Promissory
Note


$65,091,371.66 June
26, 2008


FOR VALUE
RECEIVED, AMERICA FIRST TAX EXEMPT INVESTORS, L.P., a Delaware limited
partnership (“Borrower”), hereby
promises to pay to the order of Bank of America, N.A., a national banking
association (together with any and all of its successors and assigns and/or any
other holder of this Note, “Lender”), without
offset, in immediately available funds in lawful money of the United States of
America, at 600 Wilshire Boulevard, Los Angeles, California 90017 (or at such
other place as the Lender hereafter may designate), the principal sum of
Sixty-Five Million Ninety-One Thousand Three Hundred Seventy-One Dollars and
66/100 ($65,091,371.66) (or the unpaid balance of all principal advanced against
this Note, if that amount is less), together with interest on the unpaid
principal balance of this Note from day to day outstanding as hereinafter
provided.




Section
1                      Payment Schedule and
Maturity Date.  Prior to maturity, accrued and unpaid interest
shall be due and payable in arrears on the first day of each month commencing on
August 1, 2008.
The entire principal balance of this Note then unpaid, together with all accrued
and unpaid interest and all other amounts payable hereunder and under the other
Loan Documents (as hereinafter defined), shall be due and payable in full on the
earlier of (a) September 26, 2008 (the “Maturity Date”), the
final maturity of this Note, or (b) the date on which the Lender issues any
letters of credit for the account of the Borrower pursuant to the Shortfall, Fee
and Collateral Agreement of even date herewith (as the same may from time to
time be amended, restated, modified or supplemented, the “Shortfall
Agreement”)  among the Lender, Bank of America, N.A., as LOC
Provider and TOB Liquidity Provider, Bank of America Securities LLC, as TOB
Placement and Remarketing Agent, and the Obligor.  Capitalized terms
used and not defined in this Agreement herein shall have the meanings given such
terms in the Shortfall Agreement.




Section
2                      Security; Loan
Documents.  The security for this Note includes certain
Collateral, as defined in the Shortfall Agreement.  This Note, the
Shortfall Agreement and all other documents now or hereafter securing,
guaranteeing or executed in connection with the loan evidenced by this Note (the
“Loan”), as the
same may from time to time be amended, restated, modified or supplemented, are
herein sometimes called individually a “Loan Document” and
together the “Loan
Documents.”




Section
3                      Interest
Rate




(a)           BBA LIBOR Daily Floating
Rate.  The unpaid principal balance of this Note from day to
day outstanding which is not past due, shall bear interest at a fluctuating rate
of interest per annum equal to the BBA LIBOR Daily Floating Rate plus Two
Hundred Twenty-Five (225) basis points per annum.  The “BBA LIBOR Daily Floating
Rate” shall mean a fluctuating rate of interest per annum equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as
selected by Lender from time to time) as determined for each Business Day at
approximately 11:00 a.m. London time two (2) London Banking Days prior to the
date in question, for U.S. Dollar deposits (for delivery on the first day of
such interest period) with a one month term, as adjusted from time to time in
Lender’s sole discretion for reserve requirements, deposit insurance assessment
rates and other regulatory costs.  If such rate is not available at
such time for any reason, then the rate will be determined by such alternate
method as reasonably selected by Lender.  A “London Banking Day” is a
day on which banks in London are open for business and dealing in offshore
dollars.  Interest shall be computed for the actual number of days
which have elapsed, on the basis of a 360-day year.




