SECOND AMENDED PROMISSORY NOTE
SECOND AMENDED PROMISSORY NOTE SECURED BY DEED OF TRUST This SECOND AMENDED PROMISSORY NOTE SECURED BY DEED OF
TRUST (“Second Amended Note”) is entered as of _____________, 2024 (“Effective Date”) and is secured by a deed of trust dated February 19, 2019, (the “Deed of Trust”), executed by Borrower for the benefit of Lender and encumbering Assessor Parcel Number 021-088-016, with the physical address on 0 Park Center Drive, Patterson, CA 95363 (the “Property”). Lender shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein and in the Deed of Trust.
For value received, Darron Silva, an individual (“Borrower”), promises to pay to the City of Patterson, a California municipal corporation (“Lender”), the principal sum of One Million and Forty-Five Thousand Dollars ($1,045,000) (the “Principal Amount”), with interest as set forth in this Second Amended Note (calculated on the basis of a 360-day year), as defined below, in accordance with the terms and conditions described herein.
LOAN TERMS
Section 1. Interest Rate and Payments.
(a) Monthly Payment and Interest Rate. Lender previously agreed to finance the Principal Amount in a loan to Borrower for a term of five (5) years amortized over thirty (30) years with fixed interest at five percent (5.0%) per annum, payable at Five Thousand Six Hundred and Nine Dollars and Seventy-nine cents ($5,609.79) or more per month (“Monthly Payment”). Lender agrees to extend Borrower’s term for an additional five (5) years with the same fixed interest at five percent (5.0%) per annum and Monthly Payment at Five Thousand Six Hundred and Nine Dollars 79/100 ($5,609.79) or more per month. The Monthly Payment shall be due on the first (1st) of each month and deemed late if not received by Lender on the third (3rd) day of each month. If the third (3
rd) day falls on a Saturday, Sunday, or national or state holiday where Lender is closed, then payment shall be due on the next business day Lender is open for business with the public.
The Monthly Payment shall continue to be due on the first (1st) day of the month. (b) Method of Payment. All Monthly Payments shall be paid in lawful money of the United States to Lender at the address in Section 7. Borrower may also pay the Monthly Payment via direct deposit from Borrower’s bank account to Lender’s bank account. (c) Late Charge. If the Monthly Payment or Balloon Payment, as defined below, is not made by Borrower within ten (10) days after it is due, a late charge of Two Hundred and Eighty Dollars ($280.00) may be charged by Lender to Borrower (“Late Charge”). Borrower acknowledges and agrees that it would be extremely difficult or impracticable to fix the actual damages resulting from Borrower's failure to pay amounts when due, and therefore, Borrower shall pay such Late Charge not as a penalty, but for the purpose of defraying the expenses incident to handling amounts past due. Such Late Charge represents the reasonable estimate of the loss that may be sustained by Trust due to the failure of Borrower to timely pay amounts due hereunder.
The Late Charge shall be payable by Borrower without prejudice to the rights of Lender to collect
SECOND AMENDED PROMISSORY NOTE
any other amounts to be paid under this Second Amended Note, the Deed of Trust, or to accelerate all sums due hereunder pursuant to Section 4.
(d) Balloon Payment and Maturity Date. The entire outstanding Principal Amount plus any accrued and unpaid interest (“Balloon Payment”) shall be due and payable on August 1, 2029 (“Maturity Date”). An amortization schedule, including the balloon payment due on the Maturity Date, is attached as Exhibit A. Failure by Borrower to timely make the Balloon Payment to Lender shall be a material breach of this Second Amended Note. Lender shall not extend its financing under paragraph (a) beyond the Maturity Date. From and after the Maturity Date, or an earlier date on which all sums owing under this Second Amended Note become due by acceleration or otherwise, all sums owing under this Second Amended Note will bear interest until paid in full at a rate equal to five percent (5%) per annum in excess of the rate of interest specified in subdivision (a) above (“Default Rate”).
(e) Payment Application. All payments on this Second Amended Note will be applied first to the payment of any costs, fees, late charges, or other charges incurred in connection with the indebtedness evidenced by this Second Amended Note; next, to the payment of accrued interest; then to the reduction of the principal balance; or in any other order that Lender requires.
