HOUSE, INC. - PROMISSORY NOTE - SECURED BY DEED OF TRUST

2.0 Definitions. The terms in this Note set forth in this section shall have the following meanings: 2.1 Closing Costs. "Closing Costs" shall mean the actual and reasonable costs to Borrower, including real estate transfer taxes, title insurance, and escrow costs incurred by City and by reason of the purchase or sale of the Residence by Borrower. 2.2 Net Appreciation. "Net Appreciation" shall mean the sale price of the Residence upon its Transfer by Borrower minus the Closing Costs attributable to such Transfer plus the purchase price of the Residence when originally acquired by Borrower. 2.3 Transfer. "Transfer" shall mean any voluntary or involuntary sale, assignment or transfer of ownership of the Residence or 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 (except a lease to a qualified very-low or low- income developmentally disabled person as provided in the Regulatory Agreement and Declaration of Covenants and Restrictions, dated ), or an interest evidenced by a land contract by which possession of the Residence is transferred and Borrower retains title. 3.0 Borrower's Acknowledgments. Borrower acknowledges the following: 3.1 Source of Funds Loaned to Borrower. In order to further assist Borrower in the purchase of the property located at 1352 Oak Vista Way, Pleasanton, California (the "Residence"), the City is using a portion of funds from the Housing Opportunities Made Easy (HOME) program ($195,000.00) as the source of a loan from the City to Borrower in the amount of the original principal sum of this Note; the loan, which is evidenced by this Note. Borrower shall use the Residence to provide housing for low income households with developmental disabilities and shall make every effort to keep rents at a minimum and maximize the use of the property. 3.2 Acceleration. The outstanding principal amount of the Note is due and payable by Borrower to the City in the event the Residence, or any interest in it, is Transferred by Borrower. For the purpose of this Section 3.2, "Transfer" shall have the same meaning as is set forth in Section 2.3 herein. 3.3 The Residence. The Residence more fully described in Exhibit "A" attached hereto and incorporated herein by reference, shall serve as security for the Deed of Trust executed in connection with this Note. -2-