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HomeMy WebLinkAboutCDC/2009-61 I 2 3 4 RESOLUTION NO. CDC/2009-61 5 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THAT CERTAIN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TAX EXEMPT PROMISSORY NOTE SERIES 2009 (CMB INFRASTRUCTURE INVESTMENT GROUP III, L.P.) IN THE AMOUNT NOT TO EXCEED $15,000,000, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORM THEREOF 6 7 8 WHEREAS. the Community Development Commission of the City of San Bernardino (the 9 "Commission") is authorized under Health and Safety Code Section 33000. et seq" to issue bonds, 10 notes and other obligations for the purpose of financing public capital improvements within the City 11 12 13 of San Bernardino (the "City"); and WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") I desires to finance certain infrastructure costs, including, but not limited to: (i) Omnitrans soft costs 14 for the construction of the sbX rapid bus project, including temporary relocation ofthe transit center 15 and parking lots; (ii) sewer line relocation and construction for the State Court Complex; (iii) solar 16 projects for the Agency building and other City and Agency buildings; (iv) infrastructure costs for 17 the La Placita project; (v) infrastructure cost reimbursements and additional interchange 18 expenditures for the l-215/University Boulevard Interchange (the "Project"); and (vi) restoration of 19 the California Theatre in accordance with the California Community Redevelopment Law, 111 20 addition to such other expenditures and projects as may be approved by this Commission; and 21 22 WHEREAS, in order to raise the funds required for the Project, the Agency has determined to issue its Redevelopment Agency of the City of San Bernardino Tax Exempt Promissory Note 23 24 Series 2009 (CMB Infrastructure Investment Group III, L.P,) (the "Note") in the aggregate principal 25 amount of not to exceed $15,000,000, pursuant to and secured by that certain Loan Agreement 26 (CMB Infrastructure Investment Group III, L.P.) dated as of October I, 2009, by and between CMB 27 Infrastructure Investment Group 1II, L.P" a limited partnership organized under the laws of the State 28 of California (the "Lender") and the Agency (the "Loan Agreement"); and I P IAgendas\Resolutions\Resnlu\;ons\2()()9\1 0-05-09 CMB [nfr3<lnucture _ I,,"" Agreement CDC Re'Q.doc CDC(2009-61 1 WHEREAS, the Agency has considered the terms of the transaction as contemplated herein 2 and desires at this time to approve the terms of said transaction in the public interests of the Agency. 3 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 4 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 5 FOLLOWS: 6 Section 1. The Commission hereby approves the Loan from the Lender to the Agency in 7 an amount not to exceed $ I 5,000,000, pursuant to the terms of the Loan Agreement and as further 8 evidenced by the Note. The proposed term of the Note shall be six (6) years at a rate of interest not 9 to exceed 5.25%. Interest on the Note shall be paid quarterly until maturity and principal shall be 10 paid in full on the maturity date. The Note shall be paid with available funds of the Agency as 11 further provided in the Loan Agreement. 12 Section 2. The Commission hereby approves the Note and Loan Agreement in the forms 13 as attached to this Resolution with such changes thereto as may be approved by the Interim 14 Executive Director of the Agency when such terms and conditions have been ascertained. The 15 Commission hereby further authorizes and directs that the forms of the Note and Loan Agreement as 16 attached hereto be converted into the final forms thereof together with such changes or 17 modifications as deemed necessary or desirable by the Chairman or Interim Executive Director of 18 the Agency, upon the recommendation of Lewis Brisbois Bisgaard & Smith LLP ("Agency 19 Counsel"). The Interim Executive Director or such other authorized officer of the Agency is hereby 20 authorized and directed to execute and deliver, and the Secretary is hereby authorized and directed 21 to attest to, the final forms of the Note and the Loan Agreement when the same has been prepared 22 for and in the name of the Agency, and such execution and delivery shall be deemed to be 23 conclusive evidence of the approval thereof. The Agency hereby authorizes the delivery and 24 performance of the obligations under the Note and Loan Agreement to accomplish the fInancing as 25 contemplated herein. 