HomeMy WebLinkAboutR33- Economic Development Agency CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: CMB Infrastructure Investment Group III,
Interim Executive Director L.P. - Loan Agreement for a $15,000,000 Loan
under the EB-5 Program
DATE: September 14,2009
------------ ---------------------------------------------------------------------------- ---------- -------------
Synopsis of Previous Commission/Council/Committee Action(s):
On August 20,2009, Redevelopment Committee Members Johnson, Baxter and Brinker unanimously voted to recommend that
the Community Development Commission consider this action for approval.
---------------------------------------------------------------------------------------------------------------------- - -------
Recommended Motion(s):
(Community Development Commission)
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
Contact Person(s): Brian Turnbull Phone: (909)663-1044
Project Area(s): N/A Ward(s): All
Supporting Data Attached: Q Staff Report 0 Resolution(s) H Agreement(s)/Contract(s) ❑ Map(s)❑ Letter(s)
Funding Requirements: Amount: $ -0- Source: N/A
Budget Authority: N/A
Signature: Fiscal Revi
Emil A. Marzullo,Interim Executive Director Rus eJe s
I Im Adm ' ' e Services Director
------------------------------------------------------------------------------------------------ ------ ---------------------
Commission/Council Notes:
/7iDTJDi(/ ?IJ "W401— AY0 2—Af4,c5—
----
------
------
---
---------
-----
---------------
---------------------------------------------
--- -----
—---
—
PUgendu mmDevCommission\CDC2009\ 2I-09 CMB Infrummm-EB-5Pww.m wAgmementSR&c COMMISSION MEETING AGENDA
Meeting Date: 09/21/2009
Agenda Item Number:
i
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
CMB INFRASTRUCTURE INVESTMENT GROUP III,L.P.-LOAN AGREEMENT FOR A$15,000,000
LOAN UNDER THE EB-5 PROGRAM
BACKGROUND:
CMB Infrastructure Investment Group III, L.P. ("CMB"), was formed in the mid-1990's to establish a "regional
center" for the counties of San Bernardino, Riverside and Sacramento to assist in financings for the closed military
bases in these counties. The Inland Valley Development Agency("IVDA")entered into the initial loan transaction
with CMB in 1997, for the first loan of this type pursuant to the EB-5 Program administered initially by the
Immigration and Naturalization Services ("INS") which has since been restructured into the United States
Citizenship and Immigration Services("USCIS"). Since late 2007,the IVDA and the San Bernardino International
Airport Authority("SBIAA")have jointly entered into four additional loans with other affiliates of CMB for a total
principal amount of$46,000,000. It is anticipated that an additional $6 million loan with another affiliate of CMB
will additionally be submitted to the IVDA for consideration in September 2009. The loan proceeds have been
used by the IVDA/SBIAA in part for various Airport and roadway infrastructure projects, and in most instances,the
proceeds were used to partially fund cost overruns or local matching fund requirements of other federal grants.
CURRENT ISSUE:
The EB-5 Program for the CMB regional center for San Bernardino County allows foreign nationals to obtain
permanent residency status in the United States through an investment of $500,000 in a qualified investment
activity that generates U.S.jobs. Typically, the minimum investment amount is $1,000,000 but the lower amount
of$500,000 per investor applies in San Bernardino County due to the higher unemployment rates and the closure of
the Norton Air Force Base ("NAFB"). The use of the USCIS approved economic model for infrastructure
investments allows for the use of indirect job creation based upon infrastructure expenditures by governmental
entities. CMB establishes separate limited liability companies for each investment pool and requires that there be
no prepayment by the borrowing governmental entity of the principal amount for at least forty-two months. This
restriction allows adequate time for the investors to meet all criteria required by the USCIS for obtaining the
permanent residency status. Rather than investing in private businesses as virtually all other regional centers have
elected to undertake, CMB will only place loans into infrastructure and public improvement investments with
governmental agencies whereby the necessary jobs that are required to be generated can be demonstrated utilizing
an economic model approved by the USCIS. In San Bernardino County, the model provides that for each
$1,000,000 of infrastructure and public improvement construction dollars expended by governmental agencies, 5.7
indirect jobs are generated in the local economy resulting from the construction expenditures on the infrastructure
and other public improvements. Each investor must demonstrate that their $500,000 investment has generated 10
new American jobs. $1.5 million of additional City/Agency and other public agency infrastructure costs will thus
generate 11.4 indirect jobs thereby qualifying the investor for permanent residency status.
The City of San Bernardino Economic Development Agency ("EDA") Staff has caused the preparation of certain
documents to provide for the issuance of a tax exempt note entitled "Redevelopment Agency of the City of San
Bernardino Tax Exempt Promissory Note Series 2009 (CMB Export, LLC)" (the "Note")to CMB in the aggregate
principal amount of not to exceed $15,000,000. The Note will be secured by a Loan Agreement between CMB and
the EDA in the form as included in this agenda item (the"Loan Agreement"). Several of the projects that the EDA
anticipates funding with the CMB loan proceeds will include:
1. Omnitrans soft costs for the construction of the sbX federally funded bus rapid transit project, including
temporary relocation of the transit center and parking lots.
--------------------————---—-----—--—-----—---------------———-—---------------------------------------------------------------------------
P Uge wTomm Dev Commwion\CDC 2009\09-21.9 CMB lnfmtmtum-EB-5 Pmgmm Loan Ag ment SRdx COMMISSION MEETING AGENDA
Meeting Date: 09/21/2009
Agenda Item Number: W
Economic Development Agency Staff Report
CMB Infrastructure—EB-5 Program Loan Agreement
Page 2
2. Sewer line relocation and construction for the State Court Complex on Third Street and Arrowhead.
3. Solar projects for the EDA building and other City and EDA buildings to reduce energy costs.
4. Infrastructure costs for the La Placita and Maya Cinemas projects.
5. Infrastructure cost reimbursements and additional interchange expenditures for the I-215/University Boulevard
interchange.
6. Other projects identified by the Community Development Commission of the City of San Bernardino.
The terms of the proposed loan are as follows, subject to change in the final documents:
1. Interest Rate: 5.25%,tax-exempt.
2. Principal: $15,000,000.
3. Repayment: Interest only payable quarterly; principal payable at the 6-year maturity date.
4. Security: No specific pledge of EDA real estate assets but a limited pledge of surplus tax increment revenues
and commitment to refinance the loan; at the time of loan closing there must be a demonstration of ability to
undertake a refinancing at the 6-year maturity date.
5. Closing Costs: No points or costs other than document preparation utilizing existing forms.
6. Closing Date: October,2009.
7. Funding: Increments of $500,000 will be advanced to the EDA as investors are obtained who submit the
proper documentation to the USCIS for approval; all funds should be available to the EDA by the second
quarter of 2010.
The federal legislation that allows for this type of financing under the EB-5 program is currently scheduled to
sunset as of September 30, 2009, at the end of the current federal fiscal year. However, the authorizing legislation
has been extended previously at each point in time prior to the expiration of the authorizing legislation, and it is
assumed that the EB-5 program will again be extended as part of the federal budget process in September 2009. A
loan closing would only occur if the federal legislation is extended and in effect at the time of the proposed loan
closing in October 2009.
Additional information can be obtained on the CMB website at www.cmbeb5visa.com and it contains descriptions
and photographs of the projects undertaken at both the former NAFB with the IVDA and SBIAA in addition to
those current projects at the former McClellan Air Force Base in Sacramento.
ENVIRONMENTAL IMPACT:
This action does not meet the definition of a"project"under Section 15378 of the California Environmental Quality
Act(CEQA).
FISCAL IMPACT:
Repayment of this loan would be interest only and payable quarterly. Repayment or refinance of the principal
would take place at the 6-year maturity date. There is no impact to the City's General Fund.
RECOMMENDATION:
That the Community DevelwaiesiLCsimmission adopt the attached Resolution.
Emil A.Marzullo,Interim Executive Director
PUgendukComm De CommissionTDC 20%09-21-W CMB lnfi tmcture-EB-5 Pmgnm Lan Agreement SR doc COMMISSION MEETING AGENDA
Meeting Date: 09//211/,2009
Agenda Item Number: 1":/ ?
1 RESOLUTION NO.
2
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
3 THE CITY OF SAN BERNARDINO AUTHORIZING THAT CERTAIN
4 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TAX
EXEMPT PROMISSORY NOTE SERIES 2009 (CMB INFRASTRUCTURE
5 INVESTMENT GROUP III, L.P.) IN THE AMOUNT NOT TO EXCEED
$15,000,000, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED
6 THERETO AND AUTHORIZING AND DIRECTING PREPARATION,
EXECUTION AND DELIVERY OF THE FINAL FORM THEREOF
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
of San Bernardino (the"City"); and
12
13 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency")
14 desires to finance certain infrastructure costs, including, but not limited to: (i) Omnitrans soft costs
15 for the construction of the sbX rapid bus project, including temporary relocation of the transit center
16 and parking lots; (ii) sewer line relocation and construction for the State Court Complex; (iii) solar
17 projects for the Agency building and other City and Agency buildings; (iv) infrastructure costs for
18 the La Placita project; and (v) infrastructure cost reimbursements and additional interchange
19 expenditures for the I-215/University Boulevard Interchange (the "Project") in accordance with the
20 California Community Redevelopment Law, in addition to such other expenditures and projects as
21 may be approved by this Commission; and
22 WHEREAS, in order to raise the funds required for the Project, the Agency has determined
23 to issue its Redevelopment Agency of the City of San Bernardino Tax Exempt Promissory Note
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 1, 2009, by and between CMB
27 Infrastructure Investment Group III, 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:\AgendmVRoolutionsV lutimu\2009\09-21-09 CMB 1nf W WaUM-Loan Agreement CDC Beso.doc
1 WHEREAS, the Agency has considered the terms of the transaction as contemplated herein
2 and desires at this time to approve the terns 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 $15,000,000, 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\Agendu\ReoluWns\P s btionsUW9\09-21-09 CM Infmtmaure-Loan AR ment CDC Reso.doc
I 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
i
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. This Resolution shall take effect from and after its date of adoption by this
11 Commission.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3
PUgendesVtesolutionsV esolutions\2009W9-21-N CMB lnft maum-Corm Agreement CDC R o,&o
1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO AUTHORIZING THAT CERTAIN
2 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TAX
3 EXEMPT PROMISSORY NOTE SERIES 2009 (CMB INFRASTRUCTURE
INVESTMENT GROUP III, L.P.) IN THE AMOUNT NOT TO EXCEED
4 $15,000,000, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED
THERETO AND AUTHORIZING AND DIRECTING PREPARATION,
5 EXECUTION AND DELIVERY OF THE FINAL FORM THEREOF
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 meeting
8 thereof, held on the day of 2009, by the following vote to wit:
9 Commission Members: Ayes Nays Abstain Absent
10 ESTRADA
11 BAXTER
12 BRINKER
13 SHORETT _
14 KELLEY
15 JOHNSON
16 MC CAMMACK
17
18 Secretary
19
20 The foregoing Resolution is hereby approved this day of 2009.
21
22
23 Patrick J. Morris, Chairperson
Community Development Commission
24 of the City of San Bernardino
25 Approved as to Form:
26
27 By
Age unsel
28
4
P t gendesVi kutionsVtaolutiumt20g9\09-21-09 CMB Infrestsuaure-Loan Agreement CDC Rao.doc
LOAN AGREEMENT
(CMB Infrastructure Investment Group III, L.P.)
THIS LOAN AGREEMENT (this "Agreement") is entered into as of this 1 st day of October,
2009, by and between CMB Infrastrucure Investment Group III, L.P., 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:
1. 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, L.P.)" 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.
The Borrower shall use and apply the proceeds of the Loan for any legal purposes of the
Borrower pursuant to the 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 center and parking lots; (ii) sewer line relocation and construction
for the State Court Complex; (iii) solar projects for the Borrower building and other City and Borrower
4811-3323-1364.1 1
P Wgendas\AgeMa Anachmenua gem a Attachments\Agent.Att.hments\Agrmts-AmeM 2009\09-21-09 CMB I ftw o.-I .Ag..m with Pmmissmy Note.doc
buildings; (iv) infrastructure costs for the La Placita project; and(v) infrastructure cost reimbursements
and additional interchange expenditures for the I-215/Univerity Blvd. Interchange (the "Project") in
accordance with the Community Redevelopment Law.
3. Funding of the Loan.
(a) Acknowled eg ment. 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 Agreement, 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
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
April 1, 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 1, April 1, July 1, and October 1 (each such date is defined herein as an "Interest Payment
Date"), commencing on January 1, 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
4811-3323-1364.1 2
P:V,,raiar\Agenda Attachme.n\Agenda AttachnomMAgenda Anachmenvtt grmtts-Amend ZOM09-21-09 CMB Infiantromm-Loan Agreement with Pmmisamy Note dc
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 Interest") 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 acceleration 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 Security; 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
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.
4811-3323-1364.1 3
P\Agendaa\AgeMa Amehmema\AgeMa Attachments\Agenda AttuhmentMgrmts-Amend 20(9\09-21-9 CM Infmwcture-Loan Agreement with Promissory Note&c
(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 1, 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 of the 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.
(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
4811-3323-1364.1 4
P NgendaoAgenda AttachmeoUWgeode Attachments\Agenda AvachmentaWgrmn-AmeM 2W!Wi?-2"9 CM Infastructure-Loan Agreement with Promissory Note&c
r
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.
(f) 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 USCIS. The Borrower covenants and
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 of the United States Internal
Revenue Code ("Code") or which would otherwise cause the interest on the Note to be includable in
4811-3323-1364.1 5
P'\AgendasWgetka Atuchmenu\Agenda Attachments\Age ht Amchmenta\Agrmts-Amend 2009 .21.W CM Infmtmmure-Loan Agreement with Promissory Noted c
gross income for federal income tax purposes. To this end, in the event that at any time the Borrower
is of the 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 149(b) of the Code.
(e) Private Activity 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.
(f) Not Hedge Bond. The Borrower reasonably expects that the Note will not be a
"hedge bond" within the meaning of section 149(g) of the Code and the Borrower shall comply with
all expenditure requirements imposed by said section 149(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
4811-3323-1364.1 6
P'.Wgendu\Agenda Anachmenu\Agenda Attmhments\Agenda AtmchmenWAgrmts-Amend 2009\09-21-09 CMB Infrastmcmre-6 m Agreement with Promissory Note.doc
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) By 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 15, 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) By 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`h) calendar day following an Interest Payment
Date or the fifteenth (15'h) calendar day following the Maturity Date, as applicable, as each
payment of interest and principal is required to be made; and
(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
and/or 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.
{ 4811-3323-1364.1 7
P\Agendu\Agenda Atmchmen(Mgenda Attachments\Agenda AttachmentslAgrmts-Amend 2009\09-21-09 ChBl Infruuuctum-Lon Agreement with Pmnssory Note doe
11. 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.
12. Term.
This Agreement shall terminate upon the payment in full by the Borrower of all amounts due
under the Note.
13. 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 their address for receipt of written notice by so notifying the other party in
writing.
TO LENDER: CMB Infrastructure Investment Group III, L.P.
4507 491h Avenue
Moline, Illinois 61265
Attention: Patrick Hogan
TO BORROWER: 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
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.
4811-3323-1364.1 8
P 4Agend.\A mde AnechmemtXA eMa Anechmente\AgnNa Atmchmems\Agrmts-Amend 2009\09-21-09 CMB Infruuucture-Loan Agreement with Pmmiswq Note.doc
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.
17. 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.
i
[SIGNATURE PAGE FOLLOWS)
i
i
4811-3323-1364.1 9
P'.UgenduUgeMa AttachmentMgenda Attachments\Agenda AttachmenbUgrmb-Amend 2009\09-21-09 CMB I.R t.cwre-Loan Agrament with Promissory Note.doc
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:
General Partner
BORROWER
Redevelopment Agency of the City of San Bernardino
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form:
By:
f Agency Cognsel
1
ATTEST:
(SEAL)
By:
Secretary
4811-3323-1364.1 10
P:\Agendsa\Agenda Anuchments\Agende Attachments\Agenda Attachments\grmta-Amend 2009W9-21-W CMB Infiunucture-Loan Agreement with Pmmisnory Note.doc
EXHIBIT "A"
PROMISSORY NOTE
4811-3323-1364.1 1
P4Agendaa\AgeMe Attachmenu Ageda Attachments\Agenda Attachment,\Agrmu-Amend 2009\09-21-09 Cb Infrutmctum-Loan Agreement with Promissory Note doe
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
PROMISSORY NOTE
(CMB Infrastructure Investment Group III. L.P.)
RATE OF MATURITY ISSUE
INTEREST DATE DATE
5.25% September 30, 2015 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 1,
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:
1. 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 Seven Million Dollars ($5,000,000.00) to the Holder at 4507 49`"
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.
I (b) Interest shall be paid quarterly on each January 1, April 1, July I and October 1
with the first interest payment due on January 1, 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
4511-3323-1364.1 12
I� P'.Wgendu\Agenda Attachments\Agenda Attachments\Agenda Anachments\Agrmts-Amend 2W%\ 21-0 CM Infiattmaure-Loan Agreement with Pmmissory Note&c
1
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 1, April 1, July 1 and October 1 (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 1(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 other 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.
4811-3323-1364.1 13
P:UAVndu\Agetda Auchment\Agenda AttechmenbtAgenda Attach..m\Agtmm-Amend 2W 09 21-0 Ch1B InRaswcmm-Loan Agreement with Pmmismry Note.doc
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.
11. 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 Is' 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
4811-3323-1364.1 14
P\Agenda\Agenda Anwhmems\Agenda Attachmems\Agenda Anachments\AgrmN-Amend 2W9\ 21-0 Chffi Infiatmdum-Loan Agrnment with Pmmiswry Note.doc
LOAN AGREEMENT
(CMB Infrastructure Investment Group III, L.P.)
THIS LOAN AGREEMENT (this "Agreement") is entered into as of this 1 st day of October,
2009, by and between CMB Infrastrucure Investment Group III, L.P., 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:
1. 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
i represented by the "Redevelopment Agency of the City of San Bernardino Tax Exempt Promissory
Note Series 2009 (CMB Infrastructure Investment Group III, L.P.)" 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.
The Borrower shall use and apply the proceeds of the Loan for any legal purposes of the
Borrower pursuant to the 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 center and parking lots; (ii) sewer line relocation and construction
for the State Court Complex; (iii) solar projects for the Borrower building and other City and Borrower
4811-3323-1364.1 1
P:WgeMO\AgeMa Attachmems\Ag end.Attachments\AgeMa Attwhmenus grmte-Amend 2M0 -21-0 CMB Infmtmctum-Loan Agreement with Pmmiswry Note.doc
buildings; (iv) infrastructure costs for the La Placita project; and (v) infrastructure cost reimbursements
and additional interchange expenditures for the I-215/Univerity Blvd. Interchange (the "Project") in
accordance with the Community Redevelopment Law.
3. Funding of the Loan.
(a) Acknowled e>? ment. 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`BB-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) Fundin . Subject to Section 3(a), above, and the other terms and conditions of
this Agreement, 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
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
April 1, 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 1, April 1, July 1, and October 1 (each such date is defined herein as an "Interest Payment
Date"), commencing on January 1, 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
4811-3323-1364.1 2
P UApndasUgenda AnachmentsV genda Attachmmn NAgenda Attach.,.bU,,M-Amend 2009W9-21-09 CMB InfiestmcWre-Loan Agrmment with Promiamy Note doc
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 Interest') 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 acceleration 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 Security, 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.
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.
4811-3323.1364.1 3
P9 ,g nd s\Agenda A"Onnants\Agenda Attaohmems\Agenda Anachmen Mgrmta-Amend 20 9-2I-09 CMB Infraswcwre-Loan Agreement with Promissory Note.doo
(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 1, 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 of the 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.
(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
4811-3323-1364.1 4
P:WgendaAAgende AnchmemMS.nda AnachmentsNgcnda AttachmentMpente-Amend 2"N-21-09 CMB hoinotmcmre-Loan Agreement with Promissory Note.loc
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.
(f) 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 USCIS. The Borrower covenants and
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 of the United States Internal
Revenue Code ("Code") or which would otherwise cause the interest on the Note to be includable in
4811-3323-1364.1 5
P Ugendu\Agenda AtnchmenuUgenda Attachrriws\Agnda Atlachmenu\Agrmts-Amend 2009\09-21-09 CMB InRutrutture-Lam Agreement with Pmmi..,Nme.doc
gross income for federal income tax purposes. To this end, in the event that at any time the Borrower
is of the 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 149(b) of the Code.
(e) Private Activity 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.
(f) Not Hed eg Bond. The Borrower reasonably expects that the Note will not be a
"hedge bond" within the meaning of section 149(g) of the Code and the Borrower shall comply with
all expenditure requirements imposed by said section 149(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
4811-3323-1364.1 6
P Wgendas\Agenda AttuhmenWAgenda Attachments\Agenda Attachments\ grmts-AmeM 2009\09-21-W CMB Infrutructure-loan Agreement with Promissory Note.doc
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) By 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 15, 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) By 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`s) calendar day following an Interest Payment
Date or the fifteenth (15`h) calendar day following the Maturity Date, as applicable, as each
payment of interest and principal is required to be made; and
(ii) failure to perform or a delay in performing any terns 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
and/or 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.
4811-3323-1364.1 7
P.UgerOaAAgenda Attachment,i Agenda AttachmentsVigenda AttachmenU\Agrmb-Amend 2009\09-21-09 CMB Infrsuuaure-Loan Agmeinent with Pmmissory Notn.doc
11. 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.
12. Term.
This Agreement shall terminate upon the payment in full by the Borrower of all amounts due
under the Note.
13. 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 their address for receipt of written notice by so notifying the other party in
writing.
TO LENDER: CMB Infrastructure Investment Group III, L.P.
4507 49`s Avenue
Moline, Illinois 61265
Attention: Patrick Hogan
TO BORROWER: 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
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.
1 4811-3323-1364.1 8
P.Uyendas\Ayende Attachments\Agenda Attuhmenu\Ayenda At,.hments\A"M Amend 2009b9-2I-0 CMB Nftwa mu -Loan Ayreemem with Pmmi,.,Natc doc
a
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.
17. Severabilitv.
Each and every section of this Agreement shall be construed as a separate and independent
covenant and agreement. If any tern 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]
i
4811-3323-1364.1 9
P:UgeMasWgenda Anachmenta�Agenda Atmchments genda ABaehmen191AgrmU-Amend 2009\09-21-09 CMB Infrastructure,-Loan Agreement with Promissory Note doc
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:
General Partner
BORROWER
Redevelopment Agency of the City of San Bernardino
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form:
By:
Agenc sel
ATTEST:
(SEAL)
By:
Secretary
4811-3323-1364.1 10
PSAgesWasWgenda AttachmentsUgenda Attachments\Agenda Amchments\Agrmts-Amend 21MO9-21-9 CW3 Infias more-Loan Agreement with Pmmiswu Note.doc
EXHIBIT "A"
PROMISSORY NOTE
4811-3323-1364.1
P\Agendm\Agcnda AnnihmentsWgeMa Attachmcnts\AgeMa Aunlhmenu gmts-Amend 200M-21 AW CM hnftmwcWm-Usn Agreement with Promissory Note.&c
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
PROMISSORY NOTE
(CMB Infrastructure Investment Group III. L.P.)
RATE OF MATURITY ISSUE
INTEREST DATE DATE
5.25% September 30,2015 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 1,
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:
1. 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 Seven Million Dollars ($5,000,000.00) to the Holder at 4507 49'
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 1, April 1, July 1 and October 1
with the first interest payment due on January 1, 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
P.\Agendas\Agmida Atlnhment,\ ,g a Attachments\Agenda AttachmenmUgrmts-AmeW 1009\09-21-09CMB Infrutmaure-Loan Agreement with Promissory Note doc
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 1, April 1, July 1 and October 1 (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 1(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 other 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.
4811-3323-1364.1 13
P'.\AgeMasWgende Attachments\Apauta Attuhments\Agenda Attachments\Agrmts-Amend 2MiW)-2i 4)9 CMB Inf natmetm-Loan Agreement with Pmmissory Note.doc
I
1
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.
i
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.
11. This Note and the Loan Agreement constitute the entire understanding and agreement of I'
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 lg` 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
4811-3323-1364.1 14
P UgeMes\Agenda AtmchmentsW gala Attachmtri,M ends Atuchmenu\Viett-AmetM 2009\08-21-WCMB Infimtmaure-Loan Agreement with Ihamissoty Note&c