cost or
    penalty.
Regulatory
    and Legal Risks of Our Business
Maintenance
    of our Investment Company Act of 1940 exemption imposes limits
    on our operations, which may adversely affect our
    operations.
We intend to continue to conduct our operations so that we are
    not required to register as an investment company under the
    Investment Company Act of 1940, as amended (the "Investment
    Company Act"). We expect many of our subsidiaries to rely
    on the exemptions from registration under:
    (i) Section 3(c)(5)(C) of the Investment Company Act
    available to companies primarily engaged in purchasing or
    otherwise acquiring mortgages and other liens on, and interests
    in, real estate; or (ii) Sections 3 (c)(5)(A) or
    (B) of the Investment
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Company Act available to companies primarily engaged in sales
    financing, factoring or making loans to manufacturers or
    retailers for purchases of specified merchandise or services
    (together, with companies relying on Section 3(c)(5(C),
    "3(c)(5) Businesses"). In turn, we intend to conduct
    our operations so that we qualify for the exception from the
    definition of investment company provided for under
    Section 3(c)(6) of the Investment Company Act with respect
    to diversified holding companies primarily engaged in 3(c)(5)
    Businesses and other businesses that are exempted from
    regulation under the Investment Company Act. Because the SEC
    staff has issued little interpretive guidance with respect to
    Section 3(c)(6), there can be no assurance that the SEC or
    its staff will not change its view on the interpretation of
    Section 3(c)(6) or that they would otherwise agree with our
    analysis, which, in either case, could cause us to adjust our
    investment strategy. Any such adjustment to our investment
    strategy would have a material adverse effect on us. In
    addition, certain of our subsidiaries, including certain STEP
    issuers, may also seek to rely on the Investment Company Act
    exemption under
Rule 3a-7
provided to certain structured financing vehicles that pool
    income-producing assets and issue securities backed by those
    assets. Such structured financings may not engage in portfolio
    management practices resembling those employed by mutual funds.
    As a result of these restrictions, certain of our STEP
    subsidiaries may suffer losses on their assets and we may suffer
    losses on our investments in those STEP subsidiaries.
If we are required to register under the Investment Company Act,
    we would become subject to substantial regulation with respect
    to our capital structure (including our ability to use
    leverage), management, operations, transactions with affiliated
    persons (as defined in the Investment Company Act), and
    portfolio composition, including restrictions with respect to
    diversification and industry concentration and other matters.
    Registration under the Investment Company Act would likely limit
    our ability to follow our current investment and financing
    strategies, impair our ability to make distributions to our
    common shareholders and, as a result, cause a decline in the
    price of our common shares. See "Business —
    Regulatory Environment."
Investors
    will not have the protections associated with ownership of
    shares in an investment company registered under the Investment
    Company Act.
We are not registered as an investment company under the
    Investment Company Act. Consequently, investors in the Company
    will not have the regulatory protections provided to investors
    in investment companies.
Tax
    Risks
We
    believe we are a partnership for U.S. federal income tax
    purposes and are solely relying on advice rendered by a
    nationally recognized accounting firm in making this
    determination Partnership status requires a facts and
    circumstances determination and if we are incorrect in our
    determination, we would be required to pay tax at corporate
    rates on any portion of our net income that does not constitute
tax-exempt
income, and distributions by us to our shareholders would be
    taxable dividends to the extent of our current and accumulated
    earnings and profits.
We currently classify ourselves as a partnership for
    U.S. federal income tax purposes. So long as we qualify as
    a partnership we will be able to pass through our income,
    including our federally tax-exempt income, and deductions to our
    shareholders. Our qualification as a partnership for
    U.S. federal income tax purposes involves the application
    of numerous technical provisions under which there is a lack of
    direct authority. In general, if a partnership is "publicly
    traded" (as defined in the Code) it will be treated as a
    corporation for U.S. federal income tax purposes. We expect
    to be treated as a publicly traded partnership. A publicly
    traded partnership will, however, be taxed as a partnership, and
    not as a corporation for U.S. federal income tax purposes,
    so long as 90% or more of its gross income for each taxable year
    constitutes "qualifying income" within the meaning of
    Section 7704(d) of the Code and the partnership is not
    registered under the Investment Company Act. We refer to this
    exception as the "qualifying income exception."
    Qualifying income generally includes rents, dividends, interest
    and capital gains from the sale or other disposition of stocks,
    bonds and real property. In addition, qualifying income
    generally also includes income from a notional principal
    contract (which may include certain derivatives like a total
    return swap) if the income from the reference obligation would
    be qualifying income. In determining whether interest is treated
    as qualifying
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income for purposes of these rules, interest income derived from
    a "financial business" and income and gains derived by
    a "dealer" in securities are not treated as qualifying
    income. We believe that we have and will continue to act as an
    investor with respect to our tax-exempt bond investments and
    that we have not and will not engage in a financial business,
    although there is no clear guidance on what constitutes a
    financial business under the tax law. We have taken the position
    that for purposes of determining whether we are in a financial
    business, portfolio investing activities that we engage in have
    not and will not cause us to be engaged in a financial business
    or to be considered a "dealer" in securities and that
    the activities of our taxable subsidiaries have not been (and
    will not be) attributable to us. Prospective investors should
    carefully note that we could be treated as if we were engaged in
    a financial business if the activities of our taxable
    subsidiaries, such as MFCA Funding, Inc., were attributed to us.
    It should be noted that such subsidiaries are taxable C
    corporations subject to income tax on their net income, and such
    subsidiaries are intended to engage in significant transactions
    with third parties in the operation of their businesses.
    Contrary to our belief, the IRS could assert that our activities
    constitute a financial business. If our activities constitute a
    financial business or cause us to be treated as a dealer, there
    is a substantial risk that more than 10% of our gross income
    would not constitute qualifying income.
If less than 90% of our gross income constitutes qualifying
    income, for any reason (including as a result of a taxable
    subsidiary's financing business being attributed to us),
    other than a failure that is determined to be inadvertent and
    that is cured within a reasonable time after discovery, or if we
    were registered under the Investment Company Act, our items of
    income and deduction would not pass through to our shareholders
    and our shareholders would be treated for U.S. federal
    income tax purposes as stockholders in a corporation. We would
    be required to pay income tax at corporate rates on any portion
    of our net income that did not constitute tax-exempt income. In
    addition, a portion of our federally tax-exempt income may be
    included in determining our alternative minimum tax liability.
    Distributions by us to our shareholders would constitute
    dividend income taxable to such holders to the extent of our
    current and accumulated earnings and profits, which would
    include tax-exempt income as well as any taxable income we might
    have, and the payment of these distributions would not be
    deductible by us. These consequences would have a significant
    adverse effect on us, our shareholders and the value of our
    shares. Prospective investors should consult their own tax
    advisors regarding these potential material adverse tax
    consequences.
Our
    ability to allocate and distribute to our shareholders income
    that is exempt from U.S. federal income tax will depend on the
    exclusion from gross income of the interest income that we
    receive on the bonds in which we invest. A portion of the
    interest income we earn will likely be taxable in many states
    and localities and may be includable in our shareholders'
    calculation of AMT.
We have not and will not directly or indirectly acquire a
    tax-exempt bond unless the bond receives, or there has been
    issued previously, an opinion of nationally recognized bond
    counsel which was delivered on the date of issuance of that
    security that interest on such security will be exempt from
    regular U.S. federal income taxation. We have assumed the
    continuing correctness of, the opinions of bond counsel relating
    to the exclusion of interest income from gross income for
    U.S. federal income tax purposes and have not relied on any
    other external advisors in determining such exclusion from gross
    income.
Events occurring after the date of issuance of a tax-exempt
    bond, however, may cause the interest on such tax-exempt bond to
    be includable in gross income for U.S. federal income tax
    purposes. For example, the IRS establishes certain requirements,
    such as restrictions on the investment of the proceeds of the
    bond issue, limitations on the use of proceeds of such issue and
    the property financed by such proceeds, and the payment of
    certain excess earnings to the federal government, that must be
    met after the issuance of a tax-exempt bond for interest on such
    tax-exempt bond to remain excludible from gross income for
    U.S. federal income tax purposes. The issuers and the
    underlying obligors of the tax-exempt bonds generally covenant
    to comply with such requirements and the opinion of bond counsel
    generally assumes continuing compliance with such requirements.
    In addition, for tax-exempt bonds the proceeds of which are
    loaned to a charitable organization described in
    section 501(c)(3) of the Code, the continued exclusion of
    interest from gross income for U.S. federal income tax
    purposes depends on the continuing exempt status of the
    charitable organization borrower. Failure to comply with these
    continuing requirements, however, may cause the interest on a
    tax-
26
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exempt bond to be includable in gross income for
    U.S. federal income tax purposes retroactive to its date of
    issue regardless of when such noncompliance occurs.
In addition, the IRS has an ongoing enforcement program that
    involves the audit of tax-exempt bonds to determine whether an
    issue of bonds satisfies all of the requirements that must be
    met for the interest on such bonds to be excludible from gross
    income for U.S. federal income tax purposes. From time to
    time, some of the tax-exempt bonds we own directly or indirectly
    may become the subject of such an audit by the IRS, and the IRS
    may determine that the interest on such securities is includable
    in gross income for U.S. federal income tax purposes either
    because the IRS has taken a legal position adverse to the
    conclusion reached by bond counsel in its opinion pertaining to
    the bond issue or as a result of an action taken or not taken
    after the date of the bond issue.
Interest on a bond, other than a bond the proceeds of which are
    loaned to a charitable organization described in
    Section 501(c)(3) of the Code, will not be excluded from
    gross income during any period in which we are a
    "substantial user" of the underlying property or a
    person "related to" a "substantial user." We
    or one of our affiliates, as applicable, will be a related
    person of a substantial user for this purpose if, among other
    things, we directly, or indirectly by attribution, own more than
    a specified percentage of the capital or profits interest in the
    substantial user. The attribution rules under U.S. federal
    income tax law are complex and the preceding sentence is not
    intended to be a complete summary of their application. We do
    not expect to be a "substantial user" of the
    properties financed with the proceeds of the mortgage revenue
    bonds or person "related to" a "substantial
    user." There can be no assurance, however, that the IRS
    would not challenge such a conclusion. If such challenge were
    successful, the interest received on any bond for which we were
    treated as a "substantial user" or a "related
    party" thereto would be includable in federally taxable
    gross income.
If interest paid on any tax-exempt bond in which we invest
    directly or indirectly is determined to be taxable subsequent to
    our acquisition of such interests or bond, the IRS may demand
    that our shareholders pay U.S. federal income tax on the
    interest income allocated to them, thereby adversely reducing
    our shareholders' yield.
A determination that interest on a tax-exempt bond we own
    directly or indirectly is includable in gross income for
    U.S. federal income tax purposes retroactively to its date
    of issue may cause a portion of prior years' interest
    allocations received by our shareholders to be taxable to those
    shareholders in the year of allocation. Even if the interest
    income we earn is exempt from U.S. federal income tax, such
    income will likely be taxable in many states and localities. In
    addition, interest on tax-exempt bonds generally is an item of
    tax preference for purposes of the AMT, however interest on
    tax-exempt 501(c)(3) bonds is generally only includable in the
    determination of AMT for our corporate shareholders.
We
    will have to pay some taxes and may be subject to others, which
    may reduce the cash available for distribution to our
    shareholders.
Even if we qualify to be taxed as a partnership for
    U.S. federal income tax purposes, our taxable subsidiaries
    organized as C corporations, such as MFCA Funding, Inc., will be
    required to pay some U.S. federal, state and local taxes on
    their income and property. In addition, to the extent such
    taxable subsidiaries earn tax-exempt interest income, such
    income will be a preference item and will be includable in the
    determination of the subsidiaries' AMT liability. To the
    extent our taxable subsidiaries are required to pay
    U.S. federal, state or local taxes, or AMT, we will have
    less cash available for distributions to our shareholders.
We may
    generate taxable income which will be allocated to our
    shareholders, and depending upon the nature of our operations,
    such income could be substantial.
Shareholders generally will be taxable on income allocable to
    them where such income does not constitute tax-exempt interest
    income. It should be noted that we intend to invest in taxable
    bonds as well as financial products that do not produce
    tax-exempt interest income. Accordingly, depending upon the
    nature of our activities, taxable income allocated to our
    shareholders could be substantial. We will receive dividend
    income from our taxable subsidiaries, such as MFCA Funding, Inc.
    Such income will be taxable as ordinary
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portfolio income to our shareholders. We will also generate
    capital gains upon our or our structured credit vehicles'
    sale of our tax-exempt bonds, which will be allocated to our
    shareholders and taxable as capital gain. In addition, to the
    extent that we purchase tax-exempt bonds with "market
    discount" (generally, where we purchase such bond at less
    than the price at which it was issued) we will be taxed on any
    accrued market discount at the time we receive principal
    payments on such tax-exempt bonds or upon the sale or redemption
    of such bonds.
Thus, a shareholder may have to pay taxes regardless of the
    amount of cash we distribute to shareholders. In addition, a
    shareholder will likely have a significant amount of
    "phantom income" to the extent it participates in the
    dividend reinvestment plan.
Certain
    interest expense allocated by us to holders of our shares will
    not be deductible for U.S. federal income tax
    purposes.
We will likely incur interest expense in connection with our
    investment activities. U.S. federal income tax law
    generally disallows any deduction for interest paid by a
    taxpayer on indebtedness incurred or continued for the purpose
    of purchasing or carrying a tax-exempt obligation. A purpose to
    carry tax-exempt obligations will be inferred whenever a
    taxpayer owns tax-exempt obligations and has outstanding
    indebtedness which is neither directly connected with personal
    expenditures nor incurred in connection with the active conduct
    of a trade or business. The IRS may take the position that a
    shareholder's allocable portion of any interest that we pay
    on our borrowings
and/or
any
    interest paid by a shareholder on indebtedness incurred to
    purchase our shares should be viewed in whole or in part as
    incurred to enable such shareholder to continue carrying
    tax-exempt obligations and, therefore, the deduction of any such
    interest by a shareholder should be disallowed in whole or in
    part.
Complying
    with certain tax-related requirements may cause us to forego
    otherwise attractive business or investment opportunities or
    enter into borrowings or financings we may not have otherwise
    entered into.
In order for us to remain treated as a partnership for
    U.S. federal income tax purposes, and not as an association
    or publicly traded partnership taxable as a corporation, at
    least 90% of our gross income each taxable year must consist of
    interest, dividends, capital gains and other types of
    "qualifying income." In order to comply with these
    requirements, we (and our subsidiaries) may be required to
    invest through corporations
and/or
forego attractive business or investment opportunities.
    Furthermore, to avoid being deemed to be engaged in a financial
    business for U.S. federal income tax purposes, we will be
    precluded from directly engaging in loan origination activities.
    Thus, compliance with these requirements may adversely affect
    our ability to operate solely to maximize profits.
Our
    structure involves complex provisions of U.S. federal income tax
    law for which no clear precedent or authority is available, and
    which is subject to potential change, possibly on a retroactive
    basis. Any such change could result in adverse consequences to
    the holders of Class A common shares.
The U.S. federal tax treatment of holders of our
    Class A common shares depends in some instances on
    determinations of fact and interpretations of complex provisions
    of U.S. federal income tax law for which no clear precedent
    or authority are available. Holders of Class A common
    shares also should be aware that the U.S. federal income
    tax rules are constantly under review by Congress and the IRS,
    possibly resulting in unfavorable precedent or authority on
    issues for which there was previously no clear precedent or
    authority as well as revised interpretations of established
    concepts. The IRS pays close attention to the proper application
    of tax laws to partnerships and investments in tax-exempt
    securities. The present U.S. federal income tax treatment
    of an investment in our Class A common shares may be
    modified by administrative, legislative or judicial
    interpretation at any time, and any such action may affect
    investments made by us. As an example, in the event variable
    rate certificates issued by tender option bond trusts were
    characterized as loans bearing taxable interest rather than as
    partnership interests, we would likely lose this method of
    financing our acquisition of tax-exempt bonds, which could have
    an adverse impact on our ability to generate revenue. We and
    holders of our Class A common shares could be adversely
    affected by this or any other such change in, or any new, tax
    law, regulation or interpretation.
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We may
    be subject to adverse legislative or regulatory tax changes that
    could reduce the market price of our Class A common
    shares.
At any time, the U.S. federal income tax laws or
    regulations governing partnerships or the administrative
    interpretations of those laws or regulations may be amended. We
    cannot predict when or if any new U.S. federal income tax
    law, regulation or administrative interpretation, or any
    amendment to any existing U.S. federal income tax law,
    regulation or administrative interpretation, will be adopted,
    promulgated or become effective and any such law, regulation or
    interpretation may take effect retroactively. We and our
    shareholders could be adversely affected by any such change in,
    or any new, U.S. federal income tax law, regulation or
    administrative interpretation.
We
    currently receive certain tax relief as a "qualified
    business" under the State of Pennsylvania Keystone
    Opportunity Zone, Keystone Opportunity Expansion Zone and
    Keystone Opportunity Improvement Zone Act. There is no assurance
    that we would continue to receive such tax relief under such
    act, and, as such, we may be subject to certain penalties and/or
    recapture under such act.
The State of Pennsylvania enacted the Keystone Opportunity Zone,
    Keystone Opportunity Expansion Zone and Keystone Opportunity
    Improvement Zone Act by providing qualified businesses certain
    tax benefits in order to revive economically distressed urban
    and rural communities. Currently, we are a "qualified
    business" under such Act, and receive tax relief
    thereunder. However, in order to receive tax relief, a company
    must apply for such relief on an annual basis. There can be no
    assurance that we would continue to qualify under such Act. If
    we cease to qualify, such as by relocating our executive office
    from its current location, which is situated in an
    "opportunity zone," we may be subject to certain tax
    penalties
and/or
recapture under the Act.
Risks
    Related to This Offering
There
    currently is no public market for our Class A common
    shares, an active trading market may never develop and the
    market price of the shares may be volatile.
There currently is no public market for our shares and there can
    be no assurance that an active trading market for our shares
    will develop. We expect that the Class A common shares will
    be listed on the NASDAQ Stock Market LLC under the symbol
    "          
    ." Even if an active trading market develops, the market
    price of our Class A common shares may be highly volatile
    and could be subject to wide fluctuations. Some of the factors
    that could negatively affect our share price include:
•
general market and economic conditions, including disruptions,
    downgrades, credit events and perceived problems in the credit
    markets;
•
actual or anticipated variations in our quarterly operating
    results or distributions;
•
changes in our asset composition or business strategy;
•
write-downs or perceived credit or liquidity issues affecting
    our assets;
•
market perception of our company, our business and our assets;
•
our level of indebtedness
and/or
adverse market reaction to any indebtedness we incur in the
    future;
•
additions or departures of our manager's key personnel;
•
changes in market valuations of similar companies; and
•
speculation in the press or investment community.
To the
    extent a market for our Class A common shares develops,
    shares eligible for future sale may have adverse effects on our
    share price.
Tiptree owns in the aggregate approximately 27,617,687 of our
    Class B common shares or 73.81% of the outstanding
    Class B common shares. Each Class B common share is
    convertible at any time into one Class A
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common share. Tiptree may also purchase Class A common
    shares pursuant to this offering. We cannot predict the effect,
    if any, of future sales of shares, whether by us, Tiptree or
    other shareholders, or the availability of shares for future
    sale, on the market price of our Class A common shares. We
    also may issue from time to time additional Class A common
    shares and we may grant demand or piggyback registration rights
    in connection with such issuances. Sales of substantial amounts
    of Class A common shares or the perception that such sales
    could occur may adversely affect the prevailing market price for
    our Class A common shares.
Certain
    provisions of our operating agreement and bylaws could hinder,
    delay or prevent a change of control of our
    company.
Our operating agreement and bylaws contain provisions that:
•
entitle holders of Class B common shares to 10 votes per
    share on all matters to be voted on by the shareholders in
    general;
•
permit us to issue, without any further vote or action by our
    shareholders, preferred shares in one or more series and, with
    respect to each series, to fix the number of shares, the
    relative powers, preferences and rights, and the qualifications,
    limitations or restrictions applicable to such shares;
•
limit our shareholders' ability to call special meetings;
•
limit our shareholders' ability to remove directors;
•
provide exclusive authority to the board of directors to
    establish the number of directorships and fill vacancies on our
    board of directors;
•
set forth advance notice procedures for shareholders'
    nominations of directors and proposals for consideration at
    meetings of shareholders;
•
make Section 203 of Delaware General Corporation Law
    applicable to business combinations with interested shareholders
    under certain circumstances; and
•
provide exclusive authority to our board of directors to amend
    our bylaws.
For more information, see "Description of Securities."
Because
    our voting control is concentrated among the holders of
    Class B common shares, the market price of Class A
    common shares may be adversely affected by disparate voting
    rights.
The holders of Class A common shares and Class B
    common shares have identical rights, except that holders of
    Class A common shares are entitled to one vote per share,
    while holders of Class B common shares are entitled to 10
    votes per share on all matters to be voted on by shareholders in
    general. This differential in the voting rights could adversely
    affect the market price of our Class A common shares.
    Tiptree holds a significant majority of our combined voting
    power through its ownership of Class B common shares and,
    by virtue of our dual class structure, will continue to do so
    even if it owns substantially less than a majority of our
    outstanding common shares. Furthermore, we would not be able to
    engage in actions that require a consent of a majority of our
    shareholders, including the election of directors, amendment of
    our operating agreement, and any sale of all or substantially
    all of our assets, merger or other change of control
    transaction, without the consent of Tiptree. Tiptree's
    interests may conflict with the interests of holders of other
    shares, and it has no duty to act in accordance with the
    interests of any other shareholders. Tiptree may also purchase
    Class A common shares pursuant to this offering.
We are
    a "controlled company" within the meaning of the
    NASDAQ Stock Market LLC rules and, as a result, will qualify
    for, and intend to rely on, exemptions from certain corporate
    governance requirements. You will not have the same protections
    afforded to shareholders of companies that are subject to such
    requirements.
After completion of this offering, Tiptree will control a
    majority of the combined voting power of our outstanding common
    shares. As a result, we are a "controlled company"
    within the meaning of the NASDAQ Stock Market LLC corporate
    governance standards. Under these rules, if more than 50% of the
    voting power
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of a listed company is held by an individual, group or another
    company, the listed company is a "controlled company"
    and may elect not to comply with certain corporate governance
    requirements, including:
•
the requirement that a majority of the board of directors
    consist of independent directors;
•
the requirement that we have a nominating/corporate governance
    committee that is composed entirely of independent
    directors; and
•
the requirement that we have a compensation committee that is
    composed entirely of independent directors.
Following this offering, we intend to utilize the exemption from
    the requirement that a majority of the Board of Directors
    consist of independent directors. Accordingly, you will not have
    the same protections afforded to shareholders of companies that
    are subject to all of the corporate governance requirements of
    the NASDAQ Stock Market LLC.
Our
    failure to maintain effective internal controls could have a
    material adverse effect on our business in the future, our
    access to capital markets and the price of our common
    shares.
Pursuant to the Sarbanes-Oxley Act of 2002, beginning with our
    annual report filed with the SEC for the year ending
    December 31, 2011, management will be required to deliver a
    report that assesses the effectiveness of our internal control
    over financial reporting and our independent registered public
    accounting firm will be required to deliver an attestation
    report on management's assessment of, and the operating
    effectiveness of, our internal control over financial reporting
    in conjunction with their opinion on our audited financial
    statements. Any failure to maintain adequate internal control
    over financial reporting or to implement required, new or
    improved controls, or difficulties encountered in their
    implementation, could cause us to report material weaknesses or
    other deficiencies in our internal control over financial
    reporting and could result in a more than remote possibility of
    errors or misstatements in our consolidated financial statements
    that would be material. If we or our independent registered
    public accounting firm were to conclude that our internal
    control over financial reporting were not effective, investors
    could lose confidence in our reported financial information and
    the price of our Class A common shares could decline. Our
    failure to achieve and maintain effective internal controls
    could have a material adverse effect on our business in the
    future, our access to the capital markets and investors'
    perception of us. In addition, material weaknesses in our
    internal controls could require significant expense and
    management time to remediate.
We may
    issue common shares, options and other share-based awards under
    our 2007 Equity Incentive Plan or equity incentive plans we may
    establish in the future, which may dilute shareholder value and
    cause the price of our Class A common shares to
    decline.
We may offer shares, options and other share-based awards under
    our 2007 Equity Incentive Plan, or other equity incentive plans
    we may establish in the future, to our executive officers and
    directors. If the options that we issue are exercised, or the
    restricted shares or other shares-based compensation that we
    issue vest, and those shares are sold into the public market,
    the market price of our Class A common shares may decline.
    In addition, the availability of common shares for award under
    our 2007 Equity Incentive Plan, or the grant of shares, options,
    restricted shares or other forms of shares-based compensation,
    may adversely affect the market price of our Class A common
    shares.
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CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus that are not purely
    historical are forward-looking statements. Our forward-looking
    statements include, but are not limited to, statements regarding
    our or our management's expectations, hopes, beliefs,
    intentions or strategies regarding the future. In addition, any
    statements that refer to projections, forecasts or other
    characterizations of future events or circumstances, including
    any underlying assumptions, are forward-looking statements. The
    words "anticipates," "believe,"
    "continue," "could," "estimate,"
    "expect," "intends," "may,"
    "might," "plan," "possible,"
    "potential," "predicts,"
    "project," "should," "would" and
    similar expressions may identify forward-looking statements, but
    the absence of these words does not mean that a statement is not
    forward-looking. Forward-looking statements in this prospectus
    may include, for example, statements about:
•
our dependence on Muni Capital Management and inability to find
    a suitable replacement if Muni Capital Management were to
    terminate its Management Agreement with us;
•
the existence of conflicts of interest in our relationship with
    Muni Capital Management
and/or
its
    affiliates, which could result in decisions that are not in the
    best interest of holders of common shares;
•
our business strategy;
•
our ability to compete in the marketplace;
•
our ability to acquire assets and realize gains or income from
    such assets;
•
market trends;
•
our ability to obtain future financing arrangements;
•
changes in interest rates;
•
our ability to make future distributions;
•
limitations imposed on our business by our exemption under the
    Investment Company Act;
•
the lack of a trading market for the Class A common shares;
•
general volatility of the securities markets;
•
our ability to maintain effective internal controls; and
•
changes in governmental regulations, tax laws and tax rates and
    other similar matters which may affect us and holders of the
    Class A common shares.
The forward-looking statements contained in this prospectus are
    based on our current expectations and beliefs concerning future
    developments and their potential effects on us. There can be no
    assurance that future developments affecting us will be those
    that we have anticipated. These forward-looking statements
    involve a number of risks, uncertainties (some of which are
    beyond our control) or other assumptions that may cause actual
    results or performance to be materially different from those
    expressed or implied by these forward-looking statements. These
    risks and uncertainties include, but are not limited to, those
    factors described under the heading "Risk Factors."
    Should one or more of these risks or uncertainties materialize,
    or should any of our assumptions prove incorrect, actual results
    may vary in material respects from those projected in these
    forward-looking statements. We undertake no obligation to update
    or revise any forward-looking statements, whether as a result of
    new information, future events or otherwise, except as may be
    required under applicable securities laws.
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USE OF
    PROCEEDS
The net proceeds we will receive from the sale
    of          
    Class A common shares in this offering will be
    approximately $      million (or
    approximately $      million if
    the underwriters fully exercise their option to purchase
    additional shares), after deducting the underwriters'
    discount of approximately
    $      million (or approximately
    $      million if the underwriters
    fully exercises its option to purchase additional shares).
We intend to use the net proceeds of this offering to implement
    our business strategy, including, without limitation, by
    investing in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations, assets
    derived from such bonds or other assets as described herein. We
    expect that a significant portion of the tax-exempt or other
    obligations underlying our assets or which we acquire directly
    will be issued by or on behalf of one of the following types of
    non-profit institutions, state authorities, or other
    organizations: (i) healthcare, (ii) educational,
    (iii) housing, (iv) infrastructure,
    (v) redevelopment/tax increment financing bonds,
    (vi) cultural, (vii) research and
    (viii) philanthropic. See "Business — Our
    Business Objective and Strategies". Until used in the
    growth of our business and the implementation of our business
    strategy, we intend to invest the net proceeds of this offering
    in readily marketable interest-bearing securities or may hold
    such proceeds in the form of cash.
DIVIDEND
    POLICY
We intend to periodically distribute dividends to holders of our
    Class A common shares. Holders of Class A common
    shares and Class B common shares will share ratably (based
    on the number of common shares held) in any dividend declared by
    our board of directors out of funds legally available therefor,
    subject to any statutory or contractual restrictions on the
    payment of dividends, the dividend rights of the Performance
    Share and to any restrictions on the payment of dividends
    imposed by the terms of any preferred shares we may issue in the
    future. All distributions from us will be made at the discretion
    of our board of directors, and will depend on a number of
    factors affecting us, including:
•
our financial condition;
•
general business conditions;
•
actual results of operations;
•
the timing of the deployment of our capital;
•
our debt service requirements;
•
availability of cash distributions from our subsidiaries;
•
our operating expenses;
•
any contractual, legal and regulatory restrictions on the
    payment of distributions by us to holders of the common shares
    or by our subsidiaries to us; and
•
other factors our board of directors in its discretion deem
    relevant.
We may adopt a dividend reinvestment plan that will permit the
    reinvestment of our dividends and other distributions on behalf
    of holders of Class A common shares who elect to
    participate in the plan. As a result, if our board of directors
    authorizes, and we declare, a cash dividend or other
    distribution, then holders of Class A common shares who
    have elected to participate in our dividend reinvestment plan
    will have their cash distribution reinvested in additional
    Class A common shares, rather than receiving the cash
    distribution.
Our ability to make distributions is subject to certain
    restrictions under the Delaware Limited Liability Company Act,
    or Delaware LLC Act. Under the Delaware LLC Act, a limited
    liability company generally is not permitted to make a
    distribution if, after giving effect to the distribution, the
    liabilities of the company will exceed the value of the
    company's assets. In addition, it is possible that some of
    our future financing arrangements could contain provisions
    restricting our ability to make distributions. Holders of common
    shares generally will be subject to U.S. federal income tax
    (and any applicable state and local taxes) on their respective
    allocable shares of our net taxable income regardless of the
    timing or amount of distributions we make to the holders of our
    common shares.
We made distributions to the holders of our common shares of
    $0.24 per share for the period from January 1, 2008 through
    December 31, 2008 and $0.08 per share for the period from
    June 12, 2007 (commencement of operations) through
    December 31, 2007, which we paid to the then holders of our
    common shares. For the period from January 1, 2009 through
    December 31, 2009, we did not make any distributions to
    holders of our common shares.
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CAPITALIZATION
The following table sets forth our cash and cash equivalents and
    capitalization as of December 31, 2009:
•
on an actual basis; and
•
on an as adjusted basis to give effect to the consummation of
    this offering (assuming an aggregate
    of          
    Class A common shares are purchased) and the application of
    proceeds therefrom, after deducting estimated expenses of
    $     .
You should read the information above and below in connection
    with "Use of Proceeds" and our consolidated financial
    statements and related notes and other financial information
    included in this prospectus.
December 31, 2009
Actual
As Adjusted
(Unaudited)
Cash and cash equivalents
$
29,367,353
$
Membership interests:
Common shares, no par value per share; unlimited shares
    authorized, 37,394,169
    and          shares
    outstanding, respectively
186,656,412
Unvested restricted common shares, no par value per share;
    60,000 shares authorized, 22,500 and 22,500 shares
    outstanding, respectively
8,375
Earnings / (deficit)
(84,796,238
)
Performance share allocation
(5,920,448
)
Distributions
(5,732,992
)
(5,732,992
)
Net Assets
$
90,215,109
$
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SELECTED
    FINANCIAL DATA
The following table presents selected consolidated financial
    information as of December 31, 2009 and 2008, for the years
    ended December 31, 2009 and 2008 and for the period from
    June 12, 2007 (commencement of operations) to
    December 31, 2007. The selected consolidated financial
    information has been derived from our audited consolidated
    financial statements included elsewhere in this prospectus.
Since the information presented below is only a summary and does
    not provide all of the information contained in our historical
    consolidated financial statements included elsewhere in this
    prospectus, including the related notes, you should read it in
    conjunction with "Management's Discussion and Analysis
    of Financial Condition and Results of Operations" and our
    historical consolidated financial statements, including the
    related notes, included elsewhere in this prospectus.
June 12
(Inception)
For the Year Ended
to December 31,
December 31,
December 31,
2007
2008
2009
Revenue
Income-investments
$
—
$
8,106,531
$
8,581,819
Income-total return swap
1,150,382
903,623
—
Income-other
3,937,071
1,225,434
23,345
Total revenue
5,087,453
10,235,588
8,605,164
Expenses
Management fee
1,111,993
1,276,477
962,670
Amortization of financing costs
—
38,912
194,559
Professional fees
374,727
2,047,694
963,373
Insurance
96,250
313,994
266,788
Directors compensation
65,627
391,570
58,500
Other general and administrative
90,260
268,986
200,241
Non cash incentive compensation
942,232
876,422
471,966
Total expenses
2,681,089
5,214,055
3,118,097
Net investment income
2,406,364
5,021,533
5,487,067
Realized gains (losses)
Investments
—
—
(18,957,635
)
Derivatives
(2,710,351
)
(38,829,108
)
—
Net unrealized gains (losses)
(2,710,351
)
(38,829,108
)
(18,957,635
)
Unrealized gains (losses)
Investments
—
(81,112,777
)
54,464,711
Derivatives
(17,835,065
)
7,241,926
27,095
Net unrealized gains (losses)
(17,835,065
)
(73,870,851
)
54,491,806
Net (decrease) increase in net assets resulting from
    operations before Performance Share Allocation
(18,139,052
)
(107,678,426
)
41,021,238
Performance Share Allocation
—
—
5,920,448
Net (decrease) increase in net assets resulting from
    operations after Performance Share Allocation
$
(18,139,052
)
$
(107,678,426
)
$
35,100,790
Basic net (decrease) increase in net assets from operations
    per share(1)
$
(1.05
)
$
(6.24
)
$
1.30
Diluted net (decrease) increase in net assets from operations
    per share(1)
$
(1.05
)
$
(6.24
)
$
1.30
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As of
As of
As of
December 31,
December 31,
December 31,
2007
2008
2009
Balance Sheet Data:
Cash and cash equivalents
$
128,116,802
$
9,560,219
$
29,367,353
Investments, at fair value
—
15,302,902
57,971,131
Total assets
158,550,698
29,642,139
90,668,544
Due to our manager
179,850
49,662
114,756
Accrued expenses and other liabilities
234,830
354,924
338,679
Net assets
140,339,181
29,237,553
90,215,109
Net asset value per share
7.83
1.64
2.41
Number of outstanding shares
17,847,015
17,847,015
37,416,669
(1)
Calculation excludes performance share allocation.
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MANAGEMENT'S
    DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
We were organized as a Delaware limited liability company on
    April 27, 2007. We began operations on June 12, 2007
    upon the completion of an offering of common shares of limited
    liability interests in a private offering to qualified
    institutional buyers in accordance with Rule 144A under the
    Securities Act.
We are a specialty finance company that focuses on the
    investment in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations (secured
    primarily by interests in real estate), assets derived from such
    bonds or other assets as described herein. Our objective is to
    generate attractive risk-adjusted returns and predictable cash
    distributions. We seek to achieve this objective by
    (i) acquiring interests in structured credit entities which
    own debt obligations, the interest on which is exempt from
    U.S. federal income taxation; (ii) investing in total
    return swaps and other derivative arrangements relating to tax
    exempt securities; and (iii) making direct investments in
    tax exempt securities. We may also invest in securities that are
    subject to federal income tax.
We are externally managed and advised by Muni Capital
    Management. Muni Capital Management is a wholly-owned subsidiary
    of Tricadia Holdings. Prior to March 18, 2009, we were
    managed by Cohen Municipal Capital Management, LLC (the
    "Former Manager"), a subsidiary of Cohen Brothers,
    LLC. In February 2009, Tiptree Financial Partners, a private
    partnership currently managed by Tiptree Capital, acquired a
    controlling interest in us, and caused the assignment of our
    Management Agreement from the Former Manager to Muni Capital
    Management. Currently, Tiptree owns approximately 73.81% of our
    outstanding Class B common shares
    representing     % of our combined
    voting power immediately after this offering, and may also
    purchase Class A common shares pursuant to this offering.
Critical
    Accounting Policies and Estimates
Our consolidated financial statements have been prepared by
    management in accordance with U.S. GAAP. Our significant
    accounting policies are fundamental to understanding our
    financial condition and results of operations because some of
    these policies require that we make significant estimates and
    assumptions that may affect the value of our assets or
    liabilities and our financial results. The following critical
    accounting policies have been identified because they have the
    potential to have a material impact on our financial statements,
    and because they are based on assumptions which are used in the
    accounting records to reflect, at a specific point in time,
    events whose ultimate outcome will not be known until a later
    date. Actual results could differ from these estimates.
Although we conduct our operations so that we are not required
    to register as an investment company under the Investment
    Company Act, for financial reporting purposes we are an
    investment company and we follow the AICPA Audit and Accounting
    Guide for Investment Companies, or Audit Guide. Accordingly,
    investments are carried at fair value with changes in fair value
    reflected in the consolidated statements of operations.
Principles
    of Consolidation
Our consolidated financial statements include the accounts of
    our company and our wholly owned subsidiary MFCA Funding, Inc.
    All intercompany transactions have been eliminated.
We review each investment that we make under a control based
    framework in accordance with ASC Topic 810. If we determine that
    we control the investee and the investee itself meets the
    definition of an investment company under the Audit Guide, we
    consolidate the investee. Otherwise, we will report our equity
    investment at fair value as required by the Audit Guide.
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Fair
    Value of Financial Instruments
Fair value is used to measure our financial instruments. The
    fair value of a financial instrument is the amount that would be
    received to sell an asset or paid to transfer a liability in an
    orderly transaction between market participants at the
    measurement date, also known as the exit price.
We have adopted ASC Topic 820 (formerly SFAS No. 157,
Fair Value Measurements
). ASC Topic 820 establishes a
    fair value hierarchy that prioritizes the inputs to valuation
    techniques used to measure fair value. The hierarchy gives the
    highest priority to unadjusted quoted prices in active markets
    for identical assets or liabilities (Level 1 measurements)
    and the lowest priority to unobservable inputs (Level 3
    measurements). The three levels of the fair value hierarchy are
    described below:
Level 1 — Financial assets and liabilities whose
    values are based on unadjusted quoted prices in active markets
    that are accessible at the measurement date for identical,
    unrestricted assets or liabilities.
Level 2 — Financial assets and liabilities whose
    values are based on one or more of the following:
(a) Quoted prices for similar assets or liabilities in
    active markets;
(b) Quoted prices for identical or similar assets or
    liabilities in nonactive markets;
(c) Pricing models whose inputs are observable for
    substantially the full term of the asset or liability; and
(d) Pricing models whose inputs are derived principally
    from or corroborated by observable market data through
    correlation or other means for substantially the full term of
    the asset or liability.
Level 3 — Financial assets and liabilities whose
    values are based on prices or valuation techniques that require
    inputs that are both significant to the fair value measurement
    and unobservable. These inputs reflect management's own
    assumptions about the assumptions a market participant would use
    in pricing the asset or liability.
A financial instrument's level within the fair value
    hierarchy is based on the lowest level of input that is
    significant to the fair value measurement.
Following is a description of the valuation methodologies used
    for instruments measured at fair value, as well as the general
    classification of such instruments pursuant to the valuation
    hierarchy.
Investments
We invest in debt obligations, the interest on which is exempt
    from U.S. federal income taxation. In some cases we
    purchase the investments directly and in other cases we invest
    in a special purpose trust which holds the assets. From time to
    time, we may also invest in certain derivative contracts. We
    record all of our investments at fair value.
Direct
    Investment in Tax Exempt Securities
In general, fair value is determined by obtaining quotations
    from independent pricing services. In most cases, quotes are
    obtained from two pricing services and the average of the quotes
    is used. The independent pricing services determine their quotes
    using observable inputs such as current interest rates, specific
    issuer information and other market data for such securities.
    Therefore, our estimate of fair value is subject to a high
    degree of variability based upon market conditions, the
    availability of specific issuer information and the assumptions
    made. Due to the inherent uncertainty of valuation, these
    estimated fair values may differ from the actual price obtained
    through sales. The valuation inputs used to arrive at fair value
    for such debt obligations are generally classified within
    Level 2 or Level 3 of the valuation hierarchy. The
    difference between the cost basis in the investment and the fair
    value is included in the unrealized gains/(losses) —
    investments.
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Investment
    in Trusts
We will invest in a trust in order to acquire tax exempt
    securities. The trust will acquire the bonds and finance the
    purchase by issuing junior and senior certificates. In general,
    we will purchase all of the junior certificates and third party
    investors will purchase the senior certificates. In valuing our
    investment in junior certificates we will generally use one of
    two techniques:
Asset
    Based Valuation
We will value all of the underlying assets of the trust as noted
    in the previous section above. We will then deduct from this,
    the fair value of the senior certificates of the trust. The
    senior certificates have a stated rate of interest. In addition,
    the certificate holder is entitled to a pro-rata share of 20% of
    the appreciation of the financial assets owned by the trust over
    an agreed upon threshold amount, or Gain Share.
The fair value of the senior certificates is calculated by using
    either pricing quotes from independent pricing services or
    internally prepared pricing models. Depending on the inputs to
    these models, this will generally be classified as either
    Level 2 or Level 3 financial instruments in the
    valuation hierarchy. Any fair value estimate will include any
    Gain Share owed to the senior certificates. Any change in fair
    value of the junior certificates will be recorded as a component
    of unrealized gains/(losses) — investments in the
    consolidated statements of operations.
Cash Flow
    Based Valuation
We will determine a valuation of the junior certificates by
    estimating the residual cash flows it will receive and applying
    an appropriate discount rate. In general, a cash flow based
    valuation will be considered a Level 3 valuation.
Each circumstance is unique, but in general, we utilize an asset
    based valuation. We will use a cash flow based valuation in
    cases where the asset based valuation yields a result close to
    zero (or a negative amount) yet the residual interest is still
    generating cash flow and is expected to do so for the
    foreseeable future.
The "Net Carry" or net investment earned by the trust
    is comprised of the income earned on the tax exempt securities
    acquired by the trust offset by the stated interest paid to the
    senior certificates. This Net Carry is recorded on an accrual
    basis and is recorded as a component of income-investments in
    the consolidated statements of operations. Any accrued and
    unpaid Net Carry is included as a component of receivables in
    the consolidated statements of assets and liabilities.
Interest
    Rate Swap
The fair value of the interest rate swaps is either included in
    derivative asset or derivative liability in the consolidated
    statement of assets and liabilities. Fair value is determined by
    obtaining broker or counterparty quotes. Because there were
    observable inputs used to arrive at these quoted market prices,
    we considered the interest rate swaps to be Level 2
    financial instruments within the valuation hierarchy. The change
    in the unrealized loss is included as a component of unrealized
    gains/(losses) — derivatives in the consolidated
    statements of operations. The periodic payments or receipts
    under our interest rate swap contracts are recorded as an
    increase or decrease in interest expense or income in the
    consolidated statements of operations.
Income
    Taxes
We believe we have operated to qualify and expect to continue to
    operate as a partnership for U.S. federal income tax
    purposes. As a partnership, we will not pay federal income tax
    and will be treated as a pass through entity. However, MFCA
    Funding Inc., a wholly owned subsidiary of our company, is
    organized as a C-corporation for U.S. federal income tax
    purposes and will pay federal income tax. Further, we may be
    subject to certain state and local income taxes.
With respect to MFCA Funding Inc., deferred tax assets and
    liabilities are determined using the asset and liability method
    whereby deferred tax assets and liabilities are established for
    future tax consequences of
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temporary differences between the financial statement carrying
    amounts of assets and liabilities and their tax basis. Deferred
    tax assets and liabilities are measured using enacted tax rates
    expected to apply to taxable income in years in which those
    temporary differences are expected to reverse. A valuation
    allowance is established when necessary to reduce a deferred tax
    asset to the amount expected to be realized. As of
    December 31, 2009 and 2008, we had recorded a 100%
    valuation allowance against the deferred tax asset in each
    period.
We evaluate tax positions taken or expected to be taken in the
    course of preparing our tax returns to determine whether the tax
    positions are "more-likely than-not" of being
    sustained by the applicable tax authority. Our tax benefit or
    tax expense is adjusted accordingly for tax positions not deemed
    to meet the more-likely than-not threshold in the current year.
    We record interest and penalties associated with audits as a
    component of income before income taxes. Penalties are recorded
    as an operating expense, and interest expense is recorded as
    interest expense in the statements of operations. We incurred no
    interest and penalties for the period from inception to
    December 31, 2009.
Share-Based
    Compensation
We issued share based compensation to the directors and
    employees of the Former Manager and we account for such
    issuances as equity-settled transactions using the methodology
    prescribed by ASC Topic 718 (formerly SFAS No. 123(R),
Share Based Compensation
, and Emerging Issues Task force
    (EITF)
No. 96-18,
Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services)
. Non-cash incentive compensation to
    employees was $471,966 and $876,422 for the years ended
    December 31, 2009 and 2008, respectively, and $942,232 for
    the period June 12, 2007 (commencement of operations)
    through December 31, 2007. Share based compensation for
    directors was $50,000.
Employees of our Former Manager received LTIP shares. LTIP
    shares are a special class of limited liability company
    interests whereby, upon the occurrence of certain events, we
    will revalue our assets and an increase in the valuation will be
    allocated first to the holders of the LTIP shares to equalize
    the capital accounts of each LTIP share with the capital account
    of each common share. Upon equalization of the capital accounts,
    the LTIP shares will achieve full parity with the common shares
    and, to the extent the LTIP shares are vested, can be converted
    into common shares (a
"book-up
event").
In June 2009, we offered to exchange existing LTIP shares, or
    old LTIPs, for new LTIP shares, or new LTIPs, at a rate of
one-for-two.
Under the terms of the LTIP shares, we revalued our assets upon
    the occurrence of certain specified events, and any increase in
    valuation from the time of grant until such event were allocated
    first to the holders of the LTIP shares to equalize the capital
    accounts of each LTIP share with the capital account of a common
    share. Upon equalization of the capital accounts, the LTIP
    shares achieved full parity with the common shares for all
    purposes, including with respect to subsequent allocations and
    distributions, including, to the extent vested, liquidating
    distributions. If such parity is reached, vested LTIP shares
    become convertible into an equal number of common shares and
    have all the rights of common shares following conversion. Such
    parity was reached and vested LTIP shares were converted into an
    equal number of common shares. Under the old LTIPs the
    performance target was $10.00 per share. Under the new LTIPs the
    performance target was $1.25 per share.
At a meeting of our board of directors held on July 23,
    2009, the directors approved the issuance of common shares in
    partial payment of a Performance Share allocation to our
    manager. These shares were valued at $2.01 per share, which is
    higher than the LTIP shares' performance target of $1.25
    per share. The issuance of these shares constituted a
"book-up
event" and the vested LTIP shares became eligible for
    conversion to common shares. All LTIP shares were converted to
    common shares as of December 31, 2009 and no LTIP shares
    are currently outstanding. We did not record any compensation
    expense in connection with the LTIP exchange.
Non-management directors received restricted common shares.
    Quarterly distributions on each restricted common share, whether
    vested or not, will be the same as those made on common shares.
    The restricted shares are subject to restrictions on transfer
    during the vesting period. In general, unvested restricted
    shares
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will vest upon a change of control or other liquidation. The
    fair value of the restricted common shares as of the grant date
    is being amortized to share based compensation over the three
    year vesting period of the underlying grants, net of assumed
    forfeitures.
Recent
    Accounting Pronouncements
In June 2009, the FASB issued ASC Topic 860,
Transfers and
    Servicing
(formerly Statement of Financial Accounting
    Standards (SFAS) No. 166,
Accounting for Transfers of
    Financial Assets
— an amendment of FASB Statement
    No. 140) and ASC Topic 810 (formerly
    SFAS No. 167,
Amendments to FASB Interpretation
    No. 46(R)
),which changed the accounting for
    securitizations and variable interest entities, or VIEs. ASC
    Topic 860 eliminates the concept of a qualified special purpose
    entity, or QSPE, which is an off-balance sheet trust that meets
    the qualifications in SFAS 140, changes the requirements
    for derecognizing financial assets, and requires additional
    disclosures about transfers of financial assets, including
    securitization transactions and continuing involvement with
    transferred financial assets. ASC Topic 810 will change the
    determination of whether and when a VIE, should be consolidated.
    ASC Topic 860 and ASC Topic 810 are effective for fiscal years
    beginning after November 15, 2009. We are currently
    evaluating the impact that ASC Topic 860 and ASC Topic 810 will
    have on the consolidated financial statements.
In August 2009, the FASB issued Accounting Standards Update, or
    ASU,
2009-5,
Fair Value Measurements and Disclosures — Measuring
    Liabilities at Fair Value, which amends ASC Topic 820 to provide
    further guidance on how to measure the fair value of a
    liability. ASU
2009-5
primarily sets forth the types of valuation techniques to be
    used to value a liability when a quoted price in an active
    market for the identical liability is not available. In these
    circumstances, ASU
2009-5 states
that a company can apply the quoted price of an identical or
    similar liability when traded as an asset, or other valuation
    techniques that are consistent with principles of ASC Topic 820.
    ASU
2009-5
will be effective for the next reporting period and we do not
    expect such adoption to have a material effect on the
    consolidated financial statements.
In June 2009, the FASB issued ASC Topic 855,
Subsequent
    Events (
formerly SFAS No. 165), which establishes
    general standards of accounting for, and disclosing, events that
    occur after the balance sheet date but before the financial
    statements are issued or available to be issued. ASU Topic 855
    requires the disclosure of the date through which an entity has
    evaluated subsequent events and the basis for that date, i.e.
    whether the date represents the date the financial statements
    were issued or were available to be issued.