26 Section 3. The Interim Executive Director, Agency Counsel and any and all other 27 officers of the Agency are hereby authorized and directed, for and in the name and on behalf of the 28 Agency, to do any and all things and take any and all actions, including execution and delivery of 2 P IAgcnda,\Resolmion,\ResollLlions\2009\IO-05-09 CMB Infra'tructure - Loan Agrcement CDC Re,o.doc CDC/2009-61 1 any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of 2 conveyance, warrants and other documents, which they, or any of them, may deem necessary or 3 advisable in order to consummate the Loan as described herein. Whenever, in this Resolution any 4 officer of the Agency is authorized to execute or countersign any document or take any action, such 5 execution, countersigning or action may be taken on behalf of such officer by any person designated 6 by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. The 7 Commission hereby appoints its Chairman and Interim Executive Director as agents of the Agency 8 for purposes of executing any and all documents and instruments which any officer of the Agency is 9 authorized to execute hereunder. 10 Section 4. 11 Commission. 12 III 13 III 14 III 15 III 16 III 17 III 18 III 19 III 20 III 21 III 22 III 23 III 24 III 25 III 26 III 27 III 28 III This Resolution shall take effect from and after its date of adoption by this 3 P-\Agcnda,\Resolution,\Resollltioll,\1009\IO-05-0'l CMD lnfra;[tu~[UTC' Lt1." Agreement CDC Re.,a.doc 1 2 3 4 5 6 CDC/2009-61 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THAT CERTAIN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TAX EXEMPT PROMISSORY NOTE SERIES 2009 (CMB INFRASTRUCTURE INVESTMENT GROUP III, L.P.) IN THE AMOUNT NOT TO EXCEED $15,000,000, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORM THEREOF I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 7 Development Commission of the City of San Bernardino at a j oint regular meeting 8 thereof. held on the ')1-"11 day of Ort-onpr .2009, by the following vote to wit: 9 Commission Members: Ayes Nays Abstain Absent 10 ESTRADA X 11 BAXTER X - 12 BRINKER X 13 SHORETT X 14 KELLEY X 15 JOHNSON X - 16 MC CAMMACK X 17 ~ 18 Secretary 19 20 The foregoing Resolution is hereby approved this ?r1'( day of October 21 22 23 24 ,2009. tIie Com nity Development Commission of the City of San Bernardino 25 Approved as to Form: 26 27 By !/A~.A(1j Agency~sel 28 4 P:\Agendas\Re'dlution,'.Resolut;on.\2009\IH-05_09 CMB lnr,",lr""lUre - Loan Agreement CDC Reso.dnc CDC/2009-61 , , LOAN AGREEMENT (CMB Infrastructure Investment Group III, L.P.) THIS LOAN AGREEMENT (this "Agreement") is entered into as of this 5th day of October, 2009, by and between CMB lnfrastrucure Investment Group III, LP" a limited partnership organized under the laws of the State of California (the "Lender") and the Redevelopment Agency of the City of San Bernardino (the "Borrower"), as follows: WHEREAS, the Borrower is a public body corporate and politic organized and existing under the Community Redevelopment Law (Part 2 of Division 24 of the Health and Safety Code of the State of California; and WHEREAS, the Lender was 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"); and WHEREAS, the Lender desires to lend to the Borrower for the purpose of increasing domestic capital investment, and the Borrower seeks to borrow funds from the Lender to assist the Borrower in the economic development, redevelopment and revitalization of the Borrower's Project Areas (the "Project Areas"), NOW, THEREFORE, in consideration of the promises contained herein, and for such other good and valuable consideration receipt of which is hereby acknowledged, the parties hereto agree, as follows: L The Loan, The Lender shall loan to the Borrower a principal amount equal to Fifteen Million Dollars ($15.000,000,00) (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 Borrower. 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 "Redevelopment Agency of the City of San Bernardino Tax Exempt Promissory Note Series 2009 (CMB Infrastructure Investment Group III, LP,)" substantially in the form attached hereto as Exhibit "A" (the "Note") executed by the Borrower in favor of the Lender. The Lender shall charge the Borrower no origination points or loan fees, nor require the payment of any prepaid interest, in connection with making the Loan, 2, Use of Funds, (a) The Borrower shall use and apply the proceeds of the Loan for any legal purposes of the Borrower pursuant to the California Community Redevelopment Law, Such legal purposes include, but are not limited to, (i) Omnitrans soft costs for the construction of the sbX rapid bus project, including temporary relocation of the transit cenier and parking lots; (ii) sewer line relocation and construction for the State Court Complex; (iii) solar projects for the Borrower building and other 481 ] ~3323-J 364.1 1 P: .Agend.,. Agenda Atwchmems',Agenda AlIa<:hrnenl"Agnnb_Amcnd 200')-IO-05.0'J eM!