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SECURED PROMISSORY NOTE
[__________], 2025 $23,071,081.00
Fairfield, California
FOR VALUE RECEIVED, the undersigned, FAIRFIELD NORTH TEXAS STREET LP, a California limited partnership (“Maker” or “Developer”), having its principal place of business at 5251 Ericson way, Suite A, Arcata, CA 95521, promises to pay to the order of the CITY OF FAIRFIELD, a general law city (“Payee” or the “City”), at 1000 Webster Street, Fairfield, CA 98533, Attention: City Manager, or at such other place as the holder of this Note from time to time may designate in writing, the principal sum of TWENTY-THREE MILLION SEVENTY- ONE THOUSAND EIGHTY-ONE AND NO/100 DOLLARS ($23,071,081.00), together with interest on the unpaid principal amount of this promissory note (the “City Loan Note”) from time to time outstanding at the “Applicable Interest Rate,” as defined below, in lawful money of the United States of America. This City Loan Note is being delivered, and the loans evidenced hereby are being made, pursuant to the terms of a Development Loan Agreement between Developer and the City (“Loan Agreement”). All capitalized terms used herein which are not separately defined herein shall have the meanings set forth therefor in the Loan Agreement.
As of the date of this City Loan Note, the sum of $23,071,081 of principal is outstanding; the loan shall be disbursed by City as described in the Loan Agreement , upon the written request of Developer, subject to the terms and conditions in Section 2.2 of the Loan Agreement. “Applicable Interest Rate” means three percent (3%) per annum, simple interest, except that amounts not paid when due shall accrue interest from the date due until the date paid at the lesser of: (i) seven percent (7%) per annum, simple interest, or (ii) the maximum rate permitted by applicable law.
1. Payments. Payments under this City Loan Note shall be due and payable as follows: Payments of 25% of all Residual Receipts, and after deferred developer fee has been paid in such amount described in the Loan Agreement or otherwise approved by the City, 100% of all Residual Receipts (“City Portion”) payable on July 1 after the first anniversary of issuance of a final certificate of occupancy for t he Project pursuant to the Loan Agreement, and each July 1 anniversary thereafter until this City Loan Note has been satisfied in full. Payments shall first be applied to accrued interest, then to remaining outstanding principal. In addition, the entire amount of outstanding principal and accrued interest and any additional amounts which become owing hereunder shall be paid by Maker to Payee as of the earliest of (i) a default under the Loan Agreement, any Regulatory Agreement entered into pursuant to the Loan Agreement, or the deed of trust securing this City Loan Note not cured within the applicable cure period after delivery of required notice; (ii) as provided in Section 4 below; or (iii) fifty -five (55) years after the date a final certificate of occupancy is issued for the Project (the “City Maturity Date”).
2. Secured by Deed of Trust. Repayment of this City Loan Note is secured by a deed of trust (the “City Loan Deed of Trust”) of this date executed by Maker for the benefit of Payee encumbering the property described in the City Loan Deed of Trust (the “Property” or “Site”).
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3. Prepayment. Maker shall have the right to prepay amounts owing under this City Loan Note at any time, without penalty or premium.
4. Due on Sale or Encumbrance . In the event of any Transfer (as defined below) of the Property, or any portion thereof or interest therein, Payee shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used her ein, the term “Transfer” means and includes the direct or indirect sale, transfer, conveyance, assignment, or other alienation of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, or the lease of all or substantially all of the Property or of all or substantially all of the improvements located thereon. Transfer shall not include any “Permitted Transfer” as such term is defined in the Loan Agreement. “Transfer” shall not include any lease of a rental unit so long as Trustor complies with the provisions of the Regulatory Agreement relating to such leasing activity. Failure of Beneficiary to exercise the option to declare all sums secured hereby immediately due and payable upon a Transfer will not constitute waiver of the right to exercise this option in the event of any subsequent Transfer.
5. Miscellaneous.
(a) Governing Law. All questions with respect to the construction of this City Loan Note and the rights and liabilities of the parties to this City Loan Note shall be governed by the laws of the State of California.
(b) Attorneys’ Fees.
(i) Maker shall reimburse Payee for all reasonable attorneys’ fees, costs and expenses, incurred by Payee in connection with the enforcement of Payee’s rights under this City Loan Note, including, without limitation, reasonable attorneys’ fees, costs and expen ses for trial, appellate proceedings, out -of-court negotiations, workouts and settlements or for enforcement of rights under any state or federal statute, including, without limitation, reasonable attorneys’ fees, costs and expenses incurred to protect Pay ee’s security and attorneys’ fees, costs and expenses incurred in bankruptcy and insolvency proceedings such as (but not limited to) seeking relief from stay in a bankruptcy proceeding. The term “expenses” means any expenses incurred by Payee in connectio n with any of the out -of-court, or state, federal or bankruptcy proceedings referred to above, including, without limitation, the fees and expenses of any appraisers, consultants and expert witnesses retained or consulted by Payee in connection with any such proceeding.
(ii) Payee shall also be entitled to its attorneys’ fees, costs and expenses incurred in any post-judgment proceedings to collect and enforce the judgment. This provision is separate and several and shall survive the merger of this City Loan Note into any judgment on this City Loan Note.
(c) Entire Agreement. This City Loan Note and the relevant provisions of the Loan Agreement constitute the entire agreement and understanding between and among the parties in respect of the subject matter o f such agreements and supersede all prior agreements and understandings with respect to such subject matter, whether oral or written.
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(d) Time of the Essence. Time is of the essence with respect to every provision hereof.
(e) Waivers by Maker . Except as otherwise provided in any agreement executed in connection with this City Loan Note, Maker waives: presentment; demand; notice of dishonor; notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice of costs, expens es or losses and interest thereon; and diligence in taking any action to collect any sums arising under this City Loan Note or in any proceeding against any of the rights or interests in or to properties securing payment of this City Loan Note. (f) Non-waivers. No previous waiver and no failure or delay by Maker in acting with respect to the terms of this City Loan Note or the City Loan Deed of Trust shall constitute a waiver of any breach, default, or failure of condition under this City Loan Note, the City Loan Deed of Trust or the obligations secured thereby. A waiver of any term of this City Loan Note, the City Loan Deed of Trust or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of su ch waiver. In the event of any inconsistencies between the terms of this City Loan Note and the terms of any other document related to the loan evidenced by this City Loan Note, the terms of this City Loan Note shall prevail. (g) Non-Recourse. Repayment of this Note and all other obligations of Borrower hereunder, under the Loan Agreement, Regulatory Agreement or Deed of Trust shall be a non-recourse obligation of Borrower, such that neither Borrower nor any partner of Borrower shall have any personal obl igation to make any payments or perform any other obligations of Borrower.
S-1
Secured Promissory Note
(Vista Ridge)
2348\02\4084656
MAKER:
FAIRFIELD NORTH TEXAS STREET LP,
a California limited partnership
By: Fairfield North Texas Street LLC,
a California limited liability company,
its Administrative General Partner
By: Danco Communities,
a California corporation,
its Manager
By:
Daniel Johnson
President
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President