FIRST AMENDED PARTNERSHIP AGREEMENT

under Section 7.5. The operating deficit reserve shall be funded by the Partnership in amounts not less than: $585,000 in 1989; $555,000 in 1990; $480,000 in 1991; $480,000 in 1992; $605,000 in 1993; $280,000 in 1994; $280,000 in 1995; and $285,000 in 1996. 7.14. Representations and Warranties of the General Partner. The General Partner represents, warrants and covenants to the Partnership and the Limited Partners that as of the date of this Agreement: (a) the Development is in compliance with the Mortgages and all applicable requirements of governmental entities; (b) there are no material violations of the Mortgages; (c) the land upon which the Development is located is properly zoned for the Development and the Development and its contemplated use conform to all applicable federal, state and local zoning, use and environmental laws and regulations affecting the Development; (d) good and marketable title to the Development is held by the Partnership subject to the security interests of all Mortgagees and is insured by a CLTA title policy, issued by Santa Clara Land Title Company in the amount of $15,360,000; (e) there is no material default under any agreement, contract, lease, or other commitment, nor is any claim, demand, litigation, proceeding or governmental investigation pending or threatened against or related to the business or assets of the Partnership or of the Development; -39-