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HomeMy WebLinkAboutCDC/2011-10 1 2 3 4 5 6 7 8 9 (NOTE: COMPANION RESOLUTIONS 2011-47 CDC/2011-8, CDC/2011-9, CDC/2011-11) RESOLUTION NO. CDC/2011-10 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING (1) THAT CERTAIN LOAN AGREEMENT IN CONNECTION WITH THE ISSUANCE OF THE REDEVELOPMENT AGENCY OF THE SAN BERNARDINO PROMISSORY NOTE SERIES 2011 (CITY REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS), AND (2) THAT LOAN AGREEMENT IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO PROMISSORY NOTE SERIES 2011 AND THE FORMS OF LEGAL DOCUMENTS RELATED THERETO WHEREAS, the Community Development Commission of the City of San Bernardino (the "Commission") is the governing body of the Redevelopment Agency of the City of San Bernardino 10 11 (the "Agency") and is authorized under Health and Safety Code Section 33000, et seq., to issue bonds, notes and other obligations and enter into loan agreements for the purpose of financing 12 public capital improvements within the City of San Bernardino (the "City"); and 13 14 WHEREAS, the Agency seeks to finance certain multiple Redevelopment Activities and Public Works Projects within the jurisdiction of the City over an extended period of time 15 16 (collectively, the "Projects"); and 17 WHEREAS, the Agency has determined that the best mode of financing the Projects is through a loan from the Lender (the "Loan") in the principal amount not to exceed Five Hundred 18 19 and Twenty Five Million Dollars ($525,000,000.00) under and secured by an Indenture (the "Agreement") and a Promissory Note (the "Note") in the form attached as Exhibit "A" to the 20 Agreement; and 21 22 WHEREAS, CMB Infrastructure Investment Group VII, LP, a California limited partnership (the "Lender"), organized in accordance with the requirements for regional centers as set forth under 23 the United States Immigration Act of 1990, as amended, has offered to fund the Loan pursuant to 24 the terms of the Agreement; and 25 26 WHEREAS, the repayment of the Loan will be made from the excess tax increment revenues of the Agency, which shall be placed in a special and separate account to assure that 27 adequate funds are available for the undertaking of all projects as financed by the Lender; and 28 1 P:lAgendaslComm Dev Commission12011 CDC ItemslSpecial Joint WorkshapI03-03-11 EB-S Loan Agreement $200M CDC Resa C.doc CDC/2011-10 1 WHEREAS, the Agency seeks to finance other various infrastructure projects, including, but 2 not limited to, those identified in the Programs, Projects and Activities attached as Exhibit "A" to 3 the Project Funding Agreement within the jurisdiction of the City (the "Other Projects"); and 4 WHEREAS, the Agency has determined that the best mode of financing the Other Projects is 5 through a loan from CMB Infrastructure Investment Group VII-B, LP, a California limited 6 partnership (the "Lender B") (the "10M Loan") in the principal amount not to exceed Ten Million 7 Dollars ($10,000,000.00) under and secured by an Indenture ("Agreement B") and a Promissory 8 Note ("Note B") in the form attached as Exhibit "A" to Agreement B; and 9 WHEREAS, Lender B, organized in accordance with the requirements for regional centers 10 as set forth under the United States Immigration Act of 1990, as amended, has offered to fund the 11 10M Loan pursuant to the terms of the Agreement; and 12 WHEREAS, the Agency has determined that it is in the best interests of the Agency and the 13 City to enter into the Agreement and Agreement B and to issue the Note and Note B to finance said 14 Projects; and 15 WHEREAS, based upon the foregoing, the Agency desires to approve the Agreement and 16 Agreement B and the Note and Note B as set forth above. 17 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 18 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 19 FOLLOWS: 20 Section 1. Approval of the Issuance of the Note. The Agency hereby approves the issuance 21 of the Note in the amount not to exceed $525,000,000. The Loan shall be made in tranches of 22 between $5,000,000 to $20,000,000 at a time. The proposed repayment of the tranches shall be six 23 (6) years from each tranche's initial funding date at a rate of interest not to exceed 5.25%. Interest 24 on the Note shall be paid quarterly until maturity, and principal shall be paid in full on or before the 25 Final Maturity Date, as defined in the Note. The Loan shall be repaid from the excess Tax 26 Increment Revenues of the Agency, as further described and defined in the Agreement. 27 Section 2. Approval of the Issuance of Note B. The Agency hereby approves the issuance 28 of Note B in the amount not to exceed $10,000,000. The proposed term of the 10M Loan shall be 2 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 Loan Agreement $200M CDC Reso C.doc CDC/2011-10 1 six (6) years at a rate of interest not to exceed 5.25%. Interest on the Loan shall be paid quarterly 2 until maturity, and principal shall be paid in full on or before the maturity date. The proceeds of the 3 Bond shall be transferred to the Agency under the Indenture and shall be applied by the Agency to 4 fund the Improvements. The security for the Loan shall be the surplus tax increment revenues of the 5 Agency. 6 Section 3. Approval of the Terms of the Note, Note B, the Agreement and Agreement B. 7 The Agency hereby approves the Note, Note B, the Agreement and Agreement B in the forms 8 presently on file with the Secretary of the Agency with such changes thereto as may be approved by 9 the Chairman or the Executive Director of the Agency when such terms and conditions have been 10 ascertained. The Agency hereby further authorizes and directs that the forms of the Note, Note B, 11 the Agreement and Agreement B presently on file with the Secretary be converted into the final 12 forms thereof together with such changes or modifications as deemed necessary or desirable by the 13 Chairman or Executive Director of the Agency, upon the recommendation of Agency Counsel. The 14 Chairman, Executive Director or such other authorized officer of the Agency are hereby authorized 15 and directed to execute and deliver, and the Secretary is hereby authorized and directed to attest to, 16 the final forms of the Note, Note B, the Agreement and Agreement B when the same has been 17 prepared for and in the name of the Agency, and such execution and delivery shall be deemed to be 18 conclusive evidence of the approval thereof. The Agency hereby authorizes the delivery and 19 performance of the obligations under the Note and Agreement to accomplish these financings as 20 contemplated herein. 21 Section 4. Official Action. The Chairman, Executive Director, Secretary, Agency Counsel 22 and any and all other officers of the Agency are hereby authorized and directed, for and in the name 23 and on behalf of the Agency, to do any and all things and take any and all actions, including 24 execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, 25 consents, instruments of conveyance, warrants and other documents, which they, or any of them, 26 may deem necessary or advisable in order to consummate the financings as described herein. 27 Whenever in this Resolution any officer of the Agency is authorized to execute or countersign any 28 document or take any action, such execution, countersigning or action may be taken on behalf of 3 P:\Agendas\Comm Dev Commission\2011 CDC ltems\Speciat Joint Workshop\03-03-11 EB-S Loan Agreement $200M CDC Reso Cdoe CDC/2011-10 1 such officer by any person designated by such officer to act on his or her behalf in the case such 2 officer shall be absent or unavailable. The Agency hereby appoints its Chairman and Executive 3 Director as agents of the Agency for purposes of executing any and all documents and instruments 4 which any officer of the Agency is authorized to execute hereunder. 5 Section 5. Effective Date. This Resolution shall become effective immediately upon 6 adoption. 7 1/1 8 1/1 9 11/ 10 11/ 11 1/1 12 11/ 13 1/1 14 1/1 15 1/1 16 11/ 17 1/1 18 1/1 19 1/1 20 1/1 21 11/ 22 1/1 23 11/ 24 1/1 25 1/1 26 11/ 27 1/1 28 11/ 4 P:\Agendas\Comm Dev Commission\2011 CDC ltems\Special Joint Workshop\03-03-11 EB-S Loan Agreement $200M CDC Reso c.doc CDCj2011-10 1 2 3 4 5 6 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING (1) THAT CERTAIN LOAN AGREEMENT IN CONNECTION WITH THE ISSUANCE OF THE REDEVELOPMENT AGENCY OF THE SAN BERNARDINO PROMISSORY NOTE SERIES 2011 (CITY REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS), AND (2) THAT LOAN AGREEMENT IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO PROMISSORY NOTE SERIES 2011 AND THE FORMS OF LEGAL DOCUMENTS RELATED THERETO 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission of the City of San Bernardino at a Special Joint meeting 9 thereof, held on the 3rd day of March , 2011, by the following vote to wit: 10 Commission Members: 11 MARQUEZ 12 VACANT 13 BRINKER 14 SHORETT 15 KELLEY 16 JOHNSON 17 MC CAMMACK 18 Absent Abstain Nays Ayes X ~ X X X X secrc~ tj?IJI day of March , 2011. 19 20 The foregoing Resolution is hereby approved this 21 22 23 24 LiL U"--~ . f Rikke Van Johnson, ice Chairperson l Community Development Commission ( of the City of San Bernardino 25 Approved as to Form: 26 , rYlj~ 27 By: ~~~ 28 6 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-S Loan Agreement $200M CDC Reso C.doc CDC/2011-10 INDENTURE AND LOAN AGREEMENT by and between REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP Relating to the $525,000,000 PROMISSORY NOTE (CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS) Dated as of March _, 2011 CDC/2011-10 INDENTURE AND LOAN AGREEMENT This Indenture and Loan Agreement dated as of March _,2011 (this "Agreement"), is by and between the Redevelopment Agency ofthe City of San Bernardino, a public body, corporate and politic (the "Agency"), and CMB Infrastructure Investment Group VII, LP, a California limited partnership (the "Lender"): WITNESSETH WHEREAS, the Agency seeks to finance certain multiple redevelopment activities and public works projects within the jurisdiction of the City of San Bernardino (the City") over an extended period of time (collectively, the "Projects"); and WHEREAS, the Agency has determined that the best mode of financing the Projects is through a loan from the Lender (the "Loan") in the principal amount not to exceed Five Hundred Twenty Five Million Dollars ($525,000,000.00) under and secured by this Indenture and a promissory note (the "Note") in the form attached as Exhibit "A"; and WHEREAS, the Lender, a California limited partnership, organized in accordance with the requirements for regional centers as set forth under the United States Immigration Act of 1990, as amended, has offered to fund the Loan pursuant to the terms of this Agreement; and WHEREAS, the repayment of the Loan will be made from the excess Tax Increment Revenues of the Agency, which shall be placed in a special and separate account to assure that adequate funds are available for the undertaking of all projects as financed by Lender (the "Special Account"); and WHEREAS, the obligation incurred under the Agreement will be set forth on the annual Statement of Indebtedness of the Agency; and WHEREAS, the Agency has determined that all things necessary to cause the Note, when duly executed by the Agency as provided herein, to be a legal and valid obligation of the Agency, as applicable, enforceable in accordance with its terms, and to constitute this Indenture as a valid agreement for the purposes and uses herein set forth in accordance with its terms, have been done and taken and the execution and delivery hereof and the execution, authentication and delivery ofthe Note, subject to the terms hereof, have in all respects been duly authorized. NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, and the interest on, the Note under this Indenture and to secure the performance and observance of all ofthe covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Note is to be issued and received, and in consideration of the premises and of the mutual covenants herein contained, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Agency does hereby covenant and agree with Lender, as follows: 1 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 $200M Loan Agreement (EDA).doc CDC/2011-10 ARTICLE I DEFINITIONS "Loan" means EB-5 foreign investor loan in the amount of Five Hundred Twenty Five Million Dollars ($525,000,000.00) through CMB Infrastructure Investment Group VII, LP, for the Redevelopment Activities and Public Works Projects as authorized to be issued hereunder. "Lender" means CMB Infrastructure Investment Group VII, LP, a California limited partnership, organized in accordance with the requirements for regional centers as set forth under the Immigration Act of 1990, as amended, and for the purpose of promoting economic growth through, among other things, increased export sales, improved regional productivity, job creation and increased domestic capital investment, and to generate jobs through the immigrant investor visa program of the United States Citizenship and Immigration Service ("USCIS"). "Tax Increment Revenues" means those property tax increment revenues available to the Agency or any successor in interest to the Agency attributable to the several redevelopment project areas of the Agency after payments have been remitted or provided for regarding all pass-through obligations to taxing agencies, deposits to the Low and Moderate Income Housing Fund of the Agency, and after payments of all debt service obligations previously incurred by the Agency for any form of indebtedness, including, but not limited to, publicly issued tax allocation bonds and refunding bonds, loans from private parties or commercial lending institutions and other forms of assistance provided to property owners (collectively, the "Prior Obligations"). The pledge to the Lender of the Tax Increment Revenues pursuant to this Agreement shall at all times be subordinate to the Prior Obligations and any other subsequently issued or incurred obligations of the Agency payable in whole or in party from the property tax increment revenues and/or the Tax Increment Revenues. ARTICLE II THE LOAN Section 2.1 Terms of the Loan. The Lender shall loan to the Agency a principal amount equal to Five Hundred Twenty Five Million Dollars ($525,000,000.00) (the "Loan"). The Loan shall bear interest at the rate of5.25% per annum per each Tranche, as defined hereinafter, accruing from and after each date of funding of a portion of the total principal amount of the Loan to the Agency. Interest shall be calculated on the number of actual days that the principal amount of the Loan is outstanding in each year on the basis of 365/366 days in a calendar year. The Loan shall be represented by the "$525,000,000 Redevelopment Agency ofthe City of San Bernardino Promissory Note (CMB Infrastructure Investment Group VII, LP) Series 2011" substantially in the form attached hereto as Exhibit "A" (the "Note") executed by the Agency in favor ofthe Lender. The Lender shall charge the Agency no origination points or loan fees, nor require the payment of any prepaid interest, in connection with making the Loan. 2 P:\Agendas\Comm Dev Commission12011 CDC Items\Special Joint Workshop\03-03-11 EB-5 $200M Loan Agreement (EDA).doc CDCj2011-10 Section 2.2 Form of Note. The Note shall be substantially in the form attached hereto as Exhibit "A", which is incorporated herein and made a part hereof, with necessary or appropriate variations, omissions and insertions as permitted or required hereby. Section 2.3 Application of Loan Proceeds. (a) Use of Funds. The Agency shall use and apply the proceeds of the Loan for the implementation and construction of the Projects and any other related legal purposes in connection with the Projects and of the Agency with respect to the Projects pursuant to the California Health and Safety Code. (b) Funding of the Loan. (1) Acknowledgement. The Agency hereby acknowledges that (i) the Lender, as an approved and federally-designated "regional center", is authorized and intends to raise capital from foreign investors who seek to obtain permanent residency in the United States in accordance with the EB-5 investor visa program of the Immigration and Nationality Act (the "EB-5 Program"), and (ii) it is anticipated that each foreign investor will make an investment with the Lender of Five Hundred Thousand Dollars ($500,000.00). In that regard, the Agency further acknowledges that the principal amount of the Loan to be dispersed by the Lender to the Agency is dependant on the amount of capital raised by the Lender from foreign investors, and accordingly, the Agency agrees that the Lender does not guarantee that the entire principal amount of the Loan, or any portion thereof, shall be disbursed to the Agency. Additionally, the Agency further acknowledges that to maintain compliance with the rules and regulations promulgated under the EB- 5 Program, the Lender is required to lend and/or invest its funds with third parties located within the geographic area that constitutes the Bondholder's "regional center", and accordingly, the Agency further agrees that those funds raised by the Lender pursuant to this Indenture will be allocated to such third parties for the undertaking of the Projects, which allocation shall be made in the sole and absolute discretion of the Lender. (2) Funding. (a) Subject to Section (1) above, and the other terms and conditions of this Agreement, the Loan shall be disbursed to the Agency in no more than Forty (40) Tranches, each in the minimum principal amount of Five Million Dollars ($5,000,000.00) and a maximum principal amount of Twenty Million Dollars ($20,000,000.00) (each, a "Tranche"), and each Tranche will be disbursed to the Agency at such time as determined by the Lender, in its sole and absolute discretion, provided that the Lender anticipates that each Tranche will be disbursed when the funds invested by a minimum number of investors in the Lender become available to the Lender for disbursement to the Agency. If, and when, the Lender determines it is able to disburse a Tranche to the Agency, the Lender shall provide the Agency with notice thereof, and the Agency agrees that it will accept and borrow such funds. Each Tranche, or portion thereof, shall be disbursed by wire transfer to an account of the Agency pursuant to written instructions to be provided by the Agency. The Lender shall not be required to disburse any Tranche to the Agency if an Event of Default by the Agency hereunder has occurred and is 3 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 $200M Loan Agreement (EDA).doc CDC/2011-10 continuing. Each Tranche shall commence a separate six (6)-year term from the initial funding date of that particular Tranche. The dates on which the first Five Hundred Thousand Dollars ($500,000.00) of foreign investor funds of each Tranche is disbursed to the Agency under this Agreement shall be referred to separately and numbered in the following manner: "Initial Funding Date No.1" and consecutively numbered thereafter in a similar manner for each subsequent Tranche. Collectively, these funding dates shall be referred to herein as the "Initial Funding Dates." (b) Upon execution of this Agreement, no further action shall be necessary to authorize the funding and disbursement of each consecutive Tranche or portion thereof. (3) Payment Covenant of Agency. (a) The Loan is not secured by the pledge of, the assignment of, or the granting of any security interest in, the assets, funds, revenues or properties of the Agency, except from the Tax Increment Revenues generally as provided otherwise herein. (b) The Agency hereby agrees and covenants to appropriate funds with respect to each fiscal year throughout the term of this Agreement in an amount sufficient to make required interest payments during the applicable fiscal year. In addition, the Agency agrees and covenants to appropriate funds with respect to the fiscal years in which the maturity dates occur for each Tranche in an amount sufficient to pay the outstanding principal of each Tranche on its maturity date. (c) The Loan shall be repaid through excess Tax Increment Revenues of the Agency, which shall be placed in that certain Special Account to assure that adequate funds are available for the undertaking of all projects as financed by the Lender. (d) The full obligation incurred under this Agreement shall be set forth on the annual Statement of Indebtedness of the Agency, regardless of the existence of a Tranche. (e) The obligations ofthe Agency under this Agreement and under the Note are not guaranteed by, nor payable either directly or indirectly by, nor are they the obligations of, the City of San Bernardino, California or its employees, officers or agents, but are the obligations solely of the Agency payable from the Tax Increment Revenues and other assets and funds as legally available therefore at the option of the Agency. Section 2.4 Repayment of the Loan: Prepayment Provisions. (a) Principal. Payment of principal, as set out in Tranches, shall be due and payable seventy-two (72) months following the Initial Funding Date of each Tranche (the "Maturity Dates"), and shall be paid in immediately available funds of the Agency to the Lender. The Agency may, without penalty, prepay solely as to the entire outstanding principal balance of each Tranche 4 P:\Agendas\Comm Oev Commission12011 COC Items\Special Joint Workshop\03-03-11 EB-S $200M Loan Agreement (EOA).doc CDC/2011-10 any time on or after forty-two (42) months following its Initial Funding Date (collectively, the "First Repayment Dates"), or prior to such date upon the consent of the Lender. (b) Interest. Interest on each active Tranche shall be paid quarterly throughout the term of the Loan on each January 1, Apri11, July 1 and October 1 (each such date is defined herein as an "Interest Payment Date"), with the final interest payment being due and payable on the Maturity Date of the Tranche, still outstanding, with the most recent Initial Funding Date. All interest shall be payable in arrears based upon the principal balance outstanding as of each Interest Payment Date for the immediately preceding interest accrual period for the actual number of days that principal was then outstanding on the Loan. The Lender shall submit invoices to the Agency on a quarterly basis prior to each Interest Payment Date. All interest shall be calculated on the basis of the actual number of days during each quarterly interest payment that any principal amount of the Loan was then outstanding. (c) Late Charges. A late charge of three percent (3 %) (the "Late Charge") of the amount due shall be paid with respect to each payment of interest not made within thirty (30) calendar days from and after an Interest Payment Date ("Delinquent Interest"). A late charge of three percent (3%) of the amount due shall be paid with respect to the late payment of principal on the Maturity Dates, if such payment of principal is not made by said Maturity Dates ("Delinquent Principal"). Each amount of Delinquent Interest and Delinquent Principal plus the applicable late charges (together, a "Delinquent Payment") shall bear interest at 5.25% per annum until such Delinquent Payment is made in full to the Lender. (d) Acceleration of Certain Interest Payments. In the event the Agency fails to make two (2) consecutive interest payments to the Lender, or two (2) interest payments in any twelve (12)-month period, the Lender may accelerate payment ofthe amount of interest coming due on the next two (2) succeeding Interest Payment Dates after notice from the Lender to the Agency, so that all such interest for the next two (2) Interest Payment Dates, together with all Delinquent Payments, Late Charges and interest due thereon, shall be due and payable on (i) the tenth (1oth) calendar day of the month following the month in which the second (2nd) consecutive interest payment was not made or (ii) the second (2nd) interest payment in a twelve (12)-month period was not made, as applicable. Such amounts of interest that are subject to acceleration shall only be payable upon invoice from the Lender delivered to the Agency. Thereafter, the Agency shall continue to remit quarterly interest payments in accordance with this Agreement and the Note. ARTICLE III SECURITY FOR THE BOND Section 3.1 The Loan is secured solely by the Note, in the form attached as Exhibit "A". The Agency does not specifically pledge or commit any other source of funds or assets for the repayment for the Loan other than the Tax Increment Revenues as provided herein. The Loan shall be repaid through excess Tax Increment Revenues of the Agency, which shall be placed ina Special Account to assure that adequate funds are available for the undertaking of all projects as financed by the Lender. The Note shall be subordinate to any and all existing bond, notes, liens or other obligations of the Agency. 5 P:lAgendaslComm Dev Commission12011 CDC ItemslSpecial Joint WorkshopI03-03-11 EB-5 $200M Loan Agreement (EDA).doc CDC/2011-10 ARTICLE IV REPRESENTATIONS AND COVENANTS OF THE AGENCY Section 4.1 The Agency has been duly organized under the laws of the State of California and has the power to enter into this Agreement and to incur the obligations under the Note. Section 4.2 Execution of this Agreement and the Note has been duly authorized by the governing body of the Agency. Section 4.3 No governmental or regulatory approvals that have not been previously obtained by the Agency are required for the due approval, execution and delivery by the Agency of this Agreement and the Note. Section 4.4 This Agreement and the Note will be duly executed and delivered by the Agency and this Agreement and the Note constitute valid and binding obligations of the Agency, payable as set forth herein and in the Note. Section 4.5 The representations ofthe Agency contained in this Agreement shall be true and correct in all material respects on and as of each Initial Funding Dates as referred to in Section 2.2 above, with the same force and effect as though such representations and warranties had been made on and as of such date. Section 4.6 On and as of each of the Initial Funding Dates, the Agency is not in default under any other indebtedness of the Agency, and the execution, delivery or performance of the Agency of this Agreement and the Note shall not, to the best of the Agency's knowledge, contravene any provision oflaw, statute, rule or regulation of any governmental instrumentality and shall not, to the best of the Agency's knowledge, conflict or be inconsistent with or result in any breach of any terms, covenants or provisions of, or constitute a default under, or result in the creation or imposition of a lien pursuant to the terms of, any loan agreement, credit agreement or any other agreement, contract or instrument to which the Agency is a party or by which it is bound or to which it may be subject. Section 4.7 The Agency recognizes that the investors comprising the Lender are required to demonstrate the creation of jobs through the expenditure of the funds as invested by such investors with the Lender pursuant to the rules and regulations ofthe USCIS. The Agency agrees to undertake the Projects in an expeditious manner to accomplish such expenditures of the Loan proceeds for the intended purposes under this Agreement. Section 4.8 The Agency intends to and agrees to undertake the Projects specified as the Redevelopment Activities and Public Works Projects as described in Exhibit "B." Nevertheless, the Agency reserves the right to substitute additional projects for the initially specified Projects upon written approval of the Lender at its sole discretion; such approval shall not be unreasonably withheld. 6 P:\AgendaslComm Dev Commission\2011 CDC ItemslSpecial Joint Workshopl03-03-ll EB-5 $200M Loan Agreement (EDA).doc CDCj2011-10 ARTICLE V EVENTS OF DEFAULT Section 5.1 By Lender. The following shall constitute a default by the Lender: failure to fund the Loan as provided in Section 2.3(b) ofthis Agreement within thirty (30) calendar days after written request by the Agency for an Initial Funding Date or any subsequent funding dates to occur. The Lender shall ensure that the first Tranche shall be disbursed to the Agency by June 30, 2012, and that the full amount of the Loan shall be disbursed by the Lender to the Agency as soon as practicable thereafter. Section 5.2 By Agency. The following shall constitute a default by the Agency: (a) failure to pay the principal of, interest on, and any payments with respect to, the Note, on or before the tenth (loth) calendar day following an Interest Payment Date or the fifteenth (15th) calendar day following a Maturity Date, as applicable, as each payment of interest and principal is required to be made; or (b) failure to perform, or a delay in performing, any term or provision of this Agreement and such failure or delay is not corrected within thirty (30) calendar days after receipt of notice thereof from the Lender. ARTICLE VI REMEDIES Section 6.1 Upon a default by the Lender, (i) the Agency shall be released from any further obligations under this Agreement or the Note except for the repayment of the principal of, and interest on, any dollar amounts previously advanced, if any, by the Lender to the Agency, and (ii) the Agency may seek appropriate legal, injunctive or equitable relief. Section 6.2 Upon a default by the Agency pursuant to Section 5.2 above, the Lender may institute any proceeding at law or in equity to enforce the obligations ofthe Agency under the Note and/or any covenants and obligations of the Agency contained in this Agreement. Section 6.3 In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney's fees) in bringing such action. Additionally, the Lender shall be entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due and payable to the Lender under the Note. 7 P:\Agendas\Comm Dev Commission12011 CDC ltems\Special Joint Workshop\03-03-11 E8-5 $200M Loan Agreement (EDA).doc CDC/2011-10 ARTICLE VII NO ASSIGNMENT Section 7.1 The Lender shall not be entitled to, and shall not, assign the Note, nor its right to receive payments under the Note to any other party without the prior written consent of the Agency, which consent shall not be unreasonably withheld. ARTICLE VIII TERM Section 8.1 This Agreement shall terminate upon the payment in full by the Agency of all amounts due under the Note. ARTICLE IX NOTICES Section 9.1 Notices shall be presented in person or by certified or registered United States mail, return receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized delivery service to the addresses noted below. Notice presented by United States mail shall be deemed effective the second business day after deposit with the United States Postal Service. This Section shall not prevent giving notice by personal service, telephonically verified fax transmission, or telephonically verified e-mail transmission which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by so notifying the other party in writing. TO AGENCY: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North "E" Street, Suite 301, San Bernardino, California 92401 Phone: (909) 663-1044 Fax: (909) 888-9413 TO LENDER: CMB Infrastructure Investment Group VII, LP Attention: Patrick Hogan 4507 49th Avenue Moline, Illinois 61265 8 P:lAgendaslComm Dev Commission12011 CDC ItemslSpecial Joint WorkshopI03-03-11 EB-5 $200M Loan Agreement (EDA).doc CDCj2011-10 ARTICLE X MISCELLANEOUS Section 10.1 Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the State of California, and in the event any party seeks judicial relief or to enforce or to interpret any provision of this Agreement and the Note, such actions shall be filed in the Superior Court of San Bernardino County, California, Main Branch, in the City of San Bernardino, California. Section 10.2 Entire Agreement. This Indenture constitutes the entire agreement among the parties and may not be amended without the prior written consent of the parties hereto. This Indenture supersedes all prior negotiation, discussions and previous agreements between the parties concerning the subject matter herein. The parties intend this Indenture to be the final expression of their agreement with respect to the terms herein and a complete and exclusive statement of such terms. No modification, amendment or waiver of any term herein shall be binding unless executed in writing by the parties hereto. Section 10.3 Amendment. This Indenture may be amended as deemed necessary by written instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding and legally enforceable only ifin written form and executed by the parties hereto after the same have been duly approved and authorized for execution. Section 10.4 Severability. Each and every section of this Indenture shall be construed as a separate and independent covenant and agreement. If any term or provision of this Indenture or the application thereof shall be declared invalid or unenforceable, the remainder of this Indenture, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Indenture shall be valid and enforceable to the extent permitted by law. [SIGNATURE PAGE FOLLOWS] 9 P:\Agendas\Comm Dev Commission\2011 CDC ltems\Special Joint Workshop\03-03-11 EB-5 $200M Loan Agreement (EDA).doc CDC/2011-10 IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino has caused this Indenture to be signed in the name of the Redevelopment Agency of the City of San Bernardino by its Interim Executive Director and CMB Infrastructure Investment Group VII, LP, has caused this Indenture to be signed in its name by its officer thereunto duly authorized, all as of the date and year first above written. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Emil A. Marzullo, Interim Executive Director ATTEST: By: LENDER CMB Infrastructure Investment Group VII, LP a California limited partnership By: General Partner 10 P:\AgendaslComm Dev Commission12011 CDC ItemslSpecial Joint WorkshopIOJ-OJ-ll EB-5 $200M Loan Agreement (EDA).doc CDC/2011-10 EXHIBIT" A" INLAND V ALLEY DEVELOPMENT AGENCY / REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO PROMISSORY NOTE SERIES 2011 (CITY REDEVELOPMENT ACTIVITIES AND PUBLIC WORKS PROJECTS) RATE OF INTEREST: MATURITY DATE ISSUE DATE: 5.25% per annum as applicable to each Tranche Financing The Final Maturity Date as Defined Herein Date of First Initial Funding Date as Defined in the Indenture REGISTERED OWNER: CMB Infrastructure Investment Group VII, LP PRINCIPAL AMOUNT: $525,000,000 FOR VALUE RECEIVED, THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), hereby promise to pay to CMB Infrastructure Investment Group VII, LP, a Limited Partnership, organized under the laws of the State of California (the "Lender"), from the excess Tax Increment Revenues of the Agency, which shall be placed in a special and separate account to assure that adequate funds are available for the undertaking of all projects as financed by the Lender, the principal sum of Five Hundred Twenty Five Million Dollars ($525,000,000) plus interest at a rate of 5.25% per annum, in accordance with the terms and provisions of that certain Indenture and Loan Agreement dated as of March _, 2011, by and between the Agency and CMB Infrastructure Investment Group VII, LP (the "Indenture"). This Note shall be paid in full on the Maturity Date of the Tranche, still outstanding, with the most recent Initial Funding Date, which shall be no later than six (6) years from said Initial Funding Date (the "Final Maturity Date"). The Agency agrees to pay the aforesaid principal plus interest in accordance with the terms hereinafter set forth: 1. This Note shall be payable, as follows: (a) On each Maturity Date, the undersigned shall pay in lawful money of the United States of America the principal and any remaining interest of the applicable Tranche to the Lender at 4507 49th Avenue, Moline, Illinois 61265, or to such other address or to such account and in such manner as the Lender shall direct. The Agency may, without penalty, prepay solely as to the entire outstanding principal balance on any Tranche funding at any time on or after forty-two (42) months from said Tranche's Initial Funding Date, and on any other date thereafter, or prior to such date upon the consent of the Lender. 4840-8157-9784.1 1 CDC/2011-10 (b) Interest shall be paid quarterly on each January l, Aprill, July 1 and October 1 (each such date is defined herein as an "Interest Payment Date"), commencing on the Interest Payment Date following the first Initial Funding Date with the final interest payment due and payable on the Final Maturity Date. Interest shall be payable in arrears based upon the principal balance of each Tranche this Note is outstanding as of each interest payment date. 2. If a payment is not timely made and remains overdue for a period of thirty (30) calendar days after the same becomes due and payable (a "Delinquent Payment"), the Agency, without notice or demand by the Lender, shall pay a late charge in an amount equal to three percent (3%) of the Delinquent Payment owing (the "Late Charge"). Each Delinquent Payment plus the applicable Late Charge shall bear interest at 5.25% per annum until such amount is paid in full to the Lender. 3. In the event the Agency fails to make two (2) consecutive interest payments to the Lender, or two (2) interest payments in any twelve (12)-month period, the Lender may accelerate payment of the amount of interest coming due on the next two (2) succeeding Interest Payment Dates after notice from the Lender to the Agency, so that all such interest for the next two (2) Interest Payment Dates, together with all Delinquent Payments, Late Charges and interest due thereon, shall be due and payable on the (i) tenth (1oth) calendar day of the month following the month in which the second (2nd) consecutive interest payment was not made, or (ii) the second (2nd) interest payment in a twelve (12)-month period was not made, as applicable. 4. This Note is solely the debt of the Agency. This Note is not a debt of any of the City of San Bernardino, State of California, or any other of the State's political subdivisions and neither the City of San Bernardino, the State, nor any other of said State's political subdivisions are liable hereon. This Note does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the employees, officers and agents of the Agency, nor any persons executing this Note are liable personally on this Note by reason of its issuance. 5. This Note is payable solely from the excess Tax Increment Revenues of the Agency, which shall be placed in a special and separate account to assure that adequate funds are available for the undertaking of all projects as financed by the Lender. 6. This Note shall not be assigned by the Lender without permission of the Agency, which permission shall not be unreasonably withheld. 7. The execution, delivery and performance of this Note have been duly authorized by all necessary actions of the Agency, do not require the consent or approval of any other person, regulatory, Agency or other governmental body, and do not conflict with, result in a violation of, or constitute a default of: (a) any provision of any agreement or other instrument binding upon the Agency, or (b) any law, governmental regulation, court decree or order applicable to the Agency; provided, however, that all requisite activities of the governing boards of the Agency have been taken to provide for the payment of the Note and interest thereon. 8. This Note, when delivered, shall constitute a legal, valid and binding obligation of the Agency, enforceable in accordance with its terms. 4840-8157-9784.1 2 CDC/2011-10 9. It is hereby recited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Note exist, have happened and have been performed in due time, form and manner as required by the California Constitution and the laws of the State of California. 10. This Note shall be subordinate to any and all existing bond, notes, liens or other obligations. 11. This Note and the Indenture constitute the entire understanding and agreement of the parties as to the matters set forth herein and therein. No alteration of, or amendment to, this Note shall be effective unless given in writing and signed by the Lender and the Agency. 12. Payment ofthe principal amount of this Note may not be accelerated by the Lender, unless otherwise provided in the Indenture. 13. This Note has been delivered to the Lender and accepted by the Lender in the State of California. In the event of a lawsuit, the Lender and the Agency agree to submit to the jurisdiction of the courts of San Bernardino County, California. This Note shall be governed by the laws ofthe State of California as to the interpretation of any matter contained herein. 14. If a court of competent jurisdiction finds any provision of this Note invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; provided, however, in the event the offending provision cannot be so modified, it shall be stricken and all other provisions of this Note in all respects shall remain valid and enforceable. REMAINDER INTENTIONALLY LEFT BLANK 4840-8157-9784.1 3 CDC/2011-10 IN WITNESS WHEREOF, the Agency has caused this Note to be executed as of this _ day of ,2011. Redevelopment Agency of the City of San Bernardino By: Interim Executive Director Attest: By: 4840-8157 -9784.1 4 CDC/2011-10 INDENTURE AND LOAN AGREEMENT by and between REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP Relating to the $10,000,000 PROMISSORY NOTE (CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP) CDC/2011-10 INDENTURE AND LOAN AGREEMENT This Indenture and Loan Agreement dated as of _, 2011 (this "Agreement"), is by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), and CMB Infrastructure Investment Group VII, LP, a California limited partnership (the "Lender"): WITNESSETH WHEREAS, the Agency seeks to finance certain various infrastructure projects, including, but not limited to, those identified in the Programs, Projects and Activities attached as Exhibit "A" to the Project Funding Agreement within the jurisdiction of the City of San Bernardino (the City") (the "Projects"); and WHEREAS, the Agency has determined that the best mode of financing the Projects is through a loan from Lender (the "Loan") in the principal amount not to exceed Ten Million Dollars ($10,000,000.00) under and secured by this Agreement and a promissory note (the "Note") in the form attached hereto as Exhibit "A"; and WHEREAS, the Lender, a California limited partnership, organized in accordance with the requirements for regional centers as set forth under the United States Immigration Act of 1990, as amended, has offered to fund the Loan pursuant to the terms of this Agreement; and WHEREAS, the repayment of the Loan will be made from the excess Tax Increment Revenues of the Agency; and WHEREAS, the Agency has determined that all things necessary to cause the Note, when duly executed by the Agency as provided herein, to be a legal and valid obligation of the Agency, as applicable, enforceable in accordance with its terms, and to constitute this Agreement as a valid agreement for the purposes and uses herein set forth in accordance with its terms, have been done and taken and the execution and delivery hereof and the execution, authentication and delivery of the Note, subject to the terms hereof, have in all respects been duly authorized. NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, and the interest on, the Note under this Agreement and to secure the performance and observance of all ofthe covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Note is to be issued and received, and in consideration of the premises and of the mutual covenants herein contained, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Agency does hereby covenant and agree with Lender, as follows: 1 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 SIOM Loan Agreement - FinaLdoc CDC/2011-10 ARTICLE I DEFINITIONS "Loan" means EB-5 foreign investor loan in the amount of Ten Million Dollars ($10,000,000) through CMB Infrastructure Investment Group VII, LP for the Projects as authorized to be issued hereunder. "Lender" means CMB Infrastructure Investment Group VII, LP, a California limited partnership, organized in accordance with the requirements for regional centers as set forth under the Immigration Act of 1990, as amended, and for the purpose of promoting economic growth through, among other things, increased export sales, improved regional productivity, job creation and increased domestic capital investment, and to generate jobs through the immigrant investor visa program of the United States Citizenship and Immigration Service ("USCIS"). "Tax Increment Revenues" means those property tax increment revenues available to the Agency or any successor in interest to the Agency attributable to the several redevelopment project areas of the Agency after payments have been remitted or provided for regarding all pass-through obligations to taxing agencies, deposits to the Low and Moderate Income Housing Fund of the Agency, and after payments of all debt service obligations previously incurred by the Agency for any form of indebtedness, including, but not limited to, publicly issued tax allocation bonds and refunding bonds, loans from private parties or commercial lending institutions and other forms of assistance provided to property owners (collectively, the "Prior Obligations"). The pledge to the Lender ofthe Tax Increment Revenues pursuant to this Agreement shall at all times be subordinate to the Prior Obligations and any other subsequently issued or incurred obligations of the Agency payable in whole or in party from the property tax increment revenues and/or the Tax Increment Revenues. ARTICLE II THE LOAN Section 2.1 Terms of the Loan. The Lender shall loan to the Agency a principal amount equal to Ten Million Dollars ($10,000,000.00) (the "Loan"). The Loan shall bear interest at the rate of 5 .25% per annum, accruing from and after each date of funding of a portion of the total principal amount the Loan to the Agency. Interest shall be calculated on the number of actual days that the principal amount of the Loan is outstanding in each year on the basis of365/366 days in a calendar year. The Loan shall be represented by the "$10,000,000 Redevelopment Agency of the City of San Bernardino Promissory Note Series 2011(CMB Infrastructure Investment Group VII, LP)" substantially in the form attached hereto as Exhibit "A" (the "Note") executed by the Agency in favor of the Lender. The Lender shall charge the Agency no origination points or loan fees, nor require the payment of any prepaid interest, in connection with making the Loan. Section 2.2 Form of Note. The Note shall be substantially in the form attached hereto as Exhibit "A", which is incorporated herein and made a part hereof, with necessary or appropriate variations, omissions and insertions as permitted or required hereby. 2 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 $ 10M Loan Agreement - Final.doc CDC/2011-10 Section 2.3 Application of Loan. (a) Use of Funds. The Agency shall use and apply the proceeds ofthe Loan for the construction of the Project and any other related legal purposes in connection with the Project and of the Agency with respect to the Project pursuant to the California Health and Safety Code. (b) Funding of the Loan. (1) Acknowledgement. The Agency hereby acknowledges that (i) the Lender, as an approved and federally-designated "regional center", is authorized and intends to raise capital from foreign investors who seek to obtain permanent residency in the United States in accordance with the EB-5 investor visa program ofthe Immigration and Nationality Act (the "EB-5 Program"), and (ii) it is anticipated that each foreign investor will make an investment with the Lender of Five Hundred Thousand Dollars ($500,000.00). In that regard, the Agency further acknowledges that the principal amount of the Loan to be dispersed by the Lender to the Agency is dependant on the amount of capital raised by the Lender from foreign investors, and accordingly, the Agency agrees that the Lender does not guarantee that the entire principal amount of the Loan, or any portion thereof, shall be disbursed to the Agency. Additionally, the Agency further acknowledges that to maintain compliance with the rules and regulations promulgated under the EB- 5 Program, the Lender is required to lend and/or invest its funds with third parties located within the geographic area that constitutes the Bondholder's "regional center", and accordingly, the Agency further agrees that those funds raised by the Lender pursuant to this Agreement will be allocated to such third parties for the undertaking of the Project, which allocation shall be made in the sole and absolute discretion of the Lender. (2) Funding. Subject to Section (1) above, and the other terms and conditions of this Agreement, the Loan shall be disbursed to the Agency, in no more than twenty (20) tranches, each in the minimum principal amount of Five Hundred Thousand Dollars ($500,000.00) (each, a "Tranche"), and each Tranche will be disbursed to the Agency at such time as determined by the Lender, in its sole and absolute discretion, provided that the Lender anticipates that each Tranche will be disbursed when the funds invested by an investor in the Lender become available to the Lender for disbursement to the Agency. If, and when, the Lender determines it is able to disburse a Tranche to the Agency, the Lender shall provide the Agency with notice thereof, and the Agency agrees that it will accept and borrow such funds. Each Tranche shall be disbursed by wire transfer to an account of the Agency pursuant to written instructions to be provided by the Agency. The Lender shall not be required to disburse any Tranche to the Agency if an Event of Default by the Agency hereunder has occurred and is continuing. Each Tranche shall commence a separate six (6)-year term from the initial funding date of that particular Tranche. The dates on which the first Five Hundred Thousand Dollars ($500,000.00) of foreign investor funds of each Tranche is disbursed to the Agency under this Agreement shall be referred to separately and numbered in the following manner: "Initial Funding Date No.1" and consecutively numbered thereafter in a similar manner for each subsequent Tranche. Collectively, these funding dates shall be referred to herein as the "Initial Funding Dates." 3 P:\Agendas\Comm Dev Commission\20 11 CDC ltems\Special Joint Workshop\03-03-11 EB-5 $IOM Loan Agreement - Final.doc CDC/2011-10 (3) Payment Covenant of the Agency. (a) The Loan is not secured by the pledge of, the assignment of, or the granting of any security interest in, the assets, funds, revenues or properties of the Agency, unless provided otherwise herein. (b) The Agency hereby agrees and covenants to appropriate funds with respect to each fiscal year throughout the term of this Agreement in an amount sufficient to make required interest payments during the applicable fiscal year. In addition, the Agency agrees and covenants to appropriate funds with respect to the fiscal year in which the Maturity Date occurs in an amount sufficient to pay the outstanding principal of the Loan on the Maturity Date. (c) The Loan shall be repaid through the Agency's excess Tax Increment Revenues. (d) The obligations of the Agency under this Agreement and under the Note are neither guaranteed by, nor payable either directly or indirectly by, nor are they the obligations of, the City of San Bernardino, but are the obligations solely of the Agency. Section 2.4 Repavment of the Loan; Prepayment Provisions. (a) Principal. Payment of principal, as set out in Tranches, shall be due and payable seventy-two (72) months following the Initial Funding Date of each Tranche (the "Maturity Dates"), and shall be paid in immediately available funds of the Agency to the Lender. The Agency may, without penalty, prepay solely as to the entire outstanding principal balance of each Tranche any time on or after forty-two (42) months following its Initial Funding Date (collectively, the "First Repayment Dates"), or prior to such date upon the consent of the Lender. (b) Interest. Interest shall be paid quarterly throughout the term of the Loan on each January 1, April 1, July 1 and October 1 (each such date is defined herein as an "Interest Payment Date"), commencing on October 1, 2011, with the final interest payment being due and payable on the Maturity Date ofthe Tranche, still outstanding, with the most recent Initial Funding Date (the "Final Maturity Date"). All interest shall be payable in arrears based upon the principal balance outstanding as of each Interest Payment Date for the immediately preceding interest accrual period for the actual number of days that principal was then outstanding on the Loan. The Lender shall submit invoices to the Agency on a quarterly basis prior to each Interest Payment Date. All interest shall be calculated on the basis of the actual number of days during each quarterly interest payment that any principal amount of the Loan was then outstanding. (c) Late Charges. A late charge of three percent (3 % ) (the "Late Charge") of the amount due shall be paid with respect to each payment of interest not made within thirty (30) calendar days from and after an Interest Payment Date ("Delinquent Interest"). A late charge of three percent (3%) of the amount due shall be paid with respect to the late payment of principal on the Maturity Dates, if such payment of principal is not made by said Maturity Dates ("Delinquent Principal"). Each amount of Delinquent Interest and Delinquent Principal plus the applicable late 4 P:\Agenrlas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 SIOM Loan Agreement - Final.doc CDC/2011-10 charges (together, a "Delinquent Payment") shall bear interest at 5.25% per annum until such Delinquent Payment is made in full to the Lender. (d) Acceleration of Certain Interest Payments. In the event the Agency fails to make two (2) consecutive interest payments to the Lender, or two (2) interest payments in any twelve-month period, the Lender may accelerate payment of the amount of interest coming due on the next two (2) succeeding Interest Payment Dates after notice from the Lender to the Agency, so that all such interest for the next two (2) Interest Payment Dates, together with all Delinquent Payments, Late Charges and interest due thereon, shall be due and payable on (i) the tenth (10th) calendar day of the month following the month in which the second (2nd) consecutive interest payment was not made or (ii) the second (2nd) interest payment in a twelve-month period was not made, as applicable. Such amounts of interest that are subject to acceleration shall only be payable upon invoice from the Lender delivered to the Agency. Thereafter, the Agency shall continue to remit quarterly interest payments in accordance with this Agreement and the Note. ARTICLE III SECURITY FOR THE LOAN Section 3.1 The Loan is secured solely by the Note, in the form attached as Exhibit "A". The Agency does not pledge or commit any other source offunds or assets for the repayment for the Loan. The Note shall be subordinate to any and all existing bonds, notes, liens or other obligations of the Agency. ARTICLE IV REPRESENTATIONS AND COVENANTS OF THE AGENCY Section 4.1 The Agency has been duly organized under the laws ofthe State of California and has the power to enter into this Agreement and to incur the obligations under the Note. Section 4.2 Execution of this Agreement and the Note has been duly authorized by the governing body of the Agency. Section 4.3 No governmental or regulatory approvals that have not been previously obtained by the Agency are required for the due approval, execution and delivery by the Agency of this Agreement and the Note. Section 4.4 This Agreement and the Note will be duly executed and delivered by the Agency and this Agreement and the Note constitute valid and binding obligations of the Agency, payable as set forth herein and in the Note. 5 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-S $IOM Loan Agreement - FinaL doc CDC/2011-10 Section 4.5 The representations ofthe Agency contained in this Agreement shall be true and correct in all material respects on and as of the Initial Funding Date as referred to in Section 2.2 above, with the same force and effect as though such representations and warranties had been made on and as of such date. Section 4.6 On and as ofthe Initial Funding Date, the Agency is not in default under any other indebtedness of the Agency, and the execution, delivery or performance of the Agency of this Agreement and the Note shall not, to the best of the Agency's knowledge, contravene any provision of law, statute, rule or regulation of any governmental instrumentality and shall not, to the best of Agency's knowledge, conflict or be inconsistent with or result in any breach of any terms, covenants or provisions of, or constitute a default under, or result in the creation or imposition of a lien pursuant to the terms of, any loan agreement, credit agreement or any other agreement, contract or instrument to which the Agency is a party or by which it is bound or to which it may be subject. Section 4.7 The Agency recognizes that the investors comprising the Lender are required to demonstrate the creation of jobs through the expenditure of the funds as invested by such investors with the Lender pursuant to the rules and regulations of the USeIS. The Agency agrees to undertake the Project in an expeditious manner to accomplish such expenditures of the Loan proceeds for the intended purposes under this Agreement. ARTICLE V EVENTS OF DEFAULT Section 5.1 By Lender. The following shall constitute a default by the Lender: failure to fund the Loan as provided in Section 2.3(b) of this Agreement within thirty (30) calendar days after written request by the Agency for an Initial Funding Date or any subsequent funding date to occur. The Lender shall ensure that the first $500,000.00 shall be disbursed to the Agency by January 31, 2012, and that the full amount of the Loan shall be disbursed by the Lender to the Agency on or before December 31, 2012. Section 5.2 By Agency. The following shall constitute a default by the Agency: (a) failure to pay the principal of, interest on, and any payments with respect to, the Note, on or before the tenth (10th) calendar day following an Interest Payment Date or the fifteenth (15th) calendar day following a Maturity Date, as applicable, as each payment of interest and principal is required to be made; or (b) failure to perform, or a delay in performing, any term or provision of this Agreement and such failure or delay is not corrected within thirty (30) calendar days after receipt of notice thereof from the Lender. 6 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 SIOM Loan Agreement - FinaLdoc CDC/2011-10 ARTICLE VI REMEDIES Section 6.1 Upon a default by the Lender, (i) the Agency shall be released from any further obligations under this Agreement or the Note except for the repayment of the principal of, and interest on, any dollar amounts previously advanced, if any, by the Lender to the Agency, and (ii) the Agency may seek appropriate legal, injunctive or equitable relief. Section 6.2 Upon a default by the Agency pursuant to Section 5.2 above, the Lender may institute any proceeding at law or in equity to enforce the obligations of the Agency under the Note and/or any covenants and obligations of the Agency contained in this Agreement. In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney's fees) in bringing such action. Additionally, the Lender shall be entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due and payable to the Lender under the Note. ARTICLE VII NO ASSIGNMENT The Lender shall not be entitled to, and shall not, assign the Note, nor its right to receive payments under the Note to any other party without the prior written consent of the Agency, which consent shall not be unreasonably withheld. ARTICLE VIII TERM This Agreement shall terminate upon the payment in full by the Agency of all amounts due under the Note. ARTICLE IX NOTICES Notices shall be presented in person or by certified or registered United States mail, return receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized delivery service to the addresses noted below. Notice presented by United States mail shall be deemed effective the second business day after deposit with the United States Postal Service. This Section shall not prevent giving notice by personal service, telephonically verified fax transmission, or telephonically verified e-mail transmission which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by so notifying the other party in writing. 7 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-S SIOM Loan Agreement - Fina1.doc CDC/2011-10 TO AGENCY: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 Phone: (909) 663-1044 Fax: (909) 888-9413 TO LENDER: CMB Infrastructure Investment Group VII, LP Attention: Patrick Hogan 4507 49th Avenue Moline, Illinois 61265 ARTICLE X MISCELLANEOUS Section 10.1 Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the State of California, and in the event any party seeks judicial relief or to enforce or to interpret any provision of this Agreement and the Note, such actions shall be filed in the Superior Court of San Bernardino County, California, Main Branch, in the City of San Bernardino, California. Section 10.2 Entire Agreement. This Agreement and the Note constitute the entire agreement among the parties and may not be amended without the prior written consent of the parties hereto. This Agreement supersedes all prior negotiation, discussions and previous agreements between the parties concerning the subject matter herein. The parties intend this Agreement to be the final expression of their agreement with respect to the terms herein and a complete and exclusive statement of such terms. No modification, amendment or waiver of any term herein shall be binding unless executed in writing by the parties hereto. Section 10.3 Amendment. This Agreement may be amended as deemed necessary by written instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto after the same have been duly approved and authorized for execution. Section 10.4 Severability. Each and every section ofthis Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the extent permitted by law. [SIGNATURE PAGE FOLLOWS] 8 P:\Agendas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-5 SIOM Loan Agreement - Final.doc CDC/2011-10 IN WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino has caused this Agreement to be signed in the name of the Redevelopment Agency of the City of San Bernardino by the Interim Executive Director and CMB Infrastructure Investment Group VII, LP, has caused this Agreement to be signed in its name by its officer thereunto duly authorized, all as of the date and year first above written. AGENCY Redevelopment Agency of the City of San Bernardino a public body, corporate and politic By: Interim Executive Director ATTEST: By: LENDER CMB Infrastructure Investment Group VII, LP a California limited partnership By: General Partner 9 P:\Agenrlas\Comm Dev Commission\2011 CDC Items\Special Joint Workshop\03-03-11 EB-S SIOM Loan Agreement - Final.doc CDC/2011-10 EXHIBIT "A" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO PROMISSORY NOTE SERIES 2011 (CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP) RATE OF INTEREST 5.25% per annum as applicable to each Tranche Financing MATURITY DATE The Final Maturity Date as Defined Herein ISSUE DATE Date of First Initial Funding Date as Defined in the Indenture REGISTERED OWNER: CMB Infrastructure Investment Group VII, LP PRINCIPAL AMOUNT: $10,000,000 FOR VALUE RECEIVED, THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), hereby promises to pay to CMB Infrastructure Investment Group VII, LP, a Limited Partnership, organized under the laws of the State of California (the "Lender"), from its excess Tax Increment Revenues, which shall be placed in a special and separate account to assure that adequate funds are available for the undertaking of all projects as financed by Lender, the principal sum of Ten Million Dollars ($10,000,000) plus interest at a rate of 5.25% per annum, in accordance with the terms and provisions of that certain Indenture and Loan Agreement dated as of _, 2011, by and between the Agency and CMB Infrastructure Investment Group VII, LP (the "Indenture"). This Note shall be paid in full on the Maturity Date ofthe Tranche, still outstanding, with the most recent Initial Funding Date, which shall be no later than (6) years from said Initial Funding Date (the "Final Maturity Date"). The Agency agrees to pay the aforesaid principal plus interest in accordance with the terms hereinafter set forth: 1. This Note shall be payable, as follows: (a) On each Maturity Date, the undersigned shall pay in lawful money of the United States of America the principal and any remaining interest of the applicable Tranche to the Lender at 4507 49th Avenue, Moline, Illinois 61265, or to such other address or to such account and in such manner as the Lender shall direct. The Agency may, without penalty, prepay solely as to the entire outstanding principal balance on any Tranche funding at anytime on or after forty-two (42) months from said Tranche's Initial Funding Date, and on any other date thereafter, or prior to such date upon the consent of the Lender. (b) Interest shall be paid quarterly on each January 1, April 1 , July 1 and October 1 (each such date is defined herein as an "Interest Payment Date"), commencing on the Interest Payment Date following the first Initial Funding Date with the final interest payment due and 1 CDC/2011-10 payable on the Final Maturity Date. Interest shall be payable in arrears based upon the principal balance of each Tranche this Note outstanding as of each interest payment date. 2. If a payment is not timely made and remains overdue for a period of thirty (30) calendar days after the same becomes due and payable (a "Delinquent Payment"), the Agency, without notice or demand by the Lender, shall pay a late charge in an amount equal to three percent (3%) of the Delinquent Payment owing (the "Late Charge"). Each Delinquent Payment plus the applicable Late Charge shall bear interest at 5.25% per annum until such amount is paid in full to the Lender. 3. In the event the Agency fails to make two (2) consecutive interest payments to the Lender, or two (2) interest payments in any twelve-month period, the Lender may accelerate payment of the amount of interest coming due on the next two (2) succeeding Interest Payment Dates after notice from the Lender to the Agency, so that all such interest for the next two (2) Interest Payment Dates, together with all Delinquent Payments, Late Charges and interest due thereon, shall be due and payable on the (i) tenth (10th) calendar day of the month following the month in which the second (2nd) consecutive interest payment was not made, or (ii) the second (2nd) interest payment in a twelve-month period was not made, as applicable. 4. This Note is solely the debt of the Agency. This Note is not a debt of any of the City of San Bernardino, State of California, or any other of the State's political subdivisions and neither the City of San Bernardino, the State, nor any other of said State's political subdivisions are liable hereon. This Note does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The employees, officers and agents ofthe Agency, and any persons executing this Note are not liable personally on this Note by reason of its issuance. 5. This Note is payable solely from the excess Tax Increment Revenues ofthe Agency, which shall be placed in a special and separate account to assure that adequate funds are available for the undertaking of all projects as financed by Lender. 6. This Note shall not be assigned by the Lender without permission of the Agency, which permission shall not be unreasonably withheld. 7. The execution, delivery and performance ofthis Note have been duly authorized by all necessary actions of the Agency, do not require the consent or approval of any other person, regulatory, Agency or other governmental body, and do not conflict with, result in a violation of, or constitute a default of: (a) any provision of any agreement or other instrument binding upon the Agency, or (b) any law, governmental regulation, court decree or order applicable to the Agency; provided, however, that all requisite activities of the governing boards of the Agency have been taken to provide for the payment of the Note and interest thereon. 8. This Note, when delivered, shall constitute a legal, valid and binding obligation ofthe Agency, enforceable in accordance with its terms. 2 CDC/2011-10 9. It is hereby recited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Note exist, have happened and have been performed in due time, form and manner as required by the California Constitution and the laws of the State of California. 10. This Note shall be subordinate to any and all existing bond, notes, liens or other obligations. 11. This Note and the Indenture constitute the entire understanding and agreement of the parties as to the matters set forth herein and therein. No alteration of, or amendment to, this Note shall be effective unless given in writing and signed by the Lender and the Agency. 12. Payment ofthe principal amount of this Note may not be accelerated by the Lender, unless otherwise provided in the Indenture. 13. This Note has been delivered to the Lender and accepted by the Lender in the State of California. In the event of a lawsuit, the Lender and the Agency agree to submit to the jurisdiction of the courts of San Bernardino County, California. This Note shall be governed by the laws ofthe State of California as to the interpretation of any matter contained herein. 14. If a court of competent jurisdiction finds any provision of this Note invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; provided, however, in the event the offending provision cannot be so modified, it shall be stricken and all other provisions of this Note in all respects shall remain valid and enforceable. REMAINDER INTENTIONALLY LEFT BLANK 3 CDC/2011-10 IN WITNESS WHEREOF, the Agency has caused this Note to be executed as of this _ day of ,2011. Attest: By: City Clerk Redevelopment Agency of the City of San Bernardino By: Interim Executive Director 4