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Assignment of Agreements, Plans and Specifications dated as of the date hereof and executed by Borrower for the benefit of City (the "Assignment Agreement). City shall be entitled to the benefits of the security provided by the Assignment Agreement and shall have the right to enforce the covenants and agreements contained herein, in the Loan Agreement and the Assignment Agreement. PAYMENTS 1.1 MATURITY DATE (a) Subject to Section 1.1(b) the entire principal balance outstanding under this Note, together with interest accrued thereon and any other sums accrued hereunder, shall be due and payable in one lump sum on the date (the "Maturity Date ") which is the earlier of: (i) the date that Borrower acquires a fee interest in the Property, or (ii) the third (3 anniversary of the date of this Note (provided however, if Borrower is unable to secure financing for the Project despite Borrower's good faith efforts, City shall agree to extend the Maturity Date by eighteen (18) months. Notwithstanding the foregoing, if the City provides additional financing for the Project concurrently with the Maturity Date (as such may be extended), this Note shall be cancelled and Borrower shall execute a new note which shall evidence Borrower's obligation to repay both the balance payable under this Note and the amount of the additional funds to be advanced by the City. (b) If on or prior to the Maturity Date, Borrower terminates the Loan Agreement pursuant to Section 4.1.2 (b) of the Loan Agreement, upon Borrower's delivery to City of all Assigned Documents (as defined in the Assignment Agreement), City shall forgive the outstanding balance payable under this Note provided that no Event of Developer Default exists under any City Document. 1.2 PREPAYMENT Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note provided that each such prepayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal. In no event shall any amount due under this Note become subject to any rights of offset, deduction or counterclaim on the part of Borrower. 1.3 MANNER OF PAYMENT All payments of'principal and interest on this Note shall be made to City at 835 East 14 Street, San Leandro, California 94577 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing. 2. DEFAULTS 2.1 EVENTS OF DEFAULT The occurrence of any one or more of the following events shall constitute an event of default hereunder ( "Event of Default "): 1902227.2 2