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<br />EXHIBIT "C" <br /> <br />PROMISSORY NOTE <br /> <br />Date: <br /> <br />For value received, VILLA MONTGOMERY, L.P., a California <br />limited partnership (the "Developer"), hereby promises to pay to <br />the REDEVELOPMENT AGENCY OF THE CITY OF REDWOOD CITY (the <br />"Agency"), or order, in United States currency, the principal sum <br />of Two Million Six Hundred Twenty-Seven Thousand Dollars <br />($2,627,000), plus the entire amount of the Fee Subsidy together <br />with interest thereon, if applicable, as provided below. <br /> <br />1. Disposition and Development Aqreement. This <br />Promissory Note ("Note") is entered into in connection with and <br />pursuant to that certain Amended and Restated Disposition and <br />Development Agreement (the "Agreement") by and between the Agency <br />and FIRST COMMUNITY HOUSING, INC., a California non-profit <br />corporation, dated ,2005. In the event of a conflict <br />between the provisions of this Note and the Agreement, the <br />provisions of the Agreement will govern. Capitalized terms used in <br />this Note will have the meanings set forth in the Agreement unless <br />otherwise defined herein. This Note is the "Promissory Note" as <br />defined in the Agreement. <br /> <br />2. Security. As security for payment of this Note, the <br />Developer has granted to the Agency a deed of trust ("Deed of <br />Trust") on certain property located in the City of Redwood City and <br />the improvements thereon as more fully described in the Agreement <br />(the "Property"), which Deed of Trust will be subordinate only to <br />such security instruments as are approved by the Agency in its sole <br />discretion. <br /> <br />3. <br /> <br />Repayment Provisions. <br /> <br />a. Except as set forth below, this Note shall <br />accrue at three percent (3%) simple interest and shall be repaid on <br />an annual basis, from seventy percent (70%)the Project's Net Cash <br />Flow, defined herein as gross receipts less 1) actual operating <br />costs; 2) actual property taxes; 3) actual debt service costs; 4) <br />an annual reserve deposit of $35,000 per year (2005 $), escalated <br />at 3% per year; 5) a $15,000 annual tax credit partnership <br />management fee, escalated at 3% per year, until dissolution of the <br />partnership; 6) a $5,000 annual asset management fee, escalated at <br />3% per year; 7) annual repayment of any deferred developer fee, <br />i.e, any amount of the developer fee not paid for by the project's <br />final permanent funding sources. The total amount of the developer <br /> <br />c - 1 <br /> <br />REDW\0006\DOC\001-7 <br />3/29/05 3:15 /rove <br />