KOTTINGER GARDENS PHASE 1 - AFFORDABLE HOUSING LOAN AGMT

(c) failure to pay taxes, assessments or other charges which may become liens on the Property or the Project(subject to the right to contest as set forth in the Loan Agreement); (d)the presence of Hazardous Materials on the Property or other violation of the Borrower's obligations under Article VII of the Loan Agreement or Section 7.11 of the Deed of Trust (pertaining to environmental matters), except as limited by the provisions of such agreements;. (e)the occurrence of any act or omission of Borrower that results in waste to or of the Project or the Property and which has a material adverse effect on the value of the Project or the Property; (f)the material misapplication of the Loan proceeds; (g)the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust; (h)the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project or the Property; and (i)the failure of Borrower to pay all amounts payable under this Note in full if Borrower Transfers the Property in violation of the Loan Agreement or the Regulatory Agreement. IN WITNESS WHEREOF, Borrower has executed this Note as of the date first written above. BORROWER: KOTFINGER GARDENS PHASE 1 ASSOCIATES, L.P., a California limited partnership By: Kottinger Gardens Phase 1 LLC, a California limited liability company Its: General Partner By: MP Preservation, Inc., a California nonprofit public benefit corporation, its sole member/manager By: Jan Lindenthal, Assistant Secretary OAK#4829-4624-9261 v6 10