JARMUZ, KURT AND KYLE - PROMISSORY NOTE TEN YEAR AMORTIZATION

3. Repayment. The total amount of the principal and accrued interest owed under this Note shall immediately become due and payable (i) in the event of a default by Borrower under this Note, the Deed of Trust, or (ii) on the date a Transfer is made whether voluntarily, involuntarily, or by operation of law and whether by deed, contract of sale, give, devise, bequest or otherwise. Failure to declare such amounts due shall not constitute a waiver on the part of the City to declare them due in the event of a subsequent Transfer. The borrower must notify Holder at least 30 days in advance prior to discontinuing residency of the property as primary residence. Should the Borrower desire to rent the property, a formal request to the Holder must be made. The City, at its sole discretion, elects to allow the Borrower to rent the property, provided the Borrower enters into a Rental Agreement, whereby the Borrower agrees to rent the unit to a low income tenant at a restricted rent level for a designated term. Should the City not make this election, or should the Borrower not desire to enter into such Agreement, then the Note is due and payable within thirty (30) days. Any prepayment of this loan shall require payment of the entire amount of principal plus interest accrued to the nearest date. Should the Borrower desire to sell the property during the term of this note, the City may, in its sole discretion elect to enable a buyer to assume the remainder of the mortgage on the original terms provided the buyer qualifies under the City of Pleasanton Home Ownership Program Guidelines in effect at the time of the purchase /assumption. Should the City elect not to enable an assumption of the mortgage, or if the buyer does not qualify as eligible under the City's Program Guidelines, then the Note becomes due and payable within thirty (30) days. Presentment, demand, protest and notice are hereby expressly waived by the undersigned. Should payment hereof not be made when due, the undersigned further promises to pay all costs of collections, including, without limitations, attorney fees, incurred by Holder in connection herewith. In case of default or non compliance with any of the terms of this loan hereto before, the undersigned shall pay additional interest at the rate of seven (7) percent per annum on the unpaid principal. The City shall forgive interest and principal due under this Note at the time of a Transfer, prepayment, or repayment of this Note to the extent necessary to ensure that the sum of (a) the Borrower's obligations to repay the principal and interest due on this Note and on all promissory notes secured by deeds of trust superior to the deed of trust securing this Note, and (b) plus the amount of the Borrower's original down payment do not exceed the appraised value of the house at the time of sale. 4. Transfer of Property Transfer shall mean any sale, assignment or transfer, voluntary or involuntary, of any interest in the Residence, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest for more than two (2) months during any twelve (12) month period without the written consent of the City, or an interest evidenced by a land contract by which possession of the Residence is transferred and DPA 2007 -05 -2-