(b)           Alternative
Rates.  If Lender determines that no adequate basis exists for
determining the BBA LIBOR Daily Floating Rate or that the BBA LIBOR Daily
Floating Rate will not adequately and fairly reflect the cost to Lender of
funding the Loan, or that any applicable Law or regulation or compliance
therewith by Lender prohibits or restricts or makes impossible the charging of
interest based on the BBA LIBOR Daily Floating Rate and Lender so notifies
Borrower, then until Lender notifies Borrower that the circumstances giving rise
to such suspension no longer exist, interest shall accrue and be payable on the
unpaid principal balance of this Note from the date Lender so notifies Borrower
until the Maturity Date of this Note (whether by acceleration, declaration,
extension or otherwise) at a fluctuating rate of interest equal to the Prime
Rate of Lender plus Two Hundred Twenty-Five (225) basis points per
annum.  The term “Prime Rate” means, on
any day, the rate of interest per annum then most recently established by Lender
as its “prime rate.”  Any such rate is a general reference rate of
interest, may not be related to any other rate, and may not be the lowest or
best rate actually charged by Lender to any customer or a favored rate and may
not correspond with future increases or decreases in interest rates charged by
other lenders or market rates in general, and that Lender may make various
business or other loans at rates of interest having no relationship to such
rate.  Each time the Prime Rate changes, the per annum rate of
interest on this Note shall change immediately and contemporaneously with such
change in the Prime Rate.  If Lender (including any subsequent holder
of this Note) ceases to exist or to establish or publish a prime rate from which
the Prime Rate is then determined, the applicable variable rate from which the
Prime Rate is determined thereafter shall be instead the prime rate reported in
The Wall Street
Journal (or the average prime rate if a high and a low prime rate are
therein reported), and the Prime Rate shall change without notice with each
change in such prime rate as of the date such change is reported.




(c)           Past Due
Rate.  If any amount payable by Borrower under any Loan
Document is not paid when due (without regard to any applicable grace periods),
such amount shall thereafter bear interest at the Past Due Rate (as defined
below) to the fullest extent permitted by applicable Law.  Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable on demand, at a fluctuating rate per annum (the “Past Due Rate”) equal
to the BBA LIBOR Daily Floating Rate plus four hundred (400) basis
points.




Section
4                      Prepayment.  Borrower
may prepay the principal balance of this Note, in full at any time or in part
from time to time, without fee, premium or penalty, provided that: (a) no
prepayment may be made which in Lender’s judgment would contravene or prejudice
funding under any applicable take-out financing; (b) Lender shall have actually
received from Borrower prior written notice of (i) Borrower’s intent to prepay,
(ii) the amount of principal which will be prepaid (the “Prepaid Principal”),
and (iii) the date on which the prepayment will be made; (c) each prepayment
shall be in the amount of $1,000 or a larger integral multiple of $1,000 (unless
the prepayment retires the outstanding balance of this Note in full); and (d)
each prepayment shall be in the amount of 100% of the Prepaid Principal, plus
accrued unpaid interest thereon to the date of prepayment, plus any other sums
which have become due to Lender under the Loan Documents on or before the date
of prepayment but have not been paid.  If this Note is prepaid in
full, any commitment of Lender for further advances shall automatically
terminate.  The Borrower hereby authorizes the Placement and
Remarketing Agent and the Lender to prepay this Note in full from the proceeds
of the TOB Floaters on the Letter of Credit Issuance Date.




Section
5                      Late
Charges.  If Borrower shall fail to make any payment under the
terms of this Note (other than the payment due at maturity) within fifteen (15)
days after the date such payment is due, Borrower shall pay to Lender on demand
a late charge equal to four percent (4%) of the amount of such
payment.  Such fifteen (15) day period shall not be construed as in
any way extending the due date of any payment.  The late charge is
imposed for the purpose of defraying the expenses of Lender incident to handling
such delinquent payment.  This charge shall be in addition to, and not
in lieu of, any other amount that Lender may be entitled to receive or action
that Lender may be authorized to take as a result of such late
payment.




Section
6                      Certain Provisions Regarding
Payments.  All payments made under this Note shall be applied,
to the extent thereof, to late charges, to accrued but unpaid interest, to
unpaid principal, and to any other sums due and unpaid to Lender under the Loan
Documents, in such manner and order as Lender may elect in its sole discretion,
any instructions from Borrower or anyone else to the contrary
notwithstanding.  Remittances shall be made without offset, demand,
counterclaim, deduction, or recoupment (each of which is hereby waived) and
shall be accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank or
banks.  Acceptance by Lender of any payment in an amount less than the
amount then due on any indebtedness shall be deemed an acceptance on account
only, notwithstanding any notation on or accompanying such partial payment to
the contrary, and shall not in any way (a) waive or excuse the existence of an
Event of Default (as hereinafter defined), (b) waive, impair or extinguish any
right or remedy available to Lender hereunder or under the other Loan Documents,
or (c) waive the requirement of punctual payment and performance or constitute a
novation in any respect.  Payments received after 2:00 p.m. shall be
deemed to be received on, and shall be posted as of, the following Business
Day.  Whenever any payment under this Note or any other Loan Document
falls due on a day which is not a Business Day, such payment may be made on the
next succeeding Business Day.




