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HomeMy WebLinkAbout7878RESOLUTION NO. 7878 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HADDONSTONE (USA) LTD. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE EXPENDITURE OF $210,000 THEREFOR FROM THE 1992 -2001 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND WHEREAS, Haddonstone (USA) Ltd. has expressed a willingness to locate its business activities at the Pueblo Memorial Airport Industrial Park and has committed to employ thirty (30) full time employees, and WHEREAS, Haddonstone (USA) Ltd Corporation has made application for funds Improvement Projects Fund, and through the Pueblo Economic Development from the 1992 -2001 Sales and Use Capital WHEREAS, the City Council is willing to approve such application for funds upon the terms and conditions set forth herein; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The City Council does hereby find and determine that Haddonstone (USA) Ltd.'s application for funds meets and complies with the criteria and standards established by Ordinance No. 5742 and will create employment opportunities justifying the expenditure of public funds. SECTION 2 The Agreement dated May 28, 1996 between Pueblo, a municipal corporation and Haddonstone (USA) Ltd., in substantially the form and content of the Agreement attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Agreement, with such changes thereto as the President of the City Council and City Attorney shall approve, in the name of the City and the City Clerk is authorized and directed to affix the seal of the City thereto and attest same. SECTION 3 Funds in an amount of $210,000 are hereby authorized to be expended and made available to Haddonstone (USA) Ltd. out of the 1992 -2001 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of reimbursing it for the cost of the job creating capital improvement project described in the attached Agreement. The funds hereby authorized to be expended shall be released and paid by the Director of Finance to or for the benefit of Haddonstone (USA) Ltd. after receipt (i) by the City Clerk of the documents required to be filed pursuant to paragraph 3(a) of the Agreement and (ii) by the Director of Finance of written requests for payment required by paragraph 3(c) of the Agreement. SECTION 4 This Resolution shall become effective upon final passage. ATTEST: WE _ R INTRODUCED: May 28, 1996 By Charles Jones Councilperson APPROVED: Preside of the City ouncil I TIMAIRPORT\HDDNSTOMRESOL2_WPD - AGREEMENT THIS AGREEMENT entered into as of May 28, 1996 between Pueblo, a municipal corporation (the "City ") and Haddonstone (USA) Ltd., a Delaware corporation (the "Company "). WHEREAS, Company has expressed a willingness to locate its business within the Pueblo Municipal Airport Industrial Park, and in furtherance thereof has through the Pueblo Economic Development Corporation made application for funds with the City, and WHEREAS, the City has approved such application and will make funds available to Company subject to and upon the terms and conditions of this Agreement. 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Facility" means the approximately 26,000 square foot manufacturing building located on the Property. "Full -Time Employee" means a person who performs work at the Facility for not less than thirty -two (32) hours per week whether employed by Company or by an outside entity acting as an agency to provide Full -Time Employees for Company. The term "Full -Time Employee" does not include independent contractors nor employees of independent contractors except as described herein. "Renovations" means the renovations to the Facility to be installed in accordance with the Plans and Specifications. "Lease" means the lease between Company and PDF for the Property which will be for a term of not less than ten (10) years. "Quarterly Employees" means the sum of the number of Full -Time Employees on each business day of a Quarter divided by the sum of the business days in such Quarter. "PDF" means the Pueblo Development Foundation. "Quarter" means three consecutive calendar months. "Plans and Specifications" means the plans and specifications for the Renovations approved by PDF and Company and incorporated into the Lease. "Property" means the approximately 3.65 acres of land and Facility thereon located at Pueblo Memorial Airport described as Lot 44, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado. 2. Company shall enter into the Lease and locate its business on the Property in an expeditious manner. 3. City will make available to or for the benefit of Company funds in the amount of $210,000 (the "City Funds "). Company shall spend or cause to be spent City Funds for the cost of or financing the Renovations, subject to and contingent upon: (a) Company filing in the office of the City Clerk copies of the following: (i) Executed Lease, (ii) Company's certificate or other evidence of authority to transact business in the State of Colorado, (iii) certified copy of the resolution of the governing board or appropriate partners or officers of Company approving this Agreement and authorizing its officers or appropriate partners to execute and deliver this Agreement in the name of Company, and (iv) evidence satisfactory to City that Company is diligently proceeding to locate its business on the Property. The date of such filings is herein referred to as "Closing." (b) All construction contracts for Renovations for which payment is sought from City shall be awarded after competitive bidding which allows qualified local contractors to reasonably participate in the competitive bidding procedures. (c) Company filing with the Director of Finance of City written request for payment certified by an officer of Company that the amounts included in the requests for payment have not been included in any prior request for payment and are for the actual cost of Renovations or financing therefor, identifying the Renovations or financing for which payment is sought, including with respect to Renovations certificates of the architect and general contractor that such Renovations have been installed in accordance with Plans and Specifications. (d) It is estimated that $107,446 will be spent for financing the Renovations by buying -down the interest rate of the permanent PDF loan for the Facility and $102,554 will be spent for the cost of Renovations. 4. Company acknowledges that the primary purpose of City in entering into this Agreement and the sole benefit to the City for making funds available to Company hereunder is the creation of jobs. Therefore, Company represents and commits that it will employ at the Property thirty (30) Full -Time Employees (the "Employment Commitment "). 5. Notwithstanding anything contained herein to the contrary, if Company shall for any reason default in its Employment Commitment set forth in paragraph 4 hereof, Company shall repay to City a pro -rata share of the City Funds advanced by City under paragraph 3 hereof based upon the number of Full -Time Employees employed by Company at the Property (the "Repayment Obligation "), as follows: (a) During the five (5) year period starting twelve (12) months after the Commencement date of the Lease and ending sixty (60) months thereafter (the "Repayment Period ") Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than thirty (30) employed at the Property by Company multiplied by $350.00 (the "Company's Quarterly -2- Payments "). For example, if for the Quarter ending June 1999 the Quarterly Employees is 25, the amount payable by Company to City on or before July 15, 1999 would be (30 - 25) x $350.00 = $1,750.00. (b) Company's Quarterly Payments, if any, shall be paid to the City without notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month after the end of each Quarter during the Repayment Period and for one month thereafter at the office of the Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003. All past due Company's Quarterly Payments shall bear interest at the rate of ten (10) percent per annum until paid. (c) Within fifteen (15) days after the end of each Quarter during the Repayment Period and for one calendar month thereafter, Company will submit to City's Director of Finance Company's statements showing the Quarterly Employees for the preceding Quarter and the basis upon which Quarterly Employees and Company's Quarterly Payment were computed certified by an officer of the Company to be true and correct. For purposes of verifying such employment, City shall have access to Company's books and records including payroll records. City will, however, respect the right of employees as to confidentiality of personnel records. All City Funds advanced to Company by City under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including its Repayment Obligations contained in this paragraph 5 and shall be secured by a prior perfected security interest in Company's equipment listed and described in the attached Exhibit A together with all additions, accessions, substitutions and proceeds thereof. Company shall provide all information and shall execute all documents and instruments required to grant to City a prior perfected security interest in Company's equipment listed in Exhibit A before City will advance any funds under this Agreement. Company hereby represents that the current fair market value of the equipment listed on Exhibit A is at least $262,500. 6. (a) City Council of City may, in its sole discretion, relieve Company, in whole or in part, from Company's Repayment Obligations set forth in paragraph 5, if the City Council, after public hearing, finds and determines based upon competent evidence presented at such hearing that Company was prevented from complying with its Employment Commitment by reason of an act of God, or the elements, fire, explosion, strike, insurrection, riot, shortage or unavailability of materials, supplies or labor, interruption of transportation facilities, governmental laws, regulations or restrictions, or other causes beyond Company's reasonable control. The findings and decision of the City Council shall be final and binding upon Company and City. (b) Prior to instituting any proceedings to enforce Company's Repayment Obligation under paragraph 5, City shall notify Company in writing of its intention to institute such proceedings. If Company desires to seek relief pursuant to paragraph 6(a), Company, within twenty (20) days after receipt of City's notice, shall deliver to City its written request for relief specifying the grounds upon which such relief is sought. Within sixty (60) days after receipt of Company's request, City will schedule a hearing before the City Council and give written notice to Company of the time and place of such hearing. Failure of Company to timely deliver its written request for -3- relief or to appear and submit evidence in support of its request at a scheduled hearing shall constitute a waiver of any right of company to a hearing before City Council. (c) No delay or failure by City to exercise its right to enforce Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right, unless the City Council otherwise expressly provides in its findings and decision made pursuant to paragraph 6(a). 7. If Closing does not occur on or before July 1, 1996, this Agreement shall terminate and City and Company shall be released and discharged from all obligations hereunder. Notwithstanding the provisions of the preceding sentence, in the event that Closing does not occur on or before July 1, 1996, Company shall so notify the City prior to July 1, 1996, and shall advance reasons for the delay in closing and request a reasonable extension of this Agreement. City agrees to consider such reasons and such request and to, in good faith, consider the requested extension. 8. City will cause Lot 43, Pueblo Memorial Airport Industrial Park to be divided into parcels of land through a lot line rearrangement to be approved by Pueblo County, Colorado and will convey to PDF approximately 2.6 acres of said Lot 43 contiguous to and north of the Property to be included as part of the Leased Premises under the Lease. 9. In the event of any litigation arising out of this Agreement, the court shall award to the prevailing party its costs and reasonable attorney fees. All such litigation shall be filed in the District Court, County of Pueblo, State of Colorado and each party submits to the jurisdiction of that Court. To the extent allowed by law, each party waives its right to a jury trial. 10. This Agreement expresses the entire understanding of the parties and supersedes any and all prior dealings and commitments with respect to the subject matter of this Agreement and may not be amended except in writing signed by City and Company. 11. This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado. 12. Any notices hereunder shall be sufficiently given if given personally or mailed by first class mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, or (b) if to the Company, Haddonstone (USA) Ltd., 32207 United Avenue and Fairchild Street, Pueblo, Colorado, 81001; or to such other address as either party shall specify in written notice given to the other party. M 13. Time is of the essence hereof. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, provided Company may not assign this Agreement or any interest herein. Any assignment or attempted assignment of this Agreement by Company shall be null and void. 14. The person signing this Agreement on behalf of Company represents and warrants that such party and Company have the requisite power and authority to enter into, execute, and deliver this Agreement and that this Agreement is a valid and legally binding obligation of Company enforceable against Company in accordance with its terms. 15. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] ATTEST: City Cl ATTEST: PUEBLO, A MUNICIPAL CORPORATION B Preside of the 'C4 y uncil HADDONSTONE (USA) LTD. By jj�� � �� Title: I TIT Y\AIRPORT \HDDNSTON \AGKEG.WPD - AGREEMENT BETWEEN CITY OF PUEBLO AND HADDONSTONE (USA) LTD EXHIBIT 'A' SCHEDULE OF EQUIPMENT AND VALUATION 2 each RP -200XD Cumflow mixers $18,800 each 37,600 5 each 550 Belgrade Basic Silos with all standard equipment and 15' tall structural stands $13,680 each 68,400 4 each K -Trop volumetric feeder/batcher model #K2MU560 with 1 cubic foot hopper $4,730 each 18,920 1 each Stevenson Machine Inc. Batch Weigher and Loader with 5 metres Loader Track 22,215 1 each Rice Lake Weighing Systems Model 1Q810SS Digital Weight Indicator 2,948 4 each Rice Lake Weighing Systems Model RL1800 Load Cells $749 each 2,995 1 each Sullair model LS 10 -50H 200 ACFM Screw Compressor with Dryer and Filters 15,028 2 each Le Suer Model 1020A -HS Moisture Meter $3,214 each 6,428 1 each Structural Steel Mixer, Auger and Weigh Batcher Support Platform (Johnny's Boiler Shop Inc) 23,979 2 each Acrodyne Screw Conveyors (No's 1 and 5) $4855 each 9,970 2 each Acrodyne Screw Conveyors (No's 2 and 4) $427 /each 8,542 1 each Acrodyne Screw Conveyor (No.3) 4,147 1 each American Electric Systems Engineering Control Panel and Wiring 41,665 7 each Slide Gate and Diverter Valves $729 each 5,099 TOTAL $267,936 January 16, 1996 Ms. Victoria Buckley Secretary of State State of Colorado Suite 200, 1560 Broadway Denver, Colorado 80202 VOLUNTARY DISCLOSURE AND NOTICE OF A POTENTIAL CONFLICTING INTEREST OF A PUBLIC SERVANT Dear Ms. Buckley: Pursuant to C.R.S. § §24 -18 -110 and 18 -8 -308, the undersigned member of the City Council for the City of Pueblo, County of Pueblo, State of Colorado, hereby gives notice of the existence of a potential conflicting interest and disclosure of private interest concerning the following transaction: The City of Pueblo may offer economic incentives to Haddonstone to locate a manufacturing facility at City's airport industrial park. I previously sold my business to a company which intends to distribute Haddonstone products. Under the agreement with respect to the sale of my business I may receive a percentage of the revenues from the sale of Haddonstone products by such company. As an elected member of the City Council of Pueblo I may exercise discretionary functions in connection with any economic incentives made by the City of Pueblo to Haddonstone. Very truly yours, A. Verna to City Council Member xc: City Clerk of the City of Pueblo Reception #: 1140015 Date: 09/24/1996 Time: 804 Book: 2931 Page: 187 Chris C. Munoz Inst: LEASE R Fee: 100.00 D Fee: 0.00 SC: 1.00 Pg: 1 of 20 Pueblo Co.Clk. &Rec. THIS LEASE entered into as of the G day of �-w-e , 1996 by and between Pueblo Development Foundation, a Colorado nonprofit corporation (the "Lessor ") and Haddonstone (USA) Ltd., a Delaware Corporation (the "Lessee "), WITNESSETII: WHEREAS, Lessor is or will be the owner by conveyance from Pueblo, a municipal corporation (the "City ") of Lot 44, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado, consisting of 3.65 acres more or less (the "Land "), together with an approximately 26,200 square foot building (the "Facility") located therein (collectively the Land and Facility are herein referred to as the "Leased Premises "), and further, Lessor is or will be the owner by conveyance from the City of a portion of Lot 43, Pueblo Memorial Airport Industrial Park Subdivision, consisting of 2.60 acres, more or less (the "Additional band ") which Additional Land Ties north of and is contiguous to Lot 44, and WHEREAS, Lessee is desirous of leasing and obtaining the option to purchase the Leased Premises upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein, Lessor and Lessee hereby agree as follows: .1.01 Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, subject to the covenants, provisions and conditions herein, the Leased Premises. 1.02 This Lease and Lessee's use of the Leased Premises are further subject to the covenants, conditions, restrictions and limitations set forth in the Warranty Deed attached hereto as Exhibit "A ". Lessee agrees to abide by and comply therewith the same as if they were specifically incorporated herein and for such purpose wherever the word "Company" appears in the Warranty Deed it shall be construed to mean and include the Lessee. F X1,M0MV,MK0 i� 2.01 Lessor shall cause the Facility to be renovated as herein provided (the "Renovations ") and shall pay the actual cost of Renovations up to but not to exceed $436,504 (the "Maximum Renovation Costs "). The Maximum Renovation Costs include $102,554 of the funds advanced by City to or for the benefit of Company to be used for Renovations of the Facility and Lessee's $100,000 payable to Lessor as provided in Article 2.02. 2.02 Upon execution hereof, Lessee shall pay to Lessor the sure of $100,000 to be used by Lessor for the cost of Renovations. Book: 2931 Page: 188 Chris C. Munoz Page: 2 of 20 Pueblo Co.Clk. &Rec. 2.03 The Renovations shall be designed and constructed (a) in accordance with the plans, specifications and other documents prepared by HGF Architects, Inc. (the "Architect ") and entitled "Haddonstone, Ltd. Manufacturing Facility, 32207 United Avenue and Fairchild Street, Pueblo, Colorado, dated January 10, 1996," as subsequently modified by a memorandum from John Hurtig to Tony Fortino at the Pueblo Development Foundation dated March 27, 1996 as approved by Lessor and Lessee (the "Construction Documents "). The Construction Documents are incorporated herein as if set out herein in full; and (b) by a general contractor selected by Lessor after competitive bidding which allow qualified local contractors to reasonably participate in the competitive bidding procedures (the "General Contractor "). 2.04 Lessor and Lessee shall cooperate in good faith with each other to cause the Renovations to be substantially completed and the Facility to be ready for occupancy on or before May 31, 1996. The failure to substantially complete the Renovations and have the Facility ready for occupancy by May 31, 1996 shall not affect the validity of this Agreement nor the obligations of Lessor and Lessee hereunder. 2.05 All changes in the Construction Documents shall be approved by Lessor, Lessee and the Architect. The failure of Lessor or Lessee to approve or reject any proposed Contract Document, or any change or modification thereto, or any proposed change in the work within the general scope of construction contemplated by the Construction Documents, within ten (10) days after receipt thereof shall constitute approval thereof, provided, however, that all change orders which increase the Maximum Renovation Costs shall be approved in writing by both Lessor and Lessee and Lessee shall pay to Lessor the cost of such change order in cash or certified funds within ten (10) days after the approval of such change order by Lessor and Lessee. 2.06 Whenever in this Article 2 or in any other Article of this Lease, the approval or consent of Lessor or Lessee is required, such approval or consent shall not be unreasonably withheld or delayed. The Term of this Lease shall be ten (10) years commencing upon the date that Lessor notifies Lessee that Renovations are substantially completed (the "Commencement Date ") and ending ten (10) years thereafter, unless sooner terminated as provided herein (the "Termination Date "). If Lessee does not agree that the Renovations have been substantially completed on the date specified in the notice from Lessor, Lessee shall promptly notify Lessor of its objection to those matters which are not substantially completed. Lessor shall consider, in good faith, Lessee's objections and shall either (i) extend the Commencement Date, or (ii) respond with an explanation of why substantial completion has occurred and the Commencement Date shall be the same as previously -2- Book: 2931 Page: 189 Chris C. Munoz Page: 3 of 20 Pueblo Co.C1k.&Rec. stated in Lessor's original notice. Lessor and Lessee acknowledge and agree that certain obligations under various articles of this Lease shall commence prior to Commencement Date, including but not limited to Article 2, Facility Renovation and Lessor and Lessee agree to and are bound by any such articles prior to the Commencement Date. 4.01 Lessee shall pay to Lessor monthly rent for the Leased Premises during the Term in the amount of $7,316.76 per month. Rent is payable monthly in advance, without notice or demand, with the first monthly payment due on Commencement Date, and subsequent payments due on the same day of each month thereafter. All payments shall be made at or mailed by United States mail to the following address: P. O. Box 1663, Pueblo, Colorado, 81002, or such other address as Lessor may from time to time designate to Lessee in writing. 4.02 The parties acknowledge that the monthly rent set forth in section 4.01 is directly tied to and equal to the amount of each monthly payment due on the permanent loan to be obtained by Lessor from Pueblo Bank and Trust Company in the principal amount of $689,834 with interest at the rate of five (5) percent per annum payable in one hundred twenty equal monthly installments of $7,316.76 or earlier without prepayment penalty (the "Loan "). The principal amount of the Loan represents $455,884 for the purchase of the Facility from the City, $233,950 for Lessor's share of the Renovation Costs. Lessor agrees to apply each monthly rental payment received from Lessee to the amounts due under the Loan. Lessor and Lessee further agree that Lessee will pay all Loan costs including appraisal fees either in cash upon execution of this Lease or by increasing the principal amount of the Loan and monthly rent. 4.03 All rent and other payments required to be made by Lessee hereunder which shall remain unpaid fifteen'(15) days after their due dates shall bear interest at the rate of ten percent (10 %) per annum. 4.04 Lessee's obligation to pay rent to Lessor hereunder is absolute and unconditional and rent shall not be offset, abated, reduced or withheld for any cause or reason whatsoever. 4.05 It is the intent of the parties hereto that this Lease be a "triple net" lease with Lessor incurring no obligation, monetary or otherwise, except for Renovations under Article 2 hereof. 5.01 The Leased Premises shall be used and occupied by Lessee for manufacturing and /or warehousing and incidental office purposes associated with or incident to Lessee's business activities. 5.02 Lessee shall use the Leased Premises in a careful, safe and proper manner in compliance with all laws and regulations applicable to the Leased Premises and Lessee's use thereof. -3- Book: 2931 Page: 190 Chris C. Munoz Page: 4 of 20 Pueblo Co.Clk. &Rec. Lessee shall not cause, maintain or permit any nuisance or waste in, on, or about the Leased Premises. The temporary storage of the byproducts of Lessee's production process shall not be considered to be waste as that term is used in this section 5.02. 5.03 Lessee shall not abandon nor cease to conduct business from the Leased Premises for any period longer than 180 consecutive days. 5.04 Lessee agrees and acknowledges that City reserves the right, without any obligation on its part to do so, to maintain and keep in repair the landing area of the airport and other public areas or facilities at the Pueblo Memorial Airport and to develop, modify, change, relocate, abandon, or improve the Pueblo Memorial Airport, or any part thereof, as it may determine in its sole and absolute discretion, at any time. Lessee further acknowledges and agrees that City has not made, nor by any provision of this Lease shall City be construed to have made any representation or warranty to the contrary relating thereto. The taking of possession of the Leased Premises by Lessee after Commencement Date shall be conclusive evidence that Lessee accepts the Leased Premises in its then present condition "As Is" and that the Leased Premises are in good and satisfactory condition at the time such possession was taken. Notwithstanding the foregoing sentence, Lessee's taking of possession of the Leased Premises shall not constitute or be construed to constitute a waiver or release of Lessor's obligations to complete the Renovations in accordance with the Construction Documents. 7.01 Except'as provided in section 2.05, Lessee shall not make any additions, alterations or improvements in or to the Leased Premises ( "Alterations ") without Lessor's prior written consent. Lessee shall not permit or allow any lien to be filed or recorded against the Leased Premises or Lessor's interest therein and Lessee shall fully cooperate with Lessor in obtaining the protection afforded Lessor under Section 38 -22 -105, C.R.S. All Alterations made in or to the Leased Premises by Lessee shall become the property of Lessor and be surrendered with the Leased Premises at the termination of this Lease. 7.02 All - equipment, fixtures and improvements of a detachable or temporary nature installed or placed upon the Leased Premises by Lessee, including trade fixtures, shall remain the property of Lessee, subject to Lessee's right, at its option, to remove same not later than thirty (30) days after termination of this Lease. Lessee, at its expense, shall promptly repair any damage resulting from such removal. The failure or Lessee to remove its equipment, fixtures and detachable improvements within thirty (30) days after termination of this Lease shall, at the option of Lessor, be deemed abandonment of such property. :e WO ;-,. .i� I u. -4- Book: 2931 Page: 191 Chris C. Munoz Page: 5 of 20 Pueblo Co.C1k.&Rec. 8.01 Except for Renovations as provided in Article 2 hereof, Lessor shall not be obligated to repair, maintain or alter the Leased Premises or any part thereof. Lessee, at its expense, shall keep and maintain the Leased Premises, including, without limitation, the Facility, structural components, roofs, walls, equipment, fixtures, and electrical, heating, plumbing and air conditioning systems, in good condition and repair and in a good, clean and safe condition at all times during the effective term of this Lease and return the same to Lessor at any termination hereof in as good condition and state of repair as the same were in as of Commencement Date, except for loss occasioned by ordinary wear. 8.02 If Lessee becomes obligated to make repairs which are or may be covered by any manufacturer's or contractor's warranty issued to or for the benefit of Lessor, Lessor will assign and transfer to Lessee its interest in any such warranty for the purpose of making such repairs. If any such warranty may not be legally assigned, Lessor, at the request and expense of Lessee, will enforce such warranty on behalf of Lessee. 8.03 If Lessee becomes obligated to make repairs caused by an occurrence covered by the insurance described in Article 12, the net proceeds of such insurance shall be made available to Lessee to offset the cost of such repairs. Lessor, or Lessor's officers, employees, agents and representatives, as the case may be, shall not enter the Facility on the Leased Premises, by passkeys or otherwise, without specific prior permission of Lessee, except in case of emergency, such as fire. Lessee shall not, however, unreasonably withhold such permission when such entry is necessary to examine the condition of the Leased Premises, to make such repairs and alterations as may reasonably be required for the safety, care or preservation of the Leased Premises, or to show the Leased Premises to prospective tenants. Lessee shall have the right to assign this Lease or any leasehold interest hereunder, except for the purchase option under Article 17, with the prior written consent of Lessor. Lessee shall have the right, however, without the consent of Lessor, to assign this Lease but not the purchase option, or sublet the Leased Premises or any part thereof, to any financially responsible corporation in which Lessee shall have a substantial ownership interest or which shall have a substantial ownership interest in Lessee, or any corporation, financially responsible, whether or not Lessee shall have a substantial ownership interest therein, and whether or not such corporation shall have a substantial ownership interest in Lessee, provided that in the event of such an assignment or such a subletting of the type described, Lessee shall remain liable to Lessor for Lessee's obligations under this Lease. Notwithstanding the foregoing, a merger of Lessee with, acquisition of Lessee by, or sale of substantially all of Lessee's assets as a going concern to any third party shall not constitute an assignment of this Lease. -5- Book: 2931 Page: 192 Chris C. Munoz Page: 6 of 20 Pueblo Co.C1k.&Rec. 11.01 Lessor shall not be liable to Lessee, and Lessee hereby waives all claims against Lessor, for any injury or damage to the Facility or to any person or property in or about the Leased Premises except injury or damage caused by the negligent acts of Lessor, its officers, employees or agents. 11.02 Lessee shall indemnify and hold Lessor harmless from and defend Lessor against any and all claims or liability, including cost of defense and reasonable attorney fees, for any injury or damage to any person or property whatsoever, including personal injury: (a) occurring in, on or about the Leased Premises or any part thereof by or from any cause whatsoever except injury or damage caused by the negligent acts of Lessor, its officers, employees or agents; or (b) arising out of or resulting from Lessee's use and occupancy of the Leased Premises or any equipment therein or appurtenances thereto or any activity conducted thereon. 11.03 Lessee shall secure and maintain in full force and effect, at its expense, during the Term of this Lease, commercial liability insurance including personal injury, property damage and contractual coverage in the minimum amount of $1,000,000 combined single limit naming Lessor as an additional insured. 11.04 Lessee shall secure and maintain during the Term of this Lease Colorado Worker's Compensation insurance or other similar coverage in the statutorily mandated amounts. 11.05 A copy of each insurance policy, or certificate thereof, issued by an association or company authorized to issue such policy or policies under the laws of the State of Colorado and containing a provision prohibiting cancellation or material modification of the insurance except after thirty (30) days' notice 'to Lessor, shall be delivered to the Lessor within a reasonable time after the same has been issued, and thereafter the Lessee will furnish to Lessor evidence of the continuance of the insurance coverage required herein within a reasonable time after the same has been issued. 12.01 Lessee shall, at its expense, during the Term of this Lease, secure and maintain in full force and effect "All- Risk" (including, without limitation, fire, extended coverage and boiler) insurance upon the Leased Premises. Such insurance shall be in an amount not less than the full insurable replacement value of the Facility and improvements, as such replacement value is determined by Lessee's insurance company or association authorized to issue such policies under the laws of the State of Colorado and approved by Lessor, shall contain a standard Colorado mortgagee clause in favor of Lessor and any mortgagee of Lessor's interests in the Leased Premises, and shall not be subject to cancellation, reduction or modification upon less than thirty (30) days' written notice to Lessor. Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor, its officers, agents and employees, for any loss or damage resulting from covered perils. Lessee will furnish to Lessor evidence of such insurance and its 0 Book: 2931 Page: 193 Chris C. Munoz Page: 7 of 20 Pueblo Co.Clk. &Rec. continuance during the Term of this Lease. 12.02 Lessee shall, at its expense, secure and maintain fire and extended coverage insurance on all fixtures, equipment and improvements installed by Lessee on the Leased Premises. Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor, its officers, agents and employees, for any loss or damage resulting from covered perils. 13,01 Lessee shall promptly pay and discharge as they become due and before delinquency any and all property taxes, assessments, charges, liens, levies or excises, whether general or special or ordinary or extraordinary, of every name, nature and kind whatsoever, including all governmental charges of whatsoever name, nature or kind, which may be levied, charged or imposed, or which may become a lien or charge on or against the Leased Premises or any part thereof, the leasehold interest of Lessee herein, or the improvements situated on the Leased Premises during the Term of this Lease. Notwithstanding the provisions of the preceding sentence, Lessee shall have no responsibility to pay and /or discharge any mechanic's and /or contractor's liens arising out of or relating to acts or omissions or failure to pay for improvements made by Lessor prior to Commencement Date. 13.02 Lessee shall pay before delinquency any and all property taxes levied or charged against any of the personal property belonging to it and situated on the Leased Premises or used in connection with the operation and maintenance of the Facility on the Leased Premises. 13.03 Lessee shall have the right to contest or review, by legal proceedings at its own expense, and if necessary in the name of Lessor, or in such other manner as it may deem suitable, any tax, assessment, levy or charge herein agreed to be paid by Lessee under this Article 13. Lessee may defer payment of any such contested item if in connection with the proceeding instituted by Lessee there shall have been obtained a stay of the collection of the item so contested. In the event of such contest, Lessee shall give Lessor written notice prior to the commencement of any such contest which shall be at least ten (10) days prior to delinquency of the item in contest and, on request of Lessor, Lessee shall give to Lessor a good and sufficient surety bond indemnifying Lessor against any such tax, assessment, levy or other charge and from any cost, liability or damage arising out of such contest. In the event any notices of proposed increases in taxes, assessments, levies or charges which are the obligation of Lessee are received by Lessor, it shall promptly, but in no event later than 30 days after receipt thereof, forward the same to Lessee in order that Lessee may proceed with payment or contest procedures within the periods provided for such purposes. 13.04 All rebates or refunds on account of any tax assessments, levy or charge required to be paid and paid by Lessee shall belong to Lessee, and Lessor will, on request of Lessee, execute any documents which may be necessary in order to secure the recover)bf any such rebates or refunds . and shall promptly pay over to Lessee any such rebates or refunds that may be received by Lessor whether received before or after the end of this Lease. -7- Book: 2931 Page: 194 Chris C. Munoz Page: 8 of 20 Pueblo Co.C1k.&Rec. 13.05 Lessee shall furnish Lessor within thirty (30) days after any amount is payable by Lessee under this Article 13, official receipts of the appropriate taxing authority or other proof satisfactory to Lessor evidencing such payments as are required under this Article 13. Lessee shall pay before delinquent all charges for sewer, water, gas, electricity, telephone and all other utility services furnished to or used upon the Leased Premises. Lessor shall not be obligated to furnish or provide any utilities, facilities or services of any kind. If, during the Term of this Lease, the Leased Premises shall be damaged to such an extent that the repair of such damage and the restoration of the Leased Premises can be accomplished, with reasonable diligence, within one hundred and eighty (180) days after such damage, Lessee shall promptly repair such damage and cause the Leased Premises to be restored to their condition prior to the event causing the damage. If, during the Term of this Lease, the Leased Premises shall be destroyed or damaged, or partially destroyed or damaged, to such an extent that the repair of such destruction or damage and the restoration of the Leased Premises cannot be accomplished, with reasonable diligence, within one hundred and eighty (180) days after destruction or damage, then Lessee shall promptly notify Lessor in writing of such fact, and Lessee shall have the right, during a period of thirty (30) days following such notification, to terminate this Lease by written notice to the Lessor, declaring this Lease to be terminated. If this Lease is so terminated all proceeds of insurance required to be maintained by Lessee under Article 12.01 (or, if Lessee fails to maintain the insurance required to be maintained by Lessee under Article 12.0 1, the insurance proceeds which would have been available but for such failure) shall be paid to Lessor. Unless such notice of immediate termination shall be given within such period, this Lease shall continue in full force and effect and Lessee shall promptly repair such destruction or damage and cause the Leased Premises to be restored to their condition prior to the event causing the destruction or damage. If this Lease shall be terminated as provided in this Article 15 or Article 16, Lessor shall refund to Lessee all sums received by Lessor as rent or deposit under this Lease in excess of rent due through the date of such termination, with rent due for any part of a month to be determined by prorating rent on a daily basis. iT _n i a �•u< If the whole or substantial part of the Leased Premises shall be taken or condemned by any competent authority for any public or quasi - public use or purpose under any statute or by the right of eminent domain, or purchased under threat of such taking, then this Lease shall terminate on the date when the condemning authority takes possession of the Leased Premises or the substantial part thereof so taken. There shall be an apportionment of the award for taking or condemnation to reflect the initial investment in the renovation by Lessee on an equitable basis, further, Lessee shall have the right to recover any award which may be made for damages to or condemnation of Lessee's -8- Book: 2931 Page: 195 Chris C. Munoz Page: 9 of 20 Pueblo Co.C1k.&Rec. movable trade fixtures, equipment, furniture and furnishings. 17.01 If Lessee is not in default hereunder and is then employing thirty (30) full -time employees at the Leased Premises, Lessee shall at any time during the Term of this Lease have the option to purchase the Leased Premises and all improvements therein upon the terms and conditions contained in Article 18 for a purchase price equal to the remaining principal balance of the Loan plus accrued interest at the time of closing on the purchase option. 17.02 If Lessee is not in default hereunder, Lessee shall have the option at the end of the Term of this Lease to purchase the Leased Premises and all improvements thereon upon the terms and conditions contained in Article 18 for a purchase price of Ten Dollars ($10.00), 17.03 The option hereby granted shall be exercised by Lessee by delivering to Lessor not less than 180 days before the expiration of the Term of this Lease written notice of the exercise of the option. If Lessee fails, for whatever reason, to give timely notice of its exercise of this option, the option rights granted herein shall automatically terminate. 17.04 Lessor shall provide a copy of the Loan documents and amortization schedule to Lessee within a reasonable time after Lessor secures the Loan. Upon request of Lessee, Lessor will provide Lessee with verification of payments made on the Loan and the current balance thereof. 18.01 The option to purchase under Article 17 of this Lease may not be assigned or transferred by Lessee. Any attempted assignment or transfer shall be void and unenforceable against Lessor. 18.02 Upon valid exercise of the purchase option, the terms or purchase and sale shall include the following conditions and requirements: (a) Closing to be held not later than 60 days after exercise of option; (b) - Conveyance shall be made by general warranty deed substantially in the form of Exhibit "A" attached hereto and incorporated herein by reference. In the event that Lessee does not exercise its option to purchase under Article 17 and Lessee shall, with the consent of Lessor, retain possession of the Leased Premises after the expiration of the Term of this Lease, this Lease shall continue on a month -to -month basis upon all the terms, covenants and conditions herein specified, except Articles 17 and 18. 0 Book: 2931 Page: 196 Chris C. Munoz Page: 10 of 20 Pueblo Co.Clk. &Rec. Article 20. Quiet Possession Lessee shall, and may peacefully have, hold and enjoy the Leased Premises, subject to the other terms hereof, provided that Lessee pays the rental herein recited and performs all of Lessee's covenants and agreements herein contained. 21.01 In the event of default at any time by Lessee in the payment of the rent herein provided for or in the performance of any other of its covenants herein contained, Lessor shall have the right, after thirty (30) days' notice in writing to Lessee and Lessee's failure within said thirty (30) day period to cure said default, or if said default does not relate to the payment of money and cannot by its nature be cured within said thirty (30) day period, to undertake and diligently pursue action to cure said default, to either: (a) terminate this Lease and re -enter and take possession of the Leased Premises, and/or (b) pursue any remedy whatsoever provided by law; and /or (c) re -enter and take possession of the Leased Premises and use its best efforts to relet the same for and on account of Lessee for the then full remaining portion of the unexpired Term of this Lease for any shorter period, and to collect and receive payment of rent therefor, but no such re -entry or re- letting shall be construed as a termination of this Lease or as a release of Lessee from Lessee's obligation to pay rent provided during the full Term of this Lease, or from Lessee's obligation to perform any other covenant herein contained. It expressly being understood and agreed that in the event of any such re -entry or re- letting by Lessor such re -entry or re- letting shall not operate to terminate this Lease in any other particular or alter the obligation of Lessee to perform its covenants and to pay rent pursuant to the terms hereof unless Lessor expressly so elects pursuant to paragraph 21.01(a) above. Lessor shall in no way be responsible or liable for any failure to re -let the Leased Premises, or any part thereof, or for any failure to collect any rent due upon such re- letting. No notice from lessor hereunder or under a forcible entry and detainer statute or similar law constitutes an election by Lessor to terminate this Lease unless such notice specifically so states. Lessor reserves the right following any such re -entry and /or reletting to exercise its right to terminate this Lease. 21.02 If Lessor does not elect to terminate this Lease but takes possession as provided for in Article 21.01(c), Lessee shall pay to Lessor the rent and other charges at the times and in the manner as herein provided which would be payable if such repossession had not occurred, less the net proceeds, if any, of any re- letting of the Leased Premises after deducting all Lessor's reasonable expenses including, without limitation, all repossession costs, brokerage commissions, legal expenses, attorneys' fees, alteration and repair costs and expenses of preparation for such re- letting. -10- Book: 2931 Page: 197 Chris C. Munoz Page: 11 of 20 Pueblo Co.Clk. &Rec. 21.03 Lessee shall pay all Lessor's costs, charges and expenses including costs and fees of legal counsel, agents and others retained by Lessor, incurred in enforcing Lessee's obligations hereunder or incurred by Lessor in any litigation, negotiation or transaction which Lessee causes Lessor without Lessor's fault to become involved. 21.04 If Lessee violates any of the terms and provisions of this Lease or defaults in any of its obligations hereunder other than the payment of rent or other sum payable hereunder, such violation may be restrained or such obligation enforced by injunction at the instance and request of Lessor and without the showing of any special damages or other adequate remedy at law. 21.05 In the event of a default by Lessor hereunder, Lessee shall have the right to pursue all legal and/or equitable remedies provided by law including the right to seek specific performance. No waiver of any breach or breaches of any provision, covenant or condition of this Lease shall be construed to be a waiver of any preceding or succeeding breach of such provision, covenant or condition, or of any other provision, covenant or condition; and time is of the essence for each and every provision, covenant and condition herein contained and on the part of Lessee to be done and performed. Lessor shall have the right to transfer and assign, in whole or in part, all its right and obligations hereunder and in the Leased Premises, and in such event and upon Lessor's transferee assuming Lessor's obligations hereunder no further liability or obligation shall thereafter accrue against Lessor hereunder. Lessor shall give Lessee written notice of its intent to make an assignment or transfer of this Lease and a copy of the express (written) assumption agreement between Lessor and assignee or transferor. This Lease shall be and is hereby made subordinate to any mortgage or deeds of trust which may now or hereafter encumber the Leased Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. This clause shall be self- operative and no further instrument of subordination need be required by any mortgagee. This clause shall be for the benefit of any mortgagee. In confirmation of such subordination, however, Lessee shall, at Lessor's request, execute promptly any appropriate certificate, subordination agreement or instrument that Lessor may request. Lessee hereby constitutes and appoints Lessor the Lessee's attorney - in -fact to execute any such certificate, subordination agreement or instrument for and on behalf of Lessee. Notwithstanding the fact that this Lease is and shall be subordinate as provided above, Lessee will as a result of the enforcement of the default or foreclosure provisions of such mortgage or deed of trust, including conveyance by deed in lieu of foreclosure, automatically become the Lessee of the -11- Book: 2931 Page: 198 Chris C. Munoz Page: 12 of 20 Pueblo CO.Clk. &Rec. person or party succeeding to the interest of Lessor without change in the terms or other provisions of this Lease and Lessee agrees to attorn to such party; provided, however, that such mortgagee or successor in interest shall not (i) be bound by any amendment or modification to this Lease made without the written consent of such mortgagee or such successor in interest; (ii) be liable for any previous act or omission by Lessor under this Lease; or (iii) be subject to any offset which shall theretofore have accrued to Lessee against Lessor. Lessee further agrees, upon demand, to execute such nondisturbance and attornment agreements as any such mortgagee or successor shall request. The provisions of this Article shall not alter or otherwise affect, alter or modify the option to purchase granted by Article 17 and 18 of this Lease nor shall the provisions of this Article operate to increase or otherwise alter the purchase price to be paid by Lessee upon exercise of the option in accordance with the provisions of Article 18. At Lessor's request Lessee will execute either an estoppel certificate Addressed to Lessor's mortgagee or any prospective successor of Lessor, or a third -party agreement among Lessor, Lessee and said mortgagee or successor, certifying to such facts (if true) regarding the status and terms of this Lease as may be requested, and agreeing to such notice provisions and other matters as such mortgagee or successor may reasonably require in connection with Lessor's financing or the conveyance of the Leased Premises. All notices, demands or communications of any kind which may be required or desired to be served, given or made by Lessee upon or to Lessor, under the terms of or in connection with this Lease, shall be sufficiently served, given or made (as an alternative to personal service upon Lessor) if sent by certified United States mail, addressed to: Pueblo Development Foundation Post Office Box 1663 Pueblo, Colorado 81002 (or at such other address as may hereafter from time to time be designated for this purpose by Lessor to Lessee in writing). All notices, demands or communications of any kind which may be required or desired to be served, given or made by Lessor upon or to Lessee, under the terms of or in connection with this Lease, shall be sufficiently served, given or made if such notice, demand or communication is sent by certified United States Mail, addressed to. Haddonstone (USA) Ltd. 32207 United Avenue and Fairchild Street Pueblo, Colorado 81001 (or to such other address as may hereafter from time to time be designated for this purpose by -12- Book: 2931 Page: 199 Chris C. Munoz Lessee to Lessor in writing). Page: 13 of 20 Pueblo Co.C1k.&Rec. 27.01 For the purpose of this Lease, "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or become regulated by any local government authority, the State of Colorado or the United States government and shall include, but not be limited to (1) substances defined as "hazardous waste," "restricted hazardous waste," "hazardous substance" or "hazardous material" under any applicable federal, state or local law or regulation ( "Environmental Regulations "), (2) asbestos - containing materials, (3) PCBs, (4) petroleum or petroleum based products, and (5) lead. 27.02 Lessor represents and warrants that it has not conducted any investigation with respect to Hazardous Materials on, under or about the Leased Premises but that to the best of its knowledge there are no septic tanks, no above or below ground fuel oil tanks, gasoline or chemical storage tanks, and no other underground tanks or piping or deposits of Hazardous Materials as now defined and regulated located on, under or about any portion of the Leased Premises; that no portion of the Leased Premises is as of the date of execution of this Lease subject to any lawsuit, proceeding, citation, or investigation pending or overtly threatened relating to any contamination or alleged contamination by any Hazardous Materials or any violation or alleged violation of any Environmental Regulation; that no material expenditure of funds is required of Lessor to bring any portion of the Leased Premises into compliance with any Environmental Regulations, and, finally, that all disclosures have been made to the Company regarding existing environmental conditions known by or to Lessor. 27.03 Lessee will comply with Environmental Regulations that are applicable to the Company and its use of the Leased Premises. No activity shall be undertaken by the Lessee, its employees, agents, licensees, invitees, contractors or subcontractors, on all or any portion of the Leased Premises which would cause or permit: (i) the presence, use, generation, release, discharge, storage or disposal of any Hazardous Material in, on, under, about, or from the Leased Premises or any part thereof in violation of any Environmental Regulations; (ii) any portion of the Leased Premises to become a hazardous waste treatment, storage or disposal facility without receiving proper governmental authorization, and in compliance with all environmental regulations; or (iii) the discharge of pollutants or effluents into any water source or system, or the discharge into the air of any emissions without receiving proper governmental authorization, and in compliance with all Environmental Regulations, including, without limitation, the Federal Water Pollution Control Act, U.S.C. Section 1251 etetseq. and the Clean Air Act, 42 U.S.C. Section 7401 et sea. Lessee agrees to indemnify and forever hold harmless Lessor, its agents, successors, and assigns and Lessor's mortgagee, as their interest may appear, from all claims, losses, damages, expenses and costs, including, but not limited to, attorneys' fees, remedial and cleanup costs, incurred by reason of the use, storage, generation, release, discharge, maintenance, disposal, or removal of Hazardous Materials in, on, under, about, or from the Leased Premises, or any part -13- Book: 2931 Page: 200 Chris C. Munoz Page: 14 of 20 Pueblo Co.Clk. &Rec. thereof, by Lessee, its employees, agents, licensees, invitees, contractors and subcontractors. The provisions of the Article 27.03 shall expressly survive the expiration of the Term or other termination of this Lease. At the written request of Lessee and subject to the approval of a lot line rearrangement by Pueblo County, Colorado and transfer of title thereto to Lessor by City, Lessor will include as part of the Leased Premises approximately 2.60 acres of land (contiguous to and north of Lot 44) in Lot 43, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado (the "Additional Land "). Within thirty (30) days after approval of such lot line rearrangement Lessor and Lessee will execute and attach an addendum to this Lease amending the description of the Leased Premises to include the Additional Land. 29.01 Colorado Law This Lease shall be governed by the laws of the State of Colorado and shall be construed in accordance therewith. 29.02 Writiniz for Waiver or Modification No provision of this Lease may be waived or modified except by an agreement in writing signed by the waiving party. A waiver of any term or provision shall not be construed as a waiver of any other term or provision. 29.03 Binding Effect This Lease sets forth the entire and complete understanding and agreement of the parties hereto. Lessee acknowledges and agrees that it has not relied upon any statements, representations, agreements or warranties except such as are expressed herein. This Lease shall be binding on the parties, their successors and approved assigns. The parties agree to do any and all things lawful and necessary to effectuate the purpose of this Lease. 29.04 Construction Throughout this Lease, the singular shall include the plural; the plural shall include the singular, and the masculine and neuter shall include the feminine, wherever the context so requires. 29.05 Text to Control The headings of sections are included solely for convenience of reference. If any - conflict between any heading and the text of this Lease exists, the text shall control. 29.06 Seyerab jjjty. If any provisions of this Lease is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not effect the remaining provisions. On the contrary, such remaining provisions shall be fully severable, and this Lease shall be construed and enforced as if such invalid provisions had never been inserted in the Lease. 29.07 Venue and Jury Trial Lessor and Lessee agree that the venue for all actions or -14- Book: 2931 Page: 201 Chris C. Munoz Page: 15 of 20 Pueblo Co.C1k.&Rec. causes of action relating to this Lease or the Leased Premises shall be in Pueblo County, Colorado. All such actions shall be filed in the District Court, County of Pueblo, State of Colorado and Lessor and Lessee submit to the jurisdiction of that Court. To the extent allowed by law, each party waives its right to a jury trial. 29.08 Attorney Fees In the event of any litigation under this Lease, the Court shall award the prevailing party its costs and expenses, including reasonable attorney fees. IN WITNESS WHEREOF, Lessor and Lessee, by their duly authorized representatives, have executed this Lease on the day and year first above written. PUEBLO DEVELOPMENT FOUNDATION By Title: HADDONSTONE (USA) LTD. e, p�_ Q P� Title c.� As- Book: 2931 Page: 202 Chris C. Munoz Page: 16 of 20 Pueblo Co.C1k.&Rec. THIS DEED, made this day of , 199_ by and between Pueblo Development Foundation, a Colorado nonprofit corporation (herein "PDF ") and Haddonstone (USA) Ltd., a Delaware corporation (herein "Company "), WITNESSETH: That PDF for and in consideration of the sum of $10.00 and other good and valuable consideration to PDF in hand paid by the Company, the receipt whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Company, its successors and assigns forever, all the real property situate, lying and being at Pueblo Memorial Airport, County of Pueblo, State of Colorado, described as Lot 44, Pueblo Memorial Airport Industrial Park Subdivision and all improvements thereon (herein "Property), with all its appurtenances, and warrant the title to the same, subject to easements, rights of way, restrictions and reservations of record and to the following covenants, conditions, and restrictions which are and shall be construed to be covenants running with the land described herein and binding upon the Company, its successors and assigns and inuring to the benefit of Pueblo, a Municipal Corporation (the "City "), its successors and assigns. 1. City reserves unto itself and its successors and assigns, for use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Property, together with the right to cause in the airspace above the surface of the Property such noise as may be inherent in the operation of any aircraft now known or hereafter used for navigation of or flight in said airspace, and for use of the airspace above the surface of the Property for landing on, taking off from, or operation on or over the Pueblo Memorial Airport. EXHIBIT "A" Book: 2931 Page: 203 Chris C. Munoz Page: 17 of 20 Pueblo Co.C1k.&Rec. 2. Company expressly agrees for itself, its successors and assigns to restrict the height of structures, objects of natural growth and other obstructions on the Property, to a height of not more than 4,690 feet above the mean sea level. In the event this covenant is breached, City reserves the right to enter upon the Property at the expense of the Company to remove the offending structure or object and to cut the offending growth. Company expressly agrees for itself, its successors and assigns, that it will prevent any use of the Property which would interfere with landing or taking off of aircraft at the Pueblo Memorial Airport, or otherwise constitute an airport hazard. 4. The Property and its use are further subject to the following Restrictive Covenants: (a) The Property may be used only for industrial and manufacturing facilities and incidental office uses. The Property shall not be used for smelting or plating operations, or for the storage or processing of putrescible materials, or for any purpose or business which constitutes a nuisance, or which exceeds the state air pollution control standards for the facility. Gasoline or diesel fuel used in connection with the business conducted on the Property but not for sale at retail or wholesale may be stored on the Property in an environmentally sound manner. (b) . Outdoor storage shall not be permitted except for storage of raw materials, inventory, manufactured products or equipment used in the facility. Parking areas for vehicles and roads on the Property shall be paved. (c) The Property shall not be subdivided and no building or structure over sixty (60) feet in height shall be installed or constructed on the Property. (d) No structure or building shall be constructed or installed nearer than sixty -five (65) feet of the right of way line of United Avenue or thirty -five (35) feet of the right of way line of any other abutting streets. There must be installed and maintained a minimum thirty -five (35) foot strip of living landscaped ground along and adjacent to United Avenue and twenty -five (25) feet adjacent to other abutting streets. Minimum side yards set -backs shall be twenty -five (25) feet. (e) Company shall keep and maintain the Property and all buildings , landscaping and improvements located thereon in a good, clean, safe and orderly condition free of waste, rubbish, debris and trash, provided that waste, rubbish, debris or trash produced on -site may be temporarily stored on the Property before being properly disposed of off -site if adequately screened and contained. Company shall enclose and screen from public view all outside storage and unsightly areas of the Property. -2- Book: 2931 Page: 204 Chris C. Munoz Page: 18 of 20 Pueblo Co.C1k.&Rec. (f) Company shall comply with notifications and review requirements of the Federal Aviation Administration prior to the construction, modification or alteration of any building or structure on the Property. (g) Company shall, at its own expense, cause all utilities and roads used or to be used on the Property to be extended from adjacent streets, installed on the Property, and kept and maintained in good order and condition. (h) Company shall pay to City a combined service fee for services and facilities now furnished by City at the Pueblo Memorial Airport, namely: public street maintenance, fire protection, and street lighting based upon $295.00 per acre per annum payable monthly for each acre of land conveyed to Company hereunder. City may, from time to time, reduce or eliminate any or all of the services or facilities presently being furnished and may modify, increase, or decrease the annual combined service fee provided (i) such services and fee shall be non - discriminatory among other tenants and owners of land at Pueblo Memorial Airport receiving such services and facilities, and (ii) such fee shall be reasonable in relation to City's actual cost and expense of furnishing the services and facilities then being furnished. City's cost may include the cost of capital improve- ments amortized over the useful life of the improvements. Wastewater discharged from the Property is transported to and treated at City's waste water treatment facilities, Company and the waste water so transported and treated are subject to the same restrictions, limitations, conditions, fees, and charges as other users of City's sanitary sewer system and facilities. (i) Company shall provide for storm water drainage which shall include the construction and installation of storm water detention facilities on the Property. The detention facility shall be capable of storing the developed on -site runoff from a 100 -year frequency storm. The maximum release rate from the detention facility at the ponding depth corresponding to the 10- year volume shall be .30 cfs /acre and 1.00 cfs /acre for the 100 -year ponding depth. All calculations and details shall conform with the City of Pueblo Storm Drainage Criteria Manual. The point of discharge from the detention facility shall be at a location approved by the Director of Public Works. 0) Before commencing the construction, installation or alteration of any building, structure, parking facility, outdoor sign, or other permanent improvement, or landscaping on the Property, the Company shall submit to and have approved by the City in writing the site plans and plans and specifications therefor. City's approval will not be unreasonably withheld. In the event the City or its designated representatives shall fail to approve or disapprove such plans and specifications within twenty -five (25) working days after they have been submitted to the City, such approval will not be required and this covenant will be deemed to have been complied with. Company shall use its best efforts to assure that all buildings constructed on the Property will be architecturally and aesthetically compatible with buildings constructed at the Pueblo Memorial Airport industrial park since 1985. All buildings, improvements and activities on the Property shall be constructed and conducted in compliance with all applicable federal, state and local law, regulations, and codes. -3- Book: 2931 Page: 205 Chris C. Munoz Page: 19 of 20 Pueblo Co.Clk. &Rec. (k) City reserves the right to waive all or any part of these Restrictive Covenants. 5. At the request of City, Company shall meet and in good faith confer with City concerning the annexation of the Property to the City when the Pueblo Memorial Airport, or any part thereof, including without limitation, the Property becomes eligible for annexation. 6. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and effect. 7. City shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. [S E A L] PUEBLO DEVELOPMENT FOUNDATION ATTEST: By President Secretary [S E A L] HADDONSTONE (USA) LTD. ATTEST: By Title: Secretary COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this day of 1996 by as President and as Secretary of Pueblo Development Foundation, a Colorado nonprofit corporation. Witness my hand and official seal. -4- Book: 2931 Page: 206 Chris C. Munoz Page: 20 of 20 Pueblo Co.C1k.&Rec. My commission expires: [SEAL] Notary Public ss. The foregoing instrument was acknowledged before me this 19_ by as Ltd. Witness my hand and official seal. My commission expires: [SEAL] Notary Public day of , _ of Haddonstone (USA) -5- LEASE ADDENDUM THIS Ll?ASE ADDENDUM entered into as of /Itao i r 1998 between Pueblo Development Foundation, a Colorado nonprofit corporation (the "Lessor ") and I-laddonstone (USA) Ltd., a Delaware corporation (the "Lessee "), WITNESSETII: WI IIREAS, Lessor and Lessee entered into a Lease dated June 6, 1996 with respect to real property located at the Pueblo Memorial Airport Industrial Park (the "Lease "), and WHEREAS, pursuant to Article 28 of the Lease, Additional Land is to be added to the Leased Premises upon completion of the conditions described in said Article 28, and WFII:REAS, the conditions described in Article 28 have been completed and Lessor and Lessee desire to amend the description of the Leased Premises to include the Additional Land. NOW, "fl lf?REFORE, in consideration of the foregoing and mutual covenants contained herein and in furtherance of the provisions of Article 28 of the Lease, Lesser and Lessee agree as follows: I . The description of the Leased Premises leased under the Lease and subject to the covenants, provisions and conditions of the Lease is hereby amended to be and read as follows: Parcel "A ", Lot Line Rearrangement No. 97 -09, a vacation and replat of the common lot line between Lots 43 and 44, Pueblo Memorial Airport Industrial Park Subdivision, Section 30, Township 20 South, Range 63 West, County of Pueblo, State of Colorado, recorded as Reception No. 1227647, 17A Plat, on July 8, 1998 of the records of the Pueblo County Clerk and Recorder consisting of 6.25 acres more or less, Pueblo County, Colorado (the "Land "), together with an approximately 26,200 square foot building (the 'Facility ") located thereon (collectively the Land and Facility are herein referred to as the "Leased Premises "). 2. The Lease as amended by this Lease Addendum shall remain in lull force and effect bindir:g upon and inuring to the bonefit of Lessor and Lessee and their respective successors and assigns, provided, that any assignment by Lessee is subject to the limitations and conditions of Article 10 of the Lease. Executed as of the day and year first above written. PUEBLO DEVELOPMENT FOUNDATION IIADDONSTONE (USA) LTD. B y By 4�� "title: President Titlei &auk I+ AFILESVCITYVA lit POHTVI IDONS'I'ONVADUFNI)tlt I.WPI) ` APR 26 '56 03: S6PM HADDONSTCNE LUSR] LTD. J Plemi include a typed self-addressed envolope MUSS' BE TYPED FILING FEE: $75.00 MUST SUOMIT WO COPIES Mani to; Secretary of State Corporatidhs Section 1660 Broadway, Suite 200 Denver, CO 80202 (303) 884 -2261 Fax (303) 894 -2242 APPLICATION FOR AUTHORITY For - office use only Pursuant to the provisions of the Colorado eusinew Corporation Aot, the undersigned cnrporatfbn hereby applies for Audhority to transact business In Colorsdo, and for than purpose submits the following statement: FIRST The name of the corporation le Heddons t one ( USA) Lt . (Exact Corporation name must agree with tiie attached Certificate of Good Standing) SECONDf The name -Wiidh it'eleitu to use'in Colorsdo is 011 (If tte owporats name is not avalablo for use in Colorado.) THIM It is incorporated under the laws of Delawar � (State of Incorporaton) FOURTH: The date of its into June 1, 1990 j rporation is 11tie period of durtition is Pe � Pe rue 1 F(FFTH: The street address of its principal offlconclude City. State and Zip Code) 201 Heller Pl ace Interstate Business Park, Bellmawr, NJ 08031 SIX T H: The Feet address of tie proposed registered office in Colorado is 1 675 Broadway Denver, Colorado 60202 and the name of Its proposed registered spent In (Address must include budding number and sUft number, Arset ter rural route number), town or city and z1p code, biciude a P.Q. Box it mating address is different from $ttrest addr6w) Colorado at that addresa t he Corporation Company Signature of Registered Agent By Date Business commenced or expects _ ._ .. .--3EVE4TH: The (may be in accompany)'n documon in this state_ shot its 6mclars and cars v,,- QF_FICE 1- , r , �AME SUSINESS ADDRM � Pressdent r� + .r' l , •4 `I +1. 1 y> 5 r' '•'� . ' \147 Pais L - ` •y �; b smOy V i r, PI t �J� i l. S S i W ^" F Treas Director -- Director -- Director LM additional Officers or Directors on a separate piece of papef E IG HTH: This ap piioa bon MUST BE ACCOMPANIED BY A OF MS INCORPORATION AND DATED WITHIN NINETY Signature TZ OF C00D STANDING ISSUED BY THE JURISDICTION W THE FILING OF THE APPLICATION, T1tk r ';' ��' ��i I � � �� �� • RteviSed 7/95 (COL. - 314 - 11/9/95) MINUTES OF A SPECIAL MEETING OF THE BOARD OF DIRECTORS HADDONSTONE (USA) LTD. A Delaware Corporation April 24, 1996 A special meeting of the corporation was held on this date. Richard Dennis chaired the meeting and Adrian Coles acted as secretary for the meeting. The chairman stated that the purpose of the meeting was to consider approval and execution by the Company of an Agreement with the City of Pueblo dated 1 y 2 r , 1996. He stated further that the Agreement was necessary to obtain $210,000 which will be used for financing renovations at the plant in Pueblo, Colorado; that the Agreement is a necessary component towards the acquisition and completion of the new plant site and that the Corporation should enter into the Agreement. After discussion, it was unanimously RESOLVED, that the Agreement between Haddonstone (USA) Ltd., and the City of Pueblo dated ^,-y ZS' , 1996, is approved and that Adrian Coles as Secretary of the Company is authorized to execute and deliver the Agreement in the name of the Company. There being no further business to come before the meeting, it was adjourned. 4 4-� Secretary We hereby waive notice of the meeting as written. these minutes