HomeMy WebLinkAboutContracts & Agreements_50-1989_CCv0001.pdf SECURITY PACIFIC NATIONAL BANK
GOVERNMENT SERVICES AND FINANCIAL INSTITUTIONS
DIVISION CREDIT ADMINISTRATION W26-70
BEAUDRY CENTER, 333 SOUTH BEAUDRY AVE., LOS ANGELES, CA 90017
(213) 345-2536
Daniel T. Jackson
Vice President
July 10, 1989
George Kaenel
Finance Director
City of Redlands
30 Cajon Street
Redlands, CA 92373
Dear Mr. Kaenel:
Security Pacific National Bank ("Bank") is please to provide the
City of Redlands ("City") a proposal to extend the credit
accomodation described below. This proposal is not meant to be,
nor shall it be construed as an attempt to define all the terms
and conditions of the transactions involved in this financing.
Rather, it is intended only to outline certain basic points of
business understanding around which the legal documentation is
to be structured.
The general terms are as follows:
1. Type and Purpose of Credit: A one year term loan of credit
tio -p-r-ovid—eworking capital to expire August 1, 1990.
2 . Principal Amount: $4, 000, 000.
3 . Interest Rate: Tax exempt rate of 85% of the Bank's cost of
funds at the time of funding or tax exempt rate of 80% of
the Bank's Prime rate.
The Bank's cost of funds is to be tied to a 180 day NY CD
rate. The current rate is 8.95%.
The Prime rate is defined as the Bank's floating commercial
rate, announced from time to time as its prime rate. Any
changes in said interest rate, as a result of a change in
the prime rate, will become effective on the effective day
of the change in said prime rate.
4. Term: Interest payable quarterly, principal at maturity.
City of Redlands
July 10, 1989
Page 2
5. Prepayment Penalty: Yes.
6. Commitment Fee: 1/4 of 1% of the commitment.
7. Collateral: None.
8. other conditions:
(a) subject to review and analysis of all financial
statements of the City. Need a copy of the 1986
financial statement along with the 1988-89 budget and
1989-1990 proposed budget.
(b) In the event that the Bank loses its tax exempt status
on this credit due to action taken by the City,
including but not limited to the City's incurrence of
additional debt, the interest rate shall convert to a
tax exempt rate equal to 225 basis pint (2.25%) above
the Bank's cost of funds at time of each funding or
Prime plus 150 basis pints (1.50%) .
(c) Execution of all necessary and appropriate
documentation.
(d) Reimbursement of all expenses incurred by the Bank in
connection with this transaction, not to exceed
$10,000.
(e) Opinion of City Counsel regarding the legality and
enforceability of the City to enter into this
transaction, including the governmental borrowing
codes applicable to this transaction. opinion shall
also address the tax exempt nature of this
indebtedness.
(f) Council's Resolution authorizing this transaction,
which further declares which officers have the legal
authority to incur indebtedness on behalf of the City.
This proposal shall terminate at our option, if in our opinion,
a material adverse change in the property, business prospects,
and financial condition of the City prior to the expiration of
this proposal. The City's acknowledgement of this letter shall
constitute an acceptance of the foregoing terms and conditions.
Unless accepted or terminated, this proposal expires on July 21,
1989.
City of Redlands
July 10, 1989
Page 3
Thank you for considering Security Pacific National Bank in
meeting your financing needs. If I may be of further assistance
to you, please feel free to call me.
Si xa er7
.r
Daniel:` T. Jackson
Vice President
Acknowledged and accepted A 44 1989.
City of Redlands
By: r
George Kaeilel, Finan Director
By: ( 'S.
i/ilhin5lmes, City Manager
SECURITY PACIFIC NATIONAL BANK
GOVERNMENT SERVICES AND FINANCIAL INSTITUTIONS
DIVISION CREDIT ADMINISTRATION W26-70
BEAUDRY CENTER, 333 SOUTH BEAUDRY AVE., LOS ANGELES, CA 9W17
(213) 345-2536
Arthur S. Aldridge
Vice President
August 8, 1989 AUG I I
George Kaenel IFINMCE t)BMTMENT
Finance Director
City of Redlands
30 Cajon Street
Redlands, CA 92373
Dear: Mr. Kaenel
As per your request security Pacific National Bank has agreed to
extend the time of acceptance of our commitment letter to the
City of Redlands dated July 10, 1989.
The time for acceptance has been extended to September 15, 1989.
All other terms and conditions of our letter- of July 10, 1989
remain unchanged.
If you have any questions or need further assistance please feel
free to contact us.
Sincerely,
L
rthur S. Al?idge
Vice President
ASA/sh