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HomeMy WebLinkAboutProposed AgreementLOAN AGREEMENT FOR FY 2010-2011 STREET RESURFACING IMPROVEMENT PROGRAM THIS LOAN AGREEMENT (this "Agreement") is entered into this day of March, 2011, by and between the CITY OF NATIONAL CITY (the "City") and the COMMUNITY DEVELOPMENT COMMISSION OF TI-IE CITY OF NATIONAL CITY (the "Commission"), with reference to the following facts: A. The City Council of the City of National City (the "City Council") adopted the Redevelopment Plan for National City Redevelopment Project on July 17, 2007 by Ordinance No. 2007-2295 (the "Redevelopment Plan"), which results in the allocation of a portion of the property taxes generated from the National City Redevelopment Project (the "Project Area") to the Commission for purposes of redevelopment. B. The intent of the Redevelopment Plan is, in part, to provide for the construction and installation of necessary public infrastructure and facilities and to facilitate the repair, restoration and/or replacement of existing public facilities and to perform specific actions necessary to promote the redevelopment and the economic revitalization of the Project Area; to increase, improve and preserve the community's supply of low and moderate income housing; and to take all other necessary actions to implement the Redevelopment Plan and to expend the Commission's share of property taxes (referred to as "tax increment") to accomplish the goals and objectives of the Redevelopment Plan. C. The Commission has adopted its Five -Year Implementation Plan for the Project Area, as amended from time to time (collectively, the "Implementation Plan") with established goals to support affordable housing, economic development, community revitalization, commercial revitalization, and institutional revitalization. To implement the programs and activities associated with each goal, the Commission has made redevelopment fund commitments and budget allocations based on estimated available tax increment revenue and debt financing structures. D. Pursuant to its Resolution No. 2010-148 (the "Resolution"), the Commission agreed to provide partial funding for the City's Street Resurfacing Improvement Program for fiscal year 201.0-2011 to repair curbs, gutters, sidewalks, driveways, and pedestrian crossings, and provide traffic striping and signage in the Project Area (the "Program"). The Resolution authorized the expenditure of SEVEN HUNDRED SEVENTY ONE THOUSAND TWO HUNDRED FIFTY DOLLARS and 00/100 (S771,250.00.00) of tax increment funds to reimburse the City's interim loan from its Sewer Funds to complete the Program as the Commission's contribution to the cost of the work associated with the Program (said amount referred to as the "Commission's Funding Obligation".) E. Pursuant to Section 33220 of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) (the "CRL"), certain public bodies, including the City may aid and cooperate in the planning, undertaking, construction, or operation of redevelopment projects. Consistent with said provisions, the City and Commission agreed to carry out the Loan Agreement Page 1 of 6 Program in accordance with the objectives and purposes of the Redevelopment Plan and the Implementation Plan. The Commission expressed its desire for assistance and cooperation in the implementation of the Program, particularly as it pertained to the Project Area portions of the infrastructure in question. The City agreed to aid the Commission and cooperate with the Commission to expeditiously implement the Program in accordance with the Redevelopment Plan and the Implementation Plan and undertake and complete all actions necessary or appropriate to ensure that the objectives of the Redevelopment Plan and the Implementation Plan are fulfilled within the City's fiscal year 2010-2011 as promised to the Commission. F. In considering the Commission's desire to ensure timely implementation and completion of the Program, the Commission wishes to enter into this Agreement with the City for the funding from of net available tax increment ("Net Tax Increment"), as defined, below, to finance the Commission's Funding Obligation. The purpose of this Agreement is to facilitate the implementation of the Projects and to provide funding necessary to effectuate the completion of the Projects with Net Tax Increment in this current fiscal year and forthcoming fiscal years. G. "Net Tax Increment" is defined as any tax increment generated from the Project Area, net of any amount required by the CRL to be set aside for purposes of increasing, improving or preserving the City's supply of low and moderate housing, any amounts paid to affected taxing agencies whether by statute or agreement and any amounts paid to the State of California or the County of San Diego as required by statute or agreement, existing debt service payments, and existing contractual obligations received by the Commission or any lawful successor of the Commission and/or to any of the powers and rights of the Commission pursuant to any applicable constitutional provision, statute or other provision of law now existing or adopted in the future. The pledge of Net Tax Increment shall constitute obligations to make payments authorized and incurred pursuant to Section 33445 and other applicable statutes. The obligations set forth in this Agreement will be contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. H. The City Council and the Commission by resolution have each found that the use of Commission redevelopment funding for the improvement of critical infrastructure within the Project Area scheduled in the Program is in accordance with Section 33445 of the CRL and other applicable law. The said City Council and Commission resolutions are each based on the authority of the Commission, with the consent of the City Council, to pay all or part of the cost of the installation and construction of any building, facility, structure, or other improvements which is publicly owned within the Project Arca, if the City Council makes certain determinations. H. By approving and entering into this Agreement, the Commission has approved certain obligations, including the pledge of Net Tax Increment to pay for the Commission Funding Obligation. l:. The obligations of the Commission under this Agreement shall constitute an indebtedness of the Commission for the purpose of carrying out the Redevelopment Plan for the Project Area. NOW, THEREFORE, the parties hereto do mutually agree as follows: Loan Agreement Page 2 of 6 I. INTRODUCTORY PROVISIONS The recitals above are an integral part of this Agreement and set forth the intentions of the parties and the premises on which the parties have decided to enter into this Agreement. II. COMMISSION'S OBLIGATIONS 1. The Commission agrees to pay to the City the Commission Funding Obligation for the Program as authorized by the Resolution. The Commission Funding Obligation shall be evidenced by a Promissory Note (the "Note") substantially in form attached hereto as Exhibit 1. The Commission's obligations under this Agreement, including without limitation the Commission's obligation to make the payments to the City required by this Agreement, shall constitute an indebtedness of the Commission for the purpose of carrying out the redevelopment of the Project Area and are obligations to make payments authorized and incurred pursuant to Section 33445 of the CRL and other applicable statutes. The obligations of the Commission set forth in this Agreement are contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. 2. The obligations of Commission under this Agreement shall be payable out of Net Tax Increment, as -defined in the above recitals and/or as defined or provided for in any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, levied by or for the benefit of taxing agencies in the Project Area, and allocated to the Commission and/or any lawful successor entity of the Commission and/or any entity established by law to carry out any of the redevelopment plans for the Project Area and/or expend tax increment or pay indebtedness of the Commission to be repaid with tax increment, pursuant to Section 33670 of the CRL or any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, in amounts not less than those set forth in the Note. 3. The indebtedness of Commission under this Agreement shall be subordinate to the rights of the holder or holders of any existing bonds, notes or other instruments of indebtedness (all referred to herein as "indebtedness") of the Commission incurred or issued to finance the Project Area, including without limitation any pledge of tax increment revenues from the Project Area to pay any portion of the principal (and otherwise comply with the obligations and covenants) of any bond or bonds issued or sold by Commission with respect to the Project Area. 4. All payments due to be made by the Commission to the City under this Agreement shall be made by the Commission in accordance with the schedule set forth in the Note and as otherwise necessary to reimburse the City for the cost to the City of performing its obligations hereunder. City shall provide Commission with reports accompanied by evidence reasonably satisfactory to the Commission's Executive Director that the City is making progress toward the satisfactory completion of the Program. III. CITY'S OBLIGATIONS Loan Agreement Page 3 of 6 1. The City shall perform all of the work for the Program. Any funds tendered by the Commission pursuant to this Agreement shall be devoted by the City to (i) payment for the portion of the Program work performed in the Project Area in an amount not to exceed the Commission's Funding Obligation or (ii) reimbursement to the City fund or funds from which the funding for the Program work in the Project Area was secured by the City. 2. It is the responsibility of City to pay all development and construction costs in connection with the Program from City funds and the sole obligation of the Commission under this Agreement shall be as set forth in Section II., above and further evidenced by the Note. 3. The City shall perform its obligations hereunder in accordance with the applicable provisions of federal, state and local laws, including the obligation to comply with environmental laws such as CEQA before undertaking each Project, and shall timely complete the work required for the Program, as provided in the Program. IV. LIABILITY AND INDEMNIFICATION In contemplation of the provisions of California Government Code section 895,2 imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Government Code section 895, the parties hereto, as between themselves, pursuant to the authorization contained in Government Code sections 895.4 and 895.6, shall each assume the full liability imposed upon it, or any of its officers, agents or employees, by law for injury caused by negligent or wrongful acts 'or omissions occurring in the performance of this Agreement to the same extent that such liability would be imposed in the absence of Government Code section 895.2. To achieve the above -stated purpose, each party indemnifies, defends and holds harmless the other party for any liability, losses, cost or expenses that may be incurred by such other party solely by reason of Government Code section 895.2. V. ENTIRE AGREEMENT; WAIVERS; AND AMENDMENTS 1. This Agreement shall be executed in triplicate originals, each of which is deemed to be an original. This Agreement consists of six (6) pages and one (1) exhibit, which constitute the entire understanding and agreement of the parties. 2. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter of this Agreement. 