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EXHIBIT A – FEE DEFERRAL NOTE
PROMISSORY NOTE
[BAYFRONT PROJECT FEE DEFERRAL]
For value received, the undersigned, RIDA Chula Vista, LLC, a Delaware limited liability company (“Borrower”), promises to pay to the City of Chula Vista, a chartered municipal corporation (“Lender”), the principal sum of ______________________ DOLLARS ($________________), together with interest , compounded a nnually, on the unpaid principal balance at an annual rate of three percent (3%), in accordance with the payment schedule and additional terms set forth below.
This promissory note (“Note”) is being executed by the Borrower in favor of the Lender pursuant to the terms of that certain Agreement for Deferral of Development Impact and Sewer Capacity Fees [Bayfront Resort and Convention Center] between Borrower and Lender dated May __, 2022 [insert the closing date] (the “Deferral Agreement”), the terms of which are incorporated by this reference. Unless otherwise expressly defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Deferral Agreement. To the extent of any conflict between the terms of this Note and the Deferral Agreement, the terms of this Note shall govern.
1. Payment Schedule: Payment hereunder shall consist of principal and accrued interest, if any, payable in accor dance with the following schedule: (a) 20% of the Deferred Obligation (excluding all interest accrued thereon until such date) shall be due payable on the second anniversary of the Effective Date; (b) 10% of the Deferred Obligation (excluding all interest accrued thereon until such date) shall be due and payable on the third anniversary of the Effective D ate; (c) 10% of the Deferred Obligation (excluding all interest accrued thereon until such date) shall be due and payable on the fourth anniversary of the Effective Date; and (d) any and all remaining principal and interest shall be due and payable on the fifth anniversary of the Effective Date (such fifth anniversary, the “Maturity Date”).
2. Interest: Interest on the unpaid balance shall begin to accrue on the Effective Date at the rate of three percent (3%) per annum, compounded annually.
3. Guaranty: This Note is secured by a Guaranty of even date herewith executed by __________________ in favor of Lender (“Guaranty”).
4. Prepayment: The outstanding balance of this Note or any portion of the principal amount of this Note and/or any interest accrued thereon as of the date of such prepayment may be paid at any time without penalty. Concurrently with any such prepayment, the Borrower 2 US-DOCS\131409506.2 055795-0004
shall provide written direction to the Lender with respect to how such prepayment should be applied and whether it is intended as prepayment of principal, interest, or both and how such prepayment should be allocated to amounts due and owing under this Note as of the date of prepayment. Upon a ny such prepayment, amounts owing under this Note (including with respect to compounding interest thereon) will be adjusted to reflect such prepayment as indicated in such written direction received from the Borrower.
5. Default: The occurrence of any of the following events shall constitute an “Event of Default” hereunder: (a) Borrower’s failure to pay any sum due under this Note when it becomes due and payable if such failure continues for 3 business days after receipt by the Borrower of notice of suc h failure ; (b) the occurrence of a default under the Deferral Agreement or the Guaranty after the giving of notice and expiration of any cure periods related thereto (or if there is no provision therein for notice and cure, where such default continues for thirty (30) days after receipt by the defaulting party of notice of such default; provided that if the nature of such default is such that the same cannot reasonably be cured within such thirty (30) day period, and the defaulting party diligently commences such cure within such thirty (30) day period and thereafter diligently proceeds to rectify and cure such default, then such breach shall not constitute an Event of Default ); (c) any material breach of any other promise or obligation i n this Note or in any other instrument now or after this date securing the indebtedness evidenced in this Note where such material breach continues for thirty (30) days after written notice thereof from the other party to this Note; provided that, if the nature of such material breach is such that the same cannot reasonably be cured within such thirty (30) day period, and the breaching party diligently commences such cure within such thirty (30) day period and thereafter diligently proceeds to rectify and cure such breach, then such failure shall not constitute an Event of Default ; (d) the making by Borrower of any assignment for the benefit of creditors or the voluntary appointment (at the request or with the consent of Borrower) of a receiver, custodian, liquidator or trustee in bankruptcy of any of Borrower’s property, or the filing by Borrower of a petition in bankruptcy or other similar proceeding under any law for relief of debtors; or (e) the filing against Borrower (by anyone other than the Lender) of a petition in bankruptcy or other similar proceeding under any law for relief of debtors, or the involuntary appointment (by anyone other than the Lender) of a receiver, custodian, liquidator or trustee in bankruptcy of the property of Borrower, if such p etition or appointment is not vacated or discharged within sixty (60) calendar days after the filing or making thereof . During an Event of Default, and after written notice has been given therefor and such Event of Default remains uncured for 21 days after delivery of notice, Lender may, at its option, declare this Note (including, without limitation, all accrued interest) to be immediately due and payable, regardless of the Maturity Date.
