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HomeMy WebLinkAbout7910RESOLUTION NO. 7910 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND QUALMED, INC. RELATING TO A JOB CREATING CAPITAL IMPROVE- MENT PROJECT; AUTHORIZING THE EXPENDITURE OF $4,500,000 THEREFOR FROM THE 1992 -2001 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND; AND APPROVING AND AUTHORIZING THE TRANSFER OF REAL PROPERTY WITH RESPECT THERETO WHEREAS, QualMed, Inc. has expressed a willingness to expand its business activities within the City of Pueblo and has committed to employ an additional 450 full time employees at its facilities within the City of Pueblo, and WHEREAS, QualMed, Inc. through the Pueblo Economic Development Corporation has made application for funds from the 1992 -2001 Sales and Use Tax Capital Improvement Projects Fund, and 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 QualMed, Inc.'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 July 8, 1996 between Pueblo, a municipal corporation and QualMed, Inc., a copy of which is attached hereto and incorporated herein, 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 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 The transfer and conveyance to QualMed, Inc. of the real properties described in Exhibits A and B to the attached Agreement by special warranty deed is hereby approved. The President of the City Council is authorized to execute and deliver in the name of the City a special warranty deed transferring and conveying said real properties to QualMed, Inc. in such form and content as the President of the City Council and City Attorney shall approve and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 4 Funds in an amount of $4,500,000 are hereby transferred from the unencumbered appropriation balance of the 1992 -2001 Sales and Use Tax Capital Improvement Projects Fund to a separate account and authorized to be expended and made available to QualMed, Inc. for the sole purpose of reimbursing it for the cost of renovating the real property described in Exhibits A and B to the attached Agreement. The funds hereby authorized to be expended shall be released and paid by the Director of Finance to QualMed, Inc. after receipt by the Director of Finance of the documents and written requests for payment required by Section 3.3 of the Agreement. SECTION 5. This Resolution shall become effective upon final passage. ATTEST: City Clerk INTRODUCED: July 8, 1996 By Cathy Garcia Councilperson APPROVED: Presi nt of the Ci y Council -2- AGREEMENT THIS AGREEMENT entered into as of July 8, 1996 between Pueblo, a Colorado municipal corporation (the "City ") and QualMed, Inc., a Delaware corporation (the "Company "). RECITALS 1. Company has expressed a willingness to expand its business within the downtown area of the City of Pueblo and in furtherance thereof Company has through the Pueblo Economic Development Corporation made application for funds with the City. 2. Company, subject to the terms and provisions of this Agreement, has committed to employ 450 additional full -time employees at its facilities located within the downtown area of the City of Pueblo. 3. City, subject to the terms and provisions of this Agreement, has approved Company's application for funds and has committed to make an amount not to exceed $4.5 million available to Company for the purpose of Company's renovating certain real property to be acquired by City for Company's use and benefit. AGREEMENT In consideration of the foregoing Recitals and mutual covenants contained herein, City and Company agree as follows: Section 1. Definitions In addition to terms otherwise defined herein, the following terms shall have the following meaning unless the context clearly indicates otherwise: "Architect" means a competent qualified architect engaged by Company to prepare the Plans and Specifications and oversee the construction of Improvements. "Current Employment" means 252 Full -Time Employees. "Project Area" means the area of the City of Pueblo bounded by Fourth Street on the North, Main Street on the East, Court Street on the West, and Second Street on the South. "Facilities" means Company's offices and related facilities located within Project Area including the Properties. "Full -Time Employee" means a person who is physically present and actually performs work in the Facilities for Company for not less than thirty (30) hours per week whether employed by Company or by an outside independent contractor of Company, including an independent contractor acting as an agency to provide Full -Time Employees for Company. The term "Full- Time" employee does not include independent contractors performing construction work nor employees of such independent contractors. "Improvements" means the renovation of the Properties and other on -site improvements to be constructed and installed by Company in accordance with the Plans and Specifications. "Parcel One" means the real property described on the attached Exhibit "A" and improvements thereon. "Parcel Two" means the real property described on the attached Exhibit "B" and improvements thereon. "Plans and Specifications" means the design and development plans, specifications, final working drawings, construction contracts and related documents for the construction and installation of Improvements prepared by the Architect and approved by Company. "Properties" means the real property described on the attached Exhibits "A" and "B" and improvements thereon. "Quarter" means three consecutive calendar months. "Quarterly Employees" means the sum of the number of Full -Time Employees employed by Company at the Facilities on each business day of a Quarter divided by the sum of business days in such Quarter. "State" means the State of Colorado. "Substantially Completed" means the Improvements have been substantially completed in accordance with the approved Plans and Specifications except for work or materials which do not materially interfere with Company's use of the improved structure. Any dispute with respect to Substantially Completed shall be resolved by the Architect in the good faith exercise of his professional judgment and based upon the Plans and Specifications. Section 2. Representations, Covenants and Warranties 2.1 City represents, covenants and warrants for the benefit of Company as follows: (a) City is a home rule municipality duly organized and existing under Article XX of the Constitution of the State of Colorado and the Charter of the City. The City has duly authorized and approved the execution and deliver of this Agreement. (b) This Agreement, acquisition of the Properties and construction of the Improvements are necessary, convenient and in furtherance of the municipal and governmental purposes of the City, will further economic development and create employment opportunities for its citizens, and is in the best interests of the City and its inhabitants. (c) This Agreement constitutes a legal, valid and binding obligation of City enforceable in accordance with its terms. 