> Infi-.'lructure - Lo"" Agreement with Prom.",,,._,, ",)l~,d(K' CDC/2009-61 City and Borrower buildings; (iv) infrastructure costs for the La Placita project; (v) infrastructure cost reimbursements and additional interchange expenditures for the 1-215/University Boulevard Interchange (the "Project"); and (vi) restoration of the California Theatre in accordance with the California Community Redevelopment Law. (b) The Agency hereby represents and warrants that it presently intends to undertake and complete the Projects as have been previously submitted to the Lender and accepted by the Lender for purposes of obtaining the necessary approvals from the USClS and to allow the Lender to cause to be prepared the required economic analysis of the indirect job impacts resulting from the Agency undertaking said Projects. (c) The Borrower shall not fund any other redevelopment activities or other construction undertakings of the Borrower or the City of San Bernardino that deviate in any respect whatsoever from the Projects as identified above without first having requested and obtained the prior written approval of the Lender with such approval being granted or denied by the Lender at its sole and absolute discretion. The Borrower recognizes that additional costs may be incurred by the Lender to modify any submittal to the USCIS or to amend other marketing materials prepared by the Lender in connection with the obtaining of necessary moneys to fund the Loan to the Borrower. For this reason, any such Borrower request may require the payment by the Borrower in advance of costs to be incurred by the Lender to consider any such request. 3. Funding of the Loan. (a) Acknowledgement. The Borrower 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 Borrower further acknowledges that the principal amount of the Loan to be disbursed by the Lender to the Borrower is dependent on the amount of capital raised by the Lender from foreign investors, and, accordingly, the Borrower agrees that the Lender does not guarantee that the entire principal amount of the Loan, or any portion thereof, shall be disbursed to the Borrower. Additionally, the Borrower further acknowledges that to maintain compliance with the rules and regulations promulgated under the EB-5 Program, the Lender is required to lend to and/or invest its funds with third parties, other than the Borrower, located within the geographic area that constitutes the Lender's "regional center", and accordingly, the Borrower further agrees that a portion of the funds raised by the Lender will be allocated to such third parties, which allocation shall be made in the sole and absolute discretion of the Lender. (b) Funding. Subject to Section 3(a), above, and the other terms and conditions of this A!,'feement, the Loan shall be disbursed to the Borrower by the Lender in no more than thirty (30) 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 Borrower 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 Borrower. If, and when, the Lender determines it is able to disburse a Tranche to the Borrower, the Lender shall provide the Borrower with notice thereof, and the Borrower agrees that it will accept and borrow such funds. Each Tranche shall be disbursed by wire transfer to an 4811-3323-1364.1 2 P:.'A~~nct"' Agend" All"chm~nl, Agcnd" .'\l1"chmem,.^_~,.ml,.A"'cnd :'1I0q'.11I-1I~-O<) CMillnfi-.,tn".tmc _ [",an Acreemen, ,,-t,h 1"-0mi"M\ \J",~ d.", CDC/2009-61 account of the Borrower pursuant to written instructions to be provided by the Borrower. The Lender shall not be required to disburse any Tranche to the Borrower if an Event of Default by the Borrower hereunder has occurred and is continuing. The date on which the initial Tranche is disbursed to the Borrower under this Agreement shall be referred to herein as the "Initial Funding Date". 4. Repayment of the Loan. (a) Principal. Payment of principal shall be due and payable on September 30, 2015 (the "Maturity Date"), and shall be paid in immediately available funds. The Borrower may, without penalty, prepay solely as to the entire outstanding principal balance of this Note at anytime on or after Aprill, 2013, and on any other date thereafter, or prior to such date upon the mutual consent of the parties. (b) Interest. Interest shall be paid quarterly throughout the term of the Loan on each January I, April 1, July I, and October I (each such date is defined herein as an "Interest Payment Date"), commencing on January I, 2010, with the final interest payment being due and payable on the Maturity Date. 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 Borrower 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 period that any principal amount of the Loan was then outstanding. (c) Late Charges. A late charge of three percent (3%) of the amount due shall be paid by the Borrower with respect to each payment of interest not made within thirty (30) calendar days from and after receipt of an invoice from the Lender ("Delinquent Interes!") delivered to the Borrower but such payment shall not be made earlier than an Interest Payment Date. A late charge of three percent (3%) of the amount due shall be paid by the Borrower with respect to the late payment of principal on the Maturity Date, if such payment of principal is not made by September 30, 2015 ('"Delinquent Principal"). Each amount of Delinquent Interest and Delinquent Principal plus the applicable late charge (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 Borrower 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, so that all such interest, together with all delinquent payments and interest due on such delinquent payments, shall be due and payable on the tenth (10th) calendar day of the month following the month in which the second (2nd) consecutive interest payment was not made or the second (2nd) interest payment in a twelve-month period was not made. Such amounts of interest that are subject to accelcration shall only be payable upon invoice from the Lender delivered to the Borrower. Thereafter, the Borrower shall continue to remit quarterly interest payments in accordance with this Agreement and the Note. 5. No Securitv: Payment Covenant of Borrower. (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 Borrower, and the Borrower 41:.:1 1-3323-1364.[ 3 P:'A~""d",'.A~cnd" Alla,'hmc'''''Agcnda AII,,"hmcm, ,\;!nnts-Alllcnd ~()()9'1 0-(15-0'1 CMlllnfi,"'tnl,wro _ Loal1 A~f.elllenlll tin PI'<'mi""r'i Nnle.d~c CDC/2009-61 hereby pledges to undertake a refinancing, refunding or other repayment of this Loan on or before the Maturity Date from the then available surplus tax increment revenues of the Borrower generated within the Project Areas. Nothing contained herein shall limit or other preclude the Borrower from using and applying the annual surplus tax increment revenues of the Borrower from the Project Areas for undertaking other redevelopment activities and the payment of administrative expenses of the Borrower prior to the Maturity Date; provided, however, that the Borrower covenants and agrees not to commit any such surplus tax increment revenues from the Project Areas in such manner as would preclude the Borrower from issuing such refunding bonds or undertaking any other refinancing of this Loan on or prior to the Maturity Date. (b) The Borrower 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 Borrower 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 whether from the annual surplus tax increment revenues of the Project Areas or from a refunding or other refinancing of this Loan. (c) The Borrower hereby represents that certain tax increment revenues are legally available to the Borrower for the payments required pursuant to this Agreement after and subordinate to the payments of all other required amounts as identified in the following sentence which may become available to the Borrower as surplus tax increment revenues if and when received all prior and senior debt has been paid by the Borrower. Surplus tax increment revenues may be applied to pay principal and interest on the Loan. The Borrower agrees and covenants that it shall use its best efforts to refinance the Loan prior to, or on the Maturity Date. On January I, 2010, and each year thereafter until the Maturity Date, the Borrower shall deliver its audited financial statements to the Lender for the immediately prior fiscal year of the Borrower in an effort to show Lender that Borrower has the ability to refinance the Loan on or prior to the Maturity Date. (d) The Borrower further represents that the surplus tax revenues, based upon current estimates of assessed value growth for real property in the Borrower's Project Areas, will be sufficient for the Borrower to issue additional tax increment indebtedness to repay in whole the principal portion of the Loan as the same becomes due and payable as of the Maturity Date. (e) The obligations of the Borrower under this Agreement and under the Note are not guaranteed by, nor payable either directly or indirectly by the City of San Bernardino, California, State of California or any of its subdivisions, but are the unsecured obligations solely ofthe Borrower. 6. Prior Indebtedness, The Lender hereby acknowledges that the Borrower has incurred certain prior indebtedness. The Lender acknowledges receipt of the financial audits of the Borrower for the period ending June 30, 2008, and the budgets for the past and current fiscal years and has reviewed the financial condition of the Borrower and the other notes as contained in the audit statements and the budgets. 7. Representations of Borrower. (a) The Borrower has been duly organized under the laws of the State of California and have the power to enter into this Agreement and to incur the obligations under the Note. 4Xll-3323-1364,] 4 p.- ."~endas,.^g"ml" AlI",'hllLenl'- Agenda AlI.,hmenb A~""'\,.All1cnd ~OM" 10.