Section
7                      Events of
Default.  The occurrence of any one or more of the following
shall constitute an “Event ofDefault” under this
Note:




(a)           Borrower
fails to pay when and as due and payable any amounts payable by Borrower to
Lender under the terms of this Note.




(b)           Any
covenant, agreement or condition in this Note is not fully and timely performed,
observed or kept, subject to any applicable grace or cure period.




(c)           An
Event of Default (as therein defined) occurs under any of the Loan Documents
other than this Note (subject to any applicable grace or cure
period).




Section
8                      Remedies.  Upon
the occurrence of an Event of Default, Lender may at any time thereafter
exercise any one or more of the following rights, powers and
remedies:




(a)           Lender
may accelerate the Maturity Date and declare the unpaid principal balance and
accrued but unpaid interest on this Note, and all other amounts payable
hereunder and under the other Loan Documents, at once due and payable, and upon
such declaration the same shall at once be due and payable.




(b)           Lender
may set off the amount due against any and all accounts, credits, money,
securities or other property now or hereafter on deposit with, held by or in the
possession of Lender to the credit or for the account of Borrower, without
notice to or the consent of Borrower.




(c)           Lender
may refuse to issue the Letters of Credit and the TOB Liquidity
Facilities.




(d)           Lender
may exercise any of its other rights, powers and remedies under the Loan
Documents or at law or in equity.




Section
9                      Remedies
Cumulative.  All of the rights and remedies of Lender under
this Note and the other Loan Documents are cumulative of each other and of any
and all other rights at law or in equity, and the exercise by Lender of any one
or more of such rights and remedies shall not preclude the simultaneous or later
exercise by Lender of any or all such other rights and remedies.  No
single or partial exercise of any right or remedy shall exhaust it or preclude
any other or further exercise thereof, and every right and remedy may be
exercised at any time and from time to time.  No failure by Lender to
exercise, nor delay in exercising, any right or remedy shall operate as a waiver
of such right or remedy or as a waiver of any Event of Default.




Section
10                                Costs and Expenses of
Enforcement.  Borrower agrees to pay to Lender on demand all
costs and expenses incurred by Lender in seeking to collect this Note or to
enforce any of Lender’s rights and remedies under the Loan Documents, including
court costs and reasonable attorneys’ fees and expenses, whether or not suit is
filed hereon, or whether in connection with bankruptcy, insolvency or
appeal.




Section
11                                Service of
Process.  Borrower hereby irrevocably designates and appoints
the law offices of Kutak Rock LLP, Suite 1100, 1100 Connecticut Avenue, N.W.,
Washington, D.C. 20036-4374, as Borrower’s authorized agent to accept and
acknowledge on Borrower’s behalf service of any and all process that may be
served in any suit, action, or proceeding instituted in connection with this
Note in any state or federal court sitting in the District of
Columbia.  If such agent shall cease so to act, Borrower shall
irrevocably designate and appoint without delay another such agent in the
District of Columbia satisfactory to Lender and shall promptly deliver to Lender
evidence in writing of such agent’s acceptance of such appointment and its
agreement that such appointment shall be irrevocable.




Borrower
hereby consents to process being served in any suit, action, or proceeding
instituted in connection with this Note by (a) the mailing of a copy thereof by
certified mail, postage prepaid, return receipt requested, to Borrower and (b)
serving a copy thereof upon the agent, if any, hereinabove designated and
appointed by Borrower as Borrower’s agent for service of
process.  Borrower irrevocably agrees that such service shall be
deemed to be service of process upon Borrower in any such suit, action, or
proceeding.  Nothing in this Note shall affect the right of Lender to
serve process in any manner otherwise permitted by law and nothing in this Note
will limit the right of Lender otherwise to bring proceedings against Borrower
in the courts of any jurisdiction or jurisdictions, subject to any provision or
agreement for arbitration or dispute resolution set forth in the Shortfall
Agreement.




Section
12                                Heirs, Successors and
Assigns.  The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties.  The foregoing
sentence shall not be construed to permit Borrower to assign the Loan except as
otherwise permitted under the Loan Documents.




Section
13                                General
Provisions.  Time is of the essence with respect to Borrower’s
obligations under this Note.  If more than one person or entity
executes this Note as Borrower, all of said parties shall be jointly and
severally liable for payment of the indebtedness evidenced
hereby.  Borrower and each party executing this Note as Borrower
hereby severally (a) waive demand, presentment for payment, notice of dishonor
and of nonpayment, protest, notice of protest, notice of intent to accelerate,
notice of acceleration and all other notices (except any notices which are
specifically required by this Note or any other Loan Document), filing of suit
and diligence in collecting this Note or enforcing any of the security herefor;
(b) agree to any substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily liable hereon; (c)
agree that Lender shall not be required first to institute suit or exhaust its
remedies hereon against Borrower or others liable or to become liable hereon or
to perfect or enforce its rights against them or any security herefor; (d)
consent to any extensions or postponements of time of payment of this Note for
any period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice
thereof to any of them; and (e) submit (and waive all rights to object) to
non-exclusive personal jurisdiction of any state or federal court sitting in the
state and county in which payment of this Note is to be made and any other
jurisdiction permitted under the Shortfall Agreement for the enforcement of any
and all obligations under this Note and the other Loan Documents; (f) waive the
benefit of all homestead and similar exemptions as to this Note; (g) agree that
their liability under this Note shall not be affected or impaired by any
determination that any title, security interest or lien taken by Lender to
secure this Note is invalid or unperfected; and (h) hereby subordinate to the
Loan and the Loan Documents any and all rights against Borrower and any security
for the payment of this Note, whether by subrogation, agreement or otherwise,
until this Note is paid in full.  A determination that any provision
of this Note is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.  This Note may not
be amended except in a writing specifically intended for such purpose and
executed by the party against whom enforcement of the amendment is
sought.  Captions and headings in this Note are for convenience only
and shall be disregarded in construing it.  This Note and its
validity, enforcement and interpretation shall be governed by the laws of the
State of New York (without regard to any principles of conflicts of laws) and
applicable United States federal law.  Whenever a time of day is
referred to herein, unless otherwise specified such time shall be the local time
of the place where payment of this Note is to be made.  The term
“Business Day” shall mean a day on which Lender is open for the conduct of
substantially all of its banking business at its office in the city in which
this Note is payable (excluding Saturdays and Sundays).  Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Shortfall Agreement.  The words “include” and “including”
shall be interpreted as if followed by the words “without
limitation.”




Section
14                                Notices.  Any
notice, request, or demand to or upon Borrower or Lender shall be deemed to have
been properly given or made when delivered in accordance with the terms of the
Shortfall Agreement regarding notices.




Section
15                                No
Usury.  It is expressly stipulated and agreed to be the intent
of Borrower and Lender at all times to comply with applicable state law or
applicable United States federal law (to the extent that it permits Lender to
contract for, charge, take, reserve, or receive a greater amount of interest
than under state law) and that this Section shall control every other covenant
and agreement in this Note and the other Loan Documents.  If
applicable state or federal law should at any time be judicially interpreted so
as to render usurious any amount called for under this Note or under any of the
other Loan Documents, or contracted for, charged, taken, reserved, or received
with respect to the Loan, or if Lender’s exercise of the option to accelerate
the Maturity Date, or if any prepayment by Borrower results in Borrower having
paid any interest in excess of that permitted by applicable law, then it is
Lender’s express intent that all excess amounts theretofore collected by Lender
shall be credited on the principal balance of this Note and all other
indebtedness secured by the Mortgage, and the provisions of this Note and the
other Loan Documents shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder.  All sums paid or agreed to be paid to Lender
for the use or forbearance of the Loan shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Loan.




Section
16                                Arbitration.  This
Note is subject to arbitration as provided in the Shortfall
Agreement.







IN
WITNESS WHEREOF, Borrower has duly executed this Note under seal as of the date
first above written.




Borrower:


AMERICA
FIRST TAX EXEMPT INVESTORS, L.P.,


a
Delaware limited partnership





By:
            America
      First Capital Associates Limited Partnership Two, a Delaware
      limited


partnership,
      its general partner





By:
            The
      Burlington Capital Group, LLC, a


Delaware
      limited liability company, its general
partner











By:
            /s/ Michael J.
      Draper_______________________


Name:
      Michael J. Draper


Title:   Chief
      Financial Officer