2.2 Company represents, covenants and warrants for the benefit of the City as follows: (a) Company is a corporation duly organized, existing and in good standing under the state of Delaware, is duly qualified to do business in the State, has all necessary power and authority to enter into and perform and observe the covenants and agreements on its part contained in this Agreement, is possessed of full power to own and hold real and personal property as owner, and by proper action has approved and duly authorized the execution and delivery of this Agreement. (b) All construction contracts awarded by Company for the construction or installation of the Improvements shall be awarded pursuant to competitive proposal procedures approved by City which allow qualified local contractors a reasonable opportunity to participate in competitive proposals. (c) This Agreement constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms. Section 3. City's Obligations 3.1 City is the owner of the Properties and will transfer the Properties to Company upon execution of this Agreement. 3.2 City will as provided in Section 3.3 advance to or for the benefit of Company funds in an amount not to exceed $4.5 million (the "City Funds ") to be used by Company for the construction and installation of Improvements to both Parcel One and Parcel Two. 3.3 City Funds will be made available and advanced to or for the benefit of Company on a periodic basis within thirty (30) days after Company files with the Director of Finance (a) certified copy of resolution of Company's board of directors approving this Agreement and authorizing its officers to execute and deliver same, and (b) written requests for payment certified by an authorized officer of Company that the amounts included in the request for payment have not been included in any prior request for payment and are for the actual cost of Improvements, identifying the Improvements for which payment is requested, including certificates of the Architect and general contractor that such Improvements have been installed in accordance with the approved Plans and Specifications. 3.4 City and Company acknowledge and agree that City has committed to or has expended the following sums: -3- (a) $132,839 for replacement of air conditioning refrigeration units and related improvements to that portion of Parcel Two known as the Rocky Mountain Bank Note Building. (b) $227,758 for roof replacement and renovations to that portion of Parcel Two known as the Woolworth Building. The sum specified in (a) above will be credited against the $4.5 million City Funds. The sum specified in (b) above will be credited against the $4.5 million City Funds on a pro rata basis to the extent the roof replacement and renovations are incorporated into Company's Improvements to and use of the Woolworth Building. City and Company will in good faith jointly determine within thirty (30) days after the Plans and Specifications for the Improvements to the Woolworth Building are approved by Company, the amount of (b) which shall be credited against the $4.5 million City Funds. Section 4. Parking City commits to provide its best efforts to locate by January 1, 1998 for Company's use 350 parking spaces in addition to the 248 parking spaces available to Company during December 1995. The parking spaces may be either public or private. Public parking spaces may be located in any parking area or facility owned or controlled by the City within the downtown area of the City. The additional 350 parking spaces include all parking spaces located on Parcel One and Parcel Two. Company commits (a) to pay the normal cost or charge for parking spaces and (b) to discuss Company's participation with the City in a park and ride program to help alleviate parking problems in the downtown area of the City. Section 5. Company's Obligations In addition to Company's Employment Commitment and Repayment Obligations set forth in Section 7 hereof, 5.1 Company shall cause the Plans and Specifications to be prepared by the Architect in an expeditious manner. 5.2 Company shall award the construction contracts for Improvements after competitive proposals which allow local contractors reasonable opportunity to participate and shall cause the Improvements to the Properties to be Substantially Completed on or before June 30, 1998. 5.3 Company shall at its cost and expense (less City Funds advanced or paid to or for the benefit of Company) expeditiously complete the Improvements and cause all work to be done in a good and workmanlike manner in compliance with the approved Plans and Specifications, all applicable federal, state and local laws, regulations, codes and ordinances and with all new materials except existing materials used for historical preservation purposes. Section 6. Transfer of Properties N 6.1 Company acknowledges and agrees that City has or will acquire the Properties for the use and benefit of Company and that City makes no representation or warranty with respect to the condition of the Properties or improvements thereon, environmental or otherwise. Company shall be responsible for all claims, expenses and costs, including remedial and clean-up costs, incurred by reason of, or resulting from the existence, release, discharge, disposal or removal of any hazardous materials, asbestos - containing materials, petroleum or petroleum based products, or lead, in, on, under, or about the Properties or any improvements thereon. 6.2 The Properties shall be transferred by City to Company "AS IS ", "WHERE IS" at the time of delivery of the deed. Conveyance shall be by special warranty deed subject to general taxes and assessments; covenants, conditions, reservations, restrictions and easements of record; zoning, building and land use laws, ordinances and regulations; standard printed Exceptions 1 through 5, Schedule B, ALTA 1992 Owner's Form, which are incorporated herein by reference; and all liens and encumbrances caused or created by the acts or defaults of Company (the "Title Conditions "). 6.3 After transfer of the Properties to Company by City and until Company's Repayment Obligation has been fully satisfied and discharged, Company will at its expense keep and maintain the Properties (a) insured by fire and extended coverage insurance in an amount not less than their full replacement value with a standard mortgagee clause in favor of City; (b) in good condition and state of repair; and (c) free of all liens and encumbrances which are or may become by lapse of time or subsequent action superior to the City's deed of trust lien on the Properties. 6.4 Upon execution of this Agreement by City and Company and transfer of the Properties to Company by City, the February 1, 1996 Lease between City and Company for that portion of Parcel Two commonly known as the Rocky Mountain Bank Note Building shall automatically cancel and terminate and City and Company shall be released from all obligations thereunder. Section 7. Company's Employment Commitment and Repayment Obligations 7.1 Company acknowledges and agrees that the sole purpose of City entering into this Agreement and the only benefit to the City for making funds available to Company under this Agreement is the creation of jobs. Company therefore commits and agrees to employ at the Facilities a minimum four hundred fifty (450) Full -Time Employees in addition to Company's Current Employment of 252 during the ten (10) year Repayment Period (the "Employment Commitment "). 7.2 Notwithstanding anything contained in this Agreement to the contrary or which may appear to be to the contrary, if Company shall for any reason default in Company's Employment -5- Commitment set forth in Section 7.1 hereof, Company shall repay to City a pro -rata share of the City Funds advanced by City under Section 3 hereof based upon the number of Full -Time Employees employed by Company at the Facilities (the "Repayment Obligation ") as follows: (a) During the ten (10) year period starting thirty -six (3 6) months after the earlier of (i) the calendar month in which the Improvements to the Properties are Substantially Completed or (ii) January 1, 1998 and ending ten (10) years thereafter (the "Repayment Period "), Company shall pay to City an amount each Quarter during the Repayment Period equal to the number of Quarterly Employees less than 702 multiplied by $250.00 (the "Quarterly Payment ") reduced by any available Credits. (b) For the sole and only purpose of reducing Company's Quarterly Payments, the following Credits shall be available to Company and applied to Company's Quarterly Payments until such Credits are exhausted: (i) First, an amount equal to $382,500; then, (ii) Second, an amount equal to $250.00 multiplied by the number of Quarterly Employees in excess of 252 for any Quarter during the period from January 1, 1996 to the commencement of the Repayment Period; then, (iii) Third, an amount equal to $250.00 multiplied by the number of Quarterly Employees in excess of 702 for any Quarter during the Repayment Period. (iv) The Credit described in (ii) and (iii) shall be cumulative, i.e., the Credit for any Quarters shall be added to the Credits for any other Quarter until used or applied in reduction of Company's Quarterly Payments. (c) Within sixty (60) days after the end of each calendar year starting with the year 1996 and ending the last calendar year of the Repayment Period (except as hereinafter provided for the calendar year in which the Repayment Period ends), Company will submit to City's Director of Finance Company's statement showing the Quarterly Employees, Credits and /or Quarterly Payments for each Quarter of that calendar year and the basis upon which Quarterly Employees, Credits and /or Quarterly Payments were computed certified by an officer of Company to be true and accurate (the "Annual Report "). The Annual Report for the last calendar year of the Repayment Period shall include the Quarters (and any partial Quarter) within the Repayment Period during that calendar year and shall be submitted to City by Company within sixty (60) days after the end of the Repayment Period. For purposes of verifying by investigation or audit (the "City's Audit "), Quarterly Employees, Credits and/or Quarterly Payments, City, or its designated representative, shall have access to Company's books and records including payroll records. City will, however, respect the confidentiality of Company's personnel records. (d) If at any time Company's Quarterly Payments after application of all available M Credits as shown by any Annual Report or City's Audit are in excess of $50,000, Company shall pay the amount of such Quarterly Payments to City without notice, demand, deduction, or setoff, within ninety (90) days after the calendar year for which the Annual Report was submitted or after completion of the City's Audit. All past due Company's Quarterly Payments shall bear interest at the rate of 10% per annum. Thereafter, if Company is entitled to any Credits as shown by any subsequent Annual Report or City's Audit, City will refund to Company within ninety (90) days after City's receipt of Company's Annual Report or City's Audit showing Company is entitled to such Credits, an amount equal to such Credits but in no event shall such refund exceed the amount of Quarterly Payments previously paid by Company to City. (e) If Company ceases to do business within the Properties for any consecutive six (6) month period after the earlier of (i) Substantial Completion of the Improvements to the Properties or (ii) commencement of the Repayment Period, City may declare the entire balance of Company's Repayment Obligation due and payable in full and for such purpose the entire balance of Company's Repayment Obligation shall be an amount equal to 450 times $250.00 multiplied by the then remaining Quarters of the Repayment Period after Company first ceased to do business within the Properties less all available Credits. "Ceases to do business within the Properties" means that Company has less than fifty (50) Full -Time Employees actually performing work within the Properties. (f) Company's obligations under this Agreement and Company's performance of such obligations, including without limitation, Company's Repayment Obligation, shall be secured by a first and valid deed of trust lien on the Properties. Contemporaneously with City's delivery of a special warranty deed to Company for the Properties, Company shall execute and deliver to City Company's deed of trust on the real property described in such special warranty deed securing performance of Company's obligations in form and content satisfactory to the City Attorney of City (the Company's Deed of Trust "). (g) Notwithstanding any provision herein to the contrary, Company's Repayment Obligation shall not be greater than the amount of City Funds advanced or paid to Company under Section 3.2 hereof. Section 8. Company's Default 8.1 If Company defaults in the performance of any material covenant or provision of this Agreement or Company's Deed of Trust, including without limitation, Company's Repayment Obligation under Section 7 hereof, and such default in not cured within ninety (90) days after written notice thereof is given by City to Company, such default shall constitute an event of default under this Agreement and City may, at its option: (a) cease to advance City Funds to or for the benefit of Company under Section 3 hereof, -7- (b) declare the entire balance of Company's Repayment Obligation due and owing in full and for such purposes the entire balance of Company's Repayment Obligation shall be an amount equal to 450 times $250.00 multiplied by the remaining Quarters of the Repayment Period less Credits available to Company, but in no event more than the amount of City Funds actually advanced to or for the benefit of Company under this Agreement and /or; (c) institute proceedings to enforce Company's obligations and/or to collect any delinquent Quarterly Payment or the entire balance of Company's Repayment Obligation, provided, that no such proceedings shall be instituted by City unless authorized by Resolution of the City Council of City. 8.2 The rights and remedies of City under this Agreement and Company's Deed of Trust shall be cumulative and shall be in addition to all other rights and remedies available to City in law and in equity. 