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PROMISSORY NOTE PAGE 4 SPONSOR LOAN (COUNTY FUNDS) 12. Casualty, Condemnation, Etc. In the event of any fire or other casualty to the project or eminent domain proceedings resulting in condemnation of the project or any part thereof, Maker shall have the right to rebuild the project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep this Note in balance and rebuild the project in a manner that provides adequate security to Holder for repayment of this Note or if such proceeds are insufficient, then Maker shall have funded any deficiency; (b) Holder shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement; and (c) no material default then exists under this Note or the Deed of Trust. If the casualty or condemnation affects only part of the project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of this Note in a manner that provides adequate security to Holder for repayment of the remaining balance of this Note. 13. Force Majeure. There shall be no default for construction or rehabilitation delays beyond the reasonable control of Maker, provided that such delays do not exceed one hundred eighty (180) days, or such longer period of time as may be specified in this Note or the Deed of Trust. 14. Purchase Rights. The exercise of the purchase option or right of first refusal agreement described in the Partnership Agreement shall not constitute a default under this Note or the Deed of Trust, or accelerate the maturity of this Note thereunder. Any requisite consent of Holder to (a) the exercise of said purchase option or right of first refusal agreement by the prospective purchaser identified therein; and to (b) the assumption without penalty of Note obligations by the prospective purchaser and the release of Maker from such obligations, shall not be unreasonably withheld. Subject to any such consent requirement, the exercise of rights under such agreement shall not constitute a default or accelerate maturity of this Note. 15. Standstill. Notwithstanding anything to the contrary set forth in this Note, Holder will not commence (A) until the earlier of (i) the expiration of the Compliance Period (as such term is defined in the Partnership Agreement), or (ii) the date the Limited Partner is no longer a partner in the Maker, or (B) while the Tax-Exempt Loan (as such terms is defined in the Partnership Agreement) is outstanding: (i) foreclosure proceedings with respect to the Property hereunder or under the Deed of Trust, or exercise any other rights or remedies it may have hereunder or under the Deed of Trust, including, but not limited to, accelerating this Note, collecting rents, appointing (or seeking the appointment of) a receiver or exercising any other rights or remedies hereunder; or (ii) join with any other creditor in commencing any bankruptcy reorganization, arrangement, insolvency or liquidation proceedings with respect to the Maker. 16. Non-Recourse Obligation. This Note shall be a nonrecourse obligation of Maker. At no time shall Maker or any of Maker’s partner(s) have any liability under this Note or the Deed of Trust. Holder’s sole recourse shall be limited to foreclosure under the Deed of Trust. 17. Miscellaneous. (a) Every person or entity liable at any time for the payment of the indebtedness evidenced hereby waives presentment for payment, demand and notice of nonpayment of this Note. Every such person or entity further hereby consents to any extension of the time of payment hereof or other modification of the terms of payment of this Note, the release of all or any part of the security