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Home My WebLink About11- Development Department D" VELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: INLAND BEVERAGE - Executive Director EXTENSION REQUEST DATE: December 16, 1993 --------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On December 21, 1992, the Community Development Commission approved a loan agreement with Inland Beverage Inc., in the amount of$750,000 to finance relocation and business expansion programs. On December 9, 1993, the Redevelopment Committee considered this matter and recommended to the Community Development Commission approval of the Inland Beverage loan extension request. --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission approve, and that the Executive Director be authorized to draft and execute, a six month extension of the Loan Agreement with Inland Beverage, Inc., subject to Chino Valley Bank approval, in the principal amount of$750,000 and on terms described in the attached staff report, together with such other documents as are required to carry out the terms of the Loan Agreement and its extension. Admifistrator KENNETH J. HEN ERSON Executive Director --------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Kenneth J. Henderson/John Hoeger Phone: 5081 Project Area(s): Central City (CC) Ward(s): _ Three (3) Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $No Additional Source: N/A Budget Authority: N/A --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Note : ---------------------------------------------------------------------------------------------------------------------- KJH:JBH:lag:inldbvrg.cdc COMMISSION MEETING AGENDA MEETING DATE: 12/20/1993 Agenda Item Number: �_ DE ELOPMENT DEPART . ENT STAFF REPORT --------------------------------------------------------------------------------------------------------------------- INLAND BEVERAGE - EXTENSION REQUEST The attached letter from Mr. Tommy Mason, President of Inland Beverage, requests a six month extension of the Loan Agreement between the Redevelopment Agency and Inland Beverage. The purpose of the extension is to allow Mr. Mason time to exercise his option to put his common shares of stock in Inland Beverage as described in the continuing guarantee previously executed by Mr. Mason. The Agency will be paid in full upon the completion of exercising the put option which is to occur within 30 days of April 1, 1994 under the terms of the option. This extension will be dependent upon consent and approval by Chino Valley Bank which has furnished the funds to the Agency which the Agency has, in turn, lent to Inland Beverage. Staff is contacting the bank to confirm its understanding that the bank would be willing to renew its loan for an additional six months. The terms of the extension to Inland Beverage would be: Extension: Six months. Amendment Fee: $7,500.00 Loan Costs: Inland Beverage to pay any direct costs charged by the bank for the extension. Other: Any terms or conditions modified by the bank would be correspondingly modified for Inland Beverage. Based upon the good performance of Inland Beverage in this transaction and the need for the additional time necessary to exercise the put option, it is appropriate for the Community Development Commission to grant this request for additional time. Staff recommends adoption of the form recommendation. KENNE H J. H a NDERSON, Executive Director Development De rtment ---------------------------------------------------------------------------------------------------------------------- KJH:JBH:lag:inldbvrg.cdc COMMISSION MEETING AGENDA MEETING DATE: 12/20/1993 Agenda Item Number: � i r � Y{ •� l_L It NOV 2 41993 NOVEMBER 22, 1993 KENNETH J. HENDERSON EXECUTIVE DIRECTOR DEVELOPEMENT DEPARTMENT 201 NORTH "E" ST. 3rd FLOOR SAN BERNARDINO, CA 92401 RE: INLAND BEVERAGE DEAR KEN, IT DOES NOT SEEM LIKE ALMOST A YEAR SINCE WE LAST SPOKE. IT HAS BEEN A GOOD YEAR FOR US AND I HOPE FOR YOU AND YOUR DEPARTMENT. LET ME AGAIN EXPRESS MY APPRECIATION TO YOU AND THE PEOPLE INVOLVED FOR HELPING US FIND A WAY TO SOLVE SOME OF OUR PAST PROBLEMS. YOUR HELP ALLOWED US TO REMAIN IN THE CITY WHEN WE SOLVED OUR PROBLEMS, THEREBY PROVIDING A "WIN/WIN" SITUATION FOR BOTH THE CITY OF SAN BERNARDINO AND INLAND BEVERAGE. THE PURPOSE OF THIS LETTER IS TO AGAIN ASK FOR YOUR HELP WITH A CURRENT PROBLEM. WE HAVE HAD A GREAT YEAR, AND THE PROBLEM IS MORE ONE OF TIMING THAN ANYTHING ELSE. I AM REQUESTING AN EXTENSION, UNDER THE SAME TERMS, OF SIX MONTHS OR LESS ON OUR CURRENT LOAN FROM THE CITY. I WOULD HOPE TO BEGIN AMORTIZING THE PRINCIPLE AS SOON AS' POSSIBLE, HOWEVER, THAT WOULD NOT BE FEASABLE UNTIL JUNE OF 94. THE FIRST THREE MONTHS OF ANY CALENDAR YEAR ARE "DEAD" IN THE BEVERAGE BUSINESS. HISTORICALLY, THIS HAS ALWAYS BEEN OUR SLOWEST TIME OF YEAR. ADDITIONALLY, THE END OF THE FIRST QUARTER IS WHEN WE BEGIN TO BUILD INVENTORY FOR THE SPRING AND SUMMER MONTHS. THE BOTTOM LINE IS THAT OUR CASH FLOW IS EXTREMELY TIGHT AT THAT TIME OF YEAR. WE HAVE NO PROBLEMS KEEPING UP THE INTEREST, ITS ONLY THE REDUCTION OF THE PRINCIPLE PRIOR TO JUNE OF 94, THAT IS A PROBLEM. 1455 RIVERVIEW DRIVE•SAN BERNARDINO,CALIFORNIA 92408•(909)799-8585•FAX(909) 799-8595 YOU MAY RECALL FROM PARAGRAPH 3 OF THE CONTINUING GUARANTEE EXECUTED BY ME THAT, PURSUANT TO THE RECAPITALIZATION AGREEMENT DATED JUNE 25, 1990, I HAVE A UNILATERAL RIGHT TO "PUT" MY STOCK IN INLAND BEVERAGE TO THE COORS BREWING COMPANY. I HAVE DECIDED TO EXERCISE THIS RIGHT BASED UPON OUR 1993 PERFORMANCE. I INTEND TO GIVE NOTICE BY DECEMBER 31, 1993. 1 HAVE ATTACHED THE PERTINENT PARTS OF THE AGREEMENT FOR CLARIFICATION (EXHIBIT "A") . AS YOU CAN SEE, THEY ARE REQUIRED TO COMPLETE THE TRANSACTION WITHIN 30 DAYS OF APRIL 1, 1994. AT THE TIME OF CLOSURE, ONE OF THE DEBTS PAID SIMULTANEOUSLY WILL BE THE $750,000 OWED TO THE CITY. KEN, I'M SURE YOU ARE AWARE OF OUR PAYMENT RECORD. WE ARE CURRENT AND, TO MY KNOWLEDGE, THERE HAVE BEEN NO PROBLEMS. LET ME THANK YOU AND YOUR PEOPLE IN ADVANCE FOR YOUR ASSISTANCE IN SOLVING THIS TEMPORARY PROBLEM. I HOPE WE CAN STRUCTURE ANOTHER "WIN/WIN" SOLUTION. I LOOK FORWARD TO YOUR RESPONSE. SINCERELY, TOMMY MASON PRESIDENT 1 � , om such sale. None of the other parties hereto have any rig du or obligation to Miller arising out of his agreement t e ' resp sible for a portion of FLORES ' indebtedness to Alta r aris- ing out f his income interest in the proceeds from th ale or other dis sition of FLORES ' Common Shares, or out o LORES ' agreement wi Miller. Further, Miller shall hav o right to participate in anagement of INLAND ' s business virtue of his agreement with F ES, and shall have no rig title or interest in the Common Share except as provided in is Section 4 . 5 . How- ever, the parties her o and Miller do ee that because of Mil- ler 's income interest in he sale or er disposition of FLORES ' Common Shares, Miller shal execut nd agree to be bound by the provisions of this Agreement d at Miller and the parties , other than FLORES, shall ente to a mutual release of claims and covenant not to sue in e fo of the releases and covenants not to sue which are set rth in A 'cle 8 below. - ORES represents th , he has made no other pledge, assignmen or hypothecation of his mmon Shares or his rights with res ct to the same, except as pr ided in this Sec- tion 4 .5 . 4 . 6 MASON represents that he has not edged, as- sign or hypothecated his Common Shares to any third p ty, and th MASON is the legal and beneficial owner of his Commo hares ee of any and all liens , charges or adverse claims whatsoe r. 5 . "Put" and "Call" Options . 5 .1 Commencing on April 1 , 1993 , and semi-annual- ly on each October 1 or April 1 thereafter, until April 1, 1996, MASON and FLORES shall each have the option to "put" all his Com- mon Shares to COORS, or its assignee, subject to the terms and conditions set forth in this Article 5 ( "Put Option") . The par- 14 ties understand and a•. subject to the terms and condi- tions set forth in this Article 5 , the Put Options of MASON and FLORES may be exercised independent of one another. 5 . 2 MASON and FLORES, as the case may be, ("Put- ting Party") shall give COORS prior written notice that he in- tends to exercise his Put Option. Notice shall be mailed to COORS , pursuant to the provisions of Section 14 , at least 90 days and not more than 180 days prior to the April 1 or October 1 date upon which the Putting Party intends to exercise his Put Option. 5 . 3 The settlement date shall be mutually agreed upon by the parties, but shall be no later than 30 days following either April 1 or October 1 , provided the Putting Party has com- plied with the notice provision in Section 5 . 2 ( "Settlement Date") . 5. 4 Prior to the Settlement Date, COORS may a s its obligation to purchase the Common Shares to an of i- ated pany or to a qualified third party purchaser, ject to the prove 'ons of Sections 5. 5. 4 , 5 . 5 . 5 and 5 . 5 . 6 . bject to the foregoin on the Settlement Date, COORS or ' s assignee shall purchase the Putting Party not le than all of his Common Shares, inclu ' g any Common Share transferred by the Putting Party to an inte vivos trust s permitted in Section 4. 4 above, or pledged to Al as I mitted in Section 4.5. 5. 5 The pur ase pr for the Common Shares shall be determined and id as provide 'n the following Sec- tions: 5. 5 . 1 The purchase price for h Common Share sha a determined by dividing the Formula Valu as here- after fined) by 100, 000 and multiplying the per share Fo la Val by the number of the Common Shares to be purchased from e tting Party. 15