8.3 No delay or omission by City in exercising any right or remedy under this Agreement or Company's Deed of Trust shall impair any such right or remedy, and the same may be exercised from time to time and as often as may be deemed expedient. Section 9. Limitation on Liability 9.1 In no event shall City, its officers, agents or employees be liable to Company for damages, including without limitation, compensatory, punitive, indirect, special and consequential damages, resulting from or arising out of or related to this Agreement or the performance or breach hereof or the failure or delay of City in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of City entering into this Agreement, Company hereby waives and discharges City, its officers, agents and employees from any and all claims for any and all such damages. 9.2 No breach, default, delay or failure of City under this Agreement shall be or be construed to be a waiver or release of Company's Repayment Obligation under Section 7 hereof with respect to the amount of City Funds actually advanced or paid by City to or for the benefit of Company. 9.3 Company shall have the right to specifically enforce City's obligations under this Agreement without showing or proof of an inadequate remedy at law. Section 10. Notices Any notice or communications required or permitted herein shall be in writing and shall be sufficiently given and shall be deemed given when delivered personally or mailed by certified mail, postage prepaid, as follows: (a) If to City, I City Hall Place, Pueblo, Colorado, 81003, Attention: City Manager. (b) If to Company, 225 North Main Street, Pueblo, Colorado, 81003, Attention: Legal Department. Each party reserves the right to change its address provided notice of such change is given in accordance herewith. Section 11. Waiver In the event that any agreement or covenant contained herein should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other or subsequent breach hereunder. Section 12. Miscellaneous 12.1 Time is of the essence hereof. This Agreement shall inure to the benefit of and shall be binding upon the City and Company and their respective successors and assigns, provided, that no assignment of this Agreement by Company shall be valid unless approved in writing by City. Notwithstanding the foregoing, the merger of Company with, acquisition of Company by, or sale of substantially all of Company's assets as a going concern to any third party shall not constitute an assignment of this Agreement. 12.2 This Agreement shall not be effectively amended, changed, modified or altered without the written consent of both parties. 12.3 This Agreement expresses the entire understanding of the parties and supersedes all prior dealings and commitments with respect to the subject matter of this Agreement. 12.4 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 such venue and to the jurisdiction of that Court. To the extent permitted by law, each party waives its right to a jury trial. 12.5 If any provision of this Agreement, other than the Company's Repayment Obligation, shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 12.6 This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 117 This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to conflict of law principles. 12.8 Nothing in this Agreement, expressed or implied, is intended nor shall be construed to 6� confer upon, or give to, any person or entity other than the City and Company any right, remedy or claim under or by reason of this Agreement or any covenant, condition or provision hereof, and all covenants, conditions, provisions and agreements contained in this Agreement by or on behalf of City or Company shall be for the exclusive and sole benefit of City and Company. 12.9 Whenever the approval or consent of City or Company is required under this Agreement, such consent or approval shall not be unreasonably withheld or delayed. IN WITNESS WHEREOF, the parties have executed this Agreement in Pueblo, Colorado on the day and year first above written. Attest: __ , City Cler /7 s a Attest: Title: PUEBLO, A MUNICIPAL CORPORATION r By Preside of the City Council QUALMED, INC. By Title: A►Csz ��rmah -10- Reception #: 1131265 Date: 07/18/1996 Time: 1057 Book: 2911 Page: 979 Chris C. Munoz Inst: TD R Fee: 45.00 D Fee: 0.00 SC: 1.00 Pg: 1 of 9 Pueblo Co.Clk. &Rec. COLORADO DEED OF TRUST THIS INDENTURE (the "Deed of Trust ") made this 1 7 A day of July, 1996, by and between QualMed, Inc., a Delaware Corporation, whose address is 225 North Main Street, Pueblo, Colorado, 81003 (hereinafter referred to as "Borrower ") and the Public Trustee of Pueblo County, State of Colorado (hereinafter referred to as "Trustee ") WITNESSETH: WHEREAS, Borrower has executed one certain Agreement dated July 8, 1996 between Borrower and Pueblo, a Municipal Corporation, 1 City Hall Place, Pueblo, Colorado, 81003 (hereinafter referred to as the "Agreement "); and, WHEREAS, Pueblo, a Municipal Corporation, is hereinafter referred to as the "Lender "; and, WHEREAS, the Agreement imposes certain obligations upon Borrower as therein described, including without limitation, the obligation to repay funds advanced and paid to Company by Lender in an amount not to exceed $4.5 million in the event certain minimum employment levels are not maintained by Borrower under the Agreement (hereinafter referred to as the "indebtedness "); and, WHEREAS, Borrower desires to secure the prompt payment of the aforesaid indebtedness and the performance of Borrower's other obligations under the Agreement. NOW, THEREFORE, in consideration of Ten Dollar(s) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and for the purpose aforesaid, Borrower hereby grants, bargains, sells and conveys unto Trustee in trust forever the real property located in the City of Pueblo, Pueblo County, Colorado, described in Exhibits "A" and "B" attached hereto and incorporated by reference herein, and all of Borrower's right. title and interest therein. This Deed of Trust includes, and Borrower hereby grants, bargains, sells and conveys unto Trustee in trust forever, all buildings, structures and improvements now or hereafter placed thereon, all fixtures, now or hereafter attached thereto, and all the rights, permits, hereditaments and appurtenances thereto belonging or in any way appertaining, together with any after acquired property interest in the above described property and real estate which Borrower may at any time hereafter have or acquire, and also all of the rents, issues, uses, profits and income of the above described real estate and mortgaged property from now until Borrower's indebtedness secured hereby is discharged and paid in full. All the above described property (whether real or personal) is herein referred to as the "Mortgaged Property ". To have and to hold the Mortgaged Property, together with all the privileges and appurtenances thereunto belonging: In trust nevertheless, in case of default by Borrower hereunder, Book: 2911 Page: 980 Chris C. Munoz Page: 2 of 9 Pueblo Co.C1k.