Agmt17 HIP Housing Development Corporation Promissory Note

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PROMISSORY NOTE n $1,577,750.00 DATE: J(.(V1-e- Z%, ZU( 1 For value received, HIP Housing Development Corporation, a California Non -Profit Public Benefit Corporation (the "Owner"), hereby promises to pay to the City of Redwood City (the "City"), in United States currency, the principal sum of One Million Five Hundred Seventy -Seven Thousand, Seven Hundred Fifty and no/100 Dollars ($1,577,750.00), together with interest thereon, if applicable, as provided below. 1. Fundino Aoreement This Promissory Note (the "Note") is entered into pursuant to that certain Funding Agreement (the "Agreement") by and between the City and the Owner, dated J wW J,'7, , 2017. In the event of a conflict between the provisions of this Note and the Agreement, the provisions of the Agreement will govern. Capitalized terms used in this Note will have meanings set forth in the Agreement unless otherwise defined herein. This Note is the "Promissory Note" as defined in the Agreement. 2. Security As security for payment of this Note, the Owner has granted to the City a deed of trust (the "Deed of Trust") on certain property located in the City of Redwood City and the improvements thereon as more fully described in the Agreement (the "Property"), which Deed of Trust will be subordinate only to such security instruments as are approved by the City in its sole discretion. 3. Reoavment Provisions The principal amount under the Note shall bear an interest rate of three percent (3%) simple interest from the date of execution. Payment in full on the Note shall be due on the date which is 55 years from the date of this Note (the "Note Maturity"). b. Annual oavments. Annual payments shall be made from Project's Residual Receipts (defined below), as calculated beginning the first day of the first month after execution of the Note. Annual payments shall begin upon City receipt of Owner's notification letter ("Notification Letter") that the reserve fund threshold has been met, and shall be equal to the lesser of: (a) City share of 50% of Residual Receipts, with payment amount determined by a pro rata proportion of all local funding requiring repayment (which pro rata proportion for the City shall be 75%), or (b) equal to an amortized payment assuming 3% simple interest and a 55 year term. Payment will be first applied to outstanding interest and then to principal until the Note is paid in full. ATTY/AGR/2017.145.2/ STAFFORD FUNDING AGREEMENT— PROMISSORY NOTE REV: 06-21-1715 Page 1 of 5