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9717Lpt1-197 CITY OF SAN LEANDRO AMENDMENT TO PROMISSORY NOTE The City of San Leandro, a municipal corporation (Lender) and Fenway Partners, a California Limited Partnership (Borrower) hereby agree as of January 21, 1997, to the following amendments of the Promissory Note entered into by the Lender and the Borrower and dated September 29, 1993, which is incorporated by reference herein and attached as ExhibitA hereto. 1. The preliminary "FOR VALUE RECEIVED" clause is hereby amended to delete the words "plus interest". 2. Paragraph 4(b) is hereby deleted. 3. Paragraph 4(c) is hereby deleted and the following paragraph is hereby substituted: "The Loan shall not accrue interest during the Loan term. The Loan principal shall be forgiven as set forth in the attached Exhibit B incorporated herein by reference, for the remainder of the Loan term. Program operating costs shall no longer be credited to Borrower." 4. Paragraph 4(d) is hereby deleted. 5. Paragraph 4(e) is hereby amended to replace the words "This Note" with the words "The unforgiven balance of this Note". 6. Paragraph 4(f) is hereby deleted. 7. Paragraph 4(g) is hereby amended to read: "Any failure in the performance of Borrower of any nonmonetary term, condition, provision, or covenant set forth in the Promissory Note, the "Agreement for the Use of HOME Funds," the "Deed of Trust," the "Regulatory Agreement," or any amendments thereof, including, but not limited to, the requirement to provide the affordable units and the provision to allow Section 8 renters to qualify and be eligible for the eleven (11) units of affordable housing shall cause, at the option of the Lender, the entire unforgiven balance of the loan to be paid by the Borrower to the Lender upon written notice of the Lender to the Borrower without further demand. In addition, Borrower shall pay liquidated damages in the amount to be calculated as follows. The unforgiven balance of the loan shall be multiplied by the number of years that remain until the loan expires. This amount shall be multiplied by four percent (4%). The product of this multiplication shall be considered full liquidated damages for Borrower's failure of performance. Fenway Partners Promissory Note Amendment No. 1 Page 1 of 3