In January 2010, the FASB issued Accounting Standards Update, or
    ASU,
2010-6,
Fair Value Measurements and Disclosures — Improving
    Disclosures about Fair Value Measurements, which amends ASC
    Topic 820 to provide further guidance on how to provide greater
    levels of disaggregation of asset classes. ASU
2010-6
primarily requires that transfers in and out of Level 1 and
    Level 2 be disclosed, that investment activities within
    Level 3 be disclosed on a gross basis, and that disclosure
    be provided on valuation techniques and inputs used for fair
    value measurements. ASU
2010-6
will
    be effective for the next reporting period and we do not expect
    such adoption to have a material effect on the consolidated
    financial statements and footnotes.
Results
    of Operations
Our principal sources of operating revenue are derived from
    interest, realized and unrealized gains on our portfolio of
    tax-exempt revenue bonds. Our expenses consist primarily of
    management fees, professional fees, incentive compensation,
    amortization of financing costs, and general and administrative
    expenses.
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A summary of our results of operations for the two years in the
    period ended December 31, 2009 and the period from
    June 12, 2007 (commencement of operations) to
    December 31, 2007 is as follows:
June 12
(inception)
For the Year Ended
to December 31,
December 31,
December 31,
2007
2008
2009
Revenue
Income-investments
$
—
$
8,106,531
$
8,581,819
Income-total return swap
1,150,382
903,623
—
Income-other
3,937,071
1,225,434
23,345
Total revenue
5,087,453
10,235,588
8,605,164
Expenses
Management fee
1,111,993
1,276,477
962,670
Amortization of financing costs
—
38,912
194,559
Professional fees
374,727
2,047,694
963,373
Insurance
96,250
313,994
266,788
Directors compensation
65,627
391,570
58,500
Other general and administrative
90,260
268,986
200,241
Non cash incentive compensation
942,232
876,422
471,966
Total expenses
2,681,089
5,214,055
3,118,097
Net investment income
2,406,364
5,021,533
5,487,067
Realized (losses)
Investments
—
—
(18,957,635
)
Derivatives
(2,710,351
)
(38,829,108
)
—
Net unrealized gains (losses)
(2,710,351
)
(38,829,108
)
(18,957,635
)
Unrealized (losses) gains
Investments
—
(81,112,777
)
54,464,711
Derivatives
(17,835,065
)
7,241,926
27,095
Net unrealized gains (losses)
(17,835,065
)
(73,870,851
)
54,491,806
Net (decrease) increase in net assets resulting from
    operations before Performance Share Allocation
(18,139,052
)
(107,678,426
)
41,021,238
Performance Share Allocation
—
—
5,920,448
Net (decrease) increase in net assets resulting from
    operations after Performance Share Allocation
$
(18,139,052
)
$
(107,678,426
)
$
35,100,790
Realized
    and Unrealized Gains from Investments and
    Derivatives
For the period from January 1, 2009 through
    December 31, 2009, we had total net realized and unrealized
    gains from investments and derivatives of $35.5 million. We
    had unrealized gains of $54.5 million from appreciation in
    value of our interests in the Class B Certificates of
    Non-Profit Preferred Funding Trust II ("NPPF II")
    and the Merrill Lynch Trusts (as defined below), our direct
    investments in tax-exempt bonds and an interest rate swap. We
    had a realized loss of $0.5 million from the sale of
    tax-exempt bonds, and a realized loss of $18.5 million from
    the sale of the Class B Certificates of certain trusts
    issued by Merrill Lynch (the "Merrill Lynch Trusts")
    back to Merrill Lynch, as discussed below in
    "— Revenue."
For the period from January 1, 2008 through
    December 31, 2008, we had total net realized and unrealized
    losses from investments and derivatives of $112.7 million.
    We had unrealized losses of $81.1 million from
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depreciation in the value of our interests in the NPPF II
    Class B Certificates and our direct investments in
    tax-exempt bonds. We had an unrealized gain of $7.2 million
    from appreciation in value of derivatives.
For the period from June 12, 2007 (commencement of
    operations) through December 31, 2007, we had total net
    realized and unrealized losses from a total return swap
    derivative of $20.5 million, consisting of
    $2.7 million of realized losses and $17.8 million of
    unrealized losses.
Revenue
Total revenue for the period from January 1, 2009 through
    December 31, 2009 was $8.6 million, primarily earned
    from interest income from our investment in the NPPF II
    Class B Certificates and our direct investments in
    tax-exempt bonds. Total revenue for the period from
    January 1, 2008 through December 31, 2008 was
    $10.2 million, consisting of $8.1 million earned from
    interest income from our investment in the NPPF II Class B
    Certificates, investment in the Merrill Lynch Trusts
    Class B Certificates described above and our direct
    investments in tax-exempt bonds, $1.2 million interest
    earned on cash balances, and $0.9 million interest earned
    from a total return swap. Total revenue for the period from
    June 12, 2007 (commencement of operations) through
    December 31, 2007 was $5.1 million, consisting of
    $3.8 million interest earned on cash balances, and
    $1.3 million interest earned from a total return swap and
    tender option bond program.
Expenses
Our principal operating expenses include management fees,
    professional fees, including accounting and legal fees,
    insurance, directors' compensation, general and
    administrative expenses and incentive compensation. Total
    expenses were $3.1 million, $5.2 million and
    $2.7 million for the years ended December 31, 2009 and
    2008, and the period from June 12, 2007 (commencement of
    operations) through December 31, 2007, respectively. The
    significant decline in expenses in 2009 as compared to 2008 was
    principally the result of (i) lower legal fees, (ii) a
    reduction in the number of directors of our company and
    (iii) a reduction in incentive compensation.
Management expenses consisted of $1.0 million,
    $1.3 million and $1.1 million for the years ended
    December 31, 2009 and 2008, and the period from
    June 12, 2007 (commencement of operations) through
    December 31, 2007, respectively. See
    "Management — Our Manager" for a description
    of the Management Agreement.
Management
    Agreement with Muni Capital Management
We are externally managed and advised by our manager pursuant to
    the Management Agreement, which is described under
    "Management — Our Manager."
Performance
    Share Allocation
For the period from January 1, 2009 through
    December 31, 2009, we had Performance Share allocation of
    $5.9 million, $2.1 million paid in cash and
    $3.8 million paid in common shares. Prior periods did not
    have Performance Share allocations.
Net
    Increase (Decrease) in Net Assets Resulting from Operations
    after Performance Share Allocation
For the period from January 1, 2009 through
    December 31, 2009, we had a net increase in net assets
    resulting from operations after Performance Share allocation of
    $35.1 million or $1.30 per weighted average basic and
    diluted common shares outstanding, primarily from appreciation
    in value of our various tax exempt assets. For the period from
    January 1, 2008 through December 31, 2008, we had a
    net decrease in net assets resulting from operations after
    Performance Share allocation of $107.7 million or $6.24 per
    weighted average basic and diluted common shares outstanding,
    primarily from depreciation in value of our various tax exempt
    assets. For the period from June 12, 2007 (commencement of
    operations) through December 31, 2007, we had a net
    decrease in net assets resulting from operations after
    Performance Share allocation of $18.1 million or
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$1.05 per weighted average basic and diluted common shares
    outstanding, primarily from depreciation in value of our total
    return swap.
We calculate basic net increase (decrease) in net assets
    resulting from operations per share by dividing net (decrease)
    increase in net assets from operations for the period by the
    weighted average common shares outstanding for the period, which
    includes common shares outstanding, as well as vested restricted
    common shares and vested LTIP shares that have achieved parity.
    Diluted net increase (decrease) in net assets from operations
    per share takes into account the effect of unvested restricted
    common shares and unvested LTIP shares and vested LTIP shares
    that have not achieved parity, unless they are anti-dilutive.
As of December 31, 2009, 22,500 restricted shares had not
    vested and all LTIP shares had been converted to common shares.
    As of December 31, 2008, 15,000 restricted shares and
    246,584 LTIP shares had not vested and 320,331 LTIP shares had
    vested. Both basic and fully diluted shares outstanding include
    the unrestricted common shares outstanding during the years
    ended December 31, 2009 and December 31, 2008. Fully
    diluted shares outstanding also includes the dilutive effect of
    unvested restricted common shares, vested LTIP shares that have
    not achieved parity and unconverted LTIP shares.
For the year ended December 31, 2008, we determined that
    the unvested restricted common shares and unvested LTIP shares
    and the vested LTIP shares that have not achieved parity are
    anti-dilutive. Therefore, the weighted average shares
    outstanding on a fully diluted basis are the same as the
    weighted average shares outstanding used for basic net
    (decrease) increase in net assets from operations per share.
Distributions
We made distributions of $0.24 per share for the period from
    January 1, 2008 through December 31, 2008 and $0.08
    per share for the period from June 12, 2007 (commencement
    of operations) through December 31, 2007, which we paid to
    the then holders of common shares. For the period from
    January 1, 2009 through December 31, 2009, we did not
    make any distributions.
Liquidity
    and Capital Resources
As of December 31, 2009, we had cash and cash equivalents
    of $29.1 million and restricted cash of $0.3 million
    which is not available to us. At December 31, 2009, we had
    outstanding liabilities including management fees and other
    liabilities of $0.5 million.
We believe that our liquidity level is sufficient to enable us
    to meet our anticipated liquidity requirements for at least the
    next twelve months.
Cash
    Flows from Operations
Our net cash provided by operating activities for the period
    January 1, 2009 through December 31, 2009 was $45,782,
    consisting of investment income of $9.7 million, net
    purchases of investments of $7.1 million, and general and
    administrative expenses of $2.5 million.
Our net cash used in operating activities for the period
    January 1, 2008 through December 31, 2008 was
    $114.3 million, consisting of investment and interest
    income of $7.1 million, restricted cash collateral released
    by a counterparty of $29.0 million, net purchases of
    investments of $106.9 million, net realized losses on
    termination of derivatives of $38.8 million and general and
    administrative expenses of $4.0 million.
Our net cash used in operating activities for the period
    June 12, 2007 (commencement of operations) through
    December 31, 2007 was $29.4 million, consisting of
    investment income of $3.7 million, collateral posted with a
    total return swap counterparty of $29.0 million, realized
    losses on the termination of derivatives of $2.0 million
    and general and administrative expenses of 2.1 million.
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Cash
    Flows from Financing Activities
Our net cash provided by financing activities provided net cash
    of $19.5 million for the period January 1, 2009
    through December 31, 2009, consisting of $21.6 million
    from the issuance of common shares (net of costs of $173,005)
    and $2.1 million cash used to pay the Performance Share
    allocation.
Our net cash used in financing activities used net cash of
    $4.3 million for the period January 1, 2008 through
    December 31, 2008, primarily due to distributions to common
    and LTIP shareholders.
Our net cash provided by financing activities provided net cash
    of $157.5 million for the period June 12, 2007
    (commencement of operations) through December 31, 2007,
    consisting of $158.9 million from the issuance of common
    shares (net of costs of $13.5 million) and
    $1.4 million of cash used for distributions to common and
    LTIP shareholders.
Off-Balance
    Sheet Arrangements
As of December 31, 2009, we did not have any off-balance
    sheet arrangements, as defined by SEC rules.
Contractual
    Obligations
As of December 31, 2009, we owed our manager $114,756 for
    the payment of management fees and reimbursable expenses
    pursuant to the Management Agreement. The initial term of the
    Management Agreement expires on December 31, 2010, and is
    automatically renewed for a one-year term on each anniversary
    date thereafter unless terminated as set forth in the Management
    Agreement. As such, we have a contractual obligation to pay our
    manager an estimated management fee of $1.3 million based
    on the asset value as of December 31, 2009.
Qualitative
    and Quantitative Information About Market Risk
We are exposed to credit risk and interest rate risk related to
    the interests we hold in tax-exempt bonds. Interest rates may be
    affected by economic, geo-political, monetary and fiscal policy,
    market supply and demand and other factors generally outside our
    control, and such factors may be highly volatile. Our interest
    rate risk sensitive assets and liabilities and financial
    derivatives typically are held for long-term investment and not
    held for sale purposes. Our intent in investing in STEP and
    other structured credit transactions is to limit interest rate
    risk by matching the terms of our investment assets with the
    terms of our liabilities and, to the extent necessary, through
    the use of hedging instruments.
We hold interests in tax-exempt bonds that are either floating
    rate or fixed rate. Floating rate tax-exempt bonds are generally
    priced at a fixed spread over an index such as a percentage of
    The London Inter Bank Offered Rate, or LIBOR, Bond Market
    Association, or BMA, or Municipal Market Data, or MMD, that
    reprices either quarterly, every 30 days, weekly or daily
    based upon movements in effect at each measurement date.
Increases or decreases in LIBOR, BMA or MMD may result in
    corresponding increases or decreases in our interest income and
    distributions payable to holders of certificates issued by STEPs
    and tender option bond trusts and payments to counter-parties
    under total return swaps, thereby mitigating the net earnings
    impact on our overall portfolio. For example, "AAA"
    MMD, a benchmark municipal interest rate, declined from 5.04% on
    January 2, 2009 to 4.13% on December 31, 2009. As a
    result, the average price of the MFCA portfolio as a percentage
    of par increased from 64.0% to 77.5%. In the event that
    long-term interest rates increase, the value of fixed rate
    tax-exempt bonds would be diminished. We may consider hedging
    this risk in the future if the benefit outweighs the cost of the
    hedging strategy. Such changes in interest rates would not have
    a material effect on the income of these bonds, which generally
    will be held to maturity.
We seek to manage our credit risk through underwriting and
    credit analyses that are performed in advance of acquiring an
    investment. The tax-exempt bonds that we may consider as
    reference assets for total return swaps and for future STEP and
    other structured credit transactions are subjected to a
    comprehensive credit analysis process.
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BUSINESS
Overview
We are a specialty finance company that focuses on the
    investment in the debt instruments of non-profit and municipal
    entities primarily through direct and indirect acquisition of
    tax-exempt mortgage revenue bonds or other obligations (secured
    primarily by interests in real estate), assets derived from such
    bonds or other assets as described herein. We are involved in a
    variety of businesses, including holding or acquiring tax exempt
    obligations, mortgage-related holdings, interests in structured
    credit transactions, derivative instruments, Build America Bonds
    and other assets. We derive our income from interest on the
    assets held by us and our subsidiaries and from any gains on the
    sale of assets. Our assets are, in general, primarily secured by
    mortgages on the real estate held by the obligors.
We specialize in acquiring direct and indirect debt interests in
    middle-market non-profit and municipal borrowers that are, in
    general, primarily secured by mortgages backed by the real
    estate interests of such borrowers, and often secured by the
    pledges of gross revenue of such borrowers and a debt service
    reserve fund as well, although we may invest in debt instruments
    not secured by either real estate or the cash flows of a
    non-profit entity.
We are organized as a Delaware limited liability company and we
    believe we have operated and intend to operate in a manner to
    qualify as a partnership for U.S. federal income tax
    purposes. This structure allows us to combine the limited
    liability, governance and management characteristics of a
    corporation with the pass-through tax features of a partnership.
    As a result, the income we generate generally will pass through
    to our shareholders. One or more of our subsidiaries may be
    organized as taxable C corporations that will be subject to
    applicable U.S. federal, state and local income tax on
    their earnings. Our wholly-owned subsidiary, MFCA Funding, Inc.,
    which is a taxable C corporation, may enter into derivative
    arrangements or engage, directly or through such derivative
    arrangements, in sales and trading activities. See
    "Material Federal Income Tax Consequences" for
    additional information concerning the tax consequences of an
    investment in our Class A common shares.
Our portfolio of assets, as of December 31, 2009, consisted
    of the following:
•
five tax-exempt obligations issued by or on behalf of
    middle-market non-profit entities with an aggregate market value
    of approximately $17.3 million and an aggregate notional
    balance of approximately $19.8 million, secured by first
    mortgages or deeds of trust in the real property held by such
    entities as well as, in many cases, a pledge of the
    obligor's gross revenue and a one-year debt service reserve
    fund; two of these obligations are held by MFCA Funding, Inc.,
    our wholly-owned subsidiary;
•
approximately $40.7 million by notional balance of junior
    trust certificates of NPPF II, a STEP which owns 20 tax-exempt
    obligations primarily issued by or on behalf of non-profit
    entities; NPPF II is a consolidated subsidiary of ours, having
    an aggregate notional balance of approximately
    $137.5 million;
•
an interest rate swap with a notional amount of
    $5.0 million obligating us to pay a fixed rate of interest
    in return for receiving a floating rate of interest tied to
    LIBOR, with a
mark-to-market
gain of approximately $27,000; and
•
cash and cash equivalents of approximately $29.4 million.
The primary component of our revenue is net interest income, or
    the difference between the interest income on our interest
    earning assets and the interest cost of our borrowings. Our net
    interest income totaled $8.6 million for the twelve months
    ended December 31, 2009.
See "— Our Assets" for additional
    information concerning our assets.
Our
    Manager and its Affiliates
We are externally managed and advised by Muni Capital
    Management. Muni Capital Management is a wholly-owned subsidiary
    of Tricadia Holdings. Prior to March 18, 2009, we were
    managed by the Former
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Manager. In February 2009, Tiptree acquired a controlling
    interest in us, and caused the assignment of our Management
    Agreement from the Former Manager to Muni Capital Management.
    Currently, Tiptree owns approximately 73.81% of our outstanding
    Class B common shares
    representing      % of our
    combined voting power immediately after this offering, and may
    also purchase Class A common shares pursuant to this
    offering.
Tricadia is an asset management firm founded in 2003 by Michael
    Barnes and Arif Inayatullah. Tricadia is based in New York, New
    York, has approximately $5 billion in assets under
    management and employs approximately 50 professionals.
Market
    Overview
Middle
    Market Non-Profit Entities
Part of our focus is on obligations issued by or on behalf of
    501(c)(3) non-profit public charities that have between
    $5 million and $25 million in annual revenues, which
    we refer to as "middle market" non-profit entities.
    These obligations are generally secured by first mortgages or
    deeds of trust on the real property held by the entities, may be
    additionally secured by the pledges of gross revenue of such
    entities and a debt service reserve fund. Based on data set
    forth in The Nonprofit Almanac 2008, which is based on
    Form 990 reporting from 2005, approximately 400,709
    reporting charitable tax-exempt entities controlled
    approximately $1.1 trillion of assets. These charitable
    tax-exempt 501(c)3 organizations constitute a portion of the
    target market of our company, and include, among others,
    hospitals, schools, universities, multi-family housing,
    redevelopment districts, clinics and theaters.
We believe that obligations issued by or on behalf of these
    entities can be an attractive asset for us since many of these
    entities have strong management, have strong support since they
    provide important services to their communities and typically
    are able to provide a mortgage or revenue pledge as security for
    their obligations. Furthermore, we believe that the debt
    obligations of middle-market non-profit entities generally are
    attractive assets because they often exhibit favorable credit
    characteristics and predictable payments.
Middle-market, non-profit entities often find it difficult to
    raise capital in the traditional capital markets as a result of
    their size, the complex nature of their business or regulatory
    framework and because they do not seek to raise large amounts of
    money. As a result, these borrowers have traditionally relied on
    local commercial banks to provide financing. Our manager has the
    expertise to selectively identify and purchase obligations of
    these obligors in the secondary market and can offer them
    financing alternatives in the primary market.
Revenue
    Bonds
We expect that a significant portion of the middle-market
    tax-exempt obligations that we acquire will be revenue bonds,
    which are secured primarily by a first mortgage or deed of trust
    on the non-profit entity's real property, as well as the
    operating revenues of the non-profit entity and a debt service
    reserve fund. These obligations generally will not be secured by
    a pledge of the taxing power of the nominal governmental issuer
    of the obligations. Therefore, the repayment of these
    obligations will depend entirely on the revenues of the
    nonprofit or any private guarantor of the obligations.
Municipally-Owned
    Obligations
We occasionally finance projects owned by municipal entities,
    such as county-owned hospitals, that cannot grant a mortgage on
    the property financed. We would therefore seek to secure
    available collateral, such as a leasehold mortgage or a lien on
    accounts receivable, or obtain a pledge that assets cannot be
    encumbered by other lenders.
General
    Obligation Bonds and Structured Finance
    Opportunities
We may also acquire "general obligation" or long-term
    government-issued bonds. General obligation bonds, unlike
    revenue bonds, are secured by the governmental issuer's
    pledge of its faith, credit and taxing
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power, which may be limited or unlimited, for the payment of
    principal and interest and, as a result, are generally more
    highly rated than revenue bonds, consisting primarily of ratings
    category "A" and higher-rated issues. According to the
    Bond Buyer's Annual Bond Sales and Annual Note Sales
    statistical archive, there were approximately $4.193 trillion of
    long-term and short-term general obligation bonds and notes
    issued during the ten-year period between January 1, 2000
    and December 31, 2009.
We may seek to enhance our returns from these types of bonds by
    depositing all or a portion of the beneficial interests in such
    bonds in structured finance trusts. Prior to the tightening
    conditions in the credit and lending environments experienced
    since August 2007, investors were able to take advantage of the
    historically low default rates of general obligation tax-exempt
    bonds and other highly-rated or enhanced tax-exempt obligations
    to obtain financing in the short-end of the municipal bond
    marketplace. An investor could then earn the spread between such
    financing and their residual position with limited capital risk
    and limited expected volatility.
As a result of ongoing instability in this marketplace, we
    believe that there will be continued price volatility in the
    underlying assets, resulting in opportunities to acquire
    performing assets at favorable prices, although we also believe
    that we may continue to be faced with insufficient access to
    adequate term financing. We believe that our knowledge of the
    marketplace will enable us to opportunistically take advantage
    of continuing dislocations in this market.
Market
    Trends and Opportunities
The dislocation in the capital markets that began in 2007
    affected the municipal obligations market by reducing liquidity
    and initially driving up yields in all rating categories.
    According to The Bond Buyer, reported assets in municipal bond
    funds declined from an all-time high of $397.55 billion in
    September 2008 to $336.94 billion in December 2008. This
    decline resulted from $9.1 billion in outflows from the
    funds and the remainder from market losses.
From January 1 through December 21, 2009, municipal bond
    funds have reported inflows of $77.38 billion according to
    The Bond Buyer. These inflows, together with market appreciation
    of $42.39 billion, lifted the industry-wide valuation of
    the assets of municipal bond funds to $463.59 billion.
Although there was an increase in municipal bond assets in 2009,
    various factors have contributed to a decline in yield. Since
    the Federal Reserve cut its benchmark interest rate to a range
    of zero to 0.25% on December 16, 2008, the Revenue Bond
    Index declined 127 basis points from 6.22% on
    December 18, 2008 to 4.95% on December 30, 2009. In
    addition, the popularity of Build America Bonds, or BABs, which
    were created by the American Recovery and Reinvestment Tax Act
    enacted on February 17, 2009, has contributed to a decline
    in yield in 2009. BABs are issued by selected municipalities as
    an alternative to tax-exempt bonds. Since BABs are taxable
    bonds, they reduce the supply of tax-exempt bonds and increase
    demand for other tax-exempt bonds. From April 15, 2009, the
    first date BABs were issued, to December 31, 2009,
    $63.9 billion of BABs were issued, representing 20% of all
    long-term municipal issuance.
However, we believe that there still are attractive
    opportunities to acquire tax-exempt municipal obligations. The
    decline in the use of insurance for investment grade and
    non-investment grade tax-exempt obligations has increased the
    opportunities to buy obligations that generate yield both in the
    primary and secondary markets. A number of insurers have exited
    the market since 2007, and the Bond Buyer reports that the
    percentage of bonds issued with insurance was 8.5% through
    December 2009, down from a peak of over 50% in 2005.
Furthermore, over a longer time period, from June 28, 2007
    to February 28, 2010, yields on tax-exempt obligations have
    increased both in nominal terms and relative to 30 year
    Treasury bonds. In nominal terms, according to the Bond
    Buyer's Revenue Bond Index, yields on tax exempt bonds
    increased from 4.71% to 4.95%. Relative to Treasury bonds, over
    the same period, the spread increased from -50 basis points
    to +33 basis points. The interest rate spread between
    general obligation bonds and revenue bonds, based on the Bond
    Buyer's 20 Bond GO and Revenue Bond Indices, increased from
    11 basis points to 60 basis points over the same time
    period. The reduction in the number of active bond insurers, the
    increased interest rates for tax-
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exempt bonds and the increased spread for revenue bonds relative
    to government obligation bonds all have created attractive
    opportunities to acquire tax-exempt obligations in both the
    primary and secondary markets.
We also may directly invest in BABs, which typically offer
    higher yields than tax-exempt obligations.
Competitive
    Strengths
Experienced Management Team.
Members of our
    management team have significant tax-exempt and structured
    finance experience. They have been involved in tax-exempt
    financings in a variety of capacities, including originating and
    structuring such financings. Members of our management
    originated and structured Non-Profit Preferred Funding
    Trust I, a $416.5 million, multi-tranche STEP
    transaction that, since its issuance and as of December 31,
    2009, has made all cash distributions as expected. The
    management team also structured NPPF II, a $182.6 STEP
    transaction, which issued Class B junior certificates that
    we currently hold. In addition, members of our management team
    were involved in the formation of our company and NPPF II, which
    owns tax-exempt bonds issued by or on behalf of non-profit
    obligors.
Disciplined Acquisition Process.
We believe
    that we and our manager employ a sophisticated and disciplined
    underwriting process, which is based on detailed credit analysis
    of obligors and underlying collateral. Our manager performs an
    extensive and detailed due diligence process for each proposed
and/or
planned transaction, as discussed in "— Credit
    Analysis and Risk Management" below. Our manager has
    significant expertise in analyzing the operations and financial
    statements of non-profit institutions that issue or are
    otherwise obligors of tax-exempt instruments.
Primary Market Origination Network.
Our
    manager has developed extensive contacts among originators of
    unrated tax-exempt obligations, which we believe will provide us
    with preferential access to these types of assets. This network
    includes regional and local broker-dealers and independent
    financial advisors. This network may result in favorable pricing
    on asset acquisitions and originations, which could produce
    greater returns to investors. Furthermore, we also intend to
    utilize this network to partner with such broker-dealers in the
    structuring and marketing of structured products.
Significant Ownership Interest by Our Management
    Team.
Our management team (excluding
    Tiptree's holdings) owns in the aggregate approximately
    1,835,984 common shares, or approximately 4.91% of our common
    shares outstanding after giving effect to this offering. We
    believe that our management team's interests and those of
    our shareholders are aligned, since we believe that the
    significant equity interest held by our management team
    encourages them to focus on building long term value and a
    strong franchise.
Our
    Business Objective and Strategies
Our business objective is to acquire municipal obligations
    (which in many cases are primarily secured by mortgages of real
    property or deeds of trust secured by real property),
    mortgage-related holdings and other assets, a portion of which
    we expect will consist of pass-through income exempt from
    U.S. federal income tax. We intend to seek to achieve this
    objective through acquisitions of the following types of assets:
•
tax-exempt obligations;
•
interests in non-recourse, low leverage structured credit
    entities that own tax-exempt obligations;
•
total return swaps and other derivative arrangements relating to
    tax-exempt obligations;
•
BABs; and
•
interest rate and credit hedges to reduce price volatility and
    risk.
We may also opportunistically acquire from time to time assets
    that are within our manager's areas of expertise and
    experience but do not relate to tax-exempt obligations or BABs,
    subject to maintaining our classification as a partnership for
    U.S. federal income tax purposes and our exemption from
    registration under the Investment Company Act.
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Our governing instruments do not limit the types of assets we
    may acquire. The tax-exempt obligations that we acquire may be
    investment grade or non-investment grade and may be rated or
    unrated. As described below, these obligations may be issued to
    obtain funds for various public purposes, including the
    construction of a wide range of public facilities, refunding of
    outstanding obligations and obtaining funds for general
    operating expenses and loans to other public institutions and
    facilities. In addition, obligations that we acquire may be
    issued by or on behalf of public authorities to finance
    privately owned or operated facilities, including facilities for
    the local furnishing of electricity or gas or sewage, solid
    waste disposal or other specialized facilities. We also may
    enter into total return swaps that are subject to tax on the
    income earned under the swap. In addition, we may acquire
    tax-exempt obligations that are subject to alternative minimum
    tax, and may also acquire opportunistically from time to time
    assets that generate taxable income.
A discussion of the material federal income tax implications of
    the ownership of our Class A common shares is set forth in
    "Material U.S. Federal Income Tax Considerations"
    below. Potential investors should also consult their own tax
    advisors in determining the federal, state, local, foreign or
    any other tax consequences regarding the ownership of our
    Class A common shares.
Although we do not actively seek to trade our assets, from time
    to time we may take advantage of marketplace opportunities and
    dispose of assets prior to their stated maturity or prior to the
    termination date of a structured credit entity. In 2009, such
    dispositions resulted in realized losses of $19.0 million.
    However, this amount was in excess of the carrying value of
    these assets and the dispositions resulted in a net increase to
    our net asset value.
The primary types of assets that we intend to acquire are
    described below.
Tax-Exempt
    Obligations
We expect that a significant portion of the tax-exempt
    obligations that we acquire directly or which comprise our
    underlying assets will be unrated or rated below investment
    grade by one or more nationally recognized rating agencies
    ("Baa3" or lower by Moody's or "BBB-"
    or lower by Fitch or Standard & Poor). We may under
    certain circumstances obtain private ratings on unrated
    tax-exempt obligations. We expect that a significant portion of
    the tax-exempt obligations underlying our assets or which we
    acquire directly will be issued by or on behalf of one of the
    following types of nonprofit institutions or state authorities:
•
healthcare:
general and acute care hospitals,
    critical access hospitals, behavioral and primary healthcare
    providers, assisted living facilities, clinics, long-term care
    facilities and continuing care retirement communities;
•
educational:
primary, secondary, technical and
    higher education institutions, including private, public,
    religious or independent schools;
•
housing:
entities whose primary purpose is to
    own or capitalize federally exempt multifamily or single family
    residential rental properties, and state housing authorities
    which issue tax-exempt bonds in order to finance residential
    mortgage loans, including for affordable housing projects, in
    their states;
•
cultural:
museums, aquariums, zoos, botanical
    gardens, performing arts venues (such as opera, symphony, dance
    and theater) and public television and radio;
•
research:
non-degree granting institutions
    whose primary purpose is research;
•
philanthropic:
institutions whose primary
    purpose is to distribute funds to other entities, generally for
    humanitarian purposes;
•
service/advocacy:
organizations that provide
    community and social services to different constituent groups,
    including social service organizations, professional
    associations and religious organizations;
•
infrastructure:
institutions related to power
    generation, utilities, roads, transportation, water, sewage and
    other aspects of public infrastructure; and
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•
Redevelopment/Tax Increment Financing ("TIF")
    Bonds:
debt service is paid by tax revenue
    generated from the area surrounding a redevelopment project
    without the revenue earmarked for the project itself being
    affected.
Our tax-exempt assets may also include "moral
    obligation" bonds, which typically are issued by special
    purpose public authorities. If an issuer of moral obligation
    bonds is unable to meet its obligations, the repayment of the
    bonds becomes a moral, but not a legal, obligation of the state
    or municipality in question.
In addition, our tax-exempt assets may include COPs issued by
    government authorities or entities to finance the acquisition or
    construction of equipment, land
and/or
facilities. COPs represent participations in a lease, an
    installment purchase contract or a conditional sales contract,
    which we collectively refer to as lease obligations, relating to
    such equipment, land or facilities. Although lease obligations
    do not constitute general obligations of the obligor for which
    the obligor's unlimited taxing power is pledged, a lease
    obligation is frequently backed by the obligor's covenant
    to budget for, appropriate and make the payments due under the
    lease obligation. However, certain lease obligations contain
    "non-appropriation" clauses which provide that the
    obligor has no obligation to make lease or installment purchase
    payments in future years unless money is appropriated for such
    purpose on a yearly basis. Although
    "non-appropriation" lease obligations are secured by
    the leased property, disposition of the property in the event of
    foreclosure might prove difficult and the value of the property
    may be insufficient to issue lease obligations.
We generally do not expect to directly acquire any tax-exempt
    obligations originated by our manager. We do, however, expect
    that any STEP and other structured credit entities in which we
    acquire an interest will hold tax-exempt obligations that were
    originated by our manager and later sold to such vehicles. We
    also expect the reference portfolios relating to our total
    return swaps, if any, to include tax-exempt obligations
    originated by our manager.
STEP
    and Other Structured Credit Entities
As part of our strategy, we may acquire interests in STEPs or
    other structured credit entities that hold tax-exempt
    obligations. We expect that these obligations will be primarily
    secured, in general, by mortgages or deeds of trust backed by
    the real estate interests of such borrowers, and often secured
    by the operating revenues of such borrowers, as well as a debt
    service reserve fund. We expect that most of these vehicles will
    be managed by our manager, although we may opportunistically
    acquire interests in structured credit entities managed by third
    parties. The underlying assets held by these entities may
    consist of tax-exempt obligations originated by our manager or
    third parties and later sold to them.
A STEP is a special purpose entity that is structured as a
    partnership for U.S. federal income tax purposes and issues
    two or more classes of certificates to finance the acquisition
    by the STEP of a portfolio of tax-exempt obligations. The
    classes of certificates issued by the STEP have differing levels
    of priority with respect to distributions of the income
    generated by the assets held by the STEP. We may acquire all or
    a portion of the junior STEP certificates issued by such
    entities. We may also acquire all or a portion of the more
    senior classes of certificates. In the event we acquire at least
    a majority of the most junior class of certificates, these STEP
    and other structured credit entities will be treated as our
    subsidiaries. It is our current expectation that, based on the
    interests we expect to own in STEP issuers, they will be treated
    as our subsidiaries and we will be required to consolidate all
    of the assets of the STEP issuer on our balance sheet and its
    income, net of minority interests, on our income statement.
    However, we are not required to purchase any minimum amount of
    interests in a STEP. To the extent we elect to purchase less
    than a majority of the most junior class of certificates in a
    STEP, that vehicle is not expected to be part of our
    consolidated results and will instead be treated as a minority
    interest.
Our manager may receive management fees from STEP or other
    structured credit entities for which it serves as manager. Such
    fees will be paid by the issuers, and any STEP certificates that
    we purchase will be at a price net of any placement fees payable
    to placement agents. The base management fee otherwise payable
    by us to our manager pursuant to the Management Agreement for
    any fiscal year may be reduced, but not below zero, by our
    proportionate share of the amount of any STEP or other
    structured credit portfolio management fees that are paid to our
    manager during such year by STEP or other structured credit
    entities in
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which acquire an interest, based on the percentage of the most
    junior class of certificates we hold in such entities; provided,
    however, that our manager reserves its right, to the extent
    contractually permitted, to charge us its full base management
    fee with respect to STEP or other structured credit entities for
    which it serves as manager.
Taxable
    Municipal Bonds
We may acquire taxable municipal bonds. Taxable municipal bonds
    are issued for issuers or projects that do not qualify for
    tax-exempt financing. The creation of BABs by the American
    Recovery and Reinvestment Tax Act expanded the issuance of
    taxable municipal bonds to approximately 20% of all municipal
    bonds issued during 2009. BABs allow a 35% interest payment
    subsidy (or up to a 45% subsidy with respect to certain
    "recovery zones" which have significant poverty,
    unemployment, foreclosure rates or are generally distressed) by
    the U.S. federal government with respect to issuances by
    municipalities and state-owned institutions. We may acquire
    taxable municipal obligations rated investment grade as well as
    unrated or below investment grade. We expect that the taxable
    municipal obligations that we may acquire will be issued by or
    on behalf of the types of institutions or authorities similar to
    those that issue tax-exempt obligations, as described above.
Total
    Return Swaps
We may enter into total return swaps as a means of making
    economically leveraged acquisitions of portfolios of tax-exempt
    obligations. A total return swap is a bilateral financial
    contract where one party makes regular payments based on a fixed
    or variable rate, while the other party makes payments based on
    the return of an underlying asset (which need not be owned by
    either party), which includes both the income it generates and
    any capital gains.
On the specified termination date of a swap, the swap
    counterparty will be required to pay us a portion of the
    positive total return (interest and capital gains/losses on the
    underlying portfolio of obligations less financing costs and
    adjusted for hedge gains/losses) derived from the portfolio.
    Alternatively, if the portfolio has suffered losses, we will
    share in the losses up to our agreed exposure. In addition, a
    total return swap may contain certain termination and default
    provisions that require us to transfer additional amounts to the
    swap counterparty or post cash collateral under certain
    circumstances. We will not be treated as the owner of the
    underlying portfolio subject to a total return swap for tax or
    financial reporting purposes, and any income earned by us from
    the total return swap will be taxable to us. We generally expect
    that the term of any total return swap that we may acquire will
    range from six months to one year. We may hold total return
    swaps through MFCA Funding, Inc., our wholly-owned subsidiary.
Tender
    Option Bond Programs
We may use tender option bond programs as a means of acquiring
    some tax-exempt obligations purchased in secondary market
    transactions. In tender option bond programs, tax-exempt bonds
    or STEP certificates are deposited in a special purpose vehicle,
    which typically issues two classes of certificates:
    (1) floating rate certificates, with an aggregate face
    value approximately equal to the market value of the underlying
    assets, entitling the holders to a variable interest rate based
    on prevailing short-term tax-exempt rates; and (2) a
    residual certificate, which is designed to provide its holder
    with a return similar to what the holder might have realized if
    it had directly financed the underlying assets. The holders of
    the floating rate certificates have the right to tender their
    certificates for repurchase at a price equal to the face amount
    of the certificates, plus accrued interest, on any date on which
    the floating rate is reset. We would likely retain the residual
    certificates in these programs. Generally, we may use tender
    option bond programs as a means of acquiring bonds that have
    credit ratings ranging from "AAA" to "BBB."
    We may also use tender option bond programs as a means of
    financing our acquisition of "AAA"-rated certificates
    issued by our STEP or other structured credit subsidiaries.
While we do not currently participate in any tender option bond
    programs, we have done so in the past.
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Other
    Strategies
We may also acquire other types of assets consistent with our
    overall business objective, directly or through the purchase of
    interests in structured transactions. These assets may include,
    but are not limited to:
•
short-term "taxable tail" bonds that finance the cost
    of issuance of related tax-exempt obligations, with a security
    interest that may be senior to such tax-exempt obligations;
•
asset-backed obligations backed by interests in student
    loans; and
•
tax credits.
These or other assets that we acquire may result in taxable
    income to investors in our Class A common shares.
Operating
    History
We were formed on April 23, 2007 and commenced operations
    in June 2007 upon completion of a private offering of 17,250,100
    common shares at $10 per share, resulting in net proceeds of
    approximately $159 million. At the completion of the
    offering, we entered into a management agreement with the Former
    Manager, a subsidiary of Cohen & Company.
Purchase
    of Common Shares by Tiptree and Transfer of Management
    Agreement
On February 5, 2009, Tiptree acquired 10,170,830
    outstanding common shares in negotiated private transactions,
    representing approximately 57% of the common shares outstanding
    as of such date, at an average price of approximately $1.26 per
    common share. As a result of the additional transactions
    described below, as of December 31, 2009, Tiptree owned
    27,617,687 common shares, representing approximately 74% of our
    outstanding common shares.
On March 18, 2009, the Former Manager, Cohen Brothers, LLC,
    Tricadia Capital and our manager entered into an assignment and
    assumption agreement that provided for the assignment of the
    Management Agreement to our manager. In consideration for the
    assignment, beginning on March 18, 2012, for a 10 year
    period, our manager has agreed to make payments to
    Cohen & Company equal to 10% of the revenue earned by
    our manager in excess of $1 million, subject to certain
    adjustments.
Subsequent
    Tiptree Tender Offer and Company Rights Offering
On May 12, 2009, Tiptree commenced a tender offer to
    purchase all of our outstanding common shares for the purchase
    price of $1.00 per common share. The tender offer expired on
    June 19, 2009. Tiptree purchased 2,443,550 common shares
    through the tender offer.
Also on May 12, 2009, we issued subscription rights to the
    then holders of our common shares and LTIP shares to purchase up
    to an aggregate of 18,116,964 new common shares at the price of
    $1.20 per common share. We completed the rights offering on
    June 26, 2009, issuing 18,116,964 new common shares and
    raising $21.7 million before taking into account the
    expenses of the offering. We used the net proceeds from the
    rights offering for working capital and general corporate
    purposes.
In connection with the foregoing transactions, we also offered
    one replacement LTIP share with a performance target of $1.25
    per LTIP share in exchange for two then-outstanding LTIP shares
    with a performance target of $10.00 per LTIP share. LTIP
    shareholders exchanged 566,915 LTIP shares with a performance
    target of $10.00 per LTIP share for 283,458 new LTIP shares with
    a performance target of $1.25 per LTIP share.
For additional information concerning our LTIP shares, see
    "Management — Compensation — Equity
    Compensation."
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Our
    Assets
Tax-Exempt
    Obligations
We hold five tax-exempt obligations issued by or on behalf of
    middle-market non-profit entities with an aggregate par amount
    of approximately $20 million and a market value of
    approximately $17 million as of December 31, 2009. Two
    of the obligations are held by MFCA Funding, Inc., our
    wholly-owned subsidiary. All of the obligations are pledged as
    further support to the holder of the class A certificates
    of NPPF II, as described below. We may terminate the pledge in
    exchange for a payment of $7 million.
These tax-exempt obligations are, in general, primarily secured
    by a first mortgage or deed of trust on the real property held
    by the borrower, and often also secured by the pledges of gross
    revenue of such borrower as well as a debt service reserve fund.
    The financial covenants of these tax-exempt obligations
    typically require borrowers to demonstrate satisfactory debt
    service coverage and typically restrict or limit financial
    disbursements during the term of the obligation. Standard
    covenants also may include, but may not be limited to,
    compliance with days cash on hand, and additional long term debt
    and short-term debt thresholds. In most transactions, the
    borrower also covenants to provide quarterly unaudited financial
    statements, an annual audit and quarterly and annual
    certificates of compliance with all covenants. None of the
    tax-exempt obligations held directly or indirectly by MFCA are
    in payment default, nor have any of the tax-exempt bonds drawn
    on the debt service reserve fund for payment on the obligations.
STEP
    and Other Structured Credit Assets
An important part of our initial strategy was to acquire the
    first-loss tranches of STEPs. These STEPs typically include the
    tax-exempt obligations as described in "— Tax
    Exempt Obligations" above. The subsequent dislocation in
    the structured finance market has reduced the demand for STEPs
    with multiple tranches.
On February 21, 2008, NPPF II, a newly-created trust,
    acquired a portfolio of tax-exempt obligations with a then
    current par value of $185.7 million. A majority of these
    obligations had previously been held at Deutsche Bank as part of
    the reference portfolio for a total return swap between MFCA
    Funding, Inc. and Deutsche Bank. NPPF II issued junior
    class B certificates and senior class A certificates
    to finance the purchase. We purchased all of the class B
    certificates, which had an original face value of
    $56.2 million, for $64.5 million. The class A
    certificates, which had an original face value of
    $118.1 million, were purchased by an affiliate of Deutsche
    Bank.
Holders of the class A certificates are entitled to receive
    interest distributions at a rate of 3% per annum plus a variable
    rate of not less than 78% of the expected net residual income
    from NPPF II. Holders of the class B certificates are
    entitled to receive the remaining distributions from NPPF II.
    Holders of the class A certificates are entitled to receive
    all scheduled sinking fund payments and unscheduled redemptions,
    net of gain share.
The trust agreement governing NPPF II initially required a
    mandatory auction of the assets of NPPF II starting on
    February 5, 2009. This auction date of the underlying
    obligations has been extended until February 20, 2011. We
    contributed $8 million of capital to the trust which was
    used to pay down the principal balance of the senior
    certificates. We have the right to extend the auction date for
    an additional one-year period if we make a $10 million
    prepayment in respect of the class A certificates.
Proceeds from dispositions of tax exempt obligations held by
    NPPF II, net of gain share, will be split between the two
    classes of certificates. If the majority holder of the
    class A certificates approves of the disposition, the
    proceeds will be distributed 80% to the class A
    certificates and 20% to the class B certificates. If the
    majority holder of the class A certificates does not
    approve of the disposition, the class A certificates will
    receive the greater of 80% of the par value of the tax exempt
    obligation and 80% of the proceeds from the disposition. During
    fiscal year 2009, $50.2 million of the face amount of
    senior certificates was redeemed as a result of dispositions
    within the portfolio. Scheduled paydowns of the tax-exempt
    obligations held by NPPF II are initially paid 100% to the
    holders of the class A certificates.
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Derivative
    Assets
On July 14, 2009, we entered into an interest rate swap for
    the purpose of hedging portfolio-wide interest rate risk with
    Tiptree, as a
"back-to-back"
swap with Morgan Stanley Capital Services Inc., or Morgan
    Stanley. Twice each year, on January 16 and July 16,
    beginning on January 16, 2010 and continuing through
    July 16, 2019, we will pay to Tiptree, the swap
    counterparty (and Tiptree will remit to Morgan Stanley), a fixed
    rate of 3.6475% based on a notional amount of $5,000,000, and
    four times each year, on January 16, April 16, July 16
    and October 16, beginning on October 16, 2009 and
    continuing through July 16, 2019, the swap counterparty
    will pay to us an amount equal to a floating rate of three-month
    LIBOR based on the notional amount. As of April 19, 2010,
    we have paid an aggregate of $365,959 to the swap counterparty
    (with $277,000 consisting of margin payments and $88,959
    consisting of interest payments) and received swap interest
    payments in an aggregate amount of $9,593 from the swap
    counterparty pursuant to the interest rate swap. All amounts we
    paid to Tiptree pursuant to the interest rate swap were
    thereafter remitted by Tiptree to Morgan Stanley.
Portfolio
    Overview
We have a portfolio of federally tax-exempt revenue bonds which
    have been issued to provide construction or long-term financing
    for nonprofit corporations. The nonprofit corporations financed
    by us include, among others, health care, educational, and
    social service organizations.
As of December 31, 2009, we held direct or indirect
    interests in 25 tax-exempt revenue bonds representing 22
    separate borrowers. The total par amount of directly held bonds
    was $19.7 million as of December 31, 2009 and the fair
    market value was $17.2 million. We also own the
    class B junior certificates of NPPF II. NPPF II is a STEP
    that issued class A senior certificates and class B
    junior certificates. The total par amount of bonds held in NPPF
    II was $137.5 million and the fair market value was
    $106.6 million. Deutsche Bank owns the class A senior
    certificates of NPPF II, the fair market value of which was
    $65.9 million as of December, 31 2009. The class B
    junior certificates we hold had a fair market value of
    $40.7 million as of December 31, 2009. See "STEP
    and Other Structured Credit Assets" above.
The tax-exempt bonds that we hold directly or indirectly
    generally have limited liquidity and do not trade in an active
    secondary market. All of the bonds are secured by
    (1) either a first lien mortgage or a negative pledge on
    the property, (2) a pledge of gross revenues
and/or
(3) a debt service reserve fund which is required to be
    funded with at least 12 months of principal and interest.
    The debt service reserve funds for all borrowers except the
    obligor under the Sierra Canyon tax-exempt obligation, or
    Sierra, are fully funded. Sierra paid quarterly debt service
    from the debt service reserve fund for the quarters ending
    April 30, 2009 and January 31, 2010. These amounts
    were replenished within 90 days. Sierra drew on the debt
    service reserve fund for the quarterly debt service payment due
    May 1, 2010 and Sierra management has informed our manager
    that it expects to replenish this draw within 90 days. The
    trustee of the tax-exempt obligation informed our manager that
    it believes that these draws do not constitute a default under
    the underlying documents as long as the funds are replenished
    within the 90 day period.
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The following table summarizes our tax-exempt obligation
    holdings as of December 31, 2009:
CONSOLIDATED
    SCHEDULE OF INVESTMENTS
As of December 31, 2009
Obligor
Obligor
Par
Proportional
Fair
Tax Exempt Bonds
City
State
Coupon
Maturity
Value
Ownership(4)
Value
Investments in trusts — NPPF II
Education:
21st Century Charter School
Colorado
CO
6.00
%
Oct-32
$
3,550,000
100
$
2,491,940
Project
Springs
Sacramento Country Day School
Sacramento
CA
5.65
%
Aug-37
13,530,000
100
10,366,208
Sierra Canyon High School Foundation(1)
Chatsworth
CA
6.00
%
May-32
3,882,260
18
3,065,200
Maranatha High School(1)
Pasadena
CA
7.25
%
Aug-37
11,900,000
43
9,260,937
Maine Central Institute
Pittsfield
ME
6.00
%
Aug-37
4,440,000
99
3,487,731
Total Education
37,122,260
28,672,016
Health Care Acute:
Yampa Valley Medical
Steamboat Springs
CO
5.13
%
Sep-29
7,500,000
18
6,798,413
Center(1)(2)
Labette County Medical Center(1)(2)
Parsons
KS
5.75
%
Sep-37
750,000
3
684,536
UMass Memorial Medical Center(1)(2)
Worchester
MA
5.00
%
Jul-33
10,920,000
10
9,711,129
West Penn Allegheny Health System(1)(2)
Pittsburgh
PA
5.38
%
Nov-40
11,530,000
2
8,456,506
Total Health Care Acute
30,700,000
25,650,584
Health Care Behavioral:
Cope Community Services(1)
Tucson
AZ
6.13
%
Aug-37
4,385,000
27
3,347,969
Madison Center(1)(2)
South Bend
IN
5.25
%
Feb-28
4,000,000
13
3,289,130
Alternatives Unlimited
Whitinsville
MA
7.38
%
Mar-38
10,895,000
99
9,010,383
Family Guidance Center for Behavioral Healthcare
St. Joseph
MO
5.50
%
Mar-37
5,335,000
97
3,840,426
NHS III Properties
Lafayette
PA
6.50
%
Oct-37
6,740,000
97
5,281,043
Total Health Care Behavioral
31,355,000
24,768,951
Social Services:
Goodwill of San Joaquin Valley
Stockton
CA
5.85
%
Sep-37
3,405,000
97
2,596,585
Guadalupe Centers
Kansas City
MO
6.15
%
Feb-38
4,430,000
100
3,224,021
Tri-County Community Action Program
Berlin
NH
6.50
%
Sep-37
2,100,000
98
1,592,451
Total Social Services
9,935,000
7,413,057
Other Non Profit:
Global Country of World
Maharishi Vedic City
IA
5.70
%
Feb-37
17,460,000
95
12,253,253
Peace
Global Country of World
Maharishi Vedic City
IA
5.80
%
Feb-37
1,145,000
5
815,572
Peace
YMCA of the Capital Area
Baton Rouge
LA
6.25
%
Sep-37
9,755,000
98
7,003,895
Total Other Non Profit
28,360,000
20,072,720
Total Investments of NPPF II
137,472,260
106,577,328
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Obligor
Obligor
Par
Proportional
Fair
Tax Exempt Bonds
City
State
Coupon
Maturity
Value
Ownership(4)
Value
Class A Senior Certificates
3.00
%
Feb-11
(65,856,685
)
(65,856,685
)
Class B Junior Certificates
71,615,575
100
40,720,643
Direct Investments in Tax Exempt Securities held by MFCA, LLC(3)
Health Care Acute:
Labette County Medical Center(1)
Parsons
KS
5.75
%
Sep-37
350,000
1
319,450
Total Health Care Acute
350,000
319,450
Health Care Behavioral:
Florida Care Properties(1)
Allen
TX
6.50
%
Aug-27
9,510,000
40
8,535,129
Total Health Care
9,510,000
8,535,129
Behavioral
Total Direct Investments in Tax Exempt Securities held by MFCA,
    LLC
9,860,000
8,854,579
Direct Investments in Tax Exempt Securities held by Funding
    Inc.(3)
Other Non Profit:
Cardiovascular Research Foundation(1)
New York
NY
5.40
%
Jan-35
2,000,000
11
1,516,840
Project CURE
Centennial
CO
7.38
%
Feb-28
7,905,000
100
6,879,069
Total Direct Investments in Tax Exempt Securities held by
    Funding Inc.
9,905,000
8,395,909
Total investments
$
91,380,575
$
57,971,131
(1)
MFCA holds less than 50% of the bonds outstanding and, as a
    result, cannot unilaterally direct bondholder rights and
    remedies in the event of a default.
(2)
These bonds may trade in an active secondary market.
(3)
Bonds are pledged to support the class A senior
    certificates of NPPF II.
(4)
Determined as current par outstanding divided by original
    issuance size.
Below is a brief summary of each of the tax-exempt obligations
    directly or indirectly held by us as of December 31, 2009:
COPE
    Community Services.
COPE Community Services (formerly known as COPE Behavioral
    Services) is a behavioral health care organization operating
    from nearly twenty locations throughout Tucson, Arizona. Bond
    proceeds were primarily used to fund the construction and
    renovation of several facilities, fund a capitalized interest
    fund, fund a debt service reserve fund and pay costs of issuance.
21st
    Century Charter School Project.
21st Century Charter School Project (GEO Foundation
    Holdings) manages 21st Century Charter School, a charter
    school located in Colorado Springs, Colorado operating grades
    kindergarten through twelfth. Bond proceeds were primarily used
    to refinance existing debt and to pay for costs of issuance. The
    right to foreclose on the mortgage is held for seven years from
    the date of issuance, which is until October 4, 2014, by
    the purchasers of new market tax credits that partially funded
    the transaction. After seven years, the right to foreclose on
    the mortgage reverts to the bondholders.
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Sacramento
    Country Day School.
Sacramento Country Day School is an independent, co-educational,
    college preparatory school located in Sacramento, California
    serving pre-kindergarten through grade 12. Bond proceeds were
    primarily used to construct a new lower school building,
    refurbish existing classroom space, refinance existing debt and
    to fund a debt service reserve fund and to pay for costs of
    issuance.
Sierra
    Canyon High School Foundation.
Sierra Canyon High School Foundation is an independent,
    coeducational day school located in Chatsworth, California,
    operating grades early kindergarten through twelfth. Bond
    proceeds were primarily used to fund the construction of the
    current upper school campus, fund a debt service reserve fund
    and to pay for costs of issuance.
Goodwill
    Industries of San Joaquin Valley.
Goodwill Industries of San Joaquin Valley, or Goodwill,
    located in Stockton, California, is one of the 184 member
    organizations that provide job training and placement services
    to assist people with employment barriers in becoming
    self-sufficient. Goodwill does this by operating retail stores
    and other businesses in the community that provide
on-the-job
training and fund Goodwill's programs. Bond proceeds
    were primarily used for the acquisition and improvement of two
    buildings, fund a debt service reserve fund and to pay for costs
    of issuance.
Global
    Country of World Peace.
Global Country of World Peace's primary mission is to
    promote world peace. Bond proceeds were primarily used to
    reimburse the company, located in Maharishi Vedic City, Iowa,
    for prior capital expenditures, fund new construction of several
    peace centers across the country, fund capitalized interest and
    a debt service reserve fund and to pay for costs of issuance.
Maranatha
    High School.
Maranatha High School is a non-denominational, Christian
    coeducational high school located in Pasadena, California. Bond
    proceeds were primarily used to refinance existing debt,
    renovate classroom space, purchase a contiguous property,
    reimburse prior capital expenditures, fund capitalized interest
    and a debt service reserve fund and to pay for costs of issuance.
Yampa
    Valley Medical Center.
Yampa Valley Medical Center, located in Steamboat Springs,
    Colorado, provides health care and related services to residents
    and visitors of Northern Colorado. Bond proceeds were primarily
    used to expand the existing hospital facility and acquisition of
    upgraded medical equipment, fund a debt service reserve fund and
    to pay for costs of issuance.
Madison
    Center.
Madison Center, established in 1949, provides behavioral
    healthcare services in St. Joseph, Elkhart, LaPorte, Marshall
    and Porter Counties in northern Indiana. Bond proceeds were
    primarily used to purchase or reimburse the cost of certain land
    for expansion of its existing campus, construct a child and
    adolescent center and geriatric psychiatric facility, undertake
    other demolition, construction and renovation projects on the
    South Bend, Indiana campus, fund a debt service reserve fund and
    to pay for costs of issuance.
Labette
    County Medical Center.
Labette County Medical Center is a County-owned, non-profit
    hospital, located in Parsons, Kansas. Bond proceeds were
    primarily used to refinance existing debt, finance renovations
    and additions to the existing hospital buildings, fund a debt
    service reserve fund and to pay costs of issuance. The bond is
    held by NPPF II,
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as to 69.2% of our aggregate interest therein, and as a direct
    investment of our company, as to 31.8% of our aggregate interest
    therein. The bonds held as a direct investment are pledged to
    support the class A certificates of NPPF II.
YMCA
    of the Capital Area.
YMCA of the Capital Area, located in Baton Rouge, Louisiana,
    provides programs that include physical education classes, after
    school care, summer camp programs and youth leadership to their
    constituents through eight service sites. Bond proceeds were
    primarily used to renovate and construct several multipurpose
    facilities, fund a debt service reserve fund and to pay for
    costs of issuance.
UMass
    Memorial Medical Center.
UMass Memorial Medical Center is an integrated health care
    delivery system that operates, among other facilities, a 725-bed
    acute care hospital, located in Worcester, Massachusetts. Bond
    proceeds were primarily used for building expansions, fund a
    debt service reserve fund and to pay for costs of issuance.
Alternatives
    Unlimited.
Alternatives Unlimited provides residential and employment
    services to adults with developmental or psychiatric
    disabilities. Located in Whitinsville, Massachusetts, the agency
    works with special need individuals in 44 different communities
    throughout central Massachusetts. Bond proceeds were primarily
    used to refinance existing debt, reimburse the organization for
    prior capital expenditures, fund a debt service reserve fund and
    to pay for costs of issuance.
Maine
    Central Institute.
Maine Central Institute (MCI) is a coeducational private
    day and boarding school for students in grades nine through
    postgraduate which was founded in 1866 and is located in
    Pittsfield, Maine. Bond proceeds were primarily used to finance
    renovation and expansion of the current dining area,
    construction of a student center, upgrade of existing telephone
    and computer capabilities, renovation of space to provide
    additional staff housing, refinancing existing debt and to fund
    a debt service reserve fund and to pay for costs of issuance.
Guadalupe
    Centers.
Guadalupe Centers, or GCI, is a nonprofit community service
    provider and charter school located in Kansas City, Missouri.
    The mission of GCI is to improve the quality of life for
    individuals in the Latino communities of greater Kansas City.
    GCI is a nonsectarian organization with two major affiliations:
    The Heart of America United Way and the National Council of
    La Raza. Bond proceeds were primarily used to refinance
    outstanding debt, expand the preschool childcare facility for a
    charter school, fund a debt service reserve fund and to pay for
    costs of issuance.
Family
    Guidance Center for Behavioral Healthcare.
Family Guidance Center for Behavioral Healthcare, located in St.
    Joseph, Missouri, provides services in crisis intervention,
    children, youth and adult mental health, family planning and
    chemical dependency. Bond proceeds were primarily used to
    purchase and renovate a building to house administrative offices
    and adult and children outpatient counseling services, fund a
    debt service reserve fund and to pay for costs of issuance.
Tri
    County Community Action Program.
Tri-County Community Action Program, located in Berlin, New
    Hampshire, provides social services for youths, families and
    seniors. Bond proceeds were primarily used to refinance existing
    debt, fund a debt service reserve fund and to pay for costs of
    issuance.
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West
    Penn Allegheny Health System.
West Penn Allegheny Health System controls and oversees the
    operation of 17 affiliates which together comprise the Health
    System. Located in Pittsburgh, Pennsylvania, the Health System
    is a diversified, nonprofit, integrated health care delivery
    system providing health care services to residents of Western
    Pennsylvania, Eastern Ohio and Northern West Virginia. Bond
    proceeds were primarily used to recapitalize the Company and
    fund prior and future capital expenditures, fund a debt service
    reserve fund and to pay for costs of issuance.
NHS
    III Properties.
NHS III Properties, located in Lafayette Hill, Pennsylvania, is
    a wholly owned subsidiary of Northwestern Human Services, the
    largest non-profit provider of community-based mental health
    services, mental retardation program, and other human services
    to the publicly funded sector in Pennsylvania. Bond proceeds
    were primarily used to refinance outstanding indebtedness, fund
    a debt service reserve fund and to pay for costs of issuance.
Florida
    Care Properties.
Florida Care Properties is a behavioral healthcare organization
    that owns and operates five adult training centers in
    Mississippi and one in Florida. Bond proceeds were primarily
    used to acquire the six training facilities, fund a debt service
    reserve fund and to pay for costs of issuance. The company holds
    one bond supported by a training center in Mississippi and one
    bond supported by a training center in Florida.
Cardiovascular
    Research Foundation.
Cardiovascular Research Foundation, located in New York, New
    York, is a private research medical foundation dedicated to
    promoting advances in cardiovascular medicine, specifically
    interventional cardiology, and the diagnosis and treatment of
    endovascular disorders. Bond proceeds were primarily used for
    the acquisition and renovation of a parcel of land and an
    existing building, to fund a debt service reserve fund and to
    pay for costs of issuance.
Project
    CURE (Benevolent Healthcare Foundation).
Project CURE (Benevolent Healthcare Foundation), located in
    Centennial, Colorado, is a humanitarian relief organization that
    collects medical surplus supplies and equipment and donates it
    to developing countries. Bond proceeds were primarily used to
    refinance existing debt, fund a debt service reserve fund and to
    pay for costs of issuance.
Our
    Financing Strategy
We intend to employ moderate leverage on a non-recourse basis in
    connection with our acquisitions of interests in STEPs and other
    structured credit entities, which may include tender option bond
    trusts. Our NPPF II transaction, for example, consists of two
    tranches of securities, with the senior tranche similar to
    traditional bank portfolio lending, without the use of credit
    ratings or sophisticated cash flow or collateralization
    tranching techniques. We may pursue similar financing strategies
    for other portfolios.
We may also engage in total return swaps to provide us with
    economically leveraged returns, although any income we earn
    under such swaps will be fully taxable to us or result in our
    passing through taxable income to shareholders, including
    holders of our Class A common shares. For additional
    information concerning this part of our strategy, see
    "— Our Business Objective and
    Strategies — Total Return Swaps" above.
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In addition, we may employ more traditional methods of
    financing, currently expected to consist primarily of the
    following:
•
Warehouse Credit Facilities.
Warehouse credit
    facilities generally require the borrower to maintain cash
    collateral on deposit with the warehouse lenders and are secured
    by the assets acquired. We would expect that these facilities
    would be structured so that we would not be deemed to be the tax
    owner of the obligations. If we were deemed to be the tax owner
    of the obligations, we would not be able to deduct the interest
    payments on the financing. We generally expect that the terms of
    these facilities would range from six months to one year.
•
Secured Lines of Credit.
These lines of credit
    would be secured by the assets acquired.
Credit
    Analysis and Risk Management
Our manager has an asset acquisition committee and our
    wholly-owned subsidiary, MFCA Funding, Inc., has a credit
    committee, as discussed below.
Additional information regarding each committee, as well as our
    independent directors, is set forth under "Management."
Due
    Diligence
Our asset acquisition process includes due diligence conducted
    by our manager.
Our due diligence with respect to obligations secured by, in
    whole or in part, real-estate related assets begins with an
    initial review process by our manager, focusing on potential
    investment returns, competitive positioning and property
    fundamentals. If the asset passes our initial screening and
    meets our risk-adjusted return targets, our manager will proceed
    with more detailed underwriting, due diligence and risk
    assessment. This process will include in-depth market research
    and the development of a comprehensive investment analysis and
    financial model. Careful attention will be paid to the following
    factors, among other things, with respect to the real
    estate-related assets of the borrower
and/or
the
    operations of the borrower: (i) geographic location and
    property type, (ii) condition and use of the property,
    (iii) market growth demographics, (iv) historical
    performance, (v) current and projected cash flow,
    (vi) potential for capital appreciation,
    (vii) prospects for liquidity through sale, financing or
    refinancing of the asset and (viii) tax considerations. We
    will also generally seek to condition our obligation to close
    the purchase of investment in any such asset on the delivery of
    certain documents, which may include (i) evidence of
    marketable title, subject to such liens and encumbrances as are
    acceptable to us, and (ii) title insurance policies.
Our due diligence process may also include reviewing third-party
    revenue sources such as external contracts, service
    arrangements, pledges, philanthropic support and other items,
    and reviewing publicly available information about the obligor.
Ongoing
    Monitoring
Our manager has the primary responsibility for monitoring our
    assets for potential impairment issues. The surveillance process
    includes a regular review of market conditions and public
    announcements by obligors, ongoing dialogues with obligors, a
    periodic review of collateral statistics and performance,
    meetings to discuss credit performance and a watch list.
Insurance
If we acquire tax-exempt obligations that are secured by real
    property, we will seek to ensure that the properties are covered
    by adequate insurance provided by reputable companies, with
    commercially reasonable deductibles, limits and policy
    specifications customarily carried for similar properties. There
    are, however, certain types of losses that may be either
    uninsurable or not economically insurable, such as losses due to
    floods, storms, riots, terrorism or acts of war. If an uninsured
    loss occurs, we could lose our invested capital in, and
    anticipated profits from, the asset.
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Competition
We believe that our manager's industry expertise and
    relationships provide us with a competitive advantage. This
    expertise helps us to assess risks and determine appropriate
    pricing for potential assets. In addition, we believe that our
    manager's relationships and reputation enable us to
    effectively identify and compete for attractive asset
    acquisition opportunities.
However, in acquiring our assets, we compete with mutual funds,
    closed-end funds, specialty finance companies, hedge funds,
    insurance companies, institutional investors, investment banking
    firms, financial institutions and other entities. New
    competitors continually emerge, including competitors
    specifically focused on purchasing tax-exempt assets. A
    proliferation of companies that are similar to ours may increase
    the competition for equity capital and thereby adversely affect
    the market value of our Class A common shares.
Many of our competitors are significantly larger than us, have
    greater access to capital and other resources and may possess
    other competitive advantages. Some of our competitors may be
    able to accept more risk than we can. In addition, some of our
    competitors may have higher risk tolerances or different risk
    assessments, which could allow them to consider a wider variety
    of assets than we do. They may also enjoy significant
    competitive advantages that result from, among other things, a
    lower cost of capital and better operating efficiencies.
Competition may limit the number of suitable asset acquisition
    opportunities available to us. It may also result in higher
    prices, lower yields and a narrower spread of yields over our
    borrowing costs, making it more difficult for us to acquire
    assets on attractive terms. In addition, competition for
    desirable assets could delay the investment of proceeds from
    this offering in desirable assets, which may in turn reduce our
    earnings per share and negatively affect our ability to maintain
    our dividend distributions.
Our affiliates may establish or manage other entities in the
    future that compete with us for assets. If any present or future
    affiliated investment entities have a business focus similar to
    ours, we may compete with those entities for access to the
    benefits that our relationship with our affiliates provides to
    us, including access to business opportunities. For example,
    certain funds managed by affiliates of our manager currently
    invest in tax-exempt obligations similar to the tax-exempt
    obligations in which we invest. We cannot assure you that, under
    such circumstances, our manager will allocate the most
    attractive opportunities to us.
Regulatory
    Environment
Tax
    Requirements
We believe that we have been organized and have operated so that
    we have qualified, and will continue to qualify, to be treated
    for U.S. federal income tax purposes as a partnership and
    not as an association or a publicly traded partnership taxable
    as a corporation. Our determination is based solely on advice
    rendered to us by a nationally recognized accounting firm. In
    general, an entity that is treated as a partnership for
    U.S. federal income tax purposes is not subject to
    U.S. federal income tax at the entity level. Consequently,
    as a holder of our Class A common shares, you will be
    required to take into account your allocable share of items of
    our income, gain, loss, deduction and credit for our taxable
    year ending within or with your taxable year, regardless of
    whether we make cash distributions on a current basis with which
    to pay any resulting tax.
Investment
    Company Act Exclusions
We intend to continue to conduct our operations so that we are
    not required to register as an investment company under the
    Investment Company Act. We expect many of our subsidiaries to
    rely on the exemption from registration under
    Section 3(c)(5)(C) of the Investment Company Act available
    to companies primarily engaged in purchasing or otherwise
    acquiring mortgages and other liens on, and interests in, real
    estate (as described in more detail below). Additionally,
    certain subsidiaries may rely on the exemptions available under
    Sections 3(c)(5)(A) or (B) of the Investment Company
    Act for companies that are primarily engaged in one or more of
    the following businesses: (i) purchasing or otherwise
    acquiring notes, drafts, acceptances, open accounts receivable,
    and other obligations representing part or all of the sales
    price of merchandise, insurance and services; and
    (ii) making loans to manufacturers, wholesalers, and
    retailers of, and to prospective purchasers of, specified
    merchandise, insurance, and services. In turn, we intend to
    conduct our operations so that we qualify for the exception from
    the definition of investment company provided for under
    Section 3(c)(6) of the Investment Company Act.
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Section 3(c)(6) of the Investment Company Act excepts from
    the definition of an investment company any company primarily
    engaged, directly or through majority-owned subsidiaries, in one
    or more of the 3(c)(5) Businesses, or in one or more of such
    businesses (from which not less than 25% of such company's
    gross income during its last fiscal year was derived) together
    with an additional business or businesses other than investing,
    reinvesting, owning, holding or trading in securities. We may
    rely on Section 3(c)(6) to the extent we engage directly,
    or through our "majority-owned subsidiaries," in
    3(c)(5) Businesses, including engaging in purchasing or
    otherwise acquiring directly mortgages or interests secured
    primarily by mortgages or deeds of trust and other liens and
    interests in real estate. The SEC staff has issued little
    interpretive guidance with respect to Section 3(c)(6) and
    any guidance published by the staff could require us to adjust
    our strategy accordingly. However, under the current
    interpretation of the term "primarily engaged" used by
    the SEC and the SEC staff, Section 3(c)(6) excepts a
    company from the definition of investment company if that
    company devotes at least 55% of its assets to, and derives at
    least 55% of its income from, a combination of (1) 3(c)(5)
    Businesses, from which the company derived at least 25% of its
    gross income during its last fiscal year, and (2) an
    additional business or businesses other than investing,
    reinvesting, owning, holding or trading in securities.
    Accordingly, we intend to conduct our operations to meet these
    asset and income requirements.
The determination of whether an entity is a majority-owned
    subsidiary of ours is made by us. The Investment Company Act
    defines a majority-owned subsidiary of a person as a company 50%
    or more of the outstanding voting securities of which are owned
    by such person, or by another company which is a majority-owned
    subsidiary of such person. The Investment Company Act further
    defines voting securities as any security presently entitling
    the owner or holder thereof to vote for the election of
    directors of a company. We will treat companies, including STEP
    issuers, in which we own at least a majority of the voting
    equity as majority-owned subsidiaries for purposes of
    Section 3(c)(6) of the Investment Company Act. Because
    there is little guidance in this area, there can be no assurance
    that the SEC or its staff will not change its view on the
    interpretation of Section 3(c)(6) or that they would
    otherwise agree with our analysis, which, in either case, could
    cause us to adjust our investment strategy. Any such adjustment
    to our investment strategy would have a material adverse effect
    on us.
As noted, we expect many of our subsidiaries (including certain
    STEP issuers) to rely on the exemptions from registration under
    Section 3(c)(5) of the Investment Company Act, and in
    particular, Section 3(c)(5)(C) available to companies
    primarily engaged in purchasing or otherwise acquiring mortgages
    and other liens on, and interests in, real estate.
    Section 3(c)(5)(C) of the Investment Company Act excepts
    from the definition of the term investment company any person
    who is not engaged in the business of issuing redeemable
    securities,
face-amount
certificates of the installment type or periodic payment plan
    certificates, and who is primarily engaged in the business of
    purchasing or otherwise acquiring mortgages and other liens on
    and interests in real estate. In order to qualify for this
    exemption, at least 55% of a company's portfolio must be
    composed of mortgages and other liens on and interests in real
    estate (collectively, "qualifying assets") and at
    least 80% of the company's portfolio must be composed of
    real estate-related assets. Qualifying assets include mortgage
    loans and obligations secured primarily by a first mortgage or
    deed of trust on the real property held by the borrower,
    mortgage-backed securities that represent the entire ownership
    in a pool of mortgage loans and other interests in real estate.
We expect that our subsidiaries relying on
    Section 3(c)(5)(C) (and our company, to the extent we
    engage in such activities directly) will adhere to guidance
    published by the SEC staff (and on our analyses of such
    guidance) to determine which assets are "qualifying
    assets" and "real estate-related assets." For
    instance, consistent with such guidance, tax-exempt revenue
    bonds primarily secured by mortgage loans or deeds of trust in
    real property constitute qualifying assets. To the extent that
    the SEC staff publishes new or different guidance with respect
    to these matters, we may be required to adjust our strategy
    accordingly. Thus, these limitations could result in us or the
    subsidiary holding assets we might wish to sell or selling
    assets we might wish to hold.
Certain of our subsidiaries may also seek to rely on the
    exemptions under Sections 3(c)(5)(A) or (B) of the
    Investment Company Act available to companies primarily engaged
    in sales financing, factoring or making loans to manufacturers
    or retailers for purchases of specified merchandise or services.
    We expect that our subsidiaries relying on
    Sections 3(c)(5)(A) or (B) will adhere to guidance
    published by the SEC staff (and on our analyses of such
    guidance) to determine the types of financings, loans or
    receivables that may be held.
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Additionally, certain of our subsidiaries, including certain
    STEP issuers, may seek to rely on the Investment Company Act
    exemption under
Rule 3a-7
provided to certain structured financing vehicles that pool
    income-producing assets and issue securities backed by those
    assets. Such structured financings may not engage in portfolio
    management practices resembling those employed by mutual funds.
    Accordingly, our STEP subsidiaries that rely on
Rule 3a-7
will be subject to a trust agreement which contains specific
    guidelines and restrictions limiting the discretion of the STEP
    issuer and the portfolio manager. In particular, the agreements
    will prohibit the STEP issuer from acquiring and disposing of
    assets primarily for the purpose of recognizing gains or
    decreasing losses resulting from market value changes. Certain
    sales and purchases of assets, such as dispositions of an
    underlying asset that has gone into default or is at risk of
    imminent default, may be made so long as the STEP issuers do not
    violate the guidelines contained in the trust agreements and are
    not based primarily on changes in market value. The proceeds of
    permitted dispositions may be reinvested in underlying assets
    that are consistent with the credit profile of the STEP vehicle
    under specific and predetermined guidelines. In addition, absent
    obtaining further guidance from the SEC, substitutions of assets
    may not be made solely for the purpose of enhancing our
    investment returns as the holders of the most junior
    certificates issued by the STEP issuer. As a result of these
    restrictions, certain of our STEP subsidiaries may suffer losses
    on their assets and we may suffer losses on our investments in
    those STEP subsidiaries.
If we fail to meet the tests for compliance with
    Section 3(c)(6) (including if we or our subsidiaries
    relying on Section 3(c)(5) fail to meet the tests
    applicable under that subsection and from the SEC's related
    guidance), we may be deemed to be an investment company. As we
    seek to invest the net proceeds of this offering , we may rely
    for our exemption from registration under the Investment Company
    Act upon
Rule 3a-2,
which provides a safe harbor exemption, not to exceed one year,
    for companies that have a bona fide intent to be engaged in an
    excepted activity but that temporarily fail to meet the
    requirements for another exemption from registration as an
    investment company. As required by the rule, our board of
    directors will adopt a resolution declaring our bona fide intent
    to be engaged in excepted activities. Reliance upon
Rule 3a-2
is permitted only once every three years. As a result, if we
    fail to meet the tests for compliance with Section 3(c)(6),
    or if we otherwise fail to maintain our exclusion from
    registration and another exemption is not available, we may be
    required to register as an investment company, or we may be
    required to acquire
and/or
dispose of assets in order to meet the applicable tests. Any
    such asset acquisitions or dispositions may be of assets that we
    would not acquire or dispose of in the ordinary course of our
    business, may be at unfavorable prices or may impair our ability
    to make distributions to shareholders and result in a decline in
    the price of our common shares.
If we are required to register under the Investment Company Act,
    we would become subject to substantial regulation with respect
    to our capital structure (including our ability to use
    leverage), management, operations, transactions with affiliated
    persons (as defined in the Investment Company Act), and
    portfolio composition, including restrictions with respect to
    diversification and industry concentration and other matters.
    Registration under the Investment Company Act would likely limit
    our ability to follow our current investment and financing
    strategies, impair our ability to make distributions to our
    common shareholders and, as a result, cause a decline in the
    price of our Class A common shares.
Legal
    Proceedings
There are no legal proceedings pending against us or to which we
    are a party.
Offices
Our principal executive offices are located at 2929 Arch Street,
    17th Floor, Philadelphia, Pennsylvania 19104. Our manager's
    principal executive offices are at 780 Third Avenue, 22nd Floor,
    New York, New York 10017.
We lease our principal executive offices from the Former
    Manager. We do not own any real property.
Employees
We do not have any employees. Our business is managed by
    employees of our manager under the Management Agreement.
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MANAGEMENT
Our
    Manager
We are externally managed and advised by our manager pursuant to
    the Management Agreement, which is described below. As more
    fully described below under "— The Management
    Agreement — Responsibilities of our Manager," our
    manager is responsible for providing us with senior management,
    managing our assets, administering our business activities and
    managing our
day-to-day
operations.
Our manager is a wholly-owned subsidiary of Tricadia Holdings.
    Tricadia Holdings is an asset management firm founded in 2003 by
    Michael Barnes and Arif Inayatullah. Tricadia Holdings is based
    in New York, New York, has approximately $5 billion in
    assets under management and employs approximately 50
    professionals.
Directors
    and Executive Officers
Our board of directors consists of five
    directors,          of
    whom are considered independent under the NASDAQ Listing Rules.
    We intend to appoint additional directors prior to the
    consummation of this offering. Because we are a "controlled
    company" under the NASDAQ Listing Rules, we are not
    required to have a majority of independent directors.
Pursuant to the terms of the Management Agreement, our manager
    provides us with our executive officers. In addition to serving
    as officers of our company and our subsidiaries, all of our
    executive officers are employees of Tricadia or one or more of
    the affiliates or entities that it manages.
The following table sets forth information regarding our
    directors and executive officers:
Name
Age
Title
Michael Barnes
44
Chairman and Chief Executive Officer; Director
Geoffrey Kauffman
51
President; Director
Christopher Conley
55
Chief Operating Officer
Julia Wyatt
52
Chief Financial Officer and Secretary
Daniel G. Cohen
40
Director
Andrew Gordon
56
Director
Thomas J. Reilly, Jr.
70
Director
The following describes the experience of our non-management
    directors. Biographies of our executive officers are set forth
    under "— The Management Team."
Background Summary
Daniel G. Cohen
Mr. Cohen served as our chairman from our formation in 2007
    through March 2009. He is currently the chairman and chief
    executive officer of Cohen & Company, an investment
    firm specializing in credit-related fixed income products and
    investments, and has served in such capacity since 2001. From
    2001 to 2006, Mr. Cohen also served as chief executive
    officer of Cohen & Company. Mr. Cohen holds
    similar management positions in certain investment advisory
    subsidiaries and the broker-dealer subsidiary of
    Cohen & Company. Mr. Cohen has been chairman of
    the board of directors of The Bancorp, Inc., a bank holding
    company, since 2000 and served as its chief executive officer
    from 1999 to 2000. From 2000 until 2006, Mr. Cohen served
    on the board of directors of TRM Corporation, an operator of
    automated teller machines, and as its Chairman from 2003 until
    2006. From 1995 to 2000, Mr. Cohen served as an officer of
    Resource America, an asset management company, serving as its
    chief operating officer from 1998 to 2000. From 1997 to 1999,
    Mr. Cohen was a director of Jefferson Bank of Pennsylvania,
    a commercial bank. Mr. Cohen was selected to serve as one
    of our directors because he is the chairman of the Former
    Manager and has extensive experience and familiarity with us. In
    addition, he has extensive experience in investments and board
    service.
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Background Summary
Andrew Gordon
Mr. Gordon has served as a director since March 2009. He is
    currently Managing Partner of Gordon Financial Advisors LLC, a
    boutique investment bank he founded in 2008. He is also CEO of
    SPiN Global Management LLC, a table tennis focused enterprise
    that he founded in 2008. Prior to forming Gordon Financial
    Advisors, Mr. Gordon was a Managing Director in JP
    Morgan's Financial Institutions Investment Banking Group
    from 2004 through 2007, where he led a team of investment
    bankers focused on delivering JP Morgan's products and
    services to the asset management sector, particularly equity and
    debt capital raising and mergers and acquisitions. Prior to JP
    Morgan, Mr. Gordon was a Managing Director at Lehman
    Brothers from 1987 through 1996, where he focused on the
    financial institutions sector, and a Managing Director at Credit
    Suisse First Boston from 1997 through 2000, where he led Credit
    Suisse First Boston's asset management investment banking
    coverage effort. He also served as chief operating officer of
    two asset managers, Lehman Brothers Global Asset Management,
    from 1992 through 1996, and Trilogy Advisors, from 2000 through
    2003. While at Lehman Brothers Global Asset Management,
    Mr. Gordon served as chairman of the board of its mutual
    fund complex. Mr. Gordon received his B.A. from Columbia
    College and his M.B.A. from Columbia Business School, where he
    was a member of the Beta Gamma Sigma Honor Society.
    Mr. Gordon was selected to serve as one of our directors
    because he has significant financial and investment experience.
Thomas J. Reilly, Jr.
Mr. Reilly has served as a director since June 2007. He is
    currently retired from active employment. Mr. Reilly was a
    member of the board of trustees of Taberna Realty Finance Trust,
    a specialty finance REIT, from April 2005 until December 2006.
    From 1965 to 1996, Mr. Reilly worked in public accounting
    at Arthur Andersen LLP, providing audit and consulting services
    to multinational companies in the manufacturing, professional
    services, construction and distribution industries.
    Mr. Reilly was a partner at Arthur Andersen from 1976 to
    1996 and was head of the Philadelphia office audit division from
    1979 to 1986. Mr. Reilly currently serves as a director and
    audit committee chair of Astea International, Inc., a global
    provider of service management solutions, a director and audit
    committee chair for inTEST Corporation, a designer, manufacturer
    and marketer of semiconductor automatic test equipment, a member
    of the advisory board of World Affairs Council of Philadelphia,
    and former president of Center City Residents Association.
    Mr. Reilly received his B.S. in economics with a major in
    accounting from Villanova University in 1961. Mr. Reilly
    was selected to serve as one of our directors because he has a
    strong background in accounting and finance as well as extensive
    experience in board service.
Independent
    Directors
Messrs. Reilly
    and          
    are independent directors within the meaning of the NASDAQ
    Listing Rules.
Board
    Committees
Prior to the consummation of this offering, we anticipate that
    our board of directors will establish an audit committee, as
    discussed below. Our board of directors may not have any other
    committees and we expect that the full board of directors will
    take action on compensation, director nomination and corporate
    governance matters where necessary or appropriate.
The audit committee will be comprised of
    Messrs. Reilly,          and          .
    Mr. Reilly will chair the committee.
The audit committee will be responsible for, among other things,
    engaging independent public accountants, reviewing with the
    independent public accountants the plans and results of the
    audit engagement,
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approving professional services provided by the independent
    public accountants, reviewing the independence of the
    independent public accountants, considering the range of audit
    and non-audit fees and reviewing the adequacy of our internal
    accounting controls.
Mr. Reilly will serve as the Company's audit committee
    financial expert, as such term is defined by the Sarbanes-Oxley
    Act of 2002.
Because we are a "controlled company" under the NASDAQ
    Listing Rules, we are not required to have a compensation
    committee or nominating and corporate governance committee
    comprised of independent directors.
Compensation
    Interlocks
None of our executive officers has a relationship that would
    constitute an interlocking relationship with executive officers
    or directors of another entity or insider participation in
    compensation decisions.
Compensation
Executive
    Compensation
Compensation
    Discussion and Analysis
We are externally managed and have no employees. Because the
    Management Agreement provides that our manager is responsible
    for managing our affairs, our executive officers, who are
    employees of our manager and its other affiliates, do not
    receive cash compensation from us for serving as our executive
    officers. In their capacities as officers or employees of our
    manager or its other affiliates, they devote a portion of their
    time to our affairs as is required for the performance of the
    duties of our manager under the Management Agreement.
We pay our manager a management fee, and our manager uses the
    proceeds from the management fee in part to pay compensation to
    its officers and employees. It is our understanding that the
    compensation paid to our executive officers by our manager or
    its other affiliates is not allocated in a manner that would
    allow us to determine that portion of their compensation that is
    related to the services performed for us and that portion that
    is related to services performed for other entities. See
    "— The Management Agreement —
    Performance Share" for information with respect to the
    transfer by our manager of shares of our common stock to our
    executive officers.
We have not included tabular disclosure concerning compensation
    to our named executive officers since we do not provide them
    with cash or other compensation and have not provided them with
    equity compensation within the period or otherwise required to
    be reported in tabular form.
Director
    Compensation
Members of our board of directors who are employees of any of
    our affiliates, whom we refer to as excluded directors, do not
    receive compensation for serving on the board of directors. Each
    other director, whom we refer to as a non-excluded director,
    receives an annual retainer of $20,000 (which includes all board
    meetings attended in person or telephonically), payable $10,000
    in cash and $10,000 in restricted common shares. Non-excluded
    directors who are members of the audit committee receive an
    additional $10,000 cash retainer, with an additional $5,000 cash
    retainer payable to the chairperson of the audit committee. We
    do not intend to compensate directors for additional committee
    meetings that occur on a date different from a full board of
    directors meeting date. We also reimburse all of our directors
    for their travel expenses incurred in connection with their
    attendance at full board and committee meetings.
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Our non-excluded directors are eligible to receive shares,
    options and other share-based awards. See ''—
    Equity Compensation" below.
Compensation
    of Directors in 2009
The table below indicates the compensation earned by our
    non-excluded directors for 2009.
Fees Earned
Share-Based
All Other
Total
Name
or Paid in Cash
Awards(1)
Compensation
Compensation
Daniel G. Cohen
$
7,500
$
0
$
0
$
7,500
Andrew Gordon
$
7,500
$
31,650
$
0
$
39,150
Thomas J. Reilly, Jr.
$
14,750
$
15,375
$
0
$
30,125
(1)
Represents the aggregate grant date fair value of the award as
    calculated in accordance with FASB ASC Topic 718.
Equity
    Compensation
In connection with our initial offering in June 2007, common
    shares were reserved for certain officers and employees of the
    Former Manager as LTIP shares. LTIP shares were a special class
    of limited liability company interest that had the same rights
    to voting and distributions as the common shares, but did not
    have any rights to liquidating distributions until they were
    converted into common shares. Holders of LTIP shares were
    entitled to convert their LTIP shares into an equal number of
    common shares if, in certain circumstances, the valuation of our
    assets exceeded a specified threshold that we refer to as the
    "performance target."
In July 2009, the LTIP shares became eligible to be converted
    into common shares because we issued to our manager common
    shares valued at $2.01 per Share, exceeding the performance
    target of $1.25, as partial payment for a performance fee for
    the second quarter of 2009. All of the holders of the LTIP
    shares elected to convert their LTIP shares into common shares,
    and there are currently no LTIP shares outstanding.
We may offer shares, options and other share-based awards under
    our 2007 Equity Incentive Plan, or other equity incentive plans
    we may establish in the future, to our executive officers and
    directors. We
    anticipate          
    that          
    of our common shares will be reserved for equity incentive
    awards at the time of this offering. The terms and conditions of
    awards will be determined by our board of directors.
Management
    Team
Pursuant to the terms of the Management Agreement, our manager
    provides us with our management team. The following describes
    the experience of our executive officers and other members of
    the management team.
Name/Position at the Company
Background Summary
Michael Barnes
Chief Executive Officer and Chairman
Our Chief Executive Officer and Chairman of our board of
    directors since March 2009, Mr. Barnes is a founding
    partner of Tricadia. Prior to the formation of Tricadia in 2003,
    Mr. Barnes spent two years as Head of Structured Credit
    Arbitrage within UBS Principal Finance LLC, a wholly owned
    subsidiary of UBS Warburg, which conducts proprietary trading on
    behalf of the firm. Mr. Barnes joined UBS in 2000 as part
    of the merger between UBS and PaineWebber Inc. Prior to joining
    UBS, Mr. Barnes was a Managing Director and Global Head of
    the Structured Credit Products Group of PaineWebber. Prior to
    joining PaineWebber in 1999, he spent 12 years at Bear,
    Stearns & Co. Inc., the last five of which he was head
    of their Structured Transactions Group. Mr. Barnes received
    his A.B. from Columbia College.
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Name/Position at the Company
Background Summary
Geoffrey Kauffman
President
Our President and a member of the board of directors since March
    2009, Mr. Kauffman has been a Managing Director of Tricadia
    since 2005 and the President and Chief Operating Officer of
    Tiptree since its inception in 2007. Since joining Tricadia in
    2005, Mr. Kauffman has been overseeing a variety of
    strategic acquisition opportunities and permanent capital
    projects, including the development of Tiptree. Prior to joining
    Tricadia, from 2002 to 2004, Mr. Kauffman was a partner
    with the Shidler Group in a similar capacity, with his primary
    focus being the development of a credit derivative products
    company (CDPC). Before joining the Shidler Group, from 1997 to
    2001, Mr. Kauffman was involved in the launch of the CGA
    Group of companies, which originated financial guarantee
    contracts. From 1997 through 1999, he was the President, Chief
    Underwriting Officer and Principal Representative of CGA
    Bermuda, Ltd, the CGA Group's Bermuda based insurance
    subsidiary. From 2000 to 2001, he was the President and Chief
    Executive Officer of CGA Investment Management. Prior to joining
    CGA, Mr. Kauffman was at AMBAC and the MBIA / AMBAC
    International joint venture in 1995 and 1996, where he helped
    develop their international structured finance department. Prior
    to AMBAC, from 1989 to 1995, Mr. Kauffman was with
    FGIC's ABS group and helped establish that business,
    focusing on CDOs, asset backed securities and multi-seller
    conduit programs. Prior to FGIC, Mr. Kauffman worked in the
    Investment Banking Division of Marine Midland Bank (now HSBC),
    where he focused on middle market mergers and acquisitions and
    structured finance. Mr. Kauffman holds a B.A. (Psychology)
    from Vassar College and an M.B.A. (Finance) from Carnegie Mellon
    University.
Christopher Conley
Chief Operating Officer
Our Chief Operating Officer, since 2009, Mr. Conley was a
    Managing Director at Cohen & Company Securities, LLC
    and co-head of the municipal finance platform for
    Cohen & Company from 2007 through 2009. Previously,
    beginning in 1997, Mr. Conley was president of Nonprofit
    Capital, LLC, which he founded to meet the capital needs of
    acute care, rural healthcare, behavioral healthcare and
    long-term care facilities through a national funding program.
    Prior to establishing Nonprofit Capital, LLC, Mr. Conley
    was a senior vice president at Tucker Anthony &
    Company from 1995 to 1997, where he led the municipal bond
    securitization effort. Prior to Tucker Anthony, Mr. Conley
    was senior vice president in charge of the Healthcare Group at
    Lehman Brothers in New York from 1983 to 1995, where he
    completed financing for healthcare facilities of all types,
    including multi-hospital systems, community based hospitals,
    academic medical centers, behavioral healthcare providers and
    long-term care facilities. Before that, Mr. Conley was
    employed in the Healthcare Group in Booz, Allen &
    Hamilton's New York office from 1980 to 1983. Apart from
    his business activities, Mr. Conley has served as chairman
    of the board of Our Lady of Mercy Medical Center in the Bronx,
    New York, and has served on the finance committee of Catholic
    Health Initiatives (CHI), a multi-state $6 billion revenue
    health system. Mr. Conley is a graduate of the University
    of Notre Dame, where he obtained a B.A. in anthropology, and was
    awarded a Masters of Health Administration from Duke University.
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Name/Position at the Company
Background Summary
Julia Wyatt
Chief Financial Officer and Secretary
Our Chief Financial Officer and Secretary since 2009,
    Ms. Wyatt is also the Chief Financial Officer of Tricadia.
    Prior to joining Tricadia in 2005, from 1996 to 2005,
    Ms. Wyatt was the Chief Financial Officer of Havell Capital
    Management (HCM), a specialized investment management firm
    dedicated to managing funds in fixed income markets. During her
    tenure with HCM, Ms. Wyatt was responsible for all
    non-investment related aspects of the firm, including financial,
    legal, regulatory and client services. Prior to HCM, from 1992
    to 1996, Ms. Wyatt was a senior member of the fixed income
    management group with Neuberger Berman. Previously, from 1987 to
    1991, she was employed by Morgan Grenfell Capital Management,
    where she was the Treasurer and Director of Client Services.
    Ms. Wyatt obtained her C.P.A. license during her years from
    1980 to 1988, with Deloitte & Touche, spending the
    last two years in the Executive Office Research Department.
    Ms. Wyatt has a B.S. in Accounting from the University of
    Utah.
Eileen Mullin
Senior Analyst
Our Senior Analyst since 2009, Ms. Mullin leads the group
    that performs in-depth credit analysis of all potential
    borrowers in the municipal finance sector. Previously, from 2005
    to 2009, she was a director at Cohen & Company.
    Ms. Mullin worked as a health care analyst for Prudential
    Investment Advisor's nine tax-exempt funds from 1994 to
    1995. She also was a member of Moody's Investors
    Service's Public Finance Division from 1991 to 1994. in the
    Health Care Group, where she had responsibility for Moody's
    new and ongoing health care ratings in thirteen States. Prior to
    that time, starting in 1987, Ms. Mullin was an investment
    banker in the health care finance group for both Kidder,
    Peabody & Co. and Bear, Stearns and Co. From 1985 to
    1987, she worked in the Debt Issuance Unit of the New York State
    Medical Care Facilities Finance Agency, which was the largest
    health care issuer in the country. She has also worked as an
    independent consultant from 1995 to 2005, providing credit
    analyses for other individuals and companies. Ms. Mullin
    received her undergraduate degree from Smith College and a
    Master's in Business Administration from Boston University.
Ellen Curry
Controller
Our Controller, Ms. Curry previously served as a Director
    at Core Management, Inc., a construction management company,
    where she was dedicated to finance, accounting and business
    oversight and worked from 2002 to 2007. From 1999 to 2002,
    Ms. Curry, as President of Corporate Financial Consulting
    at Foresight Solutions, analyzed the viability of real estate
    development projects, developed operating budgets and prepared
    presentations for lending institutions, and managed the income
    tax accounting and tax investment strategy for a financial
    guaranty reinsurer. Prior to that time, Ms. Curry had
    senior roles at American Business Financial Services and Enhance
    Financial Services Group and was employed by Goldman Sachs,
    Thomson McKinnon Securities and PricewaterhouseCoopers.
    Ms. Curry is a CPA and received her MBA in Finance, Magna
    Cum Laude, from the Leonard N. Stern School of Business at New
    York University. Ms. Curry attended the International
    Management Program at the Australian Graduate School of
    Management and received her BBA in Accounting, Summa Cum Laude,
    from Baruch College.
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Name/Position at the Company
Background Summary
Daniel DiBono
Vice President
Our Vice President, Mr. DiBono is primarily responsible for
    surveillance of our existing credits as well as other areas of
    operations and structuring. Mr. DiBono is also a member of
    the group that performs in-depth credit analysis on potential
    borrowers in the municipal finance sector. Mr. DiBono was
    previously a Vice President at Cohen & Company from
    2007 to 2009 and was responsible for closing all directly
    originated tax-exempt bond transactions. Mr. DiBono's
    experience includes turnaround management, financial forecasting
    and business plan development in the corporate sector and
    business development in the financial services sector. In 2002,
    Mr. DiBono received a Bachelor of Science in Business
    Administration from the State University of New York at Albany,
    concentrating in Finance and Marketing.
The
    Management Agreement
We are party to the Management Agreement, which is dated as of
    June 12, 2007. The Management Agreement initially was with
    the Former Manager and assigned to the current manager on
    March 18, 2009, following the purchase by Tiptree, an
    affiliate of our manager, of a majority of our then-outstanding
    common shares. For further information concerning the
    assignment, see "Business — Operating
    History."
Responsibilities
    of Our Manager
Pursuant to the terms of the Management Agreement, our manager
    is required to provide us with our management team, along with
    appropriate support personnel to provide the management services
    to be provided by our manager to us, the members of which team
    shall have as a primary responsibility the management of us and
    shall devote such of their time to our management as the board
    of directors reasonably deems necessary and appropriate,
    commensurate with our level of activity from time to time.
Pursuant to the Management Agreement, our manager is responsible
    for approving our acquisition of municipal obligations and other
    assets, administering our business and managing our
day-to-day
operations. The Management Agreement requires our manager to
    manage our business affairs in conformity with the policies and
    the asset acquisition guidelines that are approved by at least a
    majority of our independent directors and monitored by the board
    of directors. Among other things, our manager is responsible for
    (i) the selection, purchase, monitoring and sale of our
    portfolio assets, (ii) our financing and risk management
    activities and (iii) providing us with asset advisory
    services. Our manager is responsible for our
day-to-day
operations and performs (or causes to be performed) such
    services and activities relating to our assets and operations as
    may be appropriate, including, without limitation, the following:
(1) serving as our consultant with respect to the periodic
    review of the asset acquisition and credit criteria and
    parameters for our acquisitions, borrowings and operations, any
    modifications to which must be approved by a majority of our
    independent directors, and other policies for the approval of
    our board of directors;
(2) investigating, analyzing and selecting possible asset
    acquisition opportunities;
(3) with respect to prospective asset acquisitions,
    conducting negotiations with borrowers, sellers and purchasers
    and their respective agents, representatives and investment
    bankers;
(4) engaging and supervising, on our behalf and at our
    expense, independent contractors who provide investment banking,
    mortgage brokerage, securities brokerage and other financial
    services and such other services as may be required relating to
    our assets;
(5) negotiating on our behalf for the sale, exchange or
    other disposition of any of our assets;
(6) coordinating and managing operations of any joint
    venture or co-investment interests held by us and conducting all
    matters with any joint venture or co-investment partners;
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(7) providing executive and administrative personnel,
    office space and office services required in rendering services
    to us;
(8) administering our
day-to-day
operations and performing and supervising the performance of
    such other administrative functions necessary to our management
    as may be agreed upon by our manager and the board of directors,
    including the collection of revenues and the payment of our
    debts and obligations and maintenance of appropriate computer
    services to perform such administrative functions;
(9) communicating on our behalf with the holders of any of
    our equity or debt securities as required to satisfy the
    reporting and other requirements of any governmental bodies or
    agencies or trading markets and to maintain effective relations
    with such holders;
(10) counseling us in connection with policy decisions to
    be made by our board of directors;
(11) evaluating hedging strategies and engaging in hedging
    activities on our behalf, consistent with our status as a
    partnership and with our asset acquisition guidelines;
(12) counseling us regarding the maintenance of our
    qualification as a partnership for U.S. federal income tax
    purposes and monitoring compliance with the requirements for
    maintaining such qualification;
(13) counseling us regarding the maintenance of our
    exemption from the Investment Company Act and monitoring
    compliance with the requirements for maintaining an exemption
    thereunder;
(14) assisting us in developing criteria for asset
    purchases that are specifically tailored to our business
    objectives and making available to us its knowledge and
    experience with respect to tax-exempt bonds and other assets,
    STEP and tender option bond programs and other structured credit
    entities;
(15) representing and making recommendations to us in
    connection with the purchase and finance of and commitment to
    purchase and finance tax-exempt bonds and other assets, STEP
    certificates, tender option bond program certificates and
    interests in other structured credit entities, and in connection
    with the sale and commitment to sell such assets;
(16) selecting broker-dealers to effect transactions on our
    behalf;
(17) monitoring the operating performance of our assets and
    providing periodic reports with respect thereto to our board of
    directors, including comparative information with respect to
    such operating performance and budgeted or projected operating
    results;
(18) investing and reinvesting any money and securities of
    ours (including investing in short-term investments pending the
    acquisition of other assets, payment of fees, costs and
    expenses, or payments of dividends or distributions to our
    shareholders as such dividends or distributions may be
    authorized or approved by our board of directors), and advising
    us as to our capital structure and capital raising;
(19) causing us to retain qualified accountants (subject to
    approval of the audit committee of our board of directors) and
    legal counsel, as applicable, to assist in developing
    appropriate accounting procedures, compliance procedures and
    testing systems with respect to financial reporting obligations
    and compliance with the Code and to conduct quarterly compliance
    reviews with respect thereto;
(20) causing us to qualify to do business in all applicable
    jurisdictions and to obtain and maintain all appropriate
    licenses;
(21) assisting us in complying with all regulatory
    requirements applicable to us in respect of our business
    activities, including preparing or causing to be prepared all
    financial statements required under applicable regulations and
    contractual undertakings and all reports and documents, if any,
    required under the Exchange Act;
(22) taking all necessary actions to enable us to make
    required tax filings and reports;
(23) handling and resolving all claims, disputes or
    controversies (including all litigation, arbitration, settlement
    or other proceedings or negotiations) in which we may be
    involved or to which we may be
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subject arising out of our
day-to-day
operations, subject to such limitations or parameters as may be
    imposed from time to time by the board of directors;
(24) using commercially reasonable efforts to cause
    expenses incurred by or on our behalf to be commercially
    reasonable or commercially customary and within any budgeted
    parameters or expense guidelines set by our board of directors
    from time to time;
(25) advising us with respect to obtaining appropriate
    warehouse or other financings for our assets;
(26) advising us with respect to and structuring long-term
    financing vehicles for our portfolio of assets, and offering and
    selling securities publicly or privately in connection with any
    such structured financing;
(27) performing such other services as may be required from
    time to time for management and other activities relating to us
    and our assets as our board of directors shall reasonably
    request or our manager or our board of directors shall deem
    appropriate under the particular circumstances; and
(28) using commercially reasonable efforts to cause us to
    comply with all applicable laws.
Limitation
    of Liability
Pursuant to the Management Agreement, our manager has not
    assumed any responsibility other than to render the services
    called for thereunder in good faith and will not be responsible
    for any action of our board of directors in following or
    declining to follow our manager's advice or
    recommendations. Our manager and its members, managers,
    officers, directors, employees and affiliates will not be liable
    to us, any of our subsidiaries, our directors, our shareholders
    or any shareholders or partners of our subsidiaries for acts
    performed in accordance with and pursuant to the Management
    Agreement, except by reason of acts constituting bad faith,
    willful misconduct, gross negligence or reckless disregard of
    their duties under the Management Agreement. We have agreed to
    indemnify our manager and its members, and their respective
    managers, officers, directors, employees and affiliates and each
    person controlling our manager with respect to all expenses,
    losses, damages, liabilities, demands, charges and claims
    arising from acts of such indemnified party not constituting bad
    faith, willful misconduct, gross negligence or reckless
    disregard of duties, performed in good faith in accordance with
    and pursuant to the Management Agreement. Our manager has agreed
    to indemnify us, our shareholders, directors, officers,
    employees and each other person, if any, controlling us with
    respect to all expenses, losses, damages, liabilities, demands,
    charges and claims arising from acts of our manager constituting
    bad faith, willful misconduct, gross negligence or reckless
    disregard of its duties under the Management Agreement. As
    required by the Management Agreement, our manager carries errors
    and omissions insurance.
Term
    and Termination
The initial term of the Management Agreement expires on
    December 31, 2010, and shall be automatically renewed for a
    one-year term on each anniversary date thereafter unless
    terminated as described below. Our independent directors will
    review our manager's performance annually and, following
    the initial term, the Management Agreement may be terminated
    annually (upon 180 days' notice) upon the affirmative
    vote of at least two-thirds of our independent directors, or by
    a vote of the holders of a majority of our outstanding common
    shares, based upon (i) unsatisfactory performance that is
    materially detrimental to us or (ii) a determination that
    the management fee payable to our manager is not fair, subject
    to our manager's right to prevent such a termination
    pursuant to clause (ii) by accepting a reduction of the
    management fee agreed to by at least two-thirds of our
    independent directors and our manager. We must provide
    180 days' prior notice of any such termination and our
    manager will be paid a termination fee equal to three times the
    average annual base management fee for the two
12-month
periods preceding the date of termination, calculated as of the
    end of the most recently completed fiscal quarter prior to the
    date of termination (and annualized for any partial year), which
    may make it costly and difficult for us to terminate the
    Management Agreement. In addition, we will be required to redeem
    the Performance Share held by our manager for a price equal to
    three
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times the average annual distributions paid in respect of such
    Performance Share for the two
12-month
periods immediately preceding the date of termination.
We may also terminate the Management Agreement without payment
    of the termination fee with 30 days' prior written
    notice for cause, which is defined as (i) our
    manager's continued material breach of any provision of the
    Management Agreement following a period of 30 days after
    written notice thereof, (ii) our manager's engagement
    in any act of fraud, misappropriation of funds or embezzlement
    against us, (iii) our manager's gross negligence,
    willful misconduct or reckless disregard in the performance of
    its duties under the Management Agreement, (iv) the
    commencement of any proceeding relating to our manager's or
    Tricadia's bankruptcy, insolvency, dissolution, or similar
    matters that is not withdrawn within 60 days, (v) the
    entry of a court order or decree respecting our manager's
    or Tricadia's bankruptcy or insolvency, or our manager or
    Tricadia ceasing to pay its debts as they become due or making a
    general assignment for its creditors or (vi) a change of
    control (as defined in the Management Agreement), other than
    certain permitted changes of control, of our manager or
    Tricadia. Cause does not include unsatisfactory performance,
    even if that performance is materially detrimental to our
    business. Our manager may terminate the Management Agreement,
    without payment of the termination fee, in the event we become
    regulated as an investment company under the Investment Company
    Act. Furthermore, our manager may decline to renew the
    Management Agreement for any reason by providing us with
    180 days' written notice. Our manager may also
    terminate the Management Agreement upon 60 days'
    written notice if we default in the performance of any material
    term of the Management Agreement and the default continues for a
    period of 30 days after written notice to us, whereupon we
    would be required to pay our manager a termination fee.
Management
    Fee
We do not employ personnel and therefore rely on the resources
    of our manager to conduct our operations. Our manager uses the
    proceeds from its management fee in part to pay compensation to
    its officers and employees who, notwithstanding that certain of
    them also are our officers, receive no cash compensation
    directly from us.
Base
    Management Fee
We pay our manager a base management fee, or Base Management
    Fee, monthly in arrears in an amount equal to 1/12 of our equity
    multiplied by 1.50%. We believe that the Base Management Fee is
    comparable to the base management fee received by the managers
    of comparable externally managed specialty finance companies.
For purposes of calculating the Base Management Fee, our
    "equity" means, for any month, the sum of the net
    proceeds from any issuance of our common shares, after deducting
    any underwriting or initial purchaser's discounts and
    commissions or placement fees and other expenses and costs
    relating to the issuance, plus (or minus) our retained earnings
    (or deficit) at the end of such month (without taking into
    account any non-cash equity compensation expense incurred in
    current or prior periods), which amount shall be reduced by any
    amount that we pay for the repurchases of our common shares. The
    foregoing calculation of the Base Management Fee will be
    adjusted to exclude one-time events pursuant to changes in
    U.S. GAAP, as well as non-cash charges, after discussion
    between our manager and our independent directors and approval
    by a majority of our independent directors in the case of
    non-cash charges.
The Base Management Fee is required to be calculated by our
    manager within 15 business days after the end of each month and
    such calculation is required to be promptly delivered to us. We
    are obligated to pay the Base Management Fee within 20 business
    days after the end of each month.
The Management Agreement provides that the Base Management Fee
    payable to our manager for any fiscal year will be reduced, but
    not below zero, by our proportionate share of the amount of any
    STEP and other structured credit portfolio management fees that
    are paid to our manager for such year by the STEP and other
    structured credit entities in which we acquire invest, based on
    the percentage of the most junior class of certificates we hold
    in such STEP and other structured credit entities. Any other
    fees paid to our manager and its affiliates will not reduce the
    amount of fees we pay under the Management Agreement.
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Performance
    Share
We have awarded our manager a Performance Share in our company
    that represents a special limited liability company interest
    that entitles our manager to a special allocation of our profits
    and cash distributions if we exceed a specified performance
    threshold. The Performance Share entitles our manager to an
    allocation of profits and cash distributions, payable quarterly
    in arrears, in an amount equal to the product of: (i) 20%
    of the dollar amount by which (a) our consolidated net
    income, before distributions on the Performance Share, per
    weighted average common share for such quarter, exceeds
    (b) an amount equal to the product of (1) the weighted
    average of the prices per share of our common shares in any
    equity offerings by us, including this offering, multiplied by
    (2) the greater of (A) 2.0% and (B) 0.75% plus
    one-fourth of the ten-year MMD Index (a benchmark index
    customarily used in pricing municipal bonds) for such quarter
    multiplied by (ii) the weighted average number of common
    shares outstanding in such quarter. The foregoing calculation
    will be adjusted to exclude one-time events pursuant to changes
    in U.S. GAAP, as well as non-cash charges, after approval
    by a majority of our independent directors in the case of
    non-cash charges. "Net income" is determined by
    calculating the net income available to owners of common shares
    before non-cash equity compensation expense, each computed in
    accordance with U.S. GAAP. As consideration for the
    acquisition of the right to manage the company from the Former
    Manager, our manager will, beginning on March 18, 2012 and
    until March 18, 2022, remit to the former manager payments
    in respect of our manager's revenue in excess of
    $1 million (including the above-discussed Performance
    Share, and less certain adjustments).
We have from time to time issued common shares to our manager in
    lieu of making cash distributions owed to our manager as
    described above. Our manager has from time to time compensated
    our executive officers with common shares it received from us as
    described above.
Reimbursement
    of Expenses
Although our manager's employees perform certain legal,
    accounting, due diligence tasks and other services that outside
    professionals or outside consultants otherwise would perform,
    our manager will not be paid or reimbursed for the time required
    in performing such tasks.
We will pay all operating expenses, except those specifically
    required to be borne by our manager under the Management
    Agreement. The expenses required to be paid by us include, but
    are not limited to: transaction costs incident to the
    acquisition, disposition and financing of our assets; legal,
    tax, accounting, consulting, administrative and other similar
    service fees and expenses; the compensation and expenses of our
    directors; the cost of directors' and officers'
    liability insurance; the costs associated with the establishment
    and maintenance of any credit facilities, tender option bond
    programs and other financing arrangements and other indebtedness
    of ours (including commitment fees, accounting fees, legal fees,
    closing and other costs); expenses associated with other
    securities offerings of our company; expenses relating to making
    distributions to our shareholders; the costs of printing and
    mailing proxies and reports to our shareholders; costs
    associated with any computer software or hardware, electronic
    equipment or purchased information technology services from
    third party vendors that is used solely for us; costs incurred
    by employees and agents of our manager and its affiliates for
    travel on our behalf; costs and expenses incurred with respect
    to market information systems and publications, research
    publications and materials; settlement, clearing and custodial
    fees and expenses; expenses of our transfer agent; the costs of
    maintaining compliance with all federal, state and local rules
    and regulations or any other regulatory agency; all taxes and
    license fees; and all insurance costs incurred by us or on our
    behalf. In addition, we will be required to pay our
pro rata
portion of rent, telephone, utilities, office furniture,
    equipment, machinery and other office, internal and overhead
    expenses of our manager and its affiliates required for our
    operations. Except as noted above, our manager is responsible
    for all costs incident to the performance of its duties under
    the Management Agreement, including compensation of our
    manager's employees and other related expenses.
Conflicts
    of Interest
The Company is subject to certain conflicts of interest relating
    to Tricadia and its affiliates, including our manager. See
    "Risk Factors — Risks Relating to Our Management
    and Our Relationship with Our Manager" and
    "Business — Competition"
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PRINCIPAL
    SHAREHOLDERS
The following table sets forth information regarding beneficial
    ownership of our common shares by:
•
each person who is known by us to beneficially own 5% or more of
    the outstanding common shares;
•
each of our named executive officers;
•
each of our directors; and
•
all executive officers and directors as a group.
As of the date of this prospectus, we
    have          
    Class A common shares
    and          Class B
    common shares outstanding, including 281,458 restricted common
    shares issued under our 2007 Equity Incentive Plan and one
    Performance Share held by Muni Capital Management. The amounts
    and percentage of common shares beneficially owned are reported
    on the basis of regulations of the SEC governing the
    determination of beneficial ownership of securities. Under these
    rules, a person is deemed to be a "beneficial owner"
    of a security if that person has or shares "voting
    power," which includes the power to vote or to direct the
    voting of such security, or "investment power," which
    includes the power to dispose of or to direct the disposition of
    such security. A person is also deemed to be a beneficial owner
    of any securities of which that person has a right to acquire
    beneficial ownership within 60 days. Under these rules,
    more than one person may be deemed a beneficial owner of the
    same securities, and a person may be deemed to be a beneficial
    owner of securities as to which such person has no economic
    interest.
Unless otherwise indicated, we believe that all persons named in
    the table have sole voting and investment power with respect to
    all common shares beneficially owned by them.
Shares Beneficially Owned Prior to the
Offering(1)
%
Beneficial Ownership After the Offering(3)
%
Class A Common
Class B Common
Total
Class A Common
Class B Common
Total
Shares
Shares
Voting
Shares
Shares
Voting
Name and Address of Beneficial Owner(2)
Shares
%
Shares
%
Power
Shares
%
Shares
%
Power
Tiptree Financial Partners, L.P.
—
—
27,617,687
73.81
%
73.81
%
Michael Barnes(4)
—
—
1,304,546
3.49
%
3.31
%
Geoffrey Kauffman
—
—
200,000
0.53
%
0.53
%
Christopher Conley
—
—
92,500
0.25
%
0.25
%
Julia Wyatt
—
—
10,188
0.03
%
0.03
%
Daniel G. Cohen(5)
—
—
150,000
0.40
%
0.40
%
Andrew Gordon(6)
—
—
15,000
0.04
%
0.04
%
Thomas J. Reilly, Jr.(7)
—
—
22,500
0.06
%
0.06
%
All executive officers and directors as a group (7 individuals)
—
—
1,729,051
4.62
%
4.62
%
*
Less than 1%
(1)
Percentage of total voting power represents combined voting
    power with respect to all of our Class A common shares and
    Class B common shares. Each holder of a Class B common
    share will be entitled to ten votes per share of a Class B
    common share and each holder of a Class A common share will
    be entitled to one vote per share of a Class A common
    share, in each case on all matters submitted to our shareholders
    for a vote. The holder of the Class A common shares and the
    Class B common shares vote together as a single class on
    all matters submitted to a vote of our shareholders, except as
    may otherwise be required by law. Each Class B common share
    is convertible at any time into one Class A common share.
    See "Description of Securities."
(2)
Unless otherwise indicated, the business address of each of the
    beneficial owners is 780 Third Avenue, 29th Floor, New York, New
    York 10017. Each beneficial owner directly holds such
    person's common shares.
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(3)
Assumes the sale
    of          
    Class A common shares in this offering, but not the
    exercise of the underwriters' over-allotment option.
(4)
Includes (i) 1,238,863 Class B common shares, or 3.31%
    of the issued and outstanding Class B common shares as of
    the date hereof, beneficially owned by Michael Barnes and
    (ii) 65,683 Class B common shares, or 0.18% of the
    issued and outstanding Class B common shares as of the date
    hereof, owned by the JC Family Trust under agreement dated
    February 3, 2009, for which Michael Barnes' children
    are primary beneficiaries.
(5)
The business address of Daniel G. Cohen is
c/o Taberna
Capital, 450 Park Avenue, 11th Floor, New York, New York 10022.
(6)
Includes 2,500 vested Class B common shares and 12,500
    unvested Class B common shares. The business address of
    Andrew Gordon is
c/o GFA
LLC, 205 Third Avenue, 19th Floor, New York, New York 10003.
(7)
Includes 15,000 vested Class B common shares and 7,500
    unvested Class B common shares. The business address of
    Thomas J. Reilly, Jr. is 3910 Dempsey Lane, Huntingdon Valley,
    Pennsylvania 19006.
CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS
Management
    Agreement
As previously described, we are managed by Muni Capital
    Management under the Management Agreement, pursuant to which,
    among other things, Muni Capital Management receives a base fee,
    is eligible to receive an incentive allocation and is entitled
    to the reimbursement of certain expenses. See
    "Management — The Management Agreement" for
    more information concerning the terms of the Management
    Agreement and the management fees. Muni Capital Management is a
    wholly-owned subsidiary of Tricadia Holdings. Tricadia Holdings
    also wholly-owns Tiptree Capital, the manager of Tiptree, which
    owns approximately 73.81% of our outstanding Class B common
    shares, representing      % of our
    combined voting power immediately after this offering, and may
    purchase Class A common shares pursuant to this offering.
Indemnification
    Agreements
We have entered into indemnification agreements with our
    directors and officers that obligate us to indemnify them to the
    maximum extent permitted by Delaware law and pay such
    persons' expenses in defending any civil or criminal
    proceedings in advance of final disposition of such proceeding.
Tiptree
    Tender Offer and Company Rights Offering
On May 12, 2009, Tiptree commenced a tender offer to
    purchase all of our outstanding common shares for the purchase
    price of $1.00 per share. The tender offer expired on
    June 19, 2009. Tiptree purchased 2,443,550 common shares
    through the tender offer.
Also on May 12, 2009, we issued subscription rights to the
    then holders of our common shares and LTIP shares to purchase up
    to an aggregate of 18,116,964 new common shares at the price of
    $1.20 per share. We completed the rights offering on
    June 26, 2009, issuing 18,116,964 new common shares and
    raising $21.7 million before taking into account the
    expenses of the offering. We used the net proceeds from the
    rights offering for working capital and general corporate
    purposes. Tiptree purchased 14,901,307 common shares in
    connection with the rights offering. As of December 31,
    2009, all outstanding LTIP shares were converted to common
    shares.
Registration
    Rights
Upon the consummation of this offering, we intend to enter into
    a registration rights agreement with Tiptree pursuant to which
    Tiptree will have certain demand and piggyback registration
    rights.
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Interest
    Rate Swap
On July 14, 2009, we entered into an interest rate swap for
    the purpose of hedging portfolio-wide interest rate risk with
    Tiptree, as a
"back-to-back"
swap with Morgan Stanley Capital Services Inc. Twice each year,
    on January 16 and July 16, beginning on January 16,
    2010 and continuing through July 16, 2019, we will pay to
    Tiptree, as the swap counterparty (and Tiptree will remit to
    Morgan Stanley), a fixed rate of 3.6475% based on a notional
    amount of $5,000,000, and four times each year, on
    January 16, April 16, July 16 and October 16,
    beginning on October 16, 2009 and continuing through
    July 16, 2019, the swap counterparty will pay to us an
    amount equal to a floating rate of three-month LIBOR based on
    the notional amount. As of April 19, 2010, we have paid
    $365,959 in an aggregate amount to the swap counterparty (with
    $277,000 consisting of margin payments and $88,959 consisting of
    interest payments) and received swap interest payments in an
    aggregate amount of $9, 593 from the swap counterparty pursuant
    to the interest rate swap. All amounts we paid to Tiptree
    pursuant to the interest rate swap were thereafter remitted by
    Tiptree to Morgan Stanley.
DESCRIPTION
    OF SECURITIES
The following is a summary description of our common shares,
    certain provisions of Delaware law and certain provisions of our
    certificate of formation, operating agreement and bylaws.
    Because it is only a summary, it may not contain all the
    information that is important to you. For a description you
    should refer to our certificate of formation, operating
    agreement and bylaws, which are filed as exhibits to the
    registration statement of which this prospectus is a part, and
    to the applicable provisions of the Delaware LLC Act.
General
Immediately prior to this offering, we will effect a
    recapitalization to convert all of our outstanding common shares
    into newly designated Class B common shares on a
one-for-five
basis. After giving effect to the recapitalization, we will have
    outstanding no Class A common shares and
    37,416,669 shares of our Class B common shares. All
    shares to be sold in this offering will be Class A common
    shares.
Our operating agreement provides that our board of directors
    (without any further vote or action by our shareholders) may
    cause us to issue an unlimited amount of common shares, an
    unlimited amount of LTIP shares, one Performance Share and an
    unlimited amount of preferred shares.
Upon consummation of this offering, there will
    be          
    Class A common shares, assuming no exercise of the
    underwriters' option to purchase up to an
    additional          Class A
    common shares, 37,416,669 Class B common
    shares,          restricted
    common shares, one Performance Share, no LTIP shares and no
    preferred shares outstanding.
Common
    Shares
Each Class A common share is equivalent to a Class B
    common share for purposes of economic rights. Our operating
    agreement provides that each Class B common share is
    convertible at any time, at the option of the holder, into one
    Class A common share. Our Class A common shares are
    not convertible into any other shares.
Upon consummation of this offering and payment in full of the
    consideration payable with respect to the Class A common
    shares, the holders of such shares shall not be liable to us to
    make any additional capital contributions with respect to such
    shares, except to the extent that a shareholder receives a
    distribution in violation of the Delaware LLC Act. See
    "— Limited Liability."
No holder of common shares will be entitled to preemptive,
    redemption or conversion rights, sinking fund or cumulative
    voting rights.
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Voting
    Rights
The holders of our Class A common shares and Class B
    common shares have identical voting rights except that each
    Class A common share, which will be the only class of
    shares publicly traded, is entitled to one vote per share while
    each Class B common share is entitled to 10 votes per
    share, in each case on all matters submitted to a vote of our
    shareholders. Generally, except with respect to extraordinary
    corporate transactions, certain amendments to our operating
    agreement, liquidation and the election and removal of
    directors, all matters to be voted on by our shareholders must
    be approved by a majority (or, in the case of election of
    directors, by a plurality) of the votes cast by all common
    shares present in person or represented by proxy. Extraordinary
    corporate transactions, liquidation and the removal of directors
    for cause must be approved by at least a majority of the votes
    entitled to be cast by our shareholders generally in the
    election of directors. See "— Amendment of Our
    Operating Agreement and Bylaws" for a discussion of
    approval rights with regard to such amendments.
Dividend
    Rights
Holders of Class A common shares and Class B common
    shares will share ratably (based on the number of common shares
    held) in any dividend declared by our board of directors out of
    funds legally available therefor, subject to any statutory or
    contractual restrictions on the payment of dividends, the
    dividend rights of the Performance Share and to any restrictions
    on the payment of dividends imposed by the terms of any
    preferred shares we may issue in the future.
Liquidation
    Rights
Upon our dissolution, liquidation or winding up, after payment
    in full of all amounts required to be paid to creditors and to
    the holders of preferred shares having liquidation preferences,
    if any, the holders of our Class A common shares and
    Class B common shares will be entitled to receive our
    remaining assets available for distribution ratably in
    accordance with and to the extent of positive balances in their
    respective capital accounts after taking into account certain
    adjustments.
Other
    Matters
In the event of our merger or consolidation with or into another
    entity in connection with which our common shares are converted
    into or exchangeable for shares of stock, other securities or
    property (including cash), all holders of common shares will
    thereafter be entitled to receive the same kind and amount of
    shares of stock and other securities and property (including
    cash). Under our operating agreement, in the event of an
    inadvertent partnership termination in which the IRS has granted
    us limited relief, each holder of our common shares also is
    obligated to make such adjustments as are required by the IRS to
    maintain our status as a partnership.
LTIP
    Shares
LTIP shares are a special class of limited liability company
    interest in our company. The rights of holders of LTIP shares
    are subject to our operating agreement. As of December 31,
    2009, all outstanding LTIP shares were converted to common
    shares.
Dividend,
    Liquidation and Conversion Rights
Quarterly cash distributions on each LTIP share, whether vested
    or not, will be the same as those made on our common shares.
    LTIP shares have full parity with our common shares with respect
    to the payment of regular and special periodic or other
    distributions and distribution of assets upon liquidation,
    dissolution or winding up. Under the terms of the LTIP shares,
    each LTIP share shall be revalued to maintain parity with our
    common shares upon the occurrence of certain adjustment events.
    These events consist of: (i) a distribution by us on all
    outstanding common shares in equity securities, (ii) a
    subdivision of our outstanding common shares into a greater or
    smaller number of equity securities or (iii) the
    reclassification or recapitalization of our outstanding common
    shares. Upon the occurrence of one of these adjustment events,
    any increase in valuation
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from the time of grant until such event will be allocated first
    to the holders of the LTIP shares to equalize the capital
    accounts of each LTIP share with the capital account of a common
    share to reflect a
one-to-one
correspondence between the LTIP shares and the common shares.
    Upon equalization of the capital accounts, the LTIP shares will
    achieve full parity with the common shares for all purposes,
    including with respect to subsequent allocations and
    distributions, including, to the extent vested, liquidating
    distributions. If such parity is reached, vested LTIP shares may
    be converted into an equal number of common shares, and may
    thereafter enjoy all the rights of common shares. Until and
    unless such parity is reached, the value that will be realized
    upon a liquidation of our company for a given number of vested
    LTIP shares will be less than the value of an equal number of
    our common shares.
Voting
    Rights
The holders of LTIP shares have the same voting rights as a
    holder of common shares, as well as certain additional voting
    rights with respect to certain amendments to the operating
    agreement that will affect them adversely as a class, unless the
    holders of common shares are similarly affected by such
    amendment.
Performance
    Share
The Performance Share held by our manager is a special limited
    liability company interest in our company. No further
    Performance Share will be authorized for issuance to our
    manager, although we may issue Performance Shares to a successor
    manager, if any.
A holder of a Performance Share may not transfer any of its
    rights with respect to the Performance Share without the consent
    of our board of directors, which consent the board may withhold
    in its sole discretion. However, no consent of the board is
    required for a transfer or assignment by our manager of its
    Performance Share or the right to receive distributions pursuant
    to its Performance Share to its affiliates.
Dividend
    Rights
The Performance Share will entitle our manager to an allocation
    of profits, and cash distributions payable quarterly in arrears,
    in an amount, not less than zero, equal to the product of:
    (i) 20% of the dollar amount by which (a) our
    consolidated net income, before distributions on the Performance
    Share, per weighted average common share for such quarter,
    exceeds (b) an amount equal to the product of (A) the
    weighted average of the prices per share of our common shares in
    any equity offerings by us, including this offering, multiplied
    by (B) the greater of (1) 2.0% and (2) 0.75% plus
    one-fourth of the ten-year MMD index for such quarter,
    multiplied by (ii) the weighted average number of common
    shares outstanding in such quarter. To the extent distributions
    are payable on the Performance Share, those distributions shall
    have a priority over the payment of dividends on our common
    shares. The foregoing calculation shall be adjusted to exclude
    one-time events pursuant to changes in U.S. GAAP, as well
    as non-cash charges, after approval by a majority of our
    independent directors in the case of non-cash charges. "Net
    income" is determined by calculating the net income
    available to owners of common shares before non-cash equity
    compensation expense, each computed in accordance with
    U.S. GAAP. As consideration for the acquisition of the
    right to manage our company from the Former Manager, our manager
    will, beginning on March 18, 2012 and until March 18,
    2022, remit to the former manager payments in respect of our
    manager's revenue in excess of $1 million (including
    the above-discussed Performance Share, and less certain
    adjustments).
Voting
    Rights
The Performance Share will generally not be entitled to vote on
    matters submitted to our shareholders, except with respect to
    certain amendments to the operating agreement that will affect
    it adversely as a class.
Redemption
If we terminate the Management Agreement without cause or as a
    result of a non-renewal by us of the Management Agreement or if
    our manager terminates the Management Agreement due to our
    default, we are required to redeem the Performance Share held by
    our manager for an amount equal to three times the average
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annual distributions paid in respect of such Performance Share
    for the two
12-month
periods immediately preceding the date of termination.
Preferred
    Shares
Under our operating agreement, our board of directors (without
    any further vote or action by our shareholders) is authorized to
    provide for the issuance from time to time of an unlimited
    amount of one or more classes or series of preferred shares.
    Unless required by law or by any stock exchange, if applicable,
    any such authorized preferred shares will be available for
    issuance without further action by our common shareholders. Our
    board of directors is authorized to fix the number of shares,
    the relative powers, preferences and rights, and the
    qualifications, limitations or restrictions applicable to each
    class or series thereof by resolution authorizing the issuance
    of such class or series. As of the date of this prospectus, no
    preferred shares are outstanding and we have no current plans to
    issue any preferred shares.
We could issue a series of preferred shares that could,
    depending on the terms of the series, impede or discourage an
    acquisition attempt or other transaction that some, or a
    majority, of holders of common shares might believe to be in
    their best interests or in which holders of common shares might
    receive a premium for their common shares.
Transfer
    Agent and Registrar
The transfer agent and registrar for our Class A common
    shares is American Stock Transfer &
    Trust Company, LLC.
Listing
We intend to apply to have our common shares listed on The
    Nasdaq Stock Market LLC under the symbol
    ''          ".
    We cannot assure you that our Class A common shares will
    be, or will continue to be, listed on The Nasdaq Stock Market
    LLC.
Operating
    Agreement and Bylaws
Organization
    and Duration
We were formed on April 23, 2007, and will remain in
    existence until dissolved in accordance with our operating
    agreement. See "— Termination and
    Dissolution."
Purpose
Under our operating agreement, we are permitted to engage in any
    business activity that lawfully may be conducted by a limited
    liability company organized under Delaware law and, in
    connection therewith, to exercise all of the rights and powers
    conferred upon us pursuant to the operating agreement relating
    to such business activity; provided, however, that, except if
    our board of directors determines that it is no longer in our
    best interests, our management shall not cause us to engage,
    directly or indirectly, in any business activity that our board
    of directors determines would cause us to be treated as an
    association taxable as a corporation or otherwise taxable as an
    entity for U.S. federal income tax purposes.
Agreement
    to be Bound by our Operating Agreement; Power of
    Attorney
By purchasing a Class A common share, you will be admitted
    as a member of our limited liability company and will be bound
    by the provisions of, and deemed to be a party to, our operating
    agreement. Pursuant to this agreement, each shareholder and each
    person who acquires a common share from a shareholder grants to
    our chief executive officer and our secretary a power of
    attorney to, among other things, execute and file documents
    required for our qualification, continuance or dissolution. The
    power of attorney also grants our chief executive officer and
    our secretary the authority to make certain amendments to, and
    to execute and deliver such other documents as may be necessary
    or appropriate to carry out the provisions or purposes of, our
    operating agreement.
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Duties
    of Officers and Directors
Our operating agreement provides that, except as may otherwise
    be provided by the operating agreement or by our bylaws, our
    property, affairs and business shall be managed under the
    direction of our board of directors. Pursuant to our bylaws, our
    board of directors has the power to appoint our officers and
    such officers have the authority to exercise the powers and
    perform the duties specified in our bylaws or as may be
    specified by our board of directors. See "Management."
Our operating agreement further provides that the authority and
    function of our board of directors and officers shall be
    identical to the authority and functions of a board of directors
    and officers of a corporation organized under the Delaware
    General Corporation Law, or DGCL, except as expressly modified
    by the terms of the operating agreement. Finally, our operating
    agreement provides that except as specifically provided therein
    or as required by the Delaware LLC Act, the fiduciary duties and
    obligations owed to our members shall be the same as the
    respective duties and obligations owed by officers and directors
    of a corporation organized under the DGCL to their corporation
    and shareholders, respectively.
Our operating agreement does not expressly modify the duties and
    obligations owed by officers and directors under the DGCL.
    However, there are certain provisions in our operating agreement
    regarding exculpation and indemnification of our officers and
    directors that differ from the DGCL. First, our operating
    agreement provides that to the fullest extent permitted by
    applicable law our directors or officers will not be liable to
    us. Under the DGCL, a director or officer would be liable to us
    for (i) breach of duty of loyalty to us or our
    shareholders, (ii) intentional misconduct or knowing
    violations of the law that are not done in good faith,
    (iii) improper redemption of shares or declaration of a
    dividend or (iv) a transaction from which the director
    derived an improper personal benefit.
Second, our operating agreement provides that we indemnify our
    directors and officers for acts or omissions to the fullest
    extent permitted by law. Under the DGCL, a corporation can only
    indemnify directors and officers for acts or omissions if the
    director or officer acted in good faith, in a manner he
    reasonably believed to be in the best interests of the
    corporation, and, in a criminal action, if the officer or
    director had no reasonable cause to believe his conduct was
    unlawful. See "Limitations on Liability and Indemnification
    of Our Directors and Officers."
Size
    and Election of Board of Directors
Our operating agreement and bylaws provide that the number of
    directors may be established, increased or decreased by our
    board of directors but may not be fewer than one. Our operating
    agreement and bylaws currently provide that our directors will
    be elected at each annual meeting of shareholders to serve until
    the next annual meeting of shareholders and until their
    successors are duly elected and qualify. Except as may be
    provided by the board of directors in setting the terms of any
    class or series of preferred shares, any and all vacancies on
    the board of directors may be filled only by the affirmative
    vote of a majority of the remaining directors in office, even if
    the remaining directors do not constitute a quorum, and any
    director elected to fill a vacancy shall serve for the remainder
    of the full term of the directorship in which such vacancy
    occurred and until a successor is elected and qualifies.
Removal
    of Members of Our Board of Directors
Our operating agreement provides that a director may be removed,
    but only for cause, by the affirmative vote of at least a
    majority of the votes entitled to be cast by our shareholders
    generally in the election of our directors.
Special
    Meetings of Shareholders; Advance Notice of Director Nominations
    and New Business
Our bylaws provide that special meetings of shareholders may be
    called by our board of directors, the chairman of our board, our
    chief executive officer or president. Additionally, our bylaws
    provide that, subject to the satisfaction of certain procedural
    and information requirements by the shareholders requesting the
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meeting, a special meeting of shareholders must be called by our
    secretary upon the written request of shareholders entitled to
    cast not less than a majority of all the votes entitled to be
    cast at such meeting.
Our bylaws provide that with respect to an annual meeting of
    shareholders, nominations of persons for election to our board
    of directors and the proposal of business to be considered by
    shareholders may be made only (i) pursuant to our notice of
    the meeting, (ii) by or at the direction of our board of
    directors, or (iii) by any shareholder who is entitled to
    vote at the meeting and has complied with the advance notice
    procedures set forth in our bylaws. Our bylaws provide that,
    with respect to special meetings of our shareholders, only the
    business specified in our notice of meeting may be brought
    before the meeting, and nominations of persons for election to
    our board of directors may be made only (a) pursuant to our
    notice of the meeting, (b) by or at the direction of our
    board of directors, or (c) provided that our board of
    directors has determined that directors shall be elected at the
    meeting, by any shareholder who is entitled to vote at the
    meeting and has complied with the advance notice procedures set
    forth in our bylaws.
The purpose of requiring shareholders to give advance notice of
    nominations and other proposals is to afford our board of
    directors the opportunity to consider the qualifications of the
    proposed nominees or the advisability of the other proposals
    and, to the extent considered necessary by our board of
    directors, to inform shareholders and make recommendations
    regarding the nominations or other proposals. The advance notice
    procedures also permit a more orderly procedure for conducting
    our shareholder meetings.
Limited
    Liability
Section 18-607(c)
of the Delaware LLC Act provides that a member who receives a
    distribution from a Delaware limited liability company and knew
    at the time of the distribution that the liabilities of the
    company exceeded the fair value of its assets shall be liable to
    the company for the amount of the distribution for three years.
Section 18-607(a)
of the Delaware LLC Act provides that a limited liability
    company may not make a distribution to a member if, after the
    distribution, all liabilities of the company, other than
    liabilities to members on account of their shares and
    liabilities for which the recourse of creditors is limited to
    specific property of the company, would exceed the fair value of
    the assets of the company. For the purpose of determining the
    fair value of the assets of a company,
Section 18-607(a)
of the Delaware LLC Act provides that the fair value of property
    subject to liability for which recourse of creditors is limited
    shall be included in the assets of the company only to the
    extent that the fair value of that property exceeds the
    nonrecourse liability. Under
Section 18-704(b)
of the Delaware LLC Act, an assignee who becomes a substituted
    member of a company is liable for the obligations of his
    assignor to make contributions to the company, except the
    assignee is not obligated for liabilities unknown to him at the
    time the assignee became a member and that could not be
    ascertained from the operating agreement.
Limitations
    on Liability and Indemnification of Our Directors and
    Officers
Pursuant to our operating agreement, we have agreed to indemnify
    each of our directors and officers, to the fullest extent
    permitted by law, against all expenses and liabilities
    (including judgments, fines, penalties, interest, amounts paid
    in settlement with our approval and counsel fees and
    disbursements on a solicitor and client basis) arising from the
    performance of any of their obligations or duties in connection
    with their service to us or the operating agreement, including
    in connection with any civil, criminal, administrative,
    investigative or other action, suit or proceeding to which any
    such person may hereafter be made party by reason of being or
    having been one of our directors or officers.
Amendment
    of Our Operating Agreement and Bylaws
Amendments to our operating agreement may be proposed only by or
    with the consent of our board of directors. To adopt a proposed
    amendment, our board of directors is required to seek written
    approval of the holders of the number of shares required to
    approve the amendment or call a meeting of our shareholders to
    consider and vote upon the proposed amendment. Except as set
    forth below, an amendment must be approved by at least a
    majority of the votes entitled to be cast by our shareholders
    generally in the election of directors
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and, in general, to the extent that such amendment would have a
    material adverse effect on the holders of any class or series of
    shares, by the holders of a majority of the holders of such
    class or series.
Prohibited Amendments.
No amendment may be
    made that would:
•
increase the obligations of any shareholder without such
    shareholder's consent, unless approved by at least a
    majority of the type or class of shares so affected;
•
provide that we are not dissolved upon an election to dissolve
    our limited liability company by our board of directors that is
    approved by at least a majority of the votes entitled to be cast
    by our shareholders generally in the election of directors;
•
change the term of our existence; or
•
give any person the right to dissolve our limited liability
    company other than our board of directors' right to
    dissolve our limited liability company with the approval by at
    least a majority of the votes entitled to be cast by our
    shareholders generally in the election of directors.
The provision of our operating agreement preventing the
    amendments having the effects described in any of the clauses
    above can be amended upon the approval by at least two-thirds of
    the votes entitled to be cast by our shareholders generally in
    the election of directors.
No Shareholder Approval.
Our board of
    directors may generally make amendments to our operating
    agreement without the approval of any shareholder or assignee to
    reflect:
•
a change in our name, the location of our principal place of our
    business, our registered agent or our registered office;
•
the admission, substitution, withdrawal or removal of
    shareholders in accordance with our operating agreement;
•
the merger of our company or any of its subsidiaries into, or
    the conveyance of all of our assets to, a newly-formed entity if
    the sole purpose of that merger or conveyance is to effect a
    mere change in our legal form into another limited liability
    entity;
•
a change that our board of directors determines to be necessary
    or appropriate for us to qualify or continue our qualification
    as a company in which our members have limited liability under
    the laws of any state or to ensure that we will not be treated
    as an association taxable as a corporation or otherwise taxed as
    an entity for U.S. federal income tax purposes other than
    as we specifically so designate;
•
an amendment that our board of directors determines, based upon
    the advice of counsel, to be necessary or appropriate to prevent
    us, members of our board, or our officers, agents or trustees
    from in any manner being subjected to the provisions of the
    Investment Company Act, the Investment Advisers Act of 1940, or
    "plan asset" regulations adopted under the Employment
    Retirement Income Security Act, as amended, whether or not
    substantially similar to plan asset regulations currently
    applied or proposed;
•
an amendment that our board of directors determines to be
    necessary or appropriate for the authorization or issuance of
    additional securities;
•
any amendment expressly permitted in our operating agreement to
    be made by our board of directors acting alone;
•
an amendment effected, necessitated or contemplated by a merger
    agreement that has been approved under the terms of our
    operating agreement;
•
any amendment that our board of directors determines to be
    necessary or appropriate for the formation by us of, or our
    investment in, any corporation, partnership or other entity, as
    otherwise permitted by our operating agreement;
•
a change in our fiscal year or taxable year and related
    changes; and
•
any other amendments substantially similar to any of the matters
    described in the clauses above.
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In addition, our board of directors may make amendments to our
    operating agreement without the approval of any shareholder if
    our board of directors determines that those amendments:
•
do not adversely affect the shareholders (including any
    particular class or series of shares as compared to other
    classes or series of shares) in any material respect;
•
are necessary or appropriate to satisfy any requirements,
    conditions or guidelines contained in any opinion, directive,
    order, ruling or regulation of any federal or state agency or
    judicial authority or contained in any federal or state statute;
•
are necessary or appropriate to facilitate the trading of shares
    or to comply with any rule, regulation, guideline or requirement
    of any securities exchange on which the shares are or will be
    listed for trading, compliance with any of which our board of
    directors deems to be in the best interests of us and our
    shareholders;
•
are necessary or appropriate for any action taken by our board
    of directors relating to splits or combinations of shares under
    the provisions of our operating agreement; or
•
are required to effect the intent of the provisions of our
    operating agreement or are otherwise contemplated by our
    operating agreement.
Our bylaws provide that our board of directors has the exclusive
    power to adopt, alter or repeal the bylaws or make new bylaws.
Merger,
    Sale or Other Disposition of Assets
Our board of directors is generally prohibited, without the
    prior approval of at least a majority of the votes entitled to
    be cast by our shareholders generally in the election of
    directors, from causing us to, among other things, sell,
    exchange or otherwise dispose of all or substantially all of our
    assets in a single transaction or a series of related
    transactions, or approving on our behalf the sale, exchange or
    other disposition of all or substantially all of our assets,
    provided that our board of directors may mortgage, pledge,
    hypothecate or grant a security interest in all or substantially
    all of our assets without the approval of any shareholder. Our
    board of directors may also sell all or substantially all of our
    assets under a foreclosure or other realization upon the
    encumbrances above without that approval.
If the conditions specified in our operating agreement are
    satisfied, our board of directors may merge our company or any
    of its subsidiaries into, or convey all of our assets to, a
    newly-formed entity if the sole purpose of that merger or
    conveyance is to effect a mere change in our legal form into
    another limited liability entity, in each case without any
    approval of our shareholders. The shareholders are not entitled
    to dissenters' rights of appraisal under the operating
    agreement or applicable Delaware law in the event of a merger or
    consolidation, a sale of all or substantially all of our assets
    or any other similar transaction or event.
Termination
    and Dissolution
We will continue as a limited liability company until terminated
    under our operating agreement. We will dissolve upon:
    (i) the election of our board of directors to dissolve us,
    if approved by at least a majority of the votes entitled to be
    cast by our shareholders generally in the election of directors;
    (ii) the sale, exchange or other disposition of all or
    substantially all of our assets; (iii) the entry of a
    decree of judicial dissolution of our limited liability company;
    or (iv) at any time that we no longer have any
    shareholders, unless our business is continued in accordance
    with the Delaware LLC Act.
Tax
    Elections
Our operating agreement provides our board of directors with the
    power to decide whether to make various tax elections on behalf
    of our company. In this regard, if our board of directors
    determines that it is no longer in our best interests to
    continue as a partnership for U.S. federal income tax
    purposes, our board of directors may elect to treat us as an
    association or as a publicly traded partnership taxable as a
    corporation for U.S. federal (and applicable state) income
    tax purposes. See "Risk Factors — Tax Risks"
    for a discussion of certain risks to our classification as a
    publicly traded partnership not taxable as a corporation.
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Books
    and Reports
We are required to keep appropriate books of our business at our
    principal offices. The books will be maintained for both tax and
    financial reporting purposes or a basis that permits the
    preparation of financial statements in accordance with generally
    accepted accounting principals. For financial reporting purposes
    and tax purposes, our fiscal year and our tax year are the
    calendar year, unless otherwise determined by our board of
    directors in accordance with the Code. We have agreed to use
    reasonable efforts to furnish holders of Class A common
    shares with tax information (including
Schedule K-1)
as promptly as possible, which describes allocable share of our
    income, gain, loss and deduction for our preceding taxable year.
    In preparing this information, we will use various accounting
    and reporting conventions to determine their allocable share of
    income, gain, loss and deduction. Delivery of this information
    by us may be subject to delay as a result of the late receipt of
    any necessary tax information from an investment in which we
    hold an interest. It is therefore possible that, in any taxable
    year, our shareholders will need to apply for extensions of time
    to file their tax returns.
Potential
    Anti-Takeover Effects of Our Operating Agreement and
    Bylaws
The following is a summary of certain provisions of our
    operating agreement and bylaws that may be deemed to have an
    anti-takeover effect and may delay, deter or prevent a tender
    offer or takeover attempt that a shareholder might consider to
    be in its best interest, including those attempts that might
    result in a premium over the market price for the interests held
    by shareholders.
Authorization
    to Issue an Unlimited Number of Shares
Our operating agreement authorizes us to issue an unlimited
    number of shares for the consideration and on the terms and
    conditions established by our board of directors without the
    approval of any holders of our shares. Future issuances of
    shares or equity securities may be utilized for a variety of
    purposes, including future public offerings to raise additional
    capital, acquisitions and employee benefit plans. Our ability to
    issue additional shares and other equity securities could render
    more difficult or discourage an attempt to obtain control over
    us by means of a proxy contest, tender offer, merger or
    otherwise.
Dual
    class structure
Our Class B common shares have ten votes per share, while
    Class A common shares, which is the class of common shares
    being sold in this offering and which will be the only class of
    shares publicly traded, have one vote per share. After the
    offering, our manager, its officers and Tiptree, an affiliate of
    our manager, collectively will own 78.22% of the outstanding
    Class B common shares. Because of our dual class structure,
    our Class B shareholders will continue to be able to
    control all matters submitted to our shareholders for approval
    even if they come to own significantly less than 50% of the
    shares of our outstanding common shares. This concentrated
    control could discourage others from initiating any potential
    sale of all or substantially all of our assets, merger, or other
    change of control transaction that other shareholders may view
    as beneficial.
Delaware
    Business Combination Statute —
    Section 203
We are a limited liability company organized under Delaware law.
    Some provisions of Delaware law may delay or prevent a
    transaction that would cause a change in our control.
Section 203 of the DGCL, which restricts certain business
    combinations with interested shareholders in certain situations,
    does not apply to limited liability companies unless they elect
    to utilize it. Our operating agreement does not currently elect
    to have Section 203 of the DGCL apply to us. In general,
    this statute prohibits a publicly held Delaware corporation from
    engaging in a business combination with an interested
    shareholder for a period of three years after the date of the
    transaction by which that person became an interested
    shareholder, unless the business combination is approved in a
    prescribed manner. For purposes of Section 203, a business
    combination includes a merger, asset sale or other transaction
    resulting in a financial benefit to the interested shareholder,
    and an interested shareholder is a person who, together with
    affiliates and associates, owns, or within three years prior,
    did own, 15% or more of voting shares.
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Other
    Provisions of Our Operating Agreement and Bylaws
Certain other provisions of our operating agreement and bylaws
    may make a change in control of our company more difficult to
    effect. For example, the provision in our operating agreement
    regarding the removal of directors, when coupled with the
    provision in our bylaws authorizing our board of directors to
    fill vacant directorships, will preclude shareholders from
    removing incumbent directors and filling the vacancies created
    by such removal with their own nominees except upon a
    substantial affirmative vote. In addition, the advance notice
    provisions for shareholder nominations and proposals in our
    bylaws may also delay a change of control. Although the bylaws
    do not give our board of directors the power to disapprove
    timely shareholder nominations and proposals, they may have the
    effect of precluding a contest for the election of directors or
    proposals for other action if the proper procedures are not
    followed, and of discouraging or deterring a third party from
    conducting a solicitation of proxies to elect its own slate of
    directors to our board of directors or to approve its own
    proposal.
COMMON
    SHARES ELIGIBLE FOR FUTURE SALE
There currently is no public market for our Class A common
    shares. We cannot predict the effect, if any, that sales of
    Class A common shares or the availability of Class A
    common shares for sale will have on the market price of our
    common shares prevailing from time to time. Sales of substantial
    amounts of our Class A common shares in the public market,
    or the perception that such sales could occur, could adversely
    affect the prevailing market price of our Class A common
    shares. See "Risk Factors — Risks Related to this
    Offering." There currently is no public market for our
    Class A common shares, an active trading market may never
    develop and the market price of the Class A common shares
    may be volatile."
Upon the completion of this offering, a total
    of          
    common shares will be outstanding,
    including          
    Class A common shares and 37,416,669 Class B common
    shares, including 22,500 restricted common shares subject to a
    vesting period of three years from issuance. 7,500 of these
    restricted common shares vest and become transferable in each of
    2010, 2011 and 2012, subject to compliance with applicable
    securities laws.
    All          Class A
    common shares sold in this offering, plus any Class A
    common shares sold upon exercise of the underwriters'
    option to purchase additional shares, will be freely tradable in
    the public market without restriction or further registration
    under the Securities Act, except that any shares purchased by
    our affiliates, as that term is defined in Rule 144 under
    the Securities Act, may generally only be sold in compliance
    with the limitations of Rule 144, which is summarized below.
The
    remaining          
    common shares, consisting of all of our Class B shares,
    will be "restricted securities," as that term is
    defined in Rule 144. These restricted securities are
    eligible for public sale only if they are registered under the
    Securities Act or if they qualify for an exemption from
    registration under Rule 144 under the Securities Act, which
    is summarized below.
The SEC adopted amendments to Rule 144 effective on
    February 15, 2008 applicable to securities acquired both
    before and after that date. Under these amendments, if six
    months has elapsed since the date of acquisition of restricted
    common shares by persons who are not our affiliates at the time
    of, or at any time during the three months preceding, a sale,
    and we have been a public reporting partnership under the
    Exchange Act for at least three months before the sale, the
    holder of such restricted common shares will be entitled to
    freely sell the common shares.
Persons who have held our restricted common shares for at least
    six months but who are affiliates at the time of, or at any time
    during the three months preceding, a sale, and provided we have
    been a public reporting company under the Exchange Act for at
    least three months before the sale, will be entitled to sell
    common shares, but subject to an additional restriction
    requiring that the number of common shares sold by such persons
    within any three-month period does not exceed 1% of the total
    number of common shares then outstanding.
Sales under Rule 144 also may be subject to certain manner
    of sale provisions, notice requirements and the availability of
    current public information about us.
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UNITED
    STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
CIRCULAR 230 NOTICE
. THE FOLLOWING NOTICE IS BASED ON
    U.S. TREASURY REGULATIONS GOVERNING PRACTICE BEFORE THE
    U.S. INTERNAL REVENUE SERVICE: (1) ANY
    U.S. FEDERAL TAX ADVICE CONTAINED HEREIN, INCLUDING ANY
    OPINION OF COUNSEL REFERRED TO HEREIN, IS NOT INTENDED OR
    WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE
    PURPOSE OF AVOIDING U.S. FEDERAL TAX PENALTIES THAT MAY BE
    IMPOSED ON THE TAXPAYER; (2) ANY SUCH ADVICE IS WRITTEN TO
    SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS DESCRIBED
    HEREIN (OR IN ANY SUCH OPINION OF COUNSEL); AND (3) EACH
    TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER'S
    PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
The following is a general summary of certain U.S. federal
    income tax considerations relating to the acquisition, holding
    and disposition of our Class A common shares. For purposes
    of this section, under the heading "Certain
    U.S. Federal Income Tax Considerations," references to
    "we," "us" or "our" mean only Muni
    Funding Company of America, LLC and not our subsidiaries or
    other lower-tier entities, except as otherwise indicated. The
    following summary is based upon the Code, Treasury Regulations,
    current administrative interpretations and practices of the IRS
    (including administrative interpretations to and practices
    expressed in private letter rulings which are binding on the IRS
    only with respect to the particular taxpayers who requested and
    received these rulings) and judicial decisions, all as currently
    in effect and all of which are subject to differing
    interpretations or to change, possibly with retroactive effect.
    No assurance can be given that the IRS would not assert, or that
    a court would not sustain, a position contrary to any of the tax
    consequences described below. No advance ruling has been or will
    be sought from the IRS regarding the tax-exempt character of
    interest on our tax-exempt 501(c)(3) bonds or other investments,
    our classification as a partnership for U.S. federal income
    tax purposes or any other matter discussed in this summary. The
    summary is also based upon the assumption that our operation,
    and the operations of our subsidiaries and other lower-tier and
    affiliated entities, will, in each case, be in accordance with
    its applicable organizational documents and any representations
and/or
covenants to our tax advisors have been and will be complied
    with. This summary is for general information only, and does not
    purport to discuss all aspects of U.S. federal income
    taxation that may be important to a particular shareholder in
    light of its investment or tax circumstances or to shareholders
    subject to special tax rules, such as:
•
U.S. expatriates;
•
persons who
mark-to-market
our Class A common shares;
•
subchapter S corporations;
•
U.S. shareholders (as defined below) whose functional
    currency is not the U.S. dollar;
•
financial institutions;
•
insurance companies;
•
broker-dealers;
•
regulated investment companies;
•
real estate investment trusts;
•
trusts and estates;
•
holders who receive our shares through the exercise of employee
    share options or otherwise as compensation;
•
persons holding our Class A common shares as part of a
    "straddle," "hedge," "conversion
    transaction," "synthetic security," or other
    integrated investment;
•
persons subject to the alternative minimum tax provisions of the
    Code;
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•
persons holding their interest through a partnership or similar
    pass-through entity;
•
persons holding a 10% or more (by vote or value) beneficial
    interest in us;
•
tax-exempt organizations; and
•
non-U.S. shareholders
(as defined below).
If an entity or arrangement treated as a partnership for
    U.S. federal income tax purposes holds our shares, the
    U.S. federal income tax treatment of a partner in such
    partnership generally will depend upon the status of the partner
    and the activities of such partnership. A partner of a
    partnership holding our shares should consult its tax advisor
    regarding the U.S. federal income tax consequences to the
    partner of the acquisition, ownership and disposition of our
    shares by the partnership.
This summary assumes that shareholders will hold our
    Class A common shares as capital assets, which generally
    means as property held for investment.
For purposes of the following discussion, a
    U.S. shareholder is a shareholder that is (i) a
    citizen or resident of the United States, (ii) a
    corporation (or other entity taxable as a corporation) created
    or organized under the laws of the United States or any state
    thereof or the District of Columbia, (iii) an estate, the
    income of which is subject to U.S. federal income taxation
    regardless of its source, or (iv) a trust (a) the
    administration over which a U.S. court can exercise primary
    supervision and (b) all of the substantial decisions of
    which one or more U.S. persons have the authority to
    control. A
"non-U.S. shareholder"
is a person that is not a U.S. shareholder.
THE U.S. FEDERAL INCOME TAX TREATMENT OF OUR
    SHAREHOLDERS DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT
    AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL
    INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY IS
    AVAILABLE. IN ADDITION, THE TAX CONSEQUENCES OF HOLDING OUR
    SHARES TO ANY PARTICULAR SHAREHOLDER WILL DEPEND ON THE
    SHAREHOLDER'S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED
    TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL,
    STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES TO
    YOU, IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, OF ACQUIRING,
    HOLDING, AND DISPOSING OF OUR SHARES.
Partnership Classification.
We believe that we
    have operated, and intend to continue to operate as a
    partnership and not as an association or publicly traded
    partnership taxable as a corporation for U.S. federal
    income tax purposes. We have solely relied on the advice of a
    nationally recognized accounting firm in making this
    determination.
You should be aware that our determination of partnership status
    and any tax advice of external advisors are not binding on the
    IRS, and no assurance can be given that the IRS will not
    challenge our determination. Any advice we have received has
    also been based on various assumptions relating to our
    organization, operation, assets and activities, and that all
    factual representations and statements set forth in all relevant
    documents, records and instruments are true and correct, that
    all actions described in this prospectus will be completed in a
    timely fashion and that we will at all times operate in
    accordance with the method of operation described in our
    operating agreement and this prospectus, and is conditioned upon
    the factual representations and covenants that have been made by
    us, MFCA Funding Inc., and our former and current manager
    regarding our and MFCA Funding Inc.'s organization,
    operation, assets and activities (past, present and
    contemplated).
While we believe that we have operated and we intend to continue
    to operate so that we will qualify to be treated for
    U.S. federal income tax purposes as a partnership, and not
    as an association or a publicly traded partnership taxable as a
    corporation, given the highly complex nature of the rules
    governing partnerships, the ongoing importance of factual
    determinations, the lack of direct guidance with respect to the
    application of tax laws to the activities we are undertaking and
    the possibility of future changes in our circumstances, we
    cannot give any assurance that we have qualified or we will
    qualify as a partnership for any particular year. Our taxation
    as a partnership depends on our continuing ability to meet,
    through actual operating results, the "qualifying income
    exception" (as described below).
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Under Section 7704 of the Code, "publicly traded
    partnerships" are generally treated and taxed as
    corporations for U.S. federal income tax purposes. A
    publicly traded partnership is any partnership the interests in
    which are traded on an established securities market or which
    are readily tradable on a secondary market (or the substantial
    equivalent thereof). The listing of our shares on The NASDAQ
    Stock Market LLC causes us to be treated as a publicly traded
    partnership. However, if 90% or more of the income of a publicly
    traded partnership during each taxable year consists of
    "qualifying income" and the partnership is not
    registered under the Investment Company Act, it will be treated
    as a partnership, and not as an association or publicly traded
    partnership taxable as a corporation, for U.S. federal
    income tax purposes (the "qualifying income
    exception"). Qualifying income generally includes rents,
    dividends, interest and capital gains from the sale or other
    disposition of stocks, bonds and real property. In addition,
    qualifying income generally also includes income from a notional
    principal contract (such as a total return swap) if the income
    from the reference obligation would be qualifying income. In
    determining whether interest is treated as qualifying income for
    purposes of these rules, interest income derived from a
    "financial business" and income and gains derived by a
    "dealer" in securities are not treated as qualifying
    income.
We have taken the position that for purposes of determining
    whether we are engaged in a financial business, portfolio
    investing activities that we engage in will not cause us to be
    engaged in a financial business or to be considered a
    "dealer" in securities. However, there is no clear
    guidance as to what constitutes a financial business for
    purposes of the publicly traded partnership regulations and it
    is possible that the IRS could assert that our activities
    constitute a financial business. Prospective investors should
    carefully note that we could also be treated as engaged in a
    financial business if the activities of our taxable
    subsidiaries, such as MFCA Funding, Inc., were attributed to us
    and we were deemed to conduct a financial business. It should be
    noted, however, that as taxable C corporations, our taxable
    subsidiaries, such as MFCA Funding Inc., are subject to
    corporate income tax on their net income, and are intended to
    engage in significant transactions with third parties in the
    operation of their businesses. Notwithstanding our belief to the
    contrary, there can be no assurance that the IRS would not
    successfully challenge our compliance with the qualifying income
    requirements and assert that we are a publicly traded
    partnership taxable as a corporation for U.S. federal
    income tax purposes.
Section 7701(i) of the Code generally provides that any
    entity (or portion of an entity) that is a "taxable
    mortgage pool" (a "TMP") will be treated as a
    corporation subject to U.S. federal income tax. Under such
    Section 7701(i), any entity (or portion of an entity) will
    be a TMP if (i) substantially all of its assets consist of
    debt obligations, more than 50% of which are real estate
    mortgages (including mortgage-backed securities) (ii) such
    entity is an obligor under debt obligations (and possibly,
    certain types of equity) with two or more maturities, and
    (iii) under the terms of the entity's debt obligations
    (or an underlying arrangement), the payments on such debt
    obligations "bear a relationship" to the debt
    instruments held by the entity. These rules are intended to
    prevent income from escaping U.S. federal income tax when a
    mortgage pool is used to issue multiple mortgage backed
    securities through the use of an entity other than a real estate
    mortgage investment conduit or REMIC. We do not expect that
    greater than 50% of our (or any of our pass-through
    subsidiaries) assets will be mortgages. In addition, because of
    the absence of any relationship between the timing of payments
    on the tax-exempt bonds we hold and the timing of distributions
    on our shares we believe that neither we nor any of our
    pass-through subsidiaries will be treated as a TMP.
If, for any reason (including by being treated as engaged in a
    financial business that a taxable subsidiary is engaged in), we
    become taxable as a corporation for U.S. federal income tax
    purposes, our items of income and deduction would not pass
    through to our shareholders and our shareholders would be
    treated for U.S. federal income tax purposes as
    stockholders in a corporation. We would be required to pay
    income tax at corporate rates on any portion of our net income
    that did not constitute tax-exempt income. In addition, a
    portion of our federally tax-exempt income may be included in
    determining our alternative minimum tax ("AMT")
    liability. Distributions by us to our shareholders would
    constitute dividend income taxable to such shareholders as
    portfolio income, to the extent of our current and accumulated
    earnings and profits, which would include tax-exempt income as
    well as any taxable income we might have, and the payment of
    these distributions would not be deductible by us. These
    consequences would have a significant adverse effect on us,
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our shareholders and the value of our shares. Prospective
    investors should consult their own tax advisors regarding these
    potential material adverse tax consequences.
If at the end of any taxable year we fail to meet the qualifying
    income exception, we may still qualify as a partnership if we
    are entitled to relief under the Code for an inadvertent
    termination of partnership status. This relief will be available
    if (i) the failure is cured within a reasonable time after
    discovery, (ii) the failure is determined by the IRS to be
    inadvertent, and (iii) we agree to make such adjustments
    (including adjustments with respect to our shareholders) or to
    pay such amounts as are determined by the IRS. It is not
    possible to state whether we would be entitled to this relief in
    any or all circumstances. It also is not clear under the Code
    whether this relief is available for our first taxable year as a
    publicly traded partnership. If this relief provision is not
    applicable to a particular set of circumstances involving us, we
    will not qualify as a partnership for U.S. federal income
    tax purposes. Even if this relief provision applies and we
    retain our partnership qualification, we or our shareholders
    (during the failure period) will be required to pay such amounts
    as determined by the IRS.
The remainder of this discussion assumes that we will qualify to
    be taxed as a partnership for U.S. federal income tax
    purposes.
Taxation of Our Shareholders on our Profits and
    Losses.
By reason of our taxation as a
    partnership for U.S. federal income tax purposes, we will
    not be subject to U.S. federal income tax. We will file an
    annual partnership information return with the IRS, which
    reports the results of our operations. Each shareholder, in
    computing its U.S. federal income tax liability for a
    taxable year, will be required to take into account its
    allocable share of items of our income, gain, loss, deduction
    and credit for our taxable year ending within or with the
    taxable year of such shareholder, regardless of whether the
    shareholder has received any distributions. It is possible that
    the U.S. federal income tax liability of a shareholder with
    respect to its allocable share of our earnings in a particular
    taxable year could exceed the cash distributions to the
    shareholders for the year, thus requiring an
out-of-pocket
tax payment by the shareholder. The characterization of an item
    of our income, gain, loss, deduction or credit will generally be
    determined at the partnership level (rather than at the
    shareholder level).
The amount of "phantom income" a shareholder may
    recognize would likely significantly increase to the extent a
    shareholder elects to participate in a dividend reinvestment
    plan in respect of its shares.
We expect that a significant portion of our revenues will
    consist of tax-exempt income. There are risks that certain
    amounts of income that we report as tax-exempt income may not
    qualify for such treatment. See "— Nature of our
    Business Activities — Tax-Exempt Bonds" and
    "Risk Factors — Tax Risks — Our ability
    to allocate and distribute to our shareholders income that is
    exempt from U.S. federal income tax will depend on the
    exclusion from gross income of the interest income that we
    receive on the bonds in which we invest. A portion of the
    interest income we earn will likely be taxable in many states
    and localities and may be includable in our shareholders'
    calculation of Alternative Minimum Tax."
As part of our future investment strategy, prospective
    shareholders should note that we also expect to invest in fully
    taxable bonds and other fixed income securities.
Allocation of Profits and Losses.
Under our
    operating agreement, the Company's net capital appreciation
    or net capital depreciation for each accounting period is
    allocated among the shareholders and to their capital accounts
    without regarding to the amount of income or loss actually
    recognized by us for U.S. federal income tax purposes. The
    operating agreement provides that for each of our fiscal years,
    items of income, gain, loss, deduction or credit recognized by
    us will be allocated among our shareholders in accordance with
    their allocable shares of our items of income, gain, loss,
    deduction and credit. A shareholder's allocable share of
    such items will be determined by our operating agreement,
    provided such allocations either have "substantial economic
    effect" or are determined to be in accordance with the
    shareholders' interests. There can be no assurance however,
    that the particular methodology of allocations used by us will
    be accepted by the IRS. If such allocations are successfully
    challenged by the IRS, the allocation of our tax items among the
    shareholders may be affected.
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Section 706 of the Code generally requires that items of
    partnership income and deductions be allocated between
    transferors and transferees of partnership interests on a daily
    basis. We will apply certain assumptions and conventions in
    allocating income and deductions with respect to share transfers
    in an attempt to comply with applicable rules and report income,
    gain, deduction, loss and credit to shareholders in a manner
    that reflects such shareholders' beneficial shares of our
    items. It is possible that transfers of shares could be
    considered to occur for U.S. federal income tax purposes
    when the transfer is completed without regard to our
    conventions. As a result of such allocation method, you may be
    allocated income even if you do not receive any distributions.
If our conventions are not allowed by the Treasury Regulations
    (or only apply to transfers of less than all of a
    shareholder's shares) or if the IRS otherwise does not
    accept our conventions, the IRS may contend that our taxable
    income or losses must be reallocated among our shareholders. If
    such a contention were sustained, our shareholders'
    respective tax liabilities would be adjusted possibly to the
    detriment of certain shareholders.
Adjusted Tax Basis of Our Shares.
Our
    distributions generally will not be taxable to a shareholder to
    the extent of such shareholder's adjusted tax basis in its
    shares. In addition, a shareholder is allowed to deduct its
    allocable share of our losses (if any) only to the extent of
    such shareholder's adjusted tax basis in its shares in the
    year in which the losses occur. A shareholder's adjusted
    tax basis is generally equal to the shareholder's aggregate
    purchase price for shares and is generally increased by the
    shareholder's allocable share of our items of income,
    including tax-exempt income, and gain. A shareholder's
    adjusted tax basis is generally decreased by (a) the
    shareholder's allocable share of our items of loss and
    deduction, including any nondeductible expenses, (b) the
    amount of cash distributed by us to the shareholder, and
    (c) our tax basis in property (other than cash) distributed
    by us to the shareholder. Moreover, a shareholder's
    adjusted tax basis will include the shareholder's allocable
    share of our liabilities, if any, and cash distributions will
    include the amount of any reduction in our liabilities that is
    allocated to the shareholder.
To the extent that a shareholder's allocable share of our
    losses is not allowed because the shareholder has insufficient
    adjusted tax basis in our shares, such disallowed losses may be
    carried over by the shareholder to subsequent taxable years and
    will be allowed if and to the extent of the shareholder's
    adjusted tax basis in our shares in subsequent taxable years.
Mandatory Basis Adjustments.
We are generally
    required to adjust our tax basis in our assets in respect of all
    shareholders in cases of distributions that result in a
    "substantial basis reduction" (
i.e.
, in excess
    of $250,000) in respect of our property. We are also required to
    adjust the tax basis in our assets in respect of a transferee,
    in the case of a sale or exchange of an interest, or a transfer
    upon death, when there exists a "substantial built-in
    loss" (
i.e.,
in excess of $250,000) in respect of
    our property immediately after the transfer. For this reason, we
    will require (i) a shareholder who receives a distribution
    from us in connection with a complete withdrawal, (ii) a
    transferee of our shares (including a transferee in case of
    death) and (iii) any other shareholder in appropriate
    circumstances to provide us with information regarding its
    adjusted tax basis in our shares.
Treatment of Distributions.
Cash distributions
    by us with respect to shares or in redemption of less than all
    of a shareholder's shares generally will not be taxable to
    such shareholder. Instead, such distributions will reduce, but
    not below zero, the adjusted tax basis in all of such
    shareholder's shares immediately before the distribution.
    If such distributions to a shareholder exceed the
    shareholder's adjusted tax basis in such shareholder's
    shares, the excess will be taxable to the shareholder as gain
    from a sale or exchange of shares (as described in
    "— Disposition of Shares" below). The same
    treatment will apply to a shareholder who elects to participate
    in the dividend reinvestment plan where such shareholder will be
    treated for tax purposes as if the shareholder had chosen to
    receive such cash distributions outright. It is possible that
    partial redemptions made during the taxable year could result in
    taxable gain to a shareholder where no gain would otherwise have
    resulted if the same partial redemption were made at the end of
    the taxable year. A reduction in a shareholder's allocable
    share of our liabilities, and certain distributions of
    marketable securities by us, are treated as cash distributions
    for U.S. federal income tax purposes.
Disposition of Shares.
A sale or other taxable
    disposition of all or a part of a shareholder's shares
    (including in redemption for cash of all of the
    shareholder's shares) will be treated as a disposition of
    all or
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part, as the case may be, of such shareholder's shares.
    Such sale or other disposition generally will result in the
    recognition of gain or loss in an amount equal to the
    difference, if any, between the amount realized on the
    disposition (including the shareholder's share of any
    indebtedness, if any, of ours) and the shareholder's
    adjusted tax basis in its shares (as described in
    "— Adjusted Tax Basis of Our Shares" above).
    A shareholder's adjusted tax basis will be adjusted for
    this purpose by its allocable share of our income or loss for
    the year of such sale or other disposition. Any gain or loss
    recognized with respect to such sale or other disposition will
    generally be treated as capital gain or loss and will be
    long-term capital gain or loss if the shareholder's holding
    period for its shares exceeds one year. A portion of such gain,
    however, may be treated as ordinary income under the Code to the
    extent attributable to the shareholder's allocable share of
    unrealized gain or loss in our assets to the extent described in
    Section 751 of the Code.
Shareholders who purchase shares at different times and intend
    to sell all or part of the shares within a year of their most
    recent purchase are urged to consult their tax advisors
    regarding the application of certain "split holding
    periods" rules to them and the treatment of any gain or
    loss as long-term or short term capital gain or loss. For
    example, a selling shareholder may use the actual holding period
    of the portion of such shareholder's transferred shares,
    provided such shares are divided into identifiable shares with
    ascertainable holding periods, the selling shareholder can
    identify the portion of the shares transferred, and the selling
    shareholder elects to use the identification method for all
    sales or exchanges of our shares.
Limitation on Deductibility of Capital
    Losses.
Any capital losses generated by us (or
    upon a disposition of our shares) will generally be deductible
    by shareholders who are individuals only to the extent of such
    shareholders' capital gains for the taxable year plus up to
    $3,000 of ordinary income ($1,500 in the case of a married
    individual filing a separate return). Capital losses of an
    individual taxpayer may generally be carried forward to
    succeeding tax years to offset capital gains and then ordinary
    income (subject to the $3,000 annual limitation). Capital losses
    of a corporate taxpayer may be offset only against capital
    gains, but unused capital losses may be carried back three years
    (subject to certain limitations) and carried forward five years.
    Prospective shareholders should consult their tax advisors
    regarding the deductibility of capital losses.
Application of "At Risk" and Passive Activity
    Limitations on Deductions.
Individuals and
    certain closely held C corporations are allowed to deduct their
    allocable share of our losses (if any) only to the extent of
    each such shareholder's "at risk" amount in us at
    the end of the taxable year in which the losses occur. The
    amount for which a shareholder is "at risk" with
    respect to its interest generally is equal to its adjusted tax
    basis for such interest, less any amounts borrowed (x) in
    connection with its acquisition of such interest for which it is
    not personally liable and for which it has pledged no property
    other than its interest; (y) from persons who have a
    proprietary interest in us and from certain persons related to
    such persons; and (z) for which the shareholder is
    protected against loss through nonrecourse financing, guarantees
    or similar arrangements. To the extent that a shareholder's
    allocable share of our losses is not allowed because the
    shareholder has an insufficient amount at risk in us, such
    disallowed losses may be carried over by the shareholder to
    subsequent taxable years and will be allowed if and to the
    extent of the shareholder's at risk amount in subsequent
    years.
The Code restricts the deductibility of losses from a
    "passive activity" against certain income which is not
    derived from a passive activity. This restriction applies to
    individuals, personal service corporations and certain closely
    held corporations. It is not expected that we will generate any
    material amount of income or losses from "passive
    activities" for purposes of Section 469 of the Code.
    Accordingly, income allocated by us to a shareholder generally
    may not be offset by the passive losses of such shareholder and
    losses allocated to a shareholder generally may not be used to
    offset passive income of such shareholder. Shareholders also
    should consult their tax advisors regarding the possible
    application to them of the limitations on the deductibility of
    losses from certain passive activities contained in
    Section 469 of the Code.
Limitation on Interest Deductions.
We will
    likely incur interest expense in connection with our operation
    of investing in tax-exempt obligations. Section 265(a)(2)
    of the Code generally disallows any deduction for interest paid
    by a taxpayer on indebtedness incurred or continued for the
    purpose of purchasing or carrying a tax-exempt obligation. A
    purpose to carry tax-exempt obligations will be inferred
    whenever a taxpayer owns tax-exempt obligations and has
    outstanding indebtedness which is neither directly connected
    with personal expenditures nor incurred in connection with the
    active conduct of a trade or business. The IRS may take the
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position that a shareholder's allocable portion of any
    interest that we pay on our borrowings
and/or
any
    interest paid by a shareholder on indebtedness incurred to
    purchase our shares should be viewed in whole or in part as
    incurred to enable such shareholder to continue carrying
    tax-exempt obligations and, therefore, the deduction of any such
    interest by a shareholder should be disallowed in whole or in
    part.
Further, a risk exists that the IRS may take the position that
    short term or longer term interests in our STEP subsidiaries or
    tender option bond programs are debt. We expect to receive or
    have received opinions from deal counsel in connection with such
    transactions to the effect that such interests are not debt for
    U.S. federal income tax purposes. If the IRS takes the
    position that such interests are debt and is successful in
    maintaining this position, however, interest paid to the holders
    of such interests would not be deductible by us as the holder of
    the residual interest.
In the event that any of our interest expense is not
    attributable to tax-exempt interest income, individuals and
    other noncorporate shareholders are allowed to deduct their
    allocable share of our "investment interest" (within
    the meaning of Section 163(d) of the Code and the Treasury
    Regulations) only to the extent of each such shareholder's
    net investment income for the taxable year. A shareholder's
    net investment income generally is the excess, if any, of the
    shareholder's investment income from all sources (which is
    gross income from property held for investment) over investment
    expenses from all sources (which are deductions allowed that are
    directly connected with the production of investment income).
    Investment income excludes net capital gain attributable to the
    disposition of property held for investment, as well as
    "qualified dividend income" that is currently taxable
    at long-term capital gains, unless the shareholder elects to pay
    tax on such gain or income at ordinary income rates. To the
    extent that a shareholder's allocable share of our
    investment interest is not allowed as a deduction because the
    shareholder has insufficient net investment income, such
    disallowed investment interest may be carried over by the
    shareholder to subsequent taxable years and will be allowed if
    and to the extent of the shareholder's net investment
    income in subsequent years.
If a shareholder borrows to finance the purchase of the
    Class A common shares, any interest paid or accrued on the
    borrowing subject to the discussion above regarding the
    disallowance of deductions for interest incurred or continued
    for the purchase or carrying of tax-exempt obligations, will be
    allocated among our assets for purposes of determining the
    portion of such interest that is investment interest subject to
    the foregoing limitations or passive interest subject to the
    passive activity rules under Section 469 of the Code. The
    portion of such interest allocated to property held for
    investment (such as stock in a corporation) will be treated as
    investment interest. Shareholders should consult their tax
    advisors regarding the application to them of the allocation of
    such interest among our assets. Since the amount of a
    shareholder's allocable share of our investment interest
    that is subject to this limitation will depend on the
    shareholder's aggregate investment interest and net
    investment income from all sources for any taxable year, the
    extent, if any, to which our investment interest will be
    disallowed under this rule will depend on each
    shareholder's particular circumstances each year.
Limitation on Deduction of Certain Other
    Expenses.
We will incur various expenses in
    connection with our ongoing administration and operation.
    Payments for services generally are deductible if the payments
    are ordinary and necessary expenses, are reasonable in amount,
    and are for services performed during the year in which paid or
    accrued. Expenses which are allocable to tax-exempt interest
    income, however, are nondeductible to individual shareholders.
    We expect to adopt accounting policies for allocating our
    expenses, including the management fee paid to our manager,
    among the various segments of our business. There is no
    assurance that such policies will not be successfully challenged
    by the IRS.
To the extent our expenses are not disallowed as described in
    the previous paragraph, an individual, estate or trust may
    deduct so-called "miscellaneous itemized deductions,"
    which include fees and other expenses of ours, only to the
    extent that such deductions exceed 2% of the adjusted gross
    income of the taxpayer. The amount of a shareholder's
    allocable share of such expenses that is subject to this
    disallowance rule will depend on the shareholder's
    aggregate miscellaneous itemized deductions from all sources and
    adjusted gross income for any taxable year. Thus, the extent, if
    any, to which such fees and expenses will be subject to
    disallowance will depend on each shareholder's particular
    circumstances each year. In addition, for taxable years
    beginning during or after 2011, the Code further restricts the
    ability of an individual with an adjusted gross income in
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excess of a specified amount to deduct such investment expenses.
    Under such provision, there is a limitation on the deductibility
    of investment expenses in excess of 2% of adjusted gross income
    to the extent such excess expenses (along with certain other
    itemized deductions) exceed the lesser of (i) 3% of the
    excess of the individual's adjusted gross income over the
    specified amount or (ii) 80% of the amount of certain
    itemized deductions otherwise allowable for the taxable year.
    Moreover, such investment expenses are miscellaneous itemized
    deductions which are not deductible by a noncorporate taxpayer
    in calculating its AMT liability. A shareholder's share of
    our management fee and certain other expenses attributable to us
    will constitute miscellaneous itemized deductions for these
    purposes.
It is intended that the allocation of profits and cash
    distributions made to our manager with respect to the
    performance share is an allocable share of our earnings and not
    a fee. No assurance can be given however that the IRS could not
    recharacterize successfully the incentive allocations as a fee,
    in which case shareholders could be subject to the limitation on
    deductibility relating to miscellaneous itemized deductions and
    certain other itemized deductions of high income individuals
    with respect to such amount, as described above. Prospective
    shareholders are urged to consult their tax advisors regarding
    their ability to deduct expenses incurred by us.
Our organizational expenses from 2007 are being amortized
    ratably over a period of 15 years. Our syndication expenses
    (i.e., expenditures made in connection with the marketing and
    issuance of the shares, including placement fees) are neither
    deductible nor amortizable.
Alternative Minimum Tax.
Interest on
    tax-exempt bonds generally is an item of tax preference for
    purposes of the AMT, however interest on qualified 501(c)(3)
    bonds is generally only includable in the determination of AMT
    for our corporate shareholders. To the extent interest on any of
    the tax-exempt bonds that we own is such an item of tax
    preference, a portion of the interest income allocated to our
    shareholders also will be a tax preference item. Shareholders
    should consult their tax advisors concerning the AMT
    consequences of holding our shares.
Other U.S. Federal Income Tax
    Considerations.
Ownership of tax-exempt
    obligations may result in collateral tax consequences to certain
    taxpayers, including, without limitation, financial
    institutions, property and casualty insurance companies, certain
    foreign corporations doing business in the United States,
    certain S corporations with excess passive income,
    individual recipients of social security or railroad retirement
    benefits and individuals otherwise eligible for the earned
    income credit. Prospective purchasers of our shares should
    consult a tax advisor as to the applicability of any such
    collateral consequences.
Unrelated Business Taxable Income.
A
    shareholder that is a tax-exempt organization for
    U.S. federal income tax purposes and, therefore, generally
    exempt from U.S. federal income taxation, may nevertheless
    be subject to "unrelated business income tax" to the
    extent, if any, that its allocable share of our income consists
    of unrelated business taxable income, or UBTI. A tax-exempt
    partner in a partnership (or an entity treated as a partnership
    for U.S. federal income tax purposes) that regularly
    engages in a trade or business which is unrelated to the exempt
    function of the tax-exempt partner must include in computing its
    UBTI, its pro rata share (whether or not distributed) of such
    partnership's gross income derived from such unrelated
    trade or business. Moreover, such tax-exempt partner could be
    treated as earning UBTI to the extent that such entity derives
    income from "debt-financed property," or if the
    partnership interest itself is debt financed. Debt-financed
    property means property held to produce income with respect to
    which there is "acquisition indebtedness" (i.e.,
    indebtedness incurred in acquiring or holding property).
Because we are under no obligation to minimize UBTI,
    tax-exempt shareholders are urged to consult their tax advisors
    concerning the possible U.S. federal, state, local and
non-U.S. tax
consequences arising from an investment in our shares.
Nature of our Business Activities.
We have
    invested and anticipate that we will invest directly and
    indirectly in a variety of assets, including, but not limited
    to, tax-exempt bonds, taxable bonds, and equity interests in
    taxable subsidiaries, such as MFCA Funding, Inc.
Tax-Exempt Bonds.
We have not and will not
    directly or indirectly acquire a tax-exempt bond unless we
    receive, or there has been issued previously, an opinion of
    nationally recognized bond counsel which was
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delivered on the date of issuance of that security that interest
    on such security will be exempt from regular U.S. federal
    income taxation. We are not relying on any other external
    advisor in respect of the continuing correctness of, the
    opinions of bond counsel relating to the exclusion of interest
    income from gross income for U.S. federal income tax
    purposes and have merely assumed that such opinions received (or
    to be received) remain (or will remain) correct.
Events occurring after the date of issuance of a tax-exempt
    bond, however, may cause the interest on such tax-exempt bond to
    be includable in gross income for U.S. federal income tax
    purposes. For example, the IRS establishes certain requirements,
    such as restrictions on the investment of the proceeds of the
    bond issue, limitations on the use of proceeds of such issue and
    the property financed by such proceeds, and the payment of
    certain excess earnings to the federal government, that must be
    met after the issuance of a tax-exempt bond for interest on such
    tax-exempt bond to remain excludible from gross income for
    U.S. federal income tax purposes. The issuers and the
    underlying obligors of the tax-exempt bonds generally covenant
    to comply with such requirements and the opinion of bond counsel
    generally assumes continuing compliance with such requirements.
    In addition, for tax-exempt bonds the proceeds of which are
    loaned to a charitable organization described in
    section 501(c)(3) of the Code, the continued exclusion of
    interest from gross income for U.S. federal income tax
    purposes depends on the continuing exempt status of the
    charitable organization borrower. Neither we nor our counsel
    will monitor compliance with such requirements. Failure to
    comply with these continuing requirements, however, may cause
    the interest on a tax-exempt bond to be includable in gross
    income for U.S. federal income tax purposes retroactive to
    its date of issue.
In addition, the IRS has an ongoing enforcement program that
    involves the audit of tax-exempt bonds to determine whether an
    issue of bonds satisfies all of the requirements that must be
    met for the interest on such bonds to be excludible from gross
    income for U.S. federal income tax purposes. From time to
    time, some of the tax-exempt bonds we own directly or indirectly
    may become the subject of such an audit by the IRS, and the IRS
    may determine that the interest on such securities is includable
    in gross income for U.S. federal income tax purposes either
    because the IRS has taken a legal position adverse to the
    conclusion reached by bond counsel in its opinion pertaining to
    the bond issue or as a result of an action taken or not taken
    after the date of the bond issue.
If interest paid on any tax-exempt bond in which we invest is
    determined to be taxable subsequent to our acquisition of such
    tax-exempt bond, the IRS may demand that our shareholders pay
    U.S. federal income tax on the interest income allocated to
    them, thereby adversely reducing our shareholders' yield.
A determination that interest on a tax-exempt bond we own is
    includable in gross income for U.S. federal income tax
    purposes retroactively to its date of issue may, likewise, cause
    a portion of prior years' interest allocations received by
    our shareholders to be taxable to those shareholders in the year
    of allocation.
Tax-exempt interest earned by us will generally be tax-exempt
    income to our shareholders. If any sale or other disposition of
    a tax-exempt bond produces a gain our shareholders would
    recognize taxable income. We believe that such gains will be
    capital gains because we intend to treat our interest in
    tax-exempt bonds as investments, and do not believe that we will
    be considered to be a dealer in tax-exempt bonds.
Interest on a mortgage revenue bond we own, other than a bond
    the proceeds of which are loaned to a charitable organization
    described in Section 501(c)(3) of the Code, will not be
    excluded from gross income during any period in which we are a
    "substantial user" of the properties financed with the
    proceeds of such mortgage revenue bond or a person related to
    such a "substantial user."
A "substantial user" generally includes any underlying
    borrower and any person or entity that uses the financed
    properties on other than a de minimis basis. We would be related
    to a "substantial user" for this purpose if, among
    other things,
(i) the same person or entity owned more than a 50%
    interest in both us and in the properties financed with the
    proceeds of a bond owned by us or one of our
    subsidiaries; or
(ii) we owned a partnership or similar equity interest in
    the owner of a property financed with the proceeds of a bond
    owned by us or one of our subsidiaries.
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We do not expect to be a "substantial user" of the
    properties financed with the proceeds of the mortgage revenue
    bonds or related parties thereto. There can be no assurance,
    however, that the IRS would not challenge such conclusion. If
    such challenge were successful, the interest received on any
    bond for which we were treated as a "substantial user"
    or a "related party" thereto would be includable in
    federally taxable gross income.
Amortization of Bond Premium.
Section 171
    of the Code requires amortization of any bond premium paid in
    connection with the acquisition of a tax-exempt bond. As bond
    premium is amortized, it reduces the holder of such bond's
    basis in the bond. Under the Treasury Regulations, bond premium
    is amortized on a constant yield basis in a manner consistent
    with the accrual of original issue discount. If tax-exempt bonds
    are acquired by us at a premium, the amortization of bond
    premium will affect our basis in the tax-exempt bonds, which in
    turn, will affect the computation of gain or loss upon the sale
    or other disposition of the tax-exempt bonds.
Market Discount.
In general, market discount
    with respect to a taxable or tax-exempt bond is the amount (if
    any) by which the stated redemption price at maturity exceeds an
    investor's purchase price (except to the extent that such
    difference, if any, is attributable to original issue discount
    not yet accrued). Under current law, the accretion of market
    discount is taxable as ordinary income. Accrued market discount
    would be recognized by us as ordinary income when principal
    payments are received on the tax-exempt bonds or upon the sale
    or at redemption (including early redemption) of the tax-exempt
    bonds.
Equity interests in our taxable subsidiaries including MFCA
    Funding, Inc. We will own interests in entities that are taxable
    as corporations for U.S. federal income tax purposes,
    including our interests in MFCA Funding, Inc. We will not be
    taxed directly on the earnings of such taxable corporations.
    Distributions of cash or other property from such a taxable
    corporate subsidiary will constitute dividends for
    U.S. federal income tax purposes to the extent paid from
    the current or accumulated earnings and profits (as determined
    under U.S. federal income tax principles) of such
    subsidiary. If the amount of a distribution by a taxable
    subsidiary exceeds its current and accumulated earnings and
    profits, such excess will be treated as a tax-free return of
    capital to the extent of our tax basis in our shares of such
    subsidiary, and thereafter will be treated as capital gain.
    Dividend income from our taxable subsidiaries, if any, will be
    passed through to our shareholders and will be taxable ordinary
    portfolio income. We may also elect to retain earnings at our
    taxable subsidiaries and use their growing capital base to
    support their activities. Currently, "qualified dividend
    income" received by individuals from certain domestic
    corporations is generally subject to a reduced U.S. federal
    income tax rate of 15% (for taxable years through 2010). This
    reduced rate will generally apply to dividend income received
    from our taxable subsidiaries.
Our taxable subsidiaries will be subject to corporate level tax
    on their net taxable income at the current maximum corporate
    rate of 35%. The interest income from tax-exempt bonds held by
    our taxable subsidiaries will generally not be included in their
    taxable income. However, gains from the sale of tax-exempt
    bonds, market discount recognized with respect to bonds and
    amounts earned pursuant to derivatives will be included in our
    taxable subsidiaries' taxable income. In calculating their
    taxable income, our taxable subsidiaries will generally not be
    permitted to deduct expenses incurred in acquiring or carrying
    its tax-exempt bonds. Our taxable subsidiaries' tax-exempt
    interest income, if any, will also be subject to the AMT.
In addition, it is possible that the IRS may not agree with our
    determinations as to which expenses are allocable to our
    corporate subsidiaries and which expenses are allocable to us or
    our other subsidiaries. If all or a portion of the expenses that
    we allocate to our corporate subsidiaries are determined not to
    be deductible by those subsidiaries, they could be required to
    pay additional tax, as well as interest and penalties. We may
    acquire tax-exempt bonds from MFCA Funding, Inc. If the IRS
    determined that the purchase prices that we paid to MFCA
    Funding, Inc. were less than the amounts that would be payable
    if such corporation were not related to us, additional tax, as
    well as interest and penalties could be imposed on MFCA Funding,
    Inc.
Total Return Swaps.
Our taxable subsidiaries,
    such as MFCA Funding, Inc., have entered into, and may enter
    into, various total return swap transactions referencing
    tax-exempt bonds. The law is not entirely clear in respect of
    total return swaps and the tax treatment of a particular swap
    depends on the overall facts and circumstances in respect of
    such swap. We generally believe that a long position under a
    total return swap in respect of tax-exempt bonds is not tax
    ownership in respect of such underlying reference tax-exempt
    bonds
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although the IRS could disagree with this position. Any income
    from any total return swap is expected to be fully taxable to a
    subsidiary such as MFCA Funding, Inc. to the extent it engages
    in such transaction or will result in taxable income being
    allocated to our shareholders to the extent we enter into a
    total return swap respected as a notional principal contract
    directly or through a pass-through subsidiary.
Tax Elections.
Under Section 754 of the
    Code, a partnership may elect to have the basis of its assets
    adjusted in the event of a distribution of property to a partner
    or in the event of a transfer of its shares by sale or exchange
    or as a result of the death of a partner. Pursuant to the terms
    of our operating agreement, our Tax Matters Partner (as defined
    below), in its sole discretion, is authorized to make such an
    election. Any such election, once made, cannot be revoked
    without the IRS's consent. We have not made the election
    permitted by Section 754 of the Code.
The calculations under Section 754 of the Code are complex,
    and there is little legal authority concerning the mechanics of
    the calculations, particularly in the context of publicly traded
    partnerships. To help reduce the complexity of those
    calculations and the resulting administrative costs to us, we
    apply certain conventions in determining and allocating basis
    adjustments. The use of such conventions may result in the basis
    adjustments that do not exactly reflect a shareholder's
    purchase price for its shares. It is possible that the IRS will
    successfully assert that the conventions utilized by us do not
    satisfy the technical requirements of the Code or the Treasury
    Regulations and, thus, will require different basis adjustments
    to be made. If the IRS were to sustain such a position, a
    shareholder may have adverse tax consequences.
Constructive Termination.
Subject to the
    electing large partnership rules described below, we will be
    considered to have terminated for U.S. federal income tax
    purposes, if there is a sale or exchange of 50% or more of the
    total interest in our capital and profits within a
12-month
period. Our termination would result in the closing of our
    taxable year for all of our shareholders. In the case of a
    shareholder reporting on a taxable year other than the fiscal
    year ending on our year end, the closing of our taxable year may
    result in more than 12 months of our taxable income or loss
    being includable in the shareholder's taxable income for
    the year of termination. We would be required to make new tax
    elections after termination, including a new tax election under
    Section 754 of the Code. A termination could also result in
    penalties if we were unable to determine that the termination
    had occurred. Moreover, a termination might either accelerate
    the application of, or subject us to, any tax legislation
    enacted before the termination.
Tax Reporting.
We currently use the calendar
    year as our taxable year for U.S. federal income tax
    purposes. Under certain circumstances which we currently believe
    are unlikely to apply, a taxable year other than the calendar
    year may be required. We have and will continue to file a
    partnership return with the IRS, as required, for each calendar
    year, with respect to income, gain, loss, deduction and other
    items derived by us during such year. We will use our best
    efforts to furnish to each shareholder, by as promptly as
    possible after the close of each calendar year, specific tax
    information, including a
Schedule K-1,
which describes such person's share of our income, gain,
    loss and deduction for our preceding taxable year. Delivery of
    this information may be subject to delay depending on the timing
    of our receipt of such information from an investment in which
    we hold an interest, and accordingly it is likely that
    U.S. shareholders should anticipate the need to file
    annually with the IRS (and certain states) a request for an
    extension past April 15 or the otherwise applicable due date for
    their income tax return for the taxable year.
In preparing this information, we will take various accounting
    and reporting positions, some of which are described in this
    summary, to determine such person's share of income, gain,
    loss and deduction. We cannot assure you that those positions
    will yield a result that conforms to the requirements of the
    Code, the Treasury Regulations or administrative interpretations
    of the IRS. In addition, we can not assure prospective
    shareholders that the IRS will not successfully contend that
    those positions are impermissible. Any successful challenge by
    the IRS could negatively affect the value of an investor's
    Class A common shares.
A shareholder must file a statement with the IRS identifying the
    treatment of any item on his U.S. federal income tax return
    that is not consistent with the treatment of the item on our
    return. Intentional or negligent disregard of this consistency
    requirement may subject a shareholder to substantial penalties.
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Persons who hold our shares as a nominee for another person are
    required to furnish to us:
•
the name, address and taxpayer identification number of the
    beneficial owner and the nominee;
•
whether the beneficial owner is:
(1) a person that is not a United States person;
(2) a foreign government, an international organization or
    any wholly owned agency or instrumentality of either of the
    foregoing; or
(3) a tax-exempt entity;
•
the amount and description of shares held, acquired or
    transferred for the beneficial owner; and
•
specific information including the dates of acquisitions and
    transfers, means of acquisitions and transfers, and acquisition
    cost for purchases, as well as the amount of net proceeds from
    sales.
Brokers and financial institutions are required to furnish
    additional information, including whether they are United States
    persons and specific information on Class A common shares
    they acquire, hold or transfer for their own account. A penalty
    of $50 per failure, up to a maximum of $100,000 per calendar
    year, is imposed by the Code for failure to report that
    information to us. The nominee is required to supply the
    beneficial owner of the Class A common shares with the
    information furnished to us.
Tax Audits.
Under the Code, adjustments in tax
    liability with respect to our items generally will be made at
    our level in a partnership proceeding rather than in separate
    proceedings with each shareholder. Tiptree (or another
    shareholder designated by our Board of Directors) will represent
    us as our "Tax Matters Partner" during any audit and
    in any dispute with the IRS. Each shareholder will be informed
    of the commencement of an audit of our company. In general, the
    tax matters partner may enter into a settlement agreement with
    the IRS on behalf of, and that is binding upon, the shareholders.
Adjustments resulting from an IRS audit may require each
    shareholder to adjust a prior year's liability, and
    possibly may result in an audit of his return. Any audit of a
    shareholder's return could result in adjustments not
    related to our returns as well as those related to our returns.
The Tax Matters Partner will make some elections on our behalf
    and on behalf of our shareholders. In addition, the Tax Matters
    Partner can extend the statute of limitations for assessment of
    tax deficiencies against shareholders for items in our returns.
    The Tax Matters Partner may bind a shareholder with less than a
    1% profits interest in us to a settlement with the IRS unless
    that shareholder elects, by filing a statement with the IRS, not
    to give that authority to the Tax Matters Partner. The Tax
    Matters Partner may seek judicial review, by which all the
    shareholders are bound, of a final partnership administrative
    adjustment and, if the Tax Matters Partner fails to seek
    judicial review, judicial review may be sought by any
    shareholder having at least a 1% interest in profits or by any
    group of shareholders having in the aggregate at least a 5%
    interest in profits. However, only one action for judicial
    review will go forward, and each shareholder with an interest in
    the outcome may participate.
Elective Procedures for Large
    Partnerships.
The Code allows large partnerships
    to elect streamlined procedures for income tax reporting. This
    election, if made, would reduce the number of items that must be
    separately stated on the IRS Schedules K-1 that are issued to
    shareholders, and such Schedules K-1 would have to be provided
    on or before the first March 15 following the close of each
    taxable year. In addition, this election would prevent us from
    suffering a "technical termination" (which would close
    our taxable year) if within a 12 month period there is a
    sale or exchange of 50% or more of our total interests. If we
    make such an election, IRS audit adjustments will flow through
    to shareholders for the year in which such adjustments take
    effect rather than the year to which the adjustment relates. In
    addition, we, rather than our shareholders individually,
    generally will be liable for any interest and penalties that
    result from such audit adjustment.
Non-U.S. Shareholders.
Non-U.S. shareholders
generally will be subject to U.S. withholding tax at a 30%
    rate on the gross amount of their allocable share of our
    dividend income, certain "dividend equivalent
    payments", any taxable interest income and any other fixed
    or determinable annual or periodical income
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received from sources within the United States if such income is
    not treated as effectively connected with a trade or business
    within the United States. We generally would be required to
    withhold and pay over to the IRS such 30% withholding tax. The
    30% rate may be reduced or eliminated under the provisions of an
    applicable income tax treaty between the United States and the
    country in which such
non-U.S. persons
reside or are organized, provided the
non-U.S. person
provides us with the required certification (generally, on IRS
Form W-8BEN).
The 30% withholding tax does not apply to certain portfolio
    interest on obligations of U.S. persons allocable to
    certain shareholders who are
non-U.S. persons
(provided certain requirements are met and the required
    certification is made by the
non-U.S. person).
Moreover, shareholders who are
non-U.S. persons
generally are not subject to U.S. tax on their allocable
    share of our capital gains if (i) such gains are not
    effectively connected with the conduct of a U.S. trade or
    business of such
non-U.S. persons;
(ii) a tax treaty is applicable and such gains are not
    attributable to a permanent establishment in the United States
    maintained by such
non-U.S. persons;
or (iii) such
non-U.S. persons
are individuals who are not present in the United States for 183
    or more days during the taxable year.
Non-U.S. persons
treated as engaged in a U.S. trade or business are
    generally subject to U.S. federal income tax at the
    graduated rates applicable to U.S. persons on their net
    income which is considered to be effectively connected with such
    U.S. trade or business.
Non-U.S. persons
that are corporations may also be subject to a 30% branch
    profits tax on such effectively connected income. The 30% rate
    applicable to branch profits may be reduced or eliminated under
    the provisions of an applicable income tax treaty between the
    United States and the country in which the
non-U.S. person
resides or is organized.
While we expect that our method of operation will not result in
    us generating significant amounts of income treated as
    effectively connected with the conduct of a U.S. trade or
    business with respect to shareholders who are
non-U.S. persons,
there can be no assurance that the IRS will not assert
    successfully that some portion of our income is properly treated
    as effectively connected income with respect to such
    shareholders. If a shareholder who is a
non-U.S. person
were treated as being engaged in a U.S. trade or business
    in any year in connection with an investment in our shares, such
    shareholder generally would be required to (i) file a
    U.S. federal income tax return for such year reporting its
    allocable share, if any, of our income or loss effectively
    connected with such trade or business and (ii) pay
    U.S. federal income tax at regular U.S. tax rates on
    any such income. Moreover, a shareholder who is a corporate
non-U.S. person
might be subject to a U.S. branch profits tax on its
    allocable share of our effectively connected income, if any. In
    addition, we would be required to withhold and pay over to the
    IRS certain amounts with respect to any
non-U.S. person's
allocable share of our effectively connected income, if any. Any
    amount so withheld would be creditable against such
non-U.S. person's
U.S. federal income tax liability, and such
non-U.S. person
could claim a refund to the extent that the amount withheld
    exceeded such
non-U.S. person's
U.S. federal income tax liability for the taxable year.
    Finally, if we are engaged in a U.S. trade or business, a
    portion of any gain recognized by a shareholder who is a
non-U.S. person
on the sale or exchange of its Class A common shares may be
    treated for U.S. federal income tax purposes as effectively
    connected income, and hence such
non-U.S. person
may be subject to U.S. federal income tax on the sale or
    exchange of its Class A common shares.
In general, different rules from those described above apply in
    the case of
non-U.S. persons
subject to special treatment under U.S. federal income tax
    law, including a
non-U.S. person
(i) who has an office or fixed place of business in the
    United States or is otherwise carrying on a U.S. trade or
    business; (ii) who is an individual present in the United
    States for 183 or more days or has a "tax home" in the
    United States for U.S. federal income tax purposes; or
    (iii) who is a former citizen or resident of the United
    States.
Prospective shareholders who are
non-U.S. persons
are urged to consult their tax advisors with regard to the
    U.S. federal income tax consequences to them of acquiring,
    holding and disposing of the Class A common shares, as well
    as the effects of state, local and
non-U.S. tax
laws.