(15.09 ("MH Inhamucture - l-i'an Agreement with Pml\liS'My N'''c,d"" CDC/2009-61 (b) Execution of this Agreement and of the Note has been duly authorized by the Board of the Borrower. ( 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 the Note. (d) This Agreement has been, and the Note will be, duly executed and delivered by the Borrower and this Agreement does, and the Note 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 Note. (e) The Borrower shall provide to the Lender copies of reports prepared periodically by the Borrower regarding the status of (i) all expenditures of the proceeds of the Loan prior to the commencement of construction of a project for eligible engineering and project design costs, (ii) the commencement date for each of the identified projects for which the proceeds of the Loan will be expended together with a description of the other sources of project funds and the dollar amounts thereof, and (iii) either submittal to the Lender of the notice of completion as issued by the Borrower or such other written confirmation to the Lender as to the date of completion of each such project and the final costs for each of said projects as funded, whether in whole or in part by the proceeds of the Loan, together with the sources and dollar amounts of all other funding sources used to complete such project. (I) The audit statements and budgets referred to in Section 6, above, present fairly, in all material respects, the financial condition of the Borrower at such dates and the results of operations for the periods then ended. Since the end of the periods covered by the audit statements, there has been no known change in the financial condition of the Borrower which has materially or adversely affected the ability of the Borrower to conduct its business as presently heretofore conducted. (g) The representations of the Borrower 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 3, above, with the same force and effect as though such representations and warranties had been made on and as of such date. (h) On and as of the Initial Funding Date as referred to in Section 3, above, the Borrower is not in default under any other indebtedness of the Borrower, and the execution, delivery or performance of the Borrower of this Agreement and the Note shall not, to the best of the Borrower' knowledge, contravene any provision of law, statute, rule or regulation of any governmental instrumentality and shall not, to the best of the Borrower' 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 Borrower is a party or by which it is bound or to which it may be subject. (i) The Borrower 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 USClS. The Borrower covenants and 481 ].3323-1364.] 5 P:-Agcnda, Agenda Attachment,'Agenda Auachmcnb Agnnls.Amcnd :O(l9 IO-05-0<J CMB Infi-astrwlur< _ L"an Agreemenl ""Ill PwmilS<'''Y ~"lc,d~.. CDC/2009-61 agrees that the proceeds of each Tranche shall be expended on qualifying projects within twenty-four (24) months after receipt of such Tranche from the Lender. 8. Tax Exempt Interest. The interest payable to the Lender under the Note shall not be included in the gross income of the Lender for Federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and shall be exempt from present State of California personal income taxes. In order to maintain such tax exemptions, the Borrower hereby covenants to, and for the benefit of, the Lender, as follows: (a) Arbitrage. The Borrower will not directly or indirectly use or permit the use of proceeds of the Loan, or any other funds of the Borrower from whatever source derived, to acquire any investment, and it will not take or permit to be taken any other action, which would cause the Note to be characterized as an "arbitrage bond" within the meaning of Section 148 ofthe United States InterPal Revenue Code ("Code") or which would otherwise cause the interest on the Note to be includable in gross income for federal income tax purposes. To this end, in the event that at any time the Borrower is ofthe opinion that, for purposes of this paragraph, it is necessary to restrict or limit the yield on the investment of any moneys held under this Agreement, the Borrower shall take such action as may be necessary. (b) Rebate. Under the Agreement, the Borrower has agreed that within forty-five (45) days after each computation date it will (i) calculate or cause the calculation of the rebate amount for the Note for the period commencing on the date of issue of the Note and ending on such computation date, such rebate amount to be calculated in the manner required by Section 148 of the Code and the Tax Regulations thereunder, and (ii) pay any such rebate amount to the United States government pursuant to the Code. Within sixty (60) days after each computation date (other than the final computation date), the Borrower will pay to the United States government an amount equal to 90% of the rebate amount calculated as of such date, and within sixty (60) days after the final computation date, the Borrower will pay over to the United States government an amount equal to 100% of the rebate amount calculated as of such date. Such payments shall be made in accordance with Section 148 of the Code and the Tax Regulations thereunder. The Borrower shall keep and retain for a period of six (6) years following the retirement of the Note records of the determinations made pursuant hereto. Notwithstanding any other provision in this Agreement, the obligation to pay rebatable arbitrage to the United States of America and to comply with all other requirements of this Section shall survive the defeasance or payment in full of the Note. (c) Information Reporting. The Borrower will timely file a federal information return with respect to the Note as required by section 149(e) of the Code. (d) Federal Guarantee Prohibition. The Borrower will take no action, nor permit or suffer any action to be taken, if the result of the same would be to cause the Note to be "federally guaranteed" within the meaning of Section I 49(b) of the Code. 4Bl]-3323-1364.1 6 P:'.^~.nd",.Aycnd" Atlachm.m,-Agenda Aua,hmem,' Agml1s.Amcnd :009" I 0-05-0') ('MB Infi'a_mu,lure. [.""Il Acreemenl with P"'mi,,,'rv ~'(ll..doc CDCj2009-61 (e) Private Activitv Bond. The Borrower will take no action, nor permit or suffer any action to be taken, if the result of the same would be to cause the Note to be become a "private activity bond" within the meaning of section 141 of the Code and the Tax Regulations. (I) Not Hedge Bond. The Borrower reasonably expects that the Note will not be a "hedge bond" within the meaning of section I 49(g) of the Code and the Borrower shall comply with all expenditure requirements imposed by said section l49(g) including the investment, if any, in nonpurpose investments as defined in the Code. (g) Elections. The Borrower hereby agrees to make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations as the Borrower (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Loan and the Note. (h) Closing Certificate. The Borrower agrees to execute and deliver in connection with the issuance of the Bonds a Tax Certificate as to Arbitrage and the Provisions of Sections 141-150 of the Internal Revenue Code of 1986, or similar document containing additional representations and covenants pertaining to the exclusion of interest on the Note from the gross income of the Lender for federal income tax purposes, which representations and covenants are incorporated as though expressly set forth herein. (i) Further Actions. The Borrower will take all actions within their power and permitted by law which are or may be necessary to assure that interest on the Note at all times remains excludable from gross income for federal income tax purposes, including complying with the provisions of the Borrower's Arbitrage and Tax Matters Certificate, the covenants set forth herein and all requirements of the Code that must be satisfied subsequent to the issuance of the Note for interest on the Note to be, or continue to be, excluded from gross income for federal income tax purposes. Notwithstanding any provision of this Section, the Borrower may rely conclusively on an opinion of Bond Counsel in complying, or in any deviation from complying, with the provisions hereof. 9. Events of Default. (a) Bv Lender. The following shall constitute a default by the Lender: failure to fund the Loan as provided in Section 3 of this Agreement within thirty (30) calendar days after written request by the Borrower for the 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 Borrower by January IS, 2010, and that the full $15,000,000.00 shall be disbursed by the Lender to the Borrower on or before June 30, 2010. (b) Bv Borrower. Each of the following shall constitute a default by the Borrower: (i) failure to pay the principal of, interest on, and any other payments with respect to, the Note, on or before the tenth (10'") calendar day following an Interest Payment Date or the fifteenth (15"') calendar day following the Maturity Date, as applicable, as each payment of interest and principal is required to be made; and 481 ]-3323-1364.] 7 1':'A"~lld.,'A_".nd" Attachment,'Agenda Al1achment,-Agrmg,^"'cnd ~riO').I().(l5.09 CMB [nfi'astruClure - L".n A"r~emcnt Wilh l'Tomis_,~" )\int'.dLlO CDC/2009-61 (ii) 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. 10. Remedies. Upon a default by the Lender, (i) the Borrower 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 Borrower, and (ii) the Borrower may seek appropriate legal, injunctive or equitable relief. 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 Note andlor any covenants and obligations of the Borrower 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. ] 1. 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 Borrower first having been obtained which consent shall not be unreasonably withheld. ] 2. Term. This Agreement shall terminate upon the payment in full by the Borrower of all amounts due under the Note. ]3. 