&Rec. then upon notice and demand in writing filed with the Trustee as provided by law, it shall and may be lawful for Trustee to foreclose this Deed of Trust, and to sell and dispose of the Mortgaged Property (or any part thereof as may be designated in the notice of such sale) and all the right, title and interest of Borrower therein, in the manner as may then be provided by law, and to issue, execute and deliver his certificate of purchase, trustee's deed or certificate of redemption all as then may be provided by law. Trustee shall, out of the proceeds or avails of such sale, after first paying and retaining all fees, charges, the costs of making said sale and advertising the Mortgaged Property, and attorney's fees as herein provided, pay to Lender the amount of such indebtedness, and all moneys advanced by Lender for any purpose authorized herein or by law, with interest thereon at the interest rate as set forth in the Agreement, rendering the over plus, if any, as provided by applicable law. The sale or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against Borrower and all other persons claiming the Mortgaged Property or any part thereof by, from, through or under Borrower. The legal holder of the indebtedness may purchase the Mortgaged Property or any part thereof and it shall not be obligatory upon the purchaser or purchasers at any such sale to see to the application of the purchase money. If a release deed is required, Borrower hereby agrees to pay all the expenses thereof. Borrower hereby warrants title to the Mortgaged Property, subject only to taxes not yet due and payable, and easements, restrictions, reservations and covenants of record. Borrower hereby further covenants, acknowledges and agrees: 1. Agreement To pay the principal of and the interest on the indebtedness evidenced by the Agreement secured hereby at the time and in the manner provided therein and to perform every other covenant and obligation contained in such Agreement on the part of Borrower to perform. 2. Payment of Char To pay and discharge when due and before penalty attaches all L , round rents. taxes. assessments. water rents and other zovernmental or municipal charges, fines and impositions levied upon Borrower or the Nlortgaged Property and. upon the request of Lender, to promptly deliver the official receipts therefor to Lender, provided that Borrower need not pay any such amount so lone as the validity thereof is being contested in good faith and provision for the payment thereof, and any damage, cost, loss or expenses which may be incurred by Lender in connection therewith. is made by Borrower in a manner satisfactory to Lender. 3. Insurance: Eminent Domain To continuously maintain hazard. liability and other insurance, of such type or types and amounts as Lender may from time to time require, on the Mortgaged Property, and to pay promptly when due any premiums therefor. All insurance shall be carried with companies approved by Lender and the policies and renewals thereof (or certificates of insurance in form and substance satisfactory to Lender) shall be delivered to and held by Lender and have attached thereto loss payable clauses in favor of and in form and substance acceptable to Lender. Such insurance such provided that it may not be cancelled except upon thirty (30) days prior written notice to Lender. In event of loss. Borrower shall give immediate notice to Lender, which Book: 2911 Page: 981 Chris C. Munoz Page: 3 of 9 Pueblo Co.Clk. &Rec. may make proof of loss if not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such loss directly to Lender instead of to Borrower and Lender jointly. All insurance proceeds, or any part thereof, may be applied by Lender, at its option, to the reduction of the indebtedness hereby secured, or to the restoration or repair of the property damaged, if any, or release the same to Borrower to make the necessary repairs or restoration. All judgments, decrees and warrants for injury or damage to the Mortgaged Property and all awards pursuant to proceedings for condemnation or under power of eminent domain are hereby assigned to Lender by Borrower in their entirety and shall be paid to Lender which, at its option, may apply the same to the reduction of the indebtedness secured hereby, or to the restoration or repair of the property damaged, or release said payment to Borrower to make the necessary restoration or repairs. Lender is hereby empowered, in the name of Borrower, to receive and give acquittance for or to appeal from any such award, judgment or decree whether it be joint or several. 4. No Waste That Borrower shall not commit or permit waste to or at the Mortgaged Property and shall maintain the Mortgaged Property in good repair and condition, reasonable wear and tear excepted. On any failure so to maintain, Lender, at its option, may cause reasonable maintenance and repair work to be performed to or on the Mortgaged Property at the cost of Borrower. Borrower agrees that no part of the Mortgaged Property shall be removed, demolished or altered structurally without the prior written consent of Lender, which consent shall not be withheld unreasonably. Lender hereby consents to the remodeling of the Mortgaged Property as described and set forth in the Agreement. 5. Repair If all or any part of the Mortgaged Property shall be damaged by fire or other casualty, the Borro�yer will promptly restore the Mortgaged Property to the equivalent of its condition as of the date hereof, or better. regardless of whether or not there shall be any insurance proceeds therefor and whether or not the same are made available by the Lender for such purpose. If' any part of the Mortgaged Property shall be physically damaged through condemnation, the Borro will promptly restore, repair. or alter the remaining property in a manner satisfactory to the Lender, whether or not the same are made available by Lender for such purpose. 6. Other Liens That Borrower will pay when due any indebtedness which may be secured by a lien or charge on the Mortgaged Property or any part thereof or interest therein, and upon request exhibit satisfactory evidence to Lender of the discharge of any such lien or charge. 