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3. Borrower's Obligation. This Note evidences the Borrower's obligation to pay the City the principal amount of Ten thousand fifty five dollars and fifty cents ($10,055.50) plus accrued interest for funds loaned to Borrower by the City to finance the cost of rehabilitation improvements to the Property. 4. Interest Rate. This Note shall bear simple interest at the rate of three percent (3.00%) per annum. 5. Interest Calculation. Interest shall accrue from the date this Note was signed by the Borrower and shall continue to accrue on all unpaid principal after this Note is executed for a period of thirty (30) years. 6. Term. The total amount of the principal and accrued interest owed under this Note shall be repaid to the City within thirty (30) years from the date of execution by Borrower, unless forgiven consistent with the requirements in Sections 7 and 8 of this Note. 7. Payments. City is providing Borrower a deferred payment loan ("Loan"). Borrower is not obligated to make monthly or annual payments on principal or interest owed under this Note so long as the Borrower owns the Property, occupies it as his/her/their principal residence, and is not in violation of any provisions of this Note or the Deed of Trust. Any payments made by Borrower to City will be made in lawful money of the United States of America at the offices of the City of Pleasanton, Finance Department, 123 Main Street, Pleasanton, CA 94566, or any other place as City may from time to time designate in writing. 8. Forgiveness. If the Borrower is not in violation of any provision of this Note and the Deed of Trust and has occupied the Property as Borrower's principal residence for the duration of this Note, it shall be cancelled thirty (30) years from the date of this Note. 9. Loan Subordination/Refinance. The City's Housing Rehabilitation Program provides financial assistance for the improvement of properties occupied by very-low or low-income homeowners. This Note must be paid in full if the Borrower's existing first mortgage is refinanced. Exceptions to this policy may be considered by the City in its sole discretion under the following conditions: (i) refinancing of an existing first mortgage to obtain a lower interest rate will be possible only if the junior City Loan is subordinated to no less than second lien position. The existing City Loan will be subordinated to a refinanced first mortgage for the amount of the outstanding senior loan balance at the time of Borrower's request, plus reasonable financing fees, and no cash out; (ii) the subordinated City Loan must remain in the same or more senior position than the original City Loan. The City will only subordinate to the Borrower's first mortgage. Exceptions to this policy will be considered by the City of Pleasanton Assistant City Manager or his/her designee upon demonstration by the Borrower, in writing, that there will be a direct benefit of either housing safety or housing affordability for very-low and low-income persons. City of Pleasanton Rehabilitation Program Promissory Note Page 2