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 persona] 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 their address for receipt of written notice by so notifying the other party in writing. TO LENDER: CMB Infrastructure Investment Group III, L.P. Attention: Patrick Hogan 4507 49'h Avenue Moline, Illinois 6] 265 TO BORROWER: Redeve]opment Agency of the City of San Bernardino Attention: Emil A. Marzullo, Interim Executive Director 201 North "E" Stteet, Suite 30] San Bernardino, California 9240] 8 4811-3323-1364.1 P: Agendas Agenda AlI~,'hm<:TlIS,Ag.nd" All"chmcm"Agnms-Amcnd :'O()~ 10.05-09 CMIl Infrastlllclurc- Ll'an Agreement with Promissory \JO\<.dM CDC/2009-61 14. 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. 15. Entire Agreement. This Agreement constitutes 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. 16. 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. ] 7. Severabilitv. 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 pernlitted by law. (SIGNATURE PAGE FOLLOWS] 481 ]-3323-1364.1 9 P".~..cnrl." A"",O' A"Rchm~nt,'A"enn" A"a('hment,'_A,'nnt,_Am,'nd cOM III_O'\_()!) eMH lnn-><1l'uc",,'e _ J nRn A"f,...mcnl w;lh PT"m;"",.,- Nnt<'onc CDC/2009-61 IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement on the date first written above. LENDER CMB Infrastructure Investment Group III, L.P. By: BORROWER Redevelopment Agency of the City of San Bernardino By: Emil A. Marzullo, Interim Executive Director ~ Approved as to Form: BY:\~ - Age unsel 4811~3323-1364.1 10 P-\Agendas\Agenda Attachmems\Agenda AttachmentslAgrmls_Amend 200~\IO-05-0q C\1B Infra_'truel"re _ Loon Agreemenl "ith Promissury I\ote.doc CDC/2009-61 EXHIBIT "A" PROMISSORY NOTE 41\11-3323-]364.1 11 P A..,'n~"''\'',"T1~a AIt"chmem"'.Aecnd. All",hmcm, '\~""ls.Amend ~OO~'.IO-(lS-O<) CMB Inhmtrucl"rC. l~\.n A~"eement with pf()m;"~ry ~ole.d"c CDC/2009-61 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO PROMISSORY NOTE (CMB Infrastructure Investment Group III. L.P.) RATE OF INTEREST 5.25% MATURITY DATE September 30, 2015 ISSUE DATE October 1, 2009 REGISTERED OWNER: CMB Infrastrucure Investment Group III, L.P. PRINCIPAL AMOUNT: $15,000,000.00 The REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (the "Agency"), duly organized and existing as a community redevelopment agency of the City of San Bernardino, California, for value received, hereby promises to pay to CMB Infrastrucure Investment Group III, L.P., duly organized and existing under the laws of the State of California (the "Holder") the principal sum of Fifteen Million Dollars ($15,000,000.00) plus interest at a rate of 5.25% per annum in accordance with the terms and provisions of that certain Loan Agreement entered into as of October I, 2009 (the "Loan Agreement"), by and among the Agency and the Holder, to which reference is hereby made for a more complete statement of the terms and conditions under which the loan evidenced by this Promissory Note (this "Note") is made and is to be repaid. This Note shall be paid in full on the Maturity Date, except to the extent prepayment whether in whole or in part has been sooner made. This Promissory Note evidences the obligations incurred by the Agency pursuant to the Loan Agreement for the general redevelopment purposes of the Agency. The provisions of California Health & Safety Code Section 33640, et seq., shall not be applicable to the execution and delivery of this Promissory Note by the Borrower. The Agency agrees to pay the aforesaid principal plus interest in accordance with the terms hereinafter set forth: I. This Note shall be payable as follows: (a) On or before September 30, 2015, the undersigned shall pay in lawful money of the United States of America Fifteen Million Dollars ($15,000,000.00) to the Holder at 4507 49'h Avenue, Moline, IL 61265, or to such other address or to such account and in such manner as the Holder shall direct in writing to the Agency. (b) Interest shall be paid quarterly on each January I, April I, July 1 and October I with the first interest payment due on January I, 2010, and quarterly thereafter (each such date being an "Interest Payment Date"), and the final interest payment shall be due and payable on the Maturity Date. Interest shall be payable in arrears based upon the principal balance of the Note outstanding as of each Interest Payment Date for the precise number of days calculated on a 365/366 year basis that the applicable principal balance of this Note was outstanding during the applicable Interest Payment Calculation Period (as defined below). The Holder shall provide invoices to the Agency with respect to and as a condition precedent to all payments due and payable pursuant to this Note except as 4811-3323-1364,1 12 r.