3. This Agreement is intended solely for the benefit of the City and the Commission. Notwithstanding any reference in this Agreement to persons or entities other than the City and the Commission, there shall be no third party beneficiaries under this Agreement; provided, however, that City may, with the consent of Commission, which shall not be unreasonably withheld, assign City's rights and obligations, in whole or part, under this Agreement to any third party. Loan Agreement Page 4 of 6 4. All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representatives of the parties. VI. SEVERABII.,ITY If any term, provisions, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. VII. DEFAULT If either party fails to perform or adequately perform an obligation required by this Agreement within thirty (30) calendar clays of receiving written notice from the non -defaulting party, the party failing to perform shall be in default hereunder. In the event of default, the non - defaulting party will have all the rights and remedies available to it at law or in equity to enforce the provisions of this contract, including without limitation the right to sue for damages for breach of contract. The rights and remedies of the non -defaulting party enumerated in this paragraph arc cumulative and• shall not limit the non -defaulting party's rights under any other provision of this Agreement, or otherwise waive or deny any right or remedy, at law or in equity, existing as of the date of the Agreement or hereinafter enacted or established, that may be available to the non -defaulting party against the defaulting party. All notices of defaults shall clearly indicate a notice of default under this Agreement. VIII. BINDING ON SUCCESSORS This Agreement shall be binding on and shall inure to the benefit of all successors and assigns of the parties, whether by agreement or operation of law. SIGNTURES ON NEXT PAGE SPACE LEFT INTENTIONALLY BLANK Loan Agreement Page5 of 6 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. Attest: CITY OF NATIONAL CITY By: By: Mike Dalla Ron Morrison City Clerk Mayor Attest: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY By: By: Brad Raulston, Secretary Ron Morrison, Commission Chair APPROVED AS TO FORM: By: Claudia G. Silva City Attorney APPROVED AS TO FORM: Kane Ballmer & Berkman By: Susan Y. Cola Commission Special Counsel Loan Agreement Page 6 of 6 EXHIBIT 1. [behind this page] 0.75% Interest $771,250.00 PROMISSORY NOTE TO THE CITY OF NATIONAL CITY National City, California Date: March 2011 FOR VALUE RECEIVED, the REDEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "Commission" or "Borrower-") hereby promises to pay to the CITY OF NATIONAL CITY, a California general law city (the "City" or "Lender") the principal amount of SEVEN HUNDRED SEVENTY ONE THOUSAND TWO HUNDRED FIFTY DOLLARS and No/100 Cents ($771,250.00) (the "City Loan") together with interest on the unpaid principal balance from time to time outstanding at an annual rate of three quarters of one percent (0.75%). This Promissory Note ("Note") evidences the City Loan to the Commission, and is given by the Commission pursuant to the Community Redevelopment Law and that certain Loan Agreement for Fiscal Year 2010-2011 Street Resurfacing Improvement Program, dated March 2011, by and between the City and Commission (referred to herein as the "Agreement"). The A.greement is a public record on file in the offices of the Commission and the City, and the provisions of said document are incorporated herein by this reference. 1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. In addition, the following tenlls shall have the following meanings: "City Loan" shall mean the loan made by the City to the Commission pursuant to the Community Redevelopment Law and the Agreement in the principal amount of SEVEN HUNDRED SEVENTY ONE THOUSAND TWO HUNDRED FIFTY DOLLARS and No/100 Cents ($771,250.00), which is evidenced by this Note. "Community Redevelopment Law" shall mean the Community Redevelopment Law of the State of California set forth at California Health and Safety Code Section 33000 et seq. "Net Tax Increment" shall mean any tax increment generated from the Project Area, net of any amount required by the CRL to be set aside for purposes of increasing, improving or preserving the City's supply of low and moderate housing, any amounts paid to affected taxing agencies whether by statute or agreement and any amounts paid to the State of California or the County of San Diego as required by statute or agreement, existing debt service payments, and existing contractual obligations received by the Commission or any lawful successor of the Commission and/or to any of the powers and rights of the Commission pursuant to any applicable constitutional provision, statute or other provision of law now existing or adopted in the future. The pledge of Net Tax Increment shall constitute obligations to make payments authorized and incurred pursuant to Section 33445 and other applicable statutes. The obligations set forth in this Agreement will be contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. "Person" means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign. "Tax Increment Revenue" means the portion of property tax revenues from the increase in assessed value of real property within the Project Area that has occurred after adoption of the Redevelopment Plan for the Project Area received by the Commission to pay the principal of and interest on loans, moneys advanced to, or indebtedness (whether funded, refunded, assumed, or otherwise) incurred by the Commission to finance or refinance, in whole or in part, its activities in the Project Area. "Term" of this Note shall mean the period commencing from the execution of this • Note by the Commission until .Lune 30, 20I3, which execution date shall constitute the "Effective Date" of this Note. "Transfer" shall have the meaning set forth in Section 9 of this Note. 2. This Note evidences the obligation of the Commission to the City for the repayment of the City Loan. 3. This Note is payable at the principal office of the City, 1.243 National City Boulevard, National City, California, 91950-4379, or at such other place as the holder hereof may inform the Commission, in writing, in lawful money of the United States. 4. This Note shall be secured by the Commission's pledge of Net Tax Increment Revenue as provided in the Agreement. 5. This Note shall bear interest at the rate of three quarters of one percent (0.75 %) per annum., simple interest, which shall begin to accrue upon the execution of the Agreement and this Note. 6. The indebtedness of the Commission under this Note shall be subordinate to the rights of the holder or holders of any existing bonds, notes and other instruments of indebtedness, and existing contractual indebtedness (all referred to herein as "indebtedness") of the Commission incurred or issued to finance its activities in the Project Area, including without limitation any pledge of tax increment revenues from the Project Area to pay any portion of the principal (and otherwise comply with the obligations and covenants) of any existing bond or bonds issued or sold by the Commission with respect to the Project Area. 7. Prior to the expiration of the third (3'`i ) anniversary following the Effective Date of this Note, the Commission shall be obligated to repay the City Loan from the Commission's Net 'fax Increment, by making annual installment payments in accordance with the following schedule of payments: Promissory Note -Page2of7- PAYMENT DATE TOTAL PAYMENT PRINCIPAL TNTEREST June 30, 2011 $11,250.00 $0.00 $1.1,250.00 June 30, 2012 $340,000.00 $328,750.00 $11,250.00 June 30, 2013 $420,000.00 $411,215.63 $8,784.38 In the event that additional funds are required in order to make the Commission payments to the City required by this Note, the Commission shall make such payments from income received by the Commission from its projects and programs or any other additional funds available to it. All payments to the City shall be applied first to interest, then to reduce the principal amount owed until the entire principal amount has been paid. 8. The entire unpaid principal balance of this Note and any accrued but unpaid interest shall be due and payable immediately in the event that there is a default by the Commission under the terms of this Note or the Agreement which is not cured within the respective time period provided herein and therein. 9. (a) Prior to the repayment in full of the City Loan, the Commission shall not assign or attempt to assign any right or interest in the Agreement (referred to hereinafter- as a "Transfer"), without prior written approval of the City. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. The City shall not unreasonably withhold or delay its consent. If consent should be given, any such Transfer shall be subject to this Section 9, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. (b) Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the City, to fulfill the obligations undertaken by the Commission in the Agreement and this Note. Any such proposed transferee, by instrument in writing satisfactory to the City, for itself and its successors and assigns, and for the benefit of the City shall expressly assume all of the obligations of the Commission under the Agreement and agree to be subject to all conditions and restrictions applicable to the Commission in this Note. There shall be submitted to the City for review all instruments and other legal documents proposed to effect any such Transfer; and if approved by the City its approval shall be indicated to the Commission in writing. (c) In the absence of specific written agreement by the City, no unauthorized Transfer, or approval thereof by the City, shall be deemed to relieve the Commission or any other party from any obligations under the Agreement. (d) In the event of a Transfer prior to the time the City Loan is paid in full, without the prior written consent of the City, the remaining principal balance of the City Loan and all accrued but unpaid interest shall be immediately due and payable. (e) As used herein, "Transfer" includes the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in the Commission, or any conversion of the Commission to an entity form other than that of the Commission at the time of execution of this Note. Promissory Note - Page 3of7- (f) The City shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder. Any disapproval shall be in writing and contain the City's reasons for disapproval.. 10. Subject to the provisions and limitations of this Section 10, the obligation to repay the City Loan is a nonrecourse obligation of the Commission. Commission officials, employees, agents and attorneys shall not have any personal liability for repayment of the City Loan. The sole recourse of City for repayment of the City Loan shall be the exercise of its rights against the security for the City Loan. Provided, however, that the foregoing shall not (a) constitute a waiver of any obligation evidenced by this Note; (b) limit the right of the City to name the Commission as a party defendant in any action or proceeding hereunder so long as no judgment in the nature of a deficiency judgment shall be asked for or taken against the Commission; (c) release or impair this Note; (d) prevent or in any way hinder the City from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy or any other instrument securing the Note or as prescribed by law or in equity in case of default; (e) prevent or in any way hinder the City from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, its remedies in respect of any deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing the Note; (f) relieve the Commission of any of its obligations under any indemnity delivered by the Commission to the City; or (g) affect in any way the validity of any guarantee or indemnity from any Person of all or any of the obligations evidenced and secured by this Note. Notwithstanding the first sentence of this paragraph, City may recover directly from the Commission or from any other party: (a) Any damages, costs and expenses incurred by the City as a result of fraud or any criminal act or acts of the Commission or any member, officer, director or employee of the Commission; (b) Any damages, costs and expenses incurred by the City as a result of any misappropriation of funds; (c) Ali court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that the City shall pay to the Commission the Commission's reasonable court costs and attorneys' fees if the Commission. is the prevailing party in any such enforcement or collection action). 11. The Commission waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. The Commission hereby agrees to pay all. costs and expenses, including reasonable attorney's fees, which may be incurred by the holder hereof, in the enforcement of this Note, the Agreement or any term or provision thereof. 12. Upon the failure of Commission to perform or observe any other term or provision of this Note, upon any event of acceleration described in Section 8, or upon the Promissory Note -Page4of7- occurrence of any other event of default under the terms of the Agreement, the holder may exercise its rights or remedies hereunder or thereunder. • 13. (a) Subject to the extensions of time set forth in Section 14, and subject to the further provisions of this Section I3, failure or delay by the Commission to perform any material term or provision of this Note or the Agreement constitutes a default under this Note. (b) The City shall give written notice of default to the Commission, specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. {c) Any failures or delays by the City in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the City in asserting any of its rights and remedies shall not deprive the City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. (d) if a monetary event of default occurs under the terms of this Note or the Agreement, prior to exercising any remedies hereunder or thereunder, the City shall give to the Commission written notice of such default. The Commission shall have a reasonable period of time after such notice is given within which to cure the default prior to exercise of any remedies by the City under this Note and/or the Agreement. In no event shall the City be precluded from exercising any remedies if its security becomes or is about to become materially impaired by any failure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received. (e) If a non -monetary event of default occurs under the terms of this Note or the Agreement, prior to exercising any remedies hereunder or thereunder, the City shall give to the Commission written notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, the Commission shall have such period to effect a cure prior to exercise of any remedies by the City under this Note and/or the Agreement. If the default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and the Commission(i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then the Commission shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the City. In no event shall the City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) calendar days after the notice of default is received or deemed received. (0 Any notice of. default that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means. of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by Borrower; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. Promissory Note - Page 5 of 7 - 14. Notwithstanding specific provisions of this Note, the Commission shall not be deemed to be in default for failure to perform any non -monetary performance hereunder where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, sub -contractor or supplier, acts of the City or any other public or governmental Commission or entity, or any causes beyond the control or without the fault of the Commission ("Force Majeure Event"). An extension of time for any such Force Majeure Event shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause of the Force Majeure Event, if notice by the Commission is sent to the City within thirty (30) calendar days of knowledge of the commencement of such cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until the Commission delivers to the City written notice describing the event, its cause, when and how the Commission obtained knowledge, the date and the event commenced, and the estimated delay resulting therefrom. The Commission shall deliver such written notice within thirty (30) calendar days after it obtains actual knowledge of the Force Majeure Event. Times of performance under this Note may also be extended in writing by the City and the Commission. 15. If the rights created by this Note shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations shall be completely performed and paid. 16. The Commission shall have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty. IN WITNESS WHEREOF, the Commission has executed this Note as of the day and year set forth above. Attest: BORROWER COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY By: By: Brad Raulston, Secretary Ron Morrison, Commission Chair APPROVED AS TO FORM: By: Claudia G. Silva, General Counsel Promissory Note - Page 6of7- APPROVED AS TO FORM: Kane Ballmer & Berkman By: Susan Y. Cola Commission Special Counsel Promissory Note -Page7of7-