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PROMISSORY NOTE CITY OF SAN LEANDRO HOME INVESTMENT PARTNERSHIPS ( "HOME") PROGRAM $650,000 2012 San Leandro, California FOR VALUE RECEIVED, Alameda Housing Associates, L.P., a California limited partnership ( "Borrower "), promises to pay to the City of San Leandro, a California municipal corporation ( "City ") the principal sum of Six Hundred Fifty Thousand Dollars ($650,000), or so much thereof as may be advanced by City, together with interest as provided herein. The outstanding principal balance of this promissory note (this "Note ") shall bear simple interest at the rate of three percent (3 %) per annum commencing upon the date of disbursement. 1. Loan This Note is executed pursuant to that certain HOME Loan Agreement dated as of the date hereof and executed by and between Borrower and City (the "Loan Agreement "). Capitalized terms used without definition herein shall have the meanings ascribed to such terms in the Loan Agreement. Borrower will use the proceeds of the Loan for the construction of the project described in the Loan Agreement (the "Project "). 2. Securily. Payment of this Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust ") dated as of the date hereof and executed by Borrower as Trustor for the benefit of City as Beneficiary, and a Regulatory Agreement (the "Regulatory Agreement ") dated as of the date hereof and executed by and between Borrower and City that sets forth certain limitations on household incomes and rent for the HOME assisted units. The Deed of Trust and the Regulatory Agreement shall be recorded against the Property and the Project. 3. Maturity Date, Payments This Note shall be due and payable in full twenty (20) years from the date of issuance of a final certificate of occupancy or equivalent for the Project, but in no event later than the twenty- second (22 anniversary of the date hereof. By no later than June 1 of each year following the issuance of a final certificate of occupancy or equivalent for the Project, Borrower shall pay to City fifty percent (50 %) of all Surplus Cash (as defined in and subject to the provisions of Section 1.2 (and subsections thereof) of the Loan Agreement) to reduce the indebtedness owed under this Note. Payments shall be made in lawful money of the United States to City at 835 East 14 Street, San Leandro, California 94577, Attention: Finance Department. The place of payment may be changed from time to time as the City may from time to time designate in writing. 4. Prepayment Borrower shall have the right to prepay this Note in whole or in part without penalty or premium. 5. Default The occurrence of any of the following shall constitute an event of default under this Note, subject to the cure periods set forth in Section 6 below: (i) Borrower fails to pay any amount due hereunder within fifteen (15) days of its due date; (ii) any default by Borrower under 1908509.2