Certain Reporting Obligations.
Certain
    shareholders that own (directly or indirectly) over 50% of the
    capital or profits of us may be required to file Form TD
    F90-22.1 (an "
FBAR
") with respect to any
    investments in foreign financial accounts, which may include
non-U.S. investment
entities. Failure to file a
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required FBAR may result in civil and criminal penalties.
    Shareholders should consult with their own advisors as to
    whether they are obligated to file an FBAR with respect to an
    investment in our shares.
Tax Shelter Regulations.
In certain
    circumstances, a shareholder who disposes of an interest in a
    transaction resulting in the recognition by such shareholder of
    significant losses in excess of certain threshold amounts may be
    obligated to disclose its participation in such transaction (a
    "reportable transaction") in accordance with recently
    issued regulations governing tax shelters and other potentially
    tax-motivated transactions (the "Tax Shelter
    Regulations"). In addition, an investment in us may be
    considered a "reportable transaction" if, for example,
    we recognize certain significant losses in the future.
    Shareholders should consult their tax advisors concerning any
    possible disclosure obligation under the Tax Shelter Regulations
    with respect to the disposition of our shares.
Certain State, Local and Foreign Income Tax
    Matters.
In addition to the U.S. federal
    income tax considerations described above, shareholders should
    consider potential state, local, and foreign tax consequences of
    an investment in our shares and are urged to consult their tax
    advisor in this regard. The rules for some states and localities
    for computing
and/or
reporting taxable income may differ from the federal rules.
    Interest income that is tax-exempt for federal purposes may be
    taxable by some states and localities.
Under the tax laws of certain states, we (or the entities in
    which we invest) may be subject to state income or franchise tax
    or other taxes that may be applicable to us. Such taxes will
    decrease the amount of income available to shareholders.
    Shareholders are advised to consult their tax advisors
    concerning the tax treatment of our company, and our effect on
    the shareholders, under the tax laws of the states applicable to
    us and such shareholders.
Both the substantive features and the filing requirements of
    state income taxation of shareholders will vary according to
    factors which include, but are not limited to the following:
    (i) the status of the shareholder; (ii) whether the
    state imposes personal or corporate income taxation or instead
    imposes a form of franchise, unincorporated business or
    occupational tax; (iii) whether the state will allow
    credits or exemptions for income taxes to which a shareholder is
    subject in the shareholder's state or other jurisdiction of
    residence; (iv) the level of personal exemptions or credits
    allowed by the state and whether those exemptions or credits are
    required to be prorated on the ratio of income from sources in
    the taxing state to total income; (v) whether the
    applicable tax rate structure is applied on the basis of income
    from sources in the taxing jurisdiction or the basis of total
    income of a nonresident taxpayer. We may be required to withhold
    state taxes from distributions to shareholders in some instances.
Prospective shareholders are urged to consult their tax
    advisors with respect to the state and local tax consequences of
    acquiring, holding and disposing of the Class A common
    shares.
Backup Withholding.
We may be required in
    certain circumstances to backup withhold on certain payments
    paid to noncorporate holders of our shares who do not furnish us
    with their correct taxpayer identification number (in the case
    of individuals, their social security number) and certain
    certifications, or who are otherwise subject to backup
    withholding. If backup withholding were applicable to a
    shareholder, we would be required to withhold 28% on each
    distribution to such shareholder and to pay such amount to the
    IRS on behalf of such shareholder. Backup withholding is not an
    additional tax. Any amounts withheld from payments made to you
    may be refunded or credited against your U.S. federal
    income tax liability, if any, provided that the required
    information is furnished to the IRS.
Possible Withholding Taxes on Certain
    Payments.
Under recently enacted legislation, in
    order to avoid a U.S. withholding tax of 30% on certain
    payments (including payments of gross proceeds) made after
    December 31, 2012 with respect to certain
    U.S. investments, foreign persons will generally be
    required to enter into an agreement with the IRS identifying
    certain direct and indirect U.S. equityholders or otherwise
    provide alternative certification. Prospective
non-U.S. investors
should consult their own tax advisors regarding the possible
    implications of this legislation on their investment in our
    shares.
New Legislation or Administrative or Judicial
    Action.
The rules dealing with U.S. federal
    income taxation are constantly under review by persons involved
    in the legislative process, the IRS and the U.S. Treasury
    Department, frequently resulting in unfavorable precedent or
    authority on issues for which there
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was previously no clear precedent or authority as well as
    revised interpretations of established concepts, statutory
    changes, revisions to regulations and other modifications and
    interpretations. No assurance can be given as to whether, or in
    what form, any proposals affecting us or our Class A common
    shares will be enacted. The IRS pays close attention to the
    proper application of tax laws to partnerships. The present
    U.S. federal income tax treatment of an investment in our
    Class A common shares may be modified by administrative,
    legislative or judicial interpretation at any time, and any such
    action may affect investments and commitments previously made.
    For example, changes to the U.S. federal income tax laws
    and interpretations thereof could make it more difficult or
    impossible to meet the qualifying income exception for us to be
    treated as a partnership that is not taxable as a corporation
    for U.S. federal income tax purposes. We and our common
    shareholders could be adversely affected by any such change in,
    or any new, tax law, regulation or interpretation.
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UNDERWRITING
Ladenburg Thalmann & Co. Inc. is acting as
    representative of the underwriters named below. Subject to the
    terms and conditions stated in the underwriting agreement dated
    the date of this prospectus, each underwriter named below has
    agreed to purchase, and we have agreed to sell to that
    underwriter, the number of Class A common shares set forth
    opposite the underwriter's name.
Class A
Underwriter
Common Shares
Ladenburg Thalmann & Co. Inc.
Total
The underwriting agreement provides that the obligations of the
    underwriters to purchase the Class A common shares included
    in this offering are subject to approval of legal matters by
    counsel and to other conditions. The underwriters are obligated
    to purchase all the Class A common shares (other than those
    covered by the overallotment option described below) if they
    purchase any of the Class A common shares.
The underwriters propose to offer some of the Class A
    common shares directly to the public at the public offering
    price set forth on the cover page of this prospectus and some of
    the Class A common shares to dealers at the public offering
    price less a concession not to exceed
    $      per Class A common share.
    The underwriting discount of $      per
    Class A common share is equal
    to     % of the initial offering price.
    If all of the Class A common shares are not sold at the
    initial offering price, the representative may change the public
    offering price and other selling terms. Investors must pay for
    any Class A common shares purchased on
    or          
    before          ,
    2010. The representative has advised us that the underwriters do
    not intend to confirm any sales to any accounts over which they
    exercise discretionary authority.
We have granted to the underwriters an option, exercisable for
    45 days from the date of this prospectus, to purchase up to
    an
    additional          
    Class A common shares at the public offering price less the
    underwriting discount. The underwriters may exercise the option
    solely for the purpose of covering over-allotments, if any, in
    connection with this offering. To the extent such option is
    exercised, each underwriter must purchase a number of additional
    Class A common shares approximately proportionate to that
    underwriter's initial purchase commitment.
We and our directors and officers and Triptree and its directors
    and officers have agreed that, for a period of 180 days
    from the date of this prospectus, that they will not, without
    the prior written consent of Ladenburg Thalmann & Co.
    Inc., on behalf of the underwriters, offer, pledge, sell,
    contract to sell or otherwise dispose of or agree to sell or
    otherwise dispose of, directly or indirectly or hedge, any
    Class A common shares or any securities convertible into or
    exchangeable for Class A common shares, provided, however,
    that we may issue and sell Class A common shares pursuant
    to our dividend reinvestment plan. Ladenburg
    Thalmann & Co. Inc. in its sole discretion may release
    any of the securities subject to these
lock-up
agreements at any time without notice.
The
180-day
period in the preceding paragraph will be extended if
    (i) during the last 17 days of the
180-day
period we issue an earnings release or material news or a
    material event relating to us occurs or (ii) prior to the
    expiration of the
180-day
period, we announce that we will release earnings results during
    the
16-day
period beginning on the last day of the
180-day
period, in which case the restrictions described in the
    preceding sentence will continue to apply until the expiration
    of the
18-day
period beginning on the issuance of the earnings release or the
    announcement of the material news or the occurrence of the
    material event.
The Class A common shares offered by this prospectus,
    subject to notice of issuance, will be listed on the Nasdaq
    Stock Market LLC under the symbol
    ''          ".
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The following table shows the underwriting discounts to be paid
    to the underwriters in connection with this offering. These
    amounts are shown assuming both no exercise and full exercise of
    the underwriters' option to purchase additional
    Class A common shares.
No Exercise
Full Exercise
Per Class A common share
$
$
Total
$
$
We and Triptree have each agreed to indemnify the underwriters
    against certain liabilities, including liabilities under the
    Securities Act or to contribute to payments the underwriters may
    be required to make because of any of those liabilities.
Certain underwriters may make a market in the Class A
    common shares. No underwriter is, however, obligated to conduct
    market-making activities and any such activities may be
    discontinued at any time without notice, at the sole discretion
    of the underwriter. No assurance can be given as to the
    liquidity of, or the trading market for, the Class A common
    shares as a result of any market-making activities undertaken by
    any underwriter. This prospectus is to be used by any
    underwriter in connection with this offering and, during the
    period in which a prospectus must be delivered, with offers and
    sales of the Class A common shares in market-making
    transactions in the
over-the-counter
market at negotiated prices related to prevailing market prices
    at the time of the sale.
In connection with this offering, Ladenburg Thalmann &
    Co. Inc., on behalf of the underwriters, may purchase and sell
    Class A common shares in the open market. These
    transactions may include short sales, syndicate covering
    transactions and stabilizing transactions. Short sales involve
    syndicate sales of Class A common shares in excess of the
    number of Class A common shares to be purchased by the
    underwriters in this offering, which creates a syndicate short
    position. "Covered" short sales are sales of
    Class A common shares made in an amount up to the number of
    Class A common shares represented by the underwriters'
    over-allotment option. In determining the source of Class A
    common shares to close out the covered syndicate short position,
    the underwriters will consider, among other things, the price of
    Class A common shares available for purchase in the open
    market as compared to the price at which they may purchase
    Class A common shares through the overallotment option.
    Transactions to close out the covered syndicate short position
    involve either purchases of Class A common shares in the
    open market after the distribution has been completed or the
    exercise of the over-allotment option. The underwriters may also
    make "naked" short sales of Class A common shares
    in excess of the over-allotment option. The underwriters must
    close out any naked short position by purchasing Class A
    common shares in the open market. A naked short position is more
    likely to be created if the underwriters are concerned that
    there may be downward pressure on the price of Class A
    common shares in the open market after pricing that could
    adversely affect investors who purchase in this offering.
    Stabilizing transactions consist of bids for or purchases of
    Class A common shares in the open market while this
    offering is in progress.
The underwriters also may impose a penalty bid. Penalty bids
    permit the underwriters to reclaim a selling concession from a
    syndicate member when Ladenburg Thalmann & Co. Inc.
    repurchases Class A common shares originally sold by that
    syndicate member in order to cover syndicate short positions or
    make stabilizing purchases.
Any of these activities may have the effect of preventing or
    retarding a decline in the market price of Class A common
    shares. They may also cause the price of Class A common
    shares to be higher than the price that would otherwise exist in
    the open market in the absence of these transactions. The
    underwriters may conduct these transactions on the Nasdaq Stock
    Market LLC, or in the
over-the-counter
market, or otherwise. If the underwriters commence any of these
    transactions, they may discontinue them at any time.
We estimate that our portion of the total expenses of this
    offering, excluding the underwriting discounts, will be
    approximately $     .
A prospectus in electronic format may be made available on the
    websites maintained by one or more of the underwriters. The
    representative may agree to allocate a number of Class A
    common shares to underwriters for sale to their online brokerage
    account holders. The representative will allocate Class A
    common shares to
104
Table of Contents
underwriters that may make Internet distributions on the same
    basis as other allocations. In addition, Class A common
    shares may be sold by the underwriters to securities dealers who
    resell Class A common shares to online brokerage account
    holders.
The sum of all compensation to the underwriters in connection
    with this offering of Class A common shares, including the
    underwriting discount, will not exceed 8.0% of the total public
    offering price of the Class A common shares sold in this
    offering.
We anticipate that, from time to time, certain underwriters may
    act as brokers or dealers in connection with the execution of
    our portfolio transactions after they have ceased to be
    underwriters and, subject to certain restrictions, may act as
    brokers while they are underwriters.
Certain underwriters may have performed investment banking and
    advisory services for us, Muni Capital Management and their
    affiliates from time to time, for which they have received
    customary fees and expenses. Certain underwriters may, from time
    to time, engage in transactions with or perform services for us,
    Muni Capital Management and their affiliates in the ordinary
    course of business.
The principal business address of Ladenburg Thalmann &
    Co. Inc. is 520 Madison, 9th Floor, New York, New York
    10022.
LEGAL
    MATTERS
The validity of the securities offered by this prospectus will
    be passed upon by Schulte Roth & Zabel LLP, New York,
    New York. In connection with this offering, Greenberg Traurig
    LLP, New York, New York is acting as counsel to the underwriters.
EXPERTS
Consolidated financial statements as of December 31, 2008
    and for the year then ended and as of December 31, 2007 and
    for the period June 12, 2007 (Inception) to
    December 31, 2007 of Muni Funding Company of America, LLC,
    included in this prospectus and elsewhere in the registration
    statement, have been so included in reliance upon the report of
    Grant Thornton LLP, independent registered public accountants,
    upon the authority of said firm as experts in giving said report.
The consolidated financial statements as of December 31,
    2009 and for the year ended December 31, 2009 included in
    this prospectus and elsewhere in the registration statement have
    been included in reliance upon the reports of KPMG LLP,
    independent registered public accounting firm, appearing
    elsewhere herein and upon the authority of said firm as experts
    in accounting and auditing.
WHERE YOU
    CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on
Form S-1
under the Securities Act with respect to the securities we are
    offering by this prospectus. This prospectus does not contain
    all of the information included in the registration statement.
    For further information about us and our securities, you should
    refer to the registration statement and the exhibits and
    schedules filed with the registration statement. Whenever we
    make reference in this prospectus to any of our contracts,
    agreements or other documents, the references are materially
    complete but may not include a description of all aspects of
    such contracts, agreements or other documents, and you should
    refer to the exhibits attached to the registration statement for
    copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the
    information requirements of the Exchange Act and will file
    annual, quarterly and current event reports, proxy statements
    and other information with the SEC. You can read our SEC
    filings, including the registration statement, over the Internet
    at the SEC's website at www.sec.gov. You may also read and
    copy any document we file with the SEC at its public reference
    facility at 100 F Street, N.E., Washington, D.C.
    20549.
You may also obtain copies of the documents at prescribed rates
    by writing to the Public Reference Section of the SEC at
    100 F Street, N.E., Washington, D.C. 20549.
    Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
    facilities.
105
TABLE OF
    CONTENTS
Audited
    Financial Statements
December 31, 2009 and 2008
Page
Report of Independent Registered Public
    Accounting Firm
F-2
Consolidated Statements of Assets and
    Liabilities
F-4
Consolidated Schedule of Investments as of
    December 31, 2009
F-5
Consolidated Schedule of Investments as of
    December 31, 2008
F-6
Consolidated Statements of Operations
F-7
Consolidated Statements of Changes in Net
    Assets
F-8
Consolidated Statements of Cash Flows
F-9
Notes to Consolidated Financial Statements
F-10
Audited Financial Statements
December 31, 2007
Consolidated statement of assets and
    liabilities
F-31
Consolidated schedule of investments
F-32
Consolidated statement of operations
F-33
Consolidated statement of changes in net
    assets
F-34
Consolidated statement of cash flows
F-35
Notes to consolidated financial statements
F-36
F-1
Table of Contents
Report of
    Independent Registered Public Accounting Firm
The Board of Directors
Muni Funding Company of America, LLC:
We have audited the accompanying consolidated statement of
    assets and liabilities, including the consolidated schedule of
    investments, of Muni Funding Company of America, LLC as of
    December 31, 2009, and the related consolidated statements
    of operations, changes in net assets, and cash flows for the
    year ended December 31, 2009. These consolidated financial
    statements are the responsibility of the Company's
    management. Our responsibility is to express an opinion on these
    consolidated financial statements based on our audit. The
    accompanying consolidated statement of assets and liabilities,
    including the schedule of investments as of December 31,
    2008, and the related consolidated statements of operations,
    changes in net assets, and cash flows for the year end
    December 31, 2008 were audited by other independent
    registered public accountants whose report thereon, dated
    March 16, 2009, expressed an unqualified opinion on those
    financial statements.
We conducted our audit in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. An audit includes consideration
    of internal control over financial reporting as a basis for
    designing audit procedures that are appropriate in the
    circumstances, but not for the purpose of expressing an opinion
    on the effectiveness of the Company's internal control over
    financial reporting. Accordingly, we express no such opinion. An
    audit also includes examining, on a test basis, evidence
    supporting the amounts and disclosures in the financial
    statements, assessing the accounting principles used and
    significant estimates made by management, as well as evaluating
    the overall financial statement presentation. We believe that
    our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
    to above present fairly, in all material respects, the financial
    position of Muni Funding Company of America, LLC as of
    December 31, 2009, and the results of its operations, the
    changes in its net assets, and its cash flows for the year
    ended, in conformity with U.S. generally accepted
    accounting principles.
/s/ KPMG LLP
New York, New York
February 22, 2010
F-2
Table of Contents
Report of
    Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Muni Funding Company of America, LLC
We have audited the accompanying consolidated statements of
    assets and liabilities of Muni Funding Company of America, LLC
    (a Delaware Limited Liability Company), including the
    consolidated schedules of investments, as of December 31,
    2008 and 2007, and the related consolidated statements of
    operations, changes in net assets and cash flows for the year
    ended December 31, 2008 and the period June 12, 2007
    (Inception) to December 31, 2007. These financial
    statements are the responsibility of the Company's
    management. Our responsibility is to express an opinion on these
    financial statements based on our audits.
We conducted our audits in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. The Company is not required to
    have, nor were we engaged to perform an audit of its internal
    control over financial reporting. Our audit included
    consideration of internal control over financial reporting as a
    basis for designing audit procedures that are appropriate in the
    circumstances, but not for the purpose of expressing an opinion
    on the effectiveness of the Company's internal control over
    financial reporting. Accordingly, we express no such opinion. An
    audit also includes examining, on a test basis, evidence
    supporting the amounts and disclosures in the financial
    statements, assessing the accounting principles used and
    significant estimates made by management, as well as evaluating
    the overall financial statement presentation. We believe that
    our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
    present fairly, in all material respects, the consolidated
    financial position of Muni Funding Company of America, LLC (a
    Delaware Limited Liability Company) as of December 31, 2008
    and 2007, and the consolidated results of its operations,
    changes in net assets and cash flows for the year ended
    December 31, 2008 and the period June 12, 2007
    (Inception) to December 31, 2007, in conformity with
    accounting principles generally accepted in the United States of
    America.
/s/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
May 13, 2010
F-3
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Consolidated Statements of Assets and
    Liabilities
December 31,
    2009 and 2008
2009
2008
Assets:
Cash and cash equivalents
$
29,090,353
$
9,560,219
Restricted cash
277,000
—
Investments, at fair value
57,971,131
15,302,902
Accrued interest receivables
3,302,965
4,420,243
Derivative asset
27,095
—
Other assets
—
358,775
Total assets
90,668,544
29,642,139
Liabilities:
Due to the Manager (related party)
114,756
49,662
Accrued expenses and other liabilities
338,679
354,924
Total liabilities
453,435
404,586
Net assets
$
90,215,109
29,237,553
Net asset value per share (37,416,669 and 17,847,015 shares
    outstanding, respectively)
$
2.41
$
1.64
See accompanying notes to consolidated financial statements.
F-4
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Consolidated Schedule of Investments
December 31,
    2009
Percentage
Amortized
Cusip
State
Coupon
Maturity
of Net Assets
Par Value
Cost
Fair Value
Tax exempt bonds: (1)
Investment in trusts — NPPF 2:
Cope Community Services
89874QAA6
AZ
6.13
%
Aug-37
3.7
%
$
4,385,000
$
4,384,643
$
3,347,969
21st Century Charter School
082445AA5
AZ
6.00
Oct-32
2.8
3,550,000
3,549,814
2,491,940
Sacramento Country Day School
130795JV0
CA
5.65
Aug-37
11.5
13,350,000
13,331,239
10,366,208
Sierra Canyon High School Foundation
54465NAB0
CA
6.00
May-32
3.4
3,882,260
3,946,844
3,065,200
Goodwill of San Joaquin Valley
13033WD91
CA
5.85
Sep-37
2.9
3,405,000
3,404,711
2,596,585
Global Country of World Peace
I 9648AEC5
CO
5.70
Feb-37
13.6
17,460,000
16,979,954
12,253,253
Maranatha High School
19645 RCA7
CO
7.25
Aug-37
10.2
11,900,000
11,899,561
9,260,937
Yampa Valley Medical Center
19648AEU5
CO
5.13
Sep-29
7.5
7,500,000
7,224,824
6,798,413
Global Country of World Peace
1964745C0
CO
5.80
Feb-37
0.9
1,145,000
1,046,860
815,572
Madison Center
790609ANI
IN
5.25
Feb-28
3.6
4,000,000
3,881,024
3,289,130
Labette County Medical Center
505392BU3
KS
5.75
Sep-37
0.8
750,000
768,836
684,536
YMCA of the Capital Area
546279327
LA
6.25
Sep-37
7.8
9,755,000
9,754,151
7,003,895
UMass Memorial Medical Center
57586CLQ6
MA
5.00
Jul-33
10.7
10,920,000
10,369,676
9,711,129
Alternatives Unlimited
57583RTU9
MA
7.38
Mar-38
10.0
10,895,000
10,892,929
9,010,383
Maine Central Institute
56041NAL6
ME
6.00
Aug-37
3.9
4,440,000
4,433,875
3,487,731
Guadalupe Centers
48503IFK9
MO
6.15
Feb-38
3.6
4,430,000
4,429,852
3,224,021
Family Guidance Center for Behavioral Healthcare
79076NAA0
MO
5.50
Mar-37
4.3
5,335,000
5,211,956
3,840,426
Tri-County Community Action Program
64468KBD7
NH
6.50
Sep-37
1.8
2,100,000
2,099,797
1,592,451
West Penn Allegheny Health System
01728AG83
PA
5.38
Nov-40
9.3
11,530,000
10,973,945
8,456,506
NHS III Properties
613609XN1
PA
6.50
Oct-37
5.8
6,740,000
6,739,186
5,281,043
Total investments of NPPF 2
118.1
137,472,260
135,323,677
106,577,328
Class A Senior Certificates
65537WAA2
3.00
Feb-11
(73.0
)
(65,856,685
)
(65,856,685
)
(65,856,685
)
Class B Junior Certificates
65537WABO
45.1
71,615,575
69,466,992
40,720,643
Direct investments in tax exempt securities:
Cardiovascular Research Foundation
773557AH6
NY
5.40
Jan-35
1.7
2,000,000
1,931,404
1,516,840
Project CURE
19648AGA7
CO
7.38
Feb-28
7.6
7,905,000
7,903,250
6,879,069
Labette County Medical Center
505392BU3
KS
5.75
Sep-37
0.4
350,000
356,932
319,450
Florida Care Properties
605279GU6
MS
6.50
Aug-27
5.0
5,035,000
5,069,817
4,538,876
Florida Care Properties
928104KK3
VA
6.50
Aug-27
4.4
4,475,000
4,481,778
3,996,253
Direct investments in tax exempt securities
19.1
19,765,000
19,743,181
17,250,488
Total investments
64.2
%
$
91,380,575
$
89,210,173
$
57,971,131
(1)
All tax exempt securities held directly by the Company and in
    NPPF 2 are revenue bonds which are issued by a municipality or
    an authority on behalf of a nonprofit corporation to finance or
    refinance a specific project and are typically secured by a
    mortgage or a revenue pledge, or both, and a debt service
    reserve fund.
See accompanying notes to consolidated financial statements.
F-5
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Consolidated Schedule of Investments
December 31,
    2008
Percentage
Amortized
Cusip
State
Coupon
Maturity
of Net Assets
Par value
Cost
Fair Value
Tax exempt bonds:
Investment in trusts — NPPF 2:
Cope Community Services
89874QAA6
AZ
6.13
%
Aug-37
8.9
%
$
4,445,000
$
4,444,656
$
2,611,782
21st Century Charter School Project
082445AA5
AZ
6.00
Oct-32
7.4
3,550,000
3,549,846
2,170,248
Sacramento Country Day School
130795JV0
CA
5.65
Aug-37
29.2
13,350,000
13,330,696
8,547,838
Sierra Canyon High School Foundation
54465NAB0
CA
6.00
May-32
8.8
3,962,008
4,028,418
2,569,838
Goodwill of San Joaquin Valley
13033WD91
CA
5.85
Sep-37
7.7
3,455,000
3,454,721
2,243,478
Global Country of World Peace
19648AEC5
CO
5.70
Feb-37
38.4
18,360,000
17,837,667
11,223,009
Maranatha High School
19645RCA7
CO
7.25
Aug-37
28.7
11,900,000
11,899,595
8,389,381
Yampa Valley Medical Center
19648AEU5
CO
5.13
Sep-29
16.8
7,500,000
7,215,084
4,902,769
Global Country of World Peace
1964745C0
CO
5.80
Feb-37
12.5
5,945,000
5,418,073
3,663,071
Madison Center
790609AN1
IN
5.25
Feb-28
9.0
4,000,000
3,876,595
2,637,070
Labette County Medical Center
505392BU3
KS
5.75
Sep-37
1.5
750,000
769,199
449,370
YMCA of the Capital Area
546279J27
LA
6.25
Sep-37
21.8
9,885,000
9,884,183
6,383,535
UMass Memorial Medical Center
57586CLQ6
MA
5.00
Jul-33
20.4
10,920,000
10,355,572
5,974,441
Maine Central Institute
56041NAL6
ME
6.00
Aug-37
10.0
4,500,000
4,493,670
2,937,184
Massachusetts St Dev Fin Agy Rev
57583RTU9
MA
7.38
Mar-38
26.8
11,000,000
11,005,007
7,845,228
Eaglecrest Senior Housing
778112AA0
MN
5.38
Jul-42
43.7
23,505,000
23,024,658
12,762,569
Guadalupe Centers
485031FK9
MO
6.15
Feb-38
9.4
4,430,000
4,429,878
2,734,550
Family Guidance Ctr for Behavioral Hthcre
79076NAA0
MO
5.50
Mar-37
10.2
5,415,000
5,277,500
2,980,782
Tri-county Community Action Program
64468KBD7
NH
6.50
Sep-37
4.7
2,125,000
2,124,804
1,379,964
Oak Tree Foundation
34565IAD5
OR
5.50
Mar-37
11.3
5,245,000
5,163,937
3,287,500
West Penn Allegheny Health System
01728AG83
PA
5.38
Nov-40
19.0
11,530,000
10,964,492
5,540,482
NHS III Properties
613609XN1
PA
6.50
Oct-37
14.9
6,900,000
6,899,182
4,357,333
Reedsburg Area Medical Center
97710VH43
WI
5.65
Jun-26
26.7
11,690,000
11,828,448
7,802,315
Total investments of NPPF 2
387.8
184,362,008
181,275,881
113,393,737
Class A Senior Certificates
65537WAA2
2.85
Feb-09
(387.8
)
(116,077,410
)
(116,077,410
)
(113,393,737
)
Investment in NPPF 2
—
68,284,598
65,198,471
—
Investment in trusts — Merrill Lynch Trusts:
Class B certificate interests
708787AA4
2.9
21,270,000
20,490,986
840,389
Investment in Merrill Lynch Trusts
2.9
21,270,000
20,490,986
840,389
Direct investments in tax exempt securities:
Rockland Cnty NY Indl Dv Agy
773557AH6
NY
5.40
Jan-35
4.1
2,000,000
1,928,092
1,205,820
Colorado Health Facs Auth Rev
19648AGA7
CO
7.38
Feb-28
19.8
7,905,000
7,903,292
5,794,859
Labette County Medical Center
505392BS8
KS
5.75
Sep-29
2.8
1,250,000
1,301,194
802,653
Labette County Medical Center
505392BU3
KS
5.75
Sep-37
0.7
350,000
357,066
209,706
Florida Care Properties
605279GU6
MS
6.50
Aug-27
I 1.4
5,180,000
5,217,400
3,341,100
Florida Care Properties
928104KK3
VA
6.50
Aug-27
10.6
4,605,000
4,612,317
3,108,375
Direct investments in tax exempt securities
49.4
21,290,000
21,319,361
14,462,513
Total investments
52.3
%
$
110,844,598
$
107,008,818
$
15,302,902
See accompanying notes to consolidated financial statements.
F-6
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Consolidated Statements of Operations
Years
    ended December 31, 2009 and 2008
2009
2008
Investment income:
Income — investments
$
8,581,819
$
8,106,531
Income — total return swap
—
903,623
Income — other
23,345
1,225,434
Total investment income
8,605,164
10,235,588
Expenses:
Management fee (related party)
962,670
1,276,477
Amortization of financing costs
194,559
38,912
Professional fees
963,373
2,047,694
Insurance
266,788
313,994
Directors compensation
58,500
391,570
Shareholder reporting and transfer agent
15,427
86,703
Other general and administrative
184,814
182,283
Non cash incentive compensation (related party)
471,966
876,422
Total expenses
3,118,097
5,214,055
Net investment income
5,487,067
5,021,533
Realized losses:
Investments
(18,957,635
)
—
Derivatives
—
(38,829,108
)
Net realized losses
(18,957,635
)
(38,829,108
)
Unrealized gains (losses):
Investments
54,464,711
(81,112,777
)
Derivatives
27,095
7,241,926
Net unrealized gains (losses)
54,491,806
(73,870,851
)
Net increase (decrease) in net assets resulting from operations
    before performance share allocation
41,021,238
(107,678,426
)
Performance share allocation
(5,920,448
)
—
Net increase (decrease) in net assets resulting from operations
    after performance share allocation
$
35,100,790
$
(107,678,426
)
Basic net increase (decrease) in net assets from operations per
    share(1)
$
1.30
$
(6.24
)
Diluted net increase (decrease) in net assets from operations
    per share(1)
$
1.30
$
(6.24
)
Weighted average common shares outstanding — basic
31,649,890
17,256,289
Weighted average common shares outstanding — diluted
31,649,890
17,256,289
Distributions declared per share
$
—
$
0.24
(1)
Calculation excludes performance share allocation
See accompanying notes to consolidate financial statements.
F-7
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Consolidated Statements of Changes in Net Assets
Years
    ended December 31, 2009 and 2008
2009
2008
Increase (decrease) in net assets resulting from operations:
Net investment income
$
5,487,067
$
5,021,533
Net realized losses
(18,957,635
)
(38,829,108
)
Net unrealized gains (losses)
54,491,806
(73,870,851
)
Net increase (decrease) in net assets resulting from operations
41,021,238
(107,678,426
)
Decrease in net assets resulting from distributions to
    shareholders:
Distributions to common shareholders
—
(4,147,224
)
Distributions to LTIP shareholders
—
(152,400
)
Total decrease in net assets resulting from distributions to
    shareholders
—
(4,299,624
)
Increase in net assets from share transactions
Increase in net assets from issuance of common shares, net
25,404,800
—
Vesting of incentive compensation
471,966
876,422
Total increase in net assets from share transactions
25,876,766
876,422
Decrease in net assets from performance share allocation:
Performance share allocation paid in cash
(2,083,000
)
—
Performance share allocation paid in shares
(3,837,448
)
—
Total decrease in net assets from performance share allocation
(5,920,448
)
—
Net increase (decrease) in net assets
60,977,556
(111,101,628
)
Net assets, beginning of year
29,237,553
140,339,181
Net assets, end of year
$
90,215,109
$
29,237,553
See accompanying notes to consolidated financial statements.
F-8
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
Consolidated Statements of Cash Flows
Years
    ended December 31, 2009 and 2008
2009
2008
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations
    before performance share allocation
$
41,021,238
$
(107,678,426
)
Adjustments to reconcile net increase (decrease) in net assets
    resulting from operations before performance share allocation to
    net cash flows used in operating activities:
Net unrealized gains (losses)
(54,491,806
)
73,870,851
Non cash incentive compensation (related party)
471,966
876,422
Net realized losses(1)
18,957,635
38,228
Purchase of investments
(50,220,728
)
(106,931,326
)
Sale of investments
43,150,379
—
Amortization of bond discount
(90,804
)
(77,492
)
Change in operating assets and liabilities:
(Increase) decrease in accrued interest receivables
1,117,278
(3,070,097
)
(Increase) decrease in restricted cash
(277,000
)
29,000,000
(Increase) decrease in other assets
358,775
(275,025
)
Increase (decrease) due to the Manager
65,094
(130,188
)
Increase (decrease) in accrued expenses and other liabilities
(16,245
)
120,094
Net cash provided by (used in) operating activities
45,782
(114,256,959
)
Cash flows from financing activities:
Proceeds from issuance of common shares, net of costs of $173,005
21,567,352
—
Distributions to common shareholders
—
(4,147,224
)
Distributions to LTIP shareholders
—
(152,400
)
Performance share allocation paid in cash
(2,083,000
)
—
Net cash provided by (used in) financing activities
19,484,352
(4,299,624
)
Net increase (decrease) in cash and cash equivalents
19,530,134
(118,556,583
)
Cash and cash equivalents, beginning of year
9,560,219
128,116,802
Cash and cash equivalents, end of year
$
29,090,353
$
9,560,219
Supplemental disclosures of noncash financing activities
Performance share allocation
$
3,837,448
$
—
(1)
In 2008, net realized losses on the Statements of Cash Flows
    includes $38,228 of realized loss from the sale of Tender Option
    Bonds, which is included in the $38,829,108 of net realized
    losses on derivatives on the Statements of Operations.
See accompanying notes to consolidated financial statements.
F-9
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
December 31,
    2009 and 2008
(1)
Organization
    and Nature of Operations
Muni Funding Company of America, LLC (the "Company")
    was organized as a Delaware Limited Liability Company on
    April 27, 2007. The Company began operations on
    June 12, 2007 upon the completion of an offering of common
    shares of limited liability interests (Common Shares) in a
    private offering to qualified institutional buyers in accordance
    with Rule 144A under the Securities Act of 1933.
The Company is a specialty finance holding company that invests
    directly or indirectly in U.S. federally tax exempt bonds
    with the objective of generating attractive risk-adjusted
    returns and predictable cash distributions. The Company seeks to
    achieve this objective by (1) acquiring interests in
    structured credit vehicles which own debt obligations, the
    interest on which is exempt from U.S. federal income
    taxation; (2) investing in total return swaps and other
    derivative arrangements relating to tax exempt securities; and
    (3) making direct investments in tax exempt securities. The
    Company may also invest in securities that are subject to
    federal income tax.
The Company is externally managed and advised by Tricadia
    Municipal Management, LLC (the "Manager"). The Manager
    is a wholly-owned subsidiary of Tricadia Holdings, L.P.
    (together with its predecessors and subsidiaries
    "Tricadia"). Prior to March 18, 2009, the Company
    was managed by Cohen Municipal Capital Management, LLC (the
    "Former Manager"), a subsidiary of Cohen Brothers, LLC
    ("Cohen and Company"). In February 2009, Tiptree
    Financial Partners, L.P. ("Tiptree"), a private
    partnership managed by Tricadia, acquired a controlling interest
    in the Company. Currently, Tiptree owns approximately 75% of the
    outstanding Common Shares of the Company.
The Company has selected December 31 as its fiscal year-end. The
    Company has no stated date of dissolution.
(2)
Summary
    of Significant Accounting Policies
The accompanying consolidated financial statements have been
    prepared by management in accordance with accounting principles
    generally accepted in the United States of America
    (U.S. GAAP).
Although the Company conducts its operations so that the Company
    is not required to register as an investment company under the
    Investment Company Act, for financial reporting purposes the
    Company is an investment company and follows the AICPA Audit and
    Accounting Guide for Investment Companies (the Audit Guide).
    Accordingly, investments are carried at fair value with changes
    in fair value reflected in the consolidated statements of
    operations.
(a)
Use of
    Estimates
The preparation of financial statements in conformity with
    U.S. GAAP requires management to make assumptions and
    estimates that affect the reported amounts in the consolidated
    financial statements and the accompanying notes. Actual results
    could differ from those estimates.
(b)
Principles
    of Consolidation
The accompanying consolidated financial statements include the
    accounts of the Company and its wholly owned subsidiary MFCA
    Funding, Inc. (Funding, Inc.). All intercompany transactions
    have been eliminated.
On December 24, 2003, the Financial Accounting Standards
    Board (FASB) issued Accounting Standards Codification
    ("ASC") Topic 810,
Consolidation
(formerly
    Interpretation No. 46 (Revised December 2003),
Consolidation of Variable Interest Entities
(FIN 46R)), to clarify the application of Accounting
    Research Bulletin (ARB) No. 51,
Consolidated Financial
    Statements
(ARB 51), as amended by FASB Statement
    No. 94,
Consolidation of All Majority-Owned Subsidiaries
(SFAS No. 94). However, the effective date of
F-10
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
FIN 46R was deferred for investment companies (including
    nonregistered investment companies) that are accounting for
    investments in accordance with the Audit Guide.
On May 11, 2007, the FASB clarifies that those entities
    which account for themselves as investment companies under the
    Audit Guide are not subject to the consolidation requirements of
    FIN 46R.
The Company reviews each investment that it makes under a
    control based framework in accordance with ASC Topic 810. If the
    Company determines it controls the investee and the investee
    itself meets the definition of an investment company under the
    Audit Guide, the Company consolidates the investee. Otherwise,
    the Company will report its equity investment at fair value as
    required by the Audit Guide.
(c)
Recent
    Accounting Developments
In June 2009, the FASB issued ASC Topic 860,
Transfers and
    Servicing
(formerly Statement of Financial Accounting
    Standards (SFAS) No. 166,
Accounting for Transfers of
    Financial Assets
— an amendment of FASB Statement
    No. 140) and ASC Topic 810, (formerly
    SFAS No. 167, Amendments to FASB Interpretation
    No. 46(R)), which change the accounting for securitizations
    and VIEs. ASC Topic 860 eliminates the concept of a QSPE,
    changes the requirements for derecognizing financial assets, and
    requires additional disclosures about transfers of financial
    assets, including securitization transactions and continuing
    involvement with transferred financial assets. ASC Topic 810
    will change the determination of whether and when a VIE should
    be consolidated. ASC Topic 860 and ASC Topic 810 are effective
    for fiscal years beginning after November 15, 2009. The
    Company is currently evaluating the impact that ASC Topic 860
    and ASC Topic 810 will have on the consolidated financial
    statements.
In August 2009, the FASB issued Accounting Standards Update
    ("ASU")
2009-5,
Fair
    Value Measurements and Disclosures — Measuring
    Liabilities at Fair Value, which amends ASC Topic 820 to provide
    further guidance on how to measure the fair value of a
    liability. ASU
2009-5
primarily sets forth the types of valuation techniques to be
    used to value a liability when a quoted price in an active
    market for the identical liability is not available. In these
    circumstances, ASU
2009-5 states
that a company can apply the quoted price of an identical or
    similar liability when traded as an asset, or other valuation
    techniques that are consistent with principles of ASC Topic 820.
    ASU
2009-5
will be effective for the next reporting period and the Company
    does not expect such adoption to have a material effect on the
    consolidated financial statements.
In June 2009, the FASB issued ASC Topic 855,
Subsequent
    Events
(formerly SFAS No. 165), which establishes
    general standards of accounting for, and disclosing events that
    occur after the balance sheet date but before the financial
    statements are issued or available to be issued. It requires the
    disclosure of the date through which an entity has evaluated
    subsequent events and the basis for that date, i.e., whether the
    date represents the date the financial statements were issued or
    were available to be issued. Subsequent events have been
    evaluated through February 22, 2010, the issuance date of
    our financial statements.
(d)
Cash
    and Cash Equivalents
Cash and cash equivalents consist of cash held at banks as well
    as short term investments with an original maturity of three
    months or less, as defined in ASC Topic 230,
Statement of
    Cash Flows
.
(e)
Restricted
    Cash
Restricted cash represents cash collateral posted with
    counterparties. Income earned on restricted cash balances is
    included as a component of income — other in the
    consolidated statements of operations.
(f)
Financial
    Instruments
Fair value is used to measure the Company's financial
    instruments. The fair value of a financial instrument is the
    amount that would be received to sell an asset or paid to
    transfer a liability in an orderly transaction between market
    participants at the measurement date, also known as the exit
    price.
F-11
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
The fair values of the Company's assets and liabilities
    which qualify as financial instruments under ASC Topic 825
    (formerly SFAS No. 107,
Disclosures about Fair
    Value of Financial Instruments)
, approximate the carrying
    amounts presented in the consolidated statements of assets and
    liabilities.
The Company has adopted ASC Topic 820 (formerly
    SFAS No. 157,
Fair Value Measurements)
). ASC
    Topic 820 establishes a fair value hierarchy that prioritizes
    the inputs to valuation techniques used to measure fair value.
    The hierarchy gives the highest priority to unadjusted quoted
    prices in active markets for identical assets or liabilities
    (Level 1 measurements) and the lowest priority to
    unobservable inputs (Level 3 measurements). The three levels of
    the fair value hierarchy under ASC Topic 820 are described below:
Level 1
— Financial assets and liabilities
    whose values are based on unadjusted quoted prices in active
    markets that are accessible at the measurement date for
    identical, unrestricted assets or liabilities.
Level 2
— Financial assets and liabilities
    whose values are based on one or more of the following:
(a) Quoted prices for similar assets or liabilities in
    active markets;
(b) Quoted prices for identical or similar assets or
    liabilities in nonactive markets;
(c) Pricing models whose inputs are observable for
    substantially the full term of the asset or liability;
(d) Pricing models whose inputs are derived principally
    from or corroborated by observable market data through
    correlation or other means for substantially the full term of
    the asset or liability.
Level 3
— Financial assets and liabilities
    whose values are based on prices or valuation techniques that
    require inputs that are both significant to the fair value
    measurement and unobservable. These inputs reflect
    management's own assumptions about the assumptions a market
    participant would use in pricing the asset or liability.
A financial instrument's level within the fair value
    hierarchy is based on the lowest level of input that is
    significant to the fair value measurement. See note 6 for a
    discussion of the impact of adopting ASC Topic 820.
Following is a description of the valuation methodologies used
    for instruments measured at fair value, as well as the general
    classification of such instruments pursuant to the valuation
    hierarchy.
Investments
The Company invests in debt obligations, the interest on which
    is exempt from U.S. federal income taxation. In some cases
    the Company purchases the investments directly; and in other
    cases the Company invests in a special purpose trust which holds
    the assets. From time to time, the Company may also invest in
    certain derivative contracts. The Company records all of its
    investments at fair value.
I.
Direct
    Investment in Tax Exempt Securities
In general, fair value is determined by obtaining quotations
    from independent pricing services. In most cases, quotes are
    obtained from two pricing services and the average of both
    quotes is used. The independent pricing services determine their
    quotes using observable inputs such as current interest rates,
    specific issuer information and other market data for such
    securities. Therefore, the Company's estimate of fair value
    is subject to a high degree of variability based upon market
    conditions, the availability of specific issuer information and
    the assumptions made. Due to the inherent uncertainty of
    valuation, these estimated fair values may differ from the
    actual price obtained through sales. The valuation inputs used
    to arrive at fair value for such debt obligations are generally
    classified within Level 2 or 3 of the valuation hierarchy.
    The difference
F-12
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
between the cost basis in the investment and the fair value is
    included in the unrealized gains/(losses) —
    investments.
The income earned on the tax exempt securities is recorded on an
    accrual basis and included as a component of income-investments
    in the consolidated statements of operations. Any accrued and
    unpaid income is included as a component of receivables in the
    consolidated statements of assets and liabilities.
II.
Investment
    in Trusts
The Company will invest in a trust in order to acquire tax
    exempt securities. The trust will acquire the bonds and finance
    the purchase by issuing junior and senior certificates. In
    general, the Company will purchase all of the junior
    certificates and third party investors will purchase the senior
    certificates.
In valuing its investment, the junior certificates, the Company
    will generally use one of two techniques:
Asset
    Based Valuation
The Company will value all of the underlying assets of the trust
    as noted in the previous section above. The Company will then
    deduct from this, the fair value of the senior certificates of
    the trust. The senior certificates have a stated rate of
    interest. In addition, the certificate holder is entitled to a
    pro-rata share of 20% of the appreciation of the financial
    assets owned by the trust over an agreed upon threshold amount
    ("Gain Share").
The fair value of the senior certificates is calculated by using
    either pricing quotes from independent pricing services or
    internally prepared pricing models. Depending on the inputs to
    these models, this will generally be classified as either
    Level 2 or Level 3 financial instruments in the
    valuation hierarchy. Any fair value estimate will include any
    Gain Share owed to the senior certificates. Any change in fair
    value of the junior certificates will be recorded as a component
    of unrealized gains/(losses) — investments in the
    consolidated statements of operations.
Cash Flow
    Based Valuation
The Company will determine a valuation of the junior
    certificates by estimating the residual cash flows it will
    receive and applying an appropriate discount rate. In general, a
    cash flow based valuation will be considered a Level 3
    valuation.
Each circumstance is unique, but in general, the company will
    default to an asset based valuation. The Company will use a cash
    flow based valuation in cases where the asset based valuation
    yields a result close to zero (or a negative amount) yet the
    residual interest is still generating cash flow and is expected
    to for the foreseeable future.
The "Net Carry" of the trust is comprised of the
    income earned on the tax exempt securities acquired by the trust
    offset by the stated interest paid to the senior certificates.
    This Net Carry is recorded on an accrual basis and is recorded
    as a component of income-investments in the consolidated
    statements of operations. Any accrued and unpaid Net Carry is
    included as a component of receivables in the consolidated
    statements of assets and liabilities. See note 9 and
    note 10.
III.
    Interest Rate Swap
The Company has entered into interest rate swaps. Interest rate
    swap contracts represent the contractual exchange of fixed and
    floating rate payments based on a notional amount and a
    referenced interest rate. The Company uses interest rate swaps
    to hedge all or a portion of the interest rate risk associated
    with its investments.
F-13
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
The fair value of the interest rate swaps is either included in
    derivative asset or derivative liability in the consolidated
    statements of assets and liabilities. Fair value is determined
    by obtaining broker or counterparty quotes. Because there were
    observable inputs used to arrive at these quoted market prices,
    the Company considered the interest rate swaps to be
    Level 2 financial instruments within the valuation
    hierarchy. The change in the unrealized loss is included as a
    component of unrealized gains/(losses) — derivatives
    in the consolidated statements of operations. The periodic
    payments or receipts under the Company's interest rate swap
    contracts are recorded as an increase or decrease in interest
    expense or income in the consolidated statements of operations.
    See Note 7 for further discussion of the Company's
    interest rate swap activities.
(g)
Income
    Taxes
The Company qualifies as a partnership for U.S. federal
    income tax purposes. As a partnership, the Company will not pay
    federal income tax and will be treated as a pass through entity.
    However, MFCA Funding Inc. ("Funding Inc."), a wholly
    owned subsidiary of the Company is organized as a C-corporation
    for U.S. federal income tax purposes and will pay federal
    income tax. Further, the Company may be subject to certain state
    and local income taxes.
Deferred tax assets and liabilities are determined using the
    asset and liability method in accordance with ASC Topic 740
    (formerly SFAS No. 109,
Accounting for Income
    Taxes)
, under this method, deferred tax assets and
    liabilities are established for future tax consequences of
    temporary differences between the financial statement carrying
    amounts of assets and liabilities and their tax basis. Deferred
    tax assets and liabilities are measured using enacted tax rates
    expected to apply to taxable income in years in which those
    temporary differences are expected to reverse. A valuation
    allowance is established when necessary to reduce a deferred tax
    asset to the amount expected to be realized. As of
    December 31, 2009 and 2008, the Company had recorded a 100%
    valuation allowance against the deferred tax asset in each
    period.
In accordance with ASC Topic 740 (FIN No. 48,
Accounting for Uncertainty in Income Taxes
), the Company
    evaluates tax positions taken or expected to be taken in the
    course of preparing its tax returns to determine whether the tax
    positions are "more-likely than-not" of being
    sustained by the applicable tax authority. The Company's
    tax benefit or tax expense is adjusted accordingly for tax
    positions not deemed to meet the more-likely than-not threshold
    in the current year. The Company records interest and penalties
    associated with audits as a component of income before income
    taxes. Penalties are recorded as an operating expense, and
    interest expense is recorded as interest expense in the
    consolidated statements of operations. The Company incurred no
    interest and penalties for the period from inception to
    December 31, 2009.
(h)
Securities
    Transactions and Income
Purchases and sales of investments and derivatives are recorded
    on a trade date basis. During the period between the trade date
    and settlement date, any money due to or from the counterparty
    will be recorded either as a component of receivables or accrued
    expenses and other liabilities in the consolidated statements of
    assets and liabilities.
Realized gains and losses are determined using the average cost
    method, when partial positions are sold or unscheduled paydowns
    are received. Interest income, adjusted for the accretion of
    discounts, and expenses are recorded on the accrual basis.
(i)
Net
    Increase (Decrease) in Net Assets from Operations
In accordance with ASC Topic 260 (formerly
    SFAS No. 128,
Earnings per Share
), the Company
    presents both basic and diluted net increase (decrease) in net
    assets from operations (EPS) in its consolidated financial
    statements and footnotes thereto. Basic net increase (decrease)
    in net assets from operations (Basic EPS)
F-14
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
excludes dilution and is computed by dividing net income or loss
    allocable to common shareholders by the weighted average number
    of common shares, including shares that were issued as
    compensation, such as vested restricted shares and vested LTIP
    shares that have achieved parity, outstanding for the period.
    Diluted net increase (decrease) in net assets from operations
    (Diluted EPS) reflect the potential additional dilution of
    unvested restricted shares and unvested and vested LTIP shares
    that have not achieved parity issued as compensation if they are
    not anti-dilutive. See note 11.