Section 2. Due on Sale or Encumbrance. If any interest in the Property is sold or otherwise transferred, Lender may accelerate the Principal Amount and require the immediate payment and full satisfaction of the Principal Amount, including any accrued interest.
Section 3. Prepayment. Borrower may, at any time without penalty or premium, prepay all or any portion of the outstanding Principal Amount due under this Second Amended Note.
Prepayments shall be first applied to any unpaid late charges and other costs or fees due, then to accrued but unpaid interest, if any, and then to the Principal Amount, or in any other order that Lender requires.
Section 4. Default. A default shall be deemed to occur if Borrower (a) fails to pay any sum due under this Second Amended Note, (b) an Event of Default, as defined in the Deed of Trust, occurs, or (c) any other event or condition occurs that, under the terms of the Deed of Trust, gives rise to a right of acceleration of sums owing under this Second Amended Note. In such case, Lender, at its sole option, shall have the right to declare all sums owning under the Second Amended Note immediately due and payable. In addition, if any document related to this Second Amended Note provides for the automatic acceleration of payment of sums owing under this Second Amended Note, all sums owing will be automatically due and payable in accordance with the terms of that document.
Section 5. Hazard Insurance. Borrower shall provide to Lender evidence of hazard insurance that includes Lender as a lender’s loss payable endorsement as soon as a building is erected, adding Lender as an additional insured to the Property insurance policy until the Principal Amount is repaid by Borrower to Lender. Borrower shall specifically include Lender, as an additional insured
SECOND AMENDED PROMISSORY NOTE
and shall assign him rights to insurance proceeds up to the amount of the outstanding Principal Amount.
Section 6. Insolvency/Receivership. Either the appointment of a receiver to take possession of all or substantially all of the assets of Borrower, or a general assignment by Borrower for the benefit of creditors, or any action taken or offered by Borrower under any insolvency or bankruptcy action, will constitute a breach of this Second Amended Note by Borrower, and in such event this Second Amended Note will automatically cease and terminate.
Section 7. Notices. Except where such other form of notice is expressly permitted by the Deed of Trust, any notice required or permitted to be given in connection with this Second Amended Note or Deed of Trust must be in writing and will be deemed to have been given: (a) when hand delivered (deemed received on receipt or refusal of delivery); (b) when delivered by a nationally recognized overnight express delivery service (deemed received the next business day); or (c) when deposited in the United States Mail, registered or certified mail, postage prepaid, return receipt requested (deemed received the third business day after posting). Notices may be executed and sent by the other party’s legal counsel. Notices shall not be sent by electronic means.
Each notice shall be addressed, transmitted, or delivered, as the case may be, as set out below, or at such other address as may from time to time be designated in writing in accordance with this subsection:
If to Lender: City of Patterson
P.O. Box 667
Patterson, CA 95363
Attn: City Manager
courtesy copy to: White Brenner LLP
1608 T Street
Sacramento, CA 95811
Attn: Douglas L. White, Esq.
If to Borrower: Darron Silva
1631 Fig Avenue
Patterson, CA 95361
Attn: Darron Silva
courtesy copy to: The Sherron Law Firm, PC
638 Wolfe Ave, Suite 1
Turlock, CA 95380
Attn: Claudine Sherron, Esq.
SECOND AMENDED PROMISSORY NOTE
and Zach Drivon
General Counsel, Green Catalyst Enterprises, Inc.
3439 Brookside Road, Suite 104
Stockton, CA 95219
Section 8. Attorney’s Fees and Costs. If any action at law or in equity, including action for declaratory relief, is brought to enforce or interpret provisions of this Agreement, the prevailing Party shall be entitled to its reasonable attorney's fees and costs, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which such Party may be entitled.
Section 9. Second Amended Note Priority. This Second Amended Note is and shall at all times remain secured by a senior and first priority Deed of Trust.
Section 10. Offset; No Joint Venture. Borrower shall pay to Lender all sums owing under this Second Amended Note without deduction, offset, or counterclaim of any kind. The relationship of Borrower and Lender under this Second Amended Note is solely that of borrower and lender, and the loan evidenced by this Second Amended Note and secured by the Deed of Trust will in no manner make Lender the partner or joint venturer of Borrower.
