HOUSE - PROMISSORY NOTE - SECURED BY SECOND DEED OF TRUST

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, 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 5608 Hansen Drive, Pleasanton, California (the "Residence"), the City is using a portion of funds from the Lower Income Housing Fund 65 000 and the Housing Opportunities Made Easy (HOME) program 136 440 as the sources 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. 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. 4.0 Any notice to Borrower provided for in this Note shall be given by mailing such notice by certified mail addressed to Borrower at the Property Address stated below, or to such other address as Borrower may designate by notice to the Lender. Any notice to the Lender shall be given by *nailing such notice by certified mail, return receipt requested, to the Lender at the following address or at such other address as may have been designated by notice to Borrower: City of Pleasanton Housing Division 123 Main Street Pleasanton, CA 94566-0802 5.0 The indebtedness evidenced by this Note is secured by a Deed of Trust, dated January 17, 1997, and reference is made to the Deed of Trust for rights as to acceleration of the indebtedness evidenced by this Note, including Section 19 of the Deed of Trust which provides as follows: