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Home My WebLink AboutR08-Redevelopment Agency - REDEVELOPMENT AGENCY-REQUEST FOR COMMISSION/COUNCIL ACTION '- '-' '"'~ 1m: Glenda Saul, Executive Director Subject: AMENDING FINANCING AGREEMENT - BEST PRODUCTS COMPANY Dept: Redevelopment Agency Date: March 11, 1986 Synopsis of Previous Commission/Council action: 12/17/84 12/19/84 11/4/85 Adopted Resolution 84-546 approving final bond documents. Bond closed in the amount of $4,000,000 Adopted Resolution amending financing agreement. Recommanded motion: (MAYOR AND COMMON COUNCIL) MOVE TO ADOPT RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO __ PROVIDING FOR CERTAIN AMENDMENTS TO A FINANCING AGREEMENT; AND APPROVING SAID AMENDMENTS. /11:~ U Signature Contact person: Glenda Saul FUNDING REQUIREMENTS: Amount: $ N/A Phone: 383-5081 Ward: 1 Project: M/CC Supporting data attached: YES . No adverse Impact on City: Date: March 17, 1986. , . ncil Notes: r:.r..7C./t".1l 3/17/86 () --51 ^___..l_ 1...__ "1_ , CI1\r OF SAN BERNARDIU - REQUE( ,. FOR COUNCIL ACT )N STAFF REPORT On December 19, 1984, the City of San Bernardino issued an Industrial Development bond for Best Products Company. Included in the bond documents is the financial agreement which requires a "Net Worth maintenance" under Subsection 6.8(b). Subsequent to the Agreement, Best Company revised their accounting format. The revised accounting format was a temporary change and it was merely a technical accounting change. The company has now finalized their accounting system and is requesting an amendment to the financing agreement, to avoid a technical default on the bonds. The amendment reflects the new net worth of the company based upon the revised accounting format. Bond Counsel will be present to answer any questions you may have. Below is a brief recap of this funding: Amount: $4,000,000 Closed: December, 1984 Project: Second and "G" Streets - Showroom merchandising facility 50,000 sq. ft. - containing office and warehouse space. ,,"'....... Status: Complete Reserve & Development Fee: 1% of $4,000,000 - $40,000 Jobs: Approximately 125 . 75.0264 557G/CK 3/17/86 San Bernardino 60,009-57-3 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO PROVIDING FOR CERTAIN AMENDMENTS TO A FINANCING AGREEMENT; AND APPROVING SAID AMENDMENTS (Best Products Co., Inc. Project) WHEREAS, the Mayor and Common Council of the City of San Bernardino (the "Issuer") on December 17, 1984, adopted the following Resolution: RESOLUTION NO. 84-546 -- A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A CERTAIN FINANC- ING PURSUANT TO ORDINANCE NO. 3815 OF THE CITY; AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF ITS CITY OF SAN BERNARDINO, INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1984A (BEST PRODUCTS CO., INC. PROJECT), FOR THE PURPOSE OF PROVIDING FUNDS FOR THE ACQUISITION AND CONSTRUCTION OF SUCH PROJECT; APPROVING A CERTAIN FINANCING AGREEMENT WHICH MAKES CERTAIN PROVISIONS FOR THE BONDS AND FOR A LOAN OF THE PROCEEDS TO BEST PRODUCTS CO., INC.; APPROVING A FORM OF BOND AND AUTHORIZING ITS EXECUTION; AUTHORIZING SUCH OTHER RELATED DOCUMENTS AND FURTHER ACTION AS MAY BE NECESSARY TO CONCLUDE THE ISSU- ANCE, SALE AND DELIVERY OF SUCH BONDS: AND MAKING CERTAIN FINDINGS AND DETER- MINATIONS IN CONNECTION THEREWITH (Best Products Co., Inc. Project) . ."",-0 -1- JWB507:458.2 03-03-86 (JAS:rr) San Bernardino 60,009-57-3 WHEREAS, the Financing Agreement submitted and approved by said Resolution No. 84-546 contained certain financial covenants of Best Projects Co., Inc. (the "Company"); and WHEREAS, the Issuer, the Company and Sovran Bank, N.A. (the "Purchaser") have previously entered into certain amendments of the Financing Agreement (the "Amendments"); and WHEREAS, the Company has requested certain addi- tional amendments, attached hereto as.Exhibit A (the "Second Amendment") to said Financing Agreement. ~. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: section 1. The Financing Agreement, dated as of December 1, 1984, between the Company, the Issuer and Sovran Bank, N.A. (the "Purchaser") as modified by the Amendments is hereby further modified by the Second Amendment. The Second Amendment, contained in the attached "Exhibit A," is hereby accepted and approved. ~ Section 2. This Resolution shall take effect upon - its adoption. -2- JWB507:458.2 03-03-86 (JAS:rr) - ~--=-----=~-- -~--- San Bernardino 60,009-57-3 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the city of San Bernardino at a regular meeting thereof, held on the day of , 1986, by the following vote, to wit: AYES: Council Members NAYS: ABSENT: ABSTAIN: - City Clerk The foregoing Resolution is hereby approved this day of , 1986. Mayor of the City of San Bernardino, California !\.pproved as to form: r~;t#J~ city Attorney . -3- JWB507:458.2 03-03-86 (JAS:rr) BEST PRODUCTS CO., INC. SECOND AMENDMENT TO FINANCING AGREEMENT (San Bernardino, CA Project) DATED AS OF DECEMBER I, 1984 THIS SECOND AMENDMENT, dated as of January 31, 1986, is made by and among BEST PRODUCTS CO., INC., a Virginia corporation (the "Borrower"), the CITY OF SAN BERNARDINO, CALIFORNIA, a Charter City organized and existing under the Constitution of the State of California and the City Charter of the City of San Bernardino (the "Issuer"), and SOVRAN BANK, N.A., a national banking association (the "Bond Purchaser"). 1. Recitals. The parties have entered into a financing agreement dated as of December 1, 1984, as amended November I, 1985, (the Financing Agreement) pursuant to which the Bond Purchaser has agreed to lend to the Borrower on the terms and conditions set forth therein. The parties desire to amend the Financing Agreement as set forth below. Terms used herein as defined terms will have the same meanings given to such terms in the Financing Agreement. 2. Amendments. Subsections 6.8(b) and 6.8(c) of the Financing Agreement are hereby amended in their entirety to read as follows: "6.8(b) -- "6.8(c) Net Worth Maintenance. Maintain at the end of each fiscal quarter In each fiscal year, Consolidated Tangible Net Worth of at least the sum of: (a) the greater of (I) $320,000,000 or (Ii) $389,000,000 less the aggregate purchase price of all shares of Best Common Stock purchased by Best since June 29, 1984, (b) fifty percent (5096) of Best's cumulative Consolidated net earnings for fiscal years after January 28, 1984, but without deducting any losses, and (c) seventy- five percent (7596) of the net proceeds received by Best from the sale for cash of additional shares of Common Stock of Best after January 28, 1984." Operatinlt Charlte Maintenance. Maintain a ratio at the end of each fiscal quarter in each fiscal year, of (a) earnings before provision for income taxes and extraordinary Items, plus (b) net Interest expense plus (c) operating lease payments (all for the four most-recent fiscal quarters Including the quarter as of the end of which the determination Is made) to (a) net Interest expense, plus (b) operating lease payments (all for the four most-recent fiscal quarters including the quarter as of the end of which the determination Is made) of not less than .85:1 for the fourth fiscal quarter in fiscal 1985, and 1.5:1 for each fiscal quarter thereafter beginning with the first fiscal quarter in fiscal year 1986, all of the above as reported In the financial statements of Best prepared in accordance with generally accepted accounting principles." ~ 3. Ratification. Except as expressly amended hereby, all of the provisions of the Agreement are ratified and confirmed as in full force and effect. "- 1002a/I/2784a!2!4 , 4. Counterparts. This Amendment may be signed In any number of counterparts as If such signatures were upon the same Instrument. WITNESS the following signatures. '-.,......... 1002a!2/2784a!2/15 SOVRAN BANK, N.A. \.I .JJ By: 4~1 ~ Title: vtii /,v ~ , CITY OF SAN BERNARDINO, CALIFORNIA By: Title: ~