Section 10. General Provisions
(a) Assignment. Lender may, at its sole option, assign this Second Amended Note or designate any other person or entity as the holder hereof. (b) Governing Law; Venue. The validity, interpretation, and performance of this Second Amended Note shall be controlled by and construed pursuant to the laws of the State of California. Venue for any legal proceedings related to the enforcement of this Second Amended Note shall be in the Superior Court for the County of Stanislaus. (c) Severability. If any provision of this Second Amended Note is determined by a court to be invalid and unenforceable, or if any provision of this Second Amended Note is rendered invalid or unenforceable according to the terms of any federal or state statute, which becomes effective after the Effective Date, the remaining provisions shall continue in full force and effect and shall be construed to give effect to the intent of this Second Amended Note. (d) Drafting Presumptions. Each party acknowledges and agrees that it has reviewed this Second Amended Note and had the opportunity to review the Second Amended Note with its own legal counsel. Each party further acknowledges and agrees that it freely entered into this Second Amended Note. Should any provision of this Second Amended Note require judicial interpretation, the court interpreting or construing the provision shall not apply the rule of construction that a document is to be construed more strictly against the drafting party. (e) Waiver. No previous waiver or failure or delay by Lender in acting with respect to the terms of this Second Amended Note and the Deed of Trust shall constitute a waiver of any breach, default, or failure of condition under this Second Amended Note or the Deed of Trust. A
SECOND AMENDED PROMISSORY NOTE
waiver of any term of this Second Amended Note or the Deed of Trust must be made in writing and will be limited to the express written terms of the waiver.
Lender does not intend to contract for, charge or receive any interest or other charge which is usurious, and by execution of this Second Amended Note, Borrower acknowledges that Lender has no such intent. All agreements between Borrower and Lender, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no event, whether by reason of acceleration of the maturity hereof, or otherwise, shall the amount paid or agreed to be paid to Lender for the use, forbearance or detention of the money to be loaned hereunder or otherwise or for the payment or performance of any covenant or obligation contained herein or in any other document evidencing, securing or pertaining to the indebtedness evidenced hereby, exceed the maximum amount permissible under applicable law. If from any circumstance whatsoever fulfillment of any provision hereof or other documents, at the time performance of such provision shall be due, shall exceed the maximum amount prescribed by law, then, ipso facto, the obligations to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstance Lender shall ever receive as interest or otherwise an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to reduce the principal amount owing hereunder or on account of any other principal indebtedness of Borrower to Lender and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal hereof and such other indebtedness, such excess shall be refunded to Borrower. All sums paid or agreed to be paid to Lender for the use, forbearance or detention of the indebtedness of Borrower to Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest on account of such indebtedness does not exceed the maximum permitted by applicable law.
(f) Remedies. The rights, powers, and remedies of Lender permitted by law or contract or as set forth herein or in the Deed of Trust shall be cumulative and concurrent, and may be pursued singly, successively, or together against Borrower or the Property, in the sole discretion of Lender, and such rights, powers, and remedies shall not be exhausted by any exercise thereof but may be exercised as often as occasion therefor shall occur. Additionally, the failure to exercise any such rights, powers, and remedies or the acceptance by Lender of any payment hereunder which is less than payment in full shall not constitute a waiver of the right to exercise any of Lender's rights, powers or remedies at that time or any subsequent time. (g) Amendment of this Second Amended Note. This Second Amended Note may only be amended by the written mutual consent of the Borrower and Lender. (h) Successors and Assigns. All representations, covenants, and warranties specifically set forth in this Second Amended Note, by or on behalf of or for the benefit of any or all of the parties hereto, shall be binding upon and inure to the benefit of such Party, its successors and assigns.
(i) Time is of the Essence. Time is of the essence in this Second Amended Note in each covenant and term and condition herein.
SECOND AMENDED PROMISSORY NOTE
IN WITNESS WHEREOF, Borrower has executed and delivered this Second Amended Note as of the day and year first above written.
BORROWER:
Darron Silva, an individual
CaliforniaAll-PurposeAcknowledgment
State of California )
)
County of )
On , before me , a Notary
Public, personally appeared who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
Witness my hand and official seal.
(Signature)
(Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
EXHIBIT A
AMORTIZATION SCHEDULE