\Agenda,\Agenda Attachmen['\Agend. Ati.chmem,\Agrml,-Amcnd 200~\ I O.O~.OO ('MB Infr.structllre - Loan Agreelllent Will, Pro,niS;Qry NUle d,," CDC/2009-61 provided in Section 2 below. The Holder shall calculate the interest as shall be due and payable by the Agency on each such Interest Payment Date and provide written notice of such payment amount to the Agency in writing. Interest shall be calculated in arrears for the applicable calendar quarter ending as of the calendar day immediately prior to each January I, April I, July 1 and October I (each such calendar quarter being defined herein as an "Interest Payment Calculation Period"). (c) The Agency may, without penalty, prepay solely as to the entire outstanding principal balance of this Note at anytime on or after April 1, 2013, and on any other date thereafter, or prior to such date upon the mutual consent of the parties. 2. If a payment not timely made remains overdue for a period of thirty (30) days after the same becomes due and payable after notice as provided in Section l(b) above (a "Delinquent Payment"), the Agency, without further notice or demand by the Holder, shall pay a late charge in an amount equal to three percent (3%) of the Delinquent Payment due and owing to Holder (the "Late Charge"). The Agency agrees that an amount equal to the Late Charge is a reasonable estimate of the damage to the Holder in the event of a late payment under this Note. Each delinquent payment plus the applicable Late Charge shall bear interest at a rate equal to 5.25% per annum until such amount is paid in full to the Holder. 3. In the event the Agency fails to make two (2) consecutive interest payments to the Holder, or two (2) interest payments in any twelve-month period, the Holder may accelerate payment of the amount of interest coming due on the next two (2) succeeding interest payment dates, so that all such interest, together with all Delinquent Payments, Late Charges and interest due thereon, shall be due and payable on the tenth (10th) day of the month following the month in which, the second (2nd) consecutive interest payment was not made or the second (2nd) interest payment in a twelve-month period for which the required payment was not made. Thereafter, the Agency shall continue to remit quarterly interest payments in accordance with this Note. 4. This Note is solely the debt of the Agency. This Note is not a debt of the City of San Bernardino, California, nor of the State of California or any othcr political subdivisions of the State of California, and neither said City, said State nor any other of said political subdivisions shall be liable hereon in any manner. This Note does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the Agency nor any persons executing this Note shall be liable personally on this Note by reason of its issuance. 5. This Note 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. 6. 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. 7. This Note shall not be assigned by the Holder without the prior written consent of the Agency, which consent shall not be unreasonably withheld. 4811-3323-13641 13 P IAgcl1das\Agend. A<lachmem,IAgend^ Attoohmcn.,\Agrmts-Amelld 20091](1.0.1.09 rMlllnfr.'tJUctllre - Loan Agreemenl with Promi"Qry '<ate doc CDC/2009-61 8. The execution, delivery and performance of this Note have been duly authorized by all necessary actions of the Agency, does not require the consent or approval of any other person, regulatory authority or 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. 9. This Note, when delivered, shall constitute a legal, valid and binding obligation of the Agency, enforceable in accordance with its terms. 10. Payment of the principal amount of this Note may not be accelerated by the Holder. II. This Note and the Loan Agreement 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 Holder and the Agency. 12. This Note has been delivered to the Holder and accepted by the Holder in the State of California. In the event of a lawsuit, the Holder and the Agency agree to submit to the jurisdiction of the Superior Court of San Bernardino County, California, Main Branch, in the City of San Bernardino, California. This Note shall be governed by the laws of the State of California. 13. If a court of competent jurisdiction finds any provision of this Note to be 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 that the offending provision cannot be so modified, it shall be stricken and all other provision of this Note in all respects shall remain valid and enforceable. IN WITNESS WHEREOF, the Agency have caused the Note to be executed as of this I sl day of October, 2009. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Interim Executive Director of the Redevelopment Agency of the City of San Bernardino 4811-3323.])64.1 14 P:\Agenda.<\Agenda Attachment.lAgenda AttachmentslAgrmt,-Amend 2009\]0-05-09 C!\ffi Infrastructure - Loan Agreement with Promissory Note,doc