Effective January 1, 2009, the Company calculates EPS using
    the two-class method which is an earnings allocation formula
    that determines EPS for common shares and participating
    securities. Unvested share-based payment awards that contain
    non-forfeitable rights to distributions or distribution
    equivalents (whether paid or unpaid) are participating
    securities and shall be included in the computation of EPS using
    the two-class method. Accordingly, all earnings (distributed and
    undistributed) are allocated to common shares and participating
    securities based on their respective rights to receive
    distributions. See note 11.
(j)
Share-Based
    Compensation
The Company issued share based compensation to its directors and
    employees of its Former Manager and accounts for such issuances
    as equity-settled transactions using the methodology prescribed
    by ASC Topic 718 (formerly SFAS No. 123(R),
Share
    Based Compensation
, and Emerging Issues Task force (EITF)
No. 96-18,
Accounting
for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services)
.
Employees of the Company's Former Manager and certain
    independent members of the credit committee of Funding, Inc.
    received long term incentive profit shares (LTIP shares). LTIP
    shares are a special class of limited liability company
    interests whereby upon the occurrence of certain events, the
    Company will revalue its assets and an increase in the valuation
    will be allocated first to the holders of the LTIP shares to
    equalize the capital accounts of each LTIP share with the
    capital account of each common share. Upon equalization of the
    capital accounts, the LTIP shares will achieve full parity with
    the common shares and, to the extent the LTIP shares are vested,
    can be converted into common shares (a
"book-up
event").
At a meeting of the Board of Directors of the Company held on
    July 23, 2009, the directors approved the issuance of
    common shares in partial payment of a performance share
    allocation to the Manager. These shares were valued at $2.01 per
    share, which is higher than the LTIP shares' performance
    target of $1.25 per share. The issuance of these shares
    constituted a
"book-up
event" and the vested LTIP shares became eligible for
    conversion to common shares of the Company. All LTIP shares were
    converted to common shares as of December 31, 2009.
Nonmanagement directors received restricted common shares.
    Quarterly distributions on each restricted common share, whether
    vested or not, will be the same as those made on common shares.
    The restricted shares are subject to restrictions on transfer
    during the vesting period. In general, unvested restricted
    shares will vest early upon change of control or other
    liquidation. The fair value of the restricted common shares as
    of the grant date is being amortized to share based compensation
    over the three year vesting period of the underlying grants net
    of assumed forfeitures.
(3)
Related
    Party Transactions
Management Contract.
The Company has no
    employees and relies upon its Manager to conduct its operations
    pursuant to its management agreement dated June 12, 2007
    (the Management Agreement). On March 18, 2009, the Former
    Manager and Tricadia entered into an Assignment and Assumption
    Agreement that provided for the assignment of the Management
    Agreement to the Manager. The Manager is responsible for
    (i) the selection, purchase, monitoring and sale of
    portfolio investments; (ii) developing and implementing
F-15
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
the Company's financing and risk management policies;
    (iii) providing the Company with investment advisory
    services; and (iv) carrying out the day to day operations
    of the Company.
A.
Base Management Fee:
The Company pays
    the Manager a base management fee on a monthly basis equal to
    1/12th of the Company's US GAAP basis equity x 1.50%.
    The US GAAP basis equity shall exclude one time events pursuant
    to changes in US GAAP and other noncash charges (subject to the
    approval of the Company's independent directors). To date,
    the Company has not sought approval for any one time events or
    noncash charges. The Company accrues this expense on a monthly
    basis. Base management fees for the years ended
    December 31, 2009 and December 31, 2008 were $962,670
    and $1,276,477, respectively, and are separately reported in the
    consolidated statements of operations. The management fees
    remaining payable at December 31, 2009 and
    December 31, 2008 were $112,856 and $35,541, respectively,
    and are included as a component of due to the Manager in the
    consolidated statements of assets and liabilities.
The monthly base management fee payable will be reduced (but not
    below zero) by the proportionate share of the amount of any
    management fees paid to the Manager or its affiliates by a
    structured tax exempt partnership (STEP) or other structured
    credit vehicle in which the Company invests. The proportionate
    share is based on the percentage of the most junior class of
    certificates the Company holds in any STEP or other structured
    credit vehicle. Origination fees, structuring fees, or placement
    fees paid to the Manager and its affiliates will not reduce the
    base management fee. No such fees were incurred for the years
    ended December 31, 2009 and 2008.
B.
Performance Share Allocation
(PSA).  The Company will pay the Manager incentive
    compensation in the form of an allocation of profits to the
    performance share (on a quarterly basis) equal to the product of
    (i) 20% of the amount by which (a) consolidated net
    income per weighted average common share exceeds (b) the
    weighted average offering price of all common shares issued by
    the Company multiplied by the quarterly benchmark rate, as
    defined, and (ii) the weighted average number of common
    shares outstanding in such quarter. This amount is paid through
    a special allocation of assets to the performance share after
    the end of the quarter.
The quarterly benchmark is equal to the greater of (i) 2%
    or (ii) 0.75% plus the 10 year Municipal Market Data
    (MMD) index for the quarter. The performance share
    calculation will be adjusted to exclude one-time events pursuant
    to changes in U.S. GAAP, as well as other noncash charges
    (subject to the approval of the Company's independent
    directors). To date, the Company has not sought approval for any
    one time events or noncash charges. The Company accrues this
    expense on a quarterly basis. PSA approved by the board of
    directors for the years ended December 31, 2009 and 2008 is
    summarized below and are separately reported in the consolidated
    statements of assets and liabilities and the consolidated
    statements of operations.
Performance
    Share Allocation
Year Ended December 31
2009
2008
For the quarter ended:
March 31
$
1,200,895
$
—
June 30
2,082,691
—
September 30
2,636,862
—
December 31
—
—
Total
$
5,920,448
$
—
F-16
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
Under the Company's First Amended and Restated Limited
    Liability Company Agreement, the Company is required to pay PSA
    to the Manager. The Board of Directors considered the
    Company's need for capital and the implications of issuing
    common shares in lieu of a cash distribution and determined that
    each PSA should be paid as a combination of cash and common
    shares of the Company. Each quarterly PSA was paid as summarized
    below:
Performance
    Share Allocation Payments
For the Quarter Ended
March 31,
June 30,
September 30,
2009
2009
2009
Total PSA
$
1,200,895
$
2,082,691
$
2,636,862
PSA paid in cash
—
1,200,000
883,000
PSA paid in common shares
$
1,200,895
$
882,691
$
1,753,862
Net asset value per share before PSA
$
2.17
$
2.01
$
2.43
Shares issued in payment of PSA
553,407
438,712
721,528
Interest Rate Swap with Tiptree.
On
    July 14, 2009, the Company entered into a 10 year
    interest rate swap for the purpose of hedging portfolio-wide
    interest rate risk. The counterparty for the swap is Tiptree.
    The Company will make semi-annual interest payments to Tiptree
    based on a fixed rate of 3.6475% and a notional amount of
    $5,000,000. Tiptree will make quarterly interest payments based
    on a floating rate of three-month LIBOR and a notional amount of
    $5,000,000. The fair value of the interest rate swap is $27,095
    at December 31, 2009.
Expense Reimbursements.
From time to time, the
    Manager will pay certain of the Company's expenses and the
    Company will reimburse the Manager. Total reimbursement payments
    to Tricadia for general and administrative expenses for the
    period from March 18, 2009 through December 31, 2009
    were $447. Total reimbursement payments to the Former Manager
    for general and administrative expenses for the period from
    January 1, 2009 through March 17, 2009 and for the
    year ended December 31, 2008 were $16,780 and $146,477,
    respectively. Unpaid amounts due to the Managers for
    reimbursement at December 31, 2009 and 2008 were $0 and
    $14,121, respectively, and were included as a component of due
    to the Manager in the consolidated statements of assets and
    liabilities.
(4)
General
    and Administrative Expenses
The Company pays its own general and administrative expenses.
    The Manager is responsible for paying its employees compensation
    and benefits (with the exception of share based compensation
    described above). In general, the Company is responsible for all
    other general and administrative expenses for its operations.
These include (but are not limited to): transaction costs
    incidental to the acquisition, disposition and financing of
    investments; legal, tax, accounting, consulting, and other
    similar service fees and expenses; compensation and expenses of
    the Company's directors; the cost of directors' and
    officers' liability insurance; the costs associated with
    the establishment and maintenance of any credit facilities,
    tender option bond programs, and other financing arrangements
    and other indebtedness (including commitment fees, accounting
    fees, legal fees, closing and other costs); expenses associated
    with security offerings; expenses associated with making
    distributions to shareholders; the costs of printing and mailing
    proxies and reports to the Company's shareholders; costs
    associated with computer software or hardware; electronic
    equipment or purchased information technology services from
    third party vendors which is used solely by the Company; all
    regulatory costs incurred by the Company; and all taxes and
    insurance expense incurred by the Company or on its behalf.
F-17
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
In addition, the Company is required to pay its pro rata share
    of rent, telephone, utilities, office furniture, equipment,
    machinery and other office, internal and overhead expenses of
    the Manager which is required for the Company's operations.
    See note 3.
These expenses may be paid directly out of Company funds or,
    from time to time, will be paid by the Manager and the Company
    will reimburse the Manager.
(5)
Income
    Taxes
At December 31, 2009, the taxable subsidiary had net
    operating loss carry forwards for tax purposes of $1,016,842 and
    net capital loss carry forwards of $24,914,455. The net
    operating losses may be carried forward to reduce taxable income
    through the years 2027 of $651,733, 2028 of $245,589, and 2029
    of $119,520. The net capital losses may be carried forward to
    reduce capital gains through the years 2012 of $2,710,351 and
    2013 of $22,204,104.
Items that gave rise to deferred tax assets and liabilities at
    December 31, 2009 and 2008, were comprised of the
    following: for 2009, unrealized gains on municipal bonds, and
    net operating loss carry forward; and for 2008, unrealized
    losses on municipal bonds, net operating loss carry forward, and
    net capital loss carryforward. The gross deferred tax asset
    balance as of December 31, 2009 and 2008 was approximately
    $9,554,314 and $9,999,668, respectively. A 100% valuation has
    been established against the deferred tax assets because it is
    more likely than not that the Company will be unable to utilize
    the loss carry forwards before their respective expiration dates.
The components of the net deferred tax asset are summarized
    below:
December 31
2009
2008
Deferred tax asset:
Unrealized losses on municipal bonds
$
478,361
$
965,547
Net capital loss carryforward
8,720,058
8,720,058
Net operating loss
355,895
314,063
Total
9,554,314
9,999,668
Less:
Valuation allowance
(9,554,314
)
(9,999,668
)
$
—
$
—
The federal income tax benefit at the U.S. federal income
    tax rate of 35% is the income tax benefit reflected in the
    consolidated statements of operations which has been offset by a
    100% valuation allowance.
Income tax expense consisted of the following:
Year Ended December 31
2009
2008
Current tax expense
$
—
$
—
Deferred tax expense (credit)
445,354
(2,867,369
)
Change in valuation allowance
(445,354
)
2,867,369
Net deferred tax expense
—
—
Total
$
—
$
—
F-18
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
(6)
Fair
    Value of Financial Instruments
Upon adoption of ASC Topic 820, the Company did not record a
    transition adjustment as the Company already had previously
    recorded its assets and its liabilities at fair value.
Assets and liabilities measured at fair value on a recurring
    basis including the senior certificates for which the Company
    has elected the fair value option are summarized below (see
note 2-f
for a description of the three levels of the valuation hierarchy:
Quoted
Significant
Prices in
Other
Significant
December 31,
Active
Observable
Unobservable
2008
Markets
Inputs
Inputs
Description
Fair Value
(Level 1)
(Level 2)
(Level 3)
Assets:
Investments, at fair value
$
15,302,902
—
—
15,302,902
Quoted
Significant
Prices in
Other
Significant
December 31,
Active
Observable
Unobservable
2009
Markets
Inputs
Inputs
Description
Fair Value
(Level 1)
(Level 2)
(Level 3)
Assets:
Investments, at fair value(1)
$
57,971,131
$
—
$
17,250,488
$
40,720,643
Derivative, at fair value
27,095
—
27,095
—
(1)
See the consolidated schedule of investments for detailed
    categorization.
The following table presents additional information about assets
    and liabilities measured at fair value on a recurring basis and
    for which the Company has utilized Level 3 inputs to
    determine fair value for the years ended December 31, 2008
    and 2009:
Net
Unrealized
Realized/
Transfers in
Purchases
Gains and
January 1,
Unrealized
and/or Out,
and Sales and
December 31,
(Losses) Still
2008
Losses
Net, of Level 3
Other, Net(1)
2008
Held(2)
Assets:
Investment in NPPF2, at fair value
$
—
$
(65,198,471
)
$
63,758,256
$
1,440,215
$
—
$
(65,198,471
)
Investment in Merrill Lynch Trusts, at fair value
—
(19,650,597
)
20,483,117
7,869
840,389
(19,650,597
)
Direct Investment in Tax Exempt Securities, at fair value
—
(6,856,848
)
21,319,326
35
14,462,513
(6,856,848
)
Total Investments, at fair value
$
—
$
(91,705,916
)
$
105,560,699
$
1,448,119
$
15,302,902
$
(91,705,916
)
(1)
Primarily comprised of return of investments of underlying
    assets of the Trusts — NPPF 2 and the underlying
    assets of the Merrill Lynch Trusts and the direct investments in
    tax exempt securities offset by the partial redemption of
    Class A certificates of NPPF 2 and the Class A
    certificates of the Merrill Lynch Trusts.
(2)
Represents the amount of total gains or losses for the period,
    included in earnings, attributable to the change in unrealized
    gains (losses) relating to assets classified as Level 3
    that are still held at December 31, 2008.
F-19
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
Net
Unrealized
Realized/
Transfers in
Purchases
Gains and
January 1,
Unrealized
and/or Out,
and Sales and
December 31,
(Losses) Still
2009
Gains
Net, of Level 3
Other, Net
2009
Held(1)
Assets:
Investment in NPPF 2, at fair value
$
—
$
36,452,122
$
—
$
4,268,521
$
40,720,643
$
(28,746,349
)
Investment in Merrill Lynch Trusts, at fair value
840,389
19,650,597
—
(20,490,986
)
—
—
Direct Investments in Tax Exempt Securities, at fair value
14,462,513
4,364,155
(17,250,488
)
(1,576,180
)
—
—
Total Investments, at fair value
$
15,302,902
$
60,466,874
$
(17,250,488
)
$
(17,798,645
)
$
40,720,643
$
(28,746,349
)
(1)
Represents the amount of total gains or losses for the period,
    included in earnings, attributable to the change in unrealized
    gains (losses) relating to assets classified as Level 3
    that are still held at December 31, 2009.
(7)
Derivative
    Contracts
The Company utilizes derivative financial instruments as part of
    its overall investment activities. Investments in derivative
    contracts are subject to additional risk that can result in a
    loss of all or part of an investment. The Company's
    derivative activities are primarily classified by underlying
    interest rate risk. In addition to this interest rate exposure,
    the Company is also subject to additional counterparty risk
    should its counterparties fail to meet the contract terms.
Interest Rate Swaps
The Company is exposed to interest rate risk when there is an
    unfavorable change in the value of investments as a result of
    adverse movements in the market interest rates. The Company
    enters into interest rate swap contracts to protect against such
    adverse movements in the interest rates.
Interest rate swaps are contracts whereby counterparties
    exchange different rates of interest on a specified notional
    amount for a specified period of time. The payment flows are
    usually netted against each other, with the difference being
    paid by one party to the other. The Company enters into these
    contracts so as to minimize the underlying interest rate
    exposure of the investment portfolio. The Company is required to
    post cash collateral for the benefit of the counterparty. This
    is included as a component of restricted cash in the
    consolidated statements of assets and liabilities.
The volume of the Company's interest rate derivative
    activities has been extremely low. Specifically, there were no
    outstanding contracts as of December 31, 2008 and only one
    contract was entered into in 2009. This contract remains
    outstanding as of December 31, 2009. This very limited
    interest rate activity is consistent with the limited trading
    activity within the Company's investment portfolio.
The following table identifies the fair value amounts of
    derivative instruments included in the consolidated statements
    of assets and liabilities as derivative contracts, categorized
    by primary underlying risk, at
F-20
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
December 31, 2009. Balances are presented on a gross basis,
    prior to the application of the impact of counterparty and
    collateral netting.
ASSET
    DERIVATIVES
Interest Rate
Other
Contract Risk
Contract Risk
Total
Swap contracts
$
27,095
—
$
27,095
The following table identifies the net gain and loss amounts
    included in the consolidated statements of operations as net
    gain (loss) from derivative contracts, categorized by primary
    underlying risk, for the year ended December 31, 2009.
CHANGE IN
    UNREALIZDED GAINS / (LOSSES) ON DERIVATIVES RECOGNIZED
Interest Rate
Other
Contract Risk
Contract Risk
Total
Swap contracts
$
27,095
—
$
27,095
(8)
Restricted
    Cash
Restricted cash is comprised of:
December 31
2009
2008
IRS collateral deposit
$
277,000
$
—
$
277,000
$
—
The interest rate swap collateral deposit represents cash posted
    with Morgan Stanley as credit support. The amount will be
    returned when the interest rate swap is terminated.
(9)
NPPF
    2
NPPF 2 was created in 2008 and made its initial acquisition of a
    portfolio of tax exempt securities by issuing Class A
    Senior Certificates (the "senior certificates) and
    Class B Junior Certificates (the "junior
    certificates") to finance this purchase. The Company
    purchased all of the junior certificates. These certificates are
    carried at fair value and are included as a component of
    investments in the consolidated statements of assets and
    liabilities. The fair value of the junior certificates is the
    fair value of the tax exempt securities owned by NPPF 2 less the
    fair value of the senior certificates issued by NPPF 2. See
note 2-f
Investments in Trusts
for the Company's methodology
    in determining fair value of the assets and liabilities of NPPF
    2.
The trust agreement required a mandatory auction of the assets
    of the trust in February 2009. On February 27, 2009, the
    Company and the holder of the senior certificates of NPPF 2
    agreed to extend the mandatory auction of the trust's
    assets until February 2011. The Company agreed to contribute
    $8 million of capital to the trust which was used to pay
    down the principal balance of the senior certificates. In
    addition, the Company agreed to undertake contributing
    additional value, the deficit restoration requirement, to the
    trust at the time of liquidation of the trust to the extent that
    asset values are insufficient to fully redeem the senior
    certificates. This undertaking is supported by the deposit of
    $19.8 million par value of bonds currently held by the
    Company into a collateral account for the benefit of the trust.
    The Company receives the periodic income payments from these
    bonds and the proceeds of any maturities or sales are paid to
    the holder of the senior certificates as a reduction of par.
    This represents all of the Company's bonds that are not
    held in trusts. The
F-21
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
senior certificate holder has agreed that the Company's
    obligation to contribute to the deficit restoration can be
    satisfied at the Company's option at any time if the
    Company contributes an additional $7 million in cash
    collateral to the trust, at which point the $19.8 million
    of bonds would be released. The Company can further extend the
    auction until February 2012, if it contributes an additional
    $10 million in collateral into the trust (either in cash or
    securities reasonably acceptable to the senior certificate
    holder). The Class A Certificate Rate (Priority Income
    Distribution) was increased from 2.85% to 3.00% fixed for the
    remaining period until auction. In addition, a significant
    portion of the income proceeds was allocated to reduce the
    outstanding principal balance of the senior certificates,
    leaving approximately 13.35% of income proceeds for distribution
    to the junior certificate holder. In addition, if the individual
    assets of the trust are liquidated for more than their amortized
    cost, certificate holder is entitled to 20% of the Disposition
    Gain as determined in accordance with the U.S. Internal
    Revenue Code (i.e. the Gain Share for NPPF 2).
The proceeds of the mandatory auction are required to be used to
    redeem the senior certificates. If the bids received by the
    trustee do not exceed the face amount of the senior certificates
    (currently $65.9 million), the auction fails. Upon a failed
    auction, the interest rate payable to the senior certificates
    increases to a floating rate based on the rolling
30-day
average of the USD-SIFMA Municipal Swap Index, subject to a
    maximum rate which will not exceed the aggregate amount of
    income during the distribution period, and the auction is
    repeated weekly until successful.
The senior certificates are recourse only to the assets of the
    trust and the Company's bonds that are not held in trusts
    as described above. If the assets of the trust became worthless
    or the trust otherwise could not redeem the senior certificates,
    the net loss to the Company would be the net carrying value of
    the junior certificates of the trust, plus the net carrying
    value of direct investments in bonds included in the
    consolidated statements of assets and liabilities and any
    accrued and unpaid interest receivable on the Company's
    investment in NPPF2 and the direct investments in bonds. As of
    December 31, 2009, the junior certificates are recorded at
    a fair value of $40.7 million. The accrued Net Carry
    related to the junior certificates is included in receivables
    and is recorded at a carrying value of $2.8 million.
During 2009, $50.2 million of the face amount of senior
    certificates were redeemed as a result of dispositions within
    the portfolio.
(10)
Merrill
    Lynch Trusts
On May 8, 2008, the Company and Merrill Lynch agreed to
    create four new trusts (the Merrill Lynch Trusts) that acquired
    four bonds previously financed as part of a Tender Option Bond
    program by issuing Class A Senior Certificates (the senior
    certificates) and Class B Junior Certificates (the junior
    certificates) to finance this purchase.. The Company purchased
    the junior certificates and Merrill Lynch Capital Services
    (Merrill) purchased the senior certificates of the trusts. The
    Company paid approximately $20.5 million in aggregate for
    all the junior certificates and Merrill paid $79.6 million
    for the senior certificates for a total purchase price of
    $100.1 million. The total par value of the four bonds was
    $100.9 million. The total fair value of the bonds at the
    time was approximately $81 million. The junior certificates
    had been carried at fair value and were included as a component
    of investments in the consolidated statements of assets and
    liabilities as of December 31, 2008. The fair value of the
    junior certificates was a cash flow based valuation because the
    asset based valuation yielded a result of zero but the residual
    interest was still generating cash flow.
The junior certificates received the residual income comprised
    of: the income from the bonds, less the interest on the senior
    certificates, and less any expenses of the trusts. On
    October 9, 2009, the Company sold the junior certificates
    to Merrill for approximately $2,032,000. At the time of the
    sale, the bonds underlying the four trusts were valued at
    $77.8 million, which was less the par amount of the senior
    certificates of $79.2 million. The junior certificates at
    the time were valued at $204,740 based on the estimated future
    cash flow from the trusts through the final distribution dates.
    The Company realized a loss of $18.5 million which
F-22
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
was recorded upon the sale and is included as a component of net
    realized loss — investments in the consolidated
    statements of operations. Although the Company recorded a net
    realized loss, the sale resulted in a net increase to the net
    asset value of the Company of junior certificates at the time of
    the sale.
(11)
Equity
    Shares
The Company is organized as a limited liability company and is
    taxed as a partnership. The Company currently has the following
    classes of membership interests:
Membership
    Interests
Outstanding at December 31
Description
Authorized
2009
2008
Unrestricted common shares
Unlimited
37,394,169
17,265,100
Restricted common shares
60,000
22,500
15,000
LTIP shares
690,000
—
566,915
The combined total of restricted common shares and LTIP shares
    authorized is currently fixed at 750,000. Accordingly, the
    Company may issue more restricted common shares than listed
    above as authorized as long as the combined total is less than
    or equal to 750,000.
A.
Unrestricted Common Shares.
The
    unrestricted common shares are each entitled to one vote per
    share and participate pro rata in quarterly distributions. In
    general, except for extraordinary corporate transactions,
    certain amendments to the operating agreement, liquidation, and
    the election and removal of directors, all matters voted on by
    the shareholders require a simple majority of votes cast. In the
    case of election of directors, a plurality of votes cast in
    person or by proxy is required. In the case of extraordinary
    corporate transactions, liquidation and removal of directors for
    cause, a majority of all votes entitled to be cast is required.
The Company completed a Rights Offering for 18,116,964 new
    common shares on June 26, 2009. One subscription right was
    issued for the purchase of one common share at a price of $1.20
    per share to holders of common shares and LTIP shares. Tiptree
    purchased 14,901,307 shares and the Manager purchased
    810,798 shares in the Rights Offering. The Company raised
    $21.6 million after the expenses of the offering.
B.
Restricted Common Shares.
The
    restricted common shares are identical to normal common shares
    except that they are subject to vesting. To date, all restricted
    common shares have been issued to directors of the Company.
C.
LTIP Shares.
As of July 23, 2009,
    the LTIP shares have achieved parity with the common shares and
    became eligible for conversion to common shares. As of
    December 31, 2009, all outstanding LTIP shares were
    converted to common shares.
The Company completed a voluntary exchange of LTIP shares on
    June 26, 2009 whereby existing LTIP shares with a
    performance target of $10.00 were exchanged for new LTIP shares
    with a performance target $1.25. The exchange ratio was
one-for-two,
such that one new LTIP share was issued for every two existing
    LTIP shares tendered. 566,915 existing LTIP shares were tendered
    and 283,458 new LTIP shares were issued. There were no changes
    to capital balances as a result of the LTIP Exchange.
D.
Preferred Shares.
The Company's
    board of directors is authorized to issue an unlimited amount of
    one or more classes or series of preferred shares without
    further action or approval from the common shareholders. The
    board of directors is authorized to fix the number of shares,
    relative powers, preference and rights, and the qualifications,
    limitations or restrictions applicable to each class or series
    by resolution.
F-23
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
The Company has granted the Manager one performance share. The
    performance share is entitled to a special allocation of profits
    as described in note 3. The performance share is generally
    not entitled to vote.
As a limited liability company, the shareholder interests noted
    above are generally limited in their liability to the extent of
    each shareholder's investment in the Company. (The Company
    has no stated date of dissolution.) The following table shows
    the Company's share activity for the periods presented:
Shares
    Outstanding
Forfeiture of
December 31,
Nonvested
December 31,
Membership Interests
2007
Vested
Shares
2008
Unrestricted common shares
17,250,100
15,000
—
17,265,100
Restricted common shares
30,000
(15,000
)
—
15,000
LTIP shares:
Vested
22,000
298,331
—
320,331
Nonvested
615,000
(298,331
)
(70,085
)
246,584
637,000
—
(70,085
)
566,915
17,917,100
—
(70,085
)
17,847,015
Rollforward
    of Components of Members' Equity
Noncash
December 31,
Incentive
December 31,
2007
Compensation
Distributions
Earnings
2008
Unrestricted common shares
$
158,969,367
$
—
$
—
$
—
$
158,969,367
Restricted common shares
50,000
100,000
—
—
150,000
LTIP shares
892,232
776,422
—
1,668,654
Earnings/(deficit)
(18,139,050
)
—
—
(107,678,426
)
(125,817,476
)
Distributions
(1,433,368
)
—
(4,299,624
)
—
(5,732,992
)
$
140,339,181
$
876,422
$
(4,299,624
)
$
(107,678,426
)
$
29,237,553
F-24
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
Shares
    Outstanding
Issuance in
Lieu of
Conversion of
Performance
Issuance as
Incentive
LTIP Shares
December 31,
Rights
Shares
Share-Based
Shares
LTIP
to Common
December 31,
Membership Interests
2008
Offering
Allocation
Compensation
Vested
Exchange
Shares
2009
Unrestricted common shares
17,265,100
18,116,964
1,713,647
—
15,000
—
283,458
37,394,169
Restricted common shares
15,000
—
—
22,500
(15,000
)
—
—
22,500
LTIP shares:
Vested
320,331
—
—
—
246,584
(283,457
)
(283,458
)
—
Nonvested
246,584
—
—
—
(246,584
)
—
—
—
566,915
—
—
—
—
(283,457
)
(283,458
)
—
17,847,015
18,116,964
1,713,647
22,500
—
(283,457
)
—
37,416,669
Rollforward
    of Components of Members' Equity
Issuance in
Lieu of
Conversion of
Performance
Performance
Noncash
Incentive
LTIP Shares
December 31,
Rights
Shares
Shares
Incentive
Share
to Common
December 31,
2008
Offering
Allocation
Allocation
Compensation
Vested
Shares
Earnings
2009
Unrestricted common shares
$
158,969,367
$
21,567,352
$
—
$
3,837,448
$
—
$
300,000
$
1,982,245
$
—
$
186,656,412
Restricted common shares
150,000
—
—
—
158,375
(300,000
)
—
—
8,375
LTIP shares
1,668,654
—
—
—
313,591
(1,982,245
)
—
—
Earnings/(deficit) before
—
—
—
—
—
—
—
—
—
Performance Share Allocation
(125,817,476
)
—
—
—
—
—
41,021,238
(84,796,238
)
Performance Share Allocation
—
—
(5,920,448
)
—
—
—
—
(5,920,448
)
Distributions
(5,732,992
)
—
—
—
—
—
—
—
(5,732,992
)
$
29,237,553
$
21,567,352
$
(5,920,448
)
$
3,837,448
$
471,966
$
—
$
—
$
41,021,238
$
90,215,109
(12)
Net
    Increase (Decrease) in Net Assets from Operations Per
    Share
The Company calculates basic net increase (decrease) in net
    assets from operations per share by dividing net increase
    (decrease) in net assets from operations for the period by the
    weighted average shares of its common shares outstanding for the
    period, which includes common shares outstanding, as well as
    vested restricted common shares and vested LTIP shares that have
    achieved parity. Diluted net increase (decrease) in net assets
    from operations per share takes into account the effect of
    unvested restricted common shares and unvested LTIP shares and
    vested LTIP shares that have not achieved parity unless they are
    anti-dilutive.
For the year ended December 31, 2008, the Company
    determined that the unvested restricted common shares and
    unvested LTIP shares and the vested LTIP shares that have not
    achieved parity are anti-dilutive. Therefore, the weighted
    average shares outstanding on a fully diluted basis are the same
    as the weighted average shares outstanding used for basic net
    increase (decrease) in net assets from operations per share.
As of December 31, 2009, 22,500 restricted shares had not
    vested and all LTIP shares had been converted to common shares.
    As of December 31, 2008, 15,000 restricted shares and
    246,584 LTIP shares had not vested. Both basic and fully diluted
    shares outstanding include the unrestricted common shares
    outstanding during the years ended December 31, 2009 and
    December 31, 2008. Fully diluted shares outstanding also
F-25
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
includes the dilutive effect of unvested restricted common
    shares, vested LTIP shares that have not achieved parity and
    unconverted LTIP shares.
The Company does not include the performance share issued to the
    Manager (see note 10) in either the fully diluted net
    increase (decrease) in net assets from operations per share or
    basic net increase (decrease) in net assets from operations per
    share calculation as it does not participate in the net profits
    or distributions of the Company. See note 3 for a
    description of Performance Share Allocation recorded for the
    year ended December 31, 2009.
(13)
Share
    Based Compensation
In June 2007, the Company issued 30,000 restricted common shares
    to its directors. The Company valued the restricted common
    shares at $10 per share, the offering price of unrestricted
    common shares on June 12, 2007. The value of the restricted
    common shares issued is being amortized to noncash incentive
    compensation over the vesting period of the underlying grants,
    net of assumed forfeitures. The vesting period is three years
    and the amortization is calculated on a straight line basis.
In June 2007, August 2007 and November 2007, the Company issued
    637,000 LTIP shares to nonemployees of the Company in exchange
    for services to be provided. The fair values of the LTIP shares
    are being amortized to share based compensation over the vesting
    period of the underlying grants net of assumed forfeitures. In
    addition, the Company records an adjustment at the end of each
    reporting period to account for changes in fair value of the
    Company's common shares until the LTIP shares are vested.
The LTIP shares were issued as follows:
a. 345,000 LTIP shares were issued on June 26, 2007
    and vest over the period ending on June 30, 2010.
b. 267,000 LTIP shares were issued on August 9, 2007
    and vest over the period ending on June 30, 2010.
c. 25,000 LTIP shares were issued on November 15, 2007
    and vest over the period ending on September 30, 2010.
For the year ended December 31, 2008, 15,000 restricted
    common shares and 298,331 LTIP shares became vested. As of
    December 31, 2008, 15,000 restricted shares and 246,584
    LTIP shares were unvested.
Based on the December 31, 2008 ending net asset value per
    share, the remaining share based compensation expense to be
    recognized over the remaining vesting period is $392,079 for
    LTIP shares and $150,000 for restricted shares.
On February 5, 2009, in connection with the acquisition of
    a controlling interest of the Company by Tiptree the remaining
    unvested restricted shares and LTIP shares became vested and the
    Company recorded $419,083 of compensation expense.
In April 2009 and July 2009, the Company issued 22,500
    restricted common shares to its directors. The Company valued
    the restricted common shares at the most recent ending net asset
    value per share. The value of the restricted common shares
    issued is being amortized to noncash incentive compensation over
    the vesting period of the underlying grants, net of assumed
    forfeitures. The vesting period is three years and the
    amortization is calculated on a straight line basis.
The restricted common shares were issued as follows:
a. 7,500 restricted shares were issued on April 14,
    2009 at a value of $2.17 per share and vest over a three year
    period.
F-26
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
b. 15,000 restricted shares were issued on July 23,
    2009 at a value of $2.05 per share and vest over a three year
    period.
In June 2009, the Company offered to exchange existing LTIP
    shares (old LTIPs) for new LTIP shares (new LTIPs) at a rate of
one-for-two.
Under the terms of the LTIP shares, the Company will revalue its
    assets upon the occurrence of certain specified events, and any
    increase in valuation from the time of grant until such event
    will be allocated first to the holders of the LTIP shares to
    equalize the capital accounts of each LTIP share with the
    capital account of a common share of the Company. Upon
    equalization of the capital accounts, the LTIP shares will
    achieve full parity with the common shares for all purposes,
    including with respect to subsequent allocations and
    distributions, including, to the extent vested, liquidating
    distributions. If such parity is reached, (obtaining a
    performance target) vested LTIP shares may be converted into an
    equal number of common shares, and the holders may thereafter
    enjoy all the rights of shareholders of the Company. Under the
    old LTIPs the performance target was $10.00 per share. Under the
    new LTIPs the performance target was $1.25 per share.
All holders of outstanding LTIP shares elected to convert to new
    LTIPs. The Company did not record any compensation expense in
    connection with the LTIP exchange.
At a meeting of the Board of Directors of the Company held on
    July 23, 2009, the directors approved the issuance of
    common shares in partial payment of a performance share
    allocation to Tricadia Municipal Management, LLC, the
    Company's Manager. These shares were valued at $2.01 per
    share, which was higher than the new LTIP shares'
    performance target of $1.25 per share. This was a
"book-up
event" and vested LTIP shares became eligible for
    conversion to common shares of the Company. All LTIP shares were
    converted to common shares as of December 31, 2009. The
    company did not record any compensation expense in connection
    with the conversions of LTIP shares to common shares.
(14)
Commitments
    and Contingencies
(a)
Indemnifications
In the normal course of business, the Company enters into
    contracts that contain a variety of indemnifications. The
    Company's maximum exposure under these arrangements is
    unknown. However, the Company does not expect claims or losses
    pursuant to these contracts and expects the risk of loss to be
    remote. Thus no amounts have been accrued related to such
    indemnifications.
(b)
Management
    Contract
The initial term of the Company's management contract with
    the Manager expires on December 31, 2010 and automatically
    renews for a one year term at each anniversary thereafter. The
    contract may only be terminated after giving 180 days
    notice, if at least two-thirds of the Company's independent
    directors or the holders of at least a majority of the
    outstanding common shares vote not to automatically renew.
If the Company were to terminate the management contract without
    cause, it would be required to pay a termination fee to the
    Manager equal to three times the average annual base management
    fee for the two 12 month periods preceding the date of
    termination (annualized for any partial year period). In
    addition, the Company would need to redeem the performance share
    at an amount equal to three times the average performance share
    payments for the preceding two 12 month periods.
The contract can be terminated with cause without paying the
    termination fees described above. Cause is narrowly defined and
    does not include unsatisfactory performance, even if that
    performance is materially detrimental to the Company's
    business.
F-27
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
(c)
Registration
    Rights Agreement
The Company entered into a registration rights agreement with
    the Former Manager whereby there would be a reduction in the
    level of management fees that the Company would pay the Manager
    if the Company failed to timely file a registration statement.
The Company did not file a resale shelf registration statement
    by March 31, 2008. Accordingly, the base management fee
    payable to the Manager was reduced beginning on April 1,
    2008 as described above through June 28, 2008, and
    subsequently resumed to the original level of 1.50% from
    June 28, 2008 to December 31, 2008.
(d)
NPPF 2
    Auction
As described in note 9, the NPPF 2 trust was originally
    scheduled to auction its assets in February 2009. The Company
    has executed a term sheet to extend the auction until February
    2011 with an option to extend to February 2012.
(15)
Risk
    Management
In the ordinary course of business, the Company manages a
    variety of risks including market risk and credit risk. The
    Company identifies, measures, and monitors risk through various
    control mechanisms including diversifying exposures and
    activities across a variety of instruments, markets, and
    counterparties.
Market risk is the risk of potential adverse changes in the
    value of financial instruments and their derivatives because of
    changes in market conditions, such as interest rate movements
    and volatility in security prices. The Company manages market
    risk through the use of risk management strategies and various
    analytical monitoring techniques that evaluate the effect of
    cash instruments and derivative contracts.
Credit risk is the risk the counterparties may fail to fulfill
    their obligations or that the collateral value becomes
    inadequate. The Company attempts to minimize its counterparty
    risk exposure by monitoring the size of its credit exposure to
    and the creditworthiness of its counterparties.
(16)
Concentrations
    of Credit Risk
Cash and Cash Equivalents.
As of
    December 31, 2009, the Company held substantially all of
    its cash and cash equivalents with U.S. Bank. If
    U.S. Bank failed under its obligation as custodian of these
    funds, the Company could lose a portion or all of its
    unrestricted cash balances with U.S. Bank.
(17)
Distributions
The cash distributions were comprised of the following:
Year Ended December 31
2009
2008
Common shareholders
$
—
$
4,140,824
Restricted common shareholders
—
6,400
Holders of LTIP shares
—
152,400
$
—
$
4,299,624
F-28
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2009 and 2008
(18)
Financial
    Highlights
In accordance with the Audit Guide, the per share information
    and ratios to average net assets are presented below for each
    period:
Per Share
    Operating Performance
Year Ended December 31
2009
2008
Beginning net asset value
$
1.64
$
7.83
Net investment income
0.15
0.28
Net realized losses
(0.51
)
(2.18
)
Net unrealized gains (losses)
1.46
(4.14
)
Total from investment operations
1.10
(6.04
)
Issuance of rights offering, net
1.19
—
Other share transactions
0.12
0.09
Dilutive effect of rights offering and other
(1.48
)
—
Distributions to shareholders
—
(0.24
)
Performance share allocations
(0.16
)
—
Ending net asset value per share outstanding
$
2.41
$
1.64
The per share amounts above are calculated based on the
    Company's shares outstanding as well as its unvested
    restricted stock and its vested and unvested LTIP shares. The
    LTIP shares are included because they are eligible to receive
    distributions and the performance share is excluded.
Ratios to
    Average Net Assets
Year Ended December 31
2009
2008
Management fee
1.53
%
1.31
%
Other expenses
2.67
3.14
Noncash incentive compensation
0.75
0.90
Total expense
4.95
%
5.35
%
Net investment income
8.71
%
5.14
%
Total return
20.84
%
(79.77
)%
The above ratios for the years ended December 31, 2009 and
    2008 are calculated by dividing income or expenses as applicable
    by the monthly average of net assets ($63.0 million and
    $97.5 million, respectively).
Total return is calculated by dividing the quarterly net
    increase (decrease) in net assets from operations by beginning
    net assets for the period on a compounded basis.
The per share information, ratios and total return above are
    calculated based on the shareholder group taken as a whole. An
    individual shareholder's results may vary from those shown
    above due to the timing of capital transactions.
F-29
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
AUDITED FINANCIAL STATEMENTS
December 31, 2007
F-30
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
CONSOLIDATED
    STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 2007
ASSETS
Cash and cash equivalents
$
128,116,802
Restricted cash
29,000,000
Interest receivable
1,350,146
Other assets
83,750
Total assets
158,550,698
LIABILITIES
Unrealized loss on total return swap
17,378,922
Unrealized loss on basis swaps
417,915
Due to the Manager (related party)
179,850
Accrued expenses and other liabilities
234,830
Total liabilities
18,211,517
Net Assets
$
140,339,181
Net asset value per share (17,917,100 shares outstanding)
$
7.83
See accompanying notes to consolidated financial statements
F-31
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
CONSOLIDATED
    SCHEDULE OF INVESTMENTS
As of December 31, 2007
Number
Range of
Percentage
of
Expiration
of Net
Notional of
Derivatives
Contracts
Dates
Assets
Underlying
Cost
Fair Value
TOB (Residual Certificates)
3
Sep 2017 - Dec 2033
0.0
%
$
100,900,000
$
38,228
$
—
Total return swap:
Bonds
25
May 2008
(5.7
)%
181,850,000
—
(7,999,404
)
Interest rate swaps
23
May 2008
(6.7
)%
177,850,000
—
(9,379,518
)
359,700,000
—
(17,378,922
)
Basis swaps
2
Nov 2019 and Nov 2032
(0.3
)%
87,750,000
—
(417,915
)
$
548,350,000
$
38,228
$
(17,796,837
)
See accompanying notes to consolidated financial statements
F-32
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
CONSOLIDATED
    STATEMENT OF OPERATIONS
For the Period from June 12, 2007 (inception) to
    December 31, 2007
Revenue
Investment income — TOB
$
142,391
Investment income — total return swap
1,150,382
Interest income
3,794,680
Total revenue
5,087,453
Expenses
Management fee (related party)
1,111,993
Professional fees
374,727
Insurance
96,250
Directors compensation
65,627
Shareholder reporting and transfer agent
17,781
Other general and administrative
72,479
Non cash incentive compensation (related party)
942,232
Total expenses
2,681,089
Net investment income
2,406,364
Realized and unrealized gains and (losses) from
    investments
Net realized losses on investments
(2,710,351
)
Net unrealized losses on investments
(17,835,065
)
Net realized and unrealized losses from investments
(20,545,416
)
Net decrease in net assets resulting from operations
$
(18,139,052
)
Basic and diluted net decrease in net assets from operations per
    share
$
(1.05
)
Weighted average common shares outstanding — basic and
    diluted
17,219,668
Distributions declared per share
$
0.08
See accompanying notes to consolidated financial statements
F-33
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
CONSOLIDATED
    STATEMENT OF CHANGES IN NET ASSETS
For the Period from June 12, 2007 (inception) to
    December 31, 2007
Decrease in net assets resulting from operations
Net investment income
$
2,406,364
Net realized losses on investments
(2,710,351
)
Net unrealized losses on investments
(17,835,065
)
Net decrease in net assets resulting from operations
(18,139,052
)
Distributions to common shareholders
(1,382,408
)
Distributions to LTIP shareholders
(50,958
)
Total decrease in net assets resulting from distributions to
    shareholders
(1,433,366
)
Increase in net assets from share transactions
Increase in net assets from issuance of common shares, net
158,969,367
Increase in net assets from issuance of incentive compensation
942,232
Total increase in net assets from share transactions
159,911,599
Net increase in net assets
140,339,181
Net assets, beginning of period
—
Net assets, end of period
$
140,339,181
See accompanying notes to consolidated financial statements
F-34
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
CONSOLIDATED
    STATEMENT OF CASH FLOWS
For the Period from June 12, 2007 (inception) to
    December 31, 2007
Cash flows from operating activities:
Net decrease in net assets resulting from operations
$
(18,139,052
)
Adjustments to reconcile net decrease in net assets resulting
    from operations to net cash flows used in operating activities
Unrealized loss on total return swap
17,378,922
Investment in TOB Residual Certificates
(38,228
)
Unrealized loss on TOB Residual Certificates
38,228
Unrealized loss on basis swaps
417,915
Non cash incentive compensation (related party)
942,232
Change in operating assets and liabilities:
(Increase) decrease in receivables
(1,350,146
)
(Increase) decrease in restricted cash
(29,000,000
)
(Increase) decrease in other assets
(83,750
)
Increase (decrease) due to the Manager
179,850
Increase (decrease) in accrued expense and other liabilities
234,830
Net cash used in operating activities
(29,419,199
)
Cash flows from financing activities:
Proceeds from issuance of common shares, (net of costs of
    $13,531,633)
158,969,367
Distributions to common shareholders
(1,382,408
)
Distributions to LTIP shareholders
(50,958
)
Net cash provided by financing activities
157,536,001
Net change in cash and cash equivalents
128,116,802
Cash and cash equivalents, beginning of period
—
Cash and cash equivalents, end of period
$
128,116,802
See accompanying notes to consolidated financial statements
F-35
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 —
ORGANIZATION
    AND NATURE OF OPERATIONS
Municipal Funding Company of America, LLC (the
    "Company"), was organized as a Delaware Limited
    Liability Company on April 27, 2007. The Company began
    operations on June 12, 2007 upon the completion of an
    offering of common shares of limited liability interests
    ("Common Shares") in a private offering to qualified
    institutional buyers in accordance with Rule 144A under the
    Securities Act of 1933.
The Company is a specialty finance holding company that is
    externally managed and advised by Cohen Municipal Capital
    Management, LLC, a subsidiary of Cohen Brothers, LLC
    ("Cohen and Company"). The Company invests directly or
    indirectly in U.S. federally tax-exempt bonds with the
    objective of generating attractive risk-adjusted returns and
    predictable cash distributions. The Company seeks to achieve
    this objective by (1) acquiring interests in structured
    credit vehicles which own debt obligations, the interest on
    which is exempt from U.S. federal income taxation;
    (2) investing in total return swaps and other derivative
    arrangements relating to tax exempt bonds; and (3) making
    direct investments in Tax Exempt Bonds. The Company may also
    invest in securities that are subject to federal income tax.
The Company has selected December 31 as its fiscal year-end. The
    Company has no stated date of dissolution.
NOTE 2 —
SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements have been
    prepared by management in accordance with accounting principles
    generally accepted in the United States of America ("US
    GAAP").
Although the Company conducts its operations so that the Company
    is not required to register as an investment company under the
    Investment Company Act, for financial reporting purposes we are
    an investment company and follow the AICPA Audit and Accounting
    Guide for Investment Companies (the "Audit Guide").
    Accordingly, investments in securities are carried at fair value
    with changes in fair value reflected in the consolidated
    statement of operations.
A.
Use of
    Estimates
The preparation of financial statements in conformity with US
    GAAP requires management to make assumptions and estimates that
    affect the reported amounts in the consolidated financial
    statements and the accompanying notes. Actual results could
    differ from those estimates.
B.
Principles
    of Consolidation
The accompanying consolidated financial statements include the
    accounts of the Company and its wholly owned subsidiary MFCA
    Funding, Inc. ("Funding, Inc."). All intercompany
    transactions have been eliminated.
On December 24, 2003, the Financial Accounting Standards
    Board ("FASB") issued Interpretation No. 46 (Revised
    December 2003),
Consolidation of Variable Interest Entities
("FIN 46R"), to clarify the application of
    Accounting Research Bulletin ("ARB") No. 51,
Consolidated Financial Statements
("ARB 51"),
    as amended by FASB Statement No. 94,
Consolidation of
    All Majority-Owned Subsidiaries
("SFAS 94").
    However, the effective date of FIN 46R was deferred for
    investment companies (including non-registered investment
    companies) that are accounting for investments in accordance
    with the Audit Guide.
On May 11, 2007, the FASB issued FASB Staff Position
FIN 46R-(7)
Application of
FASB Interpretation No. 46(R)
to
    Investment Companies
("FIN 46R-7").
FIN 46R-7
clarifies that those entities which account for themselves as
    investment companies under the Audit Guide are not subject to
    the consolidation requirements of FIN 46R.
F-36
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
The Company reviews each investment that it makes under a
    control based framework in accordance with ARB 51 and
    SFAS 94. If the Company determines it controls the investee
    and the investee itself meets the definition of an investment
    company under the Audit Guide, the Company consolidates the
    investee. Otherwise, the Company will report its equity
    investment at fair value as required by the Audit Guide.
C.
Fair
    Value of Financial Instruments
The fair values of the Company's assets and liabilities
    which qualify as financial instruments under Statement of
    Financial Accounting Standard No. 107,
Disclosures about
    Fair Value of Financial Instruments
("SFAS 107") approximate the carrying amounts
    presented in the consolidated statement of assets and
    liabilities.
D.
Recent
    Accounting Developments
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements
("SFAS 157"). This
    standard establishes a single authoritative definition of fair
    value, sets out a framework for measuring fair value, and
    requires additional disclosures about fair value measurements.
    SFAS 157 applies to fair value measurements already
    required or permitted by existing standards. SFAS 157 is
    effective for financial statements issued for fiscal years
    beginning after November 15, 2007 and interim periods
    within those fiscal years. Management believes the impact of
    SFAS 157 will not be material to the Company's
    financial statements.
In February 2007, the FASB issued SFAS No. 159,
The
    Fair Value Option for Financial Assets and Financial Liabilities
("SFAS 159"). This standard provides
    companies the option of reporting certain financial instruments
    at fair value which were previously carried at cost or not
    recognized on the financial statements. This Statement is
    effective as of the beginning of an entity's first fiscal
    year that begins after November 15, 2007. Management
    believes the impact of SFAS 159 will not be material to the
    Company's financial statements.
On June 11, 2007, the American Institute of Certified
    Public Accountants (AICPA) issued SOP
07-01,
Clarification of the Scope of the Audit and Accounting Guide
    "Investment Companies" and Accounting by Parent
    Companies and Equity Method Investors for Investments in
    Investment Companies
("SOP 07-01").
SOP 07-01
also provides guidance for determining whether investment
    company accounting applied by a subsidiary or equity method
    investee should be retained in the financial statements of the
    parent company or an equity method investor.
SOP 07-01
was to be effective for fiscal years beginning after
    December 15, 2007 with early adoption encouraged. However
    due to various implementation issues that surfaced in practice
    since the SOP was issued in 2007, the FASB decided, in February
    2008, to issue FASB Staff Position
SOP 07-1-1
which indefinitely defers the effective date of
SOP 07-1.