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6. Late Fee. Borrower acknowledges that if any payment required under this Note is not paid within fifteen (15) days after the date when the same becomes due and payable, the Lender will incur extra administrative expenses (i.e., in addition to expenses incident to receipt of timely payment) and the loss of the use of funds in connection with the delinquency in payment. Because, from the nature of the case, the actual damages suffered by the Lender by reason of such extra administrative expenses and loss of use of funds would be impracticable or extremely difficult to ascertain, Borrower agrees that two percent (2%) of the amount of the delinquent payment shall be the amount of damages to which the Lender is entitled, upon such breach, in compensation therefor. Therefore, Borrower shall, in such event, without further notice, pay to the City as the Lender’s sole monetary recovery to cover such extra administrative expenses and loss of use of funds, liquid ated damages in the amount of two percent (2%) of the amount of such delinquent payment. The provisions of this paragraph are intended to govern only the determination of damages in the event of a breach in the performance of the obligation of Borrower to make timely payments hereunder. Nothing in this Note shall be construed as an expressed or implied agreement by the Lender to forbear in the collection of any delinquent payment, or be construed as in any way giving Borrower the right, expressed or implied, to fail to make timely payments hereunder, whether upon payment of such damages or otherwise. The right of the holder hereof to receive payment of such liquidated and actual damages, and receipt thereof, are without prejudice to the right of such holder to collect such delinquent payments and other amounts provided to be paid hereunder or under any security for this Note or to declare a default hereunder or under any security for this Note.
7. Default Rate of Interest: In addition to the late fee due and owing under Section 6, during the continuance of an Event of Default, the unpaid payment(s) causing such Event of Default shall bear interest at an annual rate equal to the lesser of (a) five percent (5%) interest or (b) the maximum interest rate allowed by law until such sum is paid in full.
8. Costs of Collection: If this Note is not paid when due, whether on the Maturity Date or on acceleration of this Note, Borrower promises to pay all collection costs, including, but not limited to, attorney fees and court costs, whether or not suit is filed on this Note.
9. Waiver of Presentment: Borrower and all persons liable or to become liable on this Note waive presentment, protest, and demand; notice of protest, demand, and dishonor; and any and all other notices or matters of a like nature.
10. Governing Law: This Note shall be governed by and construed in accordance with the laws of the State of California.
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11. Usury: All agreements between Borrower and Lender are expressly limited, so that in no event or contingency, whether because of the advancement of the proceeds of this Note, acceleration of maturity of the unpaid principal balance, or otherwise, shall the amoun t paid or agreed to be paid to Lender for the use, forbearance, or retention of the money to be advanced under this Note exceed the highest lawful rate permissible under applicable usury laws. If, under any circumstances, fulfillment of the provisions of this Note or the Guaranty securing this Note or any other agreement pertaining to this Not e, after timely performance of such provisions is due, shall involve exceeding the limit of validity prescribed by law that a court of competent jurisdiction deems applicable, then ipso facto, the obligations to be fulfilled shall be reduced to the limit of such validity. If, under any circumstances, Lender shall receive as interest an amount that exceeds the highest lawful rate, the amount that would be excessive int erest shall be applied to reduce the unpaid principal balance under this Note and not to pay interest, or, if such excessive interest exceeds the unpaid principal balance under this Note, such excess shall be refunded to Borrower. This provision shall con trol every other provision of this Note, the Deferral Agreement and the Guaranty.
12. Time is of the Essence: Time is of the essence with respect to all obligations of Borrower under this Note.
13. Amendment: In the event of an adjustment to the Net Development Fee Obligation pursuant to the terms of the Deferral Agreement, Borrower and Lender agree to amend this Note accordingly, with appropriate adjustments to the amount of interest accrued as of the Effective Date.
14. No Offset. Borrower’s obligations under this Note are in addition to and separate and apart from any other obligation between Borrower and Lender with respect to the Project.
Accordingly, Borrower’s obligations to make payments to Lender under this Note may not be offset by Borrower against any other obligation Borrower may have with respect to the Project. Borrower hereby waives any rights of offset it now has or may later have against the Lender, or its successors and assigns, and agrees to make the payments ca lled for in this Note in accordance with the terms of this Note.
15. Invalid Provisions. If any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Note, and this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained in this Note.
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16. Due on Transfer. The outstanding balance of this Note shall become immediately due and payable if the Borrower transfers its leasehold interests in the Project and the Borrower shall be obligated on or prior to consummation of any such transfer, to pay all amounts due and owing under this Note (including interest accruing through the date of such payment).
After such payment, the Borrower shall have no further obligations or liabilities under this Note or the Deferral Agreement and the Guarantor shall have no further obligations under the Payment Guaranty. The Borrower shall notify the Lender in writing thirty (30) calendar days prior to transferring its leasehold interests in the Project and/or Property to any transferee.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Borrower has executed this Promissory Note as of the date written below.
Date: Borrower:
RIDA CHULA VISTA, LLC, a Delaware
limited liability company
By:
Name:
Title: