Exhibit B
Form of Promissory Note
PROMISSORY NOTE SECURED BY DEED OF TRUST
Principal Amount: $ 360,000.00 Date: , 2020
FOR VALUE RECEIVED, the undersigned, Debra Kay Chisum, an individual ("Borrower"), whose address for purposes of this Promissory Note (this "Note") is P.O. Box 83 Fortuna, CA 95540 (the State of California is referred to as the "State"), PROMISES TO PAY to the order of the City of Eureka, a California public entity, its successors and/or assigns ("Lender"), at 621 11th Street, Fortuna, CA 95540, or such other place as the Lender may specify, the principal sum of Three Hundred and Sixty Thousand Dollars ($360,000.00), together with interest thereon from the Date of Disbursement (as defined below) at the initial rate of Five Percent (5%) per annum (the "Note Rate"), to be paid in lawful money of the United States of America as follows:
a. Interest from the Date of Disbursement through the end of the month shall be due and payable on the Date of Disbursement; and,
b. The payments on this Note shall be as follows:
Date Series
Number of Amount of Commences "Date
Payments Rate Payment of Commencement"
60 5.00% $ 1,932.56 [TO BE INSERTED]
1 5.00% $ 330,583.29 [TO BE INSERTED]
The day of the month on which payments are due is called the "Installment Payment Date." The last day in the last series above is called the "Date of Maturity." Each installment payment shall be applied first to accrued interest and then to principal.
Borrower's designated email address is: [email protected].
Payment Amount: Borrower and Lender agree that an initial loan payment billing notice shall be sent on or around the first business day of the month the first payment is due to the email address provided above. Borrower agrees and understands that it is their responsibility to ensure that the email may be received by their email account, and that if an email is not received for any reason they are to contact Lender for the payment amount which is due. Borrower also agrees and understands that unless the Note Rate changes or the loan payment amount changes for any reason, no new loan payment billing notice shall be sent and the Borrower shall pay the amount of the most recent billing notice.
Interest shall be calculated for actual days elapsed on the basis of a 360-day year, which results in higher interest payments than if a 365-day were used.
Maturity Date. Notwithstanding any other provision hereof, the outstanding principal balance of this Note and all accrued but unpaid Adjustable Interest shall be due and payable in full on [TO BE INSERTED] 1, 2025 ("Date of Maturity").
1. The "Date of Disbursement" for purposes of this Note shall mean [INSERT DATE OF CLOSING].
2. A "Loan Month" for purposes of this Note shall mean each successive calendar month of the term of this Note, beginning with the month in which the Date of Disbursement falls.
3. If any installment of principal and/or interest not be paid within 10 days after the due date ("Grace Period Expiration Date"), Borrower shall also pay to Lender a late charge of 10% of such installment or $25.00, whichever is greater. THE LATE CHARGE SHALL BE PAID
WITHOUT PREJUDICE TO THE RIGHT OF THE LENDER TO COLLECT ANY OTHER
AMOUNTS PROVIDED TO BE PAID OR TO DECLARE A DEFAULT UNDER THIS NOTE OR THE DEED OF TRUST (AS DEFINED BELOW). THE LATE CHARGE SHALL
BE PAYABLE NOT LATER THAN THE DUE DATE OF THE NEXT PAYMENT AND
SHALL BE SECURED BY THE DEED OF TRUST AND OTHER SECURITY DOCUMENTS (AS DEFINED BELOW). BORROWER RECOGNIZES THAT ITS
DEFAULT IN MAKING ANY PAYMENT AS AGREED TO BE PAID WHEN DUE, OR
THE OCCURRENCE OF ANY OTHER EVENT OF DEFAULT UNDER THE DEED OF
TRUST OR ANY OTHER SECURITY DOCUMENT, WILL REQUIRE LENDER TO INCUR
ADDITIONAL EXPENSE IN SERVICING AND ADMINISTERING THE LOAN, IN LOSS
TO LENDER OF THE USE OF THE MONEY DUE AND IN FRUSTRATION TO LENDER
IN MEETING ITS OTHER FINANCIAL AND LOAN COMMITMENTS AND THAT THE
DAMAGES CAUSED THEREBY WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN. BORROWER AGREES (A) THAT AN AMOUNT
EQUAL TO THE LATE CHARGE PLUS THE ACCRUAL OF INTEREST AT THE
DEFAULT RATE ISA REASONABLE ESTIMATE OF THE DAMAGE TO LENDER
CAUSED BY A LATE PAYMENT, AND (B) THAT THE ACCRUAL OF INTEREST AT
THE DEFAULT RATE FOLLOWING ANY OTHER EVENT OF DEFAULT IS A
REASONABLE ESTIMATE OF THE DAMAGE TO LENDER CAUSED BY ANOTHER
EVENT OF DEFAULT, REGARDLESS OF WHETHER THERE HAS BEEN AN ACCELERATION OF THE DEBT. NOTHING IN THIS NOTE SHALL BE CONSTRUED
AS AN OBLIGATION ON THE PART OF LENDER TO ACCEPT, AT ANY TIME, LESS
THAN THE FULL AMOUNT THEN DUE, OR AS A WAIVER OR LIMITATION OF LENDER'S RIGHT TO COMPEL PROMPT PERFORMANCE.
Initials: DIC
4. Except as provided herein, Borrower may pre-pay all or a portion of the outstanding balance at any time without penalty. Borrower shall have no right to prepay, and the lender shall have no obligation to accept tendered full or partial prepayments of any portion of the principal balance outstanding hereunder (a "Prepayment") unless and until prepayment is made on an Installment Payment Date. Prepayments shall be credited to installments of principal in the inverse order of their maturity.
5. [Intentionally Omitted.]
6. This Note is secured, without limitation, by that certain Deed of Trust With Assignment of Rents (the "Deed of Trust") of the same date given by Borrower to Fidelity National Title Company (or successor), as Trustee, for the benefit of Lender, on certain real estate and personal property (the "Trust Property") and the Other Security Documents (as defined in the Deed of Trust, referred to as the "Other Security Documents"). This Promissory Note is the Note referred to in, and is entitled to the benefits of, the Deed of Trust and the Other Security Documents.
Borrower shall be in default under this Note (referred to as an "Event of Default") and the whole sum of principal and interest shall become due and payable at the option of the lender without notice or demand, upon: (i) the nonpayment, by the Grace Period Expiration Date of any installment of principal and/or interest, or any other monetary obligation under this Note, the Deed of Trust or the Other Security Documents; or (ii) any other Event of Default under the Deed of Trust or the Other Security Documents.
8. If an Event of Default occurs, this Note shall thereafter bear interest at the rate of the lesser of (i) the Maximum Rate (as hereinafter defined) or (ii) the Contract Rate plus Eight percent (8%) per annum (which lesser rate is referred to as the "Default Rate") from the date of the Event of Default.
If an Event of Default occurs, Borrower agrees to pay all costs of foreclosure, including a reasonable fee, not to exceed $500.00, to lender or authorized servicing agent to compensate for efforts in the supervision and effectuation of a foreclosure. Such fee payable by Borrowers) prior to reinstatement of my loan shall be in addition to any other foreclosure fees provided for in the Note/Deed of Trust.
If an Event of Default occurs, Borrower understands and agrees that the Lender and/or his authorized agent has a legal right to periodically inspect the property securing this Note.
In the event this should become necessary, Borrower agrees to cooperate fully with these inspections. They will be conducted during reasonable business hours or at my earliest convenience, with (24) twenty four hour notice. A "Drive-By" inspection may be conducted if access is denied or deemed unnecessary, without prior notice.
Borrower also authorizes Lender or his authorized agent to assess a $250.00 inspection fee per property used as security for this loan each time there is an Event of Default. This fee is to help cover the costs of these inspections and will be paid by me before reinstatement of my loan.
9. Acceptance by Lender of any payment for less than what is due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due before the Grace Period Expiration Date, shall be and continue to be an Event of Default under this Note.
The rights or remedies of the Lender, as provided in this Note, the Deed of Trust or any of the Other Security Documents, or as provided at law or in equity shall be cumulative and concurrent, and may be pursued singly, jointly or successively against the Trust Property, Leases, Rents (as defined in the Deed of Trust) or any other funds, property or security held by Lender for the payment or performance thereof, or against the Borrower or otherwise, at the sole discretion of the Lender. The failure to exercise any such right or remedy shall not be construed as a waiver or release of any rights or remedies or of the right to exercise them at any later time.
10. Borrower and all endorsers, guarantors, sureties, accommodation parties hereof, and all other persons liable or to become liable for all or any part of the indebtedness under this Note, the Deed of Trust, and the Other Security Documents, waive all applicable exemption rights, whether under the laws of the State, homestead laws, or otherwise, and also waive valuation and appraisement, diligence, presentment, protest and demand, and also notice of protest, of demand, of nonpayment, of dishonor, of acceleration, of intention to accelerate and of maturity. All endorsers, guarantors, sureties, and accommodation parties hereby consent to any and all renewals, extensions or modifications of the terms hereof, including time for payment.
Any such renewals, extensions or modifications may be made without notice to any of said parties.
11. Borrower and all endorsers, guarantors, sureties, accommodation parties hereof and all other persons liable or to become liable for all or any part of this indebtedness agree to pay all costs of collection, including reasonable attorneys' fees and all costs of suit, if this Note is not paid when due, or if it is necessary to protect the security for this Note or to commence foreclosure proceedings under the Deed of Trust or any of the Other Security Documents, or if Lender is made a party to any litigation because of this Note, the Deed of Trust or any of the Other Security Documents, whether or not suit is filed, and whether through courts of original jurisdiction, as well as in courts of appellate jurisdiction, or through a bankruptcy court or other legal proceedings. Such costs of collection shall include attorneys fees and costs in all aspects of bankruptcy proceedings affecting the security for this Note or performance hereunder, including plan objection proceedings, objections to discharge, claim objection proceedings, preference actions, relief from stay litigation, motions to dismiss, convert or appoint a trustee, case monitoring and serving on a creditor's committee.
12. This Note shall not be amended, modified or changed, nor shall any waiver of any of its provision be effective unless accomplished by an instrument in writing signed by the party against whom enforcement of any amendment, modification, change or waiver is sought.
13. None of the terms and provisions contained in this Note, the Deed of Trust, or any of the Other Security Documents, shall ever be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate in excess of the Maximum Rate. The Borrower or other party now or later liable for the payment of this Note shall never be required to pay interest on this Note at a rate in excess of the Maximum Rate, and the provisions of this paragraph shall control over all other provisions and of any other instrument executed in connection herewith this loan transaction. If Lender collects monies which are deemed to be interest in excess of the Maximum Rate, all excess sums shall be applied against the unpaid principal balance and not to the payment of interest; and if a surplus remains after full payment of principal and lawful interest, the surplus shall be refunded to the Borrower in cash and the Borrower hereby agrees to accept such refund. As used in this Note, the term "Maximum Rate" means the maximum rate (or, if the context so permits or requires, an amount calculated at such rate) of interest which, at the time in question would not cause the interest charged on the indebtedness evidenced by this Note, the Deed of Trust, or any of the Other Security Documents at such time to exceed the maximum amount which Lender would be allowed to contract for, charge, take, reserve or receive under the laws of the State or any other applicable law after taking into account, to the extent required by the laws of the State or any other applicable law, all relevant payments or charges under this Note, the Deed of Trust, and the Other Security Documents.
14. Whenever used herein, the words "Borrower" and "Lender" shall be deemed to include their respective successors and assigns. In the event Borrower is comprised of more than one individual or entity, each such individual or entity shall be jointly and severally liable under this Note.
15. Time is of the essence of this Note.
16. Any notice, demand, statement, request, or consent made under this Note shall be in writing and shall be deemed given when hand-delivered or within Three (3) Days after the date sent by certified mail, return receipt requested, or the next business day after the date sent by nationally recognized overnight mail or courier service to the address, as set forth above, of the party to whom such notice is to be given, or to such other address as Borrower or Lender, as the case may be, shall in like manner designated in writing.
17. The singular number shall include the plural, and the plural the singular, and any gender shall be substituted for any other gender, where appropriate.
18. This Note is to be governed by and construed in accordance with the laws of the State, without giving effect to the conflicts of law provisions thereof. Whenever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Note. Borrower consents to the jurisdiction of the state and federal courts in the State for any actions involving the enforcement or interpretation of this Note, Deed of Trust and the transaction they evidence.
BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY SUIT INVOLVING THE
LENDER OR ANY ARRANGER OF THIS LOAN AS WELL AS ANY CLAIM FOR PUNITIVE DAMAGES.
19. THIS NOTE, THE DEED OF TRUST, ANY GUARANTY AND THE OTHER
SECURITY DOCUMENTS COLLECTIVELY REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Note effective as of the date first above written.
Borrower: Debra Kay Chisum
ebra kay Chisen
By: