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HomeMy WebLinkAboutCDC/2011-47 1 2 RESOLUTION NO. CDC/2011-47 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, RESCINDING RESOLUTION NO. CDC/2011-38 AND APPROVING THE EXECUTION AND DELIVERY OF AN AGENCY-CITY 2011-2012 LOAN AGREEMENT AND 2011-2012 NOTE OF THE CITY OF SAN BERNARDINO ("CITY") PAYABLE TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") IN THE PRINCIPAL AMOUNT EQUAL TO $1,356,250 FOR THE REPAYMENT OF THE $1,332,925 PRINCIPAL AMOUNT OF THE 2010-2011 NOTE FROM THE CITY TO THE AGENCY 3 4 5 6 7 8 WHEREAS, the City of San Bernardino, California (the "City"), is a municipal corporation 9 and a charter City duly created and existing pursuant to the Constitution and the laws of the State of 10 California; and 11 WHEREAS, the Community Development Commission of the City of San Bernardino (the 12 "Commission") acting on behalf of the Redevelopment Agency of the City of San Bernardino (the 13 "Agency"), is a redevelopment agency, a public body, corporate and politic of the State of 14 California, organized and existing pursuant to the Community Redevelopment Law (Part 1 of 15 Division 24 commencing with Section 33000) of the Health and Safety Code of the State of 16 California (the "Act"); and 17 WHEREAS, the Commission adopted Resolution No. CDC/2011-38 on June 29, 18 2011, and it was later determined earlier on said date, that the Governor of the State of California 19 had signed ABx1 26 and ABx1 27 which took effect upon such signing, thereby eliminating the 20 powers of redevelopment agencies and community development commissions to take any further 21 official actions on matters as addressed in said Resolution No. CDC/2011-38; and 22 WHEREAS, the City and the Agency previously entered into that certain loan agreement 23 designated as the "Loan Agreement" dated as of June 28, 2010 (the "Agency-City 2010-2011 Loan 24 Agreement") and that certain Revenue Anticipation Note, dated as of June 28, 2010 (the "2010-2011 25 Note") in the original principal amount equal to $1,332,925 which pursuant to the terms of the 26 applicable loan agreement was required to be repaid by the City to the Agency, together with 27 interest at the rate of interest per annum as set forth in the Agency-City 2010-2011 Loan Agreement, 28 on or before June 30, 2011. Due to the severe financial crisis that the City continues to experience 1 PlAgendaslComm Dev CommissionlCDC 2011\2011-12 Budget docsI7-11-11 BUDGET READOPTION DOCSI07-11-11 EDA Budget Adoption - City Note CDC Reso G.docx CDC/2011-47 1 and the financial inability of the City to timely repay the principal of and interest on the Agency- 2 City 2010-11 Loan Agreement, the City now desires to extend the final date for the remittance of all 3 payments of the principal of and interest on the Agency-City 2010-2011 Loan Agreement to June 4 30, 2012. The current outstanding balance of the Agency-City 2010-11 Loan Agreement, together 5 with accrued and unpaid interest thereon, is equal to $1,356,250 (the "2011-2012 Outstanding 6 Balance"); and 7 WHEREAS, it is appropriate at this time for the Commission to approve and authorize the 8 execution and delivery of an Interim Loan Agreement (the "Agency-City 2011-2012 Loan 9 Agreement") and a Revenue Anticipation Note of the City (the "2011-2012 Note") payable to the 10 Agency in the principal amount equal to $1,356,250 for the repayment of the 2010-2011 Note. 11 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 12 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 13 FOLLOWS: 14 Section 1. The Commission by the adoption of this Resolution hereby rescinds 15 Resolution No. CDC12011-38 as adopted by the Commission on June 29, 2011, for the reasons as 16 set forth in the Recitals to this Resolution. 17 Section 2. The Recitals hereinabove are true and correct and are incorporated herein by 18 this reference. 19 Section 3. The Commission hereby approves the Agency-City 2011-2012 Loan 20 Agreement in the form as attached to this Resolution as Exhibit "A" and hereby approves the 2011- 21 2012 Note in the form as attached to this Resolution as Exhibit "B" with such changes thereto as 22 may be approved by the Interim Executive Director of the Agency when such terms and conditions 23 have been ascertained. 24 Section 4. This Resolution shall take effect from and after its date of adoption by this 25 Commission. 26 / / / 27 28 2 P:lAgendaslComm Dev CommissionlCDC 2011\2011-12 Budget docsI7-ll-l1 BUDGET READOPTION DOCS\07-ll-11 EDA Budget Adoption - City Note CDC Reso Gdocx CDC/2011-47 1 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, RESCINDING RESOLUTION NO. CDC/2011-38 AND APPROVING THE EXECUTION AND DELIVERY OF AN AGENCY-CITY 2011-2012 LOAN AGREEMENT AND 2011-2012 NOTE OF THE CITY OF SAN BERNARDINO ("CITY") PAYABLE TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") IN THE PRINCIPAL AMOUNT EQUAL TO $1,356,250 FOR THE REPAYMENT OF THE $1,332,925 PRINCIPAL AMOUNT OF THE 2010-2011 NOTE FROM THE CITY TO THE AGENCY 3 4 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 7 Development Commission of the City of San Bernardino at a joint special meeting 8 thereof, held on the 11th 9 Commission Members: 10 MARQUEZ 11 VACANT 12 BRINKER 13 SHORETT 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 18 July day of Ayes X , 2011, by the following vote to wit: Nays Abstain Absent X --X- X X X secret~ 19 20 The foregoing Resolution is hereby approved this /..:5/71 day of July , 2011. 21 22 23 24 25 Approved as to Form: 26 By: a~ 27 Agency Counsel 28 3 P:lAgendaslComm Dev CommissionlCDC 2011\2011-12 Budget docsI7-11-11 BUDGET READOPTION DOCSI07-11-11 EDA Budget Adoption - City Note CDC Reso Gdocx CDC/2011-47 1 EXHIBIT" A" 2 Agency-City 2011-2012 Loan Agreement 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PlAgendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\07-ll-l1 EDA Budget Adoption - City Note CDC Reso G.docx CDC/20111-47 LOAN AGREEMENT THIS LOAN AGREEMENT (this "Agreement") is entered into as of this 30th day of June, 2011, by and between the City of San Bernardino, a charter city, organized under the Constitution and laws of the State of California (the "Borrower" or the "City"), and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Lender" or the "Agency"). In this Agreement, any reference to a "Party" shall mean either the Borrower or the Lender and any reference to the "Parties" shall collectively mean both the Borrower and the Lender. RECIT ALS WHEREAS, the Borrower desires to borrow funds from the Lender in accordance with and pursuant to this Agreement and the Revenue Anticipation Note (as defined below); and WHEREAS, the Borrower is of the reasonable understanding that adequate financial resources will be made available to repay the financial obligations incurred by the Borrower pursuant to this Agreement within the current fiscal year of the Borrower, and the Borrower does not intend to seek to have the financial obligations of this Agreement and the Revenue Anticipation Note forgiven or otherwise compromised to the financial detriment of the Lender; and WHEREAS, the Parties intend that this Agreement and the Revenue Anticipation Note be deemed for all purposes to be a legally enforceable contractual obligation between the Parties in full compliance with the City Charter and all other applicable provisions of California law with respect to the City and the limitations on the incurring of long-term debt obligations and in full compliance with all requirements of the Community Redevelopment Law ("CRL") with respect to the Agency for the use and investment of tax increment revenues of the Agency pending the final disposition or ultimate use of such assets of the Agency in furtherance of its redevelopment purposes and in compliance with the CRL; and WHEREAS, the Agency loaned an amount equal to $1,332,925 which together with accrued and unpaid interest is equal to $1,356,250 pursuant to that certain promissory note (the "2010-2011 Note") and loan agreement duly approved and executed by the Parties for the 2010-2011 fiscal year of the Parties (the "2010-2011 Loan"); and WHEREAS, the Lender desires to make one (1) principal advance to the Borrower in accordance with and pursuant to this Agreement and the Revenue Anticipation Note for the sole purpose of repaying in full the principal and accrued and unpaid interest, with respect to the 2010- 2011 Note. NOW, THEREFORE, in consideration of the above recitals of this Agreement, and for such other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 1 PlAgendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\07-11-11 EDA Budget - Loan Agreement (attachment A to Resa G) docx CDC/2011-47 1. The Loan. The Lender shall loan to the Borrower a principal amount not to exceed One Million Three Hundred Fifty-Six Thousand Two Hundred Fifty Dollars ($1,356,250), (the "Loan"), as evidenced by the 2011-2012 Revenue Anticipation Note, dated concurrently herewith, as executed by the Borrower in favor of the Lender (the "Revenue Anticipation Note" or the "Note"). The Lender shall make one (1) advance of principal to or for the account of the Borrower in the principal amount not to exceed One Million Three Hundred Fifty-Six Thousand Two Hundred Fifty Dollars ($1,356,250), in the aggregate, subject to the terms, covenants and conditions of the Revenue Anticipation Note and this Agreement. The Loan is not a revolving loan, and any amount of the Loan repaid by the Borrower to the Lender may not be re-borrowed by the Borrower. Upon three (3) business days' prior written notice from the Borrower to the Lender, the Lender shall disburse to the Borrower the requested advance under the Revenue Anticipation Note. The purpose of such advance shall be deemed to have been made for purposes of repaying in whole the principal amount and accrued and unpaid interest on the 2010-2011 Loan and for no other purposes. 2. Interest. Interest shall accrue and compound daily at the per annum interest rate of 1.75% (the "Interest Rate") on the unpaid principal balance of the Loan advance made by the Lender to the Borrower commencing on the date of disbursement of the Loan advance by the Lender to the Borrower until paid in full by the Borrower to the Lender, in accordance with and subject to the terms, covenants and conditions of the Revenue Anticipation Note and this Agreement. Interest shall be calculated on the actual number of days in a year equal to either 365 or 366 days and such calculation of interest shall be compounded on a daily basis while any amount of the Indebtedness remains unpaid and outstanding. In the Event of a Default (as defined in Section 7 of this Agreement), interest shall accrue at the Default Interest Rate (as defined in Section 4 of this Agreement) on the Indebtedness (as defined in Section 4 of this Agreement) from the Maturity Date (as defined in Section 4 of this Agreement) until paid in full by the Borrower to the Lender. 3. Prepayment. The unpaid principal amount and any interest owing under the Revenue Anticipation Note may be prepaid by the Borrower to the Lender, at any time, in whole or in part, without premium or penalty, prior to the Maturity Date together with accrued and unpaid interest to the date of any such prepayment. 4. Repavment of the Loan Principal and Interest. No periodic payments of either (i) principal and interest, or (ii) interest-only, are due and payable by the Borrower to the Lender during the term of the Revenue Anticipation Note. On June 30, 2012 (the "Maturity Date"), the Borrower shall pay to the Lender the unpaid principal amount advanced by the Lender to the Borrower under the Revenue Anticipation Note, and all accrued and unpaid interest at the Interest Rate accruing from the date of the Revenue Anticipation Note on the unpaid principal amount advanced by the Lender to the Borrower under the Revenue Anticipation Note, and any other amounts due under the Revenue Anticipation Note and this Agreement, including, without limitation, attorneys' fees and court costs (collectively, the "Indebtedness"). If the Borrower 2 P\Agendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\07-11-11 EDA Budget - Loan Agreement (attachment A to Reso G)docx CDC/2011-47 fails to pay the Indebtedness to the Lender on the Maturity Date, the Borrower shall pay to the Lender, on written demand from the Lender, a late charge in the amount of three percent (3%) of the unpaid principal amount of the Loan. Further, without notice or demand from the Lender to the Borrower, interest shall accrue on the Indebtedness at the rate of the Interest Rate plus two (2) percentage points (i.e., two hundred (200) basis points) (the "Default Interest Rate") from the Maturity Date until the Indebtedness is paid by the Borrower to the Lender in full, should the Borrower fail or refuse to pay to the Lender the Indebtedness due on the Maturity Date. The Lender shall charge the Borrower no origination points or loan fees in connection with the making of the Loan by the Lender to the Borrower. 5. No Security: Borrower Payment Covenant. 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 Borrower but this Loan shall be a general obligation of the City in accordance with Government Code Section 53857. Further, the obligations of the Borrower under the Revenue Anticipation Note and under this Agreement are not guaranteed by any entity or individual. The Borrower hereby agrees and covenants to appropriate funds to permit the Borrower to pay to the Lender the Indebtedness on or before the Maturity Date. 6. Representations, Warranties and Covenants of Borrower. The Borrower represents, warrants and covenants to the Lender, as follows: (a) The Borrower is a charter city, has been duly organized under the laws and Constitution of the State of California and has the power and authority to enter into this Agreement and to incur the obligations under the Revenue Anticipation Note. (b) The execution of this Agreement and of the Revenue Anticipation Note has been duly authorized by the Mayor and Common Council of the City of San Bernardino as the legislative body of the Borrower and such execution does not require the approval or consent of any other governmental entity. (c) No governmental or regulatory approvals that have not been previously obtained by the Borrower are required for the due approval, execution and delivery by the Borrower of this Agreement and of the Revenue Anticipation Note. (d) This Agreement and the Revenue Anticipation Note have been, and will be, duly executed and delivered by the Borrower and this Agreement and the Revenue Anticipation Note do, and will, constitute valid and binding obligations of the Borrower, payable from the revenues, funds and assets, generally, of the Borrower as set forth herein and in the Revenue Anticipation Note. (e) The Borrower shall deliver to the Lender, within thirty (30) calendar days after receipt by the Borrower of written request from the Lender, audit statements and budgets, financial statements and/or such any other information, studies and reports (singularly and collectively, the "Reports") requested by the Lender, as prepared by the Borrower at its sole cost and expense, which Reports shall be reasonably acceptable to the Lender. 3 P:IAgendaslComm Dev CommissionlCDC 2011\2011-12 Budget docsI7-11-11 BUDGET READOPTION DOCSI07-11-11 EDA Budget - Loan Agreement (attachment A to Resa G).docx CDC/2011-47 (f) The representations, warranties and covenants of the Borrower contained in this Agreement and in the Recitals hereof shall be true and correct in all material respects on and as of the date that the Lender disburses the Loan advance under the Revenue Anticipation Note and under this Agreement (the "Funding Date"), with the same force and effect as though such representations, warranties and covenants had been made on such Funding Date. (g) On such Funding Date, the Borrower shall not be in default under the Revenue Anticipation Note or under this Agreement. The Borrower shall not, to the best of the Borrower's knowledge, contravene any provision of federal, state, municipal or local law, statute, rule or regulation, as amended from time to time, and the Borrower shall not 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 Borrower is a party or by which the Borrower is bound or to which the Borrower may be subject. 7. Events of Default. (a) By Lender. The following shall constitute an event of default by the Lender: (i) the failure by the Lender to fund the Loan in accordance with the Revenue Anticipation Note and this Agreement within thirty (30) calendar days after the written request by the Borrower to the Lender, provided the Borrower is not in default under the Revenue Anticipation Note or this Agreement. (b) By Borrower. The failure by the Borrower to pay to the Lender the Indebtedness on or before the Maturity Date shall constitute an event of default by the Borrower. 8. Remedies. Upon a default by the Lender, the Borrower may seek appropriate legal, injunctive or equitable relief to enforce the obligations of the Lender under this Agreement. Upon a default by the Borrower, the Lender may institute any proceeding at law or in equity to enforce the obligations of the Borrower under the Revenue Anticipation Note and/or under 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, without limitation, reasonable attorneys' fees and court costs) in bringing such action. Reasonable attorneys' fees shall include, without limitation, the costs, salary and expenses of the City Attorney for the City, and members of his office in enforcing this Agreement and/or the Revenue Anticipation Note. 9. Assignment. The Lender shall be entitled to, and may assign this Agreement and the Revenue Anticipation Note and the Lender's right to receive the Indebtedness under the Revenue Anticipation Note and under this Agreement to any other entity or individual, without obtaining the prior consent from the Borrower. The Borrower shall not delegate its obligations under this Agreement and/or under the Revenue Anticipation Note, without the prior written consent of the Lender, which written consent may be given or withheld in the sole and absolute discretion of the Lender. 4 PlAgendaslComm Dev CommissionlCDC 2011\2011-12 Budget docsI7-11-11 BUDGET READOPTION DOCSI07-11-11 EDA Budget - Loan Agreement (attachment A to Reso G)docx CDC/2011-47 10. Term. This Agreement shall terminate upon the payment in full by the Borrower to the Lender of the Indebtedness. 11. 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 or telephonically verified fax transmission, which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either Party may change its address for receipt of written notice by so notifying the other Party in writing. To Lender: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attention: Emil A. Marzullo, Interim Executive Director Phone: (909) 663-1044 Fax: (909) 888-9413 To Borrower: City of San Bernardino 300 North "D" Street, Sixth Floor San Bernardino, California 92418 Attention: Charles McNeely, City Manager Phone: (909) 3 84-5122 Fax: (909) 384-5138 12. Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the State of California, and in the event either Party seeks judicial relief or seeks to enforce or to interpret any provision of this Agreement and/or the Revenue Anticipation Note, such actions shall be filed in the Superior Court of San Bernardino County, State of California, Main Branch, in the City of San Bernardino, California. 13. Entire Agreement. This Agreement and the Revenue Anticipation Note constitute the entire agreement between the Parties and may not be amended without the prior written consent of the Parties hereto. This Agreement and the Revenue Anticipation Note supersede all prior negotiations, discussions and previous agreements between the Parties concerning the subject matter herein and therein. The Parties intend this Agreement and the Revenue Anticipation Note 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. 5 P:\Agendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\07-11-11 EDA Budget - Loan Agreement (attachment A to Reso G)docx CDc/2011-47 14. Amendment. This Agreement and the Revenue Anticipation Note may be amended and the times for performance hereunder and pursuant to the Revenue Anticipation Note may be extended as deemed necessary by written instruments duly approved and executed by the Parties hereto and thereto and approved by the respective governing bodies of the Parties. 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. 15. Severability. Each and every section of this 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. 16. No Waiver by the Lender. No waiver of any breach, default or failure of condition under the terms of the Revenue Anticipation Note or under this Agreement shall be thereby implied from any failure of the Lender to take, or any delay by the Lender in taking action with respect to such breach, default or failure or from any previous waiver of any similar or related breach, default or failure; and a waiver of any term of the Revenue Anticipation Note or this Agreement must be made in writing and shall be limited to the express written terms of such waiver. Borrower waives presentment, protest and demand, notice of protest, demand and dishonor, and any and all other notices or matters of a like nature. 17. Successors and Assigns. The promises and agreements herein contained shall bind and inure to the benefit of, as applicable, the respective administrators, successors and assigns of the Parties. III III III III III III III III III III 6 P:\Agendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\07-11-11 EDA Budget - Loan Agreement (attachment A to Reso G).docx CDC/2011-47 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first written above. LENDER Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: cA~ ~ Agency Counsel BORROWER City of San Bernardino, a charter city By: Charles McNeely, City Manager (SEAL) ATTEST: By: City Clerk Approved as to Form: By: City Attorney 7 PlAgendas\Comm Dev CommissionlCDC 2011\2011-12 Budget docsI7-II-l1 BUDGET READOPTION DOCSI07-11-11 EDA Budget - Loan Agreement (attachment A to Reso G).docx CDCj2011-47 EXHIBIT "B" 1 2 2011-2012 Note 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 PlAgendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\07-II-l1 EDA Budget Adoption - City Note CDC Reso Gdocx CDC/2011-47 REVENUE ANTICIPATION NOTE $1,356,250 June 30, 2011 FOR VALUE RECEIVED, the undersigned, the City of San Bernardino, a charter city organized under the laws of the State of California (the "Borrower" or the "City"), hereby promises to pay to the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Lender" or the "Agency"), or to order, at the following address, 201 North "E" Street, Suite 301, San Bernardino, California 92401, or at such other place as the Lender may from time to time designate by written notice to the Borrower, in lawful money of the United States, the principal sum of One Million Three Hundred Fifty-Six Thousand Two Hundred Fifty Dollars ($1,356,250), with interest in accordance with this Revenue Anticipation Note on the unpaid principal balance from the date of this Revenue Anticipation Note, and all other amounts due under this Revenue Anticipation Note, until paid in full by the Borrower to the Lender. The obligation of the Borrower with respect to this Note is also governed by the loan agreement, as executed by and between the Borrower and the Lender concurrently herewith (the "Loan Agreement"). 1. Principal Advance. This 2011-12 Revenue Anticipation Note (this "Note" or this "Revenue Anticipation Note") evidences the obligation of the Borrower to the Lender for the repayment of the loan (the "Loan") made by the Borrower to the Lender under this Revenue Anticipation Note and under the Loan Agreement. The Lender may make one (1) advance of principal to the Borrower in the principal amount not to exceed One Million Three Hundred Fifty-Six Thousand Two Hundred Fifty Dollars ($1,356,250), in the aggregate, subject to the terms, covenants and conditions of this Revenue Anticipation Note and the Loan Agreement. The Loan is not a revolving loan, and any amount of the Loan repaid by the Borrower to the Lender may not be re-borrowed by the Borrower. Upon three (3) business days' prior written notice from the Borrower to the Lender, the Lender shall disburse to the Borrower the requested advance under this Revenue Anticipation Note. 2. Interest. Interest shall accrue and compound daily at the per annum interest rate of 1.75% (the "Interest Rate") on the unpaid principal balance of the Loan advance made by the Lender to the Borrower commencing on the date of disbursement of the Loan advance by the Lender to the Borrower until paid in full by the Borrower to the Lender, in accordance with and subject to the terms, covenants and conditions of this Revenue Anticipation Note and the Loan Agreement. Interest shall be calculated on the actual number of days in a year equal to either 365 or 366 days and such calculation of interest shall be compounded on a daily basis while any amount of the Indebtedness remains unpaid and outstanding. In the Event of a Default (as defined in Section 5) under this Revenue Anticipation Note, interest shall accrue at the Default Interest Rate (as defined in Section 4) on the Indebtedness (as defined in Section 4) from the Maturity Date until paid in full by the Borrower to the Lender. 3. Prepayment. The unpaid principal amount and any interest owing under this Revenue Anticipation Note may be prepaid by the Borrower to the Lender, at any time, in whole or in part, without premium or penalty, prior to the Maturity Date. 1 P:\Agendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\7-11-11 EDA Budget - Revenue Anticipation Note (attachment B to feso G)_docx CDCj2011-47 4. Repayment of Loan Principal and Interest. No periodic payments of either (i) principal and interest, or (ii) interest-only, are due and payable by the Borrower to the Lender during the term of this Revenue Anticipation Note. On June 30, 2012 (the "Maturity Date"), the Borrower shall pay to the Lender the unpaid principal amount advanced by the Lender to the Borrower under this Revenue Anticipation Note and all accrued and unpaid interest at the Interest Rate (as defined in Section 2) , and any other amounts due under this Revenue Anticipation Note and the Loan Agreement, including, without limitation attorneys' fees and court costs (collectively, the "Indebtedness"). If the Borrower fails to pay the Indebtedness to the Lender on the Maturity Date, the Borrower shall pay to the Lender, on written demand from the Lender, a late charge in the amount of three percent (3%) of the unpaid principal amount of the Loan. Further, without notice or demand from the Lender to the Borrower, interest shall accrue on the Indebtedness at the rate of the Interest Rate plus two (2) percentage points (i.e., two hundred (200) basis points) (the "Default Interest Rate") from the Maturity Date until the Indebtedness is paid by the Borrower to the Lender in full, should the Borrower fail or refuse to pay to the Lender the Indebtedness due on the Maturity Date. 5. Acceleration of Payment. The Indebtedness of this Loan shall become immediately due and payable by the Borrower to the Lender, at the option of the holder and without demand or notice from the Lender to the Borrower, should the Borrower fail to pay any amount due and payable under this Revenue Anticipation Note or under the Loan Agreement (and "Event of Default"). Upon the occurrence of an Event of Default, the Lender shall be permitted to exercise and enforce all rights and remedies available to the Lender, under this Revenue Anticipation Note, under this Loan Agreement, at law or in equity. 6. Application of Payments. All payments received on account of this Revenue Anticipation Note shall first be applied to all attorneys' fees, court costs and all other costs due under this Revenue Anticipation Note and under the Loan Agreement, then to all accrued and unpaid interest due under this Revenue Anticipation Note, and then to the reduction of the unpaid principal amount. 7. Attorneys' Fees. The Borrower hereby agrees to pay all costs and expenses, including reasonable attorneys' fees, which may be incurred by the Lender in the enforcement of this Revenue Anticipation Note. For purposes of this Revenue Anticipation Note, attorneys' fees shall include, without limitation, the costs, salary and expenses of the City Attorney for the City, and members of his office in enforcing this Revenue Anticipation Note. 8. Notices. Except as may be otherwise specified herein, any approval, notice, direction, consent, request or other action by the Lender shall be in writing and must be communicated to the Borrower at 300 North "D" Street, City Hall, Sixth Floor, San Bernardino, State of California, to the attention of the City Manager, or at such other place or places as the Borrower shall designate to the Lender in writing, from time to time, for the receipt of communications from the Lender. Notice shall be given as provided in Section 11 of the Loan Agreement. 9. Governim! Law. This Revenue Anticipation Note shall be construed in accordance with and be governed by the laws of the State of California with venue as provided in the Loan Agreement. 2 P:\Agendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\7-11-11 EDA Budget - Revenue Anticipation Note (attachment B to reso G).docx CDC/2011-47 10. Severability. If any provision of this Revenue Anticipation Note shall be declared invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby and such remaining provisions shall be valid and enforceable to the extent permitted by law. 11. No Waiver bv the Lender. No waiver of any breach, default or failure of condition under the terms of this Revenue Anticipation Note or under the Loan Agreement shall be thereby be implied from any failure of the Lender to take, or any delay by the Lender in taking action with respect to such breach, default or failure or from any previous waiver of any similar or related breach, default or failure; and a waiver of any term of this Revenue Anticipation Note or the Loan Agreement must be made in writing and shall be limited to the express written terms of such waiver. Borrower waives presentment, protest and demand, notice of protest, demand and dishonor; and any and all other notices or matters of a like nature. 12. Usurv/Maximum Interest Rate. All agreements between the Borrower and the Lender are expressly limited, so that in no event or contingency, whether because of the advancement of the proceeds of this Revenue Anticipation Note, acceleration of maturity of the unpaid principal balance, or otherwise, shall the amount paid or agreed to be paid to the Lender for the use, forbearance, or retention of the money to be advanced under this Revenue Anticipation Note exceed the highest lawful rate permissible under applicable usury or other laws governing interests rates for public agencies. 13. Successors and Assigns. The promises and agreements herein contained shall bind and inure to the benefit of, as applicable, the respective administrators, successors and assigns of the parties. Executed as of the date set forth above at San Bernardino, California. City of San Bernardino By: Charles McNeely, City Manager Approved as to Form: By: James F. Penman, City Attorney 3 P:\Agendas\Comm Dev Commission\CDC 2011\2011-12 Budget docs\7-11-11 BUDGET READOPTION DOCS\7-11-11 EDA Budget - Revenue Anticipation Note (attachment B to reso G).docx