Based on its review of
SOP 07-01
as issued by the AICPA on June 11, management concluded
    that adoption of
SOP 07-01
would not have a material impact to its financial statements.
    However, given that modifications may be made prior to final
    adoption of
SOP 07-01,
management can not determine the impact to the Company's
    financial statements at this time.
E.
Cash
    and Cash Equivalents
Cash and cash equivalents consist of cash held at banks as well
    as short term investments with original maturity of three months
    or less as defined in SFAS 95,
Statement of Cash
    Flows.
F-37
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
F.
Restricted
    Cash
Restricted cash represents cash collateral posted with
    counterparties. Income earned on restricted cash balances is
    included as a component of revenue in the consolidated statement
    of operations in the same line item as the income earned on the
    underlying security the restricted cash is supporting.
G.
Investments
In the ordinary course of business, the Company has entered into
    off-balance sheet derivatives. These derivatives involve, to
    varying degrees, elements of credit and market risk in excess of
    the amount recorded on the consolidated statement of assets and
    liabilities.
All derivatives are carried at fair value.
Total Return Swap ("TRS").
The
    Company, through its wholly-owned subsidiary Funding, Inc., has
    made an investment in a TRS. Under the terms of the TRS, the
    counterparty investment bank and Funding, Inc. will identify
    tax-exempt bonds that will serve as the reference portfolio for
    the swap. The counterparty is not obligated to, but may,
    actually own the bonds in the reference portfolio. The actual
    owner of the underlying bonds is able to declare the income
    received from the bonds as tax exempt. However, Funding Inc. is
    not the owner of the underlying portfolio of tax-exempt bonds.
    That is, Funding Inc. has a derivative interest in the
    underlying reference bonds but is not the owner. Therefore, any
    income earned by the TRS will be taxable to Funding, Inc.
    Funding, Inc. is required to post cash collateral for the
    benefit of the counterparty. The TRS is non-recourse to Funding,
    Inc. and Funding, Inc.'s total loss, at any one point in
    time, is limited to the cash collateral posted at that time.
The total return of the TRS has two components: (1) the
    "Net Carry" which represents the income generated by
    the reference bonds less a cost of financing which is agreed
    upon between the counterparty and Funding, Inc. and (2) the
    change in the underlying fair value of the reference bonds and
    related interest rate hedges.
The Company includes the collateral posted for the TRS as
    restricted cash in the consolidated statement of assets and
    liabilities. The value of the TRS is calculated by the
    counterparty by obtaining quoted market prices on the underlying
    bonds and interest rate hedges. The Company includes this value
    as either unrealized gain or unrealized loss on total return
    swap in the consolidated statement of assets and liabilities.
The Net Carry is recognized as a component of investment
    income — total return swap and the change in the
    underlying value of the reference bonds is recognized as an
    unrealized gain or loss on investments in the consolidated
    statement of operations. Any unrealized gain or loss will be
    realized either at termination of the TRS or when a reference
    bond is removed from the TRS.
Tender Option Bond Program
    ("TOB").
The Company makes investments
    in TOBs. A TOB is a trust that acquires tax exempt bonds in the
    secondary market. Each TOB finances this purchase by issuing
    senior floating tax exempt securities ("Senior
    Certificate") and junior residual interest tax exempt
    securities ("Residual Certificate"). The Senior
    Certificate holders are entitled to a variable rate of interest
    which is reset on a weekly basis by the remarketing agent based
    on market conditions. The Residual Certificate holders are
    entitled to the residual income (i.e. the income generated by
    the underlying bonds less the amount due to the Senior
    Certificate holders less fees and expenses incurred by the
    trust). In each TOB the Company has invested in to date,
    realized gains and losses on the underlying bonds are shared as
    follows: If the underlying bonds are sold for a gain, the Senior
    Certificate holders are entitled to 5% of the gain and the
    Residual Certificate holders are entitled to 95% of the gain. If
    the underlying bonds are sold for a loss, 100% of the loss is
    borne by the Residual Certificate holder up to its initial
    investment.
F-38
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
The Company currently purchases 100% of the Residual Certificate
    securities in each TOB in which it invests. The Senior
    Certificate holders have the right to put their securities back
    to the TOB. The Senior Certificate holders' right to put
    their securities back to the TOB terminates upon certain events,
    including (i) payment default of the underlying bonds;
    (ii) bankruptcy of the bond issuers; (iii) if the
    rating of the bonds falls below certain levels; (iv) an
    event that causes interest of the bonds to be taxable; and
    (v) bankruptcy of the guarantor of the bonds.
If the TOB is required to acquire the Senior Certificates and,
    if the remarketing agent cannot remarket them, the TOB can draw
    on a liquidity facility provided by a third party liquidity
    provider. The Company may enter into a shortfall agreement
    whereby it agrees to reimburse the third party liquidity
    provider for losses suffered under its obligations under the
    liquidity facility. Each shortfall agreement is unique and may
    provide for full recourse to the Company or limited recourse. To
    date, the Company has not entered into a shortfall agreement.
The value of the TOB Residual Certificates is calculated by
    obtaining values on the underlying bonds of the TOB. The Company
    uses an independent pricing service or quotes from independent
    broker dealers to value the underlying bonds. If the bonds have
    increased in value as compared to the cost paid by the TOB, the
    Company will increase the fair value of the TOB Residual
    Certificates by 95% of the increase in the value of the
    underlying bonds. If the bonds have decreased in value, the
    Company will reduce the fair value of the TOB Residual
    Certificate by 100% of the decline in value.
If the Company has not executed a shortfall agreement, the
    Company will not reduce the fair value of the TOB Residual
    Certificates below zero. However, if the Company has a shortfall
    agreement, the Company will reduce the fair value of the TOB
    Residual Certificates below zero resulting in a net unrealized
    loss on Residual Certificates in the consolidated statement of
    assets and liabilities. Any reduction in value of the TOB
    Residual Certificates will be limited to the maximum obligation
    the Company has agreed to under the shortfall agreement.
The fair value of the TOB Residual Certificates is either
    included as net unrealized gain or net unrealized loss on
    Residual Certificates in the consolidated statement of assets
    and liabilities.
The residual income received under the Residual Certificates is
    recorded as a component of investment income — TOB.
    The change in the value of the TOB Residual Certificates is
    included as either unrealized gain or loss on investments in the
    consolidated statement of operations. Any unrealized gain or
    loss will be realized at termination of the TOB.
Basis Swaps.
The Company has entered into two
    basis swap arrangements. A basis swap is an interest rate swap
    which involves the exchange of two floating rate financial
    instruments (that is, a floating-floating interest rate swap
    under which the floating rate payments are referenced to
    different bases).
In the case of the basis swaps entered into by the Company, no
    cash is exchanged at the outset of the contract and no principal
    payments are made by either party. A single net payment will be
    made by one counterparty at each due date. The payments commence
    in February of 2010 and are made quarterly thereafter until
    termination. The potential loss for the Company on the basis
    swaps is unlimited.
The fair value of the basis swaps is either included in
    unrealized gain or unrealized loss on basis swap in the
    consolidated statement of assets and liabilities. Fair value is
    determined by obtaining quotes from the counterparty. The change
    in the unrealized loss is included as a component of net
    unrealized losses on investments in the consolidated statement
    of operations.
The Company enters into basis swaps in order to hedge interest
    rate risk related to bonds held on balance sheet or as part of
    the reference portfolio of the TRS.
F-39
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
H.
Income
    Taxes
The Company qualifies as a partnership for U.S. federal
    income tax purposes. As a partnership, the Company will not pay
    federal income tax and will be treated as a pass through entity.
    However, a certain wholly-owned subsidiary of the Company is
    organized as a C-corporation for U.S. federal income tax
    purposes and will pay federal income tax. Further, the Company
    may be subject to certain state and local income taxes.
Deferred tax assets and liabilities are determined using the
    asset and liability method in accordance with Statement of
    Financial Accounting Standards ("SFAS") No. 109,
    "
Accounting for Income Taxes
." Under this
    method, deferred tax assets and liabilities are established for
    future tax consequences of temporary differences between the
    financial statement carrying amounts of assets and liabilities
    and their tax basis. Deferred tax assets and liabilities are
    measured using enacted tax rates expected to apply to taxable
    income in years in which those temporary differences are
    expected to reverse. A valuation allowance is established when
    necessary to reduce deferred tax amounts to the amount expected
    to be realized.
In accordance with FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes
("FIN
    48"), the Company evaluates tax positions taken or expected
    to be taken in the course of preparing its tax returns to
    determine whether the tax positions are
    "more-likely-than-not" of being sustained by the
    applicable tax authority. The Company's tax benefit or tax
    expense is adjusted accordingly for tax positions not deemed to
    meet the more-likely-than-not threshold in the current year. The
    Company records interest and penalties associated with audits as
    a component of income before income taxes. Penalties are
    recorded as an operating expense, and interest expense is
    recorded as interest expense in the statement of operations. The
    Company incurred no interest and penalties for the period ended
    December 31, 2007.
I.
Securities
    Transactions and Income
Purchases and sales of derivatives are recorded on a trade date
    basis. During the period between the trade date and settlement
    date, any money due to or from the counterparty will be recorded
    either as a component of receivables or accrued expenses and
    other liabilities in the consolidated statement of assets and
    liabilities.
Realized gains and losses are determined using the average cost
    method, when partial positions are sold. Interest income and
    expenses are recorded on the accrual basis.
J.
Net
    increase (decrease) in net assets from operations
In accordance with SFAS No. 128,
Earnings per Share
("SFAS 128"), the Company presents both basic
    and diluted net increase (decrease) in net assets from
    operations ("EPS") in its consolidated financial
    statements and footnotes thereto. Basic net increase (decrease)
    in net assets from operations ("Basic EPS") excludes
    dilution and is computed by dividing net income or loss
    allocable to common shareholders by the weighted average number
    of common shares, including vested restricted shares and vested
    LTIP shares issued as compensation, outstanding for the period.
    Diluted net increase (decrease) in net assets from operations
    ("Diluted EPS") reflect the potential additional
    dilution of unvested restricted shares and unvested LTIP shares
    issued as compensation if they are not anti-dilutive. (See
    note 6)
K.
Share-Based
    Compensation
The Company issues share based compensation to its directors and
    employees of its manager, Cohen Municipal Capital Management,
    LLC ("Cohen" or "Manager") and accounts for
    such issuances as equity-settled transactions using the
    methodology prescribed by SFAS No. 123(R)
Share
    Based Compensation
("SFAS 123R") and Emerging
    Issues Task force ("EITF")
No. 96-18
Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
.
F-40
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
Employees of the Company's Manager and certain independent
    directors of the credit committee of Funding, Inc. receive long
    term incentive profit shares ("LTIP shares"). LTIP
    shares are a special class of limited liability company
    interests. Quarterly distributions on each LTIP share, whether
    vested or not, will be the same as those made on common shares.
    However, LTIP shares will not have full parity with common
    shares with respect to liquidating distributions. Under the
    terms of the LTIP shares, the Company will revalue its assets
    upon the occurrence of certain events, and any increase in
    valuation from the time of the grant until such event will be
    allocated first to the holders of the LTIP shares to equalize
    the capital accounts of each LTIP share with the capital account
    of each common share. Upon equalization of the capital accounts,
    the LTIP shares will achieve full parity with the common shares
    and, to the extent the LTIP shares are vested, can be converted
    into common shares.
Non-management directors receive restricted common shares.
    Quarterly distributions on each restricted common share, whether
    vested or not, will be the same as those made on common shares.
    The restricted shares are subject to restrictions on transfer
    during the vesting period. In general, unvested restricted
    shares will vest early upon change of control or other
    liquidation.
The fair value of the restricted common shares as of the grant
    date is being amortized to share based compensation over the
    three year vesting period of the underlying grants net of
    assumed forfeitures.
The fair values of the LTIP shares are being amortized on a
    straight line basis to share based compensation over the vesting
    period of the underlying grants net of assumed forfeitures. In
    addition, the Company records an adjustment at the end of each
    reporting period to account for changes in fair value of the
    Company's common shares until the LTIP shares are vested.
NOTE 3 —
RELATED
    PARTY TRANSACTIONS
Management Contract
.
The Company has no
    employees and relies upon its Manager, Cohen Municipal Capital
    Management, LLC ("Cohen"), to conduct its operations
    pursuant to its management agreement dated June 12, 2007
    (the "Management Agreement"). The Manager is
    responsible for (i) the selection, purchase, monitoring and
    sale of portfolio investments; (ii) developing and
    implementing the Company's financing and risk management
    policies; (iii) providing the Company with investment
    advisory services; and (iv) carrying out the day to day
    operations of the Company.
A.
Base Management Fee:
The Company
    pays Cohen a base management fee on a monthly basis equal to
    1/12th of the Company's US GAAP basis equity x 1.50%. The
    US GAAP basis equity shall exclude one time events pursuant to
    changes in US GAAP and other non-cash charges (subject to the
    approval of the Company's independent directors). To date,
    the Company has not sought approval for any one time events or
    non-cash charges. The Company accrues this expense on a monthly
    basis. Cohen agreed to charge no management fee to the Company
    for the month of June 2007. Base management fees for the period
    from July 1, 2007 to December 31, 2007 were $1,111,993
    and are separately reported in the consolidated statement of
    operations. The management fees remaining payable at
    December 31, 2007 were $164,366 and are included as a
    component of due to Manager in the consolidated statement of
    assets and liabilities.
The base management fee otherwise payable in any fiscal year
    will be reduced (but not below zero), by the proportionate share
    of the amount of any management fees paid to Cohen or its
    affiliates by a structured tax exempt partnership
    ("STEP") or other structured credit vehicle in which
    the Company invests. The proportionate share is based on the
    percentage of the most junior class of certificates the Company
    holds in any STEP or other structured credit vehicle.
    Origination fees, structuring fees, or placement fees paid to
    Cohen and its affiliates will not reduce the base management fee.
B.
Incentive Fee:
The Company will pay
    Cohen incentive compensation (on a quarterly basis) equal to the
    product of (i) 20% of the amount by which
    (a) consolidated net income per weighted average common
F-41
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
share exceeds (b) the weighted average offering price of
    all common shares issued by the Company multiplied by the
    quarterly benchmark rate, as defined, and (ii) the weighted
    average number of common shares outstanding in such quarter.
    This amount is paid through a special allocation of income to
    the performance share issued. (See note 6)
The quarterly benchmark is equal to the greater of (i) 2%
    or (ii) 0.75% plus the 10 year Municipal Market Data
    ("MMD") index for the quarter. The performance share
    calculation will be adjusted to exclude one-time events pursuant
    to changes in US GAAP, as well as other non-cash charges
    (subject to the approval of the Company's independent
    directors). To date, the Company has not sought approval for any
    one time events or non-cash charges. The Company accrues this
    expense on a quarterly basis. No incentive fees have been
    incurred for the period from June 12, 2007 to
    December 31, 2007.
Realized loss on TRS
.  Prior to the
    Company's formation, Cohen entered into a TRS with a
    counterparty bank and began to identify reference bonds for the
    benefit of the Company. In August 2007, the TRS was assigned
    from Cohen to the Company. At that time, the accumulated mark to
    market loss on Cohen's interest in the TRS was $3,028,794.
    In order to approve the assignment and renewal of the TRS, the
    counterparty required that this loss be realized and funded. As
    part of the assignment, Cohen and the Company agreed to split
    that loss and each bear one half of the loss. This arrangement
    was approved by the independent directors of the Company.
    Accordingly, the Company recorded a $1,514,397 realized loss in
    its consolidated statement of operations. In addition, as part
    of the assignment and renewal, the counterparty required of the
    Company, a higher level of collateral and modified other terms
    of the TRS agreement. The Company posted $19,000,000 of
    collateral with the counterparty at that time and the
    counterparty returned to Cohen the collateral it had posted
    previously. The Company subsequently posted an additional
    $10,000,000 of collateral for the benefit of the counterparty
    prior to year end.
Expense reimbursements
.  From time to
    time, Cohen will pay certain of the Company's expenses and
    the Company will reimburse Cohen. Total reimbursement payments
    to Cohen for general and administrative expenses for the period
    from commencement of operations to December 31, 2007 are
    $118,171. Unpaid amounts due to the Manager for reimbursement
    are $15,484 and are included as a component of due to Manager in
    the consolidated statement of assets and liabilities.
NOTE 4 —
GENERAL
    AND ADMINISTRATIVE EXPENSES
The Company pays its own general and administrative expenses.
    Cohen is responsible for paying its employees compensation and
    benefits (with the exception of share based compensation
    described above). In general, the Company is responsible for all
    other general and administrative expenses for its operations.
These include (but are not limited to): transaction costs
    incidental to the acquisition, disposition and financing of
    investments; legal, tax, accounting, consulting, and other
    similar service fees and expenses; compensation and expenses of
    the Company's directors; the cost of directors' and
    officers' liability insurance; the costs associated with
    the establishment and maintenance of any credit facilities,
    tender option bond programs, and other financing arrangements
    and other indebtedness (including commitment fees, accounting
    fees, legal fees, closing and other costs); expenses associated
    with security offerings; expenses associated with making
    distributions to shareholders; the costs of printing and mailing
    proxies and reports to the Company's shareholders; costs
    associated with computer software or hardware; electronic
    equipment or purchased information technology services from
    third party vendors which is used solely by the Company; all
    regulatory costs incurred by the Company; and all taxes and
    insurance expense incurred by the Company or on its behalf. In
    addition, the Company is required to pay its pro rata share of
    rent, telephone, utilities, office furniture, equipment,
    machinery and other office, internal and overhead expenses of
    Cohen which is required for the Company's operations (See
    note 3).
F-42
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
These expenses may be paid directly out of Company funds or,
    from time to time, will be paid by Cohen and the Company will
    reimburse Cohen.
NOTE 5 —
INCOME
    TAXES
No provision was made for federal income tax for the period
    ended December 31, 2007, since the Company's taxable
    subsidiary had a significant net operating loss. For the period
    ended December 31, 2007, the taxable subsidiary incurred a
    net loss carry forward for tax purposes of $1,800,236. The net
    operating losses may be carried forward to reduce taxable income
    through the year 2012.
Temporary differences that give rise to deferred tax assets and
    liabilities at December 31, 2007, were comprised of
    unrealized losses on the total return swap, the basis swap, and
    the net operating loss carry forward. The gross deferred tax
    asset balance as of December 31, 2007 is approximately
    $7,132,299. A 100% valuation has been established against the
    deferred tax assets, as the utilization of the loss carry
    forwards cannot reasonably be assured.
The components of the net deferred tax asset are summarized
    below:
December 31,
2007
Deferred tax asset:
Unrealized losses
$
6,502,217
Net operating loss
630,082
Total
7,132,299
Less:
Valuation allowance
(7,132,299
)
$
—
The federal income tax benefit at the U.S. federal income
    tax rate of 35.0% is the income tax benefit reflected in the
    consolidated statement of operations which has been offset by a
    100% valuation allowance.
Income tax expense consisted of the following:
December 31,
2007
Current tax expense
$
—
Deferred tax credit
(7,132,299
)
Change in valuation allowance
7,132,299
Net Deferred tax credit
—
Total
$
—
F-43
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
NOTE 6 —
EQUITY
    SHARES
The Company is organized as a limited liability company and is
    taxed as a partnership. The Company currently has the following
    classes of membership interests:
Membership Interests as of
    December 31, 2007:
Description
Authorized
Outstanding
Unrestricted common shares
Unlimited
17,250,100
Restricted common shares
60,000
30,000
LTIP shares
690,000
637,000
The combined total of restricted common shares and LTIP shares
    authorized is currently fixed at 750,000. Accordingly, the
    Company may issue more LTIPs or more restricted common shares
    than listed above as long as the combined total is less than or
    equal to 750,000. As of December 31, 2007, all restricted
    common shares and 615,000 LTIP shares were unvested. 22,000
    LTIPs shares became vested during October and November 2007 upon
    separation of certain employees of Cohen.
A. Unrestricted common shares.
The
    unrestricted common shares are each entitled to one vote per
    share and participate pro rata in quarterly distributions. In
    general, except for extraordinary corporate transactions,
    certain amendments to the operating agreement, liquidation, and
    the election and removal of directors, all matters voted on by
    the shareholders require a simple majority
of votes cast
.
    In the case of election of directors, a plurality
of votes
    cast
in person or by proxy is required. In the case of
    extraordinary corporate transactions, liquidation and removal of
    directors for cause, a majority of all votes
entitled to be
    cast
is required.
B. Restricted common shares.
The
    restricted common shares are identical to normal common shares
    except that they are subject to vesting. To date, all restricted
    common shares have been issued to directors of the Company and
    its subsidiaries.
C. LTIP shares.
LTIP shares represent a
    special class of limited liability interest. LTIP shares are
    subject to vesting. LTIP shares are entitled to the same voting
    rights and participation in quarterly dividends as common shares
    whether vested or not. LTIP shares will not have full parity
    with common shares with respect to liquidating distributions.
    Under the terms of the LTIP shares, the Company will revalue its
    assets upon the occurrence of certain events, and any increase
    in valuation from the time of the grant until such event will be
    allocated first to the holders of the LTIP shares to equalize
    the capital accounts of each LTIP share with the capital account
    of each common share. Upon equalization of the capital accounts,
    the LTIP shares will achieve full parity with the common shares
    and, to the extent the LTIP shares are vested, can be converted
    into common shares.
D. Preferred shares.
The Company's
    board of directors is authorized to issue an unlimited amount of
    one or more classes or series of preferred shares without
    further action or approval from the common shareholders. The
    board of directors is authorized to fix the number of shares,
    relative powers, preference and rights, and the qualifications,
    limitations or restrictions applicable to each class or series
    by resolution.
The Company has granted Cohen one performance share. The
    performance share is entitled to a special allocation of profits
    as described in Note 3. The performance share is generally
    not entitled to vote.
F-44
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
As a limited liability company, the shareholder interests noted
    above are generally limited in their liability to the extent of
    each shareholder's investment in the Company. The Company
    has no stated date of dissolution. The following table shows the
    Company's share activity for the period presented:
ROLLFORWARD OF SHARES
    OUTSTANDING
Issuance as
Initial
Share Based
December 31,
Membership Interests
Inception
Offering
Compensation
Distribution
Earnings
2007
Unrestricted common shares
—
17,250,100
—
—
—
17,250,100
Restricted common shares
—
—
30,000
—
—
30,000
LTIP shares
—
—
637,000
—
—
637,000
—
17,250,100
667,000
—
—
17,917,100
ROLLFORWARD OF COMPONENTS OF
    MEMBERS' EQUITY
Initial
Offering,
December 31,
Inception
Net
Vesting
Distribution
Earnings
2007
Unrestricted common shares
$
—
$
158,969,367
$
—
$
—
$
—
$
158,969,367
Restricted common shares
—
50,000
—
—
50,000
LTIP shares
—
—
892,232
—
—
892,232
Earnings/(deficit)
—
—
—
(1,433,366
)
(18,139,052
)
(19,572,418
)
$
—
$
158,969,367
$
942,232
$
(1,433,366
)
$
(18,139,052
)
$
140,339,181
NOTE 7 —
NET
    INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS PER
    SHARE
The Company calculates basic net increase (decrease) in net
    assets from operations per share by dividing net increase
    (decrease) in net assets from operations for the period by the
    weighted-average shares of its common shares outstanding for the
    period, which includes common shares outstanding as well as
    vested restricted common and vested LTIP shares. Diluted net
    increase (decrease) in net assets from operations per share
    takes into account the effect of unvested restricted common and
    unvested LTIP shares unless they are anti-dilutive.
For the periods presented herein, the Company determined that
    the unvested restricted common and unvested LTIP shares are
    anti-dilutive. Therefore, the weighted average shares
    outstanding on a fully diluted basis are the same as the
    weighted average shares outstanding used for basic net increase
    (decrease) in net assets from operations per share.
As of December 31, 2007, all restricted shares and 615,000
    LTIP shares had not vested. Accordingly both basic and fully
    diluted shares outstanding represent the unrestricted common
    shares outstanding and 22,000 vested LTIP shares outstanding for
    the period through December 31, 2007.
The Company does not include the performance share issued to
    Cohen (see note 6) in either the fully diluted net
    increase (decrease) in net assets from operations per share or
    basic net increase (decrease) in net assets from operations per
    share calculation as it does not participate in the net profits
    or dividends of the Company. Any amounts paid under the
    management agreement as part of the performance share would be
F-45
Table of Contents
MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
reported as an expense in the consolidated statement of
    operations. To date, the performance criteria have not been met
    and no expense has been recorded.
NOTE 8 —
SHARE
    BASED COMPENSATION
In June, 2007, the Company issued 30,000 restricted common
    shares to its directors. The Company valued the restricted
    common shares at $10 per share, the offering price of
    unrestricted common shares on June 12, 2007. The value of
    the restricted common shares issued is being amortized to
    non-cash incentive compensation over the vesting period of the
    underlying grants; net of assumed forfeitures. The vesting
    period is three years.
In June 2007 and November 2007, the Company issued 637,000 LTIP
    shares to non-employees of the Company in exchange for services
    to be provided. The fair values of the LTIP shares are being
    amortized to share based compensation over the vesting period of
    the underlying grants net of assumed forfeitures. In addition,
    the Company records an adjustment at the end of each reporting
    period to account for changes in fair value of the
    Company's common shares until the LTIP shares are vested.
For vested LTIP shares, the Company values these shares based on
    the Company's most recent ending net asset value per share
    available in the month the LTIP shares vest.
The LTIP shares were issued as follows:
1. 345,000 LTIP shares were issued on June 26, 2007
    and vest over the period ending on June 30, 2010.
2. 267,000 LTIP shares were issued on August 9, 2007
    and vest over the period ending on June 30, 2010.
3. 25,000 LTIP shares were issued on November 15, 2007
    and vest over the period ending on September 30, 2010.
Based on the December 31, 2007 ending net asset value per
    share, the remaining share based compensation expense to be
    recognized over the remaining vesting period is
    $4.1 million.
NOTE 9 —
COMMITMENTS
    AND CONTINGENCIES
Indemnifications
In the normal course of business, the Company enters into
    contracts that contain a variety of indemnifications. The
    Company's maximum exposure under these arrangements is
    unknown. However, the Company does not expect claims or losses
    pursuant to these contracts and expects the risk of loss to be
    remote. Thus no amounts have been accrued related to such
    indemnifications.
Management
    contract
The initial term of the Company's management contract with
    Cohen expires on December 31, 2010 and automatically renews
    for a one year term at each anniversary thereafter. The contract
    may only be terminated after giving 180 days notice, if at
    least two-thirds of the Company's independent directors or
    the holders of at least a majority of the outstanding common
    shares vote not to automatically renew.
If the Company were to terminate the management contract without
    cause, it would be required to pay a termination fee to Cohen
    equal to three times the average annual base management fee for
    the two 12 month periods preceding the date of termination
    (annualized for any partial year period). In addition, the
    Company would need to redeem the performance share at an amount
    equal to three times the average performance share payments for
    the preceding two 12 month periods.
F-46
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MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
The contract can be terminated with cause without paying the
    termination fees described above. Cause is defined and does not
    include unsatisfactory performance, even if that performance is
    materially detrimental to the Company's business.
Tender
    option bonds — shortfall agreement
As of December 31, 2007, the Company had invested in
    several TOBs with a single financial institution as liquidity
    provider and remarketing agent (the "Liquidity
    Provider"). At the time the Company invested in the TOBs,
    the Company was in negotiations with respect to a shortfall as
    well as other agreements with the Liquidity Provider. The terms
    of the shortfall agreement were never agreed upon and no
    shortfall agreement was executed. In the absence of a shortfall
    agreement, the Company does not believe that it is obligated to
    reimburse the liquidity provider for any losses incurred.
As of December 31, 2007, the Company estimates the
    underlying value of the bonds of the TOB had declined in value
    by approximately $7.7 million since the purchase by the
    TOB. However, because the Company has determined it has no
    obligation to reimburse the liquidity provider, the Company has
    not recorded a liability or net unrealized loss for this decline
    in value.
The Company initially invested $38,228 for its investment in the
    TOB Residual Certificates. The Company currently carries this
    investment at zero in its consolidated financial statements.
Accounting for contingencies is described in
    SFAS No. 5,
Accounting for Contingencies
("SFAS 5"). In addition to disclosure of all
    contingencies, SFAS 5 requires that a contingent liability
    be recognized when the outcome of the contingency rises to the
    level of probable and reasonably estimable.
On March 13, 2008, the Liquidity Provider issued a margin
    call to the Company in the amount of $21.5 million which
    was comprised of $6.3 million of initial margin and
    $15.2 million representing the Liquidity Provider's
    estimate of the decline in value of the underlying bonds as of
    March 13, 2008. The Company has notified the Liquidity
    Provider of its position that it has no obligation to post
    margin or to reimburse the liquidity provider for the decline in
    value of the underlying bonds. On March 14, 2008, the
    Liquidity Provider served on the Company a Summons with Notice
    seeking $18.0 million in damages presumably related to this
    dispute. The Company intends to defend this action vigorously.
The Company does not currently believe it is probable that an
    adverse judgment will be rendered. Therefore, no contingent
    liability is recorded. However, if an adverse judgment were
    rendered, the Company could be found to be liable for the net
    unrealized loss on the bonds in the TOB (estimated, by the
    Company, as $7.7 million as of December 31, 2007 and,
    by the Liquidity Provider, as $15.2 million as of
    March 13, 2008) and could incur additional legal and
    court costs. Furthermore, the value of the underlying bonds in
    the TOB varies based upon changes in market conditions;
    therefore, any ultimate liability could be greater than (or less
    than) the estimated unrealized loss as of December 31, 2007
    or March 13, 2008.
Registration
    Rights Agreement
The Company entered into a registration rights agreement with
    Cohen. Terms and conditions of the agreement call for a
    reduction in the level of management fees that the Company will
    pay Cohen if the Company fails to timely file a registration
    statement. If the Company does not file a resale shelf
    registration statement by March 31, 2008, the base
    management fee payable to Cohen will be reduced by 0.50% to
    1.00% from that date until the actual filing date of a shelf
    registration statement. In addition, the agreement calls for the
    Company to retain the allocation of profits or distributions
    associated with Cohen's performance share of the Company,
    after March 31, 2008, if the resale shelf registration
    statement is not filed by March 31, 2008, until the
    registration statement is filed, at which time the Company will
    pay all allocations and distributions currently due along with
    what Cohen earned during the period since March 31, 2008.
    In the event the
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MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
Company does not file the shelf registration statement by
    June 12, 2008, the Company will further reduce Cohen's
    management fee by an additional 0.50% to 0.50%, for periods from
    June 12, 2008 until the actual filing date. Once the
    registration statement is filed, the Company will resume paying
    Cohen management fees based on the original level of 1.50%.
    However any reduction in the base management fee during the time
    the registration statement is not filed will not be recaptured
    by Cohen. If the Company has endeavored in good faith to timely
    file the resale registration statement but is unable to make
    such filing as of the specified date as a result of
    circumstances outside the reasonable control of the Company,
    then these reductions in Cohen's management fee shall not
    apply. In addition, the Company's obligations under the
    registration rights agreement will terminate in their entirety
    when the Company's non-affiliated shareholders can sell
    their shares in the Company without restriction pursuant to
    Rule 144 under the securities act of 1933, as amended.
NOTE 10 —
RISK
    MANAGEMENT
In the ordinary course of business, the Company manages a
    variety of risks including market risk and credit risk. The
    Company identifies, measures, and monitors risk through various
    control mechanisms including diversifying exposures and
    activities across a variety of instruments, markets, and
    counterparties.
Market risk is the risk of potential adverse changes in the
    value of financial instruments and their derivatives because of
    changes in market conditions, such as interest movements and
    volatility in security prices. The Company manages market risk
    through the use of risk management strategies and various
    analytical monitoring techniques that evaluate the effect of
    cash instruments and derivative contracts.
Credit risk is the risk the counterparties may fail to fulfill
    their obligations or that the collateral value becomes
    inadequate. The Company attempts to minimize its counterparty
    risk exposure by monitoring the size of its credit exposure to
    and the creditworthiness of counterparties.
NOTE 11 —
FINANCIAL
    INSTRUMENTS WITH OFF BALANCE SHEET RISK
In the normal course of its business, the Company trades various
    financial instruments and enters into various investment
    activities with off-balance sheet risk. These financial
    instruments may include total return swap arrangements, interest
    rate swaps, basis swaps and tender option bonds. Each of these
    financial instruments contains varying degrees of off-balance
    sheet risk whereby changes in the market values of the
    securities underlying the financial instruments or the
    Company's satisfaction of the related obligations may
    ultimately exceed the amount currently recorded in the
    consolidated statement of assets and liabilities.
The contract amounts of these investments do not represent the
    Company's risk of loss due to counterparty nonperformance.
    The Company's exposure to credit risk is associated with
    counterparty nonperformance on these investments and is limited
    to the unrealized gains inherent in such contracts which are
    recognized in consolidated statement of assets and liabilities
    and the cash collateral on deposit, if any, with these
    counterparties. See note 12.
The Company is subject to interest rate risk. Generally, the
    value of the fixed income securities with fixed rates will
    change inversely with changes in interest rates. Even though the
    Company currently holds no fixed rate bonds on balance sheet,
    most of the reference bonds in the TRS are fixed rate. As
    interest rates rise, the market value of fixed rate fixed income
    securities, or derivatives based on the value of fixed rate
    fixed income securities such as the TRS, tends to decrease.
    Conversely, as interest rates fall, the market value of fixed
    rate fixed income securities tends to increase. It is the
    Company's policy to manage this risk primarily through swap
    arrangements.
With respect to floating-rate tax exempt bonds, interest rate
    risk is the risk that defaults on tax-exempt bonds will increase
    during periods of rising interest rates and, during periods of
    declining interest rates, that obligors may exercise their
    option to prepay principal earlier than scheduled. Such
    increases and decreases in
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MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
rates may result in corresponding increases or decreases in the
    Company's interest income and the distribution payables to
    holders of certificates issued by tender option trusts and
    payments to counterparties under the TRS.
Total
    return swap.
The TRS is accounted for at fair value and included either in
    unrealized gain or loss on total return swap on the consolidated
    statement of assets and liabilities. The Company has posted cash
    collateral for the benefit of the counterparty in the amount of
    $29,000,000. This cash collateral is included in restricted cash
    in the consolidated statement of assets and liabilities and
    represents the maximum potential loss to the Company under the
    TRS.
Basis
    Swaps
In November 2007, the Company entered into two basis swap
    arrangements. A basis swap is an interest rate swap which
    involves the exchange of two floating rate financial instruments
    (that is, a floating-floating interest rate swap under which the
    floating rate payments are referenced to different bases).
In the case of the basis swaps entered into by the Company, no
    cash is exchanged at the outset of the contract and no principal
    payments are made by either party. A single net payment will be
    made by one counterparty at each due date. The payments commence
    in February of 2010 and are made quarterly thereafter until
    termination.
One basis swap with a notional of $60,500,000 terminates in
    November 2032. The second basis swap with a notional of
    $27,250,000 terminates in November 2019. The potential loss for
    the Company on the basis swaps is unlimited.
NOTE 12 —
CONCENTRATIONS
    OF CREDIT RISK
Total return swap.
As of December 31,
    2007, the Company maintains a TRS, including the related
    interest rate hedge agreements and interest basis swap
    agreements, with a single counterparty: Deutsche Bank. The fair
    value of the TRS is included in unrealized loss on TRS in the
    consolidated statement of assets and liabilities. In addition,
    the Company has provided the counterparty with $29,000,000 of
    cash collateral which is included in restricted cash in the
    consolidated statement of assets and liabilities. If Deutsche
    Bank failed to perform under their obligations of the TRS, the
    Company could lose the restricted cash it has posted as well as
    any unrealized gain on the TRS then outstanding. As of
    December 31, 2007, the TRS is in a net unrealized loss
    position.
Cash and cash equivalents.
As of
    December 31, 2007, the Company held $128,106,782 of its
    cash and cash equivalents with U.S. Bank. If U.S. Bank
    failed under its obligation as custodian of these funds, the
    Company could lose a portion or all of its unrestricted cash
    balances with U.S. Bank.
All other trading activities.
The
    Company's trading activities are primarily with brokers and
    financial institutions mentioned above. All securities
    transactions of the Company are cleared by multiple securities
    firms pursuant to customer agreements. At December 31,
    2007, all the investments in the TRS and TOB are positions held
    with two of these brokers. The Company had substantially all of
    its individual counterparty concentrations with these brokers
    and their affiliates.
NOTE 13 —
DISTRIBUTIONS
In November 2007, the Company's Board of Directors approved
    the initiation of a quarterly cash distribution, payable on the
    Company's common shares, restricted shares and LTIP shares.
    During the period from October 1, 2007 to December 31,
    2007, the quarterly cash distribution was $0.08 per share. The
    total
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MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
amount declared and paid was $1,433,366 comprised of $1,380,008
    to the common shareholders, $2,400 to the restricted common
    shareholders and $50,958 to the holders of LTIP shares.
NOTE 14 —
FINANCIAL
    HIGHLIGHTS
In accordance with the Audit Guide, the per share information
    and ratios to average net assets are presented below:
PER SHARE OPERATING
    PERFORMANCE
For the Period from June 12, 2007 (inception) to
    December 31, 2007
Beginning net asset value
$
—
Net investment income
0.13
Net realized losses on investments
(0.15
)
Net unrealized losses on investments
(1.00
)
Total from investment operations
(1.02
)
Distributions to shareholders
(0.08
)
Share transactions
8.93
Ending net asset value per share outstanding
$
7.83
The per share amounts above are calculated based on the
    Company's shares outstanding as well as its unvested
    restricted stock and its vested and unvested LTIP shares. The
    LTIP shares are included because they are eligible to receive
    dividends and the performance share is excluded.
RATIOS TO AVERAGE NET ASSETS
For the Period from June 12, 2007 (inception) to
    December 31, 2007
Management fee
0.73
%
Other expenses
0.41
%
Non cash incentive compensation
0.62
%
Total expense
1.76
%
Net investment income
1.58
%
Total return
(10.82
)%
The above ratios are calculated by dividing income or expenses
    as applicable by the monthly average of net assets
    ($152.1 million) and are not annualized.
Total return is calculated by dividing the quarterly net
    decrease in net assets from operations by beginning net assets
    for the period on a compounded basis and is not annualized.
The per share information, ratios and total return above are
    calculated based on the shareholder group taken as a whole. An
    individual shareholder's results may vary from those shown
    above due to the timing of capital transactions.
NOTE 15 —
SUBSEQUENT
    EVENT
In February 2008, the Company declared and paid a dividend of
    $0.08 per share. The total distribution to be made is
    $1.4 million.
In February 2008, the Company terminated the TRS which resulted
    in a termination payment of $23.1 million to the
    counterparty.
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MUNI
    FUNDING COMPANY OF AMERICA, LLC
NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS — (Continued)
December 31, 2007
In conjunction with the termination of the TRS, a newly formed
    trust, Non Profit Preferred Funding II (NPPF 2), purchased
    approximately $174.3 million of securities (most of which
    were previously the reference portfolio of the TRS) including
    transaction costs and accrued interest. NPPF 2 issued two
    classes of equity securities to finance this purchase. The
    senior securities were issued in the amount of
    $118.1 million and were purchased by the former
    counterparty to the TRS. The junior securities were issued in
    the amount of $56.2 million and were purchased by the
    Company.
In March 2008, the Liquidity Provider issued a margin call to
    the Company and served on the Company a Summons with Notice
    seeking $18.0 million in damages. See note 9
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$25,000,000
MUNI FUNDING COMPANY OF
    AMERICA, LLC
Class A Common
    Shares Representing Limited Liability Company
    Interests
PROSPECTUS
LADENBURG THALMANN &
    CO. INC.
Until          ,
    2010 (25 days after the date of this prospectus), all
    dealers that buy, sell or trade our securities, whether or not
    participating in this offering, may be required to deliver a
    prospectus. This is in addition to the dealers' obligation
    to deliver a prospectus when acting as underwriters and with
    respect to their unsold allotments or subscriptions.
,
    2010
Table of Contents
PART II
INFORMATION
    NOT REQUIRED IN PROSPECTUS
References to "the company," "the
    Registrant," "we," "us,"
    "our" and similar expressions in this Part II
    refer to Muni Funding Company Of America, LLC.
Item 13.
Other
    Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other
    than the underwriting discount, payable by us in connection with
    the offering of the securities being registered. All amounts are
    estimates except the Securities and Exchange Commission
    registration fee and the Financial Industry Regulatory Authority
    filing fee.
SEC registration fee
$
2,049.88
FINRA filing fee
$
3,375.00
NASDAQ Stock Market LLC application and listing fees
Accounting fees and expenses
Legal fees and expenses
Printing and engraving expenses
Miscellaneous
Total
$
Item 14.
Indemnification
    of Directors and Officers
Section 18-108
of the Delaware Limited Liability Company Act provides that a
    limited liability company may indemnify any member or manager or
    other person from and against any and all claims and demands
    whatsoever. The section of the prospectus entitled
    "Description of Securities — Operating Agreement
    and Bylaws — Limitations on Liability and
    Indemnification of Our Directors and Officers" is
    incorporated herein by reference.
We currently maintain liability insurance for our directors and
    officers. Such insurance would be available to our directors and
    officers in accordance with its terms.
Item 15.
Recent
    Sales of Unregistered Securities
On June 12, 2007, 17,250,100 common shares representing
    membership interests, or common shares, were sold by us to
    Friedman, Billings, Ramsey & Co. Inc. (the
    "Initial Purchaser"), at the price of $10.00 per
    share, in an offering exempt from registration pursuant to
    Section 4(2) of the Securities Act. The Initial Purchaser
    resold these common shares to "qualified institutional
    buyers," as defined in Rule 144A under the Securities
    Act, and to certain persons outside the United States pursuant
    to Regulation S under the Securities Act.
On June 12, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 30,000 restricted common shares. The recipients
    of these restricted common shares did not pay any consideration
    for these awards.
On June 26, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 345,000 LTIP shares. The recipients of these
    LTIP shares did not pay any consideration for these awards.
On August 9, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 267,000 LTIP shares. The recipients of these
    LTIP shares did not pay any consideration for these awards.
On November 15, 2007, pursuant to our 2007 Equity Incentive
    Plan, we granted 25,000 LTIP shares. The recipients of these
    restricted common shares did not pay any consideration for these
    awards.
On April 14, 2009, pursuant to our 2007 Equity Incentive
    Plan, we granted 7,500 restricted common shares. The recipients
    of these restricted common shares did not pay any consideration
    for these awards.
II-1
Table of Contents
On April 14, 2009, we granted 553,407 common shares in lieu
    of a cash distribution owed to our manager pursuant to its
    ownership of the Performance Share. These shares were valued at
    $2.17 per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section 4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
On June 26, 2009, we issued subscription rights to the then
    holders of common shares and LTIP shares to purchase up to an
    aggregate of 18,116,964 new common shares at the price of $1.20
    per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section 4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
On June 26, 2009, we consummated an exchange offer pursuant
    to which one replacement LTIP share with a performance target of
    $1.25 per share was issued in exchange for two then-outstanding
    LTIP shares with a performance target of $10.00 per LTIP share.
    LTIP shareholders exchanged 566,915 LTIP shares with a
    performance target of $10.00 per LTIP share for 283,458 new LTIP
    shares with a performance target of $1.25 per LTIP share
    pursuant to such exchange offer. The exchange of these LTIP
    shares was exempt from registration under the Securities Act in
    reliance on Section 4(2) of the Securities Act as a
    transaction by an issuer not involving a public offering.
On July 23, 2009, pursuant to our 2007 Equity Incentive
    Plan, we granted 15,000 restricted common shares. The recipients
    of these restricted common shares did not pay any consideration
    for these awards.
On July 23, 2009, we granted 438,712 common shares in lieu
    of a cash distribution owed to our manager pursuant to its
    ownership of the Performance Share. These shares were valued at
    $2.01 per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section 4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
On October 22, 2009, we granted 721,528 common shares in
    lieu of a cash distribution owed to our manager pursuant to its
    ownership of the Performance Share. These shares were valued at
    $2.43 per share. The sale of these common shares was exempt from
    registration under the Securities Act in reliance on
    Section 4(2) of the Securities Act as a transaction by an
    issuer not involving a public offering.
During our 2009 fiscal year, 246,584 LTIP shares were converted
    into 566,915 common shares valued at $3.50 per Share. The
    exchange of these LTIP shares was exempt from registration under
    the Securities Act in reliance on Section 4(2) of the
    Securities Act as a transaction by an issuer not involving a
    public offering.
Item 16.
Exhibits
    and Financial Statement Schedules
(a) The following exhibits are filed as part of this
    Registration Statement:
Exhibit
No.
Description
1
.1
Form of Underwriting Agreement*
3
.1
Certificate of Formation*
3
.2
First Amended and Restated Limited Liability Company Agreement*
3
.3
Bylaws*
4
.1
Specimen Share Certificate*
5
.1
Opinion of Schulte Roth & Zabel LLP*
10
.1
Management Agreement, dated as of June 12, 2007, by and
    between Muni Funding Company of America, LLC and Muni Capital
    Management, LLC*
10
.2
Assignment and Assumption Agreement, dated as of March 18,
    2009, by and among Cohen Municipal Capital Management, LLC,
    Cohen Brothers, LLC, Muni Capital Management, LLC and Tricadia
    Capital Management, LLC*
10
.3
Form of Director and Officer Indemnification Agreement*
23
.1
Consent of Grant Thornton LLP
II-2
Table of Contents
Exhibit
No.
Description
23
.2
Consent of KPMG LLP
23
.3
Consent of Schulte Roth & Zabel LLP (included in
    Exhibit 5.1)*
24
.1
Powers of Attorney (included on signature page to this
    Registration Statement)
99
.1
Form of Charter of Audit Committee*
*
To be filed by amendment.
(b) No financial statement schedules are required to be
    filed with this Registration Statement.
Item 17.
Undertakings
(a) The undersigned hereby undertakes to provide to the
    underwriters at the closing specified in the underwriting
    agreements, certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising
    under the Securities Act may be permitted to directors, officers
    and controlling persons of the registrant pursuant to the
    foregoing provisions, or otherwise, the registrant has been
    advised that in the opinion of the Securities and Exchange
    Commission such indemnification is against public policy as
    expressed in the Securities Act and is, therefore,
    unenforceable. In the event that a claim for indemnification
    against such liabilities (other than the payment by the
    registrant of expenses incurred or paid by a director, officer
    or controlling person of the registrant in the successful
    defense of any action, suit or proceeding) is asserted by such
    director, officer or controlling person in connection with the
    securities being registered, the registrant will, unless in the
    opinion of its counsel the matter has been settled by
    controlling precedent, submit to a court of appropriate
    jurisdiction the question whether such indemnification by it is
    against public policy as expressed in the Securities Act and
    will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance upon Rule 430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule 424(b)(1) or (4) or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective.
(2) For the purpose of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus shall be deemed to be a new registration
    statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be
    the initial
bona fide
offering thereof.
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act, the
    Registrant certifies that it has duly caused this Registration
    Statement to be signed on its behalf by the undersigned,
    thereunto duly authorized, in the City of New York, State of New
    York, on the 13th day of May, 2010.
MUNI FUNDING COMPANY OF AMERICA, LLC
By:
/s/  Michael
    Barnes
Name:     Michael Barnes
Title:
Chairman and Chief Executive Officer
Each of the undersigned officers and directors of Muni Funding
    Company of America, LLC hereby severally constitute and appoint
    each of Michael Barnes and Geoffrey Kauffman as the
    attorneys-in-fact for the undersigned, in any and all
    capacities, with full power of substitution, to sign any and all
    pre- or post-effective amendments to this Registration
    Statement, any subsequent Registration Statement for the same
    offering which may be filed pursuant to Rule 462(b) under
    the Securities Act of 1933, as amended, and any and all pre- or
    post-effective amendments thereto, and to file the same with
    exhibits thereto and other documents in connection therewith,
    with the Securities and Exchange Commission, granting unto said
    attorneys-in-fact full power and authority to do and perform
    each and every act and thing requisite and necessary to be done
    in and about the premises, as fully to all intents and purposes
    as he might or could do in person, hereby ratifying and
    confirming all that said attorneys-in-fact may lawfully do or
    cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
    Registration Statement or Amendment has been signed by the
    following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/  Michael
    Barnes
Michael
    Barnes
Chairman and Chief Executive Officer (Principal Executive
    Officer)
May 13, 2010
/s/  Julia
    Wyatt
Julia
    Wyatt
Chief Financial Officer
(Principal Accounting and Financial Officer)
May 13, 2010
/s/  Geoffrey
    Kauffman
Geoffrey
    Kauffman
Director
May 13, 2010
/s/  Daniel
    G. Cohen
Daniel
    G. Cohen
Director
May 13, 2010
/s/  Andrew
    Gordon
Andrew
    Gordon
Director
May 13, 2010
/s/  Thomas
    J. Reilly, Jr.
Thomas
    J. Reilly, Jr.
Director
May 13, 2010
II-4
Table of Contents
EXHIBIT INDEX
Exhibit
No.
Description
1
.1
Form of Underwriting Agreement*
3
.1
Certificate of Formation*
3
.2
First Amended and Restated Limited Liability Company Agreement*
3
.3
Bylaws*
4
.1
Specimen Share Certificate*
5
.1
Opinion of Schulte Roth & Zabel LLP*
10
.1
Management Agreement, dated as of June 12, 2007, by and between
    Muni Funding Company of America, LLC and Muni Capital
    Management, LLC*
10
.2
Assignment and Assumption Agreement, dated as of March 18, 2009,
    by and among Cohen Municipal Capital Management, LLC, Cohen
    Brothers, LLC, Muni Capital Management, LLC and Tricadia Capital
    Management, LLC*
10
.3
Form of Director and Officer Indemnification Agreement*
23
.1
Consent of Grant Thornton LLP
23
.2
Consent of KPMG LLP
23
.3
Consent of Schulte Roth & Zabel LLP (included in Exhibit
    5.1)*
24
.1
Powers of Attorney (included on signature page to this
    Registration Statement)
99
.1
Form of Charter of Audit Committee*
*
To be filed by amendment.