7. Right to Inspect That Lender is hereby given the right of entry on the Mortgaged Property at any reasonable time for the purpose of inspecting said property or for performing necessary repairs or maintenance not completed by Borrower. 8. Compliance with Governmental Regulations That Borrower will comply with all the laws, acts, rules, regulations and orders of anv federal, state, municipal, legislative. administrative or judicial body, commission or officer exercising any power of regulation or supervision over Book: 2911 Page: 982 Chris C. Munoz Page: 4 of 9 Pueblo Co.Clk. &Rec. Borrower or the Mortgaged Property for the construction, use or operation thereof, provided, however, that Borrower may contest any such law, act, rule, regulation or order in any reasonable manner which will not affect, in any way, the interest of Lender in or to any part of the Mortgaged Property and provided that Borrower makes provision for the payment of any damage, cost, loss or expense which may be incurred by Lender in connection therewith in a manner satisfactory to Lender. 9. Performance of Defaulted Covenants That Lender may, at its option, even after default by Borrower or after maturity of the indebtedness secured hereby, make any payment or perform any defaulted covenant, agreement or act of Borrower hereunder or under the Agreement evidencing or relating to the indebtedness secured hereby, and any moneys advanced by Lender for such purpose shall bear interest at the interest rate set forth in the Agreement, and shall thereupon become a part of the indebtedness secured hereby and shall be immediately due and payable without notice. 10. Payment of Lender's Expenses That Borrower agrees to and shall promptly pay all costs, charges and expenses incurred by Lender, including reasonable attorneys' fees arising out of or in connection with any action, proceeding or hearing, in any way affecting or relating to the Mortgaged Property, the above described Agreement or this Deed of Trust. 11. Defaults That upon the occurrence of: (1) default in the timely payment of the indebtedness secured hereby, or any part thereof; (ii) breach or violation of any of the other covenants or agreements contained herein: (iii) breach or violation of any of the terms. covenants. agreements or provisions of the Agreement to be kept or performed by Borrower: or (iv) the filing by the Borrower of a voluntary petition in bankruptcy or the Borrower's adjudication as a bankrupt or insolvent, or the filing by or against the Borrower of any petition or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future federal, state or other law or regulation relating to bankruptcy, insolvency or other relief for debtors (which, in the case of a filing against the Borrower, is not dismissed within sixty (60) days after the filing thereof) or the Borrower's seeking or consenting to or acquiescing in. or the appointment of any trustee, receiver or liquidator of Borrower or any portion of its assets or of all or any part of the Mortgaged Property or of any or all of the rents, issues, profits or revenues thereof, or the making of any general assignment for the benefit of creditors, or the admission in writing of its inability to pay its debts generally as they -4- become due, Book: 2911 Page: 983 Chris C. Hun02 Page: 5 of 9 Pueblo Co.Clk. &Rec. or any one or more of them, the whole of the indebtedness secured hereby and the interest thereon may at once, at the option of Lender, be declared immediately due and payable, and the Mortgaged Property may be sold in the manner and with the same effect as if the indebtedness had matured and remained unpaid after maturity. If foreclosure is made by Trustee, a reasonable attorney's fee for services in the supervision of such foreclosure proceedings shall be allowed and added by Trustee as a part of the cost of foreclosure. If foreclosure be by action in court, reasonable attorneys' fees shall be taxed by the court as part of the cost of such foreclosure proceedings. All such reasonable attorneys' fees (as well as the costs, charges and expenses referred to in paragraph 9 hereof) shall be and become a part of the indebtedness secured hereby ratably and on a parity with other indebtedness secured hereby. 12. Continuance of Lien That the lien of this Deed of Trust shall remain in full force and effect during any modification, postponement, extension or renewal of the time for payment of the indebtedness or any part thereof secured hereby. U. Right to Possession: Receiver That, in case of default, whereby the right of foreclosure occurs hereunder, Lender, or the holder of the certificate of purchase, shall at once become entitled to the possession, use and enjoyment of the Mortgaged Property, and to the rents, issues and profits thereof, from the accruing of such right and during the pendency of foreclosure proceedings and the period of redemption, if any. Such possession, use, enjoyment, rents, issues, and profits shall at once be delivered to Lender or the holder of the certificate of purchase on request. On refusal. the delivery of such possession may be enforced by the party entitled thereto by any appropriate civil suit or proceedings, and such party shall be entitled to a receiver for the Mortgaged Property, and of the rents. issues and profits thereof, and after any such default. including the time covered by foreclosure proceedings and the period of redemption, if any. Such entitlement shall exist as a matter of right without re(_ to the solvency or insolvency of the Borrower or of the then owner of the Mortgaged Property and - vvithout regard to the adequacy of the security for the indebtedness secured hereby. Such receiver may be appointed by any court of competent jurisdiction upon ex part application, notice thereof being hereby expressly waived, and the appointment of any such receiver, on any such application with or without notice, is hereby consented to. All rents. issues and profit. income and revenue of the Mortgaged Property shall be applied by such receiver according to law and the orders and direction of the court. 14. No Waiver by Lender That no failure by Lender to insist upon the strict performance of any covenant, agreement, term or condition of this Deed of Trust or the Agreement secured hereby or to exercise any option, right or remedy arising on account of anv breach thereof shall constitute a waiver of anv such breach or of such covenant, agreement, term or condition. No covenant, a(-Treement, terin or condition in this Deed of Trust or the Agreement secured hereby to be performed or complied with by Borrower, and no breach thereof, shall be waived. altered or modified except by a vNTitten instrument executed by Lender. No waiver of anv breach shall affect or alter this Deed of Trust or the Agreement but each and even covenant, agreement, term and condition of this Deed -5- Book: 2911 Page: 984 Chris C. Munoz Page: 6 of 9 Pueblo Co.C1k.&Rec of Trust and the Agreement secured hereby shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. 15. Cumulative Rights That each right and remedy of Lender provided for in this Deed of Trust shall be cumulative and shall be in addition to every other right or remedy provided for in the Agreement or this Deed of Trust, or now or hereafter existing at law, or in equity, or by statute or otherwise. The exercise or beginning of the exercise by Lender of any one or more of the rights or remedies provided for in this Deed of Trust or the Agreement, or now or hereafter existing at law, or in equity, or by statute or otherwise, shall not preclude the simultaneous or later exercise by Lender of any or all other rights or remedies provided for in this Deed of Trust or the Agreement, or now or hereafter existing at law, in equity, or by statute or otherwise. 16. Gender; Titles That pronouns of any gender shall include the other genders, and either the singular or plural shall include the other, as the identification of Borrower requires; and that the term "Lender" shall include any subsequent holder of the indebtedness secured hereby; that the titles of the paragraphs hereof are for reference purposes only and do not constitute part of this Deed of Trust. 17. Partial Unenforceabilitv That if any term or provision of this Deed of Trust or the application thereof to any person or circumstance shall, to any extent, be invalid, unenforceable or inapplicable, the remainder of this Deed of Trust, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid, unenforceable or inapplicable shall not be affected thereby, and each term and provision of this Deed of Trust shall be valid and be enforced to the fullest extent permitted by law. 18. Time of Essence That time is of the essence hereof. 19. Benefit That the covenants contained herein shall bind. and the benefits and advantages contained herein. shall inure to the benefit of the respective successors and assigns of Borrower. Trustee and Lender; provided that Borrower may assign its obligations hereunder without the prior written consent of Lender. 20. Construction Mortga�ae This instrument is a "construction mortgage" (as defined in Section 9- 313(1)(c) of the Colorado Uniform Commercial Code) to the extent that it secures an obligation incurred for the construction of an improvement on the Mortgaged Property. including the acquisition cost of the Mortgaged Property. 21. Financin�� Statement That this instrument is intended to be effective as a financing statement which is filed as a "fixture filing" pursuant to Section 9- 402(6) of the Colorado Uniform Commercial Code with respect to fixtures related to the Mortgaged Property; for the purposes of this paragraph, Borrower is the Debtor. and Lender is the Secured Party. 22. Use of Mortgaged Property The Borrower will not make, suffer or permit, without -6- Book: 2911 Page: 985 Chris C. Munoz Page: 7 of 9 Pueblo Co.C1k.&Rec. the prior written consent of Lender, any use of the Mortgaged Property for any purpose other than that for which the same are used or intended to be used as of the date of this Mortgage. 23. Notices All notices, demands and requests given or required to be given by any party hereto to another party shall be in writing. All such notices, demands and requests by any party to the other shall be deemed to have been properly given if delivered in person or if sent by United States registered or certified mail, postage prepaid, addressed to the other party at the address first set forth above or to such other address as such other party may, from time to time, designate by written notice given as herein required. 24. Applicable Law This Deed of Trust shall be interpreted, construed and enforced according to the laws of the State of Colorado. IN WITNESS WHEREOF, Borrower has executed this Deed of Trust on the day and year first appearing above. BORROWER: QUALMED, INC. B Y Name: Michael E. Jansen ice re i en Title: ssis ar: eneal Counsel and As iStant r retary COUNTY OF PUEBLO ) ss. STATE OF COLORADO ) The foregoing instrument 'vyas acknowledged before me in the County of Pueblo. State of lorad this 1 th day of July, 1996 by Michael E . Jansen as icy �res Assistant General Counsel of QualMed, Inc., a Delaware Corporation. and Assistant S ecretary Witness my hand and official seal. My commission expires �` HES \j C 6/21/1997 Notary Public -7- LEGAL DESCRIPTION Lot 13 and South half of Lots 14, 15 and 16, Block 32, in the Town, now City of Pueblo, according to the plan of Pueblo made for the Probate Judge of said Pueblo County by H. M. Fosdick, Engineer; also that portion of the North 10 feet in width of Second Street adjoining said Lot 13 and said South half of Lots 14, 15 and 16, County of Pueblo, State of Colorado AND The East 26 feet of Lot 10 and the West 20 feet of Lot 11, Block 32, in the Town, now Cityy of Pueblo, according to the plan of Pueblo as surveyed and platted for ttie Probate Judge of said Pueblo County by [I. M. Fosdick, Engineer; Also that portion of the Northerly 10 feet in width of Second Street adjoining said East 26 feet of Lot 10 and the West 20 Feet of Lot 11 on the South; All of Lot 12 and the East 24 feet of Lot 11, Block 32 in the Town, now City of Pueblo, as surveyed by 11. M. Fosdick, Engineer, for the Probate Judge of said County, TOGETHER WITH a strip of land 10 feet in width, lying immediately South of and contiguous to the South end of said Lot 12 and the East 24 feet of Lot 11 said 10 foot strip being 10 feet in width off the North side of Second Street in said former Town now City of Pueblo which strip was vacated and discontinued and attached to the lots adjoining thereto by an Act of the Council and house of Representatives of Colorado Territory, entitled "An Act to Change Certain Streets and Alleys in the Town of Pueblo ", approved February 8th, A.D. 1870, County of Pueblo, State of Colorado. EXHIB IT "A" LEGAL DESCRIPTION All of that portion of Block 33 In the Town, now City of Pueblo, according to the plan of Pueblo made for the Probate Judge of Pueblo County, H. M. Fosdick, Engineer, in March 1869, bounded and described as follows: BEGIIIIIING at the point of Intersection of the South line of Fourth Street with the East line of Court Street; thence South and along the East line of Court Street 119.85 feet to the point of intersection of the East lino of Court Street with the Ilorth line of the alley in said Block 33; thence Easterly arid along the North line of the alley in said Block 33 140.02 feet to a point; thence Northerly and parallel with the East line of Court Street 119.71 feet to a point in the South line of Fourth Street; thence Westerly. and along the South line of Fourth Street 140.02 feet to the POINT OF BEGIIJNG, being the same property sometimes described as'Lots 6, 7 8 and the West 8 feet of Lot 5, Block 33' or the Town, now City of Pueblo, according to the plan of Pueblo made for the Probate Judge of Pueblo County by 11. M. Fosdick, Engineer in March 1869. ALSO The Northerly 71.05 feet of Lots 1, 2, and 3, all of Lot 4, the East 36 feet in width of Lot 5 and the South 48.38 feet of the West 41.33 feet of Lot 3, Block 33, in that part of the present City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer for the Probate Judge of said Pueblo County, in March, 1869. EXHIBIT "B" LEGAL DESCRIPTION Lot 13 and South half of Lots 14, 15 and 16, Block 32, in the Town, now City of Pueblo, according to the plan of Pueblo made for the Probate Judge of said Pueblo County by If. M. Fosdick, Engineer; also that portion of the Korth 10 feet in width of Second Street adjoining said Lot 13 and said South half of Lots 14, 15 and 16, County of Pueblo, State of Colorado 1 'Tile East 26 feet of Lot 10 and the West 20 feet of Lot 11, Block 32, in the Town, now city of Pueblo, according to the plan of Pueblo as surveyed and platted for the Probate Judge of said Pueblo County by II. M. Fosdick, Engineer; Also that portion of the Ilortherly 10 feet in width of Second Street adjoining said East 26 feet of Lot 10 and the West 20 Feet of Lot 11 on the South; All of Lot 12 and the East 24 feet of Lot 11, Block 32 in the Town, now City of Pueblo, as surveyed by H. M. Fosdick, Engineer, for the Probate Judge of said County, TOGETHER WITII a strip of land 10 feet in width, lying immediately South of and contiguous to the South end of said Lot 12 and the East 24 feet of Lot li 10 foot strip being to feet in width off the North side of Second St rest. In said former Town now City of Pueblo which strip was vacated and discontinued and attached to the lots adjoining thereto by an Act of the Council and Iiouse of Representatives of Colorado Territory, entitled "An Act to Change Certain Streets and Alleys in the Town of Pueblo ", approved February 8th, A.D. 1870, County of Pueblo, State of Colorado. EXHIBIT "A" LEGAL DESCRIPTION 1111 of that portion of Block 33 in the Town, now City of Pueblo, according to the plan of Pueblo made for the Probate Judge of Pueblo County, H. M. Fosdick, Engineer, in March 1869, bounded and described as follows: BEGINNING at the point of intersection of the South line of Fourth Street with the East line of Court Street; thence South and along the East line of Court Street 119.85 feet to the point of intersection of the East line of Court Street with the Horth line of the alley in said Block 33; thence Easterly and along the North line of the alley in said Block 33 140.02 feet to a point; thence Northerly and parallel with the East line of Court Street 119.71 feet to a point in the South line of Fourth Street; thence Westerly and along the South line of Fourth Street 140.02 feet to the POINT OF BEGI411G, being the same property sometimes described as tots 6, 7, 8 and the West 8 feet of Lot 5, Block 33 of the Town, now City of Pueblo, according to the plan of PUeblo made for the Probate Judge of Pueblo County by It. M. Fosdick, Engineer in March 1869. ALSO The Northerly 71.05 feet of Lots 1, 2, and 3, all of Lot 4, the East 36 feet in width of Lot 5 and the South 48.38 feet of the West 41.33 feet of Lot 3, Block 33, in that part of the present City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer for the Probate Judge of said Pueblo County, in March, 1869. EXHIBIT "T3" 1 Recorded ............................... o'clock_ ........... M., ............................................ ReceptionNo ........... .................... ..... ...... ......................--- ............................ - -- --................Recorder. THIS DEED, Made 0— day of July , 19 96 , between P. alo, a Municipal " orporation of the County of Pueblo and State of Colo- rado, of the first part, and Qua 1Med , Inc. , a Delaware Corporation doing business in of the County of Pueblo and State of Colorado, of the second part; WITNESSETH, That the said part y of the first part, for and in consideration of the sum of Ten Dollars and Other Good and Valuable Consideration laollaxK to the said part y of the first part, in hand paid by the said party of the second part, the receipt whereof is hereby confessed and acknowledged, ha s granted, bargained, sold and conveyed, and by these presents do e s grant, bargain, sell, convey and confirm unto the said part y of the second part,its suc 9W'AR assigns forever, all the3(WjMM;j%A#W lot s or parcel s of land, situate, lying and being in the County of Pueblo and State of Colorado, bcxw-k: described in Attached Exhibits "A" and "B" which are incorporated herein as if set out herein in full Together with all and singular the hereditaments and appurtenances thereunto belonging, or in any- wise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof; and all the estate, right, title, interest, claim and demand whatsoever, of the said part y of the first part, either in law or equity, of, in and to the above bargained premises, with the hereditaments and appurtenances; TO HAVE AND TO HOLD the said premises above bar- gained and described, with the appurtenances, unto QualMed, Inc. uc c e s s ors the said party of the second part, its A and assigns forever. And the said Pueblo, a Municipal Corporation part y of the first part, for it sel f , its successors and am ass' g xm does covenant, grant, bargain and agree to and with the said part y of the second part, its su M and assigns, the above bargained premises in the quiet and peaceable possession of said part y of the second part, its suc i% against all and every person or persons lawfully claiming or to claim the whole or any part thereof, by, through or under the said part y of the first part to WARRANT AND FOREVER DEFEND. IN WITNESS WHEREOF, The said part y of the first part ha s hereunto set its hand and seal the day and year first above written. Signed, Sealed and Delivered in the presence of ------------------------------------------------------ - - - - -- [SEAL] Pueblo, a Municipal Corporation - Atte ---- ��'--- - - - - -- - --- - - - - -- --------------------------------------- - - - - -- [SEAL] . Cit Clerk _ - -.s` of the City Counci ----- � - -��- --- - - - - -- ----- -------- [SEAL] STATE OF COLORADO, T ss. County of Pueblo The foregoing instrument was acknowledged before me this / 141 day of July 1996 by* Fay B. Kastelic as President of the City Council and Gina Dutcher as City Clerk of Pueblo, a Municipal Corporation My commission expires �" 7 boo O ' 19 Witness my hand and official seal. Notary Public. — �I�Zv n.ural person or persons — insert or names; 1f by person acting In representative or official capacity or as nev -in -fact, then Insert naive of person as executor, attorney -in -fact or other capacity or description ; If by officer of cor- poration, then uisert narne or sucn otrtcer or orrtcers, as the presiuent or outer UIi Ui-